~~0001099219us-gaap:~~0001099219met:MeasurementInputLongTermEquityVolatilityMemberus-gaap:EmbeddedDerivativeFinancialInstrumentsMembersrt:~~MinimumMembermet:MortalityRatesRangeThreeMember2020-12-31~~MinimumMember2022-06-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

(Mark One)


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

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2021~~2022


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

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-15787

_____________________________________

MetLife, Inc.

(Exact name of registrant as specified in its charter)

Delaware

13-4075851

(State or other jurisdiction of
incorporation or organization)

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

200 Park Avenue,

New York,

10166-0188

(Address of principal executive offices)

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	MET	New York Stock Exchange
Floating Rate Non-Cumulative Preferred Stock, Series A, par value $0.01	MET PRA	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.625% Non-Cumulative Preferred Stock, Series E	MET PRE	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.75% Non-Cumulative Preferred Stock, Series F	MET PRF	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

At ~~October~~July 29, ~~2021, 841,160,193~~2022, 797,614,319 shares of the registrant’s common stock were outstanding.

Table of Contents


		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited) (at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 and for the Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020)~~2021)
	Interim Condensed Consolidated Balance Sheets	4
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Interim Condensed Consolidated Statements of Equity	6
	Interim Condensed Consolidated Statements of Cash Flows	7
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 — Segment Information	1112
	Note 3 — Dispositions	1819
	Note 4 — Insurance	20
	Note 5 — Closed Block	22
	Note 6 — Investments	25
	Note 7 — Derivatives	4341
	Note 8 — Fair Value	5553
	Note 9 — ~~Long-Term Debt~~Equity	7370
	Note 10 ~~— Equity~~	74
	~~Note 11~~ — Other Revenues and Other Expenses	7975
	Note 11 — Employee Benefit Plans	76
	Note 12 — ~~Employee Benefit Plans~~Income Tax	8076
	Note 13 — ~~Income Tax~~Earnings Per Common Share	8077
	Note 14 — ~~Earnings Per Common Share~~Contingencies, Commitments and Guarantees	8177
	Note 15 — ~~Contingencies, Commitments and Guarantees~~Subsequent Events	81
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8682
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~159~~149
Item 4.	Controls and Procedures	~~160~~150

Part II — Other Information
Item 1.	Legal Proceedings	~~161~~151
Item 1A.	Risk Factors	~~161~~151
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~161~~151
Item 6.	Exhibits	~~162~~152

Signatures		~~163~~153

Table of Contents

As used in this Form 10‑Q, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events and do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. They include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, future sales efforts, future expenses, the outcome of contingencies such as legal proceedings, and future trends in operations and financial results.

Many factors determine Company results, and they involve unpredictable risks and uncertainties. Our forward-looking statements depend on our assumptions, our expectations, and our understanding of the economic environment, but they may be inaccurate and may change. We do not guarantee any future performance. Our results could differ materially from those we express or imply in forward-looking statements. The risks, uncertainties and other factors, including those relating to the COVID-19 pandemic, identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission, and others, may cause such differences. These factors include:

(1) economic condition difficulties, including risks relating to public health, interest rates, credit spreads, equity, real estate, obligors and counterparties, currency exchange rates, derivatives, and terrorism and security;

(2) global capital and credit market adversity;

(3) credit facility inaccessibility;

(4) financial strength or credit ratings downgrades;

(5) unavailability, unaffordability, or inadequate reinsurance;

(6) statutory life insurance reserve financing costs or limited market capacity;

(7) legal, regulatory, and supervisory and enforcement policy changes;

(8) changes in tax rates, tax laws or interpretations;

(9) litigation and regulatory investigations;

(10) London Interbank Offered Rate ~~termination~~discontinuation and transition to alternative reference rates;

(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;

(12) MetLife, Inc.’s inability to pay dividends and repurchase common stock;

(13) MetLife, Inc.’s subsidiaries’ inability to pay it dividends;

(14) investment defaults, downgrades, or volatility;

(15) investment sales or lending difficulties;

(16) collateral or derivative-related payments;

(17) investment valuations, allowances, or impairments changes;

(18) claims or other results that differ from our estimates, assumptions, or models;

(19) global political, legal, or operational risks;

(20) business competition;

(21) technological ~~change;~~changes;

(22) catastrophes;

(23) climate changes or responses to it;

(24) deficiencies in our closed block;

(25) goodwill or other asset impairment, or deferred income tax asset allowance;

(26) acceleration of amortization of deferred policy acquisition costs, deferred sales inducements, value of business acquired, value of distribution agreements acquired or value of customer relationships acquired;

(27) product guarantee volatility, costs, and counterparty risks;

(28) risk management failures;

(29) insufficient protection from operational risks;

(30) ~~confidential information protection~~failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;

(31) accounting standards changes;

(32) excessive risk-taking;

(33) marketing and distribution difficulties;

(34) pension and other postretirement benefit assumption changes;

(35) inability to protect our intellectual property or avoid infringement claims;

(36) acquisition, integration, growth, disposition, or reorganization difficulties;

(37) Brighthouse Financial, Inc. separation risks;

(38) MetLife, Inc.’s Board of Directors influence over the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; and

(39) legal- and corporate governance-related effects on business combinations.

~~The Company will~~MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking ~~statements~~statement if ~~we believe we are~~MetLife, Inc. later becomes aware that such statement is not likely to ~~achieve them or for any other reasons.~~be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in subsequent reports to the U.S. Securities and Exchange Commission.

Table of Contents

Corporate Information

We encourage investors and others to frequently visit our website (www.metlife.com), including our Investor Relations web pages (https://investor.metlife.com). We announce significant financial and other information ~~about MetLife~~ to our investors and the public on ~~our website (www.metlife.com) through~~ the ~~MetLife~~ Investor Relations web ~~page (https://investor.metlife.com),~~pages, as well as in U.S. Securities and Exchange Commission filings, in news releases, public conference calls and ~~webcasts. MetLife encourages investors to visit the Investor Relations web page from time to time, as information is updated~~webcasts, fact sheets and ~~new information is posted.~~other documents and media. The information found on our website, including MetLife’s Sustainability Report, is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we ~~file with~~submit to the U.S. Securities and Exchange Commission, and any references to our website are intended to be inactive textual references only.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

MetLife, Inc.

Interim Condensed Consolidated Balance Sheets

~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (Unaudited)

(In millions, except share and per share data)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Investments:	Investments:					Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $310,004 and $310,811, respectively; allowance for credit loss of $68 and $81, respectively)		$	341,038	$	354,809
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $299,532 and $310,884, respectively; allowance for credit loss of $261 and $91, respectively)						Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $299,532 and $310,884, respectively; allowance for credit loss of $261 and $91, respectively)	$	284,178	$	340,274
Equity securities, at estimated fair value	Equity securities, at estimated fair value	941		1,079		Equity securities, at estimated fair value	1,085		1,269
Contractholder-directed equity securities and fair value option securities, at estimated fair value	Contractholder-directed equity securities and fair value option securities, at estimated fair value	12,055		13,319		Contractholder-directed equity securities and fair value option securities, at estimated fair value	9,875		12,142
Mortgage loans (net of allowance for credit loss of $563 and $590, respectively; includes $134 and $165, respectively, under the fair value option)		80,964		83,919
Mortgage loans (net of allowance for credit loss of $486 and $634, respectively; includes $109 and $127, respectively, under the fair value option and $24 and $0, respectively, of mortgage loans held-for-sale)						Mortgage loans (net of allowance for credit loss of $486 and $634, respectively; includes $109 and $127, respectively, under the fair value option and $24 and $0, respectively, of mortgage loans held-for-sale)	82,055		79,353
Policy loans	Policy loans	9,186		9,493		Policy loans	8,876		9,111
Real estate and real estate joint ventures (includes $225 and $169, respectively, under the fair value option and $0 and $128, respectively, of real estate held-for-sale)		12,182		11,933
Real estate and real estate joint ventures (includes $309 and $240, respectively, under the fair value option and $0 and $175, respectively, of real estate held-for-sale)						Real estate and real estate joint ventures (includes $309 and $240, respectively, under the fair value option and $0 and $175, respectively, of real estate held-for-sale)	12,376		12,216
Other limited partnership interests	Other limited partnership interests	13,480		9,470		Other limited partnership interests	14,636		14,625
Short-term investments, principally at estimated fair value	Short-term investments, principally at estimated fair value	7,150		3,904		Short-term investments, principally at estimated fair value	3,043		7,176
Other invested assets (includes $2,019 and $2,156, respectively, of leveraged and direct financing leases and $356 and $332, respectively, relating to variable interest entities)		18,683		20,593
Other invested assets (includes $1,849 and $1,930, respectively, of leveraged and direct financing leases; $343 and $351, respectively, relating to variable interest entities and allowance for credit loss of $33 and $40, respectively)						Other invested assets (includes $1,849 and $1,930, respectively, of leveraged and direct financing leases; $343 and $351, respectively, relating to variable interest entities and allowance for credit loss of $33 and $40, respectively)	19,901		18,655
Total investments	Total investments	495,679		508,519		Total investments	436,025		494,821
Cash and cash equivalents, principally at estimated fair value (includes $13 and $12, respectively, relating to variable interest entities)		18,956		19,795
Cash and cash equivalents, principally at estimated fair value						Cash and cash equivalents, principally at estimated fair value	20,548		20,047
Accrued investment income	Accrued investment income	3,354		3,388		Accrued investment income	3,154		3,185
Premiums, reinsurance and other receivables (includes $5 and $4, respectively, relating to variable interest entities)		17,816		17,870
Premiums, reinsurance and other receivables						Premiums, reinsurance and other receivables	17,769		17,149
Deferred policy acquisition costs and value of business acquired	Deferred policy acquisition costs and value of business acquired	16,191		16,389		Deferred policy acquisition costs and value of business acquired	20,248		16,061

Current income tax recoverable						Current income tax recoverable	274		184
Goodwill	Goodwill	9,638		10,112		Goodwill	9,151		9,535

Assets held-for-sale	Assets held-for-sale	7,462		7,418		Assets held-for-sale	—		7,238
Other assets (includes $1 and $1, respectively, relating to variable interest entities)		11,614		11,685
Other assets						Other assets	11,895		11,615
Separate account assets	Separate account assets	180,954		199,970		Separate account assets	143,829		179,873
Total assets	Total assets	$	761,664	$	795,146	Total assets	$	662,893	$	759,708
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities	Liabilities					Liabilities
Future policy benefits	Future policy benefits	$	197,086	$	206,656	Future policy benefits	$	193,474	$	199,721
Policyholder account balances	Policyholder account balances	203,973		205,176		Policyholder account balances	200,580		203,473
Other policy-related balances	Other policy-related balances	17,735		17,101		Other policy-related balances	19,284		17,751
Policyholder dividends payable	Policyholder dividends payable	525		587		Policyholder dividends payable	457		478
Policyholder dividend obligation	Policyholder dividend obligation	1,952		2,969		Policyholder dividend obligation	—		1,682
Payables for collateral under securities loaned and other transactions	Payables for collateral under securities loaned and other transactions	31,382		29,475		Payables for collateral under securities loaned and other transactions	23,819		31,920
Short-term debt	Short-term debt	346		393		Short-term debt	196		341
Long-term debt (includes $0 and $5, respectively, relating to variable interest entities)		14,010		14,603
Long-term debt						Long-term debt	13,677		13,933
Collateral financing arrangement	Collateral financing arrangement	806		845		Collateral financing arrangement	741		766
Junior subordinated debt securities	Junior subordinated debt securities	3,155		3,153		Junior subordinated debt securities	3,157		3,156

Current income tax payable		103		129

Deferred income tax liability	Deferred income tax liability	9,850		11,008		Deferred income tax liability	1,301		9,693
Liabilities held-for-sale	Liabilities held-for-sale	6,757		4,650		Liabilities held-for-sale	—		6,634
Other liabilities (includes $1 and $1, respectively, relating to variable interest entities)		23,697		23,614
Other liabilities						Other liabilities	25,011		22,538
Separate account liabilities	Separate account liabilities	180,954		199,970		Separate account liabilities	143,829		179,873
Total liabilities	Total liabilities	692,331		720,329		Total liabilities	625,526		691,959
Contingencies, Commitments and Guarantees (Note 15)		0		0
Contingencies, Commitments and Guarantees (Note 14)						Contingencies, Commitments and Guarantees (Note 14)	0		0
Equity	Equity					Equity
MetLife, Inc.’s stockholders’ equity:	MetLife, Inc.’s stockholders’ equity:					MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $3,905 and $4,405 aggregate liquidation preference		—		—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,186,092,767 and 1,181,614,288 shares issued, respectively; 844,531,818 and 892,910,600 shares outstanding, respectively		12		12
Preferred stock, par value $0.01 per share; $3,905 and $3,905 aggregate liquidation preference, respectively						Preferred stock, par value $0.01 per share; $3,905 and $3,905 aggregate liquidation preference, respectively	—		—
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,189,520,578 and 1,186,540,473 shares issued, respectively; 797,580,831 and 825,540,267 shares outstanding, respectively						Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,189,520,578 and 1,186,540,473 shares issued, respectively; 797,580,831 and 825,540,267 shares outstanding, respectively	12		12
Additional paid-in capital	Additional paid-in capital	33,457		33,812		Additional paid-in capital	33,548		33,511
Retained earnings	Retained earnings	40,426		36,491		Retained earnings	41,101		41,197
Treasury stock, at cost; 341,560,949 and 288,703,688 shares, respectively		(16,956)		(13,829)
Accumulated other comprehensive income (loss) ("AOCI")		12,111		18,072
Treasury stock, at cost; 391,939,747 and 361,000,206 shares, respectively						Treasury stock, at cost; 391,939,747 and 361,000,206 shares, respectively	(20,188)		(18,157)
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	(17,372)		10,919
Total MetLife, Inc.’s stockholders’ equity	Total MetLife, Inc.’s stockholders’ equity	69,050		74,558		Total MetLife, Inc.’s stockholders’ equity	37,101		67,482
Noncontrolling interests	Noncontrolling interests	283		259		Noncontrolling interests	266		267
Total equity	Total equity	69,333		74,817		Total equity	37,367		67,749
Total liabilities and equity	Total liabilities and equity	$	761,664	$	795,146	Total liabilities and equity	$	662,893	$	759,708

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

MetLife, Inc.

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)

(In millions, except per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues	Revenues									Revenues
Premiums	Premiums	$	9,455	$	9,935	$	28,914	$	28,137	Premiums	$	11,721	$	9,132	$	22,492	$	19,459
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	1,521		1,497		4,334		4,227		Universal life and investment-type product policy fees	1,516		1,422		2,934		2,813
Net investment income	Net investment income	5,568		4,729		16,162		11,877		Net investment income	3,583		5,280		7,867		10,594
Other revenues	Other revenues	663		455		1,958		1,350		Other revenues	616		664		1,276		1,295
Net investment gains (losses)	Net investment gains (losses)	(84)		(20)		1,655		(77)		Net investment gains (losses)	(685)		1,605		(1,203)		1,739
Net derivative gains (losses)	Net derivative gains (losses)	(218)		(581)		(2,032)		2,910		Net derivative gains (losses)	(1,195)		421		(2,054)		(1,814)
Total revenues	Total revenues	16,905		16,015		50,991		48,424		Total revenues	15,556		18,524		31,312		34,086
Expenses	Expenses									Expenses
Policyholder benefits and claims	Policyholder benefits and claims	10,103		10,000		30,031		27,689		Policyholder benefits and claims	11,790		9,405		22,983		19,928
Interest credited to policyholder account balances	Interest credited to policyholder account balances	1,287		1,416		4,153		3,458		Interest credited to policyholder account balances	492		1,515		1,122		2,866
Policyholder dividends	Policyholder dividends	189		206		672		788		Policyholder dividends	193		236		391		483
Other expenses	Other expenses	3,284		3,470		9,315		9,726		Other expenses	3,083		2,881		6,103		6,031
Total expenses	Total expenses	14,863		15,092		44,171		41,661		Total expenses	15,558		14,037		30,599		29,308
Income (loss) before provision for income tax	Income (loss) before provision for income tax	2,042		923		6,820		6,763		Income (loss) before provision for income tax	(2)		4,487		713		4,778
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	453		214		1,456		1,503		Provision for income tax expense (benefit)	(140)		1,075		(99)		1,003
Net income (loss)	Net income (loss)	1,589		709		5,364		5,260		Net income (loss)	138		3,412		812		3,775
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests	5		3		15		11		Less: Net income (loss) attributable to noncontrolling interests	6		5		11		10
Net income (loss) attributable to MetLife, Inc.	Net income (loss) attributable to MetLife, Inc.	1,584		706		5,349		5,249		Net income (loss) attributable to MetLife, Inc.	132		3,407		801		3,765
Less: Preferred stock dividends	Less: Preferred stock dividends	63		59		166		168		Less: Preferred stock dividends	29		35		92		103
Preferred stock redemption premium	Preferred stock redemption premium	—		14		6		14		Preferred stock redemption premium	—		6		—		6
Net income (loss) available to MetLife, Inc.’s common shareholders	Net income (loss) available to MetLife, Inc.’s common shareholders	$	1,521	$	633	$	5,177	$	5,067	Net income (loss) available to MetLife, Inc.’s common shareholders	$	103	$	3,366	$	709	$	3,656
Comprehensive income (loss)	Comprehensive income (loss)	$	1,392	$	(1,818)	$	(595)	$	8,246	Comprehensive income (loss)	$	(15,323)	$	5,325	$	(27,482)	$	(1,987)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	6		3		17		13		Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	5		6		8		11
Comprehensive income (loss) attributable to MetLife, Inc.	Comprehensive income (loss) attributable to MetLife, Inc.	$	1,386	$	(1,821)	$	(612)	$	8,233	Comprehensive income (loss) attributable to MetLife, Inc.	$	(15,328)	$	5,319	$	(27,490)	$	(1,998)


Net income (loss) available to MetLife, Inc.’s common shareholders per common share:	Net income (loss) available to MetLife, Inc.’s common shareholders per common share:									Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic	Basic	$	1.78	$	0.70	$	5.94	$	5.57	Basic	$	0.13	$	3.85	$	0.87	$	4.16
Diluted	Diluted	$	1.77	$	0.69	$	5.90	$	5.53	Diluted	$	0.13	$	3.83	$	0.86	$	4.13

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

MetLife, Inc.

Interim Condensed Consolidated Statements of Equity

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)

(In millions)

Preferred
Stock Common
Stock Additional
Paid-in
Capital Retained
Earnings Treasury
Stock
at Cost Accumulated
Other
Comprehensive
Income (Loss) Total
MetLife, Inc.’s
Stockholders’
Equity Noncontrolling
Interests Total
Equity
Balance at December 31, 2020 $ — $ 12 $ 33,812 $ 36,491 $ (13,829) $ 18,072 $ 74,558 $ 259 $ 74,817
Redemption of preferred stock (494) (494) (494)
Preferred stock redemption premium (6) (6) (6)
Treasury stock acquired in connection with share repurchases (2,112) (2,112) (2,112)
Stock-based compensation 122 122 122
Dividends on preferred stock (103) (103) (103)
Dividends on common stock (declared per share of $0.940) (829) (829) (829)
Change in equity of noncontrolling interests — 15 15
Net income (loss) 3,765 3,765 10 3,775
Other comprehensive income (loss), net of income tax (5,763) (5,763) 1 (5,762)
Balance at June 30, 2021 — 12 33,440 39,318 (15,941) 12,309 69,138 285 69,423
Treasury stock acquired in connection with share repurchases (1,015) (1,015) (1,015)
Stock-based compensation 17 17 17
Dividends on preferred stock (63) (63) (63)
Dividends on common stock (declared per share of $0.480) (413) (413) (413)
Change in equity of noncontrolling interests — (8) (8)
Net income (loss) 1,584 1,584 5 1,589
Other comprehensive income (loss), net of income tax (198) (198) 1 (197)
Balance at September 30, 2021 $ — $ 12 $ 33,457 $ 40,426 $ (16,956) $ 12,111 $ 69,050 $ 283 $ 69,333


		Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity			Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2019		$	—	$	12	$	32,680	$	33,078	$	(12,678)	$	13,052	$	66,144	$	238	$	66,382
Cumulative effects of changes in accounting principles, net of income tax								(121)						(121)				(121)
Preferred stock issuance						972								972				972
Balance at December 31, 2021																				Balance at December 31, 2021	$	—	$	12	$	33,511	$	41,197	$	(18,157)	$	10,919	$	67,482	$	267	$	67,749
Treasury stock acquired in connection with share repurchases	Treasury stock acquired in connection with share repurchases									(500)				(500)				(500)		Treasury stock acquired in connection with share repurchases									(915)				(915)				(915)
Stock-based compensation	Stock-based compensation					76								76				76		Stock-based compensation					20								20				20
Dividends on preferred stock	Dividends on preferred stock							(109)						(109)				(109)		Dividends on preferred stock							(63)						(63)				(63)
Dividends on common stock (declared per share of $0.900)								(823)						(823)				(823)
Dividends on common stock (declared per share of $0.480)																				Dividends on common stock (declared per share of $0.480)							(397)						(397)				(397)
Change in equity of noncontrolling interests	Change in equity of noncontrolling interests													—		(1)		(1)		Change in equity of noncontrolling interests													—		2		2
Net income (loss)	Net income (loss)							4,543						4,543		8		4,551		Net income (loss)							669						669		5		674
Other comprehensive income (loss), net of income tax	Other comprehensive income (loss), net of income tax											5,511		5,511		2		5,513		Other comprehensive income (loss), net of income tax											(12,831)		(12,831)		(2)		(12,833)
Balance at June 30, 2020		—		12		33,728		36,568		(13,178)		18,563		75,693		247		75,940
Redemption of preferred stock						(989)								(989)				(989)
Preferred stock redemption premium								(14)						(14)				(14)
Preferred stock issuance						989								989				989
Balance at March 31, 2022																				Balance at March 31, 2022	—		12		33,531		41,406		(19,072)		(1,912)		53,965		272		54,237
Treasury stock acquired in connection with share repurchases	Treasury stock acquired in connection with share repurchases									(80)				(80)				(80)		Treasury stock acquired in connection with share repurchases									(1,116)				(1,116)				(1,116)
Stock-based compensation	Stock-based compensation					16								16				16		Stock-based compensation					17								17				17
Dividends on preferred stock	Dividends on preferred stock							(59)						(59)				(59)		Dividends on preferred stock							(29)						(29)				(29)
Dividends on common stock (declared per share of $0.460)								(419)						(419)				(419)
Dividends on common stock (declared per share of $0.500)																				Dividends on common stock (declared per share of $0.500)							(408)						(408)				(408)
Change in equity of noncontrolling interests	Change in equity of noncontrolling interests													—		3		3		Change in equity of noncontrolling interests													—		(11)		(11)
Net income (loss)	Net income (loss)							706						706		3		709		Net income (loss)							132						132		6		138
Other comprehensive income (loss), net of income tax	Other comprehensive income (loss), net of income tax											(2,527)		(2,527)		—		(2,527)		Other comprehensive income (loss), net of income tax											(15,460)		(15,460)		(1)		(15,461)
Balance at September 30, 2020		$	—	$	12	$	33,744	$	36,782	$	(13,258)	$	16,036	$	73,316	$	253	$	73,569
Balance at June 30, 2022																				Balance at June 30, 2022	$	—	$	12	$	33,548	$	41,101	$	(20,188)	$	(17,372)	$	37,101	$	266	$	37,367


	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Total MetLife, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	—	$	12	$	33,812	$	36,491	$	(13,829)	$	18,072	$	74,558	$	259	$	74,817
Treasury stock acquired in connection with share repurchases									(999)				(999)				(999)
Stock-based compensation					98								98				98
Dividends on preferred stock							(68)						(68)				(68)
Dividends on common stock (declared per share of $0.460)							(408)						(408)				(408)
Change in equity of noncontrolling interests													—		9		9
Net income (loss)							358						358		5		363
Other comprehensive income (loss), net of income tax											(7,675)		(7,675)		—		(7,675)
Balance at March 31, 2021	—		12		33,910		36,373		(14,828)		10,397		65,864		273		66,137
Redemption of preferred stock					(494)								(494)				(494)
Preferred stock redemption premium							(6)						(6)				(6)
Treasury stock acquired in connection with share repurchases									(1,113)				(1,113)				(1,113)
Stock-based compensation					24								24				24
Dividends on preferred stock							(35)						(35)				(35)
Dividends on common stock (declared per share of $0.480)							(421)						(421)				(421)
Change in equity of noncontrolling interests													—		6		6
Net income (loss)							3,407						3,407		5		3,412
Other comprehensive income (loss), net of income tax											1,912		1,912		1		1,913
Balance at June 30, 2021	$	—	$	12	$	33,440	$	39,318	$	(15,941)	$	12,309	$	69,138	$	285	$	69,423

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

MetLife, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (Unaudited)

(In millions)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	7,256	$	6,486	Net cash provided by (used in) operating activities	$	6,392	$	3,750
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Sales, maturities and repayments of:	Sales, maturities and repayments of:					Sales, maturities and repayments of:
Fixed maturity securities available-for-sale	Fixed maturity securities available-for-sale	63,778		56,872		Fixed maturity securities available-for-sale	48,015		44,199
Equity securities	Equity securities	476		262		Equity securities	473		335
Mortgage loans	Mortgage loans	12,692		7,848		Mortgage loans	6,685		8,626
Real estate and real estate joint ventures	Real estate and real estate joint ventures	1,160		110		Real estate and real estate joint ventures	438		736
Other limited partnership interests	Other limited partnership interests	512		305		Other limited partnership interests	1,227		332
Purchases and originations of:	Purchases and originations of:					Purchases and originations of:
Fixed maturity securities available-for-sale	Fixed maturity securities available-for-sale	(69,525)		(71,503)		Fixed maturity securities available-for-sale	(44,368)		(46,011)
Equity securities	Equity securities	(57)		(154)		Equity securities	(375)		(34)
Mortgage loans	Mortgage loans	(9,909)		(10,137)		Mortgage loans	(10,157)		(6,235)
Real estate and real estate joint ventures	Real estate and real estate joint ventures	(1,174)		(1,106)		Real estate and real estate joint ventures	(615)		(429)
Other limited partnership interests	Other limited partnership interests	(2,092)		(1,279)		Other limited partnership interests	(1,506)		(1,347)
Cash received in connection with freestanding derivatives	Cash received in connection with freestanding derivatives	2,574		5,123		Cash received in connection with freestanding derivatives	2,513		1,769
Cash paid in connection with freestanding derivatives	Cash paid in connection with freestanding derivatives	(6,794)		(2,900)		Cash paid in connection with freestanding derivatives	(4,518)		(5,602)

Sales of businesses, net of cash and cash equivalents disposed of $611 and $0, respectively		3,329		—
Sales of businesses, net of cash and cash equivalents disposed of $67 and $611, respectively						Sales of businesses, net of cash and cash equivalents disposed of $67 and $611, respectively	590		3,329

Purchases of investments in operating joint ventures						Purchases of investments in operating joint ventures	(240)		—
Net change in policy loans	Net change in policy loans	179		106		Net change in policy loans	79		137
Net change in short-term investments	Net change in short-term investments	(3,165)		(35)		Net change in short-term investments	4,219		116
Net change in other invested assets	Net change in other invested assets	(267)		(55)		Net change in other invested assets	(737)		40
Other, net	Other, net	(42)		136		Other, net	(34)		(6)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(8,325)		(16,407)		Net cash provided by (used in) investing activities	1,689		(45)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Policyholder account balances:	Policyholder account balances:					Policyholder account balances:
Deposits	Deposits	75,536		73,626		Deposits	56,109		50,865
Withdrawals	Withdrawals	(71,495)		(64,856)		Withdrawals	(52,428)		(46,995)
Payables for collateral under securities loaned and other transactions:	Payables for collateral under securities loaned and other transactions:					Payables for collateral under securities loaned and other transactions:
Net change in payables for collateral under securities loaned and other transactions	Net change in payables for collateral under securities loaned and other transactions	1,279		8,025		Net change in payables for collateral under securities loaned and other transactions	(7,809)		506
Cash received for other transactions with tenors greater than three months		—		150

Cash paid for other transactions with tenors greater than three months	Cash paid for other transactions with tenors greater than three months	(100)		(175)		Cash paid for other transactions with tenors greater than three months	—		(100)
Long-term debt issued	Long-term debt issued	29		1,124		Long-term debt issued	6		15
Long-term debt repaid	Long-term debt repaid	(540)		(95)		Long-term debt repaid	(23)		(28)
Collateral financing arrangement repaid	Collateral financing arrangement repaid	(39)		(69)		Collateral financing arrangement repaid	(25)		(27)

Financing element on certain derivative instruments and other derivative related transactions, net	Financing element on certain derivative instruments and other derivative related transactions, net	305		(108)		Financing element on certain derivative instruments and other derivative related transactions, net	121		318
Treasury stock acquired in connection with share repurchases	Treasury stock acquired in connection with share repurchases	(3,127)		(580)		Treasury stock acquired in connection with share repurchases	(2,056)		(2,112)
Preferred stock issued, net of issuance costs		—		1,961

Redemption of preferred stock	Redemption of preferred stock	(494)		—		Redemption of preferred stock	—		(494)
Preferred stock redemption premium	Preferred stock redemption premium	(6)		—		Preferred stock redemption premium	—		(6)
Dividends on preferred stock	Dividends on preferred stock	(166)		(168)		Dividends on preferred stock	(92)		(103)
Dividends on common stock	Dividends on common stock	(1,242)		(1,242)		Dividends on common stock	(805)		(829)
Other, net	Other, net	20		129		Other, net	(180)		58
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(40)		17,722		Net cash provided by (used in) financing activities	(7,182)		1,068
Effect of change in foreign currency exchange rates on cash and cash equivalents balances	Effect of change in foreign currency exchange rates on cash and cash equivalents balances	(392)		6		Effect of change in foreign currency exchange rates on cash and cash equivalents balances	(467)		(192)
Change in cash and cash equivalents	Change in cash and cash equivalents	(1,501)		7,807		Change in cash and cash equivalents	432		4,581
Cash and cash equivalents, including subsidiary held-for-sale, beginning of period		20,560		16,598
Cash and cash equivalents, including subsidiary held-for-sale, end of period		$	19,059	$	24,405
Cash and cash equivalents, subsidiary held-for-sale, beginning of period		$	765	$	—
Cash and cash equivalents, subsidiary held-for-sale, end of period		$	103	$	—
Cash and cash equivalents, including subsidiaries held-for-sale, beginning of period						Cash and cash equivalents, including subsidiaries held-for-sale, beginning of period	20,116		20,560
Cash and cash equivalents, including subsidiaries held-for-sale, end of period						Cash and cash equivalents, including subsidiaries held-for-sale, end of period	$	20,548	$	25,141
Cash and cash equivalents, subsidiaries held-for-sale, beginning of period						Cash and cash equivalents, subsidiaries held-for-sale, beginning of period	$	69	$	765
Cash and cash equivalents, subsidiaries held-for-sale, end of period						Cash and cash equivalents, subsidiaries held-for-sale, end of period	$	—	$	104
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	$	19,795	$	16,598	Cash and cash equivalents, beginning of period	$	20,047	$	19,795
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	18,956	$	24,405	Cash and cash equivalents, end of period	$	20,548	$	25,037


Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information					Supplemental disclosures of cash flow information
Net cash paid (received) for:	Net cash paid (received) for:					Net cash paid (received) for:
Interest	Interest	$	606	$	579	Interest	$	435	$	440
Income tax	Income tax	$	861	$	339	Income tax	$	577	$	748
Subsidiaries held-for-sale (Note 3):
Assets held-for-sale		$	7,462	$	—
Liabilities held-for-sale		6,757		—
Net assets held-for-sale		$	705	$	—
Non-cash transactions:	Non-cash transactions:					Non-cash transactions:

Fixed maturity securities available-for-sale received in connection with pension risk transfer transactions						Fixed maturity securities available-for-sale received in connection with pension risk transfer transactions	$	1,258	$	—
Real estate and real estate joint ventures acquired in satisfaction of debt	Real estate and real estate joint ventures acquired in satisfaction of debt	$	172	$	9	Real estate and real estate joint ventures acquired in satisfaction of debt	$	187	$	171
Increase in equity securities due to in-kind distributions received from other limited partnership interests	Increase in equity securities due to in-kind distributions received from other limited partnership interests	$	273	$	66	Increase in equity securities due to in-kind distributions received from other limited partnership interests	$	63	$	151
Reclassification of certain other invested assets to contractholder-directed equity securities and fair value option securities		$	309	$	—

Increase in other liabilities associated with the notice of redemption of preferred stock		$	—	$	1,003
Increase in policyholder account balances associated with funding agreement backed notes issued but not settled						Increase in policyholder account balances associated with funding agreement backed notes issued but not settled	$	184	$	—

See accompanying notes to the interim condensed consolidated financial statements.

Table of Contents

MetLife, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLife is organized into 5 segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); and MetLife Holdings.

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain, including uncertainties associated with the ~~novel coronavirus~~ COVID-19 ~~pandemic (the “COVID-19 Pandemic”).~~pandemic. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, ~~2020~~2021 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the ~~2020~~2021 Annual Report.

Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well as partnerships and joint ventures in which the Company has ~~control,~~a controlling financial interest, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.

Held-for-Sale

The Company classifies a business as held-for-sale when management has approved or received approval to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current estimated fair value and certain other specified criteria are met. The business classified as held-for-sale is recorded at the lower of the carrying value and estimated fair value, less cost to sell. If the carrying value of the business exceeds its estimated fair value, less cost to sell, a loss is recognized and reported in net investment gains (losses). Assets and liabilities related to the business classified as held-for-sale are separately reported in the Company's consolidated balance sheets in the period in which the business is classified as held-for-sale. See Note 3. If a component of the Company has either been disposed of or is classified as held-for-sale and represents a strategic shift that has or will have a major effect on the Company’s operations and financial results, the results of the component are reported in discontinued operations.

~~Reclassifications~~

Certain amounts in the prior year periods’ interim condensed consolidated financial statements and related footnotes thereto have been reclassified to conform to the 2021 presentation as discussed throughout the Notes to the Interim Condensed Consolidated Financial Statements.

Table of Contents

MetLife, Inc.

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

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of ~~new~~ ASUs recently issued by the FASB and the impact of ~~the~~their adoption on the Company’s interim condensed consolidated financial statements.

~~Adoption of New~~Adopted Accounting Pronouncements

The table below describes the impacts of the ASUs recently adopted by the Company.

Standard

Description

Effective Date and
Method of Adoption

Impact on Financial Statements

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting; as clarified and amended by ASU 2021-01, Reference Rate Reform (Topic 848): Scope

The ~~new~~ guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions. ASU 2021-01 amends the scope of the recent reference rate reform guidance. New optional expedients allow derivative instruments impacted by changes in the interest rate used for margining, discounting, or contract price alignment to qualify for certain optional relief.

Effective for contract modifications made between March 12, 2020 and December 31, 2022.

The ~~new~~ guidance ~~reduces~~has reduced the operational and financial impacts of contract modifications that replace a reference rate, such as London Interbank Offered Rate (“LIBOR”), affected by reference rate reform. ~~The~~

Contract modifications for invested assets and derivative instruments occurred during 2021 and have continued into 2022. Based on actions taken to date, the adoption of the ~~new~~ guidance ~~provides relief from current GAAP and is~~has not ~~expected to have~~had a material impact on the Company’s interim condensed consolidated financial statements. The Company does not expect the adoption of this guidance to have a material ongoing impact and will continue to evaluate the impacts of reference rate reform on contract modifications and hedging relationships through December 31, 2022.

ASU ~~2019-12,~~2021-10, ~~Income Taxes~~Government Assistance (Topic ~~740)~~832): ~~Simplifying the Accounting for Income Taxes~~

Disclosures by Business Entities about Government Assistance

The ~~new~~ guidance ~~simplifies~~requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy and can include tax credits and other forms of government assistance. Entities are required to disclose information about (i) the nature of the transactions and the related accounting policy used to account for ~~income taxes by removing certain exceptions to~~ the ~~tax accounting guidance and providing clarification to other specific tax accounting guidance to eliminate variations in practice. Specifically, it removes~~transactions; (ii) the ~~exceptions related to~~line items on the ~~a) incremental approach for intraperiod tax allocation when there is a loss from continuing operations~~balance sheet and income ~~or a gain from other items, b) recognition of a deferred tax liability when foreign investment ownership changes from equity method investment to consolidated subsidiary~~statement that are affected by the transactions, including the associated amounts; and ~~vice versa~~(iii) the significant terms and ~~c) use of interim period tax accounting for year-to-date losses that exceed anticipated losses. The guidance also simplifies the application~~conditions of the ~~income tax guidance~~transactions, including commitments and contingencies.

Effective for ~~franchise taxes that are partially based on income and the accounting for tax law changes during interim~~annual periods ~~clarifies the accounting for transactions that result in a step-up in tax basis of goodwill, provides for the option~~beginning January 1, 2022, to elect allocation of consolidated income taxes to entities disregarded by taxing authorities for their stand-alone reporting, and requires that an entity reflect the effect of an enacted change in tax laws or ratesbe applied prospectively.

The Company is in the process of evaluating and preparing the required annual ~~effective tax rate computation~~disclosures, as applicable, to be included in ~~the interim period that includes the enactment date.~~

~~January 1, 2021. The Company adopted, using a prospective approach.~~

~~The adoption of the new guidance did not have a material impact on the Company’s interim condensed~~its 2022 consolidated financial statements.

Table of Contents

MetLife, Inc.

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

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Future Adoption of ~~New~~ Accounting Pronouncements

ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company’s interim condensed consolidated financial statements or disclosures. ASUs issued but not yet adopted as of ~~September~~June 30, ~~2021~~2022 that are currently being assessed and may or may not have a material impact on the Company’s interim condensed consolidated financial statements or disclosures are summarized in the table below.


Standard	Description	Effective Date and Method of Adoption	Impact on Financial Statements
ASU ~~2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~	The new guidance indicates how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination.	~~January 1, 2023, to be applied prospectively (with early adoption permitted).~~	~~The Company is currently evaluating the impact of the new guidance on its interim condensed consolidated financial statements.~~
~~ASU~~ 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date, as amended by ASU 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application	The ~~new~~ guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees (“market risk benefits”) on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of deferred policy acquisition costs (“DAC”) for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The amendments in ASU 2019-09 defer the effective date of ASU 2018-12 to January 1, 2022 for all entities, and the amendments in ASU 2020-11 further defer the effective date of ASU 2018-12 for an additional year to January 1, 2023 for all entities.	January 1, 2023, to be applied retrospectively to January 1, 2021 (with early adoption permitted). Estimated impacts from adoption as of the transition date of January 1, 2021 are measured using market assumptions appropriate as of that date. Such estimates do not reflect changes in market assumptions subsequent to January 1, 2021.	The Company’s implementation efforts and the evaluation of the impacts of the ~~new~~ guidance on its consolidated financial statements, as well as its systems, processes, and controls, continue to progress. Given the nature and extent of the required changes to a significant portion of the Company’s operations, the adoption of this guidance is expected to have a material impact on its financial position, results of operations, and ~~disclosures, as well as systems, processes, and controls.~~ disclosures. The Company ~~expects to~~will adopt the ~~new~~ guidance effective January 1, ~~2023 using the~~2023. The modified retrospective approach will be used, except ~~for~~in regard to market risk benefits where the Company will use the full retrospective approach. Based upon these transition methods, the Company currently estimates that the January 1, 2021 transition date impact from adoption is expected to result in a decrease to total equity in a range of approximately $21.5 billion to $24.0 billion, net of income tax. The ~~Company continues~~expected decrease in total equity includes the estimated impact to ~~evaluate the impact~~Accumulated other comprehensive income (loss) (“AOCI”) which, as of the ~~new guidance on its interim condensed consolidated financial statements.~~ ~~The Company has created~~transition date, is expected to result in a ~~governance framework and is managing~~decrease in a ~~detailed implementation plan~~range of approximately $17.0 billion to ~~support timely application~~$18.5 billion, net of the new guidance. The Company has made progress and continues to refine key accounting policy decisions, technology solutions and updates to internal controls. These activities include, but are not limited to, modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes. income tax. The most significant drivers of the expected decrease in AOCI are the anticipated impacts of the changes in the discount rates as of the transition ~~impacts are~~date to be used in measuring the liability for future policy benefits for traditional and limited payment contracts and the non-performance risk in the valuation of the Company’s market risk benefits. The expected decrease in AOCI is expected to be ~~from: (i)~~partially offset by the removal of loss recognition balances recorded in AOCI related to unrealized investment gains associated with certain long-duration products. The expected decrease in total equity also includes the estimated impact to retained earnings which, from adoption, is expected to result in a decrease in a range of approximately $4.5 billion to $5.5 billion, net of income tax. This decrease results from the requirement to account for variable annuity guarantees as market risk benefits measured at fair value (except for the changes in fair value already recognized under an existing accounting model) and ~~(ii) adjustments~~other valuation impacts to ~~AOCI for the change in the current discount rate to be used in measuring~~ the liability for future policy ~~benefits for traditional and limited payment contracts and the removal of shadow account balances.~~benefits.

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MetLife, Inc.

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

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)


Standard	Description	Effective Date and Method of Adoption	Impact on Financial Statements
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The amendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. In addition, the amendments clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require entities that hold equity securities subject to contractual sale restrictions to make disclosures about the fair value of such equity securities, the nature and remaining duration of the restriction(s) and, the circumstances that could cause a lapse in the restriction(s).	January 1, 2024, to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption (with early adoption permitted).	The Company is currently evaluating the impact of the guidance on its interim condensed consolidated financial statements.
ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The amendments in the new ASU eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.	January 1, 2023, to be applied prospectively; however, for the transition method related to the recognition and measurement of TDRs, an entity can apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Entities are permitted to early adopt these amendments, including adoption in any interim period, provided that the amendments are adopted as of the beginning of the annual reporting period that includes the interim period of adoption. In addition, entities are permitted to elect to early adopt the amendments related to TDRs accounting and related disclosure enhancements separately from the amendments related to certain vintage disclosures.	The Company is currently evaluating the impact of the guidance on its interim condensed consolidated financial statements and the alternative methods of adoption.
ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers	The guidance indicates how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination.	January 1, 2023, to be applied prospectively (with early adoption permitted).	The Company is currently evaluating the impact of the guidance on its interim condensed consolidated financial statements.

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MetLife, Inc.

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

2. Segment Information

MetLife is organized into 5 segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other.

U.S.

The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions (“RIS”). ~~Prior to its disposition, the Property & Casualty business was included in the U.S. segment. See Note 3.~~

•The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and individual disability, vision and accident & health insurance.

•The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, structured settlements, longevity reinsurance solutions, benefit funding solutions and capital markets investment ~~products, as well as solutions for funding postretirement benefits and company-, bank- and trust-owned life insurance.~~

•~~The Property & Casualty business offered personal lines of property and casualty insurance, including private passenger automobile and homeowners’ insurance.~~products.

Asia

The Asia segment offers a broad range of products and services to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, accident & health insurance and retirement and savings.

Latin America

The Latin America segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, retirement and savings, accident & health insurance and credit insurance.

EMEA

The EMEA segment offers products to individuals, corporations, other institutions, and their respective employees, which include life insurance, accident & health insurance, retirement and savings and credit insurance.

MetLife Holdings

The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets in the United States. These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance.

Corporate & Other

Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are: the excess capital, as well as certain charges and activities, not allocated to the segments (including external integration and disposition costs, internal resource costs for associates committed to acquisitions and dispositions and enterprise-wide strategic initiative restructuring charges), interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to affiliated reinsurance, investment expenses and intersegment loans bearing interest rates commensurate with related borrowings), and the Company’s investment management business (through which the Company provides public fixed income, private capital and real estate investment solutions to institutional investors worldwide).

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~2. Segment Information (continued)~~

Financial Measures and Segment Accounting Policies

Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.

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MetLife, Inc.

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

2. Segment Information (continued)

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.

The financial measures of adjusted revenues and adjusted expenses focus on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses). Adjusted expenses also excludes goodwill impairments.

The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:

•Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB fees”);

•Net investment income: (i) includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed equity securities, (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP; and

•Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in association with services provided under transition service agreements (“TSA fees”).

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~2. Segment Information (continued)~~

The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:

•Policyholder benefits and claims and policyholder dividends excludes: (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (iii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);

•Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and excludes certain amounts related to net investment income earned on contractholder-directed equity securities;

•Amortization of DAC and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;

•Amortization of negative VOBA excludes amounts related to Market value adjustments;

•Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•Other expenses excludes: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements costs, and (iii) acquisition, integration and other costs. Other expenses includes TSA fees.

Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

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MetLife, Inc.

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

2. Segment Information (continued)

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.

The Company’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. The Company’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, net income (loss) or adjusted earnings.

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

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MetLife, Inc.

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

2. Segment Information (continued)


Three Months Ended September 30, 2021		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Three Months Ended June 30, 2022																				Three Months Ended June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)																			(In millions)
Revenues	Revenues																			Revenues
Premiums	Premiums	$	5,746	$	1,594	$	705	$	532	$	805	$	16	$	9,398	$	57	$	9,455	Premiums	$	8,254	$	1,395	$	826	$	492	$	760	$	(6)	$	11,721	$	—	$	11,721
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	279		477		274		128		279		—		1,437		84		1,521		Universal life and investment-type product policy fees	284		498		296		86		339		2		1,505		11		1,516
Net investment income	Net investment income	2,098		1,354		306		46		1,771		93		5,668		(100)		5,568		Net investment income	1,710		1,012		459		38		1,280		5		4,504		(921)		3,583
Other revenues	Other revenues	383		17		9		10		57		108		584		79		663		Other revenues	405		24		10		8		23		98		568		48		616
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		—		—		—		(84)		(84)		Net investment gains (losses)	—		—		—		—		—		—		—		(685)		(685)
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		—		—		—		(218)		(218)		Net derivative gains (losses)	—		—		—		—		—		—		—		(1,195)		(1,195)
Total revenues	Total revenues	8,506		3,442		1,294		716		2,912		217		17,087		(182)		16,905		Total revenues	10,653		2,929		1,591		624		2,402		99		18,298		(2,742)		15,556
Expenses	Expenses																			Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	6,118		1,220		885		268		1,611		9		10,111		181		10,292		Policyholder benefits and claims and policyholder dividends	8,320		1,185		811		237		1,433		(2)		11,984		(1)		11,983
Interest credited to policyholder account balances	Interest credited to policyholder account balances	362		513		63		17		212		—		1,167		120		1,287		Interest credited to policyholder account balances	387		493		84		20		203		—		1,187		(695)		492
Capitalization of DAC	Capitalization of DAC	(17)		(373)		(109)		(110)		(8)		(3)		(620)		(15)		(635)		Capitalization of DAC	(14)		(370)		(120)		(108)		(8)		(2)		(622)		—		(622)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	26		470		62		118		80		2		758		58		816		Amortization of DAC and VOBA	14		321		90		95		74		2		596		20		616
Amortization of negative VOBA	Amortization of negative VOBA	—		(5)		—		(1)		—		—		(6)		—		(6)		Amortization of negative VOBA	—		(8)		—		(2)		—		—		(10)		—		(10)
Interest expense on debt	Interest expense on debt	1		—		2		—		1		236		240		—		240		Interest expense on debt	1		—		4		—		2		219		226		—		226
Other expenses	Other expenses	886		811		363		308		255		137		2,760		109		2,869		Other expenses	949		763		370		298		242		184		2,806		67		2,873
Total expenses	Total expenses	7,376		2,636		1,266		600		2,151		381		14,410		453		14,863		Total expenses	9,657		2,384		1,239		540		1,946		401		16,167		(609)		15,558
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	235		237		(1)		22		155		(96)		552		(99)		453		Provision for income tax expense (benefit)	208		159		85		20		92		(88)		476		(616)		(140)
Adjusted earnings	Adjusted earnings	$	895	$	569	$	29	$	94	$	606	$	(68)	2,125						Adjusted earnings	$	788	$	386	$	267	$	64	$	364	$	(214)	1,655
Adjustments to:	Adjustments to:																			Adjustments to:
Total revenues	Total revenues													(182)						Total revenues													(2,742)
Total expenses	Total expenses													(453)						Total expenses													609
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit													99						Provision for income tax (expense) benefit													616
Net income (loss)	Net income (loss)													$	1,589			$	1,589	Net income (loss)													$	138			$	138

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MetLife, Inc.

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

2. Segment Information (continued)


Three Months Ended September 30, 2020		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Three Months Ended June 30, 2021																				Three Months Ended June 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)																			(In millions)
Revenues	Revenues																			Revenues
Premiums	Premiums	$	6,333	$	1,654	$	529	$	551	$	876	$	(8)	$	9,935	$	—	$	9,935	Premiums	$	5,474	$	1,582	$	636	$	621	$	839	$	(20)	$	9,132	$	—	$	9,132
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	263		595		225		116		269		1		1,469		28		1,497		Universal life and investment-type product policy fees	282		436		287		107		273		1		1,386		36		1,422
Net investment income	Net investment income	1,827		1,088		221		67		1,427		58		4,688		41		4,729		Net investment income	1,998		1,158		308		62		1,543		48		5,117		163		5,280
Other revenues	Other revenues	237		16		7		13		61		82		416		39		455		Other revenues	380		19		11		16		69		109		604		60		664
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		—		—		—		(20)		(20)		Net investment gains (losses)	—		—		—		—		—		—		—		1,605		1,605
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		—		—		—		(581)		(581)		Net derivative gains (losses)	—		—		—		—		—		—		—		421		421
Total revenues	Total revenues	8,660		3,353		982		747		2,633		133		16,508		(493)		16,015		Total revenues	8,134		3,195		1,242		806		2,724		138		16,239		2,285		18,524
Expenses	Expenses																			Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	6,108		1,291		575		304		1,697		(6)		9,969		237		10,206		Policyholder benefits and claims and policyholder dividends	5,739		1,233		724		333		1,549		(13)		9,565		76		9,641
Interest credited to policyholder account balances	Interest credited to policyholder account balances	381		470		52		29		217		—		1,149		267		1,416		Interest credited to policyholder account balances	359		496		60		25		210		—		1,150		365		1,515
Capitalization of DAC	Capitalization of DAC	(119)		(431)		(84)		(122)		(5)		(3)		(764)		—		(764)		Capitalization of DAC	(13)		(395)		(100)		(122)		(9)		(3)		(642)		—		(642)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	123		506		62		125		177		2		995		71		1,066		Amortization of DAC and VOBA	8		296		83		94		56		3		540		(3)		537
Amortization of negative VOBA	Amortization of negative VOBA	—		(14)		—		(1)		—		—		(15)		—		(15)		Amortization of negative VOBA	—		(8)		—		(2)		—		—		(10)		—		(10)
Interest expense on debt	Interest expense on debt	2		—		1		—		2		224		229		—		229		Interest expense on debt	2		—		1		—		2		223		228		—		228
Other expenses	Other expenses	1,026		869		313		340		231		120		2,899		55		2,954		Other expenses	898		832		343		349		244		34		2,700		68		2,768
Total expenses	Total expenses	7,521		2,691		919		675		2,319		337		14,462		630		15,092		Total expenses	6,993		2,454		1,111		677		2,052		244		13,531		506		14,037
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	239		197		24		20		61		(132)		409		(195)		214		Provision for income tax expense (benefit)	239		221		34		35		136		(81)		584		491		1,075
Adjusted earnings	Adjusted earnings	$	900	$	465	$	39	$	52	$	253	$	(72)	1,637						Adjusted earnings	$	902	$	520	$	97	$	94	$	536	$	(25)	2,124
Adjustments to:	Adjustments to:																			Adjustments to:
Total revenues	Total revenues													(493)						Total revenues													2,285
Total expenses	Total expenses													(630)						Total expenses													(506)
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit													195						Provision for income tax (expense) benefit													(491)
Net income (loss)	Net income (loss)													$	709			$	709	Net income (loss)													$	3,412			$	3,412

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MetLife, Inc.

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

2. Segment Information (continued)


Nine Months Ended September 30, 2021		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Six Months Ended June 30, 2022																				Six Months Ended June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)																			(In millions)
Revenues	Revenues																			Revenues
Premiums	Premiums	$	16,919	$	4,861	$	1,936	$	1,751	$	2,471	$	54	$	27,992	$	922	$	28,914	Premiums	$	15,418	$	2,948	$	1,558	$	1,001	$	1,536	$	(10)	$	22,451	$	41	$	22,492
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	858		1,371		831		302		826		1		4,189		145		4,334		Universal life and investment-type product policy fees	581		946		586		174		608		2		2,897		37		2,934
Net investment income	Net investment income	6,106		3,776		913		171		4,960		153		16,079		83		16,162		Net investment income	3,584		2,254		781		79		2,689		109		9,496		(1,629)		7,867
Other revenues	Other revenues	1,159		54		30		39		188		303		1,773		185		1,958		Other revenues	831		45		19		17		67		199		1,178		98		1,276
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		—		—		—		1,655		1,655		Net investment gains (losses)	—		—		—		—		—		—		—		(1,203)		(1,203)
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		—		—		—		(2,032)		(2,032)		Net derivative gains (losses)	—		—		—		—		—		—		—		(2,054)		(2,054)
Total revenues	Total revenues	25,042		10,062		3,710		2,263		8,445		511		50,033		958		50,991		Total revenues	20,414		6,193		2,944		1,271		4,900		300		36,022		(4,710)		31,312
Expenses	Expenses																			Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	17,999		3,750		2,370		944		4,683		36		29,782		921		30,703		Policyholder benefits and claims and policyholder dividends	15,886		2,413		1,580		519		2,951		(9)		23,340		34		23,374
Interest credited to policyholder account balances	Interest credited to policyholder account balances	1,080		1,498		182		66		632		—		3,458		695		4,153		Interest credited to policyholder account balances	734		991		152		37		405		—		2,319		(1,197)		1,122
Capitalization of DAC	Capitalization of DAC	(48)		(1,203)		(304)		(359)		(25)		(9)		(1,948)		(104)		(2,052)		Capitalization of DAC	(37)		(762)		(233)		(209)		(15)		(5)		(1,261)		(11)		(1,272)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	50		1,080		205		274		190		7		1,806		137		1,943		Amortization of DAC and VOBA	28		609		170		181		150		4		1,142		11		1,153
Amortization of negative VOBA	Amortization of negative VOBA	—		(20)		—		(5)		—		—		(25)		—		(25)		Amortization of negative VOBA	—		(16)		—		(3)		—		—		(19)		—		(19)
Interest expense on debt	Interest expense on debt	4		—		4		—		4		683		695		1		696		Interest expense on debt	3		—		7		—		3		438		451		—		451
Other expenses	Other expenses	2,695		2,542		1,041		1,006		752		278		8,314		439		8,753		Other expenses	1,928		1,600		724		594		478		320		5,644		146		5,790
Total expenses	Total expenses	21,780		7,647		3,498		1,926		6,236		995		42,082		2,089		44,171		Total expenses	18,542		4,835		2,400		1,119		3,972		748		31,616		(1,017)		30,599
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	681		703		46		78		449		(288)		1,669		(213)		1,456		Provision for income tax expense (benefit)	391		392		135		36		187		(180)		961		(1,060)		(99)
Adjusted earnings	Adjusted earnings	$	2,581	$	1,712	$	166	$	259	$	1,760	$	(196)	6,282						Adjusted earnings	$	1,481	$	966	$	409	$	116	$	741	$	(268)	3,445
Adjustments to:	Adjustments to:																			Adjustments to:
Total revenues	Total revenues													958						Total revenues													(4,710)
Total expenses	Total expenses													(2,089)						Total expenses													1,017
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit													213						Provision for income tax (expense) benefit													1,060
Net income (loss)	Net income (loss)													$	5,364			$	5,364	Net income (loss)													$	812			$	812

1617

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MetLife, Inc.

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

2. Segment Information (continued)


Nine Months Ended September 30, 2020		U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Six Months Ended June 30, 2021																				Six Months Ended June 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)																			(In millions)
Revenues	Revenues																			Revenues
Premiums	Premiums	$	17,191	$	4,874	$	1,658	$	1,676	$	2,669	$	17	$	28,085	$	52	$	28,137	Premiums	$	11,173	$	3,267	$	1,231	$	1,219	$	1,666	$	38	$	18,594	$	865	$	19,459
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	806		1,445		733		324		812		2		4,122		105		4,227		Universal life and investment-type product policy fees	579		894		557		174		547		1		2,752		61		2,813
Net investment income	Net investment income	5,018		2,792		699		199		3,723		22		12,453		(576)		11,877		Net investment income	4,008		2,422		607		125		3,189		60		10,411		183		10,594
Other revenues	Other revenues	717		44		28		37		166		238		1,230		120		1,350		Other revenues	776		37		21		29		131		195		1,189		106		1,295
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		—		—		—		(77)		(77)		Net investment gains (losses)	—		—		—		—		—		—		—		1,739		1,739
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		—		—		—		2,910		2,910		Net derivative gains (losses)	—		—		—		—		—		—		—		(1,814)		(1,814)
Total revenues	Total revenues	23,732		9,155		3,118		2,236		7,370		279		45,890		2,534		48,424		Total revenues	16,536		6,620		2,416		1,547		5,533		294		32,946		1,140		34,086
Expenses	Expenses																			Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	16,581		3,867		1,634		877		5,063		23		28,045		432		28,477		Policyholder benefits and claims and policyholder dividends	11,881		2,530		1,485		676		3,072		27		19,671		740		20,411
Interest credited to policyholder account balances	Interest credited to policyholder account balances	1,251		1,362		178		83		654		—		3,528		(70)		3,458		Interest credited to policyholder account balances	718		985		119		49		420		—		2,291		575		2,866
Capitalization of DAC	Capitalization of DAC	(353)		(1,203)		(258)		(367)		(15)		(8)		(2,204)		(5)		(2,209)		Capitalization of DAC	(31)		(830)		(195)		(249)		(17)		(6)		(1,328)		(89)		(1,417)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	357		1,105		206		340		288		6		2,302		112		2,414		Amortization of DAC and VOBA	24		610		143		156		110		5		1,048		79		1,127
Amortization of negative VOBA	Amortization of negative VOBA	—		(30)		—		(5)		—		—		(35)		—		(35)		Amortization of negative VOBA	—		(15)		—		(4)		—		—		(19)		—		(19)
Interest expense on debt	Interest expense on debt	6		—		3		—		5		669		683		—		683		Interest expense on debt	3		—		2		—		3		447		455		1		456
Other expenses	Other expenses	3,104		2,540		965		1,000		698		390		8,697		176		8,873		Other expenses	1,809		1,731		678		698		497		141		5,554		330		5,884
Total expenses	Total expenses	20,946		7,641		2,728		1,928		6,693		1,080		41,016		645		41,661		Total expenses	14,404		5,011		2,232		1,326		4,085		614		27,672		1,636		29,308
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	583		443		124		62		127		(418)		921		582		1,503		Provision for income tax expense (benefit)	446		466		47		56		294		(192)		1,117		(114)		1,003
Adjusted earnings	Adjusted earnings	$	2,203	$	1,071	$	266	$	246	$	550	$	(383)	3,953						Adjusted earnings	$	1,686	$	1,143	$	137	$	165	$	1,154	$	(128)	4,157
Adjustments to:	Adjustments to:																			Adjustments to:
Total revenues	Total revenues													2,534						Total revenues													1,140
Total expenses	Total expenses													(645)						Total expenses													(1,636)
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit													(582)						Provision for income tax (expense) benefit													114
Net income (loss)	Net income (loss)													$	5,260			$	5,260	Net income (loss)													$	3,775			$	3,775

1718

Table of Contents

MetLife, Inc.

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

2. Segment Information (continued)

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(In millions)					(In millions)
U.S.	U.S.	$	282,606	$	291,483	U.S.	$	251,436	$	282,741
Asia	Asia	169,699		173,884		Asia	148,549		169,291
Latin America	Latin America	60,592		75,047		Latin America	56,233		59,763
EMEA	EMEA	27,523		28,372		EMEA	16,907		27,038
MetLife Holdings	MetLife Holdings	180,239		184,566		MetLife Holdings	156,189		179,551
Corporate & Other	Corporate & Other	41,005		41,794		Corporate & Other	33,579		41,324
Total	Total	$	761,664	$	795,146	Total	$	662,893	$	759,708

3. Dispositions

~~Disposition of MetLife Seguros S.A.~~

In September 2021, the Company sold its wholly-owned Argentinian subsidiary, MetLife Seguros S.A. (“MetLife Seguros”). In connection with the sale, a loss of $205 million, net of income tax, was recorded for the three months and nine months ended September 30, 2021, which is reflected in net investment gains (losses). See Note 10 for the changes in AOCI related to the sale. At December 31, 2020, MetLife Seguros represented $201 million of total assets in the Latin America segment. MetLife Seguros results of operations are reported in the Latin America segment adjusted earnings through the date of sale.

~~Pending~~ Disposition of MetLife Poland and Greece

In July 2021, the Company entered into definitive agreements to sell its wholly-owned subsidiaries in Poland and Greece (collectively, “MetLife Poland and Greece”) to NN Group N.V. for $738 million in total consideration, including a pre-closing dividend of $43 million. In January 2022 and April 2022, the Company completed the sales of its wholly-owned subsidiaries in Greece and Poland, respectively. In connection with the ~~pending sale, an expected~~sales, a loss of ~~$202~~$25 million, net of income tax, was recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, which iswas reflected in net investment gains (losses). and resulted in a total loss on the sales of $239 million, net of income tax. MetLife Poland and Greece results of operations are reported in the EMEA segment adjusted earnings through June 30, 2021. See Note 2 for information on accounting for divested business. ~~The transaction is expected to close~~

MetLife Poland and Greece met the criteria in the ~~first half~~second quarter of ~~2022 and is subject~~2021 to ~~regulatory approvals and satisfaction of other customary closing conditions.~~

~~The pending disposition meets the criteria for~~be classified as held-for-sale ~~accounting~~ but ~~does~~did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities are included in the separate held-for-sale line items of the asset and liability sections of the interim condensed consolidated balance ~~sheet.~~

~~Table of Contents~~

~~MetLife, Inc.~~

~~Notes to~~sheet until the ~~Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~3. Dispositions (continued)~~

~~The following table summarizes the assets and liabilities held-for-sale:~~


	~~September 30, 2021~~
	~~(In millions)~~
~~Assets:~~
~~Fixed maturity securities available-for-sale~~	$	~~2,143~~
~~Contractholder-directed equity securities~~	~~1,098~~
~~Other investments~~	~~136~~
~~Total investments~~	~~3,377~~
~~Cash and cash equivalents~~	~~103~~
~~Deferred policy acquisition costs and value of business acquired~~	~~139~~
~~Other~~	~~275~~
~~Separate accounts assets~~	~~3,568~~
~~Total assets held-for-sale~~	$	~~7,462~~

~~Liabilities:~~
~~Future policy benefits~~	$	~~940~~
~~Policyholder account balances~~	~~2,013~~
~~Other policy-related balances~~	~~103~~
~~Other~~	~~133~~
~~Separate account liabilities~~	~~3,568~~
~~Total liabilities held-for-sale~~	$	~~6,757~~

~~MetLife Poland and Greece income (loss) before provision for income tax as reflected~~quarter in the interim condensed consolidated statements of operations was $12 million and $40 million for the three months and nine months ended September 30, 2021, respectively, and ($5) million and $29 million for the three months and nine months ended September 30, 2020, respectively.

~~Disposition of Metropolitan Property and Casualty Insurance Company~~

In December 2020, the Company entered into a definitive agreement to sell its wholly-owned subsidiary, Metropolitan Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”) to Farmers Group, Inc. for $3.9 billion in cash. In addition, the Company and the Farmers Exchanges agreed to establish a 10-year strategic partnership through which the Farmers Insurance Group will offer its personal line products on MetLife’s U.S. Group Benefits platform which commenced when the transaction closed. MetLife P&C results of operations are reported in the U.S. segment adjusted earnings through December 31, 2020. See Note 2 for more information on divested businesses. In April 2021, the Company completed the sale of MetLife P&C. As a result of the sale, the Company recognized a gain of $1.4 billion ($1.1 billion, net of income tax) in net investment gains (losses) for the nine months ended September 30, 2021.

~~The~~ disposition met the criteria for held-for-sale accounting but did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities were included in the separate held-for-sale line items of the asset and liability sections of the interim condensed consolidated balance sheets at December 31, 2020.is completed.

Table of Contents

MetLife, Inc.

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

3. Dispositions (continued)

The following table summarizes the assets and liabilities held-for-sale:


	December 31, ~~2020~~2021
	(In millions)
Assets:
Fixed maturity securities available-for-sale	$	~~4,096~~2,043
~~Equity~~Contractholder-directed equity securities	571,114
~~Mortgage loans~~Other investments	~~355~~
~~Other invested assets~~	29118
Total investments	~~4,537~~3,275
Cash and cash equivalents	~~765~~69
~~Accrued investment income~~	38
~~Premiums, reinsurance and other receivables~~	~~1,411~~
Deferred policy acquisition costs and value of business acquired	~~196~~
~~Goodwill~~	~~328~~138
Other ~~assets~~	~~143~~259
Separate account assets	3,497
Total assets held-for-sale	$	~~7,418~~7,238

Liabilities:
Future policy benefits	$	~~3,506~~916
Policyholder account balances	2,005
Other policy-related balances	33103
~~Payables for collateral under securities loaned and other transactions~~Other	~~862~~113
~~Other~~Separate account liabilities	~~249~~3,497
Total liabilities held-for-sale	$	~~4,650~~6,634

MetLife ~~P&C~~Poland and Greece income (loss) before provision for income tax as reflected in the interim condensed consolidated statements of operations was ~~$121 million for the nine months ended September 30, 2021,~~$0 and ~~$20 million and $254~~$19 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2022, respectively, and $13 million and $28 million for the three months and six months ended June 30, 2021, respectively.

~~Disposition of Joint-stock Company MetLife Insurance Company~~

In January 2021, the Company completed the sale of its wholly-owned Russian subsidiary, the Joint-stock Company MetLife Insurance Company. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report for further information.

4. Insurance

Guarantees

As discussed in Notes 1 and 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report, the Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. Guaranteed minimum accumulation benefits (“GMABs”), the non-life contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”) and certain non-life contingent portions of GMIBs are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 7.

The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.

Table of Contents

MetLife, Inc.

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

4. Insurance (continued)

Information regarding the Company’s guarantee exposure, which includes direct and assumed business, but excludes offsets from hedging or ceded reinsurance, if any, was as follows at:


		September 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		In the Event of Death			At Annuitization			In the Event of Death			At Annuitization				In the Event of Death			At Annuitization			In the Event of Death			At Annuitization
		(Dollars in millions)													(Dollars in millions)
Annuity Contracts:	Annuity Contracts:													Annuity Contracts:
Variable Annuity Guarantees:	Variable Annuity Guarantees:													Variable Annuity Guarantees:
Total account value (1), (2), (3)	Total account value (1), (2), (3)	$	62,462		$	23,049		$	65,044		$	24,170		Total account value (1), (2), (3)	$	49,087		$	17,946		$	62,281		$	23,121
Separate account value (1)	Separate account value (1)	$	41,617		$	21,380		$	42,585		$	22,370		Separate account value (1)	$	31,724		$	16,516		$	42,043		$	21,508
Net amount at risk (2)	Net amount at risk (2)	$	1,631	(4)	$	519	(5)	$	1,579	(4)	$	614	(5)	Net amount at risk (2)	$	4,878	(4)	$	616	(5)	$	1,490	(4)	$	500	(5)
Average attained age of contractholders	Average attained age of contractholders	69 years			67 years			68 years			66 years			Average attained age of contractholders	69 years			68 years			68 years			66 years
Other Annuity Guarantees:	Other Annuity Guarantees:													Other Annuity Guarantees:
Total account value (1), (3)	Total account value (1), (3)	N/A			$	5,009		N/A			$	6,030		Total account value (1), (3)	N/A			$	4,150		N/A			$	5,002
Net amount at risk	Net amount at risk	N/A			$	193	(6)	N/A			$	459	(6)	Net amount at risk	N/A			$	188	(6)	N/A			$	196	(6)
Average attained age of contractholders	Average attained age of contractholders	N/A			56 years			N/A			50 years			Average attained age of contractholders	N/A			57 years			N/A			56 years


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
		Secondary Guarantees		Paid-Up Guarantees		Secondary Guarantees		Paid-Up Guarantees			Secondary Guarantees		Paid-Up Guarantees		Secondary Guarantees		Paid-Up Guarantees
		(Dollars in millions)									(Dollars in millions)
Universal and Variable Life Contracts:	Universal and Variable Life Contracts:									Universal and Variable Life Contracts:
Total account value (1), (3)	Total account value (1), (3)	$	13,532	$	2,718	$	13,426	$	2,808	Total account value (1), (3)	$	11,889	$	2,633	$	13,678	$	2,694
Net amount at risk (7)	Net amount at risk (7)	$	78,416	$	12,878	$	82,940	$	13,557	Net amount at risk (7)	$	76,788	$	12,211	$	78,762	$	12,657
Average attained age of policyholders	Average attained age of policyholders	55 years		66 years		54 years		65 years		Average attained age of policyholders	55 years		66 years		55 years		66 years

__________________

(1)The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.

(2)Includes amounts, which are not reported on the interim condensed consolidated balance sheets, from assumed variable annuity guarantees from the Company’s former operating joint venture in Japan.

(3)Includes the ~~contractholder’s~~contractholders’ 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.

Table of Contents

MetLife, Inc.

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

4. Insurance (continued)

Liabilities for Unpaid Claims and Claim Expenses

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
		(In millions)					(In millions)
Balance, beginning of period	Balance, beginning of period	$	18,591	$	19,216	Balance, beginning of period	$	20,013	$	18,591
Less: Reinsurance recoverables	Less: Reinsurance recoverables	2,417		2,377		Less: Reinsurance recoverables	3,121		2,417
Net balance, beginning of period	Net balance, beginning of period	16,174		16,839		Net balance, beginning of period	16,892		16,174
Incurred related to:	Incurred related to:					Incurred related to:
Current period	Current period	20,667		19,664		Current period	13,265		13,640
Prior periods (1)	Prior periods (1)	960		234		Prior periods (1)	683		802
Total incurred	Total incurred	21,627		19,898		Total incurred	13,948		14,442
Paid related to:	Paid related to:					Paid related to:
Current period	Current period	(14,426)		(13,803)		Current period	(8,347)		(8,806)
Prior periods	Prior periods	(6,416)		(5,378)		Prior periods	(5,241)		(5,408)
Total paid	Total paid	(20,842)		(19,181)		Total paid	(13,588)		(14,214)
Reclassified to liabilities held-for-sale (2)	Reclassified to liabilities held-for-sale (2)	(55)		—		Reclassified to liabilities held-for-sale (2)	—		(59)
Dispositions ~~(3)~~	Dispositions ~~(3)~~	(64)		—		Dispositions ~~(3)~~	—		(53)
Net balance, end of period	Net balance, end of period	16,840		17,556		Net balance, end of period	17,252		16,290
Add: Reinsurance recoverables	Add: Reinsurance recoverables	2,910		2,521		Add: Reinsurance recoverables	3,012		2,883
Balance, end of period (included in future policy benefits and other policy-related balances)	Balance, end of period (included in future policy benefits and other policy-related balances)	$	19,750	$	20,077	Balance, end of period (included in future policy benefits and other policy-related balances)	$	20,264	$	19,173

__________________

(1)~~For both the nine~~The six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020,~~include incurred claim activity and claim adjustment expenses associated with prior periods ~~increased due to events incurred in prior periods~~ but reported in the respective current ~~period.~~period, which contain impacts related to the COVID-19 pandemic, partially offset by additional premiums recorded for experience-rated contracts that are not reflected in the table above.

(2)~~See Note 3 for information on the pending disposition of MetLife Poland and Greece.~~

~~(3)~~See Note 3 for information on the Company’s business dispositions.

5. Closed Block

On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain individual life insurance policies of MLIC.

Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of the closed block.

Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.

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MetLife, Inc.

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

5. Closed Block (continued)

Information regarding the closed block liabilities and assets designated to the closed block was as follows at:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(In millions)					(In millions)
Closed Block Liabilities	Closed Block Liabilities					Closed Block Liabilities
Future policy benefits	Future policy benefits	$	38,191	$	38,758	Future policy benefits	$	37,593	$	38,046
Other policy-related balances	Other policy-related balances	289		321		Other policy-related balances	274		290
Policyholder dividends payable	Policyholder dividends payable	299		337		Policyholder dividends payable	250		253
Policyholder dividend obligation	Policyholder dividend obligation	1,952		2,969		Policyholder dividend obligation	—		1,682
Deferred income tax liability	Deferred income tax liability	175		130		Deferred income tax liability	—		210
Other liabilities	Other liabilities	269		172		Other liabilities	368		263
Total closed block liabilities	Total closed block liabilities	41,175		42,687		Total closed block liabilities	38,485		40,744
Assets Designated to the Closed Block	Assets Designated to the Closed Block					Assets Designated to the Closed Block
Investments:	Investments:					Investments:
Fixed maturity securities available-for-sale, at estimated fair value	Fixed maturity securities available-for-sale, at estimated fair value	25,977		27,186		Fixed maturity securities available-for-sale, at estimated fair value	21,257		25,669
Equity securities, at estimated fair value	Equity securities, at estimated fair value	21		24		Equity securities, at estimated fair value	14		21
Mortgage loans	Mortgage loans	6,441		6,807		Mortgage loans	6,624		6,417
Policy loans	Policy loans	4,235		4,355		Policy loans	4,120		4,191
Real estate and real estate joint ventures	Real estate and real estate joint ventures	575		559		Real estate and real estate joint ventures	583		565
Other invested assets	Other invested assets	540		468		Other invested assets	712		535
Total investments	Total investments	37,789		39,399		Total investments	33,310		37,398
Cash and cash equivalents	Cash and cash equivalents	173		—		Cash and cash equivalents	201		126
Accrued investment income	Accrued investment income	391		402		Accrued investment income	379		384
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	40		50		Premiums, reinsurance and other receivables	43		50
Current income tax recoverable	Current income tax recoverable	52		28		Current income tax recoverable	91		81
Deferred income tax asset						Deferred income tax asset	196		—
Total assets designated to the closed block	Total assets designated to the closed block	38,445		39,879		Total assets designated to the closed block	34,220		38,039
Excess of closed block liabilities over assets designated to the closed block	Excess of closed block liabilities over assets designated to the closed block	2,730		2,808		Excess of closed block liabilities over assets designated to the closed block	4,265		2,705
AOCI:	AOCI:					AOCI:
Unrealized investment gains (losses), net of income tax	Unrealized investment gains (losses), net of income tax	2,730		3,524		Unrealized investment gains (losses), net of income tax	(460)		2,562
Unrealized gains (losses) on derivatives, net of income tax	Unrealized gains (losses) on derivatives, net of income tax	100		23		Unrealized gains (losses) on derivatives, net of income tax	257		107
Allocated to policyholder dividend obligation, net of income tax	Allocated to policyholder dividend obligation, net of income tax	(1,542)		(2,346)		Allocated to policyholder dividend obligation, net of income tax	—		(1,329)
Total amounts included in AOCI	Total amounts included in AOCI	1,288		1,201		Total amounts included in AOCI	(203)		1,340
Maximum future earnings to be recognized from closed block assets and liabilities	Maximum future earnings to be recognized from closed block assets and liabilities	$	4,018	$	4,009	Maximum future earnings to be recognized from closed block assets and liabilities	$	4,062	$	4,045

Information regarding the closed block policyholder dividend obligation was as follows:


		Nine Months Ended September 30, 2021		Year Ended December 31, 2020			Six Months Ended June 30, 2022		Year Ended December 31, 2021
		(In millions)					(In millions)
Balance, beginning of period	Balance, beginning of period	$	2,969	$	2,020	Balance, beginning of period	$	1,682	$	2,969
Change in unrealized investment and derivative gains (losses)	Change in unrealized investment and derivative gains (losses)	(1,017)		949		Change in unrealized investment and derivative gains (losses)	(1,682)		(1,287)
Balance, end of period	Balance, end of period	$	1,952	$	2,969	Balance, end of period	$	—	$	1,682

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MetLife, Inc.

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

5. Closed Block (continued)

Information regarding the closed block revenues and expenses was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Revenues	Revenues									Revenues
Premiums	Premiums	$	310	$	359	$	955	$	1,097	Premiums	$	274	$	325	$	549	$	645
Net investment income	Net investment income	390		420		1,165		1,198		Net investment income	352		382		713		775
Net investment gains (losses)	Net investment gains (losses)	(7)		1		(12)		(8)		Net investment gains (losses)	(16)		(11)		(48)		(5)
Net derivative gains (losses)	Net derivative gains (losses)	12		(16)		19		7		Net derivative gains (losses)	8		6		11		7
Total revenues	Total revenues	705		764		2,127		2,294		Total revenues	618		702		1,225		1,422
Expenses	Expenses									Expenses
Policyholder benefits and claims	Policyholder benefits and claims	522		575		1,588		1,714		Policyholder benefits and claims	462		520		945		1,066
Policyholder dividends	Policyholder dividends	127		136		478		572		Policyholder dividends	128		173		261		351
Other expenses	Other expenses	24		27		73		79		Other expenses	23		24		46		49
Total expenses	Total expenses	673		738		2,139		2,365		Total expenses	613		717		1,252		1,466
Revenues, net of expenses before provision for income tax expense (benefit)	Revenues, net of expenses before provision for income tax expense (benefit)	32		26		(12)		(71)		Revenues, net of expenses before provision for income tax expense (benefit)	5		(15)		(27)		(44)
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	6		5		(3)		(15)		Provision for income tax expense (benefit)	1		(3)		(6)		(9)
Revenues, net of expenses and provision for income tax expense (benefit)	Revenues, net of expenses and provision for income tax expense (benefit)	$	26	$	21	$	(9)	$	(56)	Revenues, net of expenses and provision for income tax expense (benefit)	$	4	$	(12)	$	(21)	$	(35)

MLIC charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. MLIC also charges the closed block for expenses of maintaining the policies included in the closed block.

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MetLife, Inc.

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

6. Investments

Fixed Maturity Securities Available-for-Sale

Fixed Maturity Securities Available-for-Sale by Sector

The following table presents ~~the~~ fixed maturity securities available-for-sale (“AFS”) by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, alternative and sub-prime mortgage-backed securities. Asset-backed securities and collateralized loan obligations (“~~ABS”~~ABS & CLO”), previously disclosed as ABS in the 2021 Annual Report, includes securities collateralized by consumer loans, corporate loans and ~~consumer~~broadly syndicated bank loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS & CLO and CMBS are, collectively, “Structured Products.”


		September 30, 2021										December 31, 2020											June 30, 2022										December 31, 2021
		Amortized Cost				Gross Unrealized (1)				Estimated Fair Value		Amortized Cost				Gross Unrealized (1)				Estimated Fair Value			Amortized Cost				Gross Unrealized				Estimated Fair Value		Amortized Cost				Gross Unrealized (1)				Estimated Fair Value
Sector	Sector			Allowance for Credit Loss		Gains		Losses						Allowance for Credit Loss		Gains		Losses				Sector			Allowance for Credit Loss		Gains		Losses						Allowance for Credit Loss		Gains		Losses
		(In millions)																					(In millions)
U.S. corporate	U.S. corporate	$	81,187	$	(18)	$	11,110	$	267	$	92,012	$	79,788	$	(44)	$	13,924	$	252	$	93,416	U.S. corporate	$	85,276	$	(28)	$	2,012	$	6,705	$	80,555	$	82,694	$	(30)	$	10,651	$	281	$	93,034
Foreign corporate																						Foreign corporate	59,287		(53)		1,397		6,454		54,177		59,124		(28)		5,275		731		63,640
Foreign government	Foreign government	57,889		(19)		6,273		763		63,380		63,243		(21)		8,883		406		71,699		Foreign government	49,377		(166)		2,460		3,655		48,016		56,848		(19)		5,603		823		61,609
Foreign corporate		58,918		(24)		5,674		646		63,922		60,995		(16)		8,897		468		69,408
U.S. government and agency	U.S. government and agency	43,072		—		5,396		368		48,100		39,094		—		8,095		89		47,100		U.S. government and agency	34,314		—		1,583		2,207		33,690		41,068		—		5,807		276		46,599
RMBS	RMBS	28,716		—		1,669		118		30,267		28,415		—		2,062		42		30,435		RMBS	29,068		—		368		2,133		27,303		29,152		—		1,440		188		30,404
ABS		17,203		—		227		27		17,403		16,963		—		231		75		17,119
ABS & CLO																						ABS & CLO	17,910		—		41		897		17,054		18,443		—		185		59		18,569
Municipals	Municipals	11,636		—		2,419		15		14,040		10,982		—		2,746		6		13,722		Municipals	12,881		—		672		1,040		12,513		11,761		—		2,464		13		14,212
CMBS	CMBS	11,383		(7)		581		43		11,914		11,331		—		681		102		11,910		CMBS	11,419		(14)		133		668		10,870		11,794		(14)		476		49		12,207
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	310,004	$	(68)	$	33,349	$	2,247	$	341,038	$	310,811	$	(81)	$	45,519	$	1,440	$	354,809	Total fixed maturity securities AFS	$	299,532	$	(261)	$	8,666	$	23,759	$	284,178	$	310,884	$	(91)	$	31,901	$	2,420	$	340,274

_________________

(1)Excludes gross unrealized gains (losses) related to assets held-for-sale; these unrealized gains (losses) are included in AOCI as no component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.

The Company held non-income producing fixed maturity securities AFS with an estimated fair value of $134 million and $22 million at June 30, 2022 and December 31, 2021, respectively, with unrealized gains (losses) of ($26) million and $8 million at June 30, 2022 and December 31, 2021, respectively.

Maturities of Fixed Maturity Securities AFS

The amortized cost, net of allowance for credit loss (“ACL”), and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at ~~September~~June 30, ~~2021:~~2022:

Due in One
Year or Less Due After
One Year
Through
Five Years Due After
Five Years
Through
Ten Years Due After
Ten Years Structured
Products Total Fixed
Maturity
Securities AFS
(In millions)
Amortized cost, net of ACL $ 8,543 $ 56,031 $ 57,297 $ 130,770 $ 57,295 $ 309,936
Estimated fair value $ 8,702 $ 58,669 $ 63,388 $ 150,695 $ 59,584 $ 341,038


	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Products		Total Fixed Maturity Securities AFS
	(In millions)
Amortized cost, net of ACL	$	7,495	$	49,816	$	55,072	$	128,505	$	58,383	$	299,271
Estimated fair value	$	7,428	$	49,014	$	52,943	$	119,566	$	55,227	$	284,178

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

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MetLife, Inc.

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

6. Investments (continued)

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position without an ACL by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position.


		September 30, 2021								December 31, 2020									June 30, 2022								December 31, 2021
		Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months					Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
Sector & Credit Quality	Sector & Credit Quality	Estimated Fair Value		Gross Unrealized Losses (1)		Estimated Fair Value		Gross Unrealized Losses (1)		Estimated Fair Value		Gross Unrealized Losses (1)		Estimated Fair Value		Gross Unrealized Losses (1)		Sector & Credit Quality	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses (1)		Estimated Fair Value		Gross Unrealized Losses (1)
		(Dollars in millions)																	(Dollars in millions)
U.S. corporate	U.S. corporate	$	6,055	$	167	$	1,390	$	99	$	4,338	$	196	$	506	$	50	U.S. corporate	$	53,448	$	6,137	$	2,459	$	568	$	8,076	$	165	$	1,499	$	116
Foreign corporate																		Foreign corporate	36,341		5,653		3,764		798		10,011		404		2,834		327
Foreign government	Foreign government	8,654		399		3,501		364		6,795		305		836		100		Foreign government	17,614		2,014		5,895		1,634		7,812		319		5,377		502
Foreign corporate		9,318		448		1,885		198		4,856		321		1,255		147
U.S. government and agency	U.S. government and agency	15,354		297		504		71		4,619		87		33		2		U.S. government and agency	17,853		1,555		2,152		652		14,419		138		1,571		138
RMBS	RMBS	6,466		99		521		19		1,531		27		152		14		RMBS	19,935		1,807		1,847		326		10,363		158		417		30
ABS		2,897		13		840		14		3,428		26		2,842		49
ABS & CLO																		ABS & CLO	14,275		794		1,201		103		8,150		39		804		20
Municipals	Municipals	667		12		49		3		273		6		—		—		Municipals	6,328		1,015		74		25		524		10		65		3
CMBS	CMBS	1,300		14		659		21		1,887		63		612		39		CMBS	8,708		602		727		66		2,664		31		657		18
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	50,711	$	1,449	$	9,349	$	789	$	27,727	$	1,031	$	6,236	$	401	Total fixed maturity securities AFS	$	174,502	$	19,577	$	18,119	$	4,172	$	62,019	$	1,264	$	13,224	$	1,154
Investment grade	Investment grade	$	47,639	$	1,329	$	8,046	$	665	$	24,572	$	829	$	5,841	$	350	Investment grade	$	165,299	$	18,444	$	16,780	$	3,884	$	58,358	$	1,123	$	12,022	$	1,025
Below investment grade	Below investment grade	3,072		120		1,303		124		3,155		202		395		51		Below investment grade	9,203		1,133		1,339		288		3,661		141		1,202		129
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	50,711	$	1,449	$	9,349	$	789	$	27,727	$	1,031	$	6,236	$	401	Total fixed maturity securities AFS	$	174,502	$	19,577	$	18,119	$	4,172	$	62,019	$	1,264	$	13,224	$	1,154
Total number of securities in an unrealized loss position	Total number of securities in an unrealized loss position	3,545				793				2,177				690				Total number of securities in an unrealized loss position	14,391				1,752				4,774				979

________________

(1)Excludes gross unrealized losses related to assets held-for-sale; these unrealized losses are included in AOCI as no component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.

Evaluation of Fixed Maturity Securities AFS for Credit Loss

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

The methodology and significant inputs used to determine the amount of credit loss are as follows:

•The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.

•When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall credit loss evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; any private and public sector programs to restructure foreign government securities and municipals; and changes to the rating of the security or the issuer by rating agencies.

•Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.

With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

In periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are ~~recorded~~recognized in earnings and reported within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion thereof, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the ~~intent to sell~~intent-to-sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.

Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position

Gross unrealized losses on securities without an ACL increased ~~$806 million~~$21.3 billion for the ~~nine~~six months ended ~~September~~June 30,~~2021~~ 2022 to ~~$2.2~~$23.7 billion primarily due to increases in interest rates, ~~partially offset by narrowing~~widening credit ~~spreads.~~spreads, and the impact of weakening foreign currencies on certain non-functional currency denominated fixed maturity securities.

Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater were ~~$789 million~~$4.2 billion at ~~September~~June 30, ~~2021,~~2022, or ~~35%~~18% of the total gross unrealized losses on securities without an ACL.

Investment Grade Fixed Maturity Securities AFS

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

Below Investment Grade Fixed Maturity Securities AFS

Of the ~~$789 million~~$4.2 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, ~~$124~~$288 million, or ~~16%~~7%, were related to ~~165~~217 below investment grade securities. Unrealized losses on below investment grade securities are principally related to U.S. corporate and foreign corporate securities (primarily industrial and consumer), and foreign government ~~securities and CMBS and~~securities. These unrealized losses are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty, as well as, with respect to fixed-rate securities, rising interest rates since purchase. Management evaluates U.S. corporate and foreign corporate securities based on several factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, credit enhancements, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security. Management evaluates foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition of the issuers and any country specific economic conditions or public sector programs to restructure foreign government securities.

Current Period Evaluation

At ~~September~~June 30, ~~2021,~~2022, with respect to securities in an unrealized loss position without an ACL, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not incurred a credit loss and should not have an ACL at ~~September~~June 30, ~~2021.~~2022.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings and collateral valuation.

Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS by Sector

The rollforward of ACL for fixed maturity securities AFS by sector is as follows:


	U.S. Corporate		Foreign Corporate		Foreign Government		CMBS		Total
Three Months Ended June 30, 2022	(In millions)

Balance, at beginning of period	$	13	$	102	$	226	$	14	$	355
Additions:
ACL not previously recorded	—		—		—		—		—


Reductions:
Changes for securities with previously recorded ACL	15		(5)		(23)		—		(13)
Securities sold or exchanged	—		(44)		(37)		—		(81)


Write-offs	—		—		—		—		—

Balance, at end of period	$	28	$	53	$	166	$	14	$	261
Three Months Ended June 30, 2021
Balance, at beginning of period	$	43	$	33	$	21	$	7	$	104
Additions:
ACL not previously recorded	—		4		—		4		8

Reductions:
Changes for securities with previously recorded ACL	4		(1)		—		(4)		(1)
Securities sold or exchanged	(8)		(4)		—		—		(12)


Write-offs	—		—		—		—		—

Balance, at end of period	$	39	$	32	$	21	$	7	$	99

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

~~Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector~~

~~The rollforward of ACL for fixed maturity securities AFS by sector is as follows:~~

U.S.
Corporate Foreign
Government Foreign
Corporate RMBS CMBS Total
Three Months Ended September 30, 2021 (In millions)
Balance, at beginning of period $ 39 $ 21 $ 32 $ — $ 7 $ 99
Additions:
ACL not previously recorded 18 — — — — 18
Reductions:
Changes for securities with previously recorded ACL — — (2) — — (2)
Securities sold or exchanged (26) — (6) — — (32)
Securities intended/required to be sold prior to recovery of amortized cost basis — — — — — —
Disposition (1) — (2) — — — (2)
Write-offs (13) — — — — (13)
Balance, at end of period $ 18 $ 19 $ 24 $ — $ 7 $ 68
Three Months Ended September 30, 2020
Balance, at beginning of period $ 30 $ 129 $ 16 $ 2 $ — $ 177
Additions:
ACL not previously recorded — — — — — —
Reductions:
Changes for securities with previously recorded ACL 4 (4) — (2) — (2)
Securities sold or exchanged (4) (96) — — — (100)
Securities intended/required to be sold prior to recovery of amortized cost basis — — — — — —
Disposition — — — — — —
Write-offs — — — — — —
Balance, at end of period $ 30 $ 29 $ 16 $ — $ — $ 75

~~_________________~~

~~(1)In connection with the disposition of MetLife Seguros, ACL was reduced by $2 million. See Note 3 for additional information on the Company’s business dispositions.~~

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~6. Investments (continued)~~

U.S.
Corporate Foreign
Government Foreign
Corporate RMBS CMBS Total
Nine Months Ended September 30, 2021 (In millions)
Balance, at beginning of period $ 44 $ 21 $ 16 $ — $ — $ 81
Additions:
ACL not previously recorded 18 — 25 — 11 54
Reductions:
Changes for securities with previously recorded ACL 3 — (7) — (4) (8)
Securities sold or exchanged (34) — (10) — — (44)
Securities intended/required to be sold prior to recovery of amortized cost basis — — — — — —
Disposition (1) — (2) — — — (2)
Write-offs (13) — — — — (13)
Balance, at end of period $ 18 $ 19 $ 24 $ — $ 7 $ 68
Nine Months Ended September 30, 2020
Balance, at beginning of period $ — $ — $ — $ — $ — $ —
Additions:
ACL not previously recorded 58 139 16 2 — 215
Reductions:
Changes for securities with previously recorded ACL (3) (8) — (2) — (13)
Securities sold or exchanged (24) (102) — — — (126)
Securities intended/required to be sold prior to recovery of amortized cost basis (1) — — — — (1)
Disposition — — — — — —
Write-offs — — — — — —
Balance, at end of period $ 30 $ 29 $ 16 $ — $ — $ 75

~~_________________~~

~~(1)In connection with the disposition of MetLife Seguros, ACL was reduced by $2 million. See Note 3 for additional information on the Company’s business dispositions.~~


	U.S. Corporate		Foreign Corporate		Foreign Government		CMBS		Total
Six Months Ended June 30, 2022	(In millions)

Balance, at beginning of period	$	30	$	28	$	19	$	14	$	91
Additions:
ACL not previously recorded	13		67		207		—		287


Reductions:
Changes for securities with previously recorded ACL	15		2		(23)		—		(6)
Securities sold or exchanged	(8)		(44)		(37)		—		(89)


Write-offs	(22)		—		—		—		(22)

Balance, at end of period	$	28	$	53	$	166	$	14	$	261
Six Months Ended June 30, 2021
Balance, at beginning of period	$	44	$	16	$	21	$	—	$	81
Additions:
ACL not previously recorded	—		25		—		11		36

Reductions:
Changes for securities with previously recorded ACL	3		(5)		—		(4)		(6)
Securities sold or exchanged	(8)		(4)		—		—		(12)


Write-offs	—		—		—		—		—

Balance, at end of period	$	39	$	32	$	21	$	7	$	99

Equity Securities

~~Equity~~The following table presents equity securities ~~include~~by security type. Common stock includes common stock, exchange traded funds, mutual funds and ~~preferred stock which are reported at estimated fair value, with~~real estate investment trusts.



	June 30, 2022						December 31, 2021
	Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value
Security Type
			(In millions)
Common stock	$	714	$	217	$	931	$	784	$	295	$	1,079
Non-redeemable preferred stock	160		(6)		154		189		1		190
Total	$	874	$	211	$	1,085	$	973	$	296	$	1,269

________________

(1)Represents cumulative changes in estimated fair value, ~~included~~recognized in ~~net investment gains (losses)~~earnings, and not in Other Comprehensive Income (Loss) (“OCI”). ~~See Note 8 for further information.~~

Contractholder-Directed Equity Securities and ~~Fair Value Option~~FVO Securities

The following table presents these investments by asset type. Contractholder-directed investments supporting unit-linked variable annuity type liabilities (“Unit-linked investments”) are primarily equity securities (including mutual funds) and, ~~FVO securities (“FVO Securities”) (collectively, “Unit-linked~~to a lesser extent, fixed income investments and ~~FVO Securities”) include three categories of investments for which the FVO has been elected, or are otherwise required to be carried at estimated fair value, with~~cash and cash equivalents.


	June 30, 2022						December 31, 2021
	Cost or Amortized Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost or Amortized Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value
Asset Type
	(In millions)
Unit-linked investments	$	7,990	$	490	$	8,480	$	8,643	$	1,897	$	10,540
FVO Securities	1,173		222		1,395		1,243		359		1,602
Total	$	9,163	$	712	$	9,875	$	9,886	$	2,256	$	12,142

________________

(1)Represents cumulative changes in estimated fair value, ~~included~~recognized in ~~net income. See Note 8 for further information.~~earnings, and not in OCI.

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

6. Investments (continued)

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
Portfolio Segment	Portfolio Segment	Carrying Value		% of Total		Carrying Value		% of Total		Portfolio Segment	Carrying Value		% of Total		Carrying Value		% of Total
		(Dollars in millions)									(Dollars in millions)
Commercial	Commercial	$	51,336	63.4	%	$	52,434	62.5	%	Commercial	$	52,348	63.8	%	$	50,553	63.7	%
Agricultural	Agricultural	18,353		22.7		18,128		21.6		Agricultural	18,563		22.6		18,111		22.8
Residential	Residential	11,704		14.4		13,782		16.4		Residential	11,497		14.0		11,196		14.1
Total amortized cost	Total amortized cost	81,393		100.5		84,344		100.5		Total amortized cost	82,408		100.4		79,860		100.6
Allowance for credit loss	Allowance for credit loss	(563)		(0.7)		(590)		(0.7)		Allowance for credit loss	(486)		(0.6)		(634)		(0.8)
Subtotal mortgage loans, net	Subtotal mortgage loans, net	80,830		99.8		83,754		99.8		Subtotal mortgage loans, net	81,922		99.8		79,226		99.8
Residential — FVO	Residential — FVO	134		0.2		165		0.2		Residential — FVO	109		0.2		127		0.2

Total mortgage loans held-for-investment, net										Total mortgage loans held-for-investment, net	82,031		100.0		79,353		100.0
Mortgage loans held-for-sale										Mortgage loans held-for-sale	24		—		—		—
Total mortgage loans, net	Total mortgage loans, net	$	80,964	100.0	%	$	83,919	100.0	%	Total mortgage loans, net	$	82,055	100.0	%	$	79,353	100.0	%

The Company elects the FVO for certain residential mortgage loans that are managed on a total return ~~basis.~~basis, with changes in estimated fair value included in net investment income. See Note 8 for further information.

The amount of net ~~discounts,~~(discounts) premiums and deferred (fees) expenses, included within total amortized cost, primarily attributable to residential mortgage loans was ~~$792~~($695) million and ~~$944~~($759) million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at ~~September~~June 30, ~~2021~~2022 was $190 million, $152 million and $81 million, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at December 31, ~~2020~~2021 was ~~$191~~$180 million, $161 million and ~~$209 million; $146 million and $174 million; and $93 million and $108~~$86 million, respectively.

Purchases of mortgage loans, consisting primarily of residential mortgage loans, were ~~$499~~$868 million and ~~$1.5~~$1.7 billion for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~$204~~$532 million and ~~$1.9 billion~~$986 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

Rollforward of Allowance for Credit Loss ~~Rollforward~~for Mortgage Loans by Portfolio Segment

The ~~changes in the~~rollforward of ACL for mortgage loans, by portfolio segment, ~~were~~is as follows:


		Nine Months Ended September 30,																	Six Months Ended June 30,
		2021								2020									2022								2021
		Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total			Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
		(In millions)																	(In millions)
Balance, beginning of period	Balance, beginning of period	$	252	$	106	$	232	$	590	$	246	$	52	$	55	$	353	Balance, beginning of period	$	340	$	88	$	206	$	634	$	252	$	106	$	232	$	590

Provision (release)	Provision (release)	22		—		(37)		(15)		83		6		13		102		Provision (release)	(16)		41		(31)		(6)		22		(7)		(23)		(8)
Adoption of credit loss guidance		—		—		—		—		(118)		35		161		78
Initial credit losses on PCD loans (1)	Initial credit losses on PCD loans (1)	—		—		3		3		—		—		16		16		Initial credit losses on PCD loans (1)	—		—		—		—		—		—		2		2
Charge-offs, net of recoveries	Charge-offs, net of recoveries	—		(13)		(2)		(15)		—		(2)		(27)		(29)		Charge-offs, net of recoveries	(119)		(22)		(1)		(142)		—		(13)		(1)		(14)

Balance, end of period	Balance, end of period	$	274	$	93	$	196	$	563	$	211	$	91	$	218	$	520	Balance, end of period	$	205	$	107	$	174	$	486	$	274	$	86	$	210	$	570

~~_________________~~________________

(1)Represents the initial credit losses on purchased mortgage loans accounted for as purchased financial assets with credit deterioration (“PCD”).

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

6. Investments (continued)

Allowance for Credit Loss Methodology

The Company records an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, ~~management:~~management applies significant judgment to estimate expected lifetime credit loss, including: (i) ~~pools~~pooling mortgage loans that share similar risk characteristics, (ii) ~~considers~~considering expected lifetime credit loss over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) ~~considers~~considering past events and current and forecasted economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonably possible or probable) and reasonably expected ~~troubled debt restructurings (“TDRs”)~~TDRs (i.e., the Company grants concessions to borrower that is experiencing financial difficulties) are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).

Commercial and Agricultural Mortgage Loan Portfolio Segments

Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural, loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value (“LTV”) ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios (“DSCR”). In estimating expected lifetime credit loss over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating expected lifetime credit loss over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly, historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.

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

6. Investments (continued)

Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower DSCR. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.

For commercial mortgage loans, the primary credit quality indicator is the DSCR, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. The Company also reviews the LTV ratio of its commercial mortgage loan portfolio. LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.

For agricultural mortgage loans, the Company’s primary credit quality indicator is the LTV ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.

Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for credit loss for unfunded commercial and agricultural mortgage loan commitments that are not unconditionally cancellable is ~~recorded~~recognized in earnings and is reported within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and LTV ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, LTV ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company immediately reverts to industry historical loss experience.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

~~Mortgage Loan Concessions~~

In response to the adverse economic impact of the COVID-19 Pandemic, in 2021 and 2020, the Company granted concessions to certain of its commercial, agricultural and residential mortgage loan borrowers, including payment deferrals and other loan modifications. The Company has elected the option under the ~~Coronavirus Aid, Relief, and Economic Security Act,~~ ~~the Consolidated Appropriations Act, 2021 and the~~ ~~Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised)~~ ~~issued by bank regulatory agencies, not to account for or report qualifying concessions as TDRs and not to classify such loans as either~~

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

6. Investments (continued)

past due or nonaccrual during the payment deferral period. Additionally, in accordance with the FASB’s published response to a COVID-19 Pandemic technical inquiry, the Company continues to accrue interest income on such loans that have deferred payment. The Company records an ACL on this accrued interest income.

~~Commercial~~

For some commercial mortgage loan borrowers (principally in the retail and hotel sectors), the Company granted concessions which were primarily interest and principal payment deferrals generally ranging from three to four months and, to a much lesser extent, maturity date extensions. Deferred commercial mortgage loan interest and principal payments were $42 million at September 30, 2021.

~~Agricultural~~

For some agricultural mortgage loan borrowers (principally in the annual crops and agribusiness sectors), the Company granted concessions which were primarily principal payment deferrals generally ranging from three to 12 months, and covenant changes and, to a much lesser extent, maturity date extensions. Deferred agricultural mortgage loan interest and principal payments were $4 million at September 30, 2021.

~~Residential~~

For some residential mortgage loan borrowers, the Company granted concessions which were primarily three-month interest and principal payment deferrals. Deferred residential mortgage loan interest and principal payments were $26 million at September 30, 2021.

Credit Quality of Mortgage Loans by Portfolio Segment

The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at ~~September~~June 30, ~~2021:~~2022:


Credit Quality Indicator	Credit Quality Indicator	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total		% of Total		Credit Quality Indicator	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total		% of Total
		(Dollars in millions)																			(Dollars in millions)
LTV ratios:	LTV ratios:																			LTV ratios:
Less than 65%	Less than 65%	$	3,682	$	4,536	$	4,828	$	5,511	$	4,303	$	11,927	$	2,332	$	37,119	72.3	%	Less than 65%	$	4,139	$	5,557	$	4,006	$	5,352	$	5,462	$	14,552	$	2,597	$	41,665	79.6	%
65% to 75%	65% to 75%	1,086		1,507		3,375		2,065		1,108		2,220		—		11,361		22.1		65% to 75%	937		1,483		777		2,230		1,349		1,631		—		8,407		16.0
76% to 80%	76% to 80%	66		36		335		—		180		454		—		1,071		2.1		76% to 80%	—		2		32		410		200		291		—		935		1.8
Greater than 80%	Greater than 80%	7		—		4		79		460		1,235		—		1,785		3.5		Greater than 80%	61		—		—		4		79		1,197		—		1,341		2.6
Total	Total	$	4,841	$	6,079	$	8,542	$	7,655	$	6,051	$	15,836	$	2,332	$	51,336	100.0	%	Total	$	5,137	$	7,042	$	4,815	$	7,996	$	7,090	$	17,671	$	2,597	$	52,348	100.0	%
DSCR:	DSCR:																			DSCR:
> 1.20x	> 1.20x	$	4,308	$	5,540	$	8,034	$	7,492	$	5,578	$	13,817	$	2,064	$	46,833	91.2	%	> 1.20x	$	5,016	$	6,349	$	4,610	$	7,592	$	6,535	$	15,498	$	2,242	$	47,842	91.4	%
1.00x - 1.20x	1.00x - 1.20x	87		144		76		83		152		926		—		1,468		2.9		1.00x - 1.20x	92		272		18		—		223		340		—		945		1.8
<1.00x	<1.00x	446		395		432		80		321		1,093		268		3,035		5.9		<1.00x	29		421		187		404		332		1,833		355		3,561		6.8
Total	Total	$	4,841	$	6,079	$	8,542	$	7,655	$	6,051	$	15,836	$	2,332	$	51,336	100.0	%	Total	$	5,137	$	7,042	$	4,815	$	7,996	$	7,090	$	17,671	$	2,597	$	52,348	100.0	%

The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at ~~September~~June 30, ~~2021:~~2022:


Credit Quality Indicator	Credit Quality Indicator	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total		% of Total		Credit Quality Indicator	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total		% of Total
		(Dollars in millions)																			(Dollars in millions)
LTV ratios:	LTV ratios:																			LTV ratios:
Less than 65%	Less than 65%	$	1,460	$	3,092	$	1,972	$	2,749	$	967	$	5,345	$	890	$	16,475	89.8	%	Less than 65%	$	1,794	$	2,586	$	2,633	$	1,726	$	2,402	$	4,534	$	1,061	$	16,736	90.2	%
65% to 75%	65% to 75%	335		393		172		117		40		580		108		1,745		9.5		65% to 75%	140		321		356		185		100		503		55		1,660		8.9
76% to 80%	76% to 80%	—		—		—		—		—		11		—		11		—		76% to 80%	—		—		—		—		—		11		—		11		0.1
Greater than 80%	Greater than 80%	—		—		76		—		—		46		—		122		0.7		Greater than 80%	—		—		30		76		—		44		6		156		0.8
Total	Total	$	1,795	$	3,485	$	2,220	$	2,866	$	1,007	$	5,982	$	998	$	18,353	100.0	%	Total	$	1,934	$	2,907	$	3,019	$	1,987	$	2,502	$	5,092	$	1,122	$	18,563	100.0	%

The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at ~~September~~June 30, ~~2021:~~2022:

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~6. Investments (continued)~~


Credit Quality Indicator	Credit Quality Indicator	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total		% of Total		Credit Quality Indicator	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total		% of Total
		(Dollars in millions)																			(Dollars in millions)
Performance indicators:	Performance indicators:																			Performance indicators:
Performing	Performing	$	344	$	512	$	1,501	$	689	$	319	$	7,898	$	—	$	11,263	96.2	%	Performing	$	909	$	1,270	$	386	$	1,039	$	465	$	6,957	$	—	$	11,026	95.9	%
Nonperforming (1)	Nonperforming (1)	2		2		55		15		4		363		—		441		3.8		Nonperforming (1)	2		6		7		47		16		393		—		471		4.1
Total	Total	$	346	$	514	$	1,556	$	704	$	323	$	8,261	$	—	$	11,704	100.0	%	Total	$	911	$	1,276	$	393	$	1,086	$	481	$	7,350	$	—	$	11,497	100.0	%

__________________

(1)Includes residential mortgage loans in process of foreclosure of ~~$74~~$137 million and ~~$103~~$70 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. ~~At September 30, 2021, the~~The amortized cost of commercial and agricultural mortgage loans with an LTV ratio in excess of 100% was ~~$814~~$507 million, or 1% of total commercial and agricultural mortgage ~~loans.~~loans, at June 30, 2022.

Past Due and Nonaccrual Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows:

Past Due Greater than 90 Days Past Due
and Still Accruing Interest Nonaccrual
Portfolio Segment September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020
(In millions)
Commercial $ 15 $ 10 $ 15 $ 7 $ 159 $ 317
Agricultural 156 252 3 20 251 266
Residential 441 556 8 64 438 534
Total $ 612 $ 818 $ 26 $ 91 $ 848 $ 1,117

Table of Contents

MetLife, Inc.

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

6. Investments (continued)


	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual
Portfolio Segment	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
	(In millions)
Commercial	$	5	$	13	$	5	$	13	$	180	$	155
Agricultural	96		124		33		16		178		225
Residential	471		450		8		8		464		442
Total	$	572	$	587	$	46	$	37	$	822	$	822

The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year ~~2020~~2021 was ~~$176~~$317 million, ~~$137~~$266 million and ~~$418~~$534 million, ~~respectively. The amortized cost for nonaccrual commercial mortgage loans with no ACL was $0 and $168 million at September 30, 2021 and December 31, 2020,~~ respectively. The amortized cost for nonaccrual agricultural mortgage loans with no ACL was ~~$168~~$86 million and ~~$178~~$134 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. There were no nonaccrual commercial or residential mortgage loans without an ACL at either ~~September~~June 30, ~~2021~~2022 or December 31, ~~2020.~~2021.

Real Estate and Real Estate Joint Ventures

The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, were as follows at and for the periods indicated:

September 30, 2021 December 31, 2020 Three Months
Ended
September 30, Nine Months
Ended
September 30,
2021 2020 2021 2020
Income Type Carrying Value Income
(In millions)
Leased real estate investments $ 5,216 $ 5,450 $ 108 $ 115 $ 327 $ 322
Other real estate investments 455 419 58 34 144 93
Real estate joint ventures 6,511 6,064 113 (45) 189 (44)
Total real estate and real estate joint ventures $ 12,182 $ 11,933 $ 279 $ 104 $ 660 $ 371

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~6. Investments (continued)~~


	June 30, 2022		December 31, 2021		Three Months Ended June 30,				Six Months Ended June 30,
					2022		2021		2022		2021
Income Type	Carrying Value				Income
	(In millions)
Wholly-owned real estate:
Leased real estate	$	4,519	$	5,146	$	98	$	108	$	204	$	219
Other real estate	478		474		68		44		100		86
Real estate joint ventures	7,379		6,596		213		53		403		76
Total real estate and real estate joint ventures	$	12,376	$	12,216	$	379	$	205	$	707	$	381

The carrying value of wholly-owned real estate ~~investments~~ acquired through foreclosure was $182 million and ~~$20~~$181 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Depreciation expense on real estate investments was $31 million and ~~$92~~$59 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~$33~~$31 million and ~~$92~~$61 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively. Real estate investments were net of accumulated depreciation of ~~$861~~$890 million and ~~$1.1 billion~~$883 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Leases

Leased Real Estate Investments - Operating Leases

The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification.

See Note 8 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for a summary of leased real estate investments and income earned, by property type.

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

Leveraged and Direct Financing Leases

The Company has diversified leveraged ~~lease~~ and direct financing lease portfolios. Its leveraged leases principally include renewable energy generation facilities, rail cars, commercial real estate and commercial aircraft, and its direct financing leases principally include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values are not guaranteed by the lessee or a ~~third-party.~~third party.

Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 1110 years, but in certain circumstances can be over 1110 years, while the payment periods for direct financing leases generally range from one to 25 years but in certain circumstances can be over 25 years.

The Company records an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the investment in leases being presented at the net amount expected to be collected. In determining the ACL, ~~management:~~management applies significant judgment to estimate expected lifetime credit loss, including: (i) ~~pools~~pooling leases that share similar risk characteristics, (ii) ~~considers~~considering expected lifetime credit loss over the contractual term of the lease, and (iii) ~~considers~~considering past events and current and forecasted economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Expected lifetime credit loss on leveraged lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates ~~third-party~~third party credit ratings of the lessee and the related historical default data. Direct financing leases principally relate to leases of commercial real estate; accordingly, expected lifetime credit loss is estimated on such lease receivables consistent with the methodology for commercial mortgage loans (see “— Mortgage Loans — Allowance for Credit Loss Methodology”). The Company also assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the leased asset and considers other relevant market information such as independent third-party forecasts, consulting, asset brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax policy, potential environmental liabilities and litigation.

The investment in leveraged and direct financing leases, net of ACL, was ~~$803~~$788 million and ~~$1.2~~$1.1 billion, respectively, at ~~September~~June 30, ~~2021~~2022 and ~~$816~~$787 million and ~~$1.3~~$1.1 billion, respectively, at December 31, ~~2020.~~2021. The ACL for leveraged and direct financing leases was ~~$43~~$33 million and ~~$44~~$40 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~6. Investments (continued)~~

Cash Equivalents

~~The carrying value of cash~~Cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was ~~$8.4~~$9.8 billion and $~~9.7~~9.0 billion, principally at ~~September~~estimated fair value, at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on policyholder liabilities, DAC, VOBA and deferred sales inducements (“DSI”) that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.

The components of net unrealized investment gains (losses), included in AOCI, were as follows:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(In millions)					(In millions)
Fixed maturity securities AFS	Fixed maturity securities AFS	$	31,195	$	44,415	Fixed maturity securities AFS	$	(15,291)	$	29,461
Derivatives	Derivatives	2,031		1,924		Derivatives	2,336		2,061
Other	Other	354		267		Other	294		389
Subtotal	Subtotal	33,580		46,606		Subtotal	(12,661)		31,911
Amounts allocated from:	Amounts allocated from:					Amounts allocated from:
Policyholder liabilities(1)	Policyholder liabilities(1)	(5,245)		(10,797)		Policyholder liabilities(1)	(850)		(4,978)
DAC, VOBA and DSI	DAC, VOBA and DSI	(3,274)		(4,050)		DAC, VOBA and DSI	2,052		(3,208)
Subtotal	Subtotal	(8,519)		(14,847)		Subtotal	1,202		(8,186)
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	(6,380)		(8,009)		Deferred income tax benefit (expense)	2,023		(6,031)
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	18,681		23,750		Net unrealized investment gains (losses)	(9,436)		17,694
Net unrealized investment gains (losses) attributable to noncontrolling interests	Net unrealized investment gains (losses) attributable to noncontrolling interests	(23)		(20)		Net unrealized investment gains (losses) attributable to noncontrolling interests	(21)		(23)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	18,658	$	23,730	Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(9,457)	$	17,671

__________________

(1)Includes unearned revenue liabilities.

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


	~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022
	(In millions)
Balance, beginning of period	$	~~23,730~~17,671
Unrealized investment gains (losses) during the period	~~(13,026)~~(44,572)
Unrealized investment gains (losses) relating to:
Policyholder liabilities	~~5,552~~4,128
DAC, VOBA and DSI	~~776~~5,260
Deferred income tax benefit (expense)	~~1,629~~8,054
Net unrealized investment gains (losses)	~~18,661~~ (9,459)
Net unrealized investment gains (losses) attributable to noncontrolling interests	~~(3)~~2
Balance, end of period	$	~~18,658~~ (9,457)
Change in net unrealized investment gains (losses)	$	~~(5,069)~~(27,130)
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	~~(3)~~2
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	~~(5,072)~~(27,128)

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~6. Investments (continued)~~

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at estimated fair value at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, were in fixed income securities of the Japanese government and its agencies of ~~$33.8~~$24.7 billion and ~~$35.8~~$32.7 billion, respectively, and in fixed income securities of the South Korean government and its agencies of ~~$7.1~~$5.7 billion and ~~$8.0~~$7.1 billion, respectively.

~~Securities Lending and Repurchase Agreements~~

~~Securities, Collateral and Reinvestment Portfolio~~

~~A summary of the outstanding securities lending and repurchase agreements is as follows:~~

September 30, 2021 December 31, 2020
Securities (1) Securities (1)
Agreement Type Estimated
Fair Value Cash Collateral
Received from
Counterparties
(2) Reinvestment
Portfolio at
Estimated Fair
Value Estimated
Fair Value Cash Collateral
Received from
Counterparties
(2) Reinvestment
Portfolio at
Estimated Fair
Value
(In millions)
Securities lending $ 20,557 $ 20,989 $ 21,110 $ 18,262 $ 18,628 $ 18,884
Repurchase agreements $ 3,518 $ 3,460 $ 3,470 $ 3,276 $ 3,210 $ 3,251

~~__________________~~

~~(1)Securities on loan in connection with these programs are included within fixed maturity securities AFS and short-term investments.~~

~~(2)The liability for cash collateral for these programs is included within payables for collateral under securities loaned and other transactions and other liabilities.~~

~~Contractual Maturities~~

~~A summary of the remaining contractual maturities of securities lending and repurchase agreements is as follows:~~

September 30, 2021 December 31, 2020
Remaining Maturities Remaining Maturities
Security Type Open (1) 1 Month
or Less Over 1 Month
to 6
Months Over 6
Months
to 1 Year Total Open (1) 1 Month
or Less Over 1 Month
to 6
Months Over 6
Months
to 1 Year Total
(In millions)
Cash collateral liability by loaned security type:
Securities lending:
U.S. government and agency $ 6,195 $ 7,955 $ 5,695 $ — $ 19,845 $ 2,946 $ 10,553 $ 4,009 $ — $ 17,508
Foreign government — 322 702 — 1,024 — 291 826 — 1,117
Agency RMBS — — 119 — 119 — — — — —
U.S. corporate 1 — — — 1 3 — — — 3
Total $ 6,196 $ 8,277 $ 6,516 $ — $ 20,989 $ 2,949 $ 10,844 $ 4,835 $ — $ 18,628
Repurchase agreements:
U.S. government and agency $ — $ 3,460 $ — $ — $ 3,460 $ — $ 3,210 $ — $ — $ 3,210

~~__________________~~

~~(1)The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.~~

3835

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

Securities Lending Transactions and Repurchase Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of these transactions and agreements accounted for as secured borrowings was as follows:


		June 30, 2022						December 31, 2021
		Securities (1)						Securities (1)
Agreement Type		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value
	(In millions)
Securities lending		$	13,509	$	13,748	$	13,514	$	20,654	$	21,055	$	21,319
Repurchase agreements		$	3,208	$	3,125	$	3,065	$	3,416	$	3,325	$	3,357

__________________

(1)These securities were included within fixed maturity securities AFS, short-term investments and cash equivalents at June 30, 2022 and within fixed maturity securities AFS at December 31, 2021.

(2)The liability for cash collateral is included within payables for collateral under securities loaned and other transactions.

Contractual Maturities

Contractual maturities of these transactions and agreements accounted for as secured borrowings were as follows:


	June 30, 2022										December 31, 2021
	Remaining Maturities										Remaining Maturities
Security Type	Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total		Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total
	(In millions)
Cash collateral liability by security type:
Securities lending:
U.S. government and agency	$	2,643	$	7,017	$	2,974	$	—	$	12,634	$	5,900	$	7,052	$	7,055	$	—	$	20,007
Foreign government	—		206		712		—		918		—		285		762		—		1,047
Agency RMBS	—		141		55		—		196		—		—		—		—		—
U.S. corporate	—		—		—		—		—		1		—		—		—		1

Total	$	2,643	$	7,364	$	3,741	$	—	$	13,748	$	5,901	$	7,337	$	7,817	$	—	$	21,055

Repurchase agreements:
U.S. government and agency	$	—	$	3,125	$	—	$	—	$	3,125	$	—	$	3,325	$	—	$	—	$	3,325

__________________

(1)The related security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell ~~securities~~investments to meet the return obligation, it may have difficulty selling such collateral that is invested in ~~securities in~~ a timely manner, be forced to sell ~~securities~~investments in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both.

The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities, ~~on loan~~ or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities ~~on loan~~ are put back by the counterparty.

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

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

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value and were as follows at:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(In millions)					(In millions)
Invested assets on deposit (regulatory deposits)	Invested assets on deposit (regulatory deposits)	$	1,827	$	1,933	Invested assets on deposit (regulatory deposits)	$	1,640	$	1,872
Invested assets held in trust (external reinsurance agreements) (1)	Invested assets held in trust (external reinsurance agreements) (1)	1,100		1,124		Invested assets held in trust (external reinsurance agreements) (1)	914		1,114
Invested assets pledged as collateral (2)	Invested assets pledged as collateral (2)	24,829		25,884		Invested assets pledged as collateral (2)	27,358		24,261
Total invested assets on deposit, held in trust and pledged as collateral	Total invested assets on deposit, held in trust and pledged as collateral	$	27,756	$	28,941	Total invested assets on deposit, held in trust and pledged as collateral	$	29,912	$	27,247

__________________

(1) Represents assets held in trust related to third-party reinsurance agreements. Excludes assets held in trust ~~of $2.1 billion and $2.4 billion~~ related to reinsurance agreements between wholly-owned subsidiaries as of ~~September~~$2.0 billion and $2.1 billion at June 30,~~2021~~ 2022 and December 31, ~~2020,~~2021, respectively.

(2) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt and short-term debt related to repurchase agreements and a collateral financing arrangement (see Notes 4, 13 and 14 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report) and derivative transactions (see Note 7).

See “— Securities Lending Transactions and Repurchase Agreements” for information regarding securities supporting securities lending transactions and repurchase ~~agreement transactions~~agreements and Note 5 for information regarding investments designated to the closed block. In addition, the Company’s investment in Federal Home Loan Bank common stock, included within other invested assets, which is considered restricted until redeemed by the ~~issuers,~~issuer, was ~~$791~~$802 million and ~~$814~~$769 million, at redemption value, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Variable Interest Entities

The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the ~~entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the~~ entity.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to investment related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:


	June 30, 2022				December 31, 2021
Asset Type	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
Investment funds (primarily other invested assets)	$	277	$	9	$	292	$	1
Renewable energy partnership (primarily other invested assets)	75		—		79		—
Other investments (primarily other assets)	1		—		1		—
Total	$	353	$	9	$	372	$	1

Table of Contents

MetLife, Inc.

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

6. Investments (continued)

The following table presents the total assets and total liabilities relating to investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:

September 30, 2021 December 31, 2020
Asset Type Total
Assets Total
Liabilities Total
Assets Total
Liabilities
(In millions)
Investment funds (1) $ 288 $ 1 $ 258 $ 1
Renewable energy partnership (1) 85 — 87 —
Other investments (2) 2 — 4 5
Total $ 375 $ 1 $ 349 $ 6

~~__________________~~

~~(1)Assets of the investment funds and renewable energy partnership primarily consisted of other invested assets.~~

~~(2)Assets of other investments primarily consisted of other assets at September 30, 2021, and cash and cash equivalents at December 31, 2020.~~

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
Asset Type	Asset Type	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)		Asset Type	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
		(In millions)									(In millions)
Fixed maturity securities AFS (2)	Fixed maturity securities AFS (2)	$	61,304	$	61,304	$	60,115	$	60,115	Fixed maturity securities AFS (2)	$	55,463	$	55,463	$	62,654	$	62,654

Other limited partnership interests	Other limited partnership interests	12,218		18,507		8,355		14,911		Other limited partnership interests	13,432		19,549		13,287		20,720
Other invested assets	Other invested assets	1,181		1,254		1,320		1,404		Other invested assets	1,411		1,467		1,257		1,314
Other investments	Other investments	671		673		619		639		Other investments	917		939		776		926
Total	Total	$	75,374	$	81,738	$	70,409	$	77,069	Total	$	71,223	$	77,418	$	77,974	$	85,614

__________________

(1)The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy ~~third-parties.~~third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $3$6 million and $5 million at ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)For variable interests in Structured Products included within fixed maturity securities AFS, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

As described in Note ~~15,~~14, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for either the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021.

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MetLife, Inc.

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

6. Investments (continued)

Net Investment Income

The ~~components~~composition of net investment income ~~were~~by asset type was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
Asset Type	Asset Type	2021		2020		2021		2020		Asset Type	2022		2021		2022		2021
		(In millions)									(In millions)
Fixed maturity securities AFS	Fixed maturity securities AFS	$	2,759	$	2,820	$	8,251	$	8,482	Fixed maturity securities AFS	$	2,832	$	2,739	$	5,546	$	5,492
Equity securities	Equity securities	8		15		28		40		Equity securities	5		9		12		20
FVO Securities ~~(1)~~	FVO Securities ~~(1)~~	6		36		92		72		FVO Securities ~~(1)~~	(89)		50		(154)		86
Mortgage loans	Mortgage loans	838		885		2,586		2,631		Mortgage loans	833		885		1,657		1,748
Policy loans	Policy loans	118		124		359		374		Policy loans	114		120		230		241
Real estate and real estate joint ventures	Real estate and real estate joint ventures	279		104		660		371		Real estate and real estate joint ventures	379		205		707		381
Other limited partnership interests	Other limited partnership interests	1,541		578		3,870		291		Other limited partnership interests	168		1,047		1,094		2,329
Cash, cash equivalents and short-term investments	Cash, cash equivalents and short-term investments	25		40		74		184		Cash, cash equivalents and short-term investments	49		24		80		49
Operating joint ventures	Operating joint ventures	17		25		55		81		Operating joint ventures	31		15		49		38
Other	Other	95		78		189		209		Other	221		40		347		94
Subtotal investment income	Subtotal investment income	5,686		4,705		16,164		12,735		Subtotal investment income	4,543		5,134		9,568		10,478
Less: Investment expenses	Less: Investment expenses	232		238		701		798		Less: Investment expenses	273		232		515		469
Subtotal, net	Subtotal, net	5,454		4,467		15,463		11,937		Subtotal, net	4,270		4,902		9,053		10,009
Unit-linked investments ~~(1)~~	Unit-linked investments ~~(1)~~	114		262		699		(60)		Unit-linked investments ~~(1)~~	(687)		378		(1,186)		585

Net investment income	Net investment income	$	5,568	$	4,729	$	16,162	$	11,877	Net investment income	$	3,583	$	5,280	$	7,867	$	10,594

~~__________________~~Net investment income included realized and unrealized gains (losses) recognized in earnings of ($777) million and ($1.3) billion for the three months and six months ended June 30, 2022, respectively, and $413 million and $674 million for the three months and six months ended June 30, 2021, respectively. The amount includes realized gains (losses) on sales and disposals, primarily related to FVO securities (“FVO Securities”) and Unit-linked investments, of $40 million and $109 million for the three months and six months ended June 30, 2022, respectively, and $94 million and $261 million for the three months and six months ended June 30, 2021, respectively. The amount also includes unrealized gains (losses), representing changes in estimated fair value, recognized in earnings, primarily related to FVO Securities and Unit-linked investments, of ($817) million and ($1.4) billion for the three months and six months ended June 30, 2022, respectively, and $319 million and $413 million for the three months and six months ended June 30, 2021, respectively.

~~(1)~~Changes in estimated fair value subsequent to purchase of FVO Securities and ~~contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“~~Unit-linked ~~investments”)~~investments still held ~~as of~~at the end of the respective periods and included in net investment income were ~~$55~~($802) million and ~~$577~~($1.3) billion for the three months and six months ended June 30, 2022, respectively, and $347 million and $549 million for the three months and ~~nine~~six months ended ~~September~~June 30, 2021, ~~respectively, and $240 million and ($83) million for the three months and nine months ended September 30, 2020,~~ respectively.

Net investment income from equity method investments, comprised primarily of real estate joint ventures, other limited partnership interests, tax credit and renewable energy partnerships and operating joint ventures, ~~totaled $1.7 billion~~was $386 million and ~~$4.0~~$1.5 billion for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~$510 million~~$1.0 billion and ~~$145 million~~$2.3 billion for the three months and~~nine~~ six months ended ~~September~~June 30, ~~2020, respectively~~.2021, respectively.

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MetLife, Inc.

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

6. Investments (continued)

Net Investment Gains (Losses)

~~Components of~~ Net Investment Gains (Losses) by Asset Type and Transaction Type

The ~~components~~composition of net investment gains (losses) ~~were~~by asset type and transaction type was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
Asset Type	Asset Type	2021		2020		2021		2020		Asset Type	2022		2021		2022		2021
		(In millions)									(In millions)
Fixed maturity securities AFS	Fixed maturity securities AFS	$	129	$	113	$	67	$	267	Fixed maturity securities AFS	$	(671)	$	5	$	(1,269)	$	(62)

Equity securities ~~(1)~~	Equity securities ~~(1)~~	(33)		2		97		(210)		Equity securities ~~(1)~~	(42)		55		(92)		130

FVO Securities		1		1		5		(2)
Mortgage loans	Mortgage loans	43		(5)		101		(148)		Mortgage loans	48		(2)		92		58
Real estate and real estate joint ventures		66		1		482		4
Other limited partnership interests		(4)		(4)		(17)		1
Other (2), (3)		19		34		61		159
Real estate and real estate joint ventures (excluding changes in estimated fair value)										Real estate and real estate joint ventures (excluding changes in estimated fair value)	159		368		163		416
Other limited partnership interests (excluding changes in estimated fair value)										Other limited partnership interests (excluding changes in estimated fair value)	(2)		(8)		16		(13)
Other gains (losses)										Other gains (losses)	110		23		176		46
Subtotal	Subtotal	221		142		796		71		Subtotal	(398)		441		(914)		575

Change in estimated fair value of other limited partnership interests and real estate joint ventures	Change in estimated fair value of other limited partnership interests and real estate joint ventures	9		3		23		(9)		Change in estimated fair value of other limited partnership interests and real estate joint ventures	(1)		5		6		14
Non-investment portfolio gains (losses) (4)		(314)		(165)		836		(139)
Non-investment portfolio gains (losses)										Non-investment portfolio gains (losses)	(286)		1,159		(295)		1,150
Subtotal	Subtotal	(305)		(162)		859		(148)		Subtotal	(287)		1,164		(289)		1,164
Total net investment gains (losses)		$	(84)	$	(20)	$	1,655	$	(77)
Net investment gains (losses)										Net investment gains (losses)	$	(685)	$	1,605	$	(1,203)	$	1,739

Transaction Type										Transaction Type
Realized gains (losses) on investments sold or disposed										Realized gains (losses) on investments sold or disposed	$	(445)	$	434	$	(656)	$	437
Impairments										Impairments	5		(13)		(35)		(13)
Recognized gains (losses):										Recognized gains (losses):
Change in allowance for credit loss recognized in earnings										Change in allowance for credit loss recognized in earnings	84		(39)		(159)		(17)
Unrealized net gains (losses) recognized in earnings										Unrealized net gains (losses) recognized in earnings	(43)		64		(58)		182
Total recognized gains (losses)										Total recognized gains (losses)	41		25		(217)		165
Non-investment portfolio gains (losses)										Non-investment portfolio gains (losses)	(286)		1,159		(295)		1,150
Net investment gains (losses)										Net investment gains (losses)	$	(685)	$	1,605	$	(1,203)	$	1,739

~~__________________~~Net realized investment gains (losses) of ($405) million and ($547) million for the three months and six months ended June 30, 2022, respectively, and $528 million and $698 million for the three months and six months ended June 30, 2021, respectively, represent realized gains (losses) on sales and disposals from all invested asset classes, including realized gains (losses) on sales and disposals recognized in net investment income, primarily related to FVO Securities and Unit-linked investments.

~~(1)~~Changes in estimated fair value subsequent to purchase ~~for~~of equity securities still held as of the end of the ~~periods~~period included in net investment gains (losses) were ($~~16)~~40) million and ~~$86~~($62) million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~($2)~~$50 million and ~~($198)~~$113 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

~~(2)~~Other gains (losses) included ~~de-designated~~$42 million and $60 million reclassified from AOCI to earnings due to the sale of certain investments that were hedged in qualifying cash flow ~~hedge gains of $6~~hedges for the three months and six months ended June 30, 2022, respectively, and $19 million and ~~$54~~$48 million for the three months and ~~nine~~six months ended ~~September~~June 30, 2021, ~~respectively, and $10~~respectively.

Net investment gains (losses) includes gains (losses) from foreign currency transactions of ($137) million and ~~$65~~($14) million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively.~~

~~(3)Other gains (losses) included leveraged lease gains of $81 million for the nine months ended September 30, 2020.~~

~~(4)See Note 3 for information on the Company’s business dispositions.~~

~~Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($23)~~2022, respectively, and $10 million and ~~($4)~~$19 million for the three months and ~~nine~~six months ended ~~September~~June 30, 2021, ~~respectively, and ($17) million and $53 million for the three months and nine months ended September 30, 2020,~~ respectively.

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MetLife, Inc.

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

6. Investments (continued)

Non-investment portfolio gains (losses) for the three months and six months ended June 30, 2021, include a gain of $1.4 billion on the disposition of Metropolitan Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”). See Note 3 for information on non-investment portfolio losses relating to the disposition of MetLife Poland and Greece.

Fixed Maturity Securities AFS ~~- Sales~~ and ~~Disposals and Credit Loss~~Equity Securities – Composition of Net Investment Gains (Losses)

~~Sales of securities are determined on a specific identification basis. Proceeds from sales or disposals and the components~~The composition of net investment gains (losses) ~~were~~for these securities is as ~~shown in the table below:~~follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Fixed Maturity Securities AFS										Fixed Maturity Securities AFS	2022		2021		2022		2021
		(In millions)									(In millions)
Proceeds	Proceeds	$	10,743	$	5,934	$	37,306	$	28,004	Proceeds	$	20,710	$	10,923	$	34,734	$	26,563
Gross investment gains	Gross investment gains	$	217	$	196	$	580	$	957	Gross investment gains	$	231	$	145	$	340	$	363
Gross investment (losses)	Gross investment (losses)	(106)		(170)		(497)		(554)		Gross investment (losses)	(1,001)		(132)		(1,404)		(391)
Net credit loss (provision) release		18		87		(16)		(136)
Realized gains (losses) on sales and disposals										Realized gains (losses) on sales and disposals	(770)		13		(1,064)		(28)
Net credit loss (provision) release (change in ACL recognized in earnings)										Net credit loss (provision) release (change in ACL recognized in earnings)	94		5		(170)		(21)
Impairment (loss)										Impairment (loss)	5		(13)		(35)		(13)
Net credit loss (provision) release and impairment (loss)										Net credit loss (provision) release and impairment (loss)	99		(8)		(205)		(34)
Net investment gains (losses)	Net investment gains (losses)	$	129	$	113	$	67	$	267	Net investment gains (losses)	$	(671)	$	5	$	(1,269)	$	(62)

Equity Securities										Equity Securities
Realized gains (losses) on sales and disposals										Realized gains (losses) on sales and disposals	$	—	$	(2)	$	(30)	$	(34)
Unrealized net gains (losses) recognized in earnings										Unrealized net gains (losses) recognized in earnings	(42)		57		(62)		164
Net investment gains (losses)										Net investment gains (losses)	$	(42)	$	55	$	(92)	$	130

7. Derivatives

Accounting for Derivatives

See Note 1 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for a description of the Company’s accounting policies for derivatives and Note 8 for information about the fair value hierarchy for derivatives.

Derivative Strategies

Types of Derivative Instruments and Derivative Strategies

The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Commonly used derivative instruments include, but are not limited to:

•Interest rate derivatives: swaps, total return swaps, caps, floors, futures, swaptions, forwards and synthetic guaranteed interest contracts (“GICs”);

•Foreign currency exchange rate derivatives: swaps, forwards, options and exchange-traded futures;

•Credit derivatives: purchased or written single name or index credit default swaps, and forwards; and

•Equity derivatives: index options, variance swaps, exchange-traded futures and total return swaps.

For detailed information on these contracts and the related strategies, see Note 9 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

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MetLife, Inc.

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

7. Derivatives (continued)

Primary Risks Managed by Derivatives

The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:


			September 30, 2021						December 31, 2020								June 30, 2022						December 31, 2021
		Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value					Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
					Assets		Liabilities				Assets		Liabilities						Assets		Liabilities				Assets		Liabilities
			(In millions)														(In millions)
Derivatives Designated as Hedging Instruments:	Derivatives Designated as Hedging Instruments:														Derivatives Designated as Hedging Instruments:
Fair value hedges:	Fair value hedges:														Fair value hedges:
Interest rate swaps	Interest rate swaps	Interest rate	$	3,549	$	2,154	$	2	$	3,186	$	3,224	$	4	Interest rate swaps	Interest rate	$	4,331	$	1,683	$	313	$	3,550	$	2,164	$	6
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	908		8		32		1,106		8		78		Foreign currency swaps	Foreign currency exchange rate	735		81		—		801		11		23
Foreign currency forwards	Foreign currency forwards	Foreign currency exchange rate	1,545		—		52		1,936		24		—		Foreign currency forwards	Foreign currency exchange rate	1,536		—		154		1,636		—		58
Subtotal	Subtotal		6,002		2,162		86		6,228		3,256		82		Subtotal		6,602		1,764		467		5,987		2,175		87
Cash flow hedges:	Cash flow hedges:														Cash flow hedges:
Interest rate swaps	Interest rate swaps	Interest rate	4,429		35		1		4,750		44		—		Interest rate swaps	Interest rate	3,778		14		—		4,117		6		1
Interest rate forwards	Interest rate forwards	Interest rate	6,874		60		155		7,377		513		120		Interest rate forwards	Interest rate	8,042		—		958		6,889		89		119
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	41,201		1,602		1,456		38,604		1,549		2,017		Foreign currency swaps	Foreign currency exchange rate	42,653		3,159		1,938		41,095		1,600		1,557
Subtotal	Subtotal		52,504		1,697		1,612		50,731		2,106		2,137		Subtotal		54,473		3,173		2,896		52,101		1,695		1,677
Net investment in a foreign operation (“NIFO”) hedges:	Net investment in a foreign operation (“NIFO”) hedges:														Net investment in a foreign operation (“NIFO”) hedges:
Foreign currency forwards	Foreign currency forwards	Foreign currency exchange rate	341		18		—		164		—		3		Foreign currency forwards	Foreign currency exchange rate	249		25		—		—		—		—
Currency options	Currency options	Foreign currency exchange rate	3,000		114		—		3,600		70		—		Currency options	Foreign currency exchange rate	3,000		319		—		3,000		139		—
Subtotal	Subtotal		3,341		132		—		3,764		70		3		Subtotal		3,249		344		—		3,000		139		—
Total qualifying hedges	Total qualifying hedges		61,847		3,991		1,698		60,723		5,432		2,222		Total qualifying hedges		64,324		5,281		3,363		61,088		4,009		1,764
Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Derivatives Not Designated or Not Qualifying as Hedging Instruments:														Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swaps	Interest rate swaps	Interest rate	41,430		3,793		144		49,561		3,683		38		Interest rate swaps	Interest rate	33,956		2,006		887		38,860		3,644		115
Interest rate floors	Interest rate floors	Interest rate	8,201		202		—		12,701		350		—		Interest rate floors	Interest rate	8,351		35		—		7,701		145		—
Interest rate caps	Interest rate caps	Interest rate	77,814		69		—		40,730		13		—		Interest rate caps	Interest rate	66,410		739		—		65,559		124		—
Interest rate futures	Interest rate futures	Interest rate	2,239		3		1		1,498		—		2		Interest rate futures	Interest rate	1,106		1		7		1,615		4		—
Interest rate options	Interest rate options	Interest rate	12,508		485		17		17,746		502		5		Interest rate options	Interest rate	20,304		553		43		11,754		493		10
Interest rate forwards	Interest rate forwards	Interest rate	367		—		37		351		—		10		Interest rate forwards	Interest rate	450		—		102		374		—		26
Interest rate total return swaps	Interest rate total return swaps	Interest rate	1,048		6		31		1,048		—		59		Interest rate total return swaps	Interest rate	1,048		—		109		1,048		9		4
Synthetic GICs	Synthetic GICs	Interest rate	39,365		—		—		38,646		—		—		Synthetic GICs	Interest rate	44,841		—		—		40,121		—		—
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	12,635		690		664		13,265		603		693		Foreign currency swaps	Foreign currency exchange rate	13,392		1,426		466		12,787		768		614
Foreign currency forwards	Foreign currency forwards	Foreign currency exchange rate	15,911		99		563		15,643		209		310		Foreign currency forwards	Foreign currency exchange rate	18,043		150		1,330		16,230		36		666
Currency futures	Currency futures	Foreign currency exchange rate	867		1		—		914		3		—		Currency futures	Foreign currency exchange rate	727		3		—		839		—		2
Currency options	Currency options	Foreign currency exchange rate	900		—		—		1,350		—		—		Currency options	Foreign currency exchange rate	—		—		—		900		—		—
Credit default swaps — purchased	Credit default swaps — purchased	Credit	3,042		14		110		2,978		9		121		Credit default swaps — purchased	Credit	2,993		28		84		3,042		13		113
Credit default swaps — written	Credit default swaps — written	Credit	8,739		180		5		9,609		196		—		Credit default swaps — written	Credit	11,786		35		84		8,626		177		12
Equity futures	Equity futures	Equity market	4,417		48		14		5,427		14		38		Equity futures	Equity market	3,592		38		8		4,204		12		5
Equity index options	Equity index options	Equity market	31,016		898		441		22,954		834		437		Equity index options	Equity market	26,013		1,065		360		29,743		1,004		458
Equity variance swaps	Equity variance swaps	Equity market	733		17		15		716		15		12		Equity variance swaps	Equity market	692		17		12		699		17		13
Equity total return swaps	Equity total return swaps	Equity market	3,482		23		11		3,294		3		282		Equity total return swaps	Equity market	3,060		206		—		3,025		11		50
Total non-designated or nonqualifying derivatives	Total non-designated or nonqualifying derivatives		264,714		6,528		2,053		238,431		6,434		2,007		Total non-designated or nonqualifying derivatives		256,764		6,302		3,492		247,127		6,457		2,088
Total	Total		$	326,561	$	10,519	$	3,751	$	299,154	$	11,866	$	4,229	Total		$	321,088	$	11,583	$	6,855	$	308,215	$	10,466	$	3,852

4442

Table of Contents

MetLife, Inc.

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

7. Derivatives (continued)

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.

4543

Table of Contents

MetLife, Inc.

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

7. Derivatives (continued)

The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

The following table presents the interim condensed consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, NIFO, nonqualifying hedging relationships and embedded derivatives:


		Three Months Ended September 30, 2021															Three Months Ended June 30, 2022
		Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		Other Comprehensive Income (Loss)			Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
		(In millions)															(In millions)
Gain (Loss) on Fair Value Hedges:	Gain (Loss) on Fair Value Hedges:															Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:	Interest rate derivatives:															Interest rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	$	1	$	—	$	—	$	(53)	$	—	$	—	N/A		Derivatives designated as hedging instruments (1)	$	3	$	—	$	—	$	(408)	$	(10)	$	—	N/A
Hedged items	Hedged items	(2)		—		—		48		—		—		N/A		Hedged items	(4)		—		—		388		9		—		N/A
Foreign currency exchange rate derivatives:	Foreign currency exchange rate derivatives:															Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	28		(9)		—		—		—		—		N/A		Derivatives designated as hedging instruments (1)	61		(170)		—		—		—		—		N/A
Hedged items	Hedged items	(22)		9		—		—		—		—		N/A		Hedged items	(61)		165		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	Amount excluded from the assessment of hedge effectiveness	—		(2)		—		—		—		—		N/A		Amount excluded from the assessment of hedge effectiveness	—		28		—		—		—		—		N/A
Subtotal	Subtotal	5		(2)		—		(5)		—		—		N/A		Subtotal	(1)		23		—		(20)		(1)		—		N/A
Gain (Loss) on Cash Flow Hedges:	Gain (Loss) on Cash Flow Hedges:															Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)	Interest rate derivatives: (1)															Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	24	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	(903)
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	14		6		—		—		—		1		(21)		Amount of gains (losses) reclassified from AOCI into income	16		42		—		—		—		1		(59)
Foreign currency exchange rate derivatives: (1)	Foreign currency exchange rate derivatives: (1)															Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		398		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		749
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	2		(259)		—		—		—		—		257		Amount of gains (losses) reclassified from AOCI into income	1		(690)		—		—		—		1		688
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		256		—		—		—		—		—		Foreign currency transaction gains (losses) on hedged items	—		682		—		—		—		—		—
Credit derivatives: (1)	Credit derivatives: (1)															Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		20		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		—
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—		Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	Subtotal	16		3		—		—		—		1		678		Subtotal	17		34		—		—		—		2		475
Gain (Loss) on NIFO Hedges:	Gain (Loss) on NIFO Hedges:															Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		12		Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		168
Non-derivative hedging instruments	Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		2		Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		37
Subtotal	Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		14		Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		205
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:															Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	Interest rate derivatives (1)	(1)		—		(379)		(12)		—		—		N/A		Interest rate derivatives (1)	2		—		(1,494)		(27)		—		—		N/A
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	—		—		(128)		(2)		—		—		N/A		Foreign currency exchange rate derivatives (1)	1		—		(664)		(1)		—		—		N/A
Credit derivatives — purchased (1)	Credit derivatives — purchased (1)	—		—		4		—		—		—		N/A		Credit derivatives — purchased (1)	—		—		46		—		—		—		N/A
Credit derivatives — written (1)	Credit derivatives — written (1)	—		—		(2)		—		—		—		N/A		Credit derivatives — written (1)	—		—		(195)		—		—		—		N/A
Equity derivatives (1)	Equity derivatives (1)	(1)		—		47		5		—		—		N/A		Equity derivatives (1)	36		—		590		187		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		—		(65)		—		—		—		N/A		Foreign currency transaction gains (losses) on hedged items	—		—		176		—		—		—		N/A
Subtotal	Subtotal	(2)		—		(523)		(9)		—		—		N/A		Subtotal	39		—		(1,541)		159		—		—		N/A
Earned income on derivatives	Earned income on derivatives	62		—		258		55		(43)		—		—		Earned income on derivatives	140		—		249		46		(37)		—		—
Embedded derivatives (2)	Embedded derivatives (2)	N/A		N/A		47		—		N/A		N/A		N/A		Embedded derivatives (2)	N/A		N/A		97		—		N/A		N/A		N/A
Total	Total	$	81	$	1	$	(218)	$	41	$	(43)	$	1	$	692	Total	$	195	$	57	$	(1,195)	$	185	$	(38)	$	2	$	680

Table of Contents

MetLife, Inc.

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

7. Derivatives (continued)


	Three Months Ended June 30, 2021
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	—	$	—	$	—	$	237	$	—	$	—	N/A
Hedged items	1		—		—		(242)		—		—		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	(1)		(7)		—		—		—		—		N/A
Hedged items	1		7		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	—		(2)		—		—		—		—		N/A
Subtotal	1		(2)		—		(5)		—		—		N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	510
Amount of gains (losses) reclassified from AOCI into income	15		19		—		—		—		—		(34)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		322
Amount of gains (losses) reclassified from AOCI into income	1		95		—		—		—		1		(97)
Foreign currency transaction gains (losses) on hedged items	—		(95)		—		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		(4)
Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	16		19		—		—		—		1		697
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		17
Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		2
Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		19
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	—		—		636		8		—		—		N/A
Foreign currency exchange rate derivatives (1)	—		—		(123)		—		—		—		N/A
Credit derivatives — purchased (1)	—		—		(7)		—		—		—		N/A
Credit derivatives — written (1)	—		—		30		—		—		—		N/A
Equity derivatives (1)	(15)		—		(363)		(103)		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	—		—		7		—		—		—		N/A
Subtotal	(15)		—		180		(95)		—		—		N/A
Earned income on derivatives	27		—		245		52		(38)		—		—
Embedded derivatives (2)	N/A		N/A		(4)		—		N/A		N/A		N/A
Total	$	29	$	17	$	421	$	(48)	$	(38)	$	1	$	716

Table of Contents

MetLife, Inc.

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

7. Derivatives (continued)


	Six Months Ended June 30, 2022
	Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
	(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)	$	7	$	—	$	—	$	(860)	$	(10)	$	—	N/A
Hedged items	(8)		—		—		823		9		—		N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	93		(251)		—		—		—		—		N/A
Hedged items	(91)		245		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	—		61		—		—		—		—		N/A
Subtotal	1		55		—		(37)		(1)		—		N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	(1,667)
Amount of gains (losses) reclassified from AOCI into income	31		60		—		—		—		2		(93)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		1,201
Amount of gains (losses) reclassified from AOCI into income	3		(838)		—		—		—		1		834
Foreign currency transaction gains (losses) on hedged items	—		828		—		—		—		—		—
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		—
Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	34		50		—		—		—		3		275
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		211
Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		56
Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		267
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	3		—		(2,831)		(56)		—		—		N/A
Foreign currency exchange rate derivatives (1)	2		—		(738)		(2)		—		—		N/A
Credit derivatives — purchased (1)	—		—		92		—		—		—		N/A
Credit derivatives — written (1)	—		—		(245)		—		—		—		N/A
Equity derivatives (1)	45		—		751		269		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	—		—		294		—		—		—		N/A
Subtotal	50		—		(2,677)		211		—		—		N/A
Earned income on derivatives	223		—		484		98		(72)		—		—
Embedded derivatives (2)	N/A		N/A		139		—		N/A		N/A		N/A
Total	$	308	$	105	$	(2,054)	$	272	$	(73)	$	3	$	542

Table of Contents

MetLife, Inc.

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

7. Derivatives (continued)

Three Months Ended September 30, 2020
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Policyholder
Benefits and
Claims
Interest
Credited to
Policyholder
Account
Balances
Other
Expenses
Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1) $ 1 $ — $ — $ (154) $ — $ — N/A
Hedged items — — — 139 — — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1) (50) 44 — — — — N/A
Hedged items 46 (41) — — — — N/A
Amount excluded from the assessment of hedge effectiveness — (4) — — — — N/A
Subtotal (3) (1) — (15) — — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A $ (203)
Amount of gains (losses) reclassified from AOCI into income 9 10 — — — 1 (20)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A (615)
Amount of gains (losses) reclassified from AOCI into income 2 435 — — — — (437)
Foreign currency transaction gains (losses) on hedged items — (393) — — — — —
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A (28)
Amount of gains (losses) reclassified from AOCI into income — — — — — — —
Subtotal 11 52 — — — 1 (1,303)
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1) N/A N/A N/A N/A N/A N/A (29)
Non-derivative hedging instruments N/A N/A N/A N/A N/A N/A (8)
Subtotal N/A N/A N/A N/A N/A N/A (37)
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1) — — (601) (9) — — N/A
Foreign currency exchange rate derivatives (1) — — (190) 2 — — N/A
Credit derivatives — purchased (1) — — (8) — — — N/A
Credit derivatives — written (1) — — (9) — — — N/A
Equity derivatives (1) (6) — (499) (90) — — N/A
Foreign currency transaction gains (losses) on hedged items — — 56 — — — N/A
Subtotal (6) — (1,251) (97) — — N/A
Earned income on derivatives 50 — 262 52 (36) — —
Embedded derivatives (2) N/A N/A 408 — N/A N/A N/A
Total $ 52 $ 51 $ (581) $ (60) $ (36) $ 1 $ (1,340)

~~Table of Contents~~

~~MetLife, Inc.~~

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

7. ~~Derivatives (continued)~~

Nine Months Ended September 30, 2021
Net
Investment
Income Net
Investment
Gains
(Losses) Net
Derivative
Gains
(Losses) Policyholder
Benefits and
Claims Interest
Credited to
Policyholder
Account
Balances Other
Expenses Other
Comprehensive
Income (Loss)
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1) $ 4 $ — $ — $ (418) $ — $ — N/A
Hedged items (4) — — 379 — — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1) 40 (144) — — — — N/A
Hedged items (33) 139 — — — — N/A
Amount excluded from the assessment of hedge effectiveness — (6) — — — — N/A
Subtotal 7 (11) — (39) — — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A $ (687)
Amount of gains (losses) reclassified from AOCI into income 41 54 — — — 2 (97)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A 567
Amount of gains (losses) reclassified from AOCI into income 6 (383) — — — 1 376
Foreign currency transaction gains (losses) on hedged items — 372 — — — — —
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A N/A (52)
Amount of gains (losses) reclassified from AOCI into income — — — — — — —
Subtotal 47 43 — — — 3 107
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1) N/A N/A N/A N/A N/A N/A 58
Non-derivative hedging instruments N/A N/A N/A N/A N/A N/A 31
Subtotal N/A N/A N/A N/A N/A N/A 89
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1) 1 — (1,993) (51) — — N/A
Foreign currency exchange rate derivatives (1) — — (734) 1 — — N/A
Credit derivatives — purchased (1) — — 16 — — — N/A
Credit derivatives — written (1) — — 33 — — — N/A
Equity derivatives (1) (33) — (992) (202) — — N/A
Foreign currency transaction gains (losses) on hedged items — — 167 — — — N/A
Subtotal (32) — (3,503) (252) — — N/A
Earned income on derivatives 128 — 755 160 (120) — —
Embedded derivatives (2) N/A N/A 716 — N/A N/A N/A
Total $ 150 $ 32 $ (2,032) $ (131) $ (120) $ 3 $ 196

~~Table of Contents~~

~~MetLife, Inc.~~

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

7. ~~Derivatives (continued)~~


		Nine Months Ended September 30, 2020															Six Months Ended June 30, 2021
		Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		Other Comprehensive Income (Loss)			Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		Other Expenses		OCI
		(In millions)															(In millions)
Gain (Loss) on Fair Value Hedges:	Gain (Loss) on Fair Value Hedges:															Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:	Interest rate derivatives:															Interest rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	$	(11)	$	—	$	—	$	589	$	—	$	—	N/A		Derivatives designated as hedging instruments (1)	$	3	$	—	$	—	$	(365)	$	—	$	—	N/A
Hedged items	Hedged items	9		—		—		(613)		—		—		N/A		Hedged items	(2)		—		—		331		—		—		N/A
Foreign currency exchange rate derivatives:	Foreign currency exchange rate derivatives:															Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	17		58		—		—		—		—		N/A		Derivatives designated as hedging instruments (1)	12		(135)		—		—		—		—		N/A
Hedged items	Hedged items	(14)		(54)		—		—		—		—		N/A		Hedged items	(11)		130		—		—		—		—		N/A
Amount excluded from the assessment of hedge effectiveness	Amount excluded from the assessment of hedge effectiveness	—		(38)		—		—		—		—		N/A		Amount excluded from the assessment of hedge effectiveness	—		(4)		—		—		—		—		N/A
Subtotal	Subtotal	1		(34)		—		(24)		—		—		N/A		Subtotal	2		(9)		—		(34)		—		—		N/A
Gain (Loss) on Cash Flow Hedges:	Gain (Loss) on Cash Flow Hedges:															Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)	Interest rate derivatives: (1)															Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	1,700	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		$	(711)
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	24		58		—		—		—		2		(84)		Amount of gains (losses) reclassified from AOCI into income	27		48		—		—		—		1		(76)
Foreign currency exchange rate derivatives: (1)	Foreign currency exchange rate derivatives: (1)															Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		554		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		169
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	3		271		—		—		—		1		(275)		Amount of gains (losses) reclassified from AOCI into income	4		(124)		—		—		—		1		119
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		(190)		—		—		—		—		—		Foreign currency transaction gains (losses) on hedged items	—		116		—		—		—		—		—
Credit derivatives: (1)	Credit derivatives: (1)															Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		(52)		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		N/A		(72)
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—		Amount of gains (losses) reclassified from AOCI into income	—		—		—		—		—		—		—
Subtotal	Subtotal	27		139		—		—		—		3		1,843		Subtotal	31		40		—		—		—		2		(571)
Gain (Loss) on NIFO Hedges:	Gain (Loss) on NIFO Hedges:															Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		70		Foreign currency exchange rate derivatives (1)	N/A		N/A		N/A		N/A		N/A		N/A		46
Non-derivative hedging instruments	Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		(11)		Non-derivative hedging instruments	N/A		N/A		N/A		N/A		N/A		N/A		29
Subtotal	Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		59		Subtotal	N/A		N/A		N/A		N/A		N/A		N/A		75
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:															Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	Interest rate derivatives (1)	(6)		—		3,364		58		—		—		N/A		Interest rate derivatives (1)	2		—		(1,614)		(39)		—		—		N/A
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	—		—		(187)		(7)		—		—		N/A		Foreign currency exchange rate derivatives (1)	—		—		(606)		3		—		—		N/A
Credit derivatives — purchased (1)	Credit derivatives — purchased (1)	—		—		4		—		—		—		N/A		Credit derivatives — purchased (1)	—		—		12		—		—		—		N/A
Credit derivatives — written (1)	Credit derivatives — written (1)	—		—		(158)		—		—		—		N/A		Credit derivatives — written (1)	—		—		35		—		—		—		N/A
Equity derivatives (1)	Equity derivatives (1)	(6)		—		17		19		—		—		N/A		Equity derivatives (1)	(32)		—		(1,039)		(207)		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		—		(104)		—		—		—		N/A		Foreign currency transaction gains (losses) on hedged items	—		—		232		—		—		—		N/A
Subtotal	Subtotal	(12)		—		2,936		70		—		—		N/A		Subtotal	(30)		—		(2,980)		(243)		—		—		N/A
Earned income on derivatives	Earned income on derivatives	196		—		617		135		(118)		—		—		Earned income on derivatives	66		—		497		105		(77)		—		—
Embedded derivatives (2)	Embedded derivatives (2)	N/A		N/A		(643)		—		N/A		N/A		N/A		Embedded derivatives (2)	N/A		N/A		669		—		N/A		N/A		N/A
Total	Total	$	212	$	105	$	2,910	$	181	$	(118)	$	3	$	1,902	Total	$	69	$	31	$	(1,814)	$	(172)	$	(77)	$	2	$	(496)

__________________

(1)Excludes earned income on derivatives.

(2)The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $3$18 million and ~~($48)~~$4 millionfor the three months and ~~nine~~six months ended~~September~~ June 30, ~~2021,~~2022, respectively, and ($~~12)~~8) million and ~~$63~~($51) million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

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

7. Derivatives (continued)

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities, and (iii) foreign currency forwards to hedge the foreign currency fair value exposure of foreign currency denominated investments.

The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:


Balance Sheet Line Item	Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)					Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)
		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020				June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
		(In millions)								(In millions)
Fixed maturity securities AFS	Fixed maturity securities AFS	$	2,117	$	2,699	$	(1)	$	(1)		Fixed maturity securities AFS	$	1,752	$	2,164	$	—	$	(1)
Mortgage loans	Mortgage loans	$	749	$	952	$	(3)	$	20		Mortgage loans	$	444	$	634	$	(8)	$	3
Future policy benefits	Future policy benefits	$	(4,713)	$	(5,512)	$	(911)	$	(1,307)		Future policy benefits	$	(4,087)	$	(4,735)	$	(40)	$	(877)
Policyholder account balances											Policyholder account balances	$	(1,082)	$	—	$	9	$	—

__________________

(1)Includes ($~~169)~~149) million and ($1)161) million of hedging adjustments on discontinued hedging relationships at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

For the Company’s foreign currency forwards, the change in the estimated fair value of the derivative related to the changes in the difference between the spot price and the forward price is excluded from the assessment of hedge effectiveness. The Company has elected to record changes in estimated fair value of excluded components in earnings. For all other derivatives, all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate ~~investments, and (v) interest rate swaps and interest rate forwards to hedge forecasted fixed-rate borrowings.~~investments.

In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $6$4 million and $5$2 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~($8)~~$1 million and ~~$19~~($1) million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

At both ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed ~~eight~~seven years.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the balance in AOCI associated with cash flow hedges was ~~$2.0~~$2.3 billion and ~~$1.9~~$2.1 billion, respectively.

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At ~~September~~June 30, ~~2021,~~2022, the Company expected to reclassify ~~($137)~~$320 million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months.

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

7. Derivatives (continued)

NIFO Hedges

The Company uses foreign currency exchange rate derivatives, which may include foreign currency forwards and currency options, to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company also designates a portion of its foreign-denominated debt as a non-derivative hedging instrument of its net investments in foreign operations. The Company assesses hedge effectiveness of its derivatives based upon the change in forward rates and assesses its non-derivative hedging instruments based upon the change in spot rates. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

When net investments in foreign operations are sold or substantially liquidated, the amounts in AOCI are reclassified to the statement of operations.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the cumulative foreign currency translation gain (loss) recorded in AOCI related to NIFO hedges was ~~$253~~$570 million and ~~$164~~$303 million, respectively. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying amount of debt designated as a non-derivative hedging instrument was ~~$376~~$309 million and ~~$407~~$365 million, respectively.

Credit Derivatives

In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the effects of derivatives on the interim condensed consolidated statements of operations and comprehensive income (loss) table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The ~~Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $8.7 billion and $9.6 billion at September 30, 2021 and December 31, 2020, respectively. The~~ Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. ~~At September 30, 2021 and December 31, 2020, the Company would have received $175 million and $196 million, respectively, to terminate all of these contracts.~~

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

7. Derivatives (continued)

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:


		September 30, 2021					December 31, 2020						June 30, 2022					December 31, 2021
Rating Agency Designation of Referenced Credit Obligations (1)	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)	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)											(Dollars in millions)
Aaa/Aa/A	Aaa/Aa/A											Aaa/Aa/A
Single name credit default swaps (3)	Single name credit default swaps (3)	$	5	$	169	3.2	$	5	$	208	2.7	Single name credit default swaps (3)	$	3	$	159	2.6	$	4	$	159	3.1
Credit default swaps referencing indices	Credit default swaps referencing indices	21		1,778		1.7	27		1,779		2.5	Credit default swaps referencing indices	4		2,742		3.3	17		1,191		2.5
Subtotal	Subtotal	26		1,947		1.9	32		1,987		2.5	Subtotal	7		2,901		3.3	21		1,350		2.6
Baa	Baa											Baa
Single name credit default swaps (3)	Single name credit default swaps (3)	2		152		2.5	3		249		2.5	Single name credit default swaps (3)	2		101		2.7	2		101		3.4
Credit default swaps referencing indices	Credit default swaps referencing indices	145		6,468		5.7	156		7,318		5.5	Credit default swaps referencing indices	(46)		8,612		5.4	146		6,988		5.0
Subtotal	Subtotal	147		6,620		5.6	159		7,567		5.4	Subtotal	(44)		8,713		5.4	148		7,089		5.0
Ba	Ba											Ba
Single name credit default swaps (3)	Single name credit default swaps (3)	2		82		1.5	—		—		—	Single name credit default swaps (3)	—		42		2.0	1		82		1.2
Credit default swaps referencing indices	Credit default swaps referencing indices	(1)		20		4.2	—		—		—	Credit default swaps referencing indices	(2)		45		4.5	(1)		20		5.0
Subtotal	Subtotal	1		102		2.0	—		—		—	Subtotal	(2)		87		3.3	—		102		2.0
B	B											B

Credit default swaps referencing indices	Credit default swaps referencing indices	5		55		4.2	5		55		5.0	Credit default swaps referencing indices	1		55		3.5	5		55		4.0
Subtotal	Subtotal	5		55		4.2	5		55		5.0	Subtotal	1		55		3.5	5		55		4.0
Caa3	Caa3											Caa3

Credit default swaps referencing indices	Credit default swaps referencing indices	(4)		15		4.2	—		—		—	Credit default swaps referencing indices	(11)		30		4.0	(9)		30		4.5
Subtotal	Subtotal	(4)		15		4.2	—		—		—	Subtotal	(11)		30		4.0	(9)		30		4.5
Total	Total	$	175	$	8,739	4.7	$	196	$	9,609	4.8	Total	$	(49)	$	11,786	4.8	$	165	$	8,626	4.6

_________________

(1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.

(2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.

(3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.

Credit Risk on Freestanding Derivatives

The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.

Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearinghouses (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”).

The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties ~~and establishing and monitoring exposure limits. The Company enters into contracts with counterparties~~ in jurisdictions in which it understands that close-out netting should be ~~enforceable.~~enforceable and establishing and monitoring exposure limits. The Company’s OTC-bilateral derivative transactions are governed by International Swaps and Derivatives

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

7. Derivatives (continued)

~~governed by the International Swaps and Derivatives~~ Association, Inc. (“ISDA”) Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, close-out netting permits the Company (subject to financial regulations such as the Orderly Liquidation Authority under Title II of Dodd-Frank) to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions and to apply collateral to the obligations, without application of the automatic stay, upon the counterparty’s bankruptcy. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives as required by applicable law. Additionally, effective September 1, 2021, the Company is required to pledge initial margin for certain new OTC-bilateral derivative transactions to third party custodians.

The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by brokers and central clearinghouses to such derivatives.

SeeSee Note 8 for a description of the impact of credit risk on the valuation of derivatives.

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities		Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
		(In millions)									(In millions)
Gross estimated fair value of derivatives:	Gross estimated fair value of derivatives:									Gross estimated fair value of derivatives:
OTC-bilateral (1)	OTC-bilateral (1)	$	10,034	$	3,675	$	11,348	$	4,111	OTC-bilateral (1)	$	11,608	$	6,665	$	10,132	$	3,798
OTC-cleared (1)	OTC-cleared (1)	516		39		593		20		OTC-cleared (1)	73		160		448		24
Exchange-traded	Exchange-traded	52		15		17		40		Exchange-traded	42		15		16		7
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	10,602		3,729		11,958		4,171		Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	11,723		6,840		10,596		3,829
Gross amounts not offset on the interim condensed consolidated balance sheets:	Gross amounts not offset on the interim condensed consolidated balance sheets:									Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)	Gross estimated fair value of derivatives: (2)									Gross estimated fair value of derivatives: (2)
OTC-bilateral	OTC-bilateral	(2,206)		(2,206)		(2,926)		(2,926)		OTC-bilateral	(4,166)		(4,166)		(2,204)		(2,204)
OTC-cleared	OTC-cleared	(13)		(13)		(7)		(7)		OTC-cleared	(28)		(28)		(6)		(6)
Exchange-traded	Exchange-traded	(2)		(2)		—		—		Exchange-traded	(3)		(3)		(2)		(2)
Cash collateral: (3), (4)	Cash collateral: (3), (4)									Cash collateral: (3), (4)
OTC-bilateral	OTC-bilateral	(6,396)		—		(6,842)		—		OTC-bilateral	(6,454)		—		(6,948)		—
OTC-cleared	OTC-cleared	(434)		(16)		(530)		(5)		OTC-cleared	—		(112)		(421)		(13)
Exchange-traded	Exchange-traded	—		(9)		—		(23)		Exchange-traded	—		(12)		—		(3)
Securities collateral: (5)	Securities collateral: (5)									Securities collateral: (5)
OTC-bilateral	OTC-bilateral	(1,249)		(1,367)		(1,453)		(1,100)		OTC-bilateral	(852)		(2,442)		(891)		(1,473)
OTC-cleared	OTC-cleared	—		(9)		—		(1)		OTC-cleared	—		(19)		—		(5)
Exchange-traded	Exchange-traded	—		(3)		—		(1)		Exchange-traded	—		—		—		(2)
Net amount after application of master netting agreements and collateral	Net amount after application of master netting agreements and collateral	$	302	$	104	$	200	$	108	Net amount after application of master netting agreements and collateral	$	220	$	58	$	124	$	121

__________________

(1)At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of ~~$83~~$140 million and ~~$92~~$130 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of of ($~~22)~~15) millionand ($~~58)~~23) 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.

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

7. Derivatives (continued)

(3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. For certain collateral agreements, cash collateral is pledged to the Company as initial margin on its OTC-bilateral derivatives.

(4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company received excess cash collateral of ~~$103~~$492 million and ~~$265~~$172 million, respectively, and provided excess cash collateral of ~~$158~~$110 million and ~~$238~~$126 million, respectively, which is not included in the table above due to the foregoing limitation.

(5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at ~~September~~June 30, ~~2021,~~2022, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company received excess securities collateral with an estimated fair value of ~~$98~~$125 million and ~~$231~~$160 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company provided excess securities collateral with an estimated fair value of ~~$194 million~~$1.1 billion and ~~$269~~$243 million, respectively, for its OTC-bilateral derivatives, ~~$1.2~~$1.1 billion and ~~$2.1~~$1.2 billion, respectively, for its OTC-cleared derivatives, and ~~$214~~$164 million and ~~$318~~$185 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.

The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. Substantially all of the Company’s netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody’s and S&P. If a party’s credit or financial strength rating, as applicable, were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives. A small number of these arrangements also include credit-contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of MetLife, Inc. and/or the counterparty. At ~~September~~June 30, ~~2021,~~2022, the amount of collateral not provided by the Company due to the existence of these thresholds was $15 million.

The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.


	June 30, 2022						December 31, 2021
	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)	$	2,340	$	159	$	2,499	$	1,386	$	209	$	1,595
Estimated fair value of collateral provided:
Fixed maturity securities AFS	$	2,656	$	123	$	2,779	$	1,370	$	221	$	1,591

__________________

(1)After taking into consideration the existence of netting agreements.

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MetLife, Inc.

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

7. Derivatives (continued)

September 30, 2021 December 31, 2020
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) $ 1,242 $ 227 $ 1,469 $ 1,182 $ 3 $ 1,185
Estimated fair value of collateral provided:
Fixed maturity securities AFS $ 1,300 $ 188 $ 1,488 $ 1,222 $ 2 $ 1,224

~~__________________~~

~~(1)After taking into consideration the existence of netting agreements.~~

Embedded Derivatives

The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:


		Balance Sheet Location	September 30, 2021		December 31, 2020			Balance Sheet Location	June 30, 2022		December 31, 2021
			(In millions)						(In millions)
Embedded derivatives within asset host contracts:	Embedded derivatives within asset host contracts:						Embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits	Ceded guaranteed minimum benefits	Premiums, reinsurance and other receivables	$	39	$	55	Ceded guaranteed minimum benefits	Premiums, reinsurance and other receivables	$	35	$	38
Embedded derivatives within liability host contracts:	Embedded derivatives within liability host contracts:						Embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits	Direct guaranteed minimum benefits	Policyholder account balances	$	296	$	651	Direct guaranteed minimum benefits	Policyholder account balances	$	317	$	324
Assumed guaranteed minimum benefits	Assumed guaranteed minimum benefits	Policyholder account balances	131		283		Assumed guaranteed minimum benefits	Policyholder account balances	97		98
Funds withheld on ceded reinsurance		Other liabilities	41		100
Funds withheld and guarantees on reinsurance							Funds withheld and guarantees on reinsurance	Other liabilities	(25)		57
Fixed annuities with equity indexed returns	Fixed annuities with equity indexed returns	Policyholder account balances	157		138		Fixed annuities with equity indexed returns	Policyholder account balances	142		165
Other guarantees	Other guarantees	Policyholder account balances	1		24		Other guarantees	Policyholder account balances	—		5
Embedded derivatives within liability host contracts	Embedded derivatives within liability host contracts		$	626	$	1,196	Embedded derivatives within liability host contracts		$	531	$	649

8. Fair Value

Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

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

8. Fair Value (continued)

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:


		September 30, 2021 (1)									June 30, 2022
		Fair Value Hierarchy									Fair Value Hierarchy
		Level 1		Level 2		Level 3		Total Estimated Fair Value			Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)									(In millions)
Assets	Assets									Assets
Fixed maturity securities AFS:	Fixed maturity securities AFS:									Fixed maturity securities AFS:
U.S. corporate	U.S. corporate	$	—	$	80,783	$	11,229	$	92,012	U.S. corporate	$	—	$	69,753	$	10,802	$	80,555
Foreign corporate										Foreign corporate	—		42,397		11,780		54,177
Foreign government	Foreign government	—		63,274		106		63,380		Foreign government	—		47,913		103		48,016
Foreign corporate		—		50,415		13,507		63,922
U.S. government and agency	U.S. government and agency	27,492		20,608		—		48,100		U.S. government and agency	16,725		16,965		—		33,690
RMBS	RMBS	8		27,023		3,236		30,267		RMBS	100		24,503		2,700		27,303
ABS		—		15,878		1,525		17,403
ABS & CLO										ABS & CLO	—		15,140		1,914		17,054
Municipals	Municipals	—		14,006		34		14,040		Municipals	—		12,513		—		12,513
CMBS	CMBS	—		11,095		819		11,914		CMBS	—		10,137		733		10,870
Total fixed maturity securities AFS	Total fixed maturity securities AFS	27,500		283,082		30,456		341,038		Total fixed maturity securities AFS	16,825		239,321		28,032		284,178
Equity securities	Equity securities	594		196		151		941		Equity securities	720		186		179		1,085
Unit-linked and FVO Securities (2)	Unit-linked and FVO Securities (2)	9,171		2,051		833		12,055		Unit-linked and FVO Securities (2)	7,319		1,814		742		9,875
Short-term investments (3)	Short-term investments (3)	5,287		1,201		57		6,545		Short-term investments (3)	1,944		544		119		2,607
Residential mortgage loans — FVO	Residential mortgage loans — FVO	—		—		134		134		Residential mortgage loans — FVO	—		—		109		109
Other investments	Other investments	—		49		845		894		Other investments	—		165		1,013		1,178
Derivative assets: (4)	Derivative assets: (4)									Derivative assets: (4)
Interest rate	Interest rate	3		6,744		60		6,807		Interest rate	1		4,695		335		5,031
Foreign currency exchange rate	Foreign currency exchange rate	1		2,527		4		2,532		Foreign currency exchange rate	3		5,140		20		5,163
Credit	Credit	—		174		20		194		Credit	—		37		26		63
Equity market	Equity market	48		931		7		986		Equity market	38		1,281		7		1,326
Total derivative assets	Total derivative assets	52		10,376		91		10,519		Total derivative assets	42		11,153		388		11,583
Embedded derivatives within asset host contracts (5)	Embedded derivatives within asset host contracts (5)	—		—		39		39		Embedded derivatives within asset host contracts (5)	—		—		35		35
Separate account assets (6)	Separate account assets (6)	78,361		101,190		1,403		180,954		Separate account assets (6)	61,489		81,100		1,240		143,829
Total assets (7)	Total assets (7)	$	120,965	$	398,145	$	34,009	$	553,119	Total assets (7)	$	88,339	$	334,283	$	31,857	$	454,479
Liabilities	Liabilities									Liabilities
Derivative liabilities: (4)	Derivative liabilities: (4)									Derivative liabilities: (4)
Interest rate	Interest rate	$	1	$	349	$	38	$	388	Interest rate	$	7	$	1,983	$	429	$	2,419
Foreign currency exchange rate	Foreign currency exchange rate	—		2,509		258		2,767		Foreign currency exchange rate	—		3,680		208		3,888
Credit	Credit	—		110		5		115		Credit	—		130		38		168
Equity market	Equity market	14		467		—		481		Equity market	8		372		—		380
Total derivative liabilities	Total derivative liabilities	15		3,435		301		3,751		Total derivative liabilities	15		6,165		675		6,855
Embedded derivatives within liability host contracts (5)	Embedded derivatives within liability host contracts (5)	—		—		626		626		Embedded derivatives within liability host contracts (5)	—		—		531		531
Separate account liabilities (6)	Separate account liabilities (6)	4		13		4		21		Separate account liabilities (6)	14		21		10		45
Total liabilities	Total liabilities	$	19	$	3,448	$	931	$	4,398	Total liabilities	$	29	$	6,186	$	1,216	$	7,431

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

8. Fair Value (continued)


		December 31, 2020 (1)									December 31, 2021 (1)
		Fair Value Hierarchy									Fair Value Hierarchy
		Level 1		Level 2		Level 3		Total Estimated Fair Value			Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)									(In millions)
Assets	Assets									Assets
Fixed maturity securities AFS:	Fixed maturity securities AFS:									Fixed maturity securities AFS:
U.S. corporate	U.S. corporate	$	—	$	83,214	$	10,202	$	93,416	U.S. corporate	$	—	$	81,266	$	11,768	$	93,034
Foreign corporate										Foreign corporate	—		49,973		13,667		63,640
Foreign government	Foreign government	—		71,582		117		71,699		Foreign government	—		61,518		91		61,609
Foreign corporate		—		55,509		13,899		69,408
U.S. government and agency	U.S. government and agency	23,180		23,920		—		47,100		U.S. government and agency	25,482		21,117		—		46,599
RMBS	RMBS	—		27,133		3,302		30,435		RMBS	7		27,270		3,127		30,404
ABS		—		15,734		1,385		17,119
ABS & CLO										ABS & CLO	—		16,707		1,862		18,569
Municipals	Municipals	—		13,722		—		13,722		Municipals	—		14,212		—		14,212
CMBS	CMBS	—		11,308		602		11,910		CMBS	—		11,325		882		12,207
Total fixed maturity securities AFS	Total fixed maturity securities AFS	23,180		302,122		29,507		354,809		Total fixed maturity securities AFS	25,489		283,388		31,397		340,274
Equity securities	Equity securities	636		293		150		1,079		Equity securities	931		187		151		1,269
Unit-linked and FVO Securities (2)	Unit-linked and FVO Securities (2)	10,559		2,059		701		13,319		Unit-linked and FVO Securities (2)	9,173		2,068		901		12,142
Short-term investments (3)	Short-term investments (3)	2,762		568		43		3,373		Short-term investments (3)	5,607		950		3		6,560

Residential mortgage loans — FVO	Residential mortgage loans — FVO	—		—		165		165		Residential mortgage loans — FVO	—		—		127		127

Other investments	Other investments	83		229		573		885		Other investments	—		61		898		959
Derivative assets: (4)	Derivative assets: (4)									Derivative assets: (4)
Interest rate	Interest rate	—		7,840		489		8,329		Interest rate	4		6,577		97		6,678
Foreign currency exchange rate	Foreign currency exchange rate	3		2,287		176		2,466		Foreign currency exchange rate	—		2,551		3		2,554
Credit	Credit	—		180		25		205		Credit	—		173		17		190
Equity market	Equity market	14		830		22		866		Equity market	12		1,025		7		1,044
Total derivative assets	Total derivative assets	17		11,137		712		11,866		Total derivative assets	16		10,326		124		10,466
Embedded derivatives within asset host contracts (5)	Embedded derivatives within asset host contracts (5)	—		—		55		55		Embedded derivatives within asset host contracts (5)	—		—		38		38
Separate account assets (6)	Separate account assets (6)	91,850		107,035		1,085		199,970		Separate account assets (6)	76,312		101,424		2,137		179,873
Total assets (7)	Total assets (7)	$	129,087	$	423,443	$	32,991	$	585,521	Total assets (7)	$	117,528	$	398,404	$	35,776	$	551,708
Liabilities	Liabilities									Liabilities
Derivative liabilities: (4)	Derivative liabilities: (4)									Derivative liabilities: (4)
Interest rate	Interest rate	$	2	$	168	$	68	$	238	Interest rate	$	—	$	259	$	22	$	281
Foreign currency exchange rate	Foreign currency exchange rate	—		3,063		38		3,101		Foreign currency exchange rate	2		2,676		242		2,920
Credit	Credit	—		121		—		121		Credit	—		113		12		125
Equity market	Equity market	38		719		12		769		Equity market	5		521		—		526
Total derivative liabilities	Total derivative liabilities	40		4,071		118		4,229		Total derivative liabilities	7		3,569		276		3,852
Embedded derivatives within liability host contracts (5)	Embedded derivatives within liability host contracts (5)	—		—		1,196		1,196		Embedded derivatives within liability host contracts (5)	—		—		649		649
Separate account liabilities (6)	Separate account liabilities (6)	12		8		6		26		Separate account liabilities (6)	7		12		6		25
Total liabilities	Total liabilities	$	52	$	4,079	$	1,320	$	5,451	Total liabilities	$	14	$	3,581	$	931	$	4,526

__________________

(1)Excludes amounts ~~for financial instruments~~ reclassified to assets held-for-sale or liabilities held-for-sale. Assets held-for-sale and liabilities held-for-sale are valued on a basis consistent with similar ~~instruments~~assets and liabilities described herein. See Note 3 for information on the Company’s business dispositions.

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

8. Fair Value (continued)

(2)~~Unit-linked~~Contractholder-directed equity securities and FVO Securities (collectively, “Unit-linked and FVO Securities”) were primarily comprised of Unit-linked investments at both ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

(3)Short-term investments as presented in the tables above differ from the amounts presented on the interim condensed consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.

(4)Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.

(5)Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables ~~and other invested assets~~ on the interim condensed consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the interim condensed consolidated balance sheets.

(6)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.

(7)Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated fair value of such investments was ~~$82~~$95 million and ~~$75~~$99 million, respectively.

The following describes the valuation methodologies used to measure assets and liabilities at fair value.

Investments

Securities, Short-term Investments and Other Investments

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

When quoted prices in active markets are not available, the determination of estimated fair value of securities is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management’s judgment or estimation and cannot be supported by reference to market activity. ~~Even though these~~Unobservable inputs are ~~unobservable, management believes they are consistent with what other~~based on management’s assumptions about the inputs market participants would use ~~when~~in pricing such ~~securities and are considered appropriate given the circumstances.~~investments.

The estimated fair value of short-term investments and other investments is determined on a basis consistent with the methodologies described herein.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below. The primary valuation approaches are the market approach, which considers recent prices from market transactions involving identical or similar assets or liabilities, and the income approach, which converts expected future amounts (e.g. cash flows) to a single current, discounted amount. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.

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

8. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Fixed maturity securities AFS

U.S. corporate and Foreign corporate securities

Valuation Approaches: Principally the market and income approaches.

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

illiquidity premium

•

benchmark yields; spreads off benchmark yields; new issuances; issuer ratings

•

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

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

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

independent non-binding broker quotations

•

benchmark U.S. Treasury yield or other yields

•

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 quotations

•

credit spreads

•

comparable securities that are actively traded

Structured Products

Valuation Approaches: Principally the market and income approaches.

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

•

credit ratings

•

average delinquency rates; DSCR

•

credit ratings

•

issuance-specific information, including, but not limited to:

•

collateral type; structure of the security; vintage of the loans

•

payment terms of the underlying assets

•

payment priority within the tranche; deal performance

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

8. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Equity securities

Valuation Approaches: Principally the market approach.

Valuation Approaches: Principally the market and income approaches.

Key Input:

Key Inputs:

•

quoted prices in markets that are not considered active

•

credit ratings; issuance structures

•

quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2

•

independent non-binding broker quotations

Unit-linked and FVO Securities, Short-term investments and Other investments

Valuation Approaches: Principally the market and income approaches.

Key Inputs:

•

Unit-linked and FVO Securities include mutual fund interests without readily determinable fair values given prices are not published publicly. Valuation of these mutual funds is based upon quoted prices or reported NAV provided by the fund managers, which were based on observable inputs.

•

Unit-linked and FVO Securities, short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS and equity securities described above; accordingly, the valuation approaches and unobservable inputs used in their valuation are also similar to those described above. Other investments also include certain real estate joint ventures and use the valuation approach and key inputs as described for other limited partnership interests below.

•

Short-term investments and other investments are of a similar nature and class to the fixed maturity securities AFS and equity securities described above; accordingly, the valuation approaches and observable inputs used in their valuation are also similar to those described above.

Residential mortgage loans — FVO

•

N/A

Valuation Approaches: Principally the market approach.

Valuation Techniques and Key Inputs: These investments are based primarily on matrix pricing or other similar techniques that utilize inputs from mortgage servicers that are unobservable or cannot be derived principally from, or corroborated by, observable market data.

Separate account assets and Separate account liabilities (1)

Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly

Key Input:

•

N/A

•

quoted prices or reported NAV provided by the fund managers

Other limited partnership interests

•

N/A

Valued giving consideration to the underlying holdings of the partnerships and adjusting, if appropriate.

Key Inputs:

•

liquidity; bid/ask spreads; performance record of the fund manager

•

other relevant variables that may impact the exit value of the particular partnership interest

__________________

(1)Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. ~~Fixed~~The estimated fair value of fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents ~~are similar in nature to~~is determined on a basis consistent with the ~~instruments~~assets described under “— Securities, Short-term Investments and Other Investments” and “— Derivatives — Freestanding Derivatives.”

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

Derivatives

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models.

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)

The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. ~~Even though unobservable, these~~Unobservable inputs are based on management’s assumptions ~~deemed appropriate given~~about the ~~circumstances and management believes they are consistent with what other~~inputs market participants would use ~~when~~in pricing such ~~instruments.~~derivatives.

Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is, in part, due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Freestanding Derivatives

Level 2 Valuation Approaches and Key Inputs:

This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3.

Level 3 Valuation Approaches and Key Inputs:

These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:

Instrument

Interest Rate

Foreign Currency
Exchange Rate

Credit

Equity Market

Inputs common to Level 2 and Level 3 by instrument type

•

swap yield curves

•

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)

•

repurchase rates

•

cross currency basis curves (2)

•

credit spreads

•

correlation between model inputs (1)

•

interest rate volatility (1), (2)

•

currency correlation

•

repurchase rates

•

currency volatility (1)

•

independent non-binding broker quotations

__________________

(1)Option-based only.

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)

(2)Extrapolation beyond the observable limits of the curve(s).

Embedded Derivatives

Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, annuity contracts, guarantees on reinsurance, and investment risk within funds withheld related to certain reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the interim condensed consolidated balance sheets.

The Company calculates the fair value of these embedded derivatives, which is estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience.

The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

The Company ceded the risk associated with certain of the GMIBs previously described. These reinsurance agreements contain embedded derivatives which are included within premiums, reinsurance and other receivables on the interim condensed consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses) or policyholder benefits and claims depending on the statement of operations classification of the direct risk. The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer.

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described in “— Investments — Securities, Short-term Investments and Other Investments.” The estimated fair value of guarantees related to reinsurance is determined based on multiple stochastic scenarios and includes a nonperformance risk adjustment. The estimated fair value of these embedded derivatives is included, along with their ~~funds withheld hosts,~~underlying host contracts, in other liabilities on the interim condensed consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)

The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity indices. These equity indexed features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the interim condensed consolidated balance sheets.

The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior, is calculated by the Company’s actuarial department. The calculation is based on in-force business and uses standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk.

Embedded Derivatives Within Asset and Liability Host Contracts

Level 3 Valuation Approaches and Key Inputs:

Direct and assumed guaranteed minimum benefits

These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

Reinsurance ceded on certain guaranteed minimum benefits

These embedded derivatives are principally valued using the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in “— Direct and assumed guaranteed minimum benefits” and also include counterparty credit spreads.

Transfers between Levels

Overall, transfers between levels occur when there are changes in the observability of inputs and market activity.

Transfers into or out of Level 3:

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

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MetLife, Inc.

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

8. Fair Value (continued)

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:


						September 30, 2021				December 31, 2020				Impact of Increase in Input on Estimated Fair Value (2)						June 30, 2022				December 31, 2021				Impact of Increase in Input on Estimated Fair Value (2)
		Valuation Techniques		Significant Unobservable Inputs		Range			Weighted Average (1)	Range			Weighted Average (1)			Valuation Techniques		Significant Unobservable Inputs		Range			Weighted Average (1)	Range			Weighted Average (1)
Fixed maturity securities AFS (3)	Fixed maturity securities AFS (3)														Fixed maturity securities AFS (3)
U.S. corporate and foreign corporate	U.S. corporate and foreign corporate	•	Matrix pricing	•	Offered quotes (4)	1	-	170	111	—	-	186	117	Increase	U.S. corporate and foreign corporate	•	Matrix pricing	•	Offered quotes (4)	—	-	132	91	1	-	165	109	Increase
		•	Market pricing	•	Quoted prices (4)	—	-	113	99	—	-	116	98	Increase		•	Market pricing	•	Quoted prices (4)	20	-	126	94	—	-	117	100	Increase
		•	Consensus pricing	•	Offered quotes (4)	99	-	107	100	54	-	104	101	Increase		•	Consensus pricing	•	Offered quotes (4)	95	-	101	98	99	-	104	100	Increase
RMBS	RMBS	•	Market pricing	•	Quoted prices (4)	—	-	180	99	—	-	159	98	Increase (5)	RMBS	•	Market pricing	•	Quoted prices (4)	—	-	117	93	—	-	121	99	Increase (5)
ABS		•	Market pricing	•	Quoted prices (4)	3	-	109	102	1	-	112	100	Increase (5)
ABS & CLO															ABS & CLO	•	Market pricing	•	Quoted prices (4)	3	-	104	94	3	-	110	102	Increase (5)
		•	Consensus pricing	•	Offered quotes (4)	102	-	102	102	100	-	100	100	Increase (5)
Derivatives	Derivatives														Derivatives
Interest rate	Interest rate	•	Present value techniques	•	Swap yield (6)	149	-	221	199	92	-	184	149	Increase (7)	Interest rate	•	Present value techniques	•	Swap yield (6)	299	-	317	310	151	-	200	188	Increase (7)
				•	Repurchase rates (8)	—	-	—	—	(12)	-	1	(6)	Decrease (7)				•	Volatility (8)	1%	-	1%	1%	1%	-	1%	1%	Increase (7)
				•	Volatility (9)	0%	-	1%	1%	—	-	—	—	Increase (7)
Foreign currency exchange rate	Foreign currency exchange rate	•	Present value techniques	•	Swap yield (6)	(129)	-	1,873	117	(309)	-	248	(144)	Increase (7)	Foreign currency exchange rate	•	Present value techniques	•	Swap yield (6)	29	-	1,938	204	2	-	305	134	Increase (7)
Credit	Credit	•	Present value techniques	•	Credit spreads (10)	96	-	128	104	96	-	99	98	Decrease (7)	Credit	•	Present value techniques	•	Credit spreads (9)	85	-	148	112	96	-	133	109	Decrease (7)
		•	Consensus pricing	•	Offered quotes (11)
Equity market		•	Present value techniques or option pricing models	•	Volatility (12)	—	-	—	—	21%	-	29%	28%	Increase (7)
				•	Correlation (13)	—	-	—	—	10%	-	30%	10%			•	Consensus pricing	•	Offered quotes (10)
Embedded derivatives	Embedded derivatives														Embedded derivatives
Direct, assumed and ceded guaranteed minimum benefits	Direct, assumed and ceded guaranteed minimum benefits	•	Option pricing techniques	•	Mortality rates:										Direct, assumed and ceded guaranteed minimum benefits	•	Option pricing techniques	•	Mortality rates:
					Ages 0 - 40	0%	-	0.17%	0.08%	0%	-	0.17%	0.06%	Decrease (14)					Ages 0 - 40	0%	-	0.17%	0.08%	0%	-	0.17%	0.08%	Decrease (11)
					Ages 41 - 60	0.03%	-	0.75%	0.27%	0.03%	-	0.75%	0.30%	Decrease (14)					Ages 41 - 60	0.03%	-	0.75%	0.27%	0.03%	-	0.75%	0.27%	Decrease (11)
					Ages 61 - 115	0.12%	-	100%	2.08%	0.12%	-	100%	1.90%	Decrease (14)					Ages 61 - 115	0.12%	-	100%	2.07%	0.12%	-	100%	2.08%	Decrease (11)
				•	Lapse rates:													•	Lapse rates:
					Durations 1 - 10	0.25%	-	100%	6.30%	0.25%	-	100%	6.86%	Decrease (15)					Durations 1 - 10	0%	-	100%	6.24%	0.25%	-	100%	6.30%	Decrease (12)
					Durations 11 - 20	0.50%	-	100%	5.22%	0.50%	-	100%	5.18%	Decrease (15)					Durations 11 - 20	0.50%	-	100%	5.18%	0.50%	-	100%	5.22%	Decrease (12)
					Durations 21 - 116	0.50%	-	100%	5.22%	0.50%	-	100%	5.18%	Decrease (15)					Durations 21 - 116	0.50%	-	100%	5.18%	0.50%	-	100%	5.22%	Decrease (12)
				•	Utilization rates	0%	-	22%	0.22%	0%	-	22%	0.17%	Increase (16)
				•	Withdrawal rates	0%	-	20%	3.72%	0%	-	20%	3.98%	(17)
				•	Long-term equity volatilities	7.71%	-	25%	18.60%	8.33%	-	27%	18.70%	Increase (18)
				•	Nonperformance risk spread	0.05%	-	1.17%	0.35%	0.04%	-	1.18%	0.40%	Decrease (19)

																		•	Utilization rates	0%	-	22%	0.22%	0%	-	22%	0.22%	Increase (13)
																		•	Withdrawal rates	0%	-	20%	3.70%	0%	-	20%	3.72%	(14)
																		•	Long-term equity volatilities	8.74%	-	25%	18.60%	7.69%	-	25%	18.60%	Increase (15)
																		•	Nonperformance risk spread	0.10%	-	1.90%	0.35%	0.04%	-	1.45%	0.35%	Decrease (16)

__________________

(1)The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value of the securities and derivatives. The weighted average for embedded derivatives is determined based on a combination of account values and experience data.

(2)The impact of a decrease in input would have resulted in 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 have resulted in substantially lower (higher) valuations.

(4)Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

(5)Changes in the assumptions used for the probability of default would have been 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.

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)

(6)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.

(7)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.

(8)Ranges represent ~~different repurchase rates utilized as components within the valuation methodology and are presented in basis points.~~

~~(9)Ranges represent~~ the underlying interest rate volatility quoted in percentage points. Since this valuation methodology uses an equivalent of LIBOR for secured overnight financing rate volatility, presenting a range is more representative of the unobservable input used in the valuation.

~~(10)~~(9)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)~~(10)Atboth ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, independent non-binding broker quotations were used in the determination of less ~~tha~~n 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)~~(11)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)~~(12)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)~~(13)The utilization rate assumption estimates the percentage of contractholders with GMIBs or a 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)~~(14)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)~~(15)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.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

~~(19)~~(16)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.

Generally, all other classes of assets and liabilities classified within Level 3 that are not included in the preceding table use the same valuation techniques and significant unobservable inputs as previously described for Level 3. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in “— Nonrecurring Fair Value Measurements.”

~~The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):~~

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fixed Maturity Securities AFS
Corporate (6) Foreign
Government
Structured
Products
Municipals
Equity
Securities
Unit-linked
and FVO
Securities
(In millions)
Three Months Ended September 30, 2021
Balance, beginning of period $ 23,773 $ 145 $ 6,003 $ — $ 143 $ 849
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (22) — 9 — 6 (9)
Total realized/unrealized gains (losses) included in AOCI (402) — 36 — — —
Purchases (3) 1,853 12 334 34 8 9
Sales (3) (475) (10) (401) — (5) (8)
Issuances (3) — — — — — —
Settlements (3) — — — — — —
Transfers into Level 3 (4) 242 10 6 — — —
Transfers out of Level 3 (4) (233) (51) (407) — (1) (8)
Balance, end of period $ 24,736 $ 106 $ 5,580 $ 34 $ 151 $ 833
Three Months Ended September 30, 2020
Balance, beginning of period $ 20,732 $ 57 $ 5,377 $ — $ 373 $ 589
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (1) (1) 23 — 6 35
Total realized/unrealized gains (losses) included in AOCI 673 6 96 1 — —
Purchases (3) 1,023 12 550 10 — 7
Sales (3) (529) — (305) — (69) (13)
Issuances (3) — — — — — —
Settlements (3) — — — — — —
Transfers into Level 3 (4) 622 44 39 — — —
Transfers out of Level 3 (4) (377) (9) (368) — (158) (2)
Balance, end of period $ 22,143 $ 109 $ 5,412 $ 11 $ 152 $ 616
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2021 (5)
$ (18) $ — $ 9 $ — $ 6 $ (9)
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2020 (5)
$ (3) $ (3) $ 13 $ — $ 3 $ 35
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2021 (5)
$ (387) $ — $ 36 $ — $ — $ —
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2020 (5)
$ 665 $ 3 $ 95 $ 1 $ — $ —

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~8. Fair Value (continued)~~

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Short-term
Investments
Residential
Mortgage
Loans — FVO
Other
Investments Net
Derivatives (7) Net Embedded
Derivatives (8) Separate
Accounts (9)
(In millions)
Three Months Ended September 30, 2021
Balance, beginning of period $ 113 $ 140 $ 781 $ 57 $ (574) $ 1,249
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) 1 — 45 (279) 47 12
Total realized/unrealized gains (losses) included in AOCI (2) — — 55 — —
Purchases (3) 2 — 116 7 — 161
Sales (3) (28) — (72) — — (18)
Issuances (3) — — — (1) — —
Settlements (3) — (6) — (49) (60) —
Transfers into Level 3 (4) 1 — — — — —
Transfers out of Level 3 (4) (30) — (25) — — (5)
Balance, end of period $ 57 $ 134 $ 845 $ (210) $ (587) $ 1,399
Three Months Ended September 30, 2020
Balance, beginning of period $ 7 $ 175 $ 491 $ 798 $ (1,925) $ 1,056
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (2) 6 (8) 61 408 (3)
Total realized/unrealized gains (losses) included in AOCI (2) — — (24) (15) —
Purchases (3) 1 — 3 — — 72
Sales (3) (1) — — — — (25)
Issuances (3) — — — — — (2)
Settlements (3) — (5) — (111) (66) —
Transfers into Level 3 (4) — — — — — —
Transfers out of Level 3 (4) — — — 13 — (9)
Balance, end of period $ 3 $ 176 $ 486 $ 737 $ (1,598) $ 1,089
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2021 (5)
$ — $ (1) $ 40 $ (273) $ 44 $ —
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2020 (5)
$ (2) $ 6 $ (7) $ 47 $ 403 $ —
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2021 (5)
$ — $ — $ — $ 25 $ 1 $ —
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2020 (5)
$ (1) $ — $ — $ (28) $ (14) $ —

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MetLife, Inc.

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

8. Fair Value (continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fixed Maturity Securities AFS
Corporate (6) Foreign
Government Structured
Products Municipals Equity
Securities Unit-linked
and FVO
Securities
(In millions)
Nine Months Ended September 30, 2021
Balance, beginning of period $ 24,101 $ 117 $ 5,289 $ — $ 150 $ 701
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (28) — 36 — 16 53
Total realized/unrealized gains (losses) included in AOCI (1,171) (1) 9 — — —
Purchases (3) 3,395 13 1,333 34 10 20
Sales (3) (951) (7) (1,049) — (21) (16)
Issuances (3) — — — — — —
Settlements (3) — — — — — —
Transfers into Level 3 (4) 139 13 256 — — 86
Transfers out of Level 3 (4) (749) (29) (294) — (4) (11)
Balance, end of period $ 24,736 $ 106 $ 5,580 $ 34 $ 151 $ 833
Nine Months Ended September 30, 2020
Balance, beginning of period $ 14,229 $ 117 $ 4,458 $ 7 $ 430 $ 625
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (80) (1) 30 — 2 8
Total realized/unrealized gains (losses) included in AOCI 371 (1) (18) 1 — —
Purchases (3) 3,653 12 2,067 10 9 20
Sales (3) (911) (7) (704) — (105) (99)
Issuances (3) — — — — — —
Settlements (3) — — — — — —
Transfers into Level 3 (4) 5,416 3 73 — — 153
Transfers out of Level 3 (4) (535) (14) (494) (7) (184) (91)
Balance, end of period $ 22,143 $ 109 $ 5,412 $ 11 $ 152 $ 616
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2021 (5)
$ (21) $ — $ 33 $ — $ 11 $ 53
Changes in unrealized gains (losses) included in
net income (loss) for the instruments still held
at September 30, 2020 (5)
$ (42) $ (2) $ 36 $ — $ 1 $ 10
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2021 (5)
$ (1,141) $ (1) $ 11 $ — $ — $ —
Changes in unrealized gains (losses) included in
AOCI for the instruments still held
at September 30, 2020 (5)
$ 350 $ 2 $ (12) $ 1 $ — $ —
The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fixed Maturity Securities AFS
	Corporate (7)		Foreign Government		Structured Products		Municipals		Equity Securities		Unit-linked and FVO Securities
	(In millions)
Three Months Ended June 30, 2022
Balance, beginning of period	$	24,362	$	248	$	5,930	$	29	$	189	$	868
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(5)		4		12		—		(2)		(132)
Total realized/unrealized gains (losses) included in AOCI	(2,857)		3		(207)		—		—		—
Purchases (3)	1,643		1		536		—		2		8
Sales (3)	(315)		(2)		(468)		—		(10)		(2)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	154		3		129		—		—		—
Transfers out of Level 3 (4)	(400)		(154)		(585)		(29)		—		—
Balance, end of period	$	22,582	$	103	$	5,347	$	—	$	179	$	742
Three Months Ended June 30, 2021
Balance, beginning of period	$	23,419	$	132	$	5,507	$	5	$	154	$	812
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(8)		—		16		—		6		45
Total realized/unrealized gains (losses) included in AOCI	415		—		19		—		—		—
Purchases (3)	868		46		823		—		3		12
Sales (3)	(286)		(3)		(332)		—		(15)		(16)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	48		10		345		—		—		10
Transfers out of Level 3 (4), (5)	(683)		(40)		(375)		(5)		(5)		(14)
Balance, end of period	$	23,773	$	145	$	6,003	$	—	$	143	$	849
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (6)	$	(5)	$	4	$	12	$	—	$	(3)	$	(132)
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (6)	$	(8)	$	—	$	15	$	—	$	3	$	44
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (6)	$	(2,851)	$	3	$	(205)	$	—	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (6)	$	416	$	—	$	19	$	—	$	—	$	—

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

8. Fair Value (continued)


		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)													Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Short-term Investments		Residential Mortgage Loans — FVO		Other Investments		Net Derivatives (7)		Net Embedded Derivatives (8)		Separate Accounts (9)			Short-term Investments		Residential Mortgage Loans — FVO		Other Investments		Net Derivatives (8)		Net Embedded Derivatives (9)		Separate Accounts (10)
		(In millions)													(In millions)
Nine Months Ended September 30, 2021
Three Months Ended June 30, 2022														Three Months Ended June 30, 2022
Balance, beginning of period	Balance, beginning of period	$	43	$	165	$	573	$	594	$	(1,141)	$	1,079	Balance, beginning of period	$	5	$	119	$	1,047	$	31	$	(578)	$	2,118
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	1		(3)		70		(490)		716		14		Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		(5)		26		(292)		97		24
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	(2)		—		—		(365)		22		—		Total realized/unrealized gains (losses) included in AOCI	—		—		—		(191)		14		—
Purchases (3)	Purchases (3)	55		—		299		14		—		336		Purchases (3)	15		—		61		152		—		36
Sales (3)	Sales (3)	(37)		(11)		(72)		—		—		(43)		Sales (3)	(1)		—		(21)		—		—		(949)
Issuances (3)	Issuances (3)	—		—		—		(6)		—		(1)		Issuances (3)	—		—		—		—		—		(5)
Settlements (3)	Settlements (3)	—		(17)		—		43		(184)		6		Settlements (3)	—		(5)		—		13		(29)		6
Transfers into Level 3 (4)	Transfers into Level 3 (4)	—		—		—		1		—		10		Transfers into Level 3 (4)	100		—		—		—		—		—
Transfers out of Level 3 (4)	Transfers out of Level 3 (4)	(3)		—		(25)		(1)		—		(2)		Transfers out of Level 3 (4)	—		—		(100)		—		—		—
Balance, end of period	Balance, end of period	$	57	$	134	$	845	$	(210)	$	(587)	$	1,399	Balance, end of period	$	119	$	109	$	1,013	$	(287)	$	(496)	$	1,230
Nine Months Ended September 30, 2020
Three Months Ended June 30, 2021														Three Months Ended June 30, 2021
Balance, beginning of period	Balance, beginning of period	$	32	$	188	$	455	$	(146)	$	(742)	$	980	Balance, beginning of period	$	102	$	149	$	656	$	(162)	$	(508)	$	1,133
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(6)		10		(11)		163		(643)		(2)		Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		(1)		12		(49)		(4)		12
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	(1)		—		—		980		(21)		—		Total realized/unrealized gains (losses) included in AOCI	1		—		—		205		1		—
Purchases (3)	Purchases (3)	2		—		42		—		—		204		Purchases (3)	35		—		113		4		—		118
Sales (3)	Sales (3)	(17)		(7)		—		—		—		(95)		Sales (3)	(46)		(2)		—		—		—		(27)
Issuances (3)	Issuances (3)	—		—		—		—		—		(4)		Issuances (3)	—		—		—		(5)		—		1
Settlements (3)	Settlements (3)	—		(15)		—		(253)		(192)		1		Settlements (3)	—		(6)		—		—		(63)		3
Transfers into Level 3 (4)	Transfers into Level 3 (4)	9		—		—		—		—		10		Transfers into Level 3 (4)	50		—		—		—		—		9
Transfers out of Level 3 (4)		(16)		—		—		(7)		—		(5)
Transfers out of Level 3 (4), (5)														Transfers out of Level 3 (4), (5)	(29)		—		—		64		—		—
Balance, end of period	Balance, end of period	$	3	$	176	$	486	$	737	$	(1,598)	$	1,089	Balance, end of period	$	113	$	140	$	781	$	57	$	(574)	$	1,249
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (5)		$	—	$	(7)	$	66	$	(392)	$	715	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (5)		$	(6)	$	6	$	(7)	$	3	$	(653)	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at September 30, 2021 (5)		$	—	$	—	$	—	$	(206)	$	22	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at September 30, 2020 (5)		$	(1)	$	—	$	—	$	801	$	(20)	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (6)														Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (6)	$	—	$	(5)	$	23	$	(291)	$	97	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (6)														Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (6)	$	—	$	(2)	$	12	$	(69)	$	(3)	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (6)														Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (6)	$	—	$	—	$	—	$	(199)	$	13	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (6)														Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (6)	$	(1)	$	—	$	—	$	200	$	1	$	—

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fixed Maturity Securities AFS
	Corporate (7)		Foreign Government		Structured Products		Municipals		Equity Securities		Unit-linked and FVO Securities
	(In millions)
Six Months Ended June 30, 2022
Balance, beginning of period	$	25,435	$	91	$	5,871	$	—	$	151	$	901
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(16)		(43)		23		—		11		(169)
Total realized/unrealized gains (losses) included in AOCI	(4,892)		7		(423)		—		—		—
Purchases (3)	2,698		1		732		—		25		15
Sales (3)	(782)		(2)		(668)		—		(6)		(4)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	463		49		190		—		—		13
Transfers out of Level 3 (4)	(324)		—		(378)		—		(2)		(14)
Balance, end of period	$	22,582	$	103	$	5,347	$	—	$	179	$	742
Six Months Ended June 30, 2021
Balance, beginning of period	$	24,101	$	117	$	5,289	$	—	$	150	$	701
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(5)		1		24		—		10		62
Total realized/unrealized gains (losses) included in AOCI	(776)		(1)		(28)		—		—		—
Purchases (3)	1,722		46		1,380		—		3		21
Sales (3)	(507)		(5)		(685)		—		(16)		(15)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	101		13		270		—		—		95
Transfers out of Level 3 (4)	(863)		(26)		(247)		—		(4)		(15)
Balance, end of period	$	23,773	$	145	$	6,003	$	—	$	143	$	849
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (6)	$	(16)	$	(43)	$	23	$	—	$	9	$	(168)
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (6)	$	(8)	$	1	$	22	$	—	$	5	$	61
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (6)	$	(4,885)	$	6	$	(416)	$	—	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (6)	$	(767)	$	(1)	$	(26)	$	—	$	—	$	—

Table of Contents

MetLife, Inc.

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

8. Fair Value (continued)


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Short-term Investments		Residential Mortgage Loans — FVO		Other Investments		Net Derivatives (8)		Net Embedded Derivatives (9)		Separate Accounts (10)
	(In millions)
Six Months Ended June 30, 2022
Balance, beginning of period	$	3	$	127	$	898	$	(152)	$	(611)	$	2,131
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(1)		(9)		72		17		139		43
Total realized/unrealized gains (losses) included in AOCI	—		—		—		(410)		23		—
Purchases (3)	119		—		187		240		—		107
Sales (3)	(2)		—		(44)		—		—		(1,047)
Issuances (3)	—		—		—		(2)		—		(5)
Settlements (3)	—		(9)		—		20		(47)		4
Transfers into Level 3 (4)	—		—		—		—		—		1
Transfers out of Level 3 (4)	—		—		(100)		—		—		(4)
Balance, end of period	$	119	$	109	$	1,013	$	(287)	$	(496)	$	1,230
Six Months Ended June 30, 2021
Balance, beginning of period	$	43	$	165	$	573	$	594	$	(1,141)	$	1,079
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		(3)		25		(217)		669		2
Total realized/unrealized gains (losses) included in AOCI	(1)		—		—		(412)		22		—
Purchases (3)	84		—		183		4		—		188
Sales (3)	(10)		(11)		—		—		—		(32)
Issuances (3)	—		—		—		(6)		—		—
Settlements (3)	—		(11)		—		94		(124)		5
Transfers into Level 3 (4)	—		—		—		1		—		10
Transfers out of Level 3 (4)	(3)		—		—		(1)		—		(3)
Balance, end of period	$	113	$	140	$	781	$	57	$	(574)	$	1,249
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (6)	$	—	$	(9)	$	69	$	(15)	$	139	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (6)	$	—	$	(7)	$	26	$	(132)	$	668	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (6)	$	—	$	—	$	—	$	(390)	$	22	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (6)	$	(1)	$	—	$	—	$	(274)	$	22	$	—

__________________

(1)Amortization of premium/accretion of discount is included within net investment income. Impairments and changes in ACL charged to net income (loss) on certain securities are included in net investment gains (losses), while changes in estimated fair value of Unit-linked and FVO Securities and 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 derivative gains (losses).

(2)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(3)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.

(4)Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.

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

8. Fair Value (continued)

(5)Transfers out of Level 3 for the three months ended June 30, 2021 included $28 million of short-term investments reclassified to assets held-for-sale.

(6)Changes in unrealized gains (losses) included in net income (loss) and included in AOCI 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).

~~(6)~~(7)Comprised of U.S. and foreign corporate securities.

~~(7)~~(8)Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

~~(8)~~(9)Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

~~(9)~~(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)~~income (loss). Separate account assets and liabilities are presented net for the purposes of the rollforward.

Fair Value Option

The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The following table presents information for residential mortgage loans which are accounted for under the FVO and were initially measured at fair value.

September 30, 2021 December 31, 2020
(In millions)
Unpaid principal balance $ 135 $ 172
Difference between estimated fair value and unpaid principal balance (1) (7)
Carrying value at estimated fair value $ 134 $ 165
Loans in nonaccrual status $ 32 $ 45
Loans more than 90 days past due $ 16 $ 27
Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance $ (6) $ (13)

~~Nonrecurring Fair Value Measurements~~

The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment), using significant unobservable inputs (Level 3).

September 30, December 31, Three Months
Ended
September 30, Nine Months
Ended
September 30,
2021 2020 2021 2020 2021 2020
Carrying Value After Measurement Gains (Losses)
(In millions)
Mortgage loans, net (1) $ 389 $ 408 $ (16) $ (43) $ (41) $ (52)

~~__________________~~

~~(1)Estimated fair values for impaired mortgage loans are based on estimated fair value of the underlying collateral.~~


	June 30, 2022		December 31, 2021
	(In millions)
Unpaid principal balance	$	115	$	130
Difference between estimated fair value and unpaid principal balance	(6)		(3)
Carrying value at estimated fair value	$	109	$	127
Loans in nonaccrual status	$	24	$	32
Loans more than 90 days past due	$	10	$	14
Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance	$	(2)	$	(7)

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

8. Fair Value (continued)

Fair Value of Financial Instruments Carried at Other Than Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three-level hierarchy table disclosed in the “— Recurring Fair Value Measurements” section. The Company believes that due to the short-term nature of these excluded assets, which are primarily classified in Level 2, the estimated fair value approximates carrying value. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure.

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:


		September 30, 2021 (1)											June 30, 2022
				Fair Value Hierarchy											Fair Value Hierarchy
		Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value			Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)											(In millions)
Assets	Assets											Assets
Mortgage loans (2)	Mortgage loans (2)	$	80,830	$	—	$	—	$	84,846	$	84,846	Mortgage loans (2)	$	81,946	$	—	$	—	$	79,974	$	79,974
Policy loans	Policy loans	$	9,186	$	—	$	—	$	10,968	$	10,968	Policy loans	$	8,876	$	—	$	—	$	9,965	$	9,965

Other invested assets	Other invested assets	$	1,053	$	—	$	791	$	262	$	1,053	Other invested assets	$	1,010	$	—	$	802	$	208	$	1,010
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	$	2,582	$	—	$	755	$	2,015	$	2,770	Premiums, reinsurance and other receivables	$	2,664	$	—	$	950	$	1,802	$	2,752
Other assets	Other assets	$	296	$	—	$	101	$	192	$	293	Other assets	$	450	$	—	$	296	$	170	$	466
Liabilities	Liabilities											Liabilities
Policyholder account balances	Policyholder account balances	$	125,437	$	—	$	—	$	130,454	$	130,454	Policyholder account balances	$	124,081	$	—	$	—	$	119,988	$	119,988
Long-term debt	Long-term debt	$	13,923	$	—	$	16,825	$	—	$	16,825	Long-term debt	$	13,609	$	—	$	13,850	$	—	$	13,850
Collateral financing arrangement	Collateral financing arrangement	$	806	$	—	$	—	$	669	$	669	Collateral financing arrangement	$	741	$	—	$	—	$	602	$	602
Junior subordinated debt securities	Junior subordinated debt securities	$	3,155	$	—	$	4,589	$	—	$	4,589	Junior subordinated debt securities	$	3,157	$	—	$	3,555	$	—	$	3,555
Other liabilities	Other liabilities	$	3,328	$	—	$	1,737	$	2,261	$	3,998	Other liabilities	$	2,622	$	—	$	1,072	$	1,919	$	2,991
Separate account liabilities	Separate account liabilities	$	97,752	$	—	$	97,752	$	—	$	97,752	Separate account liabilities	$	79,050	$	—	$	79,050	$	—	$	79,050

7269

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MetLife, Inc.

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

8. Fair Value (continued)


		December 31, 2020 (1)											December 31, 2021 (1)
				Fair Value Hierarchy											Fair Value Hierarchy
		Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value			Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)											(In millions)
Assets	Assets											Assets
Mortgage loans (2)	Mortgage loans (2)	$	83,754	$	—	$	—	$	88,675	$	88,675	Mortgage loans (2)	$	79,226	$	—	$	—	$	82,788	$	82,788
Policy loans	Policy loans	$	9,493	$	—	$	—	$	11,598	$	11,598	Policy loans	$	9,111	$	—	$	—	$	10,751	$	10,751

Other invested assets	Other invested assets	$	1,188	$	—	$	814	$	374	$	1,188	Other invested assets	$	1,025	$	—	$	769	$	256	$	1,025
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	$	2,729	$	—	$	908	$	2,070	$	2,978	Premiums, reinsurance and other receivables	$	2,262	$	—	$	492	$	1,962	$	2,454
Other assets	Other assets	$	300	$	—	$	111	$	190	$	301	Other assets	$	290	$	—	$	101	$	190	$	291
Liabilities	Liabilities											Liabilities
Policyholder account balances	Policyholder account balances	$	126,458	$	—	$	—	$	134,569	$	134,569	Policyholder account balances	$	123,865	$	—	$	—	$	127,728	$	127,728
Long-term debt	Long-term debt	$	14,492	$	—	$	18,332	$	—	$	18,332	Long-term debt	$	13,852	$	—	$	16,621	$	—	$	16,621
Collateral financing arrangement	Collateral financing arrangement	$	845	$	—	$	—	$	710	$	710	Collateral financing arrangement	$	766	$	—	$	—	$	630	$	630
Junior subordinated debt securities	Junior subordinated debt securities	$	3,153	$	—	$	4,604	$	—	$	4,604	Junior subordinated debt securities	$	3,156	$	—	$	4,447	$	—	$	4,447
Other liabilities	Other liabilities	$	2,113	$	—	$	527	$	2,606	$	3,133	Other liabilities	$	2,143	$	—	$	514	$	2,321	$	2,835
Separate account liabilities	Separate account liabilities	$	115,682	$	—	$	115,682	$	—	$	115,682	Separate account liabilities	$	95,619	$	—	$	95,619	$	—	$	95,619

_________________

(1)Excludes amounts ~~for financial instruments~~ reclassified to assets held-for-sale or liabilities held-for-sale. See Note 3 for information on the Company’s business dispositions.

(2)Includes mortgage loans measured at estimated fair value on a nonrecurring basis and excludes mortgage loans measured at estimated fair value on a recurring basis.

9. ~~Long Term Debt~~Equity

Preferred Stock

Preferred stock authorized, issued and outstanding was as follows at both June 30, 2022 and December 31, 2021:


Series	Shares Authorized	Shares Issued and Outstanding
Floating Rate Non-Cumulative Preferred Stock, Series A	27,600,000	24,000,000
5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D	500,000	500,000
5.625% Non-Cumulative Preferred Stock, Series E	32,200	32,200
4.75% Non-Cumulative Preferred Stock, Series F	40,000	40,000
3.85% Fixed Rate Reset Non-Cumulative Preferred Stock, Series G	1,000,000	1,000,000
Series A Junior Participating Preferred Stock	10,000,000	—
Not designated	160,827,800	—
Total	200,000,000	25,572,200

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MetLife, Inc.

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

9. Equity (continued)

The per share and aggregate dividends declared for MetLife, Inc.’s preferred stock were as follows:


	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Series	Per Share		Aggregate		Per Share		Aggregate		Per Share		Aggregate		Per Share		Aggregate
	(In millions, except per share data)
A	$	0.256	$	6	$	0.256	$	6	$	0.506	$	12	$	0.506	$	12
C (1)	$	—	—		$	9.606	5		$	—	—		$	19.085	10
D	$	—	—		$	—	—		$	29.375	15		$	29.375	15
E	$	351.563	11		$	351.563	12		$	703.126	22		$	703.126	23
F	$	296.875	12		$	296.875	12		$	593.750	24		$	593.750	24
G	$	—	—		$	—	—		$	19.250	19		$	19.785	19
Total			$	29			$	35			$	92			$	103

__________________

(1)Dividends were paid through the dividend payment date of June 15, 2021, when all outstanding shares of MetLife, Inc.’s 5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C were redeemed and eliminated. See Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Common Stock

MetLife, Inc. announced that its Board of Directors authorized common stock repurchases as follows:


			Authorization Remaining at
Announcement Date	Authorization Amount		June 30, 2022
	(In millions)
May 4, 2022	$	3,000	$	2,475
August 4, 2021	$	3,000	$	—
December 11, 2020	$	3,000	$	—

Under these authorizations, MetLife, Inc. may purchase its common stock from the MetLife Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934), and in privately negotiated transactions. Common stock repurchases are subject to the discretion of MetLife, Inc.’s Board of Directors and will depend upon the Company’s capital position, liquidity, financial strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to management’s assessment of the stock’s underlying value, applicable regulatory approvals, and other legal and accounting factors.

For the six months ended June 30, 2022 and 2021, MetLife, Inc. repurchased 30,939,541 shares and 36,170,428 shares of its common stock, respectively, through open market purchases for $2.0 billion and $2.1 billion, respectively.

Stock-Based Compensation Plans

Performance Shares and Performance Units

Final Performance Shares are paid in shares of MetLife, Inc. common stock. Final Performance Units are payable in cash equal to the closing price of MetLife, Inc. common stock on a date following the last day of the three-year performance period. The performance factor for the January 1, 2019 – December 31, 2021 performance period was 141.3%, which was determined within a possible range from 0% to 175%. This factor has been applied to the 1,485,512 Performance Shares and 156,090 Performance Units associated with that performance period that vested on December 31, 2021. As a result, in the first quarter of 2022, MetLife, Inc. issued 2,099,028 shares of its common stock (less withholding for taxes and other items, as applicable), excluding shares that payees choose to defer, and MetLife, Inc. or its affiliates paid the cash value of 220,555 Performance Units (less withholding for taxes and other items, as applicable).

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MetLife, Inc.

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

9. Equity (continued)

Dividend Restrictions

Insurance Operations

For the six months ended June 30, 2022, American Life Insurance Company paid a dividend of $620 million to MetLife, Inc., for which regulatory approval was obtained as required.

See Note 16 of the Notes to Consolidated Financial Statements included in the 2021 Annual Report for additional information on dividend restrictions.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI attributable to MetLife, Inc. was as follows:


	Three Months Ended June 30, 2022
	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	$	3,718	$	1,464	$	(5,517)	$	(1,577)	$	(1,912)
OCI before reclassifications	(20,082)		(154)		(1,126)		3		(21,359)
Deferred income tax benefit (expense)	4,512		40		(66)		—		4,486
AOCI before reclassifications, net of income tax	(11,852)		1,350		(6,709)		(1,574)		(18,785)
Amounts reclassified from AOCI	682		629		—		23		1,334
Deferred income tax benefit (expense)	(155)		(132)		—		(4)		(291)
Amounts reclassified from AOCI, net of income tax	527		497		—		19		1,043



Sale of subsidiary, net of income tax (2)	21		—		349		—		370
Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

	Three Months Ended June 30, 2021
	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	$	16,194	$	518	$	(4,467)	$	(1,848)	$	10,397
OCI before reclassifications	2,099		828		6		1		2,934
Deferred income tax benefit (expense)	(570)		(169)		(2)		(1)		(742)
AOCI before reclassifications, net of income tax	17,723		1,177		(4,463)		(1,848)		12,589
Amounts reclassified from AOCI	(15)		(131)		—		17		(129)
Deferred income tax benefit (expense)	3		27		—		(5)		25
Amounts reclassified from AOCI, net of income tax	(12)		(104)		—		12		(104)


Sale of subsidiary, net of income tax	(176)		—		—		—		(176)
Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

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MetLife, Inc.

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

9. Equity (continued)


	Six Months Ended June 30, 2022
	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	$	16,042	$	1,629	$	(5,154)	$	(1,598)	$	10,919
OCI before reclassifications	(36,455)		(466)		(1,508)		6		(38,423)
Deferred income tax benefit (expense)	8,345		95		(85)		(1)		8,354
AOCI before reclassifications, net of income tax	(12,068)		1,258		(6,747)		(1,593)		(19,150)
Amounts reclassified from AOCI	1,003		741		—		47		1,791
Deferred income tax benefit (expense)	(230)		(152)		—		(7)		(389)
Amounts reclassified from AOCI, net of income tax	773		589		—		40		1,402
Sale of subsidiaries, net of income tax (2)	(9)		—		387		(2)		376
Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

	Six Months Ended June 30, 2021
	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	$	22,217	$	1,513	$	(3,795)	$	(1,863)	$	18,072
OCI before reclassifications	(5,879)		(614)		(747)		4		(7,236)
Deferred income tax benefit (expense)	1,376		141		(36)		(1)		1,480
AOCI before reclassifications, net of income tax	17,714		1,040		(4,578)		(1,860)		12,316
Amounts reclassified from AOCI	15		43		—		31		89
Deferred income tax benefit (expense)	(4)		(10)		—		(7)		(21)
Amounts reclassified from AOCI, net of income tax	11		33		—		24		68
Sale of subsidiaries, net of income tax	(190)		—		115		—		(75)
Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

__________________

(1)See Note 6 for information on offsets to investments related to policyholder liabilities, DAC, VOBA and DSI.

(2)See Note 3 for information on the Company’s business dispositions.

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MetLife, Inc.

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

9. Equity (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
AOCI Components	Amounts Reclassified from AOCI								Consolidated Statements of Operations and Comprehensive Income (Loss) Locations
	(In millions)
Net unrealized investment gains (losses):
Net unrealized investment gains (losses)	$	(772)	$	(6)	$	(1,122)	$	(55)	Net investment gains (losses)
Net unrealized investment gains (losses)	2		(4)		4		(9)		Net investment income
Net unrealized investment gains (losses)	88		25		115		49		Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax	(682)		15		(1,003)		(15)
Income tax (expense) benefit	155		(3)		230		4
Net unrealized investment gains (losses), net of income tax	(527)		12		(773)		(11)
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives	16		15		31		27		Net investment income
Interest rate derivatives	42		19		60		48		Net investment gains (losses)
Interest rate derivatives	1		—		2		1		Other expenses
Foreign currency exchange rate derivatives	1		1		3		4		Net investment income
Foreign currency exchange rate derivatives	(690)		95		(838)		(124)		Net investment gains (losses)
Foreign currency exchange rate derivatives	1		1		1		1		Other expenses

Gains (losses) on cash flow hedges, before income tax	(629)		131		(741)		(43)
Income tax (expense) benefit	132		(27)		152		10
Gains (losses) on cash flow hedges, net of income tax	(497)		104		(589)		(33)
Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)	(26)		(35)		(53)		(53)
Amortization of prior service (costs) credit	3		18		6		22
Amortization of defined benefit plan items, before income tax	(23)		(17)		(47)		(31)
Income tax (expense) benefit	4		5		7		7
Amortization of defined benefit plan items, net of income tax	(19)		(12)		(40)		(24)
Total reclassifications, net of income tax	$	(1,043)	$	104	$	(1,402)	$	(68)

__________________

(1)These AOCI components are included in the computation of net periodic benefit costs. See Note 11.

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MetLife, Inc.

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

10. Other Revenues and Other Expenses

Other Revenues

Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Vision fee for service arrangements	$	138	$	135	$	292	$	275
Prepaid legal plans	118		108		238		217
Fee-based investment management	100		86		202		171
Recordkeeping and administrative services (1)	43		53		90		106
Administrative services-only contracts	59		58		118		119
Other revenue from service contracts from customers	67		74		135		141
Total revenues from service contracts from customers	525		514		1,075		1,029
Other	91		150		201		266
Total other revenues	$	616	$	664	$	1,276	$	1,295

__________________

(1)Related to products and businesses no longer actively marketed by the Company.

Receivables related to revenues from service contracts from customers were $236 million and $235 million at June 30, 2022 and December 31, 2021, respectively.

Other Expenses

Information on other expenses was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Employee-related costs (1)	$	868	$	808	$	1,772	$	1,782
Third party staffing costs	375		336		758		648
General and administrative expenses	169		135		290		243
Pension, postretirement and postemployment benefit costs	24		26		49		51
Premium taxes, other taxes, and licenses & fees	137		169		290		336
Commissions and other variable expenses	1,300		1,294		2,631		2,824
Capitalization of DAC	(622)		(642)		(1,272)		(1,417)
Amortization of DAC and VOBA	616		537		1,153		1,127
Amortization of negative VOBA	(10)		(10)		(19)		(19)
Interest expense on debt	226		228		451		456
Total other expenses	$	3,083	$	2,881	$	6,103	$	6,031

__________________

(1)Includes $78 million and $115 million for the three months and six months ended June 30, 2022, respectively, and ($58) million and ($74) million for the three months and six months ended June 30, 2021, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.

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MetLife, Inc.

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

11. Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

Certain subsidiaries of MetLife, Inc. sponsor a U.S. qualified and various U.S. and non-U.S. nonqualified defined benefit pension plans covering employees who meet specified eligibility requirements. These subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance benefits for U.S. and non-U.S. retired employees.

The components of net periodic benefit costs, reported in other expenses, were as follows:


	Three Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	50	$	1	$	56	$	1
Interest costs	82		9		83		10
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(129)		(15)		(125)		(14)
Amortization of net actuarial (gains) losses	30		(6)		39		(7)
Amortization of prior service costs (credit)	(3)		—		(1)		—
Net periodic benefit costs (credit)	$	30	$	(11)	$	35	$	(10)

	Six Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	102	$	2	$	119	$	2
Interest costs	163		17		161		18
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(258)		(28)		(257)		(28)
Amortization of net actuarial (gains) losses	61		(12)		77		(27)
Amortization of prior service costs (credit)	(6)		—		(5)		—
Net periodic benefit costs (credit)	$	62	$	(21)	$	78	$	(35)

12. Income Tax

The Company’s effective tax rate for the three months ended June 30, 2022, reflecting an income tax benefit, increased from the U.S. statutory rate primarily due to tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate, tax credits and non-taxable investment income. The Company’s effective tax rate for the six months ended June 30, 2022 was (14%), reflecting an income tax benefit despite having income before provision for income tax and, differed from the U.S. statutory rate primarily due to tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate, tax credits, the corporate tax deduction for stock compensation and non-taxable investment income.

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MetLife, Inc.

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

12. Income Tax (continued)

For the three months and six months ended June 30, 2021, the effective tax rate on income (loss) before provision for income tax was 24% and 21%, respectively. The Company’s effective tax rate for the three months ended June 30, 2021 differed from the U.S. statutory rate primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, the completed sale of MetLife P&C and the pending disposition of MetLife Poland and Greece, partially offset by tax benefits related to tax credits and non-taxable investment income. The Company’s effective tax rate for the six months ended June 30, 2021 was equal to the statutory rate of 21%, primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, the completed sale of MetLife P&C and the pending disposition of MetLife Poland and Greece, offset by tax benefits related to tax credits, non-taxable investment income and the corporate tax deduction for stock compensation.

13. Earnings Per Common Share

The following table presents the weighted average shares, basic earnings per common share and diluted earnings per common share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions, except per share data)
Weighted Average Shares:
Weighted average common stock outstanding - basic	809.7		873.3		816.7		879.3
Incremental common shares from assumed exercise or issuance of stock-based awards	4.8		6.4		5.8		6.5
Weighted average common stock outstanding - diluted	814.5		879.7		822.5		885.8
Net Income (Loss):
Net income (loss)	$	138	$	3,412	$	812	$	3,775
Less: Net income (loss) attributable to noncontrolling interests	6		5		11		10
Less: Preferred stock dividends	29		35		92		103
Preferred stock redemption premium	—		6		—		6
Net income (loss) available to MetLife, Inc.’s common shareholders	$	103	$	3,366	$	709	$	3,656
Basic	$	0.13	$	3.85	$	0.87	$	4.16
Diluted	$	0.13	$	3.83	$	0.86	$	4.13

14. Contingencies, Commitments and Guarantees

Contingencies

Litigation

The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed below and those otherwise provided for in the Company’s interim condensed consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lending bank, employer, investor, investment advisor, broker-dealer, and taxpayer.

The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the U.S. Securities and Exchange Commission; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority, as well as from local and national regulators and government authorities in jurisdictions outside the United States where the Company conducts business. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries.

Table of Contents

MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. In certain circumstances where liabilities have been established there may be coverage under one or more corporate insurance policies, pursuant to which there may be an insurance recovery. Insurance recoveries are recognized as gains when any contingencies relating to the insurance claim have been resolved, which is the earlier of when the gains are realized or realizable. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at June 30, 2022. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company’s financial position. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Matters as to Which an Estimate Can Be Made

For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of June 30,2022, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $100 million.

Matters as to Which an Estimate Cannot Be Made

For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Asbestos-Related Claims

MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. MLIC has never engaged in the business of manufacturing or selling asbestos-containing products, nor has MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing or selling asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of MLIC’s employees during the period from the 1920s through approximately the 1950s and allege that MLIC learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against MLIC.

MLIC’s defenses include that: (i) MLIC owed no duty to the plaintiffs; (ii) plaintiffs did not rely on any actions of MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ injuries; and (iv) plaintiffs’ exposure occurred after the dangers of asbestos were known. During the course of the litigation, certain trial courts have granted motions dismissing claims against MLIC, while other trial courts have denied MLIC’s motions. There can be no assurance that MLIC will receive favorable decisions on motions in the future. While most cases brought to date have settled, MLIC intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

As reported in the 2021 Annual Report, MLIC received approximately 2,824 asbestos-related claims in 2021. For the six months ended June 30, 2022 and 2021, MLIC received approximately 1,319 and 1,304 new asbestos-related claims, respectively. See Note 21 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for historical information concerning asbestos claims and MLIC’s update in its recorded liability at December 31, 2021. The number of asbestos cases that may be brought, the aggregate amount of any liability that MLIC may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.

The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the willingness of courts to allow plaintiffs to pursue claims against MLIC when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts.

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary, but management does not believe any such charges are likely to have a material effect on the Company’s financial position.

The Company believes adequate provision has been made in its interim condensed consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability covers pending claims, claims not yet asserted, and legal defense costs and is based on estimates and includes significant assumptions underlying its analysis.

Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017)

Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)

Total Asset Recovery Services (the “Relator”) brought an action under the qui tam provision of the New York False Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., MLIC, and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. The Appellate Division of the New York State Supreme Court, First Department, reversed the court’s order granting MetLife, Inc. and MLIC’s motion to dismiss and remanded the case to the trial court where the Relator has filed an amended complaint. The Company intends to defend the action vigorously.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

Matters Related to Group Annuity Benefits and Assumed Variable Annuity Guarantee Reserves

In 2018, the Company announced that it identified two material weaknesses in its internal control over financial reporting related to the practices and procedures for estimating reserves for certain group annuity benefits and the calculation of reserves associated with certain variable annuity guarantees assumed from the former operating joint venture in Japan. Several regulators have made inquiries into these issues and it is possible that other jurisdictions may pursue similar investigations or inquiries. The Company is exposed to lawsuits, and could be exposed to additional legal actions relating to these issues. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, Employee Retirement Income Security Act of 1974, or other laws or regulations. The Company could incur significant costs in connection with these actions.

Derivative Demands

The MetLife, Inc. Board of Directors received six letters, dated March 28, 2018, May 11, 2018, July 16, 2018, December 20, 2018, February 5, 2019, and April 7, 2020, written on behalf of individual stockholders, demanding that MetLife, Inc. take action against current and former directors and officers for alleged breaches of fiduciary duty and/or investigate, remediate, and recover damages allegedly suffered by the Company as a result of (i) the Company’s allegedly inadequate practices and procedures for estimating reserves for certain group annuity benefits, (ii) the Company’s allegedly inadequate internal controls over financial reporting and corporate governance practices and procedures, and (iii) the alleged dissemination of false or misleading information related to these issues. The MetLife, Inc. Board of Directors appointed a special committee to investigate the allegations set forth in these six letters.

Commitments

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $4.7 billion and $4.6 billion at June 30, 2022 and December 31, 2021, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $9.8 billionand $9.1 billion at June 30, 2022 and December 31, 2021, respectively.

Guarantees

In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $329 million, with a cumulative maximum of $629 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments.

In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

The Company also has minimum fund yield requirements on certain pension funds. Since these guarantees are not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future.

The Company’s recorded liabilities were $20 million at both June 30, 2022 and December 31, 2021, for indemnities, guarantees and commitments.

15. Subsequent Events

~~Senior Notes~~Common Stock

~~In July~~MetLife, Inc. announced that its Board of Directors authorized common stock repurchases as follows:


			Authorization Remaining at
Announcement Date	Authorization Amount		June 30, 2022
	(In millions)
May 4, 2022	$	3,000	$	2,475
August 4, 2021	$	3,000	$	—
December 11, 2020	$	3,000	$	—

For the six months ended June 30, 2022 and 2021, MetLife, Inc. ~~redeemed for cash~~repurchased 30,939,541 shares and ~~canceled $500 million aggregate principal amount~~36,170,428 shares of its ~~outstanding 3.048% senior notes due December 2022. The Company recorded a premium of $17 million~~common stock, respectively, through open market purchases for $2.0 billion and $2.1 billion, respectively.

Stock-Based Compensation Plans

Performance Shares and Performance Units

Final Performance Shares are paid in ~~excess~~shares of MetLife, Inc. common stock. Final Performance Units are payable in cash equal to the closing price of MetLife, Inc. common stock on a date following the last day of the ~~debt principal~~three-year performance period. The performance factor for the January 1, 2019 – December 31, 2021 performance period was 141.3%, which was determined within a possible range from 0% to 175%. This factor has been applied to the 1,485,512 Performance Shares and ~~accrued and unpaid interest to other expenses.~~

~~Credit Facility~~

~~In February 2021,~~156,090 Performance Units associated with that performance period that vested on December 31, 2021. As a result, in the first quarter of 2022, MetLife, Inc. issued 2,099,028 shares of its common stock (less withholding for taxes and other items, as applicable), excluding shares that payees choose to defer, and MetLife, ~~Funding,~~ Inc. ~~amended~~or its affiliates paid the cash value of 220,555 Performance Units (less withholding for taxes and ~~restated their five-year $3.0 billion unsecured credit agreement (as amended and restated,~~other items, as applicable).

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MetLife, Inc.

Notes to the ~~“2021 Five-Year Credit Agreement”). The facility may be used~~Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Equity (continued)

Dividend Restrictions

Insurance Operations

For the six months ended June 30, 2022, American Life Insurance Company paid a dividend of $620 million to MetLife, Inc., for ~~general corporate purposes (including~~which regulatory approval was obtained as required.

See Note 16 of the Notes to Consolidated Financial Statements included in the ~~case of loans, to back up commercial paper and,~~2021 Annual Report for additional information on dividend restrictions.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the ~~case~~balances of ~~letters~~each component of ~~credit,~~AOCI attributable to support variable annuity policy and reinsurance reserve requirements). All borrowings under the 2021 Five-Year Credit Agreement must be repaid by February 26, 2026, except that letters of credit outstanding on that date may remain outstanding until no later than February 26, 2027. MetLife, Inc. ~~incurred costs~~was as follows:


	Three Months Ended June 30, 2022
	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	$	3,718	$	1,464	$	(5,517)	$	(1,577)	$	(1,912)
OCI before reclassifications	(20,082)		(154)		(1,126)		3		(21,359)
Deferred income tax benefit (expense)	4,512		40		(66)		—		4,486
AOCI before reclassifications, net of income tax	(11,852)		1,350		(6,709)		(1,574)		(18,785)
Amounts reclassified from AOCI	682		629		—		23		1,334
Deferred income tax benefit (expense)	(155)		(132)		—		(4)		(291)
Amounts reclassified from AOCI, net of income tax	527		497		—		19		1,043



Sale of subsidiary, net of income tax (2)	21		—		349		—		370
Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

	Three Months Ended June 30, 2021
	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	$	16,194	$	518	$	(4,467)	$	(1,848)	$	10,397
OCI before reclassifications	2,099		828		6		1		2,934
Deferred income tax benefit (expense)	(570)		(169)		(2)		(1)		(742)
AOCI before reclassifications, net of income tax	17,723		1,177		(4,463)		(1,848)		12,589
Amounts reclassified from AOCI	(15)		(131)		—		17		(129)
Deferred income tax benefit (expense)	3		27		—		(5)		25
Amounts reclassified from AOCI, net of income tax	(12)		(104)		—		12		(104)


Sale of subsidiary, net of income tax	(176)		—		—		—		(176)
Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

Table of ~~$6 million~~Contents

MetLife, Inc.

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

9. Equity (continued)


	Six Months Ended June 30, 2022
	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	$	16,042	$	1,629	$	(5,154)	$	(1,598)	$	10,919
OCI before reclassifications	(36,455)		(466)		(1,508)		6		(38,423)
Deferred income tax benefit (expense)	8,345		95		(85)		(1)		8,354
AOCI before reclassifications, net of income tax	(12,068)		1,258		(6,747)		(1,593)		(19,150)
Amounts reclassified from AOCI	1,003		741		—		47		1,791
Deferred income tax benefit (expense)	(230)		(152)		—		(7)		(389)
Amounts reclassified from AOCI, net of income tax	773		589		—		40		1,402
Sale of subsidiaries, net of income tax (2)	(9)		—		387		(2)		376
Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

	Six Months Ended June 30, 2021
	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	$	22,217	$	1,513	$	(3,795)	$	(1,863)	$	18,072
OCI before reclassifications	(5,879)		(614)		(747)		4		(7,236)
Deferred income tax benefit (expense)	1,376		141		(36)		(1)		1,480
AOCI before reclassifications, net of income tax	17,714		1,040		(4,578)		(1,860)		12,316
Amounts reclassified from AOCI	15		43		—		31		89
Deferred income tax benefit (expense)	(4)		(10)		—		(7)		(21)
Amounts reclassified from AOCI, net of income tax	11		33		—		24		68
Sale of subsidiaries, net of income tax	(190)		—		115		—		(75)
Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

__________________

(1)See Note 6 for information on offsets to investments related to ~~the 2021 Five-Year Credit Agreement, which were capitalized~~policyholder liabilities, DAC, VOBA and ~~included in other assets. These costs are being amortized over the remaining term of the 2021 Five-Year Credit Agreement.~~

DSI.

(2)See Note 3 for information on the Company’s business dispositions.

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MetLife, Inc.

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

9. Equity (continued)

~~10. Equity~~

~~Preferred Stock~~

~~Preferred stock authorized, issued and outstanding~~Information regarding amounts reclassified out of each component of AOCI was as follows:

September 30, 2021 December 31, 2020
Series Shares
Authorized Shares Issued and Outstanding Shares
Authorized Shares Issued and Outstanding
Floating Rate Non-Cumulative Preferred Stock, Series A 27,600,000 24,000,000 27,600,000 24,000,000
5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (1) — — 1,500,000 500,000
5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D 500,000 500,000 500,000 500,000
5.625% Non-Cumulative Preferred Stock, Series E 32,200 32,200 32,200 32,200
4.75% Non-Cumulative Preferred Stock, Series F 40,000 40,000 40,000 40,000
3.85% Fixed Rate Reset Non-Cumulative Preferred Stock, Series G 1,000,000 1,000,000 1,000,000 1,000,000
Series A Junior Participating Preferred Stock 10,000,000 — 10,000,000 —
Not designated 160,827,800 — 159,327,800 —
Total 200,000,000 25,572,200 200,000,000 26,072,200


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
AOCI Components	Amounts Reclassified from AOCI								Consolidated Statements of Operations and Comprehensive Income (Loss) Locations
	(In millions)
Net unrealized investment gains (losses):
Net unrealized investment gains (losses)	$	(772)	$	(6)	$	(1,122)	$	(55)	Net investment gains (losses)
Net unrealized investment gains (losses)	2		(4)		4		(9)		Net investment income
Net unrealized investment gains (losses)	88		25		115		49		Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax	(682)		15		(1,003)		(15)
Income tax (expense) benefit	155		(3)		230		4
Net unrealized investment gains (losses), net of income tax	(527)		12		(773)		(11)
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives	16		15		31		27		Net investment income
Interest rate derivatives	42		19		60		48		Net investment gains (losses)
Interest rate derivatives	1		—		2		1		Other expenses
Foreign currency exchange rate derivatives	1		1		3		4		Net investment income
Foreign currency exchange rate derivatives	(690)		95		(838)		(124)		Net investment gains (losses)
Foreign currency exchange rate derivatives	1		1		1		1		Other expenses

Gains (losses) on cash flow hedges, before income tax	(629)		131		(741)		(43)
Income tax (expense) benefit	132		(27)		152		10
Gains (losses) on cash flow hedges, net of income tax	(497)		104		(589)		(33)
Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)	(26)		(35)		(53)		(53)
Amortization of prior service (costs) credit	3		18		6		22
Amortization of defined benefit plan items, before income tax	(23)		(17)		(47)		(31)
Income tax (expense) benefit	4		5		7		7
Amortization of defined benefit plan items, net of income tax	(19)		(12)		(40)		(24)
Total reclassifications, net of income tax	$	(1,043)	$	104	$	(1,402)	$	(68)

__________________

(1)~~On May 17, 2021,~~These AOCI components are included in the ~~outstanding 500,000 shares~~computation of MetLife, Inc.’s 5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (the “Series C preferred stock”) were irrevocably called for redemption, and on June 15, 2021, MetLife, Inc. redeemed and canceled the shares.net periodic benefit costs. See

In May 2021, MetLife, Inc. delivered a notice of redemption to the holders of the Series C preferred stock pursuant to which it would redeem the remaining 500,000 shares of Series C preferred stock at a redemption price of $1,000 per share. In connection with the redemption, MetLife, Inc. recognized a preferred stock redemption premium of $6 million (calculated as the difference between the carrying value of the Series C preferred stock and the total amount paid by MetLife, Inc. to the holders of the Series C preferred stock in connection with the redemption), which was recorded as a reduction of retained earnings at June 30,2021. All outstanding shares of Series C preferred stock were redeemed on the dividend payment date of June 15, 2021 for an aggregate redemption price of $500 million in cash.

In June 2021, MetLife, Inc. filed a Certificate of Elimination (the “Certificate of Elimination”) of Series C preferred stock with the Secretary of State of the State of Delaware to eliminate all references to the Series C preferred stock in MetLife, Inc.’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), including the related Certificate of Designations. As a result of the filing of the Certificate of Elimination, MetLife, Inc.’s Certificate of Incorporation was amended to eliminate all references therein to the Series C preferred stock, and the shares that were designated to such series were returned to the status of authorized but unissued shares of preferred stock, par value $0.01 per share, of MetLife, Inc., without designation as to series. The Certificate of Elimination does not affect the total number of authorized shares of capital stock of MetLife, Inc. or the total number of authorized shares of preferred stock.

~~The per share and aggregate dividends declared for MetLife, Inc.’s preferred stock were as follows:~~

Three Month Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Series Per Share Aggregate Per Share Aggregate Per Share Aggregate Per Share Aggregate
(In million, except per share data)
A $ 0.256 $ 6 $ 0.256 $ 6 $ 0.762 $ 18 $ 0.762 $ 18
C $ — — $ 9.940 15 $ 19.085 10 $ 36.190 54
D $ 29.375 14 $ 29.375 15 $ 58.750 29 $ 58.750 30
E $ 351.563 11 $ 351.563 11 $ 1,054.689 34 $ 1,054.689 34
F $ 296.875 12 $ 296.875 12 $ 890.625 36 $ 791.667 32
G $ 19.250 20 $ — — $ 39.035 39 $ — —
Total $ 63 $ 59 $ 166 $ 168
Note 11.

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MetLife, Inc.

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

10. ~~Equity~~Other Revenues and Other Expenses

Other Revenues

Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Vision fee for service arrangements	$	138	$	135	$	292	$	275
Prepaid legal plans	118		108		238		217
Fee-based investment management	100		86		202		171
Recordkeeping and administrative services (1)	43		53		90		106
Administrative services-only contracts	59		58		118		119
Other revenue from service contracts from customers	67		74		135		141
Total revenues from service contracts from customers	525		514		1,075		1,029
Other	91		150		201		266
Total other revenues	$	616	$	664	$	1,276	$	1,295

__________________

(1)Related to products and businesses no longer actively marketed by the Company.

Receivables related to revenues from service contracts from customers were $236 million and $235 million at June 30, 2022 and December 31, 2021, respectively.

Other Expenses

Information on other expenses was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Employee-related costs (1)	$	868	$	808	$	1,772	$	1,782
Third party staffing costs	375		336		758		648
General and administrative expenses	169		135		290		243
Pension, postretirement and postemployment benefit costs	24		26		49		51
Premium taxes, other taxes, and licenses & fees	137		169		290		336
Commissions and other variable expenses	1,300		1,294		2,631		2,824
Capitalization of DAC	(622)		(642)		(1,272)		(1,417)
Amortization of DAC and VOBA	616		537		1,153		1,127
Amortization of negative VOBA	(10)		(10)		(19)		(19)
Interest expense on debt	226		228		451		456
Total other expenses	$	3,083	$	2,881	$	6,103	$	6,031

__________________

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MetLife, Inc.

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

11. Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

The components of net periodic benefit costs, reported in other expenses, were as follows:


	Three Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	50	$	1	$	56	$	1
Interest costs	82		9		83		10
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(129)		(15)		(125)		(14)
Amortization of net actuarial (gains) losses	30		(6)		39		(7)
Amortization of prior service costs (credit)	(3)		—		(1)		—
Net periodic benefit costs (credit)	$	30	$	(11)	$	35	$	(10)

	Six Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	102	$	2	$	119	$	2
Interest costs	163		17		161		18
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(258)		(28)		(257)		(28)
Amortization of net actuarial (gains) losses	61		(12)		77		(27)
Amortization of prior service costs (credit)	(6)		—		(5)		—
Net periodic benefit costs (credit)	$	62	$	(21)	$	78	$	(35)

12. Income Tax

Table of Contents

MetLife, Inc.

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

12. Income Tax (continued)

13. Earnings Per Common Share

The following table presents the weighted average shares, basic earnings per common share and diluted earnings per common share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions, except per share data)
Weighted Average Shares:
Weighted average common stock outstanding - basic	809.7		873.3		816.7		879.3
Incremental common shares from assumed exercise or issuance of stock-based awards	4.8		6.4		5.8		6.5
Weighted average common stock outstanding - diluted	814.5		879.7		822.5		885.8
Net Income (Loss):
Net income (loss)	$	138	$	3,412	$	812	$	3,775
Less: Net income (loss) attributable to noncontrolling interests	6		5		11		10
Less: Preferred stock dividends	29		35		92		103
Preferred stock redemption premium	—		6		—		6
Net income (loss) available to MetLife, Inc.’s common shareholders	$	103	$	3,366	$	709	$	3,656
Basic	$	0.13	$	3.85	$	0.87	$	4.16
Diluted	$	0.13	$	3.83	$	0.86	$	4.13

14. Contingencies, Commitments and Guarantees

Contingencies

Litigation

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

Matters as to Which an Estimate Can Be Made

Matters as to Which an Estimate Cannot Be Made

Asbestos-Related Claims

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

The Company believes adequate provision has been made in its interim condensed consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability covers pending claims, claims not yet asserted, and legal defense costs and is based on estimates and includes significant assumptions underlying its analysis.

Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017)

Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)

Table of Contents

MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

Matters Related to Group Annuity Benefits and Assumed Variable Annuity Guarantee Reserves

Derivative Demands

Commitments

Mortgage Loan Commitments

Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments

Guarantees

Table of Contents

MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

The Company’s recorded liabilities were $20 million at both June 30, 2022 and December 31, 2021, for indemnities, guarantees and commitments.

15. Subsequent Events

Common Stock

MetLife, Inc. announced that its Board of Directors authorized common stock repurchases as follows:


				Authorization Remaining at					Authorization Remaining at
Announcement Date	Announcement Date	Authorization Amount		September 30, 2021		Announcement Date	Authorization Amount		June 30, 2022
		(In millions)					(In millions)
May 4, 2022						May 4, 2022	$	3,000	$	2,475
August 4, 2021	August 4, 2021	$	3,000	$	2,708	August 4, 2021	$	3,000	$	—
December 11, 2020	December 11, 2020	$	3,000	$	—	December 11, 2020	$	3,000	$	—
July 31, 2019		$	2,000	$	—

Under these authorizations, MetLife, Inc. may purchase its common stock from the MetLife Policyholder Trust, in the open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of ~~1934 (“Exchange Act”))~~1934), and in privately negotiated transactions. Common stock repurchases are subject to the discretion of MetLife, Inc.’s Board of Directors and will depend upon the Company’s capital position, liquidity, financial strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to management’s assessment of the stock’s underlying value, applicable regulatory approvals, and other legal and accounting factors.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MetLife, Inc. repurchased ~~52,857,261~~30,939,541 shares and ~~12,806,464~~36,170,428 shares of its common stock, respectively, through open market purchases for ~~$3.1~~$2.0 billion and ~~$580 million,~~$2.1 billion, respectively.

Stock-Based Compensation Plans

Performance Shares and Performance Units

Final Performance Shares are paid in shares of MetLife, Inc. common stock. Final Performance Units are payable in cash equal to the closing price of MetLife, Inc. common stock on a date following the last day of the three-year performance period. The performance factor for the January 1, ~~2018~~2019 – December 31, ~~2020~~2021 performance period was ~~110.8%~~141.3%, which was determined within a possible range from 0% to 175%. This factor has been applied to the ~~1,266,651~~1,485,512 Performance Shares and ~~170,214~~156,090 Performance Units associated with that performance period that vested on December 31, ~~2020.~~2021. As a result, in the first quarter of ~~2021,~~2022, MetLife, Inc. issued ~~1,403,449~~2,099,028 shares of its common stock (less withholding for taxes and other items, as applicable), excluding shares that payees choose to defer, and MetLife, Inc. or its affiliates paid the cash value of ~~188,597~~220,555 Performance Units (less withholding for taxes and other items, as applicable).

~~Dividend Restrictions~~

~~Insurance Operations~~

~~For the nine months ended September 30, 2021, American Life Insurance Company paid a dividend of $600 million to MetLife, Inc., for which regulatory approval was obtained as required.~~

Additionally, for the nine months ended September 30, 2021, Metropolitan Property and Casualty Insurance Company paid a non-cash dividend of $35 million consisting of the stock of a subsidiary to MetLife, Inc., for which regulatory approval was obtained as required. See Note 3 on the disposition of MetLife P&C.

~~See Note 16 of the Notes to Consolidated Financial Statements included in the 2020 Annual Report for additional information on dividend restrictions.~~

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

~~10.~~9. Equity (continued)

Dividend Restrictions

Insurance Operations

For the six months ended June 30, 2022, American Life Insurance Company paid a dividend of $620 million to MetLife, Inc., for which regulatory approval was obtained as required.

See Note 16 of the Notes to Consolidated Financial Statements included in the 2021 Annual Report for additional information on dividend restrictions.

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI attributable to MetLife, Inc. was as follows:


		Three Months Ended September 30, 2021											Three Months Ended June 30, 2022
		Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total			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)											(In millions)
Balance, beginning of period	Balance, beginning of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309	Balance, beginning of period	$	3,718	$	1,464	$	(5,517)	$	(1,577)	$	(1,912)
Other comprehensive income (loss) before reclassifications		(633)		442		(421)		5		(607)
OCI before reclassifications												OCI before reclassifications	(20,082)		(154)		(1,126)		3		(21,359)
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	208		(102)		(4)		(1)		101		Deferred income tax benefit (expense)	4,512		40		(66)		—		4,486
AOCI before reclassifications, net of income tax	AOCI before reclassifications, net of income tax	17,110		1,413		(4,888)		(1,832)		11,803		AOCI before reclassifications, net of income tax	(11,852)		1,350		(6,709)		(1,574)		(18,785)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(91)		236		—		30		175		Amounts reclassified from AOCI	682		629		—		23		1,334
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	22		(54)		—		(3)		(35)		Deferred income tax benefit (expense)	(155)		(132)		—		(4)		(291)
Amounts reclassified from AOCI, net of income tax	Amounts reclassified from AOCI, net of income tax	(69)		182		—		27		140		Amounts reclassified from AOCI, net of income tax	527		497		—		19		1,043

Sale of subsidiary, net of income tax (2)	Sale of subsidiary, net of income tax (2)	22		—		146		—		168		Sale of subsidiary, net of income tax (2)	21		—		349		—		370
Balance, end of period	Balance, end of period	$	17,063	$	1,595	$	(4,742)	$	(1,805)	$	12,111	Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

		Three Months Ended September 30, 2020											Three Months Ended June 30, 2021
		Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total			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)											(In millions)
Balance, beginning of period	Balance, beginning of period	$	21,759	$	4,154	$	(5,382)	$	(1,968)	$	18,563	Balance, beginning of period	$	16,194	$	518	$	(4,467)	$	(1,848)	$	10,397
Other comprehensive income (loss) before reclassifications		(2,212)		(846)		507		(3)		(2,554)
OCI before reclassifications												OCI before reclassifications	2,099		828		6		1		2,934
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	190		207		(4)		1		394		Deferred income tax benefit (expense)	(570)		(169)		(2)		(1)		(742)
AOCI before reclassifications, net of income tax	AOCI before reclassifications, net of income tax	19,737		3,515		(4,879)		(1,970)		16,403		AOCI before reclassifications, net of income tax	17,723		1,177		(4,463)		(1,848)		12,589
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(64)		(457)		—		21		(500)		Amounts reclassified from AOCI	(15)		(131)		—		17		(129)
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	41		97		—		(5)		133		Deferred income tax benefit (expense)	3		27		—		(5)		25
Amounts reclassified from AOCI, net of income tax	Amounts reclassified from AOCI, net of income tax	(23)		(360)		—		16		(367)		Amounts reclassified from AOCI, net of income tax	(12)		(104)		—		12		(104)

Sale of subsidiary, net of income tax												Sale of subsidiary, net of income tax	(176)		—		—		—		(176)
Balance, end of period	Balance, end of period	$	19,714	$	3,155	$	(4,879)	$	(1,954)	$	16,036	Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

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

~~10.~~9. Equity (continued)

Nine Months
Ended
September 30, 2021
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 $ 22,217 $ 1,513 $ (3,795) $ (1,863) $ 18,072
Other comprehensive income (loss) before reclassifications (6,512) (172) (1,168) 9 (7,843)
Deferred income tax benefit (expense) 1,584 39 (40) (2) 1,581
AOCI before reclassifications, net of income tax 17,289 1,380 (5,003) (1,856) 11,810
Amounts reclassified from AOCI (76) 279 — 61 264
Deferred income tax benefit (expense) 18 (64) — (10) (56)
Amounts reclassified from AOCI, net of income tax (58) 215 — 51 208
Sale of subsidiaries, net of income tax (3) (168) — 261 — 93
Balance, end of period $ 17,063 $ 1,595 $ (4,742) $ (1,805) $ 12,111
Nine Months
Ended
September 30, 2020
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 $ 18,283 $ 1,698 $ (4,927) $ (2,002) $ 13,052
Other comprehensive income (loss) before reclassifications 2,674 2,202 76 (3) 4,949
Deferred income tax benefit (expense) (785) (461) (28) 1 (1,273)
AOCI before reclassifications, net of income tax 20,172 3,439 (4,879) (2,004) 16,728
Amounts reclassified from AOCI (297) (359) — 64 (592)
Deferred income tax benefit (expense) 87 75 — (14) 148
Amounts reclassified from AOCI, net of income tax (210) (284) — 50 (444)
Sale of subsidiary, net of income tax (248) — — — (248)
Balance, end of period $ 19,714 $ 3,155 $ (4,879) $ (1,954) $ 16,036


	Six Months Ended June 30, 2022
	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	$	16,042	$	1,629	$	(5,154)	$	(1,598)	$	10,919
OCI before reclassifications	(36,455)		(466)		(1,508)		6		(38,423)
Deferred income tax benefit (expense)	8,345		95		(85)		(1)		8,354
AOCI before reclassifications, net of income tax	(12,068)		1,258		(6,747)		(1,593)		(19,150)
Amounts reclassified from AOCI	1,003		741		—		47		1,791
Deferred income tax benefit (expense)	(230)		(152)		—		(7)		(389)
Amounts reclassified from AOCI, net of income tax	773		589		—		40		1,402
Sale of subsidiaries, net of income tax (2)	(9)		—		387		(2)		376
Balance, end of period	$	(11,304)	$	1,847	$	(6,360)	$	(1,555)	$	(17,372)

	Six Months Ended June 30, 2021
	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	$	22,217	$	1,513	$	(3,795)	$	(1,863)	$	18,072
OCI before reclassifications	(5,879)		(614)		(747)		4		(7,236)
Deferred income tax benefit (expense)	1,376		141		(36)		(1)		1,480
AOCI before reclassifications, net of income tax	17,714		1,040		(4,578)		(1,860)		12,316
Amounts reclassified from AOCI	15		43		—		31		89
Deferred income tax benefit (expense)	(4)		(10)		—		(7)		(21)
Amounts reclassified from AOCI, net of income tax	11		33		—		24		68
Sale of subsidiaries, net of income tax	(190)		—		115		—		(75)
Balance, end of period	$	17,535	$	1,073	$	(4,463)	$	(1,836)	$	12,309

__________________

(1)See Note 6 for information on offsets to investments related to policyholder liabilities, DAC, VOBA and ~~DSI.~~DSI.

(2)~~See Note 3 for information on the sale of MetLife Seguros.~~

~~(3)~~S~~See~~ee Note 3 for information on the Company’s business dispositions.

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

~~10.~~9. Equity (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020				2022		2021		2022		2021
AOCI Components	AOCI Components	Amounts Reclassified from AOCI								Consolidated Statements of Operations and Comprehensive Income (Loss) Locations	AOCI Components	Amounts Reclassified from AOCI								Consolidated Statements of Operations and Comprehensive Income (Loss) Locations
		(In millions)										(In millions)
Net unrealized investment gains (losses):	Net unrealized investment gains (losses):										Net unrealized investment gains (losses):
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	$	97	$	65	$	42	$	320	Net investment gains (losses)	Net unrealized investment gains (losses)	$	(772)	$	(6)	$	(1,122)	$	(55)	Net investment gains (losses)
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	(4)		(8)		(13)		(18)		Net investment income	Net unrealized investment gains (losses)	2		(4)		4		(9)		Net investment income
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	(2)		7		47		(5)		Net derivative gains (losses)	Net unrealized investment gains (losses)	88		25		115		49		Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax	Net unrealized investment gains (losses), before income tax	91		64		76		297			Net unrealized investment gains (losses), before income tax	(682)		15		(1,003)		(15)
Income tax (expense) benefit	Income tax (expense) benefit	(22)		(41)		(18)		(87)			Income tax (expense) benefit	155		(3)		230		4
Net unrealized investment gains (losses), net of income tax	Net unrealized investment gains (losses), net of income tax	69		23		58		210			Net unrealized investment gains (losses), net of income tax	(527)		12		(773)		(11)
Unrealized gains (losses) on derivatives - cash flow hedges:	Unrealized gains (losses) on derivatives - cash flow hedges:										Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives	Interest rate derivatives	14		9		41		24		Net investment income	Interest rate derivatives	16		15		31		27		Net investment income
Interest rate derivatives	Interest rate derivatives	6		10		54		58		Net investment gains (losses)	Interest rate derivatives	42		19		60		48		Net investment gains (losses)
Interest rate derivatives	Interest rate derivatives	1		1		2		2		Other expenses	Interest rate derivatives	1		—		2		1		Other expenses
Foreign currency exchange rate derivatives	Foreign currency exchange rate derivatives	2		2		6		3		Net investment income	Foreign currency exchange rate derivatives	1		1		3		4		Net investment income
Foreign currency exchange rate derivatives	Foreign currency exchange rate derivatives	(259)		435		(383)		271		Net investment gains (losses)	Foreign currency exchange rate derivatives	(690)		95		(838)		(124)		Net investment gains (losses)
Foreign currency exchange rate derivatives	Foreign currency exchange rate derivatives	—		—		1		1		Other expenses	Foreign currency exchange rate derivatives	1		1		1		1		Other expenses

Gains (losses) on cash flow hedges, before income tax	Gains (losses) on cash flow hedges, before income tax	(236)		457		(279)		359			Gains (losses) on cash flow hedges, before income tax	(629)		131		(741)		(43)
Income tax (expense) benefit	Income tax (expense) benefit	54		(97)		64		(75)			Income tax (expense) benefit	132		(27)		152		10
Gains (losses) on cash flow hedges, net of income tax	Gains (losses) on cash flow hedges, net of income tax	(182)		360		(215)		284			Gains (losses) on cash flow hedges, net of income tax	(497)		104		(589)		(33)
Defined benefit plans adjustment: (1)	Defined benefit plans adjustment: (1)										Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)	Amortization of net actuarial gains (losses)	(34)		(26)		(87)		(78)			Amortization of net actuarial gains (losses)	(26)		(35)		(53)		(53)
Amortization of prior service (costs) credit	Amortization of prior service (costs) credit	4		5		26		14			Amortization of prior service (costs) credit	3		18		6		22
Amortization of defined benefit plan items, before income tax	Amortization of defined benefit plan items, before income tax	(30)		(21)		(61)		(64)			Amortization of defined benefit plan items, before income tax	(23)		(17)		(47)		(31)
Income tax (expense) benefit	Income tax (expense) benefit	3		5		10		14			Income tax (expense) benefit	4		5		7		7
Amortization of defined benefit plan items, net of income tax	Amortization of defined benefit plan items, net of income tax	(27)		(16)		(51)		(50)			Amortization of defined benefit plan items, net of income tax	(19)		(12)		(40)		(24)
Total reclassifications, net of income tax	Total reclassifications, net of income tax	$	(140)	$	367	$	(208)	$	444		Total reclassifications, net of income tax	$	(1,043)	$	104	$	(1,402)	$	(68)

__________________

(1)These AOCI components are included in the computation of net periodic benefit costs. See Note ~~12.~~11.

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

~~11.~~10. Other Revenues and Other Expenses

Other Revenues

Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Vision fee for service arrangements ~~(1)~~	Vision fee for service arrangements ~~(1)~~	$	135	$	—	$	410	$	—	Vision fee for service arrangements ~~(1)~~	$	138	$	135	$	292	$	275
Prepaid legal plans	Prepaid legal plans	107		100		324		300		Prepaid legal plans	118		108		238		217
Fee-based investment management	Fee-based investment management	95		82		266		232		Fee-based investment management	100		86		202		171
Recordkeeping and administrative services ~~(2)~~(1)	Recordkeeping and administrative services ~~(2)~~(1)	54		50		160		145		Recordkeeping and administrative services ~~(2)~~(1)	43		53		90		106
Administrative services-only contracts	Administrative services-only contracts	56		54		175		164		Administrative services-only contracts	59		58		118		119
Other revenue from service contracts from customers	Other revenue from service contracts from customers	69		45		210		159		Other revenue from service contracts from customers	67		74		135		141
Total revenues from service contracts from customers	Total revenues from service contracts from customers	516		331		1,545		1,000		Total revenues from service contracts from customers	525		514		1,075		1,029
Other	Other	147		124		413		350		Other	91		150		201		266
Total other revenues	Total other revenues	$	663	$	455	$	1,958	$	1,350	Total other revenues	$	616	$	664	$	1,276	$	1,295

__________________

(1)~~For information regarding the Company’s acquisition of Versant Health, Inc., see Note 3 of the Notes to the Consolidated Financial Statements included in the 2020 Annual Report.~~

~~(2)~~Related to products and businesses no longer actively marketed by the Company.

Receivables related to revenues from service contracts from customers were $236 million and $235 million at June 30, 2022 and December 31, 2021, respectively.

Other Expenses

Information on other expenses was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Employee-related costs (1)	Employee-related costs (1)	$	794	$	866	$	2,576	$	2,577	Employee-related costs (1)	$	868	$	808	$	1,772	$	1,782
Third party staffing costs	Third party staffing costs	353		309		1,001		968		Third party staffing costs	375		336		758		648
General and administrative expenses	General and administrative expenses	212		172		455		553		General and administrative expenses	169		135		290		243
Pension, postretirement and postemployment benefit costs	Pension, postretirement and postemployment benefit costs	43		37		94		113		Pension, postretirement and postemployment benefit costs	24		26		49		51
Premium taxes, other taxes, and licenses & fees	Premium taxes, other taxes, and licenses & fees	144		194		480		563		Premium taxes, other taxes, and licenses & fees	137		169		290		336
Commissions and other variable expenses	Commissions and other variable expenses	1,323		1,376		4,147		4,099		Commissions and other variable expenses	1,300		1,294		2,631		2,824
Capitalization of DAC	Capitalization of DAC	(635)		(764)		(2,052)		(2,209)		Capitalization of DAC	(622)		(642)		(1,272)		(1,417)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	816		1,066		1,943		2,414		Amortization of DAC and VOBA	616		537		1,153		1,127
Amortization of negative VOBA	Amortization of negative VOBA	(6)		(15)		(25)		(35)		Amortization of negative VOBA	(10)		(10)		(19)		(19)
Interest expense on debt	Interest expense on debt	240		229		696		683		Interest expense on debt	226		228		451		456
Total other expenses	Total other expenses	$	3,284	$	3,470	$	9,315	$	9,726	Total other expenses	$	3,083	$	2,881	$	6,103	$	6,031

__________________

(1)Includes ~~($15)~~ $78 million and $115 million for the three months and six months ended June 30, 2022, respectively, and ($~~89)~~58) million and ($74) million for the three months and ~~nine~~six months ended ~~September~~June 30, 2021, ~~respectively, and ($44) million and ($84) million for the three months and nine months ended September 30, 2020,~~ respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.

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MetLife, Inc.

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

~~12.~~11. Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

The components of net periodic benefit costs, reported in other expenses, were as follows:

Three Months
Ended
September 30,
2021 2020
Pension
Benefits Other
Postretirement
Benefits Pension
Benefits Other
Postretirement
Benefits
(In millions)
Service costs $ 58 $ 2 $ 62 $ 2
Interest costs 89 9 89 10
Expected return on plan assets (124) (14) (132) (15)
Amortization of net actuarial (gains) losses 38 (6) 45 (19)
Amortization of prior service costs (credit) (6) — (4) (1)
Net periodic benefit costs (credit) $ 55 $ (9) $ 60 $ (23)
Nine Months
Ended
September 30,
2021 2020
Pension
Benefits Other
Postretirement
Benefits Pension
Benefits Other
Postretirement
Benefits
(In millions)
Service costs $ 177 $ 4 $ 185 $ 4
Interest costs 250 27 267 31
Curtailment (gains) losses (1) (17) — — —
Expected return on plan assets (381) (42) (396) (46)
Amortization of net actuarial (gains) losses 115 (33) 134 (56)
Amortization of prior service costs (credit) (11) — (12) (2)
Net periodic benefit costs (credit) $ 133 $ (44) $ 178 $ (69)

~~__________________~~

~~(1)See Note 3 for information on the Company’s business dispositions.~~


	Three Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	50	$	1	$	56	$	1
Interest costs	82		9		83		10
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(129)		(15)		(125)		(14)
Amortization of net actuarial (gains) losses	30		(6)		39		(7)
Amortization of prior service costs (credit)	(3)		—		(1)		—
Net periodic benefit costs (credit)	$	30	$	(11)	$	35	$	(10)

	Six Months Ended June 30,
	2022				2021
	Pension Benefits		Other Postretirement Benefits		Pension Benefits		Other Postretirement Benefits
	(In millions)
Service costs	$	102	$	2	$	119	$	2
Interest costs	163		17		161		18
Curtailment (gains) losses	—		—		(17)		—
Expected return on plan assets	(258)		(28)		(257)		(28)
Amortization of net actuarial (gains) losses	61		(12)		77		(27)
Amortization of prior service costs (credit)	(6)		—		(5)		—
Net periodic benefit costs (credit)	$	62	$	(21)	$	78	$	(35)

~~13.~~12. Income Tax

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MetLife, Inc.

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

12. Income Tax (continued)

For the three months and ~~nine~~six months ended ~~September~~June 30, 2021, the effective tax rate on income (loss) before provision for income tax was ~~22%~~24% and 21%, respectively. The Company’s effective tax rate for the three months ended ~~September~~June 30, 2021 differed from the U.S. statutory rate primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, ~~and~~ the completed sale of MetLife ~~Seguros,~~P&C and the pending disposition of MetLife Poland and Greece, partially offset by tax benefits related to tax credits and non-taxable investment income. The Company’s effective tax rate for the ~~nine~~six months ended ~~September~~June 30, 2021 was equal to the statutory rate of 21%, primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, the completed ~~sales~~sale of MetLife P&C ~~and MetLife Seguros~~ and the pending disposition of MetLife Poland

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~~MetLife, Inc.~~

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

~~13. Income Tax (continued)~~

and Greece, offset by tax benefits related to tax credits, non-taxable investment income and the corporate tax deduction for stock compensation.

For the three months and nine months ended September 30, 2020, the effective tax rate on income (loss) before provision for income tax was 23% and 22%, respectively. The Company’s effective tax rate for the three months ended September 30, 2020 differed from the U.S. statutory rate primarily due to tax charges from the sale of MetLife Seguros de Retiro S.A. (“MetLife Seguros de Retiro”) and foreign earnings taxed at different rates than the U.S. statutory rate, partially offset by tax benefits related to non-taxable investment income and tax credits. The Company’s effective tax rate for the nine months ended September 30, 2020 differed from the U.S. statutory rate primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate and the sale of MetLife Seguros de Retiro, partially offset by tax benefits related to non-taxable investment income, tax credits and the finalization of bankruptcy proceedings for a leveraged lease investment.

~~14.~~13. Earnings Per Common Share

The following table presents the weighted average shares, basic earnings per common share and diluted earnings per common share:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions, except per share data)									(In millions, except per share data)
Weighted Average Shares:	Weighted Average Shares:									Weighted Average Shares:
Weighted average common stock outstanding - basic	Weighted average common stock outstanding - basic	854.9		908.7		871.1		910.5		Weighted average common stock outstanding - basic	809.7		873.3		816.7		879.3
Incremental common shares from assumed exercise or issuance of stock-based awards	Incremental common shares from assumed exercise or issuance of stock-based awards	6.3		5.0		6.4		5.1		Incremental common shares from assumed exercise or issuance of stock-based awards	4.8		6.4		5.8		6.5
Weighted average common stock outstanding - diluted	Weighted average common stock outstanding - diluted	861.2		913.7		877.5		915.6		Weighted average common stock outstanding - diluted	814.5		879.7		822.5		885.8
Net Income (Loss):	Net Income (Loss):									Net Income (Loss):
Net income (loss)	Net income (loss)	$	1,589	$	709	$	5,364	$	5,260	Net income (loss)	$	138	$	3,412	$	812	$	3,775
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests	5		3		15		11		Less: Net income (loss) attributable to noncontrolling interests	6		5		11		10
Less: Preferred stock dividends	Less: Preferred stock dividends	63		59		166		168		Less: Preferred stock dividends	29		35		92		103
Preferred stock redemption premium	Preferred stock redemption premium	—		14		6		14		Preferred stock redemption premium	—		6		—		6
Net income (loss) available to MetLife, Inc.’s common shareholders	Net income (loss) available to MetLife, Inc.’s common shareholders	$	1,521	$	633	$	5,177	$	5,067	Net income (loss) available to MetLife, Inc.’s common shareholders	$	103	$	3,366	$	709	$	3,656
Basic	Basic	$	1.78	$	0.70	$	5.94	$	5.57	Basic	$	0.13	$	3.85	$	0.87	$	4.16
Diluted	Diluted	$	1.77	$	0.69	$	5.90	$	5.53	Diluted	$	0.13	$	3.83	$	0.86	$	4.13

~~15.~~14. Contingencies, Commitments and Guarantees

Contingencies

Litigation

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MetLife, Inc.

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

~~15.~~14. Contingencies, Commitments and Guarantees (continued)

In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the Company’s actual experience in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. In certain circumstances where liabilities have been established there may be coverage under one or more corporate insurance policies, pursuant to which there may be an insurance recovery. Insurance recoveries are recognized as gains when any contingencies relating to the insurance claim have been resolved, which is the earlier of when the gains are realized or realizable. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at ~~September~~June 30, ~~2021.~~2022. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company’s financial position. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Matters as to Which an Estimate Can Be Made

For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of ~~September~~June 30, ~~2021,~~2022, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to ~~$150~~$100 million.

Matters as to Which an Estimate Cannot Be Made

Asbestos-Related Claims

MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. MLIC has never engaged in the business of manufacturing ~~producing, distributing~~ or selling ~~asbestos or~~ asbestos-containing products, nor has MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing ~~producing, distributing~~ or selling ~~asbestos or~~ asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of MLIC’s employees during the period from the 1920s through approximately the 1950s and allege that MLIC learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against MLIC. MLIC employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling individual or groups of claims or lawsuits under appropriate circumstances.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~15. Contingencies, Commitments and Guarantees (continued)~~

~~Claims asserted against MLIC have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos.~~ MLIC’s defenses ~~(beyond denial of certain factual allegations)~~ include that: (i) MLIC owed no duty to the ~~plaintiffs— it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs,~~plaintiffs; (ii) plaintiffs did not rely on any actions of ~~MLIC,~~MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ ~~injuries,~~injuries; and (iv) plaintiffs’ exposure occurred after the dangers of asbestos were ~~known, and (v) the applicable time with respect to filing suit has expired.~~known. During the course of the litigation, certain trial courts have granted motions dismissing claims against MLIC, while other trial courts have denied MLIC’s motions. There can be no assurance that MLIC will receive favorable decisions on motions in the future. While most cases brought to date have settled, MLIC intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

As reported in the ~~2020~~2021 Annual Report, MLIC received approximately ~~2,496~~2,824 asbestos-related claims in ~~2020.~~2021. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MLIC received approximately ~~2,156~~1,319 and ~~1,768~~1,304 new asbestos-related claims, respectively. See Note 21 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for historical information concerning asbestos claims and MLIC’s update in its recorded liability at December 31, ~~2020.~~2021. The number of asbestos cases that may be brought, the aggregate amount of any liability that MLIC may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.

The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the ~~impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the~~ willingness of courts to allow plaintiffs to pursue claims against MLIC when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts.

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be ~~necessary. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management,~~necessary, but management does not believe any such charges are likely to have a material effect on the Company’s financial position.

The Company believes adequate provision has been made in its interim condensed consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability is based on its estimation of the following elements, as informed by the facts presently known to it, its understanding of current law and its past experiences: (i) the probable and reasonably estimable liability for asbestoscovers pending claims, ~~already asserted against MLIC, including claims settled but not yet paid, (ii) the probable and reasonably estimable liability for asbestos~~ claims not yet asserted, ~~against MLIC, but which MLIC believes are reasonably probable of assertion,~~ and ~~(iii) the~~ legal defense costs ~~associated with the foregoing claims. Significant~~and is based on estimates and includes significant assumptions underlying ~~MLIC’s analysis of the adequacy of~~ its ~~recorded liability with respect to asbestos litigation include: (i) the number of future claims, (ii) the cost to resolve claims, and (iii) the cost to defend claims.~~analysis.

MLIC reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants and the jurisdictions in which claims are pending. Based upon its regular reevaluation of its exposure from asbestos litigation, MLIC has updated its liability analysis for asbestos-related claims through ~~September~~June 30, ~~2021.~~

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~15. Contingencies, Commitments and Guarantees (continued)~~

2022.

Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017)

Plaintiffs filed this putative class and collective action on behalf of themselves and all current and former long-term disability (“LTD”) claims specialists between February 2011 and the present for alleged wage and hour violations under the Fair Labor Standards Act (“FLSA”), the New York Labor Law, and the Connecticut Minimum Wage Act. The suit alleges that MLIC improperly reclassified the plaintiffs and similarly situated LTD claims specialists from non-exempt to exempt from overtime pay in November 2013. As a result, they and members of the putative class were no longer eligible for overtime pay even though they allege they continued to work more than 40 hours per week. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On ~~March 22, 2018,~~June 29, 2022, the United States District Court for the Southern District of New York entered an offer of judgment disposing of the FLSA claims in exchange for a $3,000 payment to plaintiffs by MLIC. The parties entered into an agreement to settle the remaining state law claims, and on July 15, 2022, the court ~~conditionally certified~~entered a stipulation of dismissal with prejudice disposing of those claims. MLIC has accrued the case as a collective action, requiring that notice be mailed to LTD claims specialists who worked for MLIC from February 8, 2014 to the present. On August 31, 2021, the court granted MLIC’s motion to de-certify the case as a collective action, denied the plaintiffs’ motion to certify classes of LTD claims specialists under New York, Illinois, and Connecticut law, and granted MLIC’s motion for summary judgment as to the lead plaintiff’s FLSA claims. On September 14, 2021, the plaintiffs petitioned the appellate court for permission to appeal the denial of their motion to certify the classes, and on October 1, 2021, the plaintiffs filed a motion seeking interlocutory reviewfull amount of the ~~decertification ruling. MLIC intends to defend this action vigorously.~~settlement payments in prior periods.

Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)

Total Asset Recovery Services (the “Relator”) brought an action under the qui tam provision of the New York False Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., MLIC, and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. ~~On April 3, 2019, the court granted MetLife, Inc.’s and MLIC’s motion to dismiss and dismissed the complaint in its entirety.~~ The ~~Relator filed an appeal with the~~ Appellate Division of the New York State Supreme Court, First ~~Department. On December 10, 2020, the Appellate Division~~Department, reversed the court’s order granting MetLife, Inc. and MLIC’s motion to dismiss and remanded the case to the trial court ~~and permitted~~where the ~~Relator’s counsel to file an amended complaint. On March 5, 2021, the~~ Relator has filed an amended complaint. The Company intends to defend the action vigorously.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

Matters Related to Group Annuity Benefits and Assumed Variable Annuity Guarantee Reserves

~~Parchmann v. MetLife, Inc., et. al. (E.D.N.Y., filed February 5, 2018)~~

Plaintiff filed this putative class action seeking to represent a class of persons who purchased MetLife, Inc. common stock from February 27, 2013 through January 29, 2018. Plaintiff alleges that MetLife, Inc., its former Chief Executive Officer and Chairman of the Board, and its former Chief Financial Officer violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder by issuing materially false and/or misleading financial statements. Plaintiff alleges that MetLife’s practices and procedures for estimating reserves for certain group annuity benefits were inadequate, and that MetLife had inadequate internal control over financial reporting. Plaintiff seeks unspecified compensatory damages and other relief. On January 11, 2021, the court granted MetLife’s motion to dismiss and dismissed the complaint in its entirety. Plaintiff filed an appeal with the United States Court of Appeals for the Second Circuit. Defendants intend to defend this action vigorously.

~~Table of Contents~~

~~MetLife, Inc.~~

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

~~15. Contingencies, Commitments and Guarantees (continued)~~

Derivative Demands

Commitments

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were ~~$4.3~~$4.7 billion and ~~$3.3~~$4.6 billion at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were ~~$9.1~~$9.8 billion and ~~$8.5~~$9.1 billion at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Guarantees

In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $329 million, with a cumulative maximum of ~~$634~~$629 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments.

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MetLife, Inc.

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

14. Contingencies, Commitments and Guarantees (continued)

The Company’s recorded liabilities were $20 million at both ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021, for indemnities, guarantees and commitments.

15. Subsequent Events

Senior Notes

In July 2022, MetLife, Inc. issued $1.0 billion of senior notes due July 2052 which bear interest at a fixed rate of 5.00%, payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $11 million of related costs which will be amortized over the term of the senior notes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

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Forward-Looking Statements and Other Financial Information

For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. This discussion should be read in conjunction with MetLife, Inc.’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~“2020~~“2021 Annual Report”), the cautionary language regarding forward-looking statements included below, the “Risk Factors” set forth in Part II, Item 1A, and the additional risk factors referred to therein, “Quantitative and Qualitative Disclosures About Market Risk” and the Company’s interim condensed consolidated financial statements included elsewhere herein.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Note Regarding Forward-Looking Statements” for cautionary language regarding forward-looking statements.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our performance measures, adjusted earnings and adjusted earnings available to common shareholders, that are not based on accounting principles generally accepted in the United States of America (“GAAP”). See “— Non-GAAP and Other Financial Disclosures” for definitions and a discussion of these and other financial measures, and “— Results of Operations” and “— Investments” for reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP measures.

Executive Summary

Overview

MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLife is organized into five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. See Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.

COVID-19 Pandemic

We continue to closely monitor developments relating to the ~~novel coronavirus~~ COVID-19 pandemic ~~(the “COVID-19 Pandemic”)~~ and assess its impact on our business. The COVID-19 ~~Pandemic~~pandemic continues to impact the global economy and financial markets and has caused volatility in the global equity, credit and real estate markets. See “— Industry Trends — Financial and Economic Environment.” We have implemented risk management and business continuity plans and taken preventive measures and other precautions, such as employee business travel restrictions and remote work arrangements which, to date, have enabled us to maintain our critical business processes, customer service levels, relationships with key vendors, financial reporting systems, internal ~~controls~~control over financial reporting and disclosure controls and procedures.

We continue to grant certain accommodations to our customers and borrowers, including (i) relaxing claim documentation requirements for disability claims and (ii) payment deferrals and other loan modifications on certain commercial, agricultural and residential mortgage loans. See ~~Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding COVID-19 Pandemic-related mortgage loan concessions. See also~~ “— Results of Operations — Segment Results and Corporate & Other” for further information regarding the effect of the COVID-19 ~~Pandemic~~pandemic on our businesses.

Current Period Highlights

During the three months ended ~~September~~June 30, ~~2021,~~2022, adjusted premiums, fees and other revenues, net of foreign currency fluctuations, ~~decreased~~increased compared to the prior period driven by growth in our U.S. segment, primarily in our Retirement and Income Solutions (“RIS”) business. Equity market returns had a less favorable impact on our private equity funds and hedge funds compared to the ~~disposition~~prior period and resulted in lower investment yields, however, positive net flows drove an increase in our investment portfolio. Changes in long-term interest rates drove an unfavorable change in net derivative gains (losses). Current period results include net investment losses versus gains in the prior period, which included the gain on the sale of ~~MetLife~~Metropolitan Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”). Growth in our Group Benefits business in our U.S. segment was driven by the acquisition of Versant Health, Inc. (“Versant Health”). Strong returns in our private equity portfolio resulted in improved investment yields and changes in key equity indexes and long-term interest rates drove a favorable change in net derivative gains (losses). In addition, results in both periods included a charge due to the impact of our annual actuarial assumption review. Underwriting experience was ~~unfavorable~~favorable and reflected ~~impacts~~a decline in COVID-19 related claims. In addition, the current period includes the favorable impact from a reinsurance settlement and the ~~COVID-19 Pandemic.~~prior period included the release of a legal reserve.

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The following represents segment level results and percentage contributions to total segment level adjusted earnings available to common shareholders for the three months ended ~~September~~June 30, ~~2021:~~2022:

__________________

(1)Excludes Corporate & Other adjusted loss available to common shareholders of ~~$131~~$243 million.

(2)Consistent with GAAP guidance for segment reporting, adjusted earnings is our GAAP measure of segment performance. For additional information, see Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

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Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

Consolidated Results - Highlights

Net income (loss) available to MetLife, Inc.’s common shareholders ~~up $888 million:~~

•

~~Favorable change in net derivative gains (losses) of $363 million ($287 million, net of income tax)(2)~~

•

~~Favorable change from annual actuarial assumption reviews of $97 million ($85 million, net of income tax)(3)~~

down $3.3 billion:

•

Unfavorable change in net investment gains (losses) of ~~$64 million~~$2.3 billion ($~~51 million,~~1.8 billion, net of income tax)

•

Unfavorable change in net derivative gains (losses) of $1.6 billion ($1.3 billion, net of income tax)(2)

•

Adjusted earnings available to common shareholders ~~up $484~~down $463 million

(1) See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for reconciliations and definitions of non-GAAP financial measures.

(2) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings available to common shareholders. See “— Investments — Investment Portfolio Results” for additional information.

(3) Includes amounts recognized in net derivative gains (losses) and adjusted earnings available to common shareholders. See “— Results of Operations — Consolidated Results — Three Months Ended September 30, 2021 Compared with the Three Months Ended September 30, 2020 — Actuarial Assumption Review” for additional information.

Consolidated Results - Adjusted Earnings Highlights

Adjusted earnings available to common shareholders ~~up $484~~was down $463 million ~~primary~~primarily due to ~~(i) higher~~lower investment yields ~~due to strong~~as a result of the unfavorable impact of lower equity market returns inon our private equity ~~portfolio, (ii)~~funds and hedge funds and higher expenses, partially offset by higher net investment income due to a larger average invested asset base ~~(iii)~~and favorable underwriting, primarily driven by a decline in COVID-19 related claims. In addition, the current period includes the favorable ~~change~~impact from ~~our annual actuarial assumption reviews (see below),~~a reinsurance settlement and ~~(iv) higher fee income, partially offset by (i) unfavorable underwriting, which reflected impacts from~~ the ~~COVID-19 Pandemic, and (ii)~~prior period included the ~~disposition~~release of ~~MetLife P&C, which decreased adjusted earnings by $18 million.~~a legal reserve.

•

~~Current period~~For a more in-depth discussion of our consolidated results, ~~included the unfavorable impact from our annual actuarial assumption review~~see “— Results of ~~$140 million, net~~Operations — Consolidated Results,” “— Results of ~~income tax.~~

•

~~Prior period results included the unfavorable impact from our annual actuarial assumption review~~Operations — Consolidated Results - Adjusted Earnings” and “— Results of ~~$203 million, net of income tax.~~Operations — Segment Results and Corporate & Other.”

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~~Nine~~

Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

Consolidated Results - Highlights

Net income (loss) available to MetLife, Inc.’s common shareholders ~~up $110 million:~~down $2.9 billion:

•

~~Favorable~~Unfavorable change in net investment gains (losses) of ~~$1.7~~$2.9 billion ($~~1.4~~2.3 billion, net of income tax)

•

~~Favorable change from annual actuarial assumption reviews of $97 million ($85 million, net of income tax)(3)~~

•

Unfavorable change in net derivative gains (losses) of ~~$4.9 billion~~$240 million ($~~3.9 billion,~~190 million, net of income tax)(2)

•

Adjusted earnings available to common shareholders ~~up $2.3 billion~~down $701 million

(1) See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for reconciliations and definitions of non-GAAP financial measures.

Consolidated Results - Adjusted Earnings Highlights

Adjusted earnings available to common shareholders ~~up $2.3 billion~~was down $701 million primarily due to ~~(i) higher~~lower investment yields ~~due to strong~~as a result of the unfavorable impact of lower equity market returns inon our private equity ~~portfolio, (ii) an increase in~~funds and hedge funds and higher expenses, partially offset by higher net investment income due to a larger average invested asset base ~~(iii) lower interest credited expenses, (iv)~~and favorable underwriting, primarily driven by a decline in COVID-19 related claims. In addition, the current period includes the favorable impact from a reinsurance settlement and the prior period included the release of a legal reserve in the current period, and (v) the favorable change from our annual actuarial assumption reviews (see below), partially offset by (i) unfavorable underwriting, which reflected impacts from the COVID-19 Pandemic, and (ii) the disposition of MetLife P&C, which decreased adjusted earnings by $210 million.

•

~~Current period results included the unfavorable impact from our annual actuarial assumption review of $140 million, net of income tax.~~

•

~~Prior period results included the unfavorable impact from our annual actuarial assumption review of $203 million, net of income tax.~~

reserve.

For a more in-depth discussion of our consolidated results, see “— Results of Operations — Consolidated Results,” “— Results of Operations — Consolidated Results - Adjusted Earnings” and “— Results of Operations — Segment Results and Corporate & Other.”

For a more in-depth discussion of our consolidated results, see “— Results of Operations — Consolidated Results,” “— Results of Operations — Consolidated Results — Adjusted Earnings” and “— Results of Operations — Segment Results and Corporate & Other.”

~~Consolidated Company Outlook~~

The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary — Consolidated Company Outlook” in Part II, Item 7, of the 2020 Annual Report. There have been no material changes to our consolidated company outlook from that previously discussed in the 2020 Annual Report except as noted below.

As disclosed in MetLife, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, we expect our direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers, to be below 12.3% for the full year 2021 and 2022.

Industry Trends

We continue to be impacted by the changing global financial and economic environment that has been affecting the industry.

Financial and Economic Environment

We are closely monitoring political and economic conditions that might contribute to global market volatility and impact our business operations, investment portfolio and derivatives, such as global inflation, supply chain disruptions, the Russia-Ukraine conflict and the COVID-19 ~~Pandemic.~~pandemic. See “— Impact of Market Interest Rates — Effects of Inflation,” and “— Investments — Current Environment.”

We are also monitoring the imposition of tariffs, sanctions or other barriers to international trade, changes to international trade agreements, and their potential impacts on our business, results of operations and financial ~~condition, including the impact~~condition.

Table of the trade agreement reached by the United Kingdom (“U.K.”) and the European Union (“EU”) in December 2020. See “Regulatory Developments — Cross-Border Trade and Investments” herein and “Business — Regulation — Cross-Border Trade and Investments” included in the 2020 Annual Report. In addition, the possibility of government shutdowns or a failure to raise the U.S. debt ceiling, due to a policy impasse or otherwise, could adversely impact our business and liquidity.Contents

Governments and central banks around the world ~~have~~ responded to the COVID-19 ~~Pandemic~~pandemic with unprecedented fiscal and monetary policies, ~~which~~but many of these stimulus programs have ~~had significant effects~~concluded due to global economic recovery and ~~may have ongoing effects on financial markets and the global economy.~~rising inflation. In the United States, the Board of Governors of the Federal Reserve System ~~continues to expand its balance sheet, although it announced reductions in~~(“Federal Reserve Board”) ended its asset purchases starting in November 2021. Additionally, the board members’ forecasts suggest the policy rate is likely to remain near zero into 2022, with possible increase thereafter. Separately, the U.S. Congress passed another COVID-related stimulus packagepurchase program in March ~~2021.~~2022 and began to reduce its holdings on June 1, 2022. The Federal Open Market Committee has raised interest rates four times in 2022; further increases in the target range for the federal funds rate are expected throughout 2022 to combat inflation. This has caused the gap between the two-year U.S. Treasury and the 10-year U.S. Treasury yield to flatten and has contributed to a heightened level of concern about an economic downturn in the United States. The European Central Bank (“ECB”) ~~continues~~ended its pandemic asset purchase program ~~albeit at a slower pace,~~in March 2022 and ~~has signaled~~ its ~~intention~~quantitative easing program in July 2022. The ECB raised its policy interest rates in July 2022 and is expected to continue to do so throughout 2022 to combat inflation. It also announced a new program, the ~~program through at least March 31, 2022.~~Transmission Protection Instrument, which aims to prevent financial fragmentation by helping more indebted periphery euro area member states, which could otherwise face a widening of government bond yield spreads, over core members like Germany, as the ECB tightens policy. The Bank of England ~~(“BoE”) has maintained low interest rates and continued~~ended its ~~expanded~~ quantitative easing program ~~which it~~in 2021 and has indicated will continue through year-end 2021. The ECB has stated its willingness to maintain its policies despite inflation currently above target levels, as economic activity and price levels rebound from COVID-19 Pandemic-depressed levels. The BoE officials, however, have indicated thatbeen raising interest rates ~~may soon increase~~since December 2021 to combat ~~rising inflation. Additionally,~~inflation, with further increases expected throughout 2022. Russia’s invasion of Ukraine and sanctions imposed in response represent an inflationary shock for Europe and globally, driving commodity prices up and contributing to broader inflationary pressure. Europe is particularly vulnerable given its proximity to the conflict and reliance on Russia as a ~~number~~primary source of ~~European countries, including~~its energy imports. Higher global food and energy prices in the ~~U.K., have implemented large fiscal stimulus programs, as well as~~wake of the ~~provision~~conflict present additional challenges to the economic performance of ~~guarantees~~net importers of these items, particularly for certain emerging market economies in Eastern Europe and ~~loans for private sector companies. The EU also approved a regional stimulus package comprised of grants and low interest financing to member states, which became operational in mid-2021.~~the Middle East.

In Japan, the Bank of Japan (“BoJ”) has ~~continued~~kept its monetary ~~easing program but, in order to further enhance~~policy settings on hold. The BoJ has downgraded its ~~effectiveness~~economic assessment of the Japanese economy, noting downside risks from higher oil and ~~sustainability,~~commodity prices stemming from the ~~Bank~~Russia-Ukraine conflict. The BoJ has also strengthened its phrasing around the outlook for inflation given the expected pass-through of ~~Japan (i) introduced a program to promote lending which~~higher energy and commodity prices. The BoJ’s more cautious view on domestic and external growth, coupled with still below target CPI inflation, suggests that monetary policy will ~~enable the Bank of Japan to mitigate potential negative side effects of further reductions in short and long term interest rates; (ii) has clarified the target range of yield curve fluctuations~~remain on hold for the ~~10-year~~time being. The Japanese ~~government bond, including an upper limit when necessary,~~yen has weakened to its lowest level against the U.S. dollar since 2015 as monetary policy divergence has widened between the BoJ and ~~(iii) announced greater purchasing flexibility for exchange-traded funds and Japan real estate investment trusts.~~the Federal Reserve leading to growing concerns about Japan’s economy.

Impact of ~~a Sustained Low~~Market Interest ~~Rate Environment~~Rates

Market interest rates are a key driver of our results. ~~For discussion on the potential impact of low interest~~Increases and decreases in such rates, as well as extended periods of stagnation, may impact our ~~mitigating actions, see~~business and investments in various ways. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of ~~a Sustained Low~~Market Interest ~~Rate Environment”~~Rates” and “Risk Factors — Economic Environment and Capital Markets Risks” included in the ~~2020~~2021 Annual Report.

Effects of Inflation

Management believes that while inflation has not had a material effect on the Company’s consolidated results of operations, except insofar as inflation may affect interest rates, both rising interest rates and inflation will have a neutral to modest impact on our business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of Market Interest Rates — Impact of a Rising Interest Rate Environment,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of Market Interest Rates — Interest Rate Scenarios” included in the 2021 Annual Report.

An increase in inflation could affect our business in several ways. In our group life and disability businesses, premiums increase as compensation levels of our customers’ employees increase. However, during inflationary periods with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax assets that may not be realizable. Inflation also increases expenses for labor and other costs, potentially putting pressure on profitability if such costs cannot be passed through in our product prices. Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities.

Competitive Pressures

See “Business — Competition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Competitive Pressures” in the ~~2020~~2021 Annual Report for information on our competitive position.

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Regulatory Developments

The following discussion on regulatory developments should be read in conjunction with “Business — Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Regulatory Developments” included in the ~~2020~~2021 Annual Report, as amended or supplemented here.

~~Insurance Regulatory Examinations and Other Activities~~

In 2019, we and other insurance and pension fund companies provided annuities sales practices information to the Chilean insurance and pension regulators. The regulators found that non-employee sales agents of MetLife Chile and other insurers had engaged in improper sales practices and that ProVida S.A. and other pension fund companies provided improper advice to customers. MetLife Chile and ProVida S.A.’s objections were rejected and the companies have paid applicable fines, which did not have a substantial impact on MetLife Chile or Provida S.A..

~~National Association of Insurance Commissioners~~

~~Risk-Based Capital~~

The National Association of Insurance Commissioners (“NAIC”) adopted revisions to certain factors used to calculate Life Risk-Based Capital (“RBC”), which is the denominator of the RBC ratios, in light of changes to U.S. tax laws in recent years. These revisions have resulted in increased RBC charges and reduced the RBC ratios of our insurance subsidiaries. The NAIC has approved RBC revisions for corporate bonds, real estate equity and longevity risk that will take effect at year-end 2021 and are expected to have a modest net positive RBC impact on us.

~~NYDFS Guidance on Diversity and Corporate Governance~~

On March 16, 2021, the New York State Department of Financial Services (“NYDFS”) stated it expects the insurers it regulates to make diversity of their leadership a business priority and a key element of their corporate governance. The NYDFS collected data from insurers that met certain New York premium thresholds, including MetLife, Inc. and certain of its subsidiaries, regarding the diversity of their corporate boards and management. The NYDFS plans to publish such data on an aggregate basis to measure progress in the industry. In addition, the NYDFS will include diversity-related questions in its examination process starting in 2022.

~~Securities, Broker-Dealer and Investment Adviser Regulation~~

In April 2021, the Appellate Division of the New York State Supreme Court overturned NYDFS Regulation 187- Suitability and Best Interests in Life Insurance and Annuity Transactions for being unconstitutionally vague. The NYDFS has appealed the decision.

Environmental Laws and Regulations

In furtherance of President Biden’s Executive Order on Climate-Related Financial Risk, dated May 20, 2021, the Federal Insurance Office (“FIO”) sought public comment on climate-related financial risks in the insurance industry through November 2021. The FIO’s request for information noted that it will work on assessing how the insurance sector may mitigate climate change impacts and help achieve national climate-related goals. The FIO intends to publish a report by year-end that addresses climate-related issues in the regulation of insurers and climate related disclosures by insurers.

On March ~~25, 2021,~~21, 2022, the NYDFS issued for public comment proposed guidance for New York domestic insurers, which states that insurers are expected to take a proportionate approach, based on their business, to managing their exposure to the financial risks from climate change. The NYDFS intends to formally adopt the guidance, as modified by the comment process, and it has integrated questions on this topic as part of its supervisory activities.

On July 14, 2021, the NYDFS published notice of the adoption of amendments to regulations governing enterprise risk management, effective August 13, 2021. Among other provisions, the amendments require that certain additional risks, including climate change risk, be specifically included in an insurance group's enterprise risk management function.

~~The~~ U.S. Securities and Exchange Commission (the “SEC”) ~~is continuing its focus on climate,~~proposed rules requiring registrants to provide additional climate-related information in their registration statements and annual reports, including in their financial statements. The proposal sets forth proposed rules for disclosure of climate-related risks, material impacts, governance, risk management, financial statement metrics, greenhouse gas emissions, attestation of emissions disclosures, and targets and goals.

On May 25, 2022, the SEC proposed rules requiring registered investment companies, business development companies, and registered and certain unregistered investment advisers to disclose in their fund prospectuses, annual reports and Form ADV information about how funds and advisers incorporate environmental, social and governance ~~(“ESG”) risks and opportunities, and has published its rulemaking list which contains several ESG-related rulemakings that the SEC is considering.~~factors into their investment strategies.

Cross-Border Trade and Investments

~~Recent~~In April 2022, we received authorization from the Central Bank of Ireland for a new entity, MetLife Investment Management Europe, under the Undertakings for the Collective Investment in Transferable Securities Directive and the Alternative Investment Fund Managers Directive with the Markets in Financial Instruments Directive top-up permissions, which allows us to continue our investment management business in the European Union (“EU”).

The U.S., the EU and the United Kingdom (“U.K.”), maintain and enforce a variety of economic sanctions against designated countries and their nationals around the world, which can result in disruptions in cross-border activity. In particular, U.S., EU and U.K. sanctions on Russia have ~~imposed~~expanded as a result of the war in Ukraine. These new sanctions, including a series of presidential executive orders and regulations administered by the U.S. Department of Treasury’s Office of Foreign Assets Control, have, inter alia, expanded restrictions on transactions with ~~respect~~the Russian Central Bank and other specified Russian government entities, dealing in Russian sovereign debt, engaging in certain debt and equity transactions, and engaging in transactions related to all new investment in the Russian Federation. Trade and investment in China may also be impacted by U.S. sanctions. The Biden administration has previously issued restrictions targeting certain activity involving ~~China. A series of U.S. presidential executive orders imposes prohibitions on engaging in certain transactions involving the purchase or sale of publicly traded~~specified Chinese securities or any publicly traded securities that are derivative of, or are designed to provide investment exposure to such securities, of any listed Chinese Military-Industrial Complex Companies. In addition, the Biden administration issued an executive order directing a review of foreign adversary connected software applications to review transactions that risk sabotage of U.S. information and communications technology or services, critical infrastructure, digital economy, national security, or the security and safety of U.S. persons. This review could result in new actions to restrict U.S. persons from engaging in certain transactions with any identified foreign parties.technology.

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~~Employee Retirement Income Security Act of 1974, Fiduciary Considerations, and Other Pension and Retirement Regulation~~

In 2020, the Chilean Congress approved two bills, each of which allowed individuals to withdraw up to 10% of pension accounts or the account balance if it is below a certain amount. In April 2021, the Chilean Congress approved a third bill allowing for additional withdrawals of pension funds which could deplete approximately one third of pension accounts. The bill also requires insurance companies to advance payments of up to 10% of the reserves allocated to a customer’s annuity. ProVida S.A., MetLife Chile and other companies in the industry continue to process such payments. In August 2021, the Chilean Congress initiated discussion of a fourth bill allowing for additional withdrawals of up to 10% of pension funds and requiring insurance companies to advance payments of up to 10% of the reserves allocated to a customer’s annuity. A final vote on the proposal is expected in November 2021. Further, the Chilean Congress is considering a separate bill aimed at improving the pension system for lower income participants. A vote may occur on this proposal in early 2022. Additional major pension reform in Chile is possible in the future. The impact of any such pension reforms will depend on the final measures adopted, and in some cases could have an adverse effect on our Chilean pension business. We have initiated a formal consultation process with the Chilean government to seek a resolution of our concerns regarding these developments.

London Interbank Offered Rate

~~The Financial Conduct Authority,~~In March 2022, federal legislation was enacted to address the ~~U.K. regulator of~~transition from U.S. Dollar London Interbank Offered ~~Rates~~Rate (“LIBOR”)~~, previously indicated that it intends~~ to ~~stop persuading~~alternative reference rates for all U.S. law governed contracts with non-existent or ~~compelling panel banks~~inadequate U.S. Dollar LIBOR fallback provisions. Except with respect to ~~submit quotes used to determine LIBOR after 2021. On March 5, 2021,~~ the ~~Intercontinental Exchange Benchmark Administration, the administrator of LIBOR, announced that it will cease the publication of one week~~one-week and two-month U.S. Dollar LIBOR ~~and~~tenors, the federal legislation supersedes all ~~non-USD (GBP, EUR, CHF and JPY) LIBOR settings at~~state law addressing the ~~end of December 2021, but will extend the publication of the remaining~~ U.S. Dollar LIBOR ~~settings (overnight and one, three, six and 12 month U.S. Dollar LIBOR) until~~transition, including legislation enacted in New York in 2021. The implementation of the ~~end of June 2023. U.S. bank regulators have advised banks to cease writing,~~federal legislation is subject to ~~certain limited exceptions, new U.S. Dollar LIBOR contracts~~regulations to be promulgated by the ~~end of 2021.~~

We use LIBOR and other interbank offered rates as interest reference rates in many of our financial instruments. Existing contract fallback provisions, and whether, how, and when we and others develop and adopt alternative reference rates, will influence the effect of any changes to or discontinuation of LIBOR on us. We actively participate in the New York Federal Reserve Bank convened Alternative Reference Rate Committee (“ARRC”) and other industry association efforts on the transition to alternative reference rates. In April 2021, the State of New York enacted legislation to address the transition from LIBOR for certain New York law governed agreements, which is generally consistent with the ARRC’s recommendations to facilitate the transition.Board. We continue to assess current and alternative reference rates’ merits, limitations, risks and suitability for our investment and insurance processes.

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Summary of Critical Accounting Estimates

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

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

(ii)capitalization and amortization of deferred policy acquisition costs (“DAC”) and the establishment and amortization of value of business acquired (“VOBA”);

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

(iv)investment allowance for credit loss (“ACL”) and impairments;

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

(vi)measurement of goodwill and related impairment;

(vii)measurement of employee benefit plan liabilities;

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

(ix)liabilities for litigation and regulatory matters.

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

The Company’s critical accounting estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” and Note 1 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

~~Goodwill~~

Goodwill is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test.

For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, an impairment charge would be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company will consider income tax effects from any tax deductible goodwill on the carrying value of the reporting unit when measuring the goodwill impairment loss, if applicable. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected adjusted earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new and renewed business, as well as margins on such business, interest rate levels, credit spreads, equity market levels, and the discount rate that we believe is appropriate for the respective reporting unit.

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

In the third quarter of 2021, the Company performed its annual goodwill impairment tests on all of its reporting units, using both qualitative and quantitative assessments. The quantitative assessment utilized the market multiple, embedded value and discounted cash flow valuation approaches based on best available data as of June 30, 2021. The Company concluded that the estimated fair values of all its reporting units were substantially in excess of their carrying values and, therefore, goodwill was not impaired.

~~Economic Capital~~

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in our business. Our economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. Economic capital-based risk estimation is an evolving science and industry best practices have emerged and continue to evolve. Areas of evolving industry best practices include stochastic liability valuation techniques, alternative methodologies for the calculation of diversification benefits, and the quantification of appropriate shock levels. MetLife’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. For further information, see “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

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Acquisitions and Dispositions

Acquisitions

~~Pending~~ Ownership Increase of PNB MetLife

In ~~October 2021,~~February 2022, the Company ~~entered into a share purchase agreement to acquire 15.27%~~acquired approximately 15.0% ownership in PNB MetLife India Insurance Company Limited (“PNB MetLife”). ~~Upon completion of the transaction,~~As a result, the Company’s ownership in PNB MetLife, an operating joint venture accounted for under the equity method, ~~will increase~~increased to ~~47.325%~~approximately 47.0%. ~~The transaction will close upon receipt of all necessary regulatory approvals and satisfaction of other closing conditions.~~ This transaction supports the Company’s continued growth in India and will enable us to deliver more value for our customers, partners and shareholders.

~~Acquisition~~Dispositions

Disposition of ~~Versant Health~~MetLife Poland and Greece

For information regarding the ~~Company’s December 2020 acquisition~~Company's dispositions of ~~Versant Health,~~its wholly-owned subsidiaries in Poland and Greece (collectively, “MetLife Poland and Greece”), which were reported as held-for-sale, see ~~Note~~Notes 1 and 3 of the Notes to the Interim Condensed Consolidated Financial ~~Statements included in the 2020 Annual Report.~~Statements.

~~Dispositions~~

Disposition of MetLife Seguros

For information regarding the Company's September 2021 disposition of its wholly-owned Argentinian subsidiary, MetLife Seguros S.A. (“MetLife Seguros”), see Note 3 of the Notes to the ~~Interim Condensed~~ Consolidated Financial ~~Statements.~~

~~Pending Disposition of MetLife Poland and Greece~~

~~For information regarding~~Statements included in the Company's pending disposition of its wholly-owned subsidiaries in Poland and Greece (collectively, “MetLife Poland and Greece”) to NN Group N.V., reported as held-for-sale, see Notes 1 and 3 of the Notes to the Interim Condensed Consolidated Financial Statements.2021 Annual Report.

Disposition of MetLife P&C

For information regarding the Company's April 2021 disposition of MetLife P&C, which was reported as held-for-sale, see Notes 1 and 3 of the Notes to the ~~Interim Condensed~~ Consolidated Financial ~~Statements.~~Statements included in the 2021 Annual Report.

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Disposition of MetLife Russia

For information regarding the Company's January 2021 disposition of its wholly-owned Russian subsidiary, the Joint-stock Company MetLife Insurance Company (“MetLife Russia”), see Note 3 of the Notes to the Consolidated Financial Statements included in the ~~2020 Annual Report.~~

~~Disposition of MetLife Seguros de Retiro~~

For information regarding the Company's October 2020 disposition of one of its wholly-owned Argentinian subsidiaries, MetLife Seguros de Retiro S.A. (“MetLife Seguros de Retiro”), see Note 3 of the Notes to the Consolidated Financial Statements included in the 20202021 Annual Report.

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Results of Operations

Consolidated Results


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Revenues	Revenues									Revenues
Premiums	Premiums	$	9,455	$	9,935	$	28,914	$	28,137	Premiums	$	11,721	$	9,132	$	22,492	$	19,459
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	1,521		1,497		4,334		4,227		Universal life and investment-type product policy fees	1,516		1,422		2,934		2,813
Net investment income	Net investment income	5,568		4,729		16,162		11,877		Net investment income	3,583		5,280		7,867		10,594
Other revenues	Other revenues	663		455		1,958		1,350		Other revenues	616		664		1,276		1,295
Net investment gains (losses)	Net investment gains (losses)	(84)		(20)		1,655		(77)		Net investment gains (losses)	(685)		1,605		(1,203)		1,739
Net derivative gains (losses)	Net derivative gains (losses)	(218)		(581)		(2,032)		2,910		Net derivative gains (losses)	(1,195)		421		(2,054)		(1,814)
Total revenues	Total revenues	16,905		16,015		50,991		48,424		Total revenues	15,556		18,524		31,312		34,086
Expenses	Expenses									Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	10,292		10,206		30,703		28,477		Policyholder benefits and claims and policyholder dividends	11,983		9,641		23,374		20,411
Interest credited to policyholder account balances	Interest credited to policyholder account balances	1,287		1,416		4,153		3,458		Interest credited to policyholder account balances	492		1,515		1,122		2,866

Capitalization of DAC	Capitalization of DAC	(635)		(764)		(2,052)		(2,209)		Capitalization of DAC	(622)		(642)		(1,272)		(1,417)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	816		1,066		1,943		2,414		Amortization of DAC and VOBA	616		537		1,153		1,127
Amortization of negative VOBA	Amortization of negative VOBA	(6)		(15)		(25)		(35)		Amortization of negative VOBA	(10)		(10)		(19)		(19)
Interest expense on debt	Interest expense on debt	240		229		696		683		Interest expense on debt	226		228		451		456
Other expenses	Other expenses	2,869		2,954		8,753		8,873		Other expenses	2,873		2,768		5,790		5,884
Total expenses	Total expenses	14,863		15,092		44,171		41,661		Total expenses	15,558		14,037		30,599		29,308
Income (loss) before provision for income tax	Income (loss) before provision for income tax	2,042		923		6,820		6,763		Income (loss) before provision for income tax	(2)		4,487		713		4,778
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	453		214		1,456		1,503		Provision for income tax expense (benefit)	(140)		1,075		(99)		1,003
Net income (loss)	Net income (loss)	1,589		709		5,364		5,260		Net income (loss)	138		3,412		812		3,775
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests	5		3		15		11		Less: Net income (loss) attributable to noncontrolling interests	6		5		11		10
Net income (loss) attributable to MetLife, Inc.	Net income (loss) attributable to MetLife, Inc.	1,584		706		5,349		5,249		Net income (loss) attributable to MetLife, Inc.	132		3,407		801		3,765
Less: Preferred stock dividends	Less: Preferred stock dividends	63		59		166		168		Less: Preferred stock dividends	29		35		92		103
Preferred stock redemption premium	Preferred stock redemption premium	—		14		6		14		Preferred stock redemption premium	—		6		—		6
Net income (loss) available to MetLife, Inc.’s common shareholders	Net income (loss) available to MetLife, Inc.’s common shareholders	$	1,521	$	633	$	5,177	$	5,067	Net income (loss) available to MetLife, Inc.’s common shareholders	$	103	$	3,366	$	709	$	3,656

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

During the three months ended ~~September~~June 30, ~~2021,~~2022, net income (loss) ~~increased $880 million~~decreased $3.3 billion from the prior period, primarily driven by ~~favorable~~unfavorable changes in ~~adjusted earnings and~~net investment gains (losses), net derivative gains (losses), net of investment hedge adjustments, ~~as well as a favorable change from our annual actuarial assumption reviews.~~and adjusted earnings.

Management of Investment Portfolio and Hedging Market Risks with Derivatives. ~~We manage~~See “— Investments — Overview” for a discussion of the management of our investment portfolio using disciplined asset/liability management (“ALM”) principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities available-for-sale (“AFS”) and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities. In addition, our general account investment portfolio includes, within contractholder-directed equity securities and fair value option securities (“FVO Securities”), contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“Unit-linked investments”), which do not qualify as separate account assets. Returns on these Unit-linked investments, which can vary significantly from period to period, include changes in estimated fair value subsequent to purchase, inure to contractholders and are offset in earnings by a corresponding change in policyholder account balances through interest credited to policyholder account balances.portfolio.

~~Table of Contents~~

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

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We also use derivatives as an integral part of our management of the investment portfolio and insurance liabilities to hedge certain risks, including changes in interest rates, foreign currency exchange rates, credit spreads and equity market levels. We use freestanding interest rate, equity, credit and currency derivatives to hedge certain invested assets and insurance liabilities. A portion of these hedges are designated and qualify as accounting hedges, which reduce volatility in earnings. For those hedges not designated as accounting hedges, changes in market factors lead to the recognition of fair value changes in net derivative gains (losses) generally without an offsetting gain or loss recognized in earnings for the item being hedged, which creates volatility in earnings. We actively evaluate market risk hedging needs and strategies to ensure our free cash flow and capital objectives are met under a range of market conditions.

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

We continuously review and refine our hedging strategy in light of changing economic and ~~ongoing refinement~~market conditions, evolving National Association of ~~the strategy may be required to take advantage~~Insurance Commissioners (“NAIC”) and New York State Department of ~~the NAIC rules related to a~~Financial Services statutory requirements, and accounting ~~election for derivatives that mitigate interest rate sensitivity related to variable annuity guarantees.~~rule changes. As a part of our current ~~hedge~~hedging strategy, we maintain portfolio level derivatives in our macro hedge program. These macro hedge program derivatives, which are included in the non-VA program derivatives section of the table below, mitigate the potential ~~loss of~~deterioration in our ~~overall statutory~~ capital positions from significant adverse economic conditions.

~~Table of Contents~~

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


		Three Months Ended September 30,					Three Months Ended June 30,
		2021		2020			2022		2021
		(In millions)					(In millions)
Non-VA program derivatives:	Non-VA program derivatives:					Non-VA program derivatives:
Interest rate	Interest rate	$	(181)	$	(402)	Interest rate	$	(1,149)	$	660
Foreign currency exchange rate	Foreign currency exchange rate	(147)		(104)		Foreign currency exchange rate	(318)		(62)
Credit	Credit	13		(4)		Credit	(129)		31
Equity	Equity	70		(249)		Equity	312		(196)
Non-VA embedded derivatives	Non-VA embedded derivatives	45		(2)		Non-VA embedded derivatives	153		(37)
Total non-VA program derivatives	Total non-VA program derivatives	(200)		(761)		Total non-VA program derivatives	(1,131)		396
VA program derivatives:	VA program derivatives:					VA program derivatives:
Market risks in embedded derivatives	Market risks in embedded derivatives	65		336		Market risks in embedded derivatives	(1)		78
Nonperformance risk adjustment on embedded derivatives	Nonperformance risk adjustment on embedded derivatives	3		(12)		Nonperformance risk adjustment on embedded derivatives	18		(8)
Other risks in embedded derivatives	Other risks in embedded derivatives	(66)		86		Other risks in embedded derivatives	(73)		(37)
Total embedded derivatives	Total embedded derivatives	2		410		Total embedded derivatives	(56)		33
Freestanding derivatives hedging embedded derivatives	Freestanding derivatives hedging embedded derivatives	(20)		(230)		Freestanding derivatives hedging embedded derivatives	(8)		(8)
Total VA program derivatives	Total VA program derivatives	(18)		180		Total VA program derivatives	(64)		25
Net derivative gains (losses)	Net derivative gains (losses)	$	(218)	$	(581)	Net derivative gains (losses)	$	(1,195)	$	421

The ~~favorable~~unfavorable change in net derivative gains (losses) on non-VA program derivatives was ~~$561 million~~$1.5 billion ($~~443 million,~~1.2 billion, net of income tax). This was primarily due to ~~key equity indexes decreasing~~long-term interest rates increasing in the current period versus ~~increasing in the prior period or increasing less in the current period than~~decreasing in the prior period. This ~~favorably~~unfavorably impacted the estimated fair value of ~~equity options and total~~receive fixed interest rate of return swaps that are part of our macro hedge program. In addition, long-term rates increased less in the current period compared with the prior period. This favorably impacted the estimated fair value of receiver options that are part of our macro hedge program.swaps. Because certain of these hedging strategies are not designated or do not qualify as accounting hedges, the changes in the estimated fair value of these freestanding derivatives are recognized in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the items being hedged.

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The unfavorable change in net derivative gains (losses) on VA program derivatives was ~~$198~~$89 million ($~~156~~70 million, net of income tax). This was due to (i) an unfavorable change of ~~$152~~$79 million ($120 million, net of income tax) in other risks in embedded derivatives (primarily policyholder behavior and other non-market risks that generally cannot be hedged), and (ii) an unfavorable change of $61 million ($4862 million, net of income tax) in market risks in embedded derivatives, net of freestanding derivatives hedging market risks in embedded derivatives, and (ii) an unfavorable change of $36 million, ($28 million, net of income tax) in other risks in embedded derivatives, partially offset by a favorable change of ~~$15~~$26 million ($1220 million, net of income tax) in the nonperformance risk adjustment on embedded derivatives.

The primary changes in market factors affecting the valuation of VA program derivatives are summarized as follows:

•Key equity index levels decreased in the current period versus increased in the prior period, contributing to an unfavorable change in our embedded derivatives and a favorable change in our freestanding derivatives. For example, the S&P Global Ratings (“S&P”) 500 index decreased 16% in the current period and increased 8% in the prior period.

•Long-term interest rates increased in the current period versus decreased in the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives. For example, the 30-year U.S. swap rate increased 69 basis points in the current period and decreased 43 basis points in the prior period.

The aforementioned ~~$152~~$36 million ($~~120~~28 million, net of income tax) unfavorable change in other risks in embedded derivatives reflects actuarial assumption updates and a combination of factors, such as fees deducted from accounts, changes in the benefit base, premiums, lapses, withdrawals and deaths, in addition to changes to cross-effect, basis mismatch, risk margin and fund allocation.

The aforementioned ~~$61~~$26 million ($48 million, net of income tax) unfavorable change reflects a $271 million ($214 million, net of income tax) unfavorable change in market risks in embedded derivatives, partially offset by a $210 million ($166 million, net of income tax) favorable change in freestanding derivatives that hedge market risks in embedded derivatives.

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~~The primary changes in market factors affecting the valuation of VA program derivatives are summarized as follows:~~

•Key equity index levels increased less in the current period compared with the prior period, contributing to an unfavorable change in our embedded derivatives and a favorable change in our freestanding derivatives. For example, the S&P Global Ratings (“S&P”) 500 Index increased 0.2% in the current period and increased 8% in the prior period.

•Long-term interest rates increased less in the current period compared with the prior period, contributing to an unfavorable change in our embedded derivatives. For example, the 30-year U.S. swap rate increased 2 basis points in the current period and increased 20 ~~basis points in the prior period.~~

~~The aforementioned $15 million ($12~~ million, net of income tax) favorable change in the nonperformance risk adjustment ~~included in the valuation of~~on embedded derivatives resulted from a favorable change of ~~$15~~$27 million, ~~before~~($21 million, net of income ~~tax,~~tax) related to changes in our own credit spread, partially offset by a slight unfavorable change related to model changes and changes in capital market inputs, such as long-term interest rates and key equity index levels, on variable annuity guarantees.

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

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

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

Net Investment Gains (Losses). The unfavorable change in net investment gains (losses) of ~~$64 million~~$2.3 billion ($~~51 million,~~1.8 billion, net of income tax) primarily reflects (i) a prior period gain on the disposition of MetLife P&C, (ii) current period ~~loss~~losses on ~~the sale~~sales of ~~MetLife Seguros. This unfavorable change was partially offset by increased~~fixed maturity securities, (iii) lower gains on sales of real estate investments, and ~~fixed maturity securities compared to~~(iv) net foreign currency transaction losses in the ~~prior~~current period.

Taxes. For the three months ended ~~September~~June 30, 2022, our effective tax rate on income (loss) before provision for income tax, which reflects an income tax benefit, increased from the U.S. statutory rate of 21% primarily due to tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate, tax credits and non-taxable investment income. For the three months ended June 30, 2021, our effective tax rate on income (loss) before provision for income tax was ~~22%~~24%, which differed from the U.S. statutory rate of 21% primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, ~~and~~ the completed sale of MetLife ~~Seguros,~~P&C and the pending disposition of MetLife Poland and Greece, partially offset by tax benefits related to tax credits and non-taxable investment income. For the three months ended September 30, 2020, our effective tax rate on income (loss) before provision for income tax was 23%, which differed from the U.S. statutory rate of 21% primarily due to tax charges from the sale of MetLife Seguros de Retiro and foreign earnings taxed at different rates than the U.S. statutory rate, partially offset by tax benefits related to non-taxable investment income and tax credits.

~~Actuarial Assumption Review.~~ Results for the current period include a $281 million ($216 million, net of income tax) charge associated with our annual review of actuarial assumptions related to reserves and DAC, of which a $2 million ($1 million, net of income tax) loss was recognized in net derivative gains (losses).

Of the $281 million charge, $129 million ($96 million, net of income tax) was related to DAC and $152 million ($120 million, net of income tax) was associated with reserves. The portion of the $281 million charge that is included in adjusted earnings is $187 million ($140 million, net of income tax).

The $2 million ($1 million, net of income tax) loss recognized in net derivative gains (losses) associated with our annual review of actuarial assumptions is included within the other risks in embedded derivatives line in the table above.

As a result of our annual review of actuarial assumptions, changes were made to economic, biometric, policyholder behavior, and operational assumptions. The most significant impacts were in the MetLife Holdings segment, driven by updates to behavioral assumptions for variable annuities and in Asia, driven by economic assumption updates for interest sensitive whole life. The breakdown of total current period results is summarized as follows:

•~~Economic assumption updates resulted in unfavorable impacts to reserves and DAC, for a net charge of $136 million ($101 million, net of income tax).~~

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•~~Changes in biometric assumptions resulted in favorable impacts to reserves and slightly unfavorable impacts to DAC, for a net gain of $39 million ($29 million, net of income tax).~~

•~~Changes in policyholder behavior assumptions resulted in unfavorable impacts to reserves and favorable impacts to DAC, for a net charge of $195 million ($152 million, net of income tax).~~

•~~Changes in operational assumptions resulted in favorable impacts to reserves and unfavorable impacts to DAC, for a net gain of $11 million ($8 million, net of income tax).~~

Results for the prior period include a $378 million ($301 million, net of income tax) charge associated with our annual review of actuarial assumptions related to reserves and DAC, of which a $44 million ($34 million, net of income tax) gain was recognized in net derivative gains (losses). Of the $378 million charge, $120 million ($94 million, net of income tax) was related to DAC and $258 million ($207 million, net of income tax) was associated with reserves. The portion of the $378 million charge that is included in adjusted earnings is $255 million ($203 million, net of income tax).

Adjusted Earnings. As more fully described in “— Non-GAAP and Other Financial Disclosures,” we use adjusted earnings, which does not equate to net income (loss), as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that the presentation of adjusted earnings and other financial measures based on adjusted earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate comparisons to industry results. Adjusted earnings should not be viewed as a substitute for net income (loss). Adjusted earnings available to common shareholders and adjusted earnings available to common shareholders on a constant currency basis should not be viewed as substitutes for net income (loss) available to MetLife, Inc.’s common shareholders. Adjusted earnings available to common shareholders ~~increased $484~~decreased $463 million, net of income tax, to $1.6 billion, net of income tax, for the three months ended June 30, 2022 from $2.1 billion, net of income tax, for the three months ended ~~September~~June 30, ~~2021 from $1.6 billion, net of income tax, for the three months ended September 30, 2020.~~2021.

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~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, net income (loss) ~~increased $104 million~~decreased $3.0 billion from the prior period, primarily driven by ~~favorable~~unfavorable changes in ~~adjusted earnings and~~ net investment gains (losses), ~~as well as a favorable change from our annual actuarial assumption reviews, partially offset by an unfavorable change in~~adjusted earnings and net derivative gains (losses), net of investment hedge adjustments.

~~Net Derivative Gains (Losses).~~ The table below presents the impact on net derivative gains (losses) from non-VA program derivatives and VA program derivatives:


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
		(In millions)					(In millions)
Non-VA program derivatives:	Non-VA program derivatives:					Non-VA program derivatives:
Interest rate	Interest rate	$	(1,206)	$	3,763	Interest rate	$	(2,091)	$	(1,025)
Foreign currency exchange rate	Foreign currency exchange rate	(356)		(156)		Foreign currency exchange rate	(170)		(209)
Credit	Credit	75		(109)		Credit	(122)		62
Equity	Equity	(612)		(253)		Equity	359		(682)
Non-VA embedded derivatives	Non-VA embedded derivatives	64		(7)		Non-VA embedded derivatives	47		19
Total non-VA program derivatives	Total non-VA program derivatives	(2,035)		3,238		Total non-VA program derivatives	(1,977)		(1,835)
VA program derivatives:	VA program derivatives:					VA program derivatives:
Market risks in embedded derivatives	Market risks in embedded derivatives	803		(494)		Market risks in embedded derivatives	199		738
Nonperformance risk adjustment on embedded derivatives	Nonperformance risk adjustment on embedded derivatives	(48)		63		Nonperformance risk adjustment on embedded derivatives	4		(51)
Other risks in embedded derivatives	Other risks in embedded derivatives	(103)		(205)		Other risks in embedded derivatives	(111)		(37)
Total embedded derivatives	Total embedded derivatives	652		(636)		Total embedded derivatives	92		650
Freestanding derivatives hedging embedded derivatives	Freestanding derivatives hedging embedded derivatives	(649)		308		Freestanding derivatives hedging embedded derivatives	(169)		(629)
Total VA program derivatives	Total VA program derivatives	3		(328)		Total VA program derivatives	(77)		21
Net derivative gains (losses)	Net derivative gains (losses)	$	(2,032)	$	2,910	Net derivative gains (losses)	$	(2,054)	$	(1,814)

The unfavorable change in net derivative gains (losses) on non-VA program derivatives was ~~$5.3 billion~~$142 million ($~~4.2 billion,~~112 million, net of income tax). This was primarily due to long-term interest rates increasing more significantly in the current period ~~versus decreasing significantly in~~as compared to the prior period. This unfavorably impacted the estimated fair value of receive fixed interest rate swaps and ~~options that are part of our macro hedge program. In addition,~~options. This unfavorable change was partially offset by key equity indexes ~~increased~~decreasing in the current period versus ~~decreased~~increasing in the prior period, ~~or increased more in the current period compared with the prior period. This unfavorably impacted the estimated fair value of~~favorably impacting equity options and ~~equity~~ total rate of return swaps ~~that are~~acquired primarily as part of our macro hedge program. Because certain of these hedging strategies are not designated or do not qualify as accounting hedges, the changes in the estimated fair value of these freestanding derivatives are recognized in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the items being hedged.

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The ~~favorable~~unfavorable change in net derivative gains (losses) on VA program derivatives was ~~$331~~$98 million ($~~261~~77 million, net of income tax). This was due to (i) ~~a favorable~~an unfavorable change of ~~$340~~$79 million ($~~269~~62 million, net of income tax) in market risks in embedded derivatives, net of freestanding derivatives ~~that hedge~~hedging market risks in embedded derivatives, and (ii) ~~a favorable~~an unfavorable change of ~~$102~~$74 million, ($8158 million, net of income tax) in other risks in embedded derivatives, ~~(primarily policyholder behavior and other non-market risks that generally cannot be hedged),~~ partially offset by ~~an unfavorable~~a favorable change of ~~$111~~$55 million ($8843 million, net of income tax) in the nonperformance risk adjustment ~~included in the valuation of~~on embedded derivatives.

The aforementioned ~~$340~~$79 million ($~~269~~62 million, net of income tax) ~~favorable~~unfavorable change reflects a ~~$1.3 billion~~$539 million ($~~1.0 billion,~~425 million, net of income tax) ~~favorable~~unfavorable change in market risks in embedded derivatives, partially offset by a ~~$957~~$460 million ($~~756~~363 million, net of income tax) ~~unfavorable~~favorable change in freestanding derivatives ~~that hedge~~hedging market risks in embedded derivatives.

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The primary changes in market factors affecting the valuation of VA program derivatives are summarized as follows:

•Key equity index levels ~~increased more~~decreased in the current period ~~compared with~~versus increased in the prior period, contributing to ~~a favorable~~an unfavorable change in our embedded derivatives and ~~an unfavorable~~a favorable change in our freestanding derivatives. For example, the S&P 500 ~~Index increased 15%~~index decreased 21% in the current period and increased 4%14% in the prior period.

•Long-term interest rates increased more significantly in the current period ~~versus decreased significantly in~~compared to the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded ~~derivatives and an unfavorable change in our freestanding~~ derivatives. For example, the 30-year U.S. swap rate increased 39122 basis points in the current period and ~~decreased 97~~increased 37 basis points in the prior period.

The aforementioned ~~$102~~$74 million ($8158 million, net of income tax) ~~favorable~~unfavorable change in other risks in embedded derivatives reflects actuarial assumption updates and a combination of factors, such as fees deducted from accounts, changes in the benefit base, premiums, lapses, withdrawals and deaths, in addition to changes to cross-effect, basis mismatch, risk margin and fund allocation.

The aforementioned ~~$111~~$55 million ($8843 million, net of income tax) ~~unfavorable~~favorable change in the nonperformance risk adjustment on embedded derivatives resulted from ~~an unfavorable~~a favorable change of ~~$91~~$33 million, ~~before~~($26 million, net of income ~~tax,~~tax) related to changes in our own credit spread, in addition to a favorable change of $22 million, ($17 million, net of income tax) related to model changes and changes in capital market inputs, such as long-term interest rates and key equity index levels, on variable annuity ~~guarantees, in addition to an unfavorable change of $20 million, before income tax, related to changes in our own credit spread.~~guarantees.

Net Investment Gains (Losses). The ~~favorable~~unfavorable change in net investment gains (losses) of ~~$1.7~~$2.9 billion ($~~1.4~~2.3 billion, net of income tax) primarily reflects (i) the ~~current~~prior period gain on the disposition of MetLife P&C, (ii) ~~increased~~current period losses on sales of fixed maturity securities, (iii) lower gains on sales of real estate investments, ~~compared to the prior period, (iii) a current period release compared to a prior period provision for mortgage loan credit loss, and~~ (iv) mark-to-market ~~gains~~losses in the current period compared to ~~mark-to-market losses~~market-to-market gains in the prior period on equity securities, which are measured at ~~estimated~~ fair value through net income (loss)~~. These favorable changes were partially offset by~~, and (v) net foreign currency transaction losses in the current ~~period loss on the sale of MetLife Seguros and on the pending disposition of MetLife Poland and Greece, as well as lower gains on sales of fixed maturity securities compared to the prior~~ period.

Divested Businesses. Income (loss) before provision for income tax related to divested businesses, excluding net investment gains (losses) and net derivative gains (losses), ~~increased $118~~decreased $81 million ($9862 million, net of income tax) to ~~$95~~$3 million ($817 million, net of income tax) in the current period from ~~a loss of $23~~$84 million ($1769 million, net of income tax) in the prior period. Included in this ~~increase~~decrease was ~~an increase~~a decline in total revenues of ~~$905~~$846 million, before income tax, and ~~an increase~~a decrease in total expenses of ~~$787~~$765 million, before income tax. Divested businesses primarily ~~include~~included activity related to the disposition of MetLife P~~&C.~~&C in the prior period.

Taxes. For the ~~nine~~six months ended ~~September~~June 30, 2022, our effective tax rate on income (loss) before provision for income tax was (14%), which reflects an income tax benefit despite having income before provision for income tax. Our effective tax rate differed from the U.S. statutory rate of 21% primarily due to tax benefits from foreign earnings taxed at different rates than the U.S. statutory rate, tax credits, the corporate tax deduction for stock compensation and non-taxable investment income. For the six months ended June 30, 2021, our effective tax rate on income (loss) before provision for income tax was equal to the U.S. statutory rate of 21% as tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, the completed ~~sales~~sale of MetLife P&C, ~~and MetLife Seguros,~~ and the pending disposition of MetLife Poland and Greece were offset by tax benefits related to tax credits, non-taxable investment income and the corporate tax deduction for stock compensation. For the nine months ended September 30, 2020, our effective tax rate on income (loss) before provision for income tax was 22%, which differed from the U.S. statutory rate of 21% primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate and the sale of MetLife Seguros de Retiro, partially offset by tax benefits related to non-taxable investment income, tax credits and the finalization of bankruptcy proceedings for a leveraged lease investment.

~~Actuarial Assumption Review.~~ For the results of our 2021 and 2020 annual actuarial assumption reviews, see “— Three Months Ended September 30, 2021 Compared with the Three Months Ended September 30, 2020 — Actuarial Assumption Review.”

Adjusted Earnings. Adjusted earnings available to common shareholders ~~increased $2.3 billion,~~decreased $701 million, net of income tax, to ~~$6.1~~$3.4 billion, net of income tax, for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 from ~~$3.8~~$4.1 billion, net of income tax, for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

~~102~~95

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Reconciliation of net income (loss) to adjusted earnings available to common shareholders and premiums, fees and other revenues to adjusted premiums, fees and other revenues

Three Months Ended ~~September~~June 30, ~~2021~~2022


			U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total				U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
			(In millions)																(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders	Net income (loss) available to MetLife, Inc.'s common shareholders		$	978	$	610	$	(402)	$	74	$	501	$	(240)	$	1,521	Net income (loss) available to MetLife, Inc.'s common shareholders		$	504	$	(737)	$	(21)	$	70	$	367	$	(80)	$	103
Add: Preferred stock dividends	Add: Preferred stock dividends		—		—		—		—		—		63		63		Add: Preferred stock dividends		—		—		—		—		—		29		29
Add: Preferred stock redemption premium	Add: Preferred stock redemption premium		—		—		—		—		—		—		—		Add: Preferred stock redemption premium		—		—		—		—		—		—		—
Add: Net income (loss) attributable to noncontrolling interests	Add: Net income (loss) attributable to noncontrolling interests		—		—		1		1		—		3		5		Add: Net income (loss) attributable to noncontrolling interests		—		1		3		1		—		1		6
Net income (loss)	Net income (loss)		978		610		(401)		75		501		(174)		1,589		Net income (loss)		504		(736)		(18)		71		367		(50)		138
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:	Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:																Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:	Revenues:																Revenues:
		Net investment gains (losses)	115		122		(199)		(13)		48		(157)		(84)			Net investment gains (losses)	(340)		(471)		32		13		(60)		141		(685)
		Net derivative gains (losses)	86		(34)		(299)		(9)		(3)		41		(218)			Net derivative gains (losses)	49		(1,135)		(202)		(3)		(5)		101		(1,195)
		Premiums	—		—		—		57		—		—		57			Premiums	—		—		—		—		—		—		—
		Universal life and investment-type product policy fees	—		46		—		18		20		—		84			Universal life and investment-type product policy fees	—		(11)		—		3		19		—		11
		Net investment income	(89)		16		(9)		61		(74)		(5)		(100)			Net investment income	(66)		(152)		(78)		(559)		(66)		—		(921)
		Other revenues	—		—		—		6		—		73		79			Other revenues	—		—		—		2		—		46		48
Expenses:
		Policyholder benefits and claims and policyholder dividends	(8)		(21)		—		(43)		(108)		(1)		(181)			Policyholder benefits and claims and policyholder dividends	(2)		34		(155)		(24)		148		—		1
		Interest credited to policyholder account balances	1		(55)		(8)		(58)		—		—		(120)			Interest credited to policyholder account balances	—		125		8		562		—		—		695
		Capitalization of DAC	—		—		—		15		—		—		15			Capitalization of DAC	—		—		—		—		—		—		—
		Amortization of DAC and VOBA	—		(30)		—		(13)		(15)		—		(58)			Amortization of DAC and VOBA	—		12		—		—		(32)		—		(20)
		Amortization of negative VOBA	—		—		—		—		—		—		—			Amortization of negative VOBA	—		—		—		—		—		—		—
		Interest expense on debt	—		—		—		—		—		—		—			Interest expense on debt	—		—		—		—		—		—		—
		Other expenses	—		—		1		(36)		—		(74)		(109)			Other expenses	—		—		2		(3)		—		(66)		(67)
		Goodwill impairment	—		—		—		—		—		—		—			Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit		(22)		(3)		84		(4)		27		17		99		Provision for income tax (expense) benefit		75		476		108		16		(1)		(58)		616
Adjusted earnings	Adjusted earnings		$	895	$	569	$	29	$	94	$	606	(68)		2,125		Adjusted earnings		$	788	$	386	$	267	$	64	$	364	(214)		1,655
Less: Preferred stock dividends	Less: Preferred stock dividends												63		63		Less: Preferred stock dividends												29		29
Adjusted earnings available to common shareholders	Adjusted earnings available to common shareholders												$	(131)	$	2,062	Adjusted earnings available to common shareholders												$	(243)	$	1,626

Premiums, fees and other revenues	Premiums, fees and other revenues		$	6,408	$	2,134	$	988	$	751	$	1,161	$	197	$	11,639	Premiums, fees and other revenues		$	8,943	$	1,906	$	1,132	$	591	$	1,141	$	140	$	13,853
Less: adjustments to premiums, fees and other revenues	Less: adjustments to premiums, fees and other revenues		—		46		—		81		20		73		220		Less: adjustments to premiums, fees and other revenues		—		(11)		—		5		19		46		59
Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues		$	6,408	$	2,088	$	988	$	670	$	1,141	$	124	$	11,419	Adjusted premiums, fees and other revenues		$	8,943	$	1,917	$	1,132	$	586	$	1,122	$	94	$	13,794

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Three Months Ended ~~September~~June 30, ~~2020~~2021


			U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total				U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
			(In millions)																(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders	Net income (loss) available to MetLife, Inc.'s common shareholders		$	766	$	422	$	(18)	$	58	$	(369)	$	(226)	$	633	Net income (loss) available to MetLife, Inc.'s common shareholders		$	1,169	$	711	$	26	$	(69)	$	492	$	1,037	$	3,366
Add: Preferred stock dividends	Add: Preferred stock dividends		—		—		—		—		—		59		59		Add: Preferred stock dividends		—		—		—		—		—		35		35
Add: Preferred stock redemption premium	Add: Preferred stock redemption premium		—		—		—		—		—		14		14		Add: Preferred stock redemption premium		—		—		—		—		—		6		6
Add: Net income (loss) attributable to noncontrolling interests	Add: Net income (loss) attributable to noncontrolling interests		—		—		—		1		—		2		3		Add: Net income (loss) attributable to noncontrolling interests		—		1		1		—		—		3		5
Net income (loss)	Net income (loss)		766		422		(18)		59		(369)		(151)		709		Net income (loss)		1,169		712		27		(69)		492		1,081		3,412
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:	Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:																Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:	Revenues:																Revenues:
		Net investment gains (losses)	34		69		(109)		(10)		10		(14)		(20)			Net investment gains (losses)	403		66		(4)		(204)		(72)		1,416		1,605
		Net derivative gains (losses)	(93)		(67)		67		24		(442)		(70)		(581)			Net derivative gains (losses)	32		261		(80)		21		135		52		421
		Premiums	—		—		—		—		—		—		—			Premiums	—		—		—		—		—		—		—
		Universal life and investment-type product policy fees	—		3		—		4		21		—		28			Universal life and investment-type product policy fees	—		13		—		3		20		—		36
		Net investment income	(103)		31		13		184		(84)		—		41			Net investment income	(85)		(8)		(8)		333		(69)		—		163
		Other revenues	—		—		—		—		—		39		39			Other revenues	—		—		—		—		—		60		60
Expenses:
		Policyholder benefits and claims and policyholder dividends	(10)		(21)		25		(8)		(223)		—		(237)			Policyholder benefits and claims and policyholder dividends	(12)		(15)		21		11		(81)		—		(76)
		Interest credited to policyholder account balances	1		(71)		(11)		(186)		—		—		(267)			Interest credited to policyholder account balances	1		(33)		(14)		(319)		—		—		(365)
		Capitalization of DAC	—		—		—		—		—		—		—			Capitalization of DAC	—		—		—		—		—		—		—
		Amortization of DAC and VOBA	—		(4)		—		2		(69)		—		(71)			Amortization of DAC and VOBA	—		(9)		—		1		11		—		3
		Amortization of negative VOBA	—		—		—		—		—		—		—			Amortization of negative VOBA	—		—		—		—		—		—		—
		Interest expense on debt	—		—		—		—		—		—		—			Interest expense on debt	—		—		—		—		—		—		—
		Other expenses	—		—		(4)		(2)		—		(49)		(55)			Other expenses	—		—		(4)		(2)		—		(62)		(68)
		Goodwill impairment	—		—		—		—		—		—		—			Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit		37		17		(38)		(1)		165		15		195		Provision for income tax (expense) benefit		(72)		(83)		19		(7)		12		(360)		(491)
Adjusted earnings	Adjusted earnings		$	900	$	465	$	39	$	52	$	253	(72)		1,637		Adjusted earnings		$	902	$	520	$	97	$	94	$	536	(25)		2,124
Less: Preferred stock dividends	Less: Preferred stock dividends												59		59		Less: Preferred stock dividends												35		35
Adjusted earnings available to common shareholders	Adjusted earnings available to common shareholders												$	(131)	$	1,578	Adjusted earnings available to common shareholders												$	(60)	$	2,089

Adjusted earnings available to common shareholders on a constant currency basis (1)	Adjusted earnings available to common shareholders on a constant currency basis (1)		$	900	$	466	$	41	$	52	$	253	$	(131)	$	1,581	Adjusted earnings available to common shareholders on a constant currency basis (1)		$	902	$	498	$	83	$	76	$	536	$	(60)	$	2,035

Premiums, fees and other revenues	Premiums, fees and other revenues		$	6,833	$	2,268	$	761	$	684	$	1,227	$	114	$	11,887	Premiums, fees and other revenues		$	6,136	$	2,050	$	934	$	747	$	1,201	$	150	$	11,218
Less: adjustments to premiums, fees and other revenues	Less: adjustments to premiums, fees and other revenues		—		3		—		4		21		39		67		Less: adjustments to premiums, fees and other revenues		—		13		—		3		20		60		96
Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues		$	6,833	$	2,265	$	761	$	680	$	1,206	$	75	$	11,820	Adjusted premiums, fees and other revenues		$	6,136	$	2,037	$	934	$	744	$	1,181	$	90	$	11,122

Adjusted premiums, fees and other revenues on a constant currency basis (1)	Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	6,833	$	2,225	$	807	$	682	$	1,206	$	75	$	11,828	Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	6,136	$	1,786	$	899	$	665	$	1,181	$	90	$	10,757

__________________

(1)Amounts for U.S., MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.

~~104~~

Table of Contents

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022


			U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total				U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
			(In millions)																(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders	Net income (loss) available to MetLife, Inc.'s common shareholders		$	2,905	$	1,171	$	(319)	$	34	$	746	$	640	$	5,177	Net income (loss) available to MetLife, Inc.'s common shareholders		$	1,104	$	(829)	$	241	$	7	$	290	$	(104)	$	709
Add: Preferred stock dividends	Add: Preferred stock dividends		—		—		—		—		—		166		166		Add: Preferred stock dividends		—		—		—		—		—		92		92
Add: Preferred stock redemption premium	Add: Preferred stock redemption premium		—		—		—		—		—		6		6		Add: Preferred stock redemption premium		—		—		—		—		—		—		—
Add: Net income (loss) attributable to noncontrolling interests	Add: Net income (loss) attributable to noncontrolling interests		—		1		4		2		—		8		15		Add: Net income (loss) attributable to noncontrolling interests		—		1		4		3		—		3		11
Net income (loss)	Net income (loss)		2,905		1,172		(315)		36		746		820		5,364		Net income (loss)		1,104		(828)		245		10		290		(9)		812
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:	Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:																Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:	Revenues:																Revenues:
		Net investment gains (losses)	473		62		(195)		(200)		94		1,421		1,655			Net investment gains (losses)	(606)		(657)		38		(103)		(147)		272		(1,203)
		Net derivative gains (losses)	127		(737)		(412)		6		(964)		(52)		(2,032)			Net derivative gains (losses)	248		(1,909)		62		(23)		(522)		90		(2,054)
		Premiums	865		—		—		57		—		—		922			Premiums	—		—		—		41		—		—		41
		Universal life and investment-type product policy fees	—		59		—		26		60		—		145			Universal life and investment-type product policy fees	—		(19)		—		18		38		—		37
		Net investment income	(236)		77		(27)		479		(216)		6		83			Net investment income	(133)		(262)		(156)		(944)		(138)		4		(1,629)
		Other revenues	11		—		—		6		—		168		185			Other revenues	—		—		—		5		—		93		98
Expenses:
		Policyholder benefits and claims and policyholder dividends	(603)		(59)		91		(92)		(257)		(1)		(921)			Policyholder benefits and claims and policyholder dividends	14		22		(217)		(80)		227		—		(34)
		Interest credited to policyholder account balances	2		(194)		(33)		(470)		—		—		(695)			Interest credited to policyholder account balances	—		199		44		954		—		—		1,197
		Capitalization of DAC	89		—		—		15		—		—		104			Capitalization of DAC	—		—		—		11		—		—		11
		Amortization of DAC and VOBA	(98)		(27)		—		(12)		—		—		(137)			Amortization of DAC and VOBA	—		27		—		(9)		(29)		—		(11)
		Amortization of negative VOBA	—		—		—		—		—		—		—			Amortization of negative VOBA	—		—		—		—		—		—		—
		Interest expense on debt	—		—		—		—		—		(1)		(1)			Interest expense on debt	—		—		—		—		—		—		—
		Other expenses	(222)		1		3		(40)		—		(181)		(439)			Other expenses	—		—		4		(25)		—		(125)		(146)
		Goodwill impairment	—		—		—		—		—		—		—			Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit			(84)		278		92		2		269		(344)		213
																		Provision for income tax (expense) benefit	100		805		61		49		120		(75)		1,060
Adjusted earnings	Adjusted earnings		$	2,581	$	1,712	$	166	$	259	$	1,760	(196)		6,282		Adjusted earnings		$	1,481	$	966	$	409	$	116	$	741	(268)		3,445
Less: Preferred stock dividends	Less: Preferred stock dividends												166		166		Less: Preferred stock dividends												92		92
Adjusted earnings available to common shareholders	Adjusted earnings available to common shareholders												$	(362)	$	6,116	Adjusted earnings available to common shareholders												$	(360)	$	3,353

Premiums, fees and other revenues	Premiums, fees and other revenues		$	19,812	$	6,345	$	2,797	$	2,181	$	3,545	$	526	$	35,206	Premiums, fees and other revenues		$	16,830	$	3,920	$	2,163	$	1,256	$	2,249	$	284	$	26,702
Less: adjustments to premiums, fees and other revenues	Less: adjustments to premiums, fees and other revenues		876		59		—		89		60		168		1,252		Less: adjustments to premiums, fees and other revenues		—		(19)		—		64		38		93		176
Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues		$	18,936	$	6,286	$	2,797	$	2,092	$	3,485	$	358	$	33,954	Adjusted premiums, fees and other revenues		$	16,830	$	3,939	$	2,163	$	1,192	$	2,211	$	191	$	26,526

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~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021


			U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total				U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total
			(In millions)																(In millions)
Net income (loss) available to MetLife, Inc.'s common shareholders	Net income (loss) available to MetLife, Inc.'s common shareholders		$	2,317	$	1,428	$	(107)	$	359	$	1,872	$	(802)	$	5,067	Net income (loss) available to MetLife, Inc.'s common shareholders		$	1,927	$	561	$	83	$	(40)	$	245	$	880	$	3,656
Add: Preferred stock dividends	Add: Preferred stock dividends		—		—		—		—		—		168		168		Add: Preferred stock dividends		—		—		—		—		—		103		103
Add: Preferred stock redemption premium	Add: Preferred stock redemption premium		—		—		—		—		—		14		14		Add: Preferred stock redemption premium		—		—		—		—		—		6		6
Add: Net income (loss) attributable to noncontrolling interests	Add: Net income (loss) attributable to noncontrolling interests		—		1		3		4		—		3		11		Add: Net income (loss) attributable to noncontrolling interests		—		1		3		1		—		5		10
Net income (loss)	Net income (loss)		2,317		1,429		(104)		363		1,872		(617)		5,260		Net income (loss)		1,927		562		86		(39)		245		994		3,775
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:	Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:																Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
Revenues:	Revenues:																Revenues:
		Net investment gains (losses)	11		226		(81)		(1)		(86)		(146)		(77)			Net investment gains (losses)	358		(60)		4		(187)		46		1,578		1,739
		Net derivative gains (losses)	395		533		(202)		35		2,238		(89)		2,910			Net derivative gains (losses)	41		(703)		(113)		15		(961)		(93)		(1,814)
		Premiums	—		52		—		—		—		—		52			Premiums	865		—		—		—		—		—		865
		Universal life and investment-type product policy fees	—		31		(3)		13		64		—		105			Universal life and investment-type product policy fees	—		13		—		8		40		—		61
		Net investment income	(237)		(94)		(2)		(45)		(200)		2		(576)			Net investment income	(147)		61		(18)		418		(142)		11		183
		Other revenues	—		—		—		—		—		120		120			Other revenues	11		—		—		—		—		95		106
Expenses:	Expenses:																Expenses:
		Policyholder benefits and claims and policyholder dividends	(34)		(93)		(116)		87		(276)		—		(432)			Policyholder benefits and claims and policyholder dividends	(595)		(38)		91		(49)		(149)		—		(740)
		Interest credited to policyholder account balances	8		21		(17)		58		—		—		70			Interest credited to policyholder account balances	1		(139)		(25)		(412)		—		—		(575)
		Capitalization of DAC	—		5		—		—		—		—		5			Capitalization of DAC	89		—		—		—		—		—		89
		Amortization of DAC and VOBA	—		(47)		—		1		(66)		—		(112)			Amortization of DAC and VOBA	(98)		3		—		1		15		—		(79)
		Amortization of negative VOBA	—		—		—		—		—		—		—			Amortization of negative VOBA	—		—		—		—		—		—		—
		Interest expense on debt	—		—		—		—		—		—		—			Interest expense on debt	—		—		—		—		—		(1)		(1)
		Other expenses	—		(24)		—		(4)		—		(148)		(176)			Other expenses	(222)		1		2		(4)		—		(107)		(330)
		Goodwill impairment	—		—		—		—		—		—		—			Goodwill impairment	—		—		—		—		—		—		—
Provision for income tax (expense) benefit			(29)		(252)		51		(27)		(352)		27		(582)
																		Provision for income tax (expense) benefit	(62)		281		8		6		242		(361)		114
Adjusted earnings	Adjusted earnings		$	2,203	$	1,071	$	266	$	246	$	550	(383)		3,953		Adjusted earnings		$	1,686	$	1,143	$	137	$	165	$	1,154	(128)		4,157
Less: Preferred stock dividends	Less: Preferred stock dividends												168		168		Less: Preferred stock dividends												103		103
Adjusted earnings available to common shareholders	Adjusted earnings available to common shareholders												$	(551)	$	3,785	Adjusted earnings available to common shareholders												$	(231)	$	4,054

Adjusted earnings available to common shareholders on a constant currency basis (1)	Adjusted earnings available to common shareholders on a constant currency basis (1)		$	2,203	$	1,104	$	291	$	254	$	550	$	(551)	$	3,851	Adjusted earnings available to common shareholders on a constant currency basis (1)		$	1,686	$	1,103	$	115	$	137	$	1,154	$	(231)	$	3,964

Premiums, fees and other revenues	Premiums, fees and other revenues		$	18,714	$	6,446	$	2,416	$	2,050	$	3,711	$	377	$	33,714	Premiums, fees and other revenues		$	13,404	$	4,211	$	1,809	$	1,430	$	2,384	$	329	$	23,567
Less: adjustments to premiums, fees and other revenues	Less: adjustments to premiums, fees and other revenues		—		83		(3)		13		64		120		277		Less: adjustments to premiums, fees and other revenues		876		13		—		8		40		95		1,032
Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues		$	18,714	$	6,363	$	2,419	$	2,037	$	3,647	$	257	$	33,437	Adjusted premiums, fees and other revenues		$	12,528	$	4,198	$	1,809	$	1,422	$	2,344	$	234	$	22,535

Adjusted premiums, fees and other revenues on a constant currency basis (1)	Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	18,714	$	6,426	$	2,571	$	2,087	$	3,647	$	257	$	33,702	Adjusted premiums, fees and other revenues on a constant currency basis (1)		$	12,528	$	3,789	$	1,747	$	1,296	$	2,344	$	234	$	21,938

__________________

(1)Amounts for U.S., MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency impact is not significant.

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Consolidated Results —- Adjusted Earnings

Business Overview. Adjusted premiums, fees and other revenues for the three months ended ~~September~~June 30, ~~2021 decreased $401 million,~~2022 increased $2.7 billion, or 3%24%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, ~~decreased $409 million,~~increased $3.0 billion, or 3%28%, compared to the prior period primarily due to ~~a decrease of $908 million attributable to the disposition of MetLife P&C. Growth~~higher premiums in our RIS business and growth in our Group Benefits business, ~~including the acquisition of Versant Health, was partially offset by lower premiums~~both in our ~~Retirement~~U.S. segment. Strong sales and ~~Income Solutions (“RIS”) business. In~~solid persistency in our Latin America segment and higher fees in our Asia segment, primarily in Japan, also contributed to the improvement in adjusted premiums, fees and other ~~revenues declined compared to the prior period mainly due to the impact of our annual actuarial assumption review in both periods.~~revenues. A decrease in adjusted premiums, fees and other revenues in our EMEA segment was primarily due to the ~~disposition of MetLife Russia and the pending~~ disposition of MetLife Poland and ~~Greece~~. Higher annuitizations in Chile due to improved market conditions, coupled with higher sales and persistency in Mexico, resulted in an increase in adjusted premiums, fees and other revenues in our Latin America segment.Greece. In our MetLife Holdings segment, we anticipate an average decline in adjusted premiums, fees and other revenues of approximately 5%6% to 7%8% per year from expected business run-off.

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Overview.The primary drivers of the ~~increase~~decrease in adjusted earnings were ~~higher~~lower investment yields due to ~~strong~~the unfavorable impact of lower equity market returns inon our private equity ~~portfolio,~~funds and hedge funds and higher expenses, partially offset by higher net investment income due to a larger average invested asset base ~~higher fee income~~ and favorable underwriting, primarily driven by a decline in COVID-19 related claims. In addition, the current period includes the favorable ~~change~~impact from ~~our annual actuarial assumption reviews, partially offset by unfavorable underwriting, which reflected impacts from~~a reinsurance settlement and the ~~COVID-19 Pandemic. The disposition~~prior period included the release of ~~MetLife P&C decreased adjusted earnings by $18 million. All amounts discussed below are net of the results of this business.~~a legal reserve.

Foreign Currency. Changes in foreign currency exchange rates ~~did not have~~had a ~~material~~$54 million negative impact on adjusted earnings for the ~~third~~second quarter of ~~2021~~2022 compared to the prior period. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. We benefited from positive net flows ~~in the majority~~from most of our businesses, which increased our average invested asset ~~base. Growth in the investment portfolios of our U.S.~~base and ~~Asia segments~~ resulted in higher net investment income. However, consistent with the growth in average invested assets, interest credited expenses on certain insurance-related liabilities increased. ~~In addition, higher~~Higher premiums, fees and other revenues, net of corresponding changes in policyholder benefits, improved adjusted earnings, primarily from growth in our ~~EMEA~~Asia and ~~Latin America~~EMEA segments, partially offset by a decline in our MetLife Holdings segment. Higher ~~fee income in our EMEA, Latin America and Asia segments was partially~~commissions were largely offset by ~~a decrease in our MetLife Holdings segment. Also, an increase in expenses due to business growth, net of~~higher DAC ~~capitalization, was more than offset by the 2021 abatement of the annual health insurer fee under the Patient Protection and Affordable Care Act (“PPACA”).~~capitalization. The combined impact of the items affecting our business growth, ~~in addition to~~as well as higher DAC amortization, resulted in a ~~$90~~$183 million increase in adjusted earnings.

Market Factors. Market factors, including interest rate levels, variability in equity market returns, and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Excluding the impact of changes in foreign currency exchange rates on net investment income in our non-U.S. segments and changes in inflation rates on our inflation-indexed investments, investment yields ~~increased.~~decreased. The ~~increase~~decrease in investment yields was primarily driven by the ~~favorable~~unfavorable impact of ~~strong~~lower equity market returns on our private equity funds and ~~higher income on real estate investments.~~hedge funds. These ~~increases~~decreases were partially offset by ~~lower~~the favorable impact of higher real estate market returns on our real estate investments, primarily real estate funds, and higher yields on our fixed income ~~securities and mortgage loans, as well as decreased returns on FVO Securities.~~securities. The ~~net~~ impact of interest rate fluctuations resulted in a decline in our average interest credited rates on ~~deposit-type~~long duration insurance and ~~long-duration liabilities,~~investment-type products, which drove a decrease in interest credited expenses. The changes in market factors discussed above resulted in a ~~$744~~$775 million ~~increase~~decrease in adjusted earnings.

Underwriting ~~Actuarial Assumption Review~~ and Other Insurance Adjustments. ~~Unfavorable~~Favorable underwriting resulted in a ~~$481~~$206 million ~~decrease~~increase in adjusted earnings and reflected overall lower impacts from the COVID-19 ~~Pandemic.~~pandemic. This was primarily driven by ~~unfavorable~~favorable mortality ~~experience~~ in our ~~U.S.,~~ Latin America and ~~MetLife Holdings~~U.S. segments, ~~coupled with~~partially offset by unfavorable claims experience in our ~~MetLife Holdings, U.S. and~~ Asia segments. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $63 million in adjusted earnings. Changes in operational, biometric and economic assumptions were less unfavorable in the current period when compared to the prior period.segment. Refinements to certain insurance and other liabilities in both periods resulted in a ~~$48~~$103 million increase in adjusted ~~earnings. Dividend scale reductions, as well as run-off~~earnings, which includes a reinsurance settlement in Metropolitan Life Insurance Company’s (“MLIC”) closed block, contributed to lower dividend expenses of $9 million and lower associated DAC amortization of $84 million, which increased adjusted earnings.the current period in our MetLife Holdings segment.

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Expenses. Adjusted earnings decreased ~~$15~~$133 million ~~compared to the prior period,~~ primarily due to ~~lower interest expenses on tax positions due to an audit settlement~~increases in ~~the prior period, as well as higher~~ corporate-related expenses inand the ~~current period, partially offset by higher~~release of a legal ~~expenses~~reserve in the prior period.

Taxes. For each of the three months ended ~~September~~June 30, 2022 and 2021, our effective tax rate on adjusted earnings was equal to the U.S. statutory rate of 21% as benefits from tax credits and non-taxable investment income were offset by tax charges from foreign earnings taxed at different rates than the U.S. statutory rate. For the three months ended September 30, 2020, our effective tax rate on adjusted earnings was 20%22%, which differed from the U.S. statutory rate of 21% primarily due to tax ~~benefits from non-taxable investment income and tax credits, partially offset by tax~~ charges from foreign earnings taxed at different rates than the U.S. statutory ~~rate.~~rate, partially offset by tax benefits from tax credits and non-taxable investment income.

~~Nine~~

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Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

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

Overview. The primary drivers of the ~~increase~~decrease in adjusted earnings were ~~higher~~lower investment yields due to ~~strong~~the unfavorable impact of lower equity market returns inon our private equity ~~portfolio, an increase in~~funds and hedge funds and higher expenses, partially offset by higher net investment income due to a larger average invested asset base ~~lower interest credited expenses,~~and favorable underwriting, primarily driven by a decline in COVID-19 related claims. In addition, the current period includes the favorable impact from a reinsurance settlement and the prior period included the release of a legal reserve in the current period and a favorable change from our annual actuarial assumption reviews, partially offset by unfavorable underwriting, which reflected impacts from the COVID-19 Pandemic, and the disposition of MetLife P&C. The disposition of MetLife P&C decreased adjusted earnings by $210 million. All amounts discussed below are net of the results of this business.reserve.

Foreign Currency. Changes in foreign currency exchange rates had a ~~$65~~$91 million ~~positive~~negative impact on adjusted earnings for the first ~~nine~~six months of ~~2021~~2022 compared to the prior period. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. We benefited from positive net flows ~~in the majority~~from most of our businesses, which increased our average invested asset ~~base. Growth in the investment portfolios of our U.S.~~base and ~~Asia segments~~ resulted in higher net investment income. However, consistent with the growth in average invested assets, interest credited expenses on certain insurance-related liabilities increased. ~~In addition, higher~~Higher premiums, fees and other revenues, net of corresponding changes in policyholder benefits, improved adjusted earnings, primarily from growth in our EMEA, Asia and Latin America segments, partially offset by a decline in our MetLife Holdings segment. ~~Lower fee income in our MetLife Holdings and EMEA segments was partially~~Higher commissions were largely offset by ~~increases~~higher DAC capitalization. Lower variable expenses in ~~our~~ Asia and Latin America segments. Also, an increase in expenses due to business growth was more than offset by the related increase in DAC capitalization and the 2021 abatement of the annual health insurer fee under the PPACA.improved adjusted earnings. The combined impact of the items affecting our business growth, as well as to higher DAC amortization, resulted in a ~~$211~~$492 million increase in adjusted earnings.

Market Factors. Market factors, including interest rate levels, variability in equity market returns, and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Excluding the impact of changes in foreign currency exchange rates on net investment income in our non-U.S. segments and changes in inflation rates on our inflation-indexed investments, investment yields ~~increased.~~decreased. The ~~increase~~decrease in investment yields was primarily driven by the ~~favorable~~unfavorable impact of ~~strong~~lower equity market returns on our private equity funds, hedge funds, and ~~higher income~~fair value option securities (“FVO Securities”), as well as lower yields on ~~real estate investments.~~our mortgage loans. These ~~increases~~decreases were partially offset by ~~lower yields on fixed income securities and mortgage loans, as well as decreased~~the favorable impact of higher real estate market returns on ~~FVO Securities.~~our real estate investments, primarily real estate funds. The ~~net~~ impact of interest rate fluctuations resulted in a decline in our average interest credited rates on ~~deposit-type~~long duration insurance and ~~long-duration liabilities,~~investment-type products, which drove a decrease in interest credited expenses. The changes in market factors discussed above resulted in a ~~$2.8~~$1.3 billion ~~increase~~decrease in adjusted earnings.

Underwriting ~~Actuarial Assumption Review~~ and Other Insurance Adjustments. ~~Unfavorable~~Favorable underwriting resulted in ~~an $850~~a $277 million ~~decrease~~increase in adjusted earnings and reflected overall lower impacts from the COVID-19 ~~Pandemic.~~pandemic. This was primarily driven by ~~unfavorable~~favorable mortality in our ~~U.S. and~~ Latin America and U.S. segments, ~~coupled with~~partially offset by unfavorable claims experience in our ~~EMEA~~MetLife Holdings and ~~U.S.~~Asia segments. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $63 million in adjusted earnings. Changes in operational, biometric and economic assumptions were less unfavorable in the current period when compared to the prior period. Refinements to certain insurance and other liabilities in both periods resulted in ~~a $43~~an $85 million increase in adjusted ~~earnings. Dividend scale reductions, as well as run-off~~earnings, which includes a reinsurance settlement in ~~MLIC’s closed block, contributed to lower dividend expenses of $82 million and lower associated DAC amortization of $84 million, which increased adjusted earnings.~~the current period in our MetLife Holdings segment.

Expenses. Adjusted earnings ~~increased $106~~decreased $206 million ~~compared to the prior period,~~ primarily due to increases in corporate-related expenses and the release of a legal reserve in the ~~current period and lower legal expenses.~~prior period.

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Taxes. For the ~~nine~~six months ended ~~September~~June 30, 2022, our effective tax rate on adjusted earnings was 22%, which differed from the U.S. statutory rate of 21% primarily due to tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, partially offset by tax benefits from tax credits, the corporate tax deduction for stock compensation and non-taxable investment income. For the six months ended June 30, 2021, our effective tax rate on adjusted earnings was 21%, which is equal to the U.S. statutory rate, ~~of 21% as~~and reflects tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, offset by tax benefits from tax credits, non-taxable investment income and the corporate tax deduction for stock compensation were offset by tax charges from foreign earnings taxed at different rates than the U.S. statutory rate. For the nine months ended September 30, 2020, our effective tax rate on adjusted earnings was 19%, which differed from the U.S. statutory rate of 21% primarily due to tax benefits from non-taxable investment income, tax credits and the finalization of bankruptcy proceedings for a leveraged lease investment, partially offset by tax charges from foreign earnings taxed at different rates than the U.S. statutory rate.compensation.

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Segment Results and Corporate & Other

U.S.

Business ~~Overview.~~ Overview. Adjusted premiums, fees and other revenues for the three months ended ~~September~~June 30, ~~2021 decreased $425 million,~~2022 increased $2.8 billion, or 6%46%, compared to the prior period. This was primarily due to ~~a decrease of $908 million attributable to the disposition of MetLife P&C, as well as lower~~higher premiums in our RIS business, ~~partially offset by~~as well as growth in our Group Benefits business. ~~See Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding the MetLife P&C disposition.~~ The increase in our Group Benefits business was primarily due to the current period impact of the Versant Health acquisition. In addition, growth in other core products was driven by increases in the group life and group disability businesses. Growth from our group life business included increased premiums from our participating contracts, which can fluctuate with claims experience. Growth in voluntary products was due to the impact of new sales and growth in membership in our accident & health and legal plans businesses. These increases were partially offset by lower dental premiums, driven by the impact of the release of an unearned premium reserve in the prior period. The decrease in premiums in RIS was mainly driven by ~~the impact of prior period~~ sales in the pension risk transfer business ~~partially offset by increases~~in the current period, as well as an increase in our ~~post-retirement,~~ U.K. longevity reinsurance ~~and structured settlement businesses.~~business. Changes in RIS premiums are mostly offset by a corresponding change in policyholder benefits. The increase in our Group Benefits business was primarily due to growth from our group disability, voluntary products, term life and dental businesses. This was partially offset by a decrease in premiums from our term life participating contracts, which can fluctuate with claims experience.

~~Growth in RIS’s stable value and capital market investments businesses drove increases in policyholder account and separate account balances, resulting in higher fees and interest margins.~~


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Adjusted revenues	Adjusted revenues									Adjusted revenues
Premiums	Premiums	$	5,746	$	6,333	$	16,919	$	17,191	Premiums	$	8,254	$	5,474	$	15,418	$	11,173
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	279		263		858		806		Universal life and investment-type product policy fees	284		282		581		579
Net investment income	Net investment income	2,098		1,827		6,106		5,018		Net investment income	1,710		1,998		3,584		4,008
Other revenues	Other revenues	383		237		1,159		717		Other revenues	405		380		831		776
Total adjusted revenues	Total adjusted revenues	8,506		8,660		25,042		23,732		Total adjusted revenues	10,653		8,134		20,414		16,536
Adjusted expenses	Adjusted expenses									Adjusted expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	6,118		6,108		17,999		16,581		Policyholder benefits and claims and policyholder dividends	8,320		5,739		15,886		11,881
Interest credited to policyholder account balances	Interest credited to policyholder account balances	362		381		1,080		1,251		Interest credited to policyholder account balances	387		359		734		718
Capitalization of DAC	Capitalization of DAC	(17)		(119)		(48)		(353)		Capitalization of DAC	(14)		(13)		(37)		(31)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	26		123		50		357		Amortization of DAC and VOBA	14		8		28		24
Interest expense on debt	Interest expense on debt	1		2		4		6		Interest expense on debt	1		2		3		3
Other expenses	Other expenses	886		1,026		2,695		3,104		Other expenses	949		898		1,928		1,809
Total adjusted expenses	Total adjusted expenses	7,376		7,521		21,780		20,946		Total adjusted expenses	9,657		6,993		18,542		14,404
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	235		239		681		583		Provision for income tax expense (benefit)	208		239		391		446
Adjusted earnings	Adjusted earnings	$	895	$	900	$	2,581	$	2,203	Adjusted earnings	$	788	$	902	$	1,481	$	1,686

Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues	$	6,408	$	6,833	$	18,936	$	18,714	Adjusted premiums, fees and other revenues	$	8,943	$	6,136	$	16,830	$	12,528

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

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

~~The disposition of MetLife P&C decreased adjusted earnings by $18 million. All amounts discussed below are net of the results of this business.~~

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Business ~~Growth.~~ Growth. The impact of positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets, improving net investment income. However, consistent with ~~the~~ growth in average invested assets, interest credited expenses on ~~long-duration~~long duration insurance and ~~deposit-type liabilities~~investment-type products increased. Higher ~~volume-related, premium tax and~~ direct expenses, ~~driven by business growth, were partially offset by the 2021 abatement of the annual health insurer fee under the PPACA. This net~~including certain employee-related costs, coupled with an increase in variable expenses, ~~was~~were more than offset by a corresponding increase in ~~adjusted~~ premiums, fees and other revenues. The combined impact of the items affecting our business growth increased adjusted earnings by ~~$42~~$129 million.

Market Factors. Market factors, including interest rate levels, variability in equity market returns and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields ~~increased~~decreased primarily driven by the ~~favorable~~unfavorable impact of lower equity market returns on our private equity funds and hedge funds, partially offset by the favorable impact of higher ~~income from~~real estate market returns on our real estate investments, ~~partially offset by lower yields on fixed income securities and mortgage loans.~~primarily real estate funds. The ~~net~~ impact of interest rate fluctuations resulted in ~~a decline~~an increase in our average interest credited rates on ~~deposit-type~~long duration insurance and ~~long-duration liabilities,~~investment-type products, which drove ~~a decrease~~an increase in interest credited expenses. The changes in market factors discussed above resulted in a ~~$250~~$418 million ~~increase~~decrease in adjusted earnings.

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Underwriting and Other Insurance Adjustments.~~Unfavorable~~ Favorable mortality in our Group Benefits business resulted in an increase in adjusted earnings of $135 million. This was driven by decreases in both incidence and severity of COVID-19 and non-COVID-19 claims. Less favorable mortality in our RIS business resulted in a decrease in adjusted earnings of $312 million. This was primarily driven by increases in both incidence and severity in both COVID-19 and core claims in the current period. Favorable mortality in our RIS business, including the impact of the COVID-19 Pandemic, resulted in an increase in adjusted earnings of $38$24 million, driven by our ~~structured settlement,~~ pension risk transfer and ~~institutional income annuity~~specialized benefit resource businesses. Unfavorable claims experience, partially offset by the impact of growth in our Group Benefits business, resulted in a $44 million decrease in adjusted earnings. This decrease was primarily driven by: (i) unfavorable dental results due to the impact of the release of an unearned premium reserve and reduced utilization, both in the prior period; and (ii) unfavorableFavorable claims experience in our ~~group disability business. This unfavorable claims experience was partially offset by: (i) the impact of the acquisition of Versant Health on our vision business; (ii) the impact of~~dental business, as well as growth in our accident & health ~~business;~~ and ~~(iii) favorable claims experience~~vision businesses, partially offset by unfavorable results in our ~~individual~~ disability ~~business.~~businesses, resulted in a $26 million increase in adjusted earnings. Refinements to certain insurance and other liabilities in both periods resulted in a ~~$34~~$42 million increase in adjusted earnings.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

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

~~The disposition of MetLife P&C decreased adjusted earnings by $210 million. All amounts discussed below are net of the results of this business.~~

Business Growth.The impact of positive flows from pension risk transfer transactions and funding agreement issuances resulted in higher average invested assets, improving net investment income. However, consistent with ~~the~~ growth in average invested assets, interest credited expenses on ~~long-duration~~long duration insurance and ~~deposit-type liabilities~~investment-type products increased. Higher ~~volume-related, premium tax and~~ direct expenses, ~~driven by business growth, were partially offset by the 2021 abatement of the annual health insurer fee under the PPACA. This net~~including certain employee-related costs, coupled with an increase in variable expenses, ~~was~~were more than offset by a corresponding increase in ~~adjusted~~ premiums, fees and other revenues. The combined impact of the items affecting our business growth increased adjusted earnings by ~~$115~~$212 million.

Market Factors.Market factors, including interest rate levels, variability in equity market returns and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields ~~increased~~decreased primarily driven by the ~~favorable~~unfavorable impact of lower equity market returns on our private equity funds and ~~higher income on real estate investments, partially offset by~~hedge funds, and lower yields on fixed income securities, ~~and mortgage loans.~~partially offset by the favorable impact of higher real estate market returns on our real estate investments, primarily real estate funds. The ~~net~~ impact of interest rate fluctuations resulted in a decline in our average interest credited rates on ~~deposit-type~~long duration insurance and ~~long-duration liabilities,~~investment-type products, which drove a decrease in interest credited expenses. The changes in market factors discussed above resulted in a ~~$1.0 billion increase~~$603 million decrease in adjusted earnings.

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Underwriting and Other Insurance Adjustments.~~Unfavorable~~ Favorable mortality in our Group Benefits business resulted in an increase in adjusted earnings of $167 million. This was driven by decreases in both incidence and severity of COVID-19 and non-COVID-19 claims. Less favorable mortality in our RIS business resulted in a decrease in adjusted earnings of ~~$587 million. This was~~$11 million, primarily driven by: (i) increases in both incidence and severity in both COVID-19 and core claims across our life businesses; and (ii) unfavorable results in our accidental death & dismemberment business due to lower incidence in the prior period as a result of the COVID-19 Pandemic. Favorable mortality in our RIS business, including the impact of the COVID-19 Pandemic, resulted in an increase in adjusted earnings of $73 million, driven by our pension risk transfer and structured settlement businesses, partially offset by favorable results in our institutional income annuity and specialized benefit resource businesses. Favorable claims experience in our dental business, as well as growth in our accident & health and ~~structured settlement~~vision businesses, partially offset by unfavorable results in our ~~institutional income annuity business. Unfavorable claims experience, partially offset by the impact of growth in our Group Benefits business,~~disability businesses, resulted in a ~~$43~~$13 million ~~decrease~~increase in adjusted earnings, primarily due to: (i) unfavorable claims experience in our group disability business; and (ii) unfavorable dental results, as a result of the COVID-19 Pandemic, which limited availability of services and reduced utilization in the prior period, partially offset by: (i) the impact of the acquisition of Versant Health on our vision business; (ii) favorable claims experience in the individual disability business; and (iii) the impact of business growth in our accident & health business.earnings. Refinements to certain insurance and other liabilities in both periods resulted in a $4$20 million increase in adjusted earnings.

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Table of Contents

Asia

Business Overview. Adjusted premiums, fees and other revenues for the three months ended ~~September~~June 30, ~~2021~~2022 decreased ~~$177~~$120 million, or 8%6%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, ~~decreased $137~~increased $131 million, or 6%7%, compared to the prior period, mainly due to ~~the impact of our annual actuarial assumption review~~increases in ~~both periods.~~Japan, Korea and Australia. In ~~addition,~~Japan, higher fees from foreign currency-denominated life and fixed annuity products ~~and business growth in other markets~~ were ~~largely~~partially offset by a decrease in premiums from yen-denominated life products.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Adjusted revenues	Adjusted revenues									Adjusted revenues
Premiums	Premiums	$	1,594	$	1,654	$	4,861	$	4,874	Premiums	$	1,395	$	1,582	$	2,948	$	3,267
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	477		595		1,371		1,445		Universal life and investment-type product policy fees	498		436		946		894
Net investment income	Net investment income	1,354		1,088		3,776		2,792		Net investment income	1,012		1,158		2,254		2,422
Other revenues	Other revenues	17		16		54		44		Other revenues	24		19		45		37
Total adjusted revenues	Total adjusted revenues	3,442		3,353		10,062		9,155		Total adjusted revenues	2,929		3,195		6,193		6,620
Adjusted expenses	Adjusted expenses									Adjusted expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	1,220		1,291		3,750		3,867		Policyholder benefits and claims and policyholder dividends	1,185		1,233		2,413		2,530
Interest credited to policyholder account balances	Interest credited to policyholder account balances	513		470		1,498		1,362		Interest credited to policyholder account balances	493		496		991		985
Capitalization of DAC	Capitalization of DAC	(373)		(431)		(1,203)		(1,203)		Capitalization of DAC	(370)		(395)		(762)		(830)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	470		506		1,080		1,105		Amortization of DAC and VOBA	321		296		609		610
Amortization of negative VOBA	Amortization of negative VOBA	(5)		(14)		(20)		(30)		Amortization of negative VOBA	(8)		(8)		(16)		(15)
Other expenses	Other expenses	811		869		2,542		2,540		Other expenses	763		832		1,600		1,731
Total adjusted expenses	Total adjusted expenses	2,636		2,691		7,647		7,641		Total adjusted expenses	2,384		2,454		4,835		5,011
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	237		197		703		443		Provision for income tax expense (benefit)	159		221		392		466
Adjusted earnings	Adjusted earnings	$	569	$	465	$	1,712	$	1,071	Adjusted earnings	$	386	$	520	$	966	$	1,143

Adjusted earnings on a constant currency basis	Adjusted earnings on a constant currency basis	$	569	$	466	$	1,712	$	1,104	Adjusted earnings on a constant currency basis	$	386	$	498	$	966	$	1,103

Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues	$	2,088	$	2,265	$	6,286	$	6,363	Adjusted premiums, fees and other revenues	$	1,917	$	2,037	$	3,939	$	4,198
Adjusted premiums, fees and other revenues on a constant currency basis	Adjusted premiums, fees and other revenues on a constant currency basis	$	2,088	$	2,225	$	6,286	$	6,426	Adjusted premiums, fees and other revenues on a constant currency basis	$	1,917	$	1,786	$	3,939	$	3,789

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Foreign ~~Currency.~~Currency. Changes in foreign currency exchange rates ~~did not have a material impact on~~decreased adjusted earnings by $22 million for the ~~third~~second quarter of ~~2021~~2022 compared to the prior ~~period.~~period, primarily due to the weakening of the Japanese yen, Korean won and Australian dollar against the U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business ~~Growth.~~Growth ~~Asia’s adjusted~~. Increased premiums, fees and other revenues, partially offset by higher policyholder benefits, contributed to Asia’s business growth. Consistent with this business growth, commissions increased, but were offset by DAC capitalization. Positive net flows in Japan and Korea resulted in higher average invested assets, which improved net investment income. The increase in net investment income was mostly offset by a corresponding increase in interest credited expenses on certain insurance liabilities. The combined impact of the items affecting our business growth, as well as higher DAC amortization, improved adjusted earnings by $30 million.

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Market Factors. Market factors, including interest rate levels and variability in equity market returns, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields decreased, driven by the unfavorable impact of lower equity market returns on our private equity and hedge funds. These unfavorable impacts were partially offset by the favorable impact of higher real estate market returns on our real estate investments, primarily real estate funds, as well as higher earnings from our operating joint ventures in China and India. In addition, there were higher yields on fixed income securities supporting products sold in Japan denominated in Japanese yen, U.S. dollars and Australian dollars. A decrease in interest credited expenses on certain insurance liabilities also improved adjusted earnings. The changes in market factors discussed above decreased adjusted earnings by $90 million.

Underwriting. Unfavorable underwriting, mainly driven by COVID-19-related claims in Japan, decreased adjusted earnings by $55 million.

Six Months Ended June 30, 2022 Compared with the Six Months Ended June 30, 2021

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

Foreign Currency. Changes in foreign currency exchange rates decreased adjusted earnings by $40 million for the first six months of 2022 compared to the prior period, primarily due to the weakening of the Japanese yen, Korean won and Australian dollar against the U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. Increased premiums, fees and other revenues, as ~~discussed above; however, this was more than~~well as lower variable expenses, were partially offset by ~~a decline in~~higher policyholder benefits ~~lower~~and commissions, ~~and variable expenses,~~ net of DAC capitalization, which ~~resulted in an increase~~contributed to ~~adjusted earnings.~~Asia’s business growth. Positive net flows in Japan and Korea resulted in higher average invested assets, which improved net investment income. The increase in net investment income was partially offset by a corresponding increase in interest credited expenses on certain insurance liabilities. The combined impact of the items affecting our business growth, as well as higher DAC amortization, improved adjusted earnings by ~~$23 million.~~

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~~Market Factors.~~ Market factors, including interest rate levels and variability in equity market returns, continued to impact our results. Investment yields increased driven by the favorable impact of equity market returns on our private equity funds and higher income on real estate investments, partially offset by lower yields on fixed income securities supporting products sold in Japan denominated in U.S. and Australian dollars. In addition, a decrease in interest credited expense improved adjusted earnings. The changes in market factors discussed above increased adjusted earnings by $157 million.

~~Underwriting and Actuarial Assumption Review.~~ Higher claims, primarily in Japan and Korea decreased adjusted earnings by $28 million. The unfavorable change from our annual actuarial assumption reviews resulted in a net decrease of $51 million in adjusted earnings.

~~Nine Months Ended September 30, 2021 Compared with the Nine Months Ended September 30, 2020~~

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

~~Foreign Currency.~~ Changes in foreign currency exchange rates increased adjusted earnings by $33 million for the first nine months of 2021 compared to the prior period, primarily due to the strengthening of the Australian dollar and Korean won against the U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

~~Business Growth.~~ Asia’s adjusted premiums, fees and other revenues decreased as compared to the prior period; however, this was more than offset by a decline in policyholder benefits, which improved adjusted earnings. Positive net flows in Japan and Korea resulted in higher average invested assets, which improved net investment income. The increase in net investment income was offset by a corresponding increase in interest credited expenses on certain insurance liabilities. The combined impact of the items affecting our business growth improved adjusted earnings by $56$79 million.

Market ~~Factors.~~Factors. Market factors, including interest rate levels and variability in equity market returns, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields ~~increased~~decreased, driven by the ~~favorable~~unfavorable impact of lower equity market returns on our private equity ~~funds~~ and hedge funds. These unfavorable impacts were partially offset by the favorable impact of higher ~~income~~real estate market returns on our real estate investments, ~~partially offset by lower yields on fixed income securities supporting products sold~~primarily real estate funds, as well as higher earnings from our operating joint ventures in ~~Japan denominated in U.S.~~China and ~~Australian dollars.~~India. In addition, a decrease in interest credited ~~expense~~expenses on certain insurance liabilities improved adjusted earnings. The changes in market factors discussed above ~~increased~~decreased adjusted earnings by ~~$587~~$135 million.

~~Underwriting, Actuarial Assumption Review and Other Insurance Adjustments.~~Underwriting. ~~Higher lapses in Japan and claims in Korea, partially offset~~Unfavorable underwriting, mainly driven by ~~lower~~COVID-19-related claims in Japan, ~~resulted in a slight decrease in~~decreased adjusted ~~earnings.~~The unfavorable change from our annual actuarial assumption reviews resulted in a net decrease of $51 million in adjusted earnings. Refinements to certain insurance liabilities and other liabilities in both periods resulted in a $10 million increase in adjusted earnings.earnings by $60 million.

~~Expenses.~~Expenses ~~Adjusted earnings increased by $12 million,~~. Higher expenses, primarily driven by ~~lower~~higher employee-related and other operating expenses, as well as an increase in ~~Japan and lower~~ corporate ~~overhead.~~overhead costs, decreased adjusted earnings by $25 million.

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Table of Contents

Latin America

Business Overview. Adjusted premiums, fees and other revenues for the three months ended ~~September~~June 30, ~~2021~~2022 increased ~~$227~~$198 million, or ~~30%~~21%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased ~~$181~~$233 million, or ~~22%~~26%, compared to the prior period, mainly driven by ~~an improvement in the annuity market in Chile and~~ strong sales and solid persistency across the region.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Adjusted revenues	Adjusted revenues									Adjusted revenues
Premiums	Premiums	$	705	$	529	$	1,936	$	1,658	Premiums	$	826	$	636	$	1,558	$	1,231
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	274		225		831		733		Universal life and investment-type product policy fees	296		287		586		557
Net investment income	Net investment income	306		221		913		699		Net investment income	459		308		781		607
Other revenues	Other revenues	9		7		30		28		Other revenues	10		11		19		21
Total adjusted revenues	Total adjusted revenues	1,294		982		3,710		3,118		Total adjusted revenues	1,591		1,242		2,944		2,416
Adjusted expenses	Adjusted expenses									Adjusted expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	885		575		2,370		1,634		Policyholder benefits and claims and policyholder dividends	811		724		1,580		1,485
Interest credited to policyholder account balances	Interest credited to policyholder account balances	63		52		182		178		Interest credited to policyholder account balances	84		60		152		119
Capitalization of DAC	Capitalization of DAC	(109)		(84)		(304)		(258)		Capitalization of DAC	(120)		(100)		(233)		(195)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	62		62		205		206		Amortization of DAC and VOBA	90		83		170		143

Interest expense on debt	Interest expense on debt	2		1		4		3		Interest expense on debt	4		1		7		2
Other expenses	Other expenses	363		313		1,041		965		Other expenses	370		343		724		678
Total adjusted expenses	Total adjusted expenses	1,266		919		3,498		2,728		Total adjusted expenses	1,239		1,111		2,400		2,232
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	(1)		24		46		124		Provision for income tax expense (benefit)	85		34		135		47
Adjusted earnings	Adjusted earnings	$	29	$	39	$	166	$	266	Adjusted earnings	$	267	$	97	$	409	$	137

Adjusted earnings on a constant currency basis	Adjusted earnings on a constant currency basis	$	29	$	41	$	166	$	291	Adjusted earnings on a constant currency basis	$	267	$	83	$	409	$	115

Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues	$	988	$	761	$	2,797	$	2,419	Adjusted premiums, fees and other revenues	$	1,132	$	934	$	2,163	$	1,809
Adjusted premiums, fees and other revenues on a constant currency basis	Adjusted premiums, fees and other revenues on a constant currency basis	$	988	$	807	$	2,797	$	2,571	Adjusted premiums, fees and other revenues on a constant currency basis	$	1,132	$	899	$	2,163	$	1,747

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Foreign Currency. Changes in foreign currency exchange rates ~~resulted in a slight increase in~~decreased adjusted earnings by $14 million for the ~~third~~second quarter of ~~2021~~2022 compared to the prior ~~period.~~period, mainly due to the weakening of foreign currencies against the U.S. dollar, primarily the Chilean peso. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business ~~Growth.~~Growth Latin America experienced growth across several lines of business, primarily within Chile and Mexico. While this growth resulted in increased premiums and policy fee income, it was largely offset by related changes in policyholder benefits. A decrease in average invested assets, primarily in Argentina, resulted in lower net investment income. Although business growth drove an increase in commissions and other variable expenses, this was largely offset by a corresponding increase in DAC capitalization. The combined impact of the items affecting business growth increased adjusted earnings by $31 million.

~~Market Factors.~~ Market factors, including interest rate levels and variability in equity market returns, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields increased driven by higher returns on private equity funds and higher prepayment income. The changes in market factors discussed above increased adjusted earnings by $22 million.

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~~Table of Contents~~

~~Underwriting, Actuarial Assumption Review and Other Insurance Adjustments.~~ Unfavorable underwriting drove a $86 million decrease in adjusted earnings which includes impacts from COVID-19-related claims, primarily in Mexico and Brazil. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $7 million in adjusted earnings. Refinements to certain insurance liabilities and other liabilities in both periods resulted in an $11 million increase in adjusted earnings.

~~Expenses and Taxes.~~ Our focus on investing in growth drove increases in technology and employee-related expenses, partially offset by the impact of continued expense discipline, resulting in a net decrease in adjusted earnings of $7 million. Tax-related adjustments in both periods resulted in a $12 million increase in adjusted earnings, primarily driven by a recurring tax item related to inflation in both Mexico and Chile, as well as a current period tax adjustment in Brazil.

~~Nine Months Ended September 30, 2021 Compared with the Nine Months Ended September 30, 2020~~

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

~~Foreign Currency.~~ Changes in foreign currency exchange rates increased adjusted earnings by $25 million for the first nine months of 2021 compared to the prior period, mainly due to the strengthening of foreign currencies against the U.S. dollar, primarily the Mexican and Chilean pesos. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

~~Business Growth.~~ ~~Despite a decrease in annuity premiums in Chile driven by the COVID-19 Pandemic,~~. Latin America experienced premium and fee growth across the region, primarily in Chile and Mexico. The net increase in premiums and fees was largely offset by related changes in policyholder benefits. An increase in average invested assets, primarily in Chile, generated higher net investment income. ~~In addition, DAC amortization and~~The increase in net investment income was partially offset by a corresponding increase in interest credited expenses on certain insurance ~~liabilities decreased. Although business~~liabilities. Business growth in ~~Mexico~~the region drove an increase in commissions and other variable expenses, ~~this~~which was ~~mostly~~partially offset by higher DAC capitalization. The combined impact of the items affecting business growth, as well as higher DAC amortization, increased adjusted earnings by ~~$57~~$8 million.

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Market Factors. Market factors, including interest rate levels and variability in equity market returns, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields increased, driven by higher yields on fixed maturity securities and mortgage loans in Chile and Mexico, and the favorable impact of an increase in bond index returns on our Chilean encaje within FVO Securities, partially offset by lower equity market returns on private equity funds and higher prepayment income, partially offset by lower yields on fixed income securities and the unfavorable impact of rising rates on FVO Securities within our Chilean encaje. In addition, interest credited expense decreased.funds. The changes in market factors discussed above, ~~increased~~as well as the net impact of inflation, resulted in a $39 million increase in adjusted ~~earnings by $40 million.~~earnings.

Underwriting ~~Actuarial Assumption Review~~ and Other Insurance Adjustments.~~Unfavorable~~ Favorable underwriting drove a ~~$264~~$124 million ~~decrease~~increase in adjusted ~~earnings which~~earnings. This increase includes ~~impacts from~~a decline in both incidence and severity of COVID-19-related ~~life~~ claims, primarily in ~~Mexico. The favorable change from our annual actuarial assumption reviews resulted~~Mexico and Brazil, as well as a reduction to the incurred but not reported (“IBNR”) reserve that was established in ~~a net increase of $7 million in adjusted earnings.~~the prior year. Refinements to certain insurance liabilities and other liabilities in ~~both periods~~the current period resulted in a ~~$15~~$4 million increase in adjusted earnings.

Expenses and ~~Taxes.~~ Taxes~~A prior period information technology charge~~. Adjusted earnings decreased $8 million due to higher employee-related costs and ~~expense discipline across~~ the ~~region, partially offset by investments~~region’s continued investment in ~~technology in the current period, drove an increase in adjusted earnings of $8 million.~~technology. Tax-related adjustments in both periods resulted in ~~a $12~~an $18 million increase in adjusted earnings, primarily driven by ~~a recurring~~ tax ~~item~~items related to inflation in ~~both Mexico and~~ Chile.

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~~Table of Contents~~

~~EMEA~~

~~Business Overview.~~ Adjusted premiums, fees and other revenues for the three months ended September 30, 2021 decreased $10 million, or 1%, compared to the prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $12 million, or 2%, compared to the prior period primarily due to the disposition of MetLife Russia and the pending disposition of MetLife Poland and Greece, partially offset by growth in our (i) corporate solutions business in the U.K., (ii) accident & health and ordinary life businesses across the region, and (iii) pension business in Romania, as well as a favorable refinement to an unearned revenue reserve in Czech Republic and Slovakia.

Three Months
Ended
September 30, Nine Months
Ended
September 30,
2021 2020 2021 2020
(In millions)
Adjusted revenues
Premiums $ 532 $ 551 $ 1,751 $ 1,676
Universal life and investment-type product policy fees 128 116 302 324
Net investment income 46 67 171 199
Other revenues 10 13 39 37
Total adjusted revenues 716 747 2,263 2,236
Adjusted expenses
Policyholder benefits and claims and policyholder dividends 268 304 944 877
Interest credited to policyholder account balances 17 29 66 83
Capitalization of DAC (110) (122) (359) (367)
Amortization of DAC and VOBA 118 125 274 340
Amortization of negative VOBA (1) (1) (5) (5)
Other expenses 308 340 1,006 1,000
Total adjusted expenses 600 675 1,926 1,928
Provision for income tax expense (benefit) 22 20 78 62
Adjusted earnings $ 94 $ 52 $ 259 $ 246
Adjusted earnings on a constant currency basis $ 94 $ 52 $ 259 $ 254
Adjusted premiums, fees and other revenues $ 670 $ 680 $ 2,092 $ 2,037
Adjusted premiums, fees and other revenues on a constant currency basis $ 670 $ 682 $ 2,092 $ 2,087

~~Three~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Three~~Six Months Ended ~~September~~June 30, ~~2020~~2021

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

Foreign Currency. Changes in foreign currency exchange rates ~~did not have a material impact on~~decreased adjusted earnings by $22 million for the ~~third quarter~~first six months of ~~2021 as~~2022 compared to the prior ~~period.~~period, mainly due to the weakening of foreign currencies against the U.S. dollar, primarily the Chilean peso. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business ~~Growth.~~Growth ~~Growth~~. Latin America experienced premium and fee growth across the region, primarily in ~~our (i) corporate solutions business~~Chile and Mexico. The net increase in premiums and fees was largely offset by related changes in policyholder benefits. An increase in average invested assets, primarily in Chile, generated higher net investment income. The increase in net investment income was partially offset by a corresponding increase in interest credited expenses on certain insurance liabilities. Business growth in the ~~U.K., (ii) pension business in Romania, (iii) ordinary life and accident & health businesses in Europe, and (iv) credit life business in Turkey resulted in a $14 million~~region drove an increase in commissions and other variable expenses, which was offset by higher DAC capitalization. The combined impact of the items affecting business growth, as well as higher DAC amortization, increased adjusted ~~earnings.~~earnings by $21 million.

Market Factors. Market factors, including interest rate levels and variability in equity market returns, ~~favorably impacted results~~continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields increased, driven by higher yields on fixed maturity securities and ~~increased~~mortgage loans in Chile and Mexico, and the favorable impact of an increase in bond index returns on our Chilean encaje within FVO Securities, partially offset by lower equity market returns on private equity funds. The changes in market factors discussed above, as well as the net impact of inflation, resulted in a $40 million increase in adjusted earnings.

Underwritingand Other Insurance Adjustments. Favorable underwriting drove a $222 million increase in adjusted earnings. This increase includes a decline in both incidence and severity of COVID-19-related claims, primarily in Mexico and Brazil, as well as a reduction to the IBNR reserve that was established in the prior year. Refinements to certain insurance liabilities and other liabilities in both periods resulted in a $6 million increase in adjusted earnings.

Expenses and Taxes. Adjusted earnings decreased $18 million due to higher employee-related costs and the region’s continued investment in technology, partially offset by the impact of continued expense discipline. Tax-related adjustments in both periods resulted in a $24 million increase in adjusted earnings, primarily driven by ~~$6 million.~~tax items related to inflation in Chile.

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Table of Contents

EMEA

~~Underwriting~~Business Overview. Adjusted premiums, fees and ~~Actuarial Assumption Review.~~ ~~Adjusted earnings increased $3~~other revenues for the three months ended June 30, 2022 decreased $158 million, as a result of favorable underwriting experience in our corporate solutions business across the region, partially offset by unfavorable underwriting experience in our (i) accident & health business in Europe and the Gulf, (ii) ordinary life business in Portugal, the Gulf and Hungary, and (iii) variable life business in Czech Republic. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $25 million in adjusted earnings.

~~Expenses.~~ ~~Lower expenses resulted in a slight increase in adjusted earnings.~~

~~Other.~~ ~~In addition~~or 21%, compared to the ~~items discussed above, adjusted earnings~~prior period. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased ~~by $8~~$79 million, or 12%, compared to the prior period primarily due to (i) the ~~pending~~ disposition of MetLife Poland and Greece, (ii) a prior period favorable refinement to an unearned premium reserve in Italy, and (iii) a decrease in our corporate solutions business in the ~~disposition of MetLife Russia.~~Gulf, partially offset by growth in our (i) accident and health business across the region, (ii) corporate solutions business in Egypt, and (iii) credit life business in Turkey.

~~Nine~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Adjusted revenues
Premiums	$	492	$	621	$	1,001	$	1,219
Universal life and investment-type product policy fees	86		107		174		174
Net investment income	38		62		79		125
Other revenues	8		16		17		29
Total adjusted revenues	624		806		1,271		1,547
Adjusted expenses
Policyholder benefits and claims and policyholder dividends	237		333		519		676
Interest credited to policyholder account balances	20		25		37		49
Capitalization of DAC	(108)		(122)		(209)		(249)
Amortization of DAC and VOBA	95		94		181		156
Amortization of negative VOBA	(2)		(2)		(3)		(4)

Other expenses	298		349		594		698
Total adjusted expenses	540		677		1,119		1,326
Provision for income tax expense (benefit)	20		35		36		56
Adjusted earnings	$	64	$	94	$	116	$	165

Adjusted earnings on a constant currency basis	$	64	$	76	$	116	$	137

Adjusted premiums, fees and other revenues	$	586	$	744	$	1,192	$	1,422
Adjusted premiums, fees and other revenues on a constant currency basis	$	586	$	665	$	1,192	$	1,296

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Foreign Currency. Changes in foreign currency exchange rates ~~increased~~decreased adjusted earnings by $8$18 million for the ~~first nine months~~second quarter of ~~2021~~2022 as compared to the prior period, primarily driven by the ~~weakening~~strengthening of the U.S. dollar against the euro, ~~the British pound, Czech koruna~~Turkish lira and ~~the Polish zloty, partially offset by the strengthening of the U.S. dollar against the Turkish lira.~~Egyptian pound. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth.Growth in our (i) accident & health business across the region, (ii) corporate solutions business in Egypt, and (iii) credit life business in Turkey, partially offset by a decrease in our corporate solutions business in the ~~U.K., (ii) pension business in Romania, and (iii) ordinary life and accident & health businesses in Europe~~Gulf, resulted in a ~~$32~~$4 million increase in adjusted earnings.

Market Factors. Market factors, including interest rate levels and variability in equity market returns, ~~favorably impacted results and increased~~decreased adjusted earnings by ~~$14~~$9 million. This was primarily due to ~~a decrease~~an increase in DAC amortization in our variable life ~~business.~~business as a result of equity market movements.

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Underwriting ~~Actuarial Assumption Review~~ and Other Insurance Adjustments.Adjusted earnings ~~decreased $50~~increased $23 million as a result of ~~unfavorable~~favorable underwriting experience, primarily due to the impact of the COVID-19 ~~Pandemic,~~pandemic, which resulted in lower utilization in the ~~prior period~~second quarter of 2022 and higher claims in the ~~current~~prior period. ~~Unfavorable~~Favorable underwriting experience in our (i) corporate solutions business ~~across~~in the ~~region,~~U.K., Egypt and the Gulf, (ii) ordinary life business in Portugal, (iii) variable life business in the Gulf and Lebanon, and ~~Czech Republic, and (iii) accident & health~~(iv) credit life business in ~~Europe and the Gulf was~~Turkey were partially offset by ~~favorable~~unfavorable underwriting experience in our ordinary life business in ~~France. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $25 million in adjusted earnings.~~France and the Gulf. Refinements to certain insurance-related assets and liabilities in both periods resulted in a ~~$14~~$23 million decrease in adjusted earnings mainly due to the aforementioned prior period refinement in Italy.

Expenses. Higher expenses resulted in a $7 million decrease in adjusted earnings mainly due to various operating expenses across the region.

Other. In addition to the items discussed above, adjusted earnings decreased slightly due to the disposition of MetLife Poland and Greece.

Six Months Ended June 30, 2022 Compared with the Six Months Ended June 30, 2021

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

Foreign Currency. Changes in foreign currency exchange rates decreased adjusted earnings by $28 million for the first six months of 2022 as compared to the prior period, primarily driven by the strengthening of the U.S. dollar against the Turkish lira, euro and Egyptian pound. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.

Business Growth. Growth in our (i) accident & health business across the region, (ii) credit life business in Turkey, (iii) corporate solutions business in Egypt and (iv) ordinary life business in Europe, partially offset by a decrease in our corporate solutions business in the Gulf, resulted in a $7 million increase in adjusted earnings.

~~Expenses~~Market Factors. Market factors, including interest rate levels and ~~Taxes.~~variability in equity market returns, decreased adjusted earnings by $11 million. This was primarily due to an increase in DAC amortization in our variable life business as a result of equity market movements.

Underwriting and Other Insurance Adjustments. Adjusted earnings increased $29 million as a result of favorable underwriting experience, primarily due to the impact of the COVID-19 pandemic, which resulted in lower utilization in the first six months of 2022 and higher claims in the prior period. Favorable underwriting experience in our (i) corporate solutions business in Egypt, the Gulf and the U.K., (ii) variable life business in the Gulf, Lebanon and Czech Republic, (iii) ordinary life business in Portugal, and (iv) credit life business in Turkey were partially offset by unfavorable underwriting experience in our ordinary life business in France and the Gulf. Refinements to certain insurance-related assets and liabilities in both periods resulted in a $21 million decrease in adjusted earnings mainly due to the aforementioned prior period refinement in Italy.

Expenses. Higher expenses resulted in a $3$15 million decrease in adjusted ~~earnings. Taxes decreased adjusted~~ earnings ~~by $13 million, primarily~~mainly due to ~~changes in business mix among tax jurisdictions, as well as a revision to a tax asset in Greece.~~various operating expenses across the region.

Other.In addition to the items discussed above, adjusted earnings decreased by ~~$14~~$11 million due to the ~~pending~~ disposition of MetLife Poland and ~~Greece and the disposition of MetLife Russia.~~Greece.

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MetLife Holdings

Business Overview. Our MetLife Holdings segment consists of operations relating to products and businesses, previously included in our former retail business, that we no longer actively market in the United States. We anticipate an average decline in adjusted premiums, fees and other revenues of approximately 5%6% to 7%8% per year from expected business run-off. A significant portion of our adjusted earnings is driven by separate account balances. Most directly, these balances determine asset-based fee income but they also impact DAC amortization and asset-based commissions. Separate account balances are driven by movements in the market, surrenders, deposits, withdrawals, benefit payments, transfers and policy charges. Although we have discontinued selling our long-term care product, we continue to collect premiums and administer the existing block of business, which contributed to asset growth in the segment, and we expect the related reserves to grow as this block matures.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Adjusted revenues	Adjusted revenues									Adjusted revenues
Premiums	Premiums	$	805	$	876	$	2,471	$	2,669	Premiums	$	760	$	839	$	1,536	$	1,666
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	279		269		826		812		Universal life and investment-type product policy fees	339		273		608		547
Net investment income	Net investment income	1,771		1,427		4,960		3,723		Net investment income	1,280		1,543		2,689		3,189
Other revenues	Other revenues	57		61		188		166		Other revenues	23		69		67		131
Total adjusted revenues	Total adjusted revenues	2,912		2,633		8,445		7,370		Total adjusted revenues	2,402		2,724		4,900		5,533
Adjusted expenses	Adjusted expenses									Adjusted expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	1,611		1,697		4,683		5,063		Policyholder benefits and claims and policyholder dividends	1,433		1,549		2,951		3,072
Interest credited to policyholder account balances	Interest credited to policyholder account balances	212		217		632		654		Interest credited to policyholder account balances	203		210		405		420
Capitalization of DAC	Capitalization of DAC	(8)		(5)		(25)		(15)		Capitalization of DAC	(8)		(9)		(15)		(17)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	80		177		190		288		Amortization of DAC and VOBA	74		56		150		110
Interest expense on debt	Interest expense on debt	1		2		4		5		Interest expense on debt	2		2		3		3
Other expenses	Other expenses	255		231		752		698		Other expenses	242		244		478		497
Total adjusted expenses	Total adjusted expenses	2,151		2,319		6,236		6,693		Total adjusted expenses	1,946		2,052		3,972		4,085
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	155		61		449		127		Provision for income tax expense (benefit)	92		136		187		294
Adjusted earnings	Adjusted earnings	$	606	$	253	$	1,760	$	550	Adjusted earnings	$	364	$	536	$	741	$	1,154

Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues	$	1,141	$	1,206	$	3,485	$	3,647	Adjusted premiums, fees and other revenues	$	1,122	$	1,181	$	2,211	$	2,344

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Business Growth. ~~Negative~~An increase in average invested assets resulted in higher net investment income, improving adjusted earnings. However, negative net flows infrom our deferred annuity business resulted in lower asset-based fee income. In addition, premiums declined due to business run-off and the impact of dividend scale reductions in both periods. ~~These reductions to adjusted earnings were partially offset by a slight increase to net investment income as a result of higher average invested assets.~~ The combined impact of the items affecting our business growth, as well as lower DAC amortization, offset and resulted in no impact to adjusted earnings.

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Underwriting and Other Insurance Adjustments. Less favorable underwriting in our (i) long-term care business, reflecting a smaller impact from the COVID-19 pandemic in the current period, and (ii) life business, resulted in an $18 million decrease in adjusted earnings. A reinsurance settlement in the current period resulted in a $77 million increase in adjusted earnings. Dividend scale reductions, as well as run-off in the Metropolitan Life Insurance Company’s (“MLIC”) closed block, contributed to lower dividend expense, net of DAC amortization, and resulted in a $17 million increase in adjusted earnings.

Expenses. Adjusted earnings increased by $13 million mainly due to lower corporate-related expenses.

Six Months Ended June 30, 2022 Compared with the Six Months Ended June 30, 2021

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

Business Growth. An increase in average invested assets resulted in higher net investment income, improving adjusted earnings. However, negative net flows from our deferred annuity business resulted in lower asset-based fee income. In addition, premiums declined due to business run-off and the impact of dividend scale reductions in both periods. The combined impact of the items affecting our business growth, as well as lower DAC amortization, resulted in a $31 million increase in adjusted earnings.

Market Factors. Market factors, including interest rate levels, variability in equity market returns, and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields ~~increased~~decreased driven by the ~~favorable~~unfavorable impact of lower equity market returns on our private equity and hedge funds and ~~higher prepayment~~lower yields on our fixed income securities and mortgage loans. These declines were partially offset by ~~lower yields~~the impact of higher real estate market returns on ~~fixed income securities.~~our real estate investments, primarily real estate funds. In addition, in our deferred annuity business, higher ~~equity market returns drove higher asset-based fee income, which increased~~costs associated with our variable annuity GMDBs resulted in a decrease in adjusted earnings. The changes in market factors discussed above, ~~partially offset by~~as well as higher DAC amortization, resulted in a ~~$266~~$493 million ~~increase~~decrease in adjusted earnings.

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Underwriting ~~Actuarial Assumption Review,~~ and Other Insurance Adjustments. ~~Adjusted earnings decreased by $62 million, driven by unfavorable~~Less favorable underwriting, mainly in our long-term care ~~and life business. Underwriting results are inclusive of the~~business, reflecting a smaller impact offrom the COVID-19 ~~Pandemic, where~~pandemic in the current period, ~~was more negatively impacted. The favorable change from our annual actuarial assumption reviews~~ resulted in a ~~net~~$79 million decrease in adjusted earnings. A reinsurance settlement in the current period resulted in a $77 million increase ~~of $82 million~~ in adjusted earnings. Dividend scale reductions, as well as run-off in ~~MLIC’s~~the MLIC closed block, contributed to lower dividend ~~expenses~~expense, net of ~~$9 million and lower associated~~ DAC amortization, ~~of $84~~and resulted in a $42 million ~~which increased~~increase in adjusted earnings.

Expenses. Adjusted earnings ~~decreased~~increased by ~~$13~~$11 million mainly due to ~~higher~~lower corporate-related expenses.

~~Nine~~

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Corporate & Other


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Adjusted revenues
Premiums	$	(6)	$	(20)	$	(10)	$	38
Universal life and investment-type product policy fees	2		1		2		1
Net investment income	5		48		109		60
Other revenues	98		109		199		195
Total adjusted revenues	99		138		300		294
Adjusted expenses
Policyholder benefits and claims and policyholder dividends	(2)		(13)		(9)		27

Capitalization of DAC	(2)		(3)		(5)		(6)
Amortization of DAC and VOBA	2		3		4		5
Interest expense on debt	219		223		438		447
Other expenses	184		34		320		141
Total adjusted expenses	401		244		748		614
Provision for income tax expense (benefit)	(88)		(81)		(180)		(192)
Adjusted earnings	(214)		(25)		(268)		(128)
Less: Preferred stock dividends	29		35		92		103
Adjusted earnings available to common shareholders	$	(243)	$	(60)	$	(360)	$	(231)

Adjusted premiums, fees and other revenues	$	94	$	90	$	191	$	234

The table below presents adjusted earnings available to common shareholders by source:


	Three Months Ended June 30,			Six Months Ended June 30,
		2022		2021		2022		2021
		(In millions)
Business activities		$	34	$	28	$	70	$	57
Net investment income		6		51		110		64
Interest expense on debt		(226)		(235)		(453)		(469)
Corporate initiatives and projects		(21)		(24)		(33)		(49)
Other		(95)		74		(142)		77
Provision for income tax (expense) benefit and other tax-related items		88		81		180		192
Preferred stock dividends		(29)		(35)		(92)		(103)
Adjusted earnings available to common shareholders		$	(243)	$	(60)	$	(360)	$	(231)

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with the ~~Nine~~Three Months Ended ~~September~~June 30, ~~2020~~2021

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

Business ~~Growth~~Activities. Negative net flows in our annuity business resulted in lower asset-based fee income. In addition, premiums declined due to business run-off and the impact of dividend scale reductions in both periods. Average invested assets were essentially unchanged with no impact to net investment income. The combined impact of the items affecting our business growth, including higher DAC amortization, resulted in a $51 million decrease in adjusted earnings.

~~Market Factors~~. Market factors, including interest rate levels, variability in equity market returns, and foreign currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields increased driven by the favorable impact of equity market returns on our private equity funds and higher prepayment income, partially offset by lower yields on fixed income securities. In our deferred annuity business, higher equity market returns drove higher asset-based fee income, which increased adjusted earnings. The changes in market factors discussed above, partially offset by higher DAC amortization, resulted in a $1.0 billion increase in adjusted earnings.

~~Underwriting, Actuarial Assumption Review, and Other Insurance Adjustments.~~ Favorable underwriting, mainly in our long-term care business, resulted in a $15 million increase in adjusted earnings, which reflects the impact of the COVID-19 Pandemic. The favorable change from our annual actuarial assumption reviews resulted in a net increase of $82 million in adjusted earnings. Dividend scale reductions, as well as run-off in MLIC’s closed block, contributed to lower dividend expenses of $82 million and lower associated DAC amortization of $84 million, which increased adjusted earnings.

~~Expenses. Adjusted earnings decreased by $32 million mainly due to higher corporate-related expenses.~~

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~~Corporate & Other~~

Three Months
Ended
September 30, Nine Months
Ended
September 30,
2021 2020 2021 2020
(In millions)
Adjusted revenues
Premiums $ 16 $ (8) $ 54 $ 17
Universal life and investment-type product policy fees — 1 1 2
Net investment income 93 58 153 22
Other revenues 108 82 303 238
Total adjusted revenues 217 133 511 279
Adjusted expenses
Policyholder benefits and claims and policyholder dividends 9 (6) 36 23
Capitalization of DAC (3) (3) (9) (8)
Amortization of DAC and VOBA 2 2 7 6
Interest expense on debt 236 224 683 669
Other expenses 137 120 278 390
Total adjusted expenses 381 337 995 1,080
Provision for income tax expense (benefit) (96) (132) (288) (418)
Adjusted earnings (68) (72) (196) (383)
Less: Preferred stock dividends 63 59 166 168
Adjusted earnings available to common shareholders $ (131) $ (131) $ (362) $ (551)
Adjusted premiums, fees and other revenues $ 124 $ 75 $ 358 $ 257

~~The table below presents adjusted earnings available to common shareholders by source:~~

Three Months
Ended
September 30, Nine Months
Ended
September 30,
2021 2020 2021 2020
(In millions)
Business activities $ 41 $ 30 $ 98 $ 60
Net investment income 95 59 159 26
Interest expense on debt (247) (238) (716) (705)
Corporate initiatives and projects (25) (27) (74) (83)
Other (28) (28) 49 (99)
Provision for income tax (expense) benefit and other tax-related items 96 132 288 418
Preferred stock dividends (63) (59) (166) (168)
Adjusted earnings available to common shareholders $ (131) $ (131) $ (362) $ (551)

~~Three Months Ended September 30, 2021 Compared with the Three Months Ended September 30, 2020~~

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

~~Business Activities.~~ Adjusted earnings from business activities increased $9$5 million. This was primarily related to improved results from certain of our businesses.

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Net Investment Income. Net investment income ~~increased $28~~decreased $36 million, primarily due to ~~increased~~lower returns on our equity market sensitive investments, including private equity funds and ~~higher income~~FVO Securities, as well as lower yields on ~~real estate investments.~~our mortgage loans. These ~~increases~~decreases were partially offset by ~~lower yields~~a higher average invested asset base and higher income on our ~~fixed income securities and decreased returns on FVO Securities.~~real estate investments.

Interest Expense on Debt. Interest expense on debt ~~increased~~decreased by $7 million, primarily due to ~~excess premium associated with redeemed debt~~a senior note redemption in July 2021.

Corporate Initiatives and Projects & Other. Adjusted earnings decreased $131 million, primarily as a result of an increase in corporate-related expenses and the release of a legal reserve in the ~~current~~prior period.

Provision for Income Tax (Expense) Benefit and Other Tax-Related Items. An unfavorable change in Corporate & Other’s ~~effective~~taxes was primarily due to lower utilization of tax ~~rate~~preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate.

Preferred Stock Dividends. Adjusted earnings available to common shareholders increased $6 million primarily as a result of the redemption and cancellation of the 5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (the “Series C preferred stock”), in June 2021.

Six Months Ended June 30, 2022 Compared with the Six Months Ended June 30, 2021

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

Business Activities. Adjusted earnings from business activities increased $10 million. This was primarily related to improved results from certain of our businesses.

Net Investment Income. Net investment income increased $36 million, primarily due to a higher average invested asset base, as well as increased income on real estate investments. These increases were partially offset by decreased returns on our equity market sensitive investments, including private equity funds and FVO Securities, as well as lower yields on our mortgage loans.

Interest Expense on Debt. Interest expense on debt decreased by $13 million, primarily due to a senior note redemption in July 2021.

Corporate Initiatives and Projects & Other. Adjusted earnings decreased $160 million, primarily as a result of an increase in corporate-related expenses, the release of a legal reserve in the prior period and higher interest expense on tax positions due to audit settlements in the prior period, partially offset by lower employee-related costs.

Provision for Income Tax (Expense) Benefit and Other Tax-Related Items. An unfavorable change in Corporate & Other’s taxes was primarily due to lower utilization of tax preferenced items, which include foreign earnings taxed at different rates than the U.S. statutory rate, non-taxable investment income and tax ~~credits.~~

~~Nine Months Ended September 30, 2021 Compared with the Nine Months Ended September 30, 2020~~

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

~~Business Activities.~~ ~~Adjusted earnings from business activities increased $30 million. This was primarily related to improved results from certain of our businesses.~~

~~Net Investment Income.~~ Net investment income increased $105 million, primarily due to increased returns on our equity market sensitive investments, including private equity funds, as well as increased income on real estate investments. These increases werecredits, partially offset by lower ~~yields on our fixed income securities and decreased returns on FVO Securities.~~

~~Interest Expense on Debt.~~ ~~Interest expense on debt increased $9 million, primarily due to excess premium associated with redeemed debt in the current period.~~

~~Provision for Income Tax (Expense) Benefit and Other Tax-Related Items.~~ ~~An unfavorable change in Corporate & Other’s taxes was primarily due to the finalization of bankruptcy proceedings for a leveraged lease investment in the prior period, lower~~ taxes on stock ~~compensation and lower utilization of tax preferenced items, which include non-taxable investment income, tax credits and foreign earnings taxed at different rates than the U.S. statutory rate.~~compensation.

~~Other.~~Preferred Stock Dividends. Adjusted earnings available to common shareholders increased ~~$117~~$11 million primarily as a result of the ~~release~~redemption and cancellation of ~~a legal reserve~~the Series C preferred stock, in the current period, lower legal expenses and a decrease in certain corporate-related expenses, partially offset by an increase in employee-related expenses and higher interest expense on tax positions due to audit settlements in both periods.June 2021.

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Investments

~~Investment Risks~~Overview

We manage our investment portfolio using disciplined asset/liability management (“ALM”) principles, focusing on cash flow and duration to support our current and future liabilities. Our ~~primary investment objective~~intent is to ~~optimize, net~~match the timing and amount of ~~income tax,~~liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted investment income and risk-adjusted total ~~return while ensuring that assets~~return. Our investment portfolio is heavily weighted toward fixed income investments, with the vast majority of our portfolio invested in fixed maturity securities available-for-sale (“AFS”) and ~~liabilities are managed on a~~mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration ~~basis. The Investments Department, led by the Chief Investment Officer, manages investment risks using a risk control framework comprised~~ of policies, procedures and limits. The Investment Risk Committee and Asset-Liability Steering Committee review and monitor investment risk limits and tolerances. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Investment Risks” included in the 2020 Annual Report for an explanation of investment risks and our risk control framework.insurance liabilities.

Current Environment

As a global insurance company, we continue to be impacted by the changing global financial and economic environment, the fiscal and monetary policy of governments and central banks around the world and other governmental measures. The COVID-19 ~~Pandemic~~pandemic continues to impact the global economy and financial markets and has caused volatility in the global equity, credit and real estate markets. See “— Industry Trends — Financial and Economic Environment.” Uncertainty created by the COVID-19 ~~Pandemic~~pandemic may persist for some time and may continue to impact pricing levels of risk-bearing investments, as well as our business operations, investment portfolio and derivatives.

~~Governments~~ Rising market interest rates have impacted our investment portfolio and ~~central banks around~~derivatives. See “— Industry Trends,” as well as “— Results of Operations — Consolidated Results,” and “— Results of Operations — Consolidated Results - Adjusted Earnings” for impacts on our derivatives and analysis of the ~~world responded~~period over period changes in investment portfolio results. See also “Investments — Fixed Maturity Securities Available-for-Sale — Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position” in Note 6 of the Notes to the ~~COVID-19 Pandemic with unprecedented fiscal and monetary policies, which have had significant effects and may have ongoing effects~~Interim Condensed Consolidated Financial Statements for impacts on ~~financial markets and~~ the global economy. These policy responses include both fiscal and monetary stimulus measures. Many of these policy responses have concluded, and the Federal Reserve announced reductions in the amount of support provided by asset purchases starting in November 2021 and its officials suggested that they may raise interest rates in 2022.net unrealized gain (loss) on our fixed maturity securities AFS.

Selected Country and Sector Investments

Selected Country: We have a market presence in numerous countries and, therefore, our investment portfolio, which supports our insurance operations and related policyholder liabilities, as well as our global portfolio diversification objectives, is exposed to risks posed by local political and economic ~~conditions, as well as those resulting from~~conditions. The countries included in the ~~COVID-19 Pandemic. Our investment portfolio is currently~~following table have been the most affected by these ~~conditions for the countries in the~~risks. The table ~~below. The following table~~below presents a summary of selected country fixed maturity securities AFS, at estimated fair ~~value. The information below is presented~~value, on a “country of risk basis” (e.g. where the issuer primarily conducts business).


		Selected Country Fixed Maturity Securities AFS at September 30, 2021																Selected Country Fixed Maturity Securities AFS at June 30, 2022
Country	Country	Sovereign (1)			Financial Services			Non-Financial Services			Structured Products			Total (2)			Country	Sovereign (1)			Financial Services			Non-Financial Services			Structured Products			Total (2)
		(Dollars in millions)																(Dollars in millions)
Mexico	Mexico	$	2,583		$	752		$	2,127		$	34		$	5,496		Mexico	$	2,502		$	692		$	1,833		$	31		$	5,058
Chile	Chile	1,377			849			2,961			2			5,189			Chile	1,420			815			2,637			1			4,873
Italy																	Italy	16			53			554			—			623
Colombia	Colombia	369			74			195			—			638			Colombia	328			62			135			—			525
Peru																	Peru	114			19			206			—			339
Russian Federation (3)																	Russian Federation (3)	28			—			46			—			74
Ukraine (3)																	Ukraine (3)	59			—			2			—			61
Turkey																	Turkey	44			—			9			—			53

Peru		119			48			256			—			423
Turkey		98			2			16			—			116

Argentina		12			—			7			—			19
Total	Total	$	4,558		$	1,725		$	5,562		$	36		$	11,881		Total	$	4,511		$	1,641		$	5,422		$	32		$	11,606
Investment grade %	Investment grade %	88.9		%	92.0		%	89.4		%	90.5		%	89.6		%	Investment grade %	89.0		%	91.2		%	87.2		%	92.2		%	88.5		%

__________________

(1)Sovereign includes government and agency.

(2)The par value, amortized cost net of ACL and estimated fair value, net of purchased and written credit default swaps, of these ~~selected country fixed maturity~~ securities ~~AFS were $11.4~~were $12.2 billion, ~~$10.9~~$11.3 billion and $11.1 billion, respectively, at ~~September~~June 30, ~~2021.~~2022. The notional value and estimated fair value of the net purchased and written credit default swaps were ~~$760~~$(505) million and $3$19 million, respectively, at ~~September~~June 30, ~~2021.~~2022.

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~~Selected Sector:~~ (3)As ~~a result~~ of ~~current economic conditions including~~June 30, 2022, the ~~effects on the global economy~~amortized cost, ACL and financial markets from the COVID-19 Pandemic, certain sectors of our investment portfolio have continued to experience stress. Our fixed maturity securities AFS exposure to stressed sectors is summarized below:

Selected Sectors at September 30, 2021
Sectors Book Value (1) Investment
Grade % % of Total
Investments
(Dollars in millions)
Airports $ 3,234 82 % 0.6 %
Cruise Lines / Leisure 896 94 % 0.2
Airlines 465 69 % 0.1
Restaurants 421 96 % 0.1
Lodging 185 65 % —
Fixed Maturity Securities AFS Exposure to Stressed Sectors (2) $ 5,201 1.0 %
Total Investments (3) $ 514,635

~~__________________~~

~~(1)Fixed maturity securities AFS at~~ amortized cost, net of ~~ACL.~~

~~(2)~~ACL of our Russian Federation sovereign securities were ~~The par value, estimated fair value,~~$120 million, $89 million and ~~estimated fair value,~~$31 million, respectively; and the amortized cost, ACL and amortized cost, net of ~~written credit default swaps,~~ACL of ~~these~~our Russian Federation corporate securities were ~~$5.2 billion, $5.6 billion and $5.7 billion, respectively, at September 30, 2021. The notional value and estimated fair value of the written credit default swaps were $169~~$88 million, $42 million and $3$46 million ~~respectively, at September 30, 2021.~~

~~(3)Represents total cash, cash equivalents and invested assets.~~

~~We maintain a portfolio of Airports sector fixed maturity securities AFS that is diversified across issuers and geographies, with 46%, 23% and 23% of the exposure in Europe, Asia and U.S.~~, respectively. ~~This portfolio is primarily invested~~As of June 30, 2022, the amortized cost, ACL and amortized cost, net of ACL of our Ukraine sovereign securities were $117 million, $57 million and $60 million, respectively; and the amortized cost, ACL and amortized cost, net of ACL of our Ukraine corporate securities were $3 million, $1 million and $2 million, respectively.

Selected Sector: See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Current Environment —Selected Country and Sector Investments” included in ~~higher quality, highly rated investment grade securities. At September 30,~~the 2021 ~~this securities portfolio was in an unrealized gain position~~Annual Report for information on our Selected Sector investments as of ~~$249 million.~~December 31, 2021.

We manage direct and indirect investment exposure in the selected countries and sectors through fundamental analysis and we continually monitor and adjust our level of investment exposure.

Investment Portfolio Results

The reconciliation of net investment income under GAAP to adjusted net investment income is presented below.


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended June 30,				For the Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Net investment income — GAAP basis		$	5,568	$	4,729	$	16,162	$	11,877
Net investment income — GAAP										Net investment income — GAAP	$	3,583	$	5,280	$	7,867	$	10,594
Investment hedge adjustments	Investment hedge adjustments	228		229		660		555		Investment hedge adjustments	232		212		447		432
Unit-linked investment income	Unit-linked investment income	(114)		(262)		(699)		60		Unit-linked investment income	688		(378)		1,186		(585)
Other	Other	(14)		(8)		(44)		(39)		Other	1		3		(4)		(30)
Adjusted net investment income (1)	Adjusted net investment income (1)	$	5,668	$	4,688	$	16,079	$	12,453	Adjusted net investment income (1)	$	4,504	$	5,117	$	9,496	$	10,411

__________________

(1)See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for a discussion of the adjustments made to net investment income under GAAP in calculating adjusted net investment income.

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The following yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe it enhances understanding of our investment portfolio results.


		For the Three Months Ended September 30,								For the Nine Months Ended September 30,									For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2021				2020				2021				2020					2022				2021				2022				2021
Asset Class	Asset Class	Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount		Asset Class	Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount		Yield % (1)		Amount
		(Dollars in millions)																	(Dollars in millions)
Fixed maturity securities (2), (3)		3.71	%	$	2,761	3.87	%	$	2,849	3.73	%	$	8,330	3.89	%	$	8,473
Fixed maturity securities AFS (2), (3)																		Fixed maturity securities AFS (2), (3)	3.66	%	$	2,709	3.76	%	$	2,785	3.59	%	$	5,347	3.74	%	$	5,569
Mortgage loans (3)	Mortgage loans (3)	4.12		837		4.27		885		4.18		2,583		4.28		2,631		Mortgage loans (3)	4.11		832		4.29		885		4.12		1,655		4.20		$	1,746
Real estate and real estate joint ventures	Real estate and real estate joint ventures	6.00		181		0.39		11		4.28		385		1.30		110		Real estate and real estate joint ventures	8.98		277		3.65		109		8.40		518		3.42		$	204
Policy loans	Policy loans	5.09		118		5.15		124		5.14		359		5.18		374		Policy loans	5.09		114		5.18		120		5.11		230		5.16		$	241
Equity securities	Equity securities	4.85		8		5.56		15		4.69		28		5.03		40		Equity securities	2.46		5		4.30		9		2.99		12		4.62		$	20
Other limited partnership interests	Other limited partnership interests	48.43		1,542		28.28		578		45.04		3,877		4.90		296		Other limited partnership interests	4.69		171		36.58		1,050		15.02		1,097		43.04		$	2,335
Cash and short-term investments	Cash and short-term investments	0.70		20		1.28		34		0.76		62		1.44		116		Cash and short-term investments	1.53		43		0.72		21		1.30		73		0.79		$	42
Other invested assets	Other invested assets	—		342		—		331		—		906		—		844		Other invested assets	—		484		—		266		—		848		—		$	564
Investment income	Investment income	5.36	%	5,809		4.52	%	4,827		5.09	%	16,530		4.07	%	12,884		Investment income	4.29	%	4,635		4.85	%	5,245		4.51	%	9,780		4.95	%	$	10,721
Investment fees and expenses	Investment fees and expenses	(0.12)		(125)		(0.12)		(131)		(0.12)		(399)		(0.12)		(387)		Investment fees and expenses	(0.12)		(131)		(0.12)		(128)		(0.13)		(273)		(0.13)		$	(274)
Net investment income including divested businesses (4)	Net investment income including divested businesses (4)	5.24	%	5,684		4.40	%	4,696		4.97	%	16,131		3.95	%	12,497		Net investment income including divested businesses (4)	4.17	%	4,504		4.73	%	5,117		4.38	%	9,507		4.82	%	$	10,447
Less: net investment income from divested businesses (4)	Less: net investment income from divested businesses (4)			16				8				52				44		Less: net investment income from divested businesses (4)			—				—				11				$	36
Adjusted net investment income	Adjusted net investment income			$	5,668			$	4,688			$	16,079			$	12,453	Adjusted net investment income			$	4,504			$	5,117			$	9,496			$	10,411

__________________

(1)We calculate yields using adjusted net investment income as a percent of average quarterly asset carrying values. Adjusted net investment income excludes ~~recognized~~realized gains (losses) from sales and disposals, and includes the impact of changes in foreign currency exchange rates. Average quarterly asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, annuities funding structured settlement claims, freestanding derivative assets, collateral received from derivative counterparties ~~the effects of consolidating under GAAP certain variable interest entities that are treated as consolidated securitization entities (“CSEs”)~~ and contractholder-directed equity securities. In addition, average quarterly asset carrying values include invested assets reclassified to held-for-sale, while ending carrying values exclude invested assets reclassified to held-for-sale. 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 from fixed maturity securities includes amounts from FVO Securities of $6($89) million and ~~$92~~($154) million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, and ~~$36~~$50 million and ~~$72~~$86 million for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively.

(3)Investment income from fixed maturity securities AFS and mortgage loans includes prepayment fees.

(4)See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for discussion of divested businesses.

See “— Results of Operations — Consolidated Results —- Adjusted Earnings” for an analysis of the period over period changes in investment portfolio results.

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Fixed Maturity Securities AFS and Equity Securities

The following table presents fixed maturity securities AFS and equity securities by type (public or private) and information about perpetual and redeemable securities held at:


		September 30, 2021					December 31, 2020						June 30, 2022					December 31, 2021
Securities by Type												Securities by Type	Estimated Fair Value			% of Total		Estimated Fair Value			% of Total
		Estimated Fair Value			% of Total		Estimated Fair Value			% of Total			(Dollars in millions)
		(Dollars in millions)
Fixed maturity securities AFS:
Fixed maturity securities AFS												Fixed maturity securities AFS
Publicly-traded	Publicly-traded	$	269,275		79.0	%	$	284,083		80.1	%	Publicly-traded	$	218,282		76.8	%	$	267,040		78.5	%
Privately-placed	Privately-placed	71,763			21.0		70,726			19.9		Privately-placed	65,896			23.2		73,234			21.5
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	341,038		100.0	%	$	354,809		100.0	%	Total fixed maturity securities AFS	$	284,178		100.0	%	$	340,274		100.0	%
Percentage of cash and invested assets	Percentage of cash and invested assets	66.3		%			67.2		%			Percentage of cash and invested assets	62.2		%			66.1		%
Equity securities:
Equity securities												Equity securities
Publicly-traded	Publicly-traded	$	781		83.1	%	$	851		78.9	%	Publicly-traded	$	864		79.6	%	$	1,118		88.1	%
Privately-held	Privately-held	160			16.9		228			21.1		Privately-held	221			20.4		151			11.9
Total equity securities	Total equity securities	$	941		100.0	%	$	1,079		100.0	%	Total equity securities	$	1,085		100.0	%	$	1,269		100.0	%
Percentage of cash and invested assets	Percentage of cash and invested assets	0.2		%			0.2		%			Percentage of cash and invested assets	0.2		%			0.2		%
Perpetual and redeemable securities:
Perpetual and redeemable securities												Perpetual and redeemable securities
Perpetual securities included within fixed maturity securities AFS and equity securities	Perpetual securities included within fixed maturity securities AFS and equity securities	$	322				$	344				Perpetual securities included within fixed maturity securities AFS and equity securities	$	289				$	321
Redeemable preferred stock with a stated maturity included within fixed maturity securities AFS	Redeemable preferred stock with a stated maturity included within fixed maturity securities AFS	$	479				$	912				Redeemable preferred stock with a stated maturity included within fixed maturity securities AFS	$	855				$	864

See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information about fixed maturity securities AFS by sector, contractual maturities, ~~and~~ continuous gross unrealized ~~losses.~~losses and equity securities by security type and the related cost, net unrealized gains (losses) and estimated fair value of these securities; as well as realized gains (losses) on sales and disposals and unrealized net gains (losses) recognized in earnings.

Included within fixed maturity securities AFS are structured securities, including residential mortgage-backed securities (“RMBS”), asset-backed securities and collateralized loan obligations (“~~ABS”~~ABS & CLO”), previously disclosed as ABS in the 2021 Annual Report, and commercial mortgage-backed securities (“CMBS”) (collectively, “Structured Products”). See “— Structured Products” for further information.

Perpetual securities are included within fixed maturity securities AFS and equity securities. Upon acquisition, we classify perpetual securities that have attributes of both debt and equity as fixed maturity securities AFS if the securities have an interest rate step-up feature which, when combined with other qualitative factors, indicates that the securities have more debt-like characteristics; while those with more equity-like characteristics are classified as equity securities. Many of such securities, commonly referred to as “perpetual hybrid securities,” have been issued by non-U.S. financial institutions that are accorded the highest two capital treatment categories by their respective regulatory bodies (i.e. core capital, or “Tier 1 capital” and perpetual deferrable securities, or “Upper Tier 2 capital”).

Redeemable preferred stock with a stated maturity is included within fixed maturity securities AFS. These securities, which are commonly referred to as “capital securities,” primarily have cumulative interest deferral features and are primarily issued by U.S. financial institutions.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Valuation of Securities” included in the ~~2020~~2021 Annual Report for further information on the processes used to value securities and the related controls.

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Fair Value of Fixed Maturity Securities AFS and Equity Securities

Fixed maturity securities AFS and equity securities measured at estimated fair value on a recurring basis and their corresponding fair value pricing sources were as follows:


		September 30, 2021									June 30, 2022
		Fixed Maturity Securities AFS				Equity Securities
Level										Level	Fixed Maturity Securities AFS				Equity Securities
		(Dollars in millions)									(Dollars in millions)
Level 1	Level 1									Level 1
Quoted prices in active markets for identical assets	Quoted prices in active markets for identical assets	$	27,500	8.1	%	$	594	63.1	%	Quoted prices in active markets for identical assets	$	16,825	5.9	%	$	720	66.4	%
Level 2	Level 2									Level 2
Independent pricing sources	Independent pricing sources	282,375		82.8		184		19.6		Independent pricing sources	238,769		84.0		142		13.1
Internal matrix pricing or discounted cash flow techniques	Internal matrix pricing or discounted cash flow techniques	707		0.2		12		1.3		Internal matrix pricing or discounted cash flow techniques	552		0.2		44		4.1
Significant other observable inputs	Significant other observable inputs	283,082		83.0		196		20.9		Significant other observable inputs	239,321		84.2		186		17.2
Level 3	Level 3									Level 3
Independent pricing sources	Independent pricing sources	24,065		7.1		5		0.5		Independent pricing sources	22,148		7.8		21		1.9
Internal matrix pricing or discounted cash flow techniques	Internal matrix pricing or discounted cash flow techniques	5,940		1.7		146		15.5		Internal matrix pricing or discounted cash flow techniques	5,502		2.0		155		14.2
Independent broker quotations	Independent broker quotations	451		0.1		—		—		Independent broker quotations	382		0.1		3		0.3
Significant unobservable inputs	Significant unobservable inputs	30,456		8.9		151		16.0		Significant unobservable inputs	28,032		9.9		179		16.4
Total estimated fair value	Total estimated fair value	$	341,038	100.0	%	$	941	100.0	%	Total estimated fair value	$	284,178	100.0	%	$	1,085	100.0	%

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for the fixed maturity securities AFS and equity securities fair value ~~hierarchy.~~

The majority of the Level 3 fixed maturity securities AFS and equity securities were concentrated in three sectors at September 30, 2021: foreign corporate securities, U.S. corporate securities and RMBS. During the three months ended September 30, 2021, Level 3 fixed maturity securities AFS increased by $535 million, or 2%. The increase was driven by purchases in excess of sales, partially offset by a decrease in estimated fair value recognized in other comprehensive income (loss) (“OCI”) and by transfers out of Level 3 in excess of transfers into Level 3. During the nine months ended September 30, 2021, Level 3 fixed maturity securities AFS increased by $949 million, or 3%. The increase was driven by purchases in excess of sales, partially offset by a decrease in estimated fair value recognized in OCI and by transfers out of Level 3 in excess of transfers into Level 3.

~~See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for~~hierarchy; a rollforward of the fair value measurements for securities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) ~~inputs,~~inputs; transfers into and/or out of Level 3,3; and further information about the valuation approaches and inputs by level by major classes of invested assets that affect the amounts reported above.

The majority of the Level 3 fixed maturity securities AFS and equity securities were concentrated in three sectors at June 30, 2022: foreign corporate securities, U.S. corporate securities and RMBS. During the three months ended June 30, 2022, Level 3 fixed maturity securities AFS decreased by $2.5 billion, or 8%. The decrease was driven by a decrease in estimated fair value recognized in other comprehensive income (loss) and by transfers out of Level 3 in excess of transfers into Level 3, partially offset by purchases in excess of sales. During the six months ended June 30, 2022, Level 3 fixed maturity securities AFS decreased by $3.4 billion, or 11%. The decrease was driven by a decrease in estimated fair value recognized in other comprehensive income (loss), partially offset by purchases in excess of sales.

See ~~also~~ “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Valuation of Securities” included in the ~~2020~~2021 Annual Report for further information on the estimates and assumptions that affect the amounts reported above.

Fixed Maturity Securities AFS

See Notes 1 and 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information about fixed maturity securities AFS by sector, contractual maturities and continuous gross unrealized losses.

Fixed Maturity Securities AFS Credit Quality — Ratings

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Fixed Maturity Securities AFS Credit Quality — Ratings” included in the ~~2020~~2021 Annual Report for a discussion of the credit quality ratings assigned by Nationally Recognized Statistical Rating Organizations (“NRSRO”), credit quality designations ~~assigned by~~ and ~~methodologies used~~designation categories assigned by the Securities Valuation Office of the NAIC for fixed maturity securities AFS and ~~revised~~modeling methodologies adopted by the NAIC for ~~certain Structured Products.~~non-agency RMBS and CMBS that estimate security level expected losses under a variety of economic scenarios.

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NRSRO ratings and NAIC designations are as of the dates shown below. Over time, credit ratings and designations can migrate, up or down, through the NRSRO’s and NAIC’s continuous monitoring process. NRSRO ratings are based on availability of applicable ratings. If no NRSRO rating is available, then an internally developed rating is used. If no NAIC designation is available, then, as permitted by the NAIC, an internally developed designation is used. NAIC designations are generally similar to the credit quality ratings of the NRSRO, except for (i) non-agency RMBS and CMBS and (ii) securities rated Ca or C by NRSROs, included within Caa and lower, that are designated NAIC 6; accordingly, NAIC designations may not correspond to NRSRO ratings.

The following table presents total fixed maturity securities AFS by NRSRO rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the applicable NAIC designation from the NAIC published comparison of NRSRO ratings to NAIC designations except for non-agency RMBS and CMBS, held by MetLife, Inc.'s insurance subsidiaries that maintain the NAIC statutory basis of accounting, which are presented using revised NAIC methodologies. NRSRO ratings are as of the dates shown below. Over time, credit ratings can migrate, up or down, through the NRSRO continuous monitoring process. See Notes 1 and 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information.

September 30, 2021 December 31, 2020
NAIC
Designation NRSRO Rating Amortized
Cost net of ACL Unrealized
Gains (Losses) (1)
Estimated
Fair
Value
% of
Total
Amortized
Cost net of ACL Unrealized
Gains (Losses) (1)
Estimated
Fair
Value
% of
Total
(Dollars in millions)
1 Aaa/Aa/A $ 217,164 $ 21,994 $ 239,158 70.1 % $ 218,252 $ 31,761 $ 250,013 70.5 %
2 Baa 76,573 8,258 84,831 24.9 76,342 11,360 87,702 24.7
Subtotal investment grade 293,737 30,252 323,989 95.0 294,594 43,121 337,715 95.2
3 Ba 12,032 844 12,876 3.8 11,840 972 12,812 3.6
4 B 3,557 27 3,584 1.0 3,688 14 3,702 1.1
5 Caa and lower 596 (31) 565 0.2 536 (33) 503 0.1
6 In or near default 14 10 24 — 72 5 77 —
Subtotal below investment grade 16,199 850 17,049 5.0 16,136 958 17,094 4.8
Total fixed maturity securities AFS $ 309,936 $ 31,102 $ 341,038 100.0 % $ 310,730 $ 44,079 $ 354,809 100.0 %
is provided.


		June 30, 2022								December 31, 2021
NRSRO Rating	NAIC Designation	Amortized Cost net of ACL		Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Amortized Cost net of ACL		Unrealized Gains (Losses) (1)		Estimated Fair Value		% of Total
		(Dollars in millions)
Aaa/Aa/A	1	$	203,589	$	(8,499)	$	195,090	68.7	%	$	217,886	$	21,508	$	239,394	70.4	%
Baa	2	80,253		(5,470)		74,783		26.3		77,739		7,470		85,209		25.0
Subtotal investment grade		283,842		(13,969)		269,873		95.0		295,625		28,978		324,603		95.4
Ba	3	11,955		(826)		11,129		3.9		11,439		534		11,973		3.5
B	4	2,888		(235)		2,653		0.9		3,152		(2)		3,150		0.9
Caa and lower	5	426		(37)		389		0.2		563		(37)		526		0.2
In or near default	6	160		(26)		134		—		14		8		22		—
Subtotal below investment grade		15,429		(1,124)		14,305		5.0		15,168		503		15,671		4.6
Total fixed maturity securities AFS		$	299,271	$	(15,093)	$	284,178	100.0	%	$	310,793	$	29,481	$	340,274	100.0	%

__________________

(1) Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the Company’s business dispositions.

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The following tables present total fixed maturity securities AFS, ~~based on~~at estimated fair value, by sector and by NRSRO rating, ~~and the applicable NAIC designations from the NAIC published comparison of NRSRO ratings to NAIC designations,~~ except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In addition, in the ~~revised~~following table, the applicable NAIC ~~methodologies:~~designation from the NAIC published comparison of the NRSRO ratings to NAIC designations is provided.

Fixed Maturity Securities AFS — 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)
September 30, 2021
U.S. corporate $ 46,131 $ 39,084 $ 4,612 $ 1,868 $ 317 $ — $ 92,012
Foreign government 53,723 5,846 3,273 517 17 4 63,380
Foreign corporate 23,531 35,774 3,827 574 215 1 63,922
U.S. government and agency 47,562 538 — — — — 48,100
RMBS 28,979 853 222 179 15 19 30,267
ABS 15,165 1,889 262 86 1 — 17,403
Municipals 13,529 493 18 — — — 14,040
CMBS 10,538 354 662 360 — — 11,914
Total fixed maturity securities AFS $ 239,158 $ 84,831 $ 12,876 $ 3,584 $ 565 $ 24 $ 341,038
Percentage of total 70.1 % 24.9 % 3.8 % 1.0 % 0.2 % — % 100.0 %
December 31, 2020
U.S. corporate $ 46,847 $ 39,552 $ 4,649 $ 2,018 $ 326 $ 24 $ 93,416
Foreign government 61,322 6,678 3,161 456 77 5 71,699
Foreign corporate 26,812 37,884 3,984 648 74 6 69,408
U.S. government and agency 46,543 557 — — — — 47,100
RMBS 29,347 706 197 153 14 18 30,435
ABS 15,328 1,496 197 96 1 1 17,119
Municipals 13,240 460 22 — — — 13,722
CMBS 10,574 369 602 331 11 23 11,910
Total fixed maturity securities AFS $ 250,013 $ 87,702 $ 12,812 $ 3,702 $ 503 $ 77 $ 354,809
Percentage of total 70.5 % 24.7 % 3.6 % 1.1 % 0.1 % — % 100.0 %

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	Fixed Maturity Securities AFS — by Sector & Credit Quality Rating
NRSRO Rating	Aaa/Aa/A			Baa			Ba			B			Caa and Lower			In or Near Default			Total Estimated Fair Value
NAIC Designation	1			2			3			4			5			6
	(Dollars in millions)
June 30, 2022
U.S. corporate	$	40,472		$	33,742		$	4,525		$	1,569		$	173		$	74		$	80,555
Foreign corporate	19,021			31,299			3,257			506			93			1			54,177
Foreign government	39,742			5,151			2,698			329			67			29			48,016
U.S. government and agency	33,219			471			—			—			—			—			33,690
RMBS	26,428			713			81			62			4			15			27,303
ABS & CLO	14,051			2,535			351			76			26			15			17,054
Municipals	12,166			323			24			—			—			—			12,513
CMBS	9,991			549			193			111			26			—			10,870
Total fixed maturity securities AFS	$	195,090		$	74,783		$	11,129		$	2,653		$	389		$	134		$	284,178
Percentage of total	68.7		%	26.3		%	3.9		%	0.9		%	0.2		%	—		%	100.0		%

December 31, 2021
U.S. corporate	$	47,377		$	39,094		$	4,523		$	1,796		$	244		$	—		$	93,034
Foreign corporate	23,228			35,893			3,731			577			210			1			63,640
Foreign government	52,316			5,739			3,032			506			14			2			61,609
U.S. government and agency	46,065			534			—			—			—			—			46,599
RMBS	29,529			634			150			67			5			19			30,404
ABS & CLO	15,920			2,221			316			85			27			—			18,569
Municipals	13,737			457			18			—			—			—			14,212
CMBS	11,222			637			203			119			26			—			12,207
Total fixed maturity securities AFS	$	239,394		$	85,209		$	11,973		$	3,150		$	526		$	22		$	340,274
Percentage of total	70.4		%	25.0		%	3.5		%	0.9		%	0.2		%	—		%	100.0		%

U.S. and Foreign Corporate Fixed Maturity Securities AFS

We maintain a diversified portfolio of corporate fixed maturity securities AFS across industries and issuers. This portfolio did not have any exposure to any single issuer in excess of 1% of total investments at ~~September~~June 30, ~~2021.~~2022. The top 10 holdings comprised 1% and 2% of total investments at ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. The table below presents our U.S. and foreign corporate securities holdings by industry at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
Industry	Industry	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total		Industry	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total
		(Dollars in millions)									(Dollars in millions)
Industrial	Industrial	$	45,688	29.3	%	$	47,472	29.2	%	Industrial	$	39,710	29.5	%	$	45,732	29.2	%
Finance	Finance	35,623		22.9		37,645		23.1		Finance	31,125		23.1		35,676		22.7
Consumer	Consumer	30,924		19.8		33,384		20.5		Consumer	26,735		19.8		31,142		19.9
Utility	Utility	28,889		18.5		29,984		18.4		Utility	23,820		17.7		28,961		18.5
Communications	Communications	12,107		7.8		12,107		7.4		Communications	10,505		7.8		12,346		7.9
Other	Other	2,703		1.7		2,232		1.4		Other	2,837		2.1		2,817		1.8
Total	Total	$	155,934	100.0	%	$	162,824	100.0	%	Total	$	134,732	100.0	%	$	156,674	100.0	%

~~As a result~~

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Table of current economic conditions, including the effects of the COVID-19 Pandemic, we have experienced stress within certain sub-sectors of our industrial and consumer corporate securities portfolios, principally in Airports, Cruise Lines / Leisure, Airlines, Restaurants and Lodging. See “— Current Environment — Selected Country and Sector Investments.”Contents

Structured Products

Structured Products are comprised of investments in securities that are collateralized by residential mortgages, commercial mortgages, bank loans and other assets. Our investment selection criteria and monitoring includes the reviews of credit ratings, characteristics of the assets underlying the securities, borrower characteristics and the level of credit enhancement. We held ~~$59.6~~$55.2 billion and ~~$59.5~~$61.2 billion of Structured Products, at estimated fair value, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, as presented in the RMBS, ABS & CLO and CMBS sections below.

RMBS

Our RMBS portfolio is diversified by security type and risk profile. The following table presents our RMBS portfolio by security type, risk profile and ratings profile at:


		September 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses) (1)			Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses) (1)
		(Dollars in millions)													(Dollars in millions)
Security type	Security type													Security type
Collateralized mortgage obligations	Collateralized mortgage obligations	$	17,206	56.8	%	$	1,237	$	17,342	57.0	%	$	1,468	Collateralized mortgage obligations	$	17,029	62.4	%	$	(768)	$	17,646	58.0	%	$	1,092
Pass-through mortgage-backed securities	Pass-through mortgage-backed securities	13,061		43.2		314		13,093		43.0		552		Pass-through mortgage-backed securities	10,274		37.6		(997)		12,758		42.0		160
Total RMBS	Total RMBS	$	30,267	100.0	%	$	1,551	$	30,435	100.0	%	$	2,020	Total RMBS	$	27,303	100.0	%	$	(1,765)	$	30,404	100.0	%	$	1,252
Risk profile	Risk profile													Risk profile
Agency	Agency	$	19,902	65.8	%	$	884	$	20,408	67.1	%	$	1,314	Agency	$	16,317	59.8	%	$	(1,286)	$	19,487	64.1	%	$	671
Non Agency														Non Agency
Prime	Prime	2,730		9.0		24		1,637		5.4		38		Prime	2,977		10.9		(312)		3,018		9.9		13
Alt-A	Alt-A	3,531		11.7		305		3,809		12.5		306		Alt-A	4,731		17.3		(124)		3,887		12.8		267
Sub-prime	Sub-prime	4,104		13.5		338		4,581		15.0		362		Sub-prime	3,278		12.0		(43)		4,012		13.2		301
Subtotal Non Agency														Subtotal Non Agency	10,986		40.2	%	(479)		10,917		35.9	%	581
Total RMBS	Total RMBS	$	30,267	100.0	%	$	1,551	$	30,435	100.0	%	$	2,020	Total RMBS	$	27,303	100.0	%	$	(1,765)	$	30,404	100.0	%	$	1,252
Ratings profile	Ratings profile													Ratings profile
Rated Aaa/AAA		$	21,987	72.6	%			$	22,555	74.1	%
Rated Aaa and Aa														Rated Aaa and Aa	$	22,001	80.6	%			$	24,190	79.6	%
Designated NAIC 1	Designated NAIC 1	$	28,979	95.7	%			$	29,347	96.4	%			Designated NAIC 1	$	26,423	96.8	%			$	29,529	97.1	%

__________________

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See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Investments — Fixed Maturity Securities AFS and Equity Securities — Structured Products — RMBS” included in the ~~2020~~2021 Annual Report for further information about collateralized mortgage obligations and pass-through mortgage-backed securities, as well as agency, prime, alternative residential mortgage loans (“Alt-A”) and sub-prime RMBS.

Historically, we have managed our exposure to sub-prime RMBS holdings by focusing primarily on senior tranche securities, stress testing the portfolio with severe loss assumptions and closely monitoring the performance of the portfolio. Our sub-prime RMBS portfolio consists predominantly of securities that were purchased ~~after 2012~~ at significant discounts to par value and discounts to the expected principal recovery value of these securities. The vast majority of these securities are investment grade under the NAIC designations (e.g., NAIC 1 and NAIC 2).

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ABS & CLO

Our non-mortgage loan-backed structured securities are comprised of two broad categories of securitizations: ABS ~~portfolio is~~& CLO. These portfolios are diversified by collateral type and issuer. The following table presents ~~our ABS portfolio~~these portfolios by collateral type and ratings profile at:

September 30, 2021 December 31, 2020
Estimated
Fair
Value % of
Total Net
Unrealized
Gains (Losses) (1) Estimated
Fair
Value % of
Total Net
Unrealized
Gains (Losses) (1)
(Dollars in millions)
Collateral type
Collateralized obligations (2) $ 8,383 48.2 % $ 18 $ 8,946 52.2 % $ (16)
Consumer loans 1,701 9.8 61 1,535 9.0 46
Student loans 1,098 6.3 15 1,174 6.9 7
Credit card loans 785 4.5 11 1,006 5.9 13
Automobile loans 1,420 8.2 17 976 5.7 20
Foreign residential loans 910 5.2 4 956 5.5 15
Other loans 3,106 17.8 74 2,526 14.8 71
Total $ 17,403 100.0 % $ 200 $ 17,119 100.0 % $ 156
Ratings profile
Rated Aaa/AAA $ 8,242 47.4 % $ 9,164 53.5 %
Designated NAIC 1 $ 15,165 87.1 % $ 15,328 89.5 %


	June 30, 2022						December 31, 2021
	Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses) (1)
	(Dollars in millions)
ABS
Collateral type
Vehicle and equipment loans	$	1,385	8.1	%	$	(44)	$	1,864	10.0	%	$	10
Consumer Loans	1,510		8.9		(65)		1,653		8.9		48
Student loans	914		5.4		(59)		1,143		6.2		15
Foreign residential loans	708		4.2		(34)		922		5.0		2
Credit card	1,082		6.3		(8)		900		4.8		9
Other (2)	3,977		23.3		(307)		3,646		19.6		45
Total ABS	9,576		56.2	%	(517)		10,128		54.5	%	129
CLO (3)	7,478		43.8		(339)		8,441		45.5		(3)
Total ABS & CLO	$	17,054	100.0	%	$	(856)	$	18,569	100.0	%	$	126

ABS ratings profile
Rated Aaa and Aa	$	4,554	47.6	%			$	5,289	52.2	%
Designated NAIC 1	$	7,252	75.7	%			$	8,105	80.0	%
CLO ratings profile
Rated Aaa and Aa	$	5,703	76.3	%			$	6,749	80.0	%
Designated NAIC 1	$	6,790	90.8	%			$	7,815	92.6	%
ABS & CLO ratings profile
Rated Aaa and Aa	$	10,257	60.1	%			$	12,038	64.8	%
Designated NAIC 1	$	14,042	82.3	%			$	15,920	85.7	%

__________________

(2) Other ABS are broadly diversified across several subsectors and issuers, including securities with the following collateral types: digital infrastructure, franchise, transportation equipment, and renewable energy.

(3) Includes primarily securities collateralized ~~loan obligations.~~by broadly syndicated bank loans.

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Table of Contents

CMBS

Our CMBS portfolio is comprised primarily of securities collateralized by multiple commercial mortgage loans and is diversified by property type, borrower ~~geography~~ and ~~vintage year.~~geography. The following tables present our CMBS portfolio by ~~NRSRO rating~~collateral type and ~~vintage year.~~ratings profile at.

September 30, 2021
Aaa Aa A Baa Below
Investment
Grade Total
Vintage Year Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value
(Dollars in millions)
2003-2014 $ 1,249 $ 1,322 $ 1,013 $ 1,059 $ 576 $ 588 $ 183 $ 175 $ 151 $ 133 $ 3,172 $ 3,277
2015 456 487 56 59 54 56 7 7 — — 573 609
2016 270 291 65 70 53 55 — — — — 388 416
2017 774 816 346 367 193 199 — — — — 1,313 1,382
2018 1,823 2,005 301 318 179 191 10 10 — — 2,313 2,524
2019 958 997 142 145 655 672 — — — — 1,755 1,814
2020 534 543 232 238 216 224 27 27 — — 1,009 1,032
2021 391 392 223 224 210 214 29 30 — — 853 860
Total $ 6,455 $ 6,853 $ 2,378 $ 2,480 $ 2,136 $ 2,199 $ 256 $ 249 $ 151 $ 133 $ 11,376 $ 11,914
Ratings Distribution 57.5 % 20.8 % 18.5 % 2.1 % 1.1 % 100.0 %
December 31, 2020
Aaa Aa A Baa Below
Investment
Grade Total
Vintage Year Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value Amortized
Cost net of ACL Estimated
Fair
Value
(Dollars in millions)
2003 - 2013 $ 958 $ 1,011 $ 898 $ 917 $ 373 $ 355 $ 105 $ 96 $ 114 $ 98 $ 2,448 $ 2,477
2014 451 480 429 449 169 171 10 9 — — 1,059 1,109
2015 462 492 65 69 38 40 7 6 — — 572 607
2016 282 310 56 60 54 53 — — — — 392 423
2017 757 807 432 463 150 150 — — — — 1,339 1,420
2018 1,704 1,891 592 647 205 214 9 9 — — 2,510 2,761
2019 1,048 1,100 138 141 596 610 — — — — 1,782 1,851
2020 734 748 280 293 186 191 29 30 — — 1,229 1,262
Total $ 6,396 $ 6,839 $ 2,890 $ 3,039 $ 1,771 $ 1,784 $ 160 $ 150 $ 114 $ 98 $ 11,331 $ 11,910
Ratings Distribution 57.4 % 25.5 % 15.0 % 1.3 % 0.8 % 100.0 %


	June 30, 2022						December 31, 2021
	Estimated Fair Value		% of Total		Net Unrealized Gains (Losses)		Estimated Fair Value		% of Total		Net Unrealized Gains (Losses) (1)
	(Dollars in millions)
Collateral type
Conduit	$	7,456	68.6	%	$	(347)	$	8,282	67.8	%	$	341
Single asset and single borrower	1,959		18.0		(123)		2,269		18.6		32
Commercial real estate collateralized loan obligations	534		4.9		(11)		653		5.4		2
Agency	543		5.0		(36)		610		5.0		50
Other	378		3.5		(18)		393		3.2		2
Total CMBS	$	10,870	100.0	%	$	(535)	$	12,207	100	%	$	427
Ratings profile
Rated Aaa and Aa	$	8,510	78.3	%			$	9,614	78.8	%
Designated NAIC 1	$	9,990	91.9	%			$	11,222	91.9	%

~~The tables above reflect NRSRO ratings including Moody’s Investors Service, S&P, Fitch Ratings and Morningstar, Inc. CMBS designated NAIC 1 were 88.5% and 88.8%~~__________________

(1) Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of ~~total CMBS at September 30, 2021 and December 31, 2020, respectively.~~the Notes to the Interim Condensed Consolidated Financial Statements for information on the Company’s business dispositions.

Evaluation of Fixed Maturity Securities AFS for Credit Loss, Rollforward of Allowance for Credit Loss and Credit Loss on Fixed Maturity Securities AFS Recognized in Earnings

See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information about the evaluation of fixed maturity securities AFS for credit loss, rollforward of the ACL, net credit loss provision (release) ~~for credit~~, and impairment loss, as well as realized gross gains and gross losses on sales and disposals of fixed maturity securities AFS ~~sold~~ at and for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Contractholder-Directed Equity Securities and Fair Value Option Securities

The estimated fair value of these investments, which are primarily comprised of contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“Unit-linked ~~investments,~~investments”), was$9.9 billion and $12.1 billion, or 2.2%and ~~$13.3 billion, or 2.3% and 2.5%~~2.4% of cash and invested assets, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. See Notes 6 and 8 of the Notes to the Interim Condensed Consolidated Financial Statements for a description of this portfolio, ~~its~~investments by asset type and the related cost or amortized cost, net unrealized gains (losses) and estimated fair value of these securities, the fair value hierarchy and a rollforward of the fair value measurements for these investments measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

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Securities Lending ~~and~~Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

We participate in a securities lending ~~program whereby securities are loaned to third-parties, primarily brokerage firms~~transactions, repurchase agreements and ~~commercial banks. We also participate in short-term repurchase agreement transactions~~third-party custodian administered programs with unaffiliated financial ~~institutions.~~institutions in the normal course of business for the purpose of enhancing the total return on our investment portfolio.

Securities lending transactions and repurchase agreements: We account for these arrangements as secured borrowings and record a liability in the amount of the cash received. We obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the securities are returned to us. Through these arrangements, we were liable for cash collateral under our control of $16.9 billion and $24.4 billion at June 30, 2022 and December 31, 2021, respectively, including a portion that may require the immediate return of cash collateral we hold. See ~~“— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Securities Lending and Repurchase Agreements” and~~ Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as “Summary of Significant Accounting Policies — Investments — Securities Lending Transactions and Repurchase Agreements” in Note 1 of the Notes of the Consolidated Financial Statements included in the 2021 Annual Report for further ~~information.~~information about the secured borrowings accounting and the classification of revenues and expenses.

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Table of Contents

Third-party custodian administered programs: The estimated fair value of securities we own which are loaned in connection with these programs was $392 million and $273 million at June 30, 2022 and December 31, 2021, respectively. The estimated fair value of the related non-cash collateral on deposit with third-party custodians on our behalf, which is not reflected in our interim condensed consolidated financial statements and cannot be sold or re-pledged, was $403 million and $282 million at June 30, 2022 and December 31, 2021, respectively.

Mortgage Loans

Our mortgage loans held-for-investment are principally collateralized by commercial, agricultural and residential properties. Mortgage loans ~~held-for-investment are~~ carried at amortized cost and the related ACL are summarized as follows at:


		September 30, 2021									December 31, 2020									June 30, 2022									December 31, 2021
Portfolio Segment	Portfolio Segment		Amortized Cost		% of Total		ACL		% of Amortized Cost		Amortized Cost		% of Total		ACL		% of Amortized Cost		Portfolio Segment		Amortized Cost		% of Total		ACL		% of Amortized Cost		Amortized Cost		% of Total		ACL		% of Amortized Cost
			(Dollars in millions)																		(Dollars in millions)
Commercial	Commercial		$	51,336	63.1	%	$	274	0.5	%	$	52,434	62.2	%	$	252	0.5	%	Commercial		$	52,348	63.5	%	$	205	0.4	%	$	50,553	63.3	%	$	340	0.7	%
Agricultural	Agricultural		18,353		22.5		93		0.5		18,128		21.5		106		0.6		Agricultural		18,563		22.5		107		0.6	%	18,111		22.7		88		0.5	%
Residential	Residential		11,704		14.4		196		1.7		13,782		16.3		232		1.7		Residential		11,497		14.0		174		1.5	%	11,196		14.0		206		1.8	%
Total	Total		$	81,393	100.0	%	$	563	0.7	%	$	84,344	100.0	%	$	590	0.7	%	Total		$	82,408	100.0	%	$	486	0.6	%	$	79,860	100.0	%	$	634	0.8	%

The carrying value of all mortgage loans, net of ACL, was ~~15.7%~~18.0% and ~~15.9%~~15.4% of cash and invested assets at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Our commercial, agricultural and residential mortgage loan portfolios are subject to uncertain market conditions, including the effects of the COVID-19 Pandemic. As a result of the COVID-19 Pandemic, we granted concessions (e.g., payment deferrals and other loan modifications) to certain of our commercial mortgage loan borrowers (principally in the hotel and retail sectors) and residential mortgage loan borrowers and, to a much lesser extent, some of our agricultural mortgage loan borrowers. While we granted concessions in 2021, the pace has significantly decreased from 2020. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding COVID-19 Pandemic-related mortgage loan concessions. See also “— Commercial Mortgage Loans by Geographic Region and Property Type.”

We diversify our mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. Of our commercial and agricultural mortgage loan held-for-investment portfolios, ~~84%~~85% are collateralized by properties located in the United States, with the remaining ~~16%~~15% collateralized by properties located outside the United States, which includes ~~4% of properties located in Mexico~~5%, 3% and 1% of properties located in Mexico, U.K. and Chile, respectively, at ~~September~~June 30, ~~2021.~~2022. The carrying values of our commercial and agricultural mortgage loans held-for-investment located in California, New York and Texas were 17%, 9% and 7%, respectively, of total commercial and agricultural mortgage loans ~~heldforinvestment~~held-for-investment at ~~September~~June 30, ~~2021.~~2022. Additionally, we manage risk when originating commercial and agricultural mortgage loans by generally lending up to 75% of the estimated fair value of the underlying real estate collateral.

We manage our residential mortgage loan ~~heldforinvestment~~held-for-investment portfolio in a similar manner to reduce risk of concentration, with ~~91%~~92% collateralized by properties located in the United States, and the remaining 9%8% collateralized by properties located outside the United States, principally in Chile, at ~~September~~June 30, ~~2021.~~2022. The carrying values of our residential mortgage loans located in California, Florida, and New York were ~~30%~~32%, 9%10%, and 9%8%, respectively, of total residential mortgage loans at ~~September~~June 30, ~~2021.~~2022.

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Commercial Mortgage Loans by Geographic Region and Property Type. Commercial mortgage loans are the largest ~~component of the~~ mortgage loan ~~invested asset class.~~portfolio segment. The tables below present the diversification across geographic regions and property types of commercial mortgage loans held-for-investment at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
		Amount		% of Total		Amount		% of Total			Amount		% of Total		Amount		% of Total
		(Dollars in millions)									(Dollars in millions)
Region	Region									Region
Non-U.S.	Non-U.S.	$	9,501	18.5	%	$	10,581	20.2	%	Non-U.S.	$	9,726	18.6	%	$	9,969	19.7	%
Pacific	Pacific	10,249		20.0		10,235		19.5		Pacific	9,901		18.9		9,676		19.1
Middle Atlantic	Middle Atlantic	7,877		15.3		8,233		15.7		Middle Atlantic	7,918		15.1		7,537		14.9
South Atlantic	South Atlantic	7,047		13.7		7,217		13.8		South Atlantic	6,852		13.1		6,800		13.5
West South Central	West South Central	3,434		6.7		3,887		7.4		West South Central	3,943		7.5		3,492		6.9
New England										New England	2,781		5.3		2,748		5.4
East North Central	East North Central	2,229		4.3		2,494		4.8		East North Central	1,489		2.9		2,129		4.2
New England		2,623		5.1		2,126		4.0
Mountain	Mountain	1,996		3.9		1,777		3.4		Mountain	2,268		4.3		1,993		4.0
East South Central	East South Central	824		1.6		700		1.3		East South Central	636		1.2		759		1.5
West North Central	West North Central	649		1.3		609		1.2		West North Central	428		0.8		663		1.3
Multi-Region and Other	Multi-Region and Other	4,907		9.6		4,575		8.7		Multi-Region and Other	6,406		12.3		4,787		9.5
Total amortized cost	Total amortized cost	51,336		100.0	%	52,434		100.0	%	Total amortized cost	52,348		100.0	%	50,553		100.0	%
Less: ACL	Less: ACL	274				252				Less: ACL	205				340
Carrying value, net of ACL	Carrying value, net of ACL	$	51,062			$	52,182			Carrying value, net of ACL	$	52,143			$	50,213
Property Type	Property Type									Property Type
Office	Office	$	22,573	44.0	%	$	23,928	45.6	%	Office	$	21,923	41.9	%	$	22,388	44.3	%
Apartment										Apartment	10,536		20.1		9,121		18.0
Retail	Retail	8,684		16.9		8,911		17.0		Retail	8,524		16.3		8,548		16.9
Apartment		8,910		17.4		8,764		16.7
Industrial	Industrial	5,562		10.8		5,365		10.2		Industrial	4,902		9.4		5,096		10.1
Hotel	Hotel	3,175		6.2		3,377		6.5		Hotel	3,323		6.3		3,201		6.3
Other	Other	2,432		4.7		2,089		4.0		Other	3,140		6.0		2,199		4.4
Total amortized cost	Total amortized cost	51,336		100.0	%	52,434		100.0	%	Total amortized cost	52,348		100.0	%	50,553		100.0	%
Less: ACL	Less: ACL	274				252				Less: ACL	205				340
Carrying value, net of ACL	Carrying value, net of ACL	$	51,062			$	52,182			Carrying value, net of ACL	$	52,143			$	50,213

Our commercial mortgage loan portfolio is well positioned with exposures concentrated in high quality underlying properties located in primary markets typically with institutional investors who are better positioned to manage their assets during periods of market volatility. Our portfolio is comprised primarily of lower risk loans with higher debt service coverage ratios (“DSCR”) and lower loan-to-value (“LTV”) ratios. See “— Mortgage Loan Credit Quality -— Monitoring Process” for further information and Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for a distribution of our commercial mortgage loans by DSCR and LTV ratios. Excluding loans with a COVID-19 Pandemic-related payment deferral, over 99% of our commercial mortgage loan portfolio was current at September 30, 2021, including all of our hotel and retail commercial mortgage loans. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding COVID-19 Pandemic-related mortgage loan concessions.

Mortgage Loan Credit Quality - Monitoring Process. We monitor our mortgage loan investments on an ongoing basis, including a review of loans by credit quality indicator and loans that are current, past due, restructured and under foreclosure. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding mortgage loans by credit quality indicator, past due and nonaccrual mortgage loans.

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We review our commercial mortgage loans on an ongoing basis. These reviews may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower ~~DSCR and loans with a COVID-19 Pandemic-related payment deferral.~~DSCR. The monitoring process for agricultural mortgage loans is generally similar, with a focus on higher risk loans, such as loans with higher LTV ratios. Agricultural mortgage loans are reviewed on an ongoing basis which include, but are not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, including reviews on a geographic and property-type basis. We review our residential mortgage loans on an ongoing basis, with a focus on higher risk loans, such as nonperforming loans. See Notes 1 and 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information on our evaluation of residential mortgage loans and related ACL methodology.

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LTV ratios and DSCR are common measures in the assessment of the quality of commercial mortgage loans. LTV ratios are a common measure in the assessment of the quality of agricultural mortgage loans. LTV ratios compare the amount of the loan to the estimated fair value of the underlying collateral. An LTV ratio greater than 100% indicates that the loan amount is greater than the collateral value. An LTV ratio of less than 100% indicates an excess of collateral value over the loan amount. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. For our commercial mortgage loans, our average LTV ratio was ~~57% and 58%~~56% at ~~September~~both June 30, ~~2021~~2022 and December 31, ~~2020, respectively~~2021 and our average DSCR was 2.6x and 2.5x at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan portfolio. For our agricultural mortgage loans, our average LTV ratio was 48% and 49% at ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. The values utilized in calculating our agricultural mortgage loan LTV ratio are developed in connection with the ongoing review of our agricultural loan portfolio and are routinely updated.

Mortgage Loan Allowance for Credit Loss. Our ACL is established for both pools of loans with similar risk characteristics and for mortgage loans with dissimilar risk characteristics, collateral dependent loans and reasonably expected troubled debt restructurings, individually on a loan specific basis. We record an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected.

In determining our ACL, management (i) pools mortgage loans that share similar risk characteristics, (ii) considers expected lifetime credit loss over the contractual term of our mortgage loans, as adjusted for expected prepayments and any extensions, and (iii) considers past events and current and forecasted economic conditions. Actual credit loss realized could be different from the amount of the ACL recorded. These evaluations and assessments are revised as conditions change and new information becomes available, which can cause the ACL to increase or decrease over time as such evaluations are revised. Negative credit migration, including an actual or expected increase in the level of problem loans, will result in an increase in the ACL. Positive credit migration, including an actual or expected decrease in the level of problem loans, will result in a decrease in the ACL. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information on how the ACL is established and monitored, and activity in and balances of the ~~ACL, as of and for the nine months ended September 30, 2021 and 2020.~~ACL.

Real Estate and Real Estate Joint Ventures

Real estate and real estate joint ventures is comprised of wholly-owned real estate and joint ventures with interests in single property income-producing real estate and, to a lesser extent, joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the operation of income-producing properties, as well as ~~a runoff portfolio.~~real estate funds. The carrying value of real estate and real estate joint ventures was $12.4 billion and $12.2 billion, or 2.7% and ~~$11.9 billion, or~~ 2.4% ~~and 2.3%~~ of cash and invested assets, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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Our real estate investments are typically stabilized properties that we intend to hold for the longer-term for portfolio diversification and long-term appreciation. Our real estate investment portfolio has significantly appreciated ~~since acquisition~~ to a ~~$6.3~~$7.5 billion and ~~$6.1~~$6.2 billion unrealized gain position at ~~September~~June 30, 2022 and June 30, 2021, ~~and September 30, 2020, respectively, that is available to absorb valuation declines from the current economic conditions.~~respectively. We continuously monitor expected future cash flows of each of our real estate investments and incorporate them into our periodic impairment analyses. As a result of the COVID-19 Pandemic, we performed impairment analyses during the nine months ended September 30, 2021 and September 30, 2020, which included updated estimates of expected future cash flows. As a result of our impairment analyses, we recorded one impairment during the nine months ended September 30, 2020 for $13 million. This impairment was recorded in net investment income as the investment is in a real estate fund. There were no impairments recognized in earnings within net investment gains (losses) on real estate and real estate joint ventures for either the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021.

We diversify our real estate investments by both geographic region and property type to reduce risk of concentration. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for a summary of real estate investments, by income type, as well as income earned.

Other Limited Partnership Interests

Other limited partnership interests are comprised of investments in private funds, including private equity funds and hedge funds. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying value of other limited partnership interests was $~~13.5~~14.6 billion and ~~$9.5~~$14.6 billion, which included $~~669~~543 million and ~~$643~~$663 million of hedge funds, respectively. Other limited partnership interests were ~~2.62%~~3.2% and ~~1.79%~~2.8% of cash and invested assets at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Cash distributions on these investments are generated from ~~realized~~ investment gains, operating income from the underlying investments of the funds and liquidation of the underlying investments of the funds.

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We use the equity method of accounting for most of our private equity funds. We generally recognize our share of a private equity fund’s earnings in net investment income on a three-month lag when the information is reported to us. Accordingly, changes in equity market levels, which can impact the underlying results of these private equity funds, are ~~recorded~~recognized in earnings within our net investment income on a three-month lag.

Other Invested Assets

The following table presents the carrying value of our other invested assets by type at:


		September 30, 2021					December 31, 2020						June 30, 2022					December 31, 2021
Asset Type	Asset Type	Carrying Value			% of Total		Carrying Value			% of Total		Asset Type	Carrying Value			% of Total		Carrying Value			% of Total
		(Dollars in millions)											(Dollars in millions)
Freestanding derivatives with positive estimated fair values	Freestanding derivatives with positive estimated fair values	$	10,519		56.3	%	$	11,866		57.6	%	Freestanding derivatives with positive estimated fair values	$	11,583		58.2	%	$	10,466		56.1	%
Tax credit and renewable energy partnerships	Tax credit and renewable energy partnerships	1,583			8.5		1,751			8.5		Tax credit and renewable energy partnerships	1,466			7.4		1,564			8.4
Annuities funding structured settlement claims												Annuities funding structured settlement claims	1,237			6.2		1,251			6.7
Direct financing leases	Direct financing leases	1,216			6.5		1,340			6.5		Direct financing leases	1,061			5.3		1,143			6.1
Annuities funding structured settlement claims		1,254			6.7		1,263			6.1
Operating joint ventures												Operating joint ventures	1,139			5.7		901			4.8
Leveraged leases	Leveraged leases	803			4.3		816			4.0		Leveraged leases	788			4.0		787			4.2
FHLB common stock	FHLB common stock	791			4.2		814			4.1		FHLB common stock	802			4.0		769			4.1
Operating joint ventures		828			4.4		733			3.6
Funds withheld	Funds withheld	514			2.8		508			2.5		Funds withheld	451			2.3		525			2.8
Other	Other	1,175			6.3		1,502			7.2		Other	1,374			6.9		1,249			6.8
Total	Total	$	18,683		100.0	%	$	20,593		100.0	%	Total	$	19,901		100.0	%	$	18,655		100.0	%

Percentage of cash and invested assets	Percentage of cash and invested assets	3.6		%			3.9		%			Percentage of cash and invested assets	4.4		%			3.6		%

InvestmentCommitments

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We enter into the following commitments in the normal course of business for the purpose of enhancing the total return on our investment portfolio: mortgage loan commitments and commitments to fund partnerships, bank credit facilities, bridge loans and private corporate bond investments. See Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements for the amount of our unfunded investment commitments at June 30, 2022 and December 31, 2021. See “Net Investment Income” and “Net Investment Gains (Losses)” in Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the investment income, investment expense, gains and losses from such investments and the liability for credit loss for unfunded mortgage loan commitments. See also “— Fixed Maturity Securities AFS and Equity Securities,” “— Mortgage Loans,” “— Real Estate and Real Estate Joint Ventures” and “— Other Limited Partnership Interests.”

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Derivatives

~~Derivative Risks~~Overview

We are exposed to various risks relating to our ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. We use a variety of strategies to manage these risks, including the use of ~~derivatives.~~derivatives such as market standard purchased and written credit default swap contracts. See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for:

•A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks.

•Information about the primary underlying risk exposure, gross notional amount, and estimated fair value of our derivatives by type of hedge designation, excluding embedded derivatives held at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

•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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

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We enter into market standard purchased and written credit default swap contracts. Payout under such contracts is triggered by certain credit events experienced by the referenced entities. For credit default swaps covering North American corporate issuers, credit events typically include bankruptcy and failure to pay on borrowed money. For European corporate issuers, credit events typically also include involuntary restructuring. With respect to credit default contracts on sovereign debt, credit events typically include failure to pay debt obligations, repudiation, moratorium, or involuntary restructuring. In each case, payout on a credit default swap is triggered only after the relevant third party, Credit Derivatives Determinations Committee, determines that a credit event has occurred.

We use purchased credit default swaps to mitigate credit risk in our investment portfolio. Generally, we purchase credit protection by entering into credit default swaps referencing the issuers of specific assets we own. In certain cases, basis risk exists between these credit default swaps and the specific assets we own. For example, we may purchase credit protection on a macro basis to reduce exposure to specific industries or other portfolio concentrations. In such instances, the referenced entities and obligations under the credit default swaps may not be identical to the individual obligors or securities in our investment portfolio. In addition, our purchased credit default swaps may have shorter tenors than the underlying investments they are hedging, which gives us more flexibility in managing our credit exposures. We believe that our purchased credit default swaps serve as effective economic hedges of our credit exposure.

See “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures — Hedging Activities” included in the ~~2020~~2021 Annual Report for more information about our use of derivatives by major hedge program.

Fair Value Hierarchy

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy.

The valuation of Level 3 derivatives involves the use of significant unobservable inputs and generally requires a higher degree of management judgment or estimation than the valuations of Level 1 and Level 2 derivatives. Although Level 3 inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such instruments and are considered appropriate given the circumstances. The use of different inputs or methodologies could have a material effect on the estimated fair value of Level 3 derivatives and could materially affect net income.

Derivatives categorized as Level 3 at ~~September~~June 30, ~~2021~~2022 include: interest rate forwards with maturities which extend beyond the observable portion of the yield curve; ~~interest rate total return swaps with unobservable repurchase rates;~~ interest rate caps with unobservable volatility inputs; foreign currency swaps and forwards with certain unobservable inputs, including the unobservable portion of the yield curve; and credit default swaps priced using unobservable credit spreads, or that are priced through independent broker ~~quotations; and equity index options with unobservable correlation inputs.~~quotations. At ~~September~~June 30, ~~2021,~~2022, less than 1% of the estimated fair value of our derivatives was priced through independent broker quotations.

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for a rollforward of the fair value measurements for derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

The gain (loss) on Level 3 derivatives primarily relates to foreign currency derivatives that are valued using an unobservable portion of the swap yield curves and interest rate total return swaps with observable interest rates. Other significant inputs include the unobservable interest rate which extends beyond the observable portion of the yield curve. We validate the reasonableness of these inputs by valuing the positions using internal models and comparing the results to broker quotations.

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~~The gain (loss) on Level 3 derivatives, percentage of gain (loss) attributable to observable and unobservable inputs, and the primary drivers of observable gain (loss) are summarized as follows:~~

Three Months
Ended
September 30, 2021 Nine Months
Ended
September 30, 2021
Gain (loss) recognized in net income (loss) (in millions) ($279) ($490)
Approximate percentage of gain (loss) attributable to observable inputs —% 23%
Primary drivers of observable gain (loss) N/A Increases in interest rates on interest
rate total return swaps and increases in certain equity index levels on equity derivatives.
Approximate percentage of gain (loss) attributable to unobservable inputs 100% 77%

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates — Derivatives” included in the ~~2020~~2021 Annual Report for further information on the estimates and assumptions that affect derivatives.

Credit Risk

See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for information about how we manage credit risk related to derivatives and for the estimated fair value of our net derivative assets and net derivative liabilities after the application of master netting agreements and collateral.

Our policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. This policy applies to the recognition of derivatives on the consolidated balance sheets, and does not affect our legal right of offset.

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Credit Derivatives

The following table presents the gross notional amount and estimated fair value of credit default swaps at:


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
Credit Default Swaps	Credit Default Swaps	Gross Notional Amount		Estimated Fair Value		Gross Notional Amount		Estimated Fair Value		Credit Default Swaps	Gross Notional Amount		Estimated Fair Value		Gross Notional Amount		Estimated Fair Value
		(In millions)									(In millions)
Purchased	Purchased	$	3,042	$	(96)	$	2,978	$	(112)	Purchased	$	2,993	$	(56)	$	3,042	$	(100)
Written	Written	8,739		175		9,609		196		Written	11,786		(49)		8,626		165
Total	Total	$	11,781	$	79	$	12,587	$	84	Total	$	14,779	$	(105)	$	11,668	$	65

The following table presents the gross gains, gross losses and net gains (losses) recognized in net derivative gains (losses) for credit default swaps as follows:


		Three Months Ended September 30,												Nine Months Ended September 30,													Three Months Ended June 30,												Six Months Ended June 30,
		2021						2020						2021						2020							2022						2021						2022						2021
Credit Default Swaps	Credit Default Swaps	Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Credit Default Swaps	Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)		Gross Gains		Gross Losses		Net Gains (Losses)
		(In millions)																								(In millions)
Purchased (1)	Purchased (1)	$	5	$	(1)	$	4	$	—	$	(8)	$	(8)	$	21	$	(5)	$	16	$	37	$	(33)	$	4	Purchased (1)	$	45	$	2	$	47	$	(4)	$	(3)	$	(7)	$	94	$	(2)	$	92	$	16	$	(4)	$	12
Written (1)	Written (1)	2		(4)		(2)		2		(11)		(9)		44		(11)		33		31		(189)		(158)		Written (1)	(20)		(175)		(195)		30		—		30		2		(247)		(245)		42		(7)		35
Total	Total	$	7	$	(5)	$	2	$	2	$	(19)	$	(17)	$	65	$	(16)	$	49	$	68	$	(222)	$	(154)	Total	$	25	$	(173)	$	(148)	$	26	$	(3)	$	23	$	96	$	(249)	$	(153)	$	58	$	(11)	$	47

__________________

(1)Gains (losses) do not include earned income (expense) on credit default swaps.

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The ~~favorable~~unfavorable change in net gains (losses) on written credit default swaps of ~~$191~~$280 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was due to certain credit spreads on certain credit default swaps used as replications ~~narrowing~~widening in the current period as compared to narrowing in the prior period. The favorable change in net gains (losses) on purchased credit defaults swaps of $80 million for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was due to certain credit spreads on certain credit default swaps widening in the current period as compared to narrowing in the prior period.

The maximum amount at risk related to our written credit default swaps is equal to the corresponding gross notional amount. In a replication transaction, we pair an asset on our balance sheet with a written credit default swap to synthetically replicate a corporate bond, a core asset holding of life insurance companies. Replications are entered into in accordance with the guidelines approved by state insurance regulators and the NAIC and are an important tool in managing the overall corporate credit risk within the Company. In order to match our long-dated insurance liabilities, we seek to buy long-dated corporate bonds. In some instances, these may not be readily available in the market, or they may be issued by corporations to which we already have significant corporate credit exposure. For example, by purchasing Treasury bonds (or other high-quality assets) and associating them with written credit default swaps on the desired corporate credit name, we can replicate the desired bond exposures and meet our ALM needs. In addition, given the shorter tenor of the credit default swaps (generally five-year tenors) versus a long dated corporate bond, we have more flexibility in managing our credit exposures.

Collateral for Derivatives

We enter into derivatives to manage various risks relating to our ongoing business operations. We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not reflected on our interim condensed consolidated balance sheets. The amounts of this non-cash collateral were $977 million and $1.1 billion, at estimated fair value, at June 30, 2022 and December 31, 2021, respectively. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Pledged Collateral” and Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for information regarding the earned income on and the gross notional amount, estimated fair value of assets and liabilities and primary underlying risk exposure of our derivatives.

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Embedded Derivatives

See Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements for information about embedded derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy and a rollforward of the fair value measurements for embedded derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.

See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for information about the nonperformance risk adjustment included in the valuation of guaranteed minimum benefits accounted for as embedded derivatives.

~~Off-Balance Sheet Arrangements~~Policyholder Liabilities

We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations or to provide for future annuity payments. Amounts for actuarial liabilities are computed and reported on the interim condensed consolidated financial statements in conformity with GAAP. For more details on Policyholder Liabilities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” included in the 2021 Annual Report.

We periodically review our estimates of actuarial liabilities for future benefits and compare them with our actual experience. We revise estimates, to the extent permitted or required under GAAP, if we determine that future expected experience differs from assumptions used in the development of actuarial liabilities. We charge or credit changes in our liabilities to expenses in the period the liabilities are established or re-estimated. If the liabilities originally established for future benefit payments prove inadequate, we must increase them. Such an increase could adversely affect our earnings and have a material adverse effect on our business, results of operations and financial condition.

See “Business — Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy Analysis” and “Risk Factors — Business Risks” included in the 2021 Annual Report for further information regarding required analyses of the adequacy of statutory reserves of our insurance operations.

The following discussions on future policy benefits and policyholder account balances should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Industry Trends — Impact of Market Interest Rates” included in the 2021 Annual Report, as amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q and “— Variable Annuity Guarantees.” See also Notes 1 and 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for additional information.

Future Policy Benefits

We establish liabilities for amounts payable under insurance policies. A discussion of future policy benefits by segment (as well as Corporate & Other) follows.

U.S.

Amounts payable under insurance policies for this segment are comprised of group insurance and annuities. For group insurance, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium policy provisions, liabilities for survivor income benefit insurance, active life policies and premium stabilization and other contingency liabilities held under life insurance contracts. For group annuity contracts, future policyholder benefits are primarily related to payout annuities, including pension risk transfers, structured settlement annuities and institutional income annuities. There is no interest rate crediting flexibility on these liabilities.

Asia

Future policy benefits for this segment are held primarily for traditional life, endowment, annuity and accident & health contracts. They are also held for total return pass-through provisions included in certain universal life and savings products. They include certain liabilities for variable annuity and variable life guarantees of minimum death benefits, and longevity guarantees. Factors impacting these liabilities include sustained periods of lower than expected yields, lower than expected asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and actual mortality or morbidity resulting in higher than expected benefit payments.

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Latin America

Future policy benefit liabilities for this segment are held primarily for immediate annuities, traditional life contracts and total return pass-through provisions included in certain universal life and savings products. There is no interest rate crediting flexibility on the immediate annuity and traditional life liabilities. Other factors impacting these liabilities are actual mortality resulting in higher than expected benefit payments and actual lapses resulting in lower than expected income.

EMEA

Future policy benefits for this segment include unearned premium reserves for group life and medical and credit insurance contracts. Future policy benefits are also held for traditional life, endowment and annuity contracts with significant mortality risk and accident & health contracts. Factors impacting these liabilities include lower than expected asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and actual mortality or morbidity resulting in higher than expected benefit payments.

MetLife Holdings

Future policy benefits for the life insurance business are comprised mainly of liabilities for traditional life insurance contracts. For the annuities business, future policy benefits are comprised mainly of liabilities for life-contingent income annuities and liabilities for the variable annuity guaranteed minimum benefits that are accounted for as insurance. For the long-term care business, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium policy provisions, and active life policies. In addition, for our other products, future policyholder benefits related to the reinsurance of our former Japan joint venture are comprised of liabilities for the variable annuity guaranteed minimum benefits that are accounted for as insurance.

Corporate & Other

Future policy benefits primarily include liabilities for other reinsurance business.

Policyholder Account Balances

Policyholder account balances are generally equal to the account value, which includes accrued interest credited, but excludes the impact of any applicable charge that may be incurred upon surrender. A discussion of policyholder account balances by segment follows.

U.S.

Policyholder account balances in this segment are comprised of funding agreements, retained asset accounts, universal life policies, the fixed account of variable life insurance policies and specialized life insurance products for benefit programs.

Group Benefits

Policyholder account balances in this business are held for retained asset accounts, universal life policies, the fixed account of variable life insurance policies and specialized life insurance products for benefit programs. Policyholder account balances are credited interest at a rate we determine, which is influenced by current market rates. Most of these policyholder account balances have minimum credited rate guarantees.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Group Benefits:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	5,564	$	5,435
Equal to or greater than 2% but less than 4%	$	1,531	$	1,489
Equal to or greater than 4%	$	817	$	786

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Retirement and Income Solutions

Policyholder account balances in this business are held largely for investment-type products, mainly funding agreements, as well as postretirement benefits and corporate-owned life insurance to fund non-qualified benefit programs for executives. Interest crediting rates vary by type of contract and can be fixed or variable. Variable interest crediting rates are generally tied to an external index, most commonly (1-month or 3-month) LIBOR or Secured Overnight Financing Rate. We guarantee payment of interest and return of principal at the contractual maturity date.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for RIS:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	653	$	—
Equal to or greater than 2% but less than 4%	$	817	$	188
Equal to or greater than 4%	$	4,601	$	4,346

Asia

Policyholder account balances in this segment are held largely for fixed income retirement and savings plans, fixed deferred annuities, interest sensitive whole life products, universal life and, to a lesser degree, liability amounts for Unit-linked investments that do not meet the GAAP definition of separate accounts. Also included are certain liabilities for retirement and savings products sold in certain countries in Asia that generally are sold with minimum credited rate guarantees. Liabilities for guarantees on certain variable annuities in Asia are accounted for as embedded derivatives and recorded at estimated fair value and are also included within policyholder account balances. Most of these policyholder account balances have minimum credited rate guarantees. Liabilities for Unit-linked investments are impacted by changes in the fair value of the associated underlying investments, as the return on assets is generally passed directly to the policyholder.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Asia:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Annuities:
Greater than 0% but less than 2%	$	30,330	$	1,706
Equal to or greater than 2% but less than 4%	$	920	$	414
Equal to or greater than 4%	$	1	$	1
Life & Other:
Greater than 0% but less than 2%	$	11,414	$	10,700
Equal to or greater than 2% but less than 4%	$	34,371	$	21,276
Equal to or greater than 4%	$	277	$	277

Latin America

Policyholder account balances in this segment are held largely for investment-type products, universal life products, deferred annuities and Unit-linked investments that do not meet the GAAP definition of separate accounts. Liabilities for Unit-linked investments are impacted by changes in the fair value of the associated investments, as the return on assets is generally passed directly to the policyholder. Many of the other liabilities have minimum credited rate guarantees.

EMEA

Policyholder account balances in this segment are held mostly for universal life, deferred annuities, pension products, and Unit-linked investments that do not meet the GAAP definition of separate accounts. They are also held for endowment products without significant mortality risk. Most of these policyholder account balances have minimum credited rate guarantees. Liabilities for Unit-linked investments are impacted by changes in the fair value of the associated investments, as the return on assets is generally passed directly to the policyholder.

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MetLife Holdings

Life policyholder account balances in this segment are held for retained asset accounts, universal life policies, the fixed account of variable life insurance policies, and funding agreements. For annuities, policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable annuities, non-life contingent income annuities, and embedded derivatives related to variable annuity guarantees. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. Most of these policyholder account balances have minimum credited rate guarantees. Additionally, for our other products, policyholder account balances are held for variable annuity guarantees assumed from a former operating joint venture in Japan that are accounted for as embedded derivatives.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the MetLife Holdings segment:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	1,098	$	1,069
Equal to or greater than 2% but less than 4%	$	17,108	$	15,675
Equal to or greater than 4%	$	7,248	$	6,645

Variable Annuity Guarantees

We issue, directly and through assumed business, certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets. See Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as Notes 1 and 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for additional information.

Certain guarantees, including portions thereof, have insurance liabilities established that are included in future policy benefits. Guarantees accounted for in this manner include GMDBs, the life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”), elective guaranteed minimum income benefit (“GMIB”) annuitizations, and the life contingent portion of GMIBs that require annuitization when the account balance goes to zero. These liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future benefits exceed those previously projected or when current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the current estimates of future benefits are lower than those previously projected or when current estimates of future assessments exceed those previously projected. At the end of each reporting period, we update the actual amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current period charge or increase to earnings.

Certain guarantees, including portions thereof, accounted for as embedded derivatives, are recorded at estimated fair value and included in policyholder account balances. Guarantees accounted for as embedded derivatives include guaranteed minimum accumulation benefits (“GMABs”), the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs. The estimated fair values of guarantees accounted for as embedded derivatives are determined based on the present value of projected future benefits minus the present value of projected future fees. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk-neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital market scenarios to determine an economic liability. The reported estimated fair value is then determined by taking the present value of these risk-free generated cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin. For more information on the determination of estimated fair value, see Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements.

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The table below presents the carrying value for guarantees at:


	Future Policy Benefits				Policyholder Account Balances
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
	(In millions)
Asia
GMDB	$	4	$	4	$	—	$	—
GMAB	—		—		10		14
GMWB	28		32		75		107
EMEA
GMDB	5		3		—		—
GMAB	—		—		15		6
GMWB	28		19		(37)		(58)
MetLife Holdings
GMDB	542		561		—		—
GMIB	1,054		1,029		189		180
GMAB	—		—		(1)		—
GMWB	200		174		163		173
Total	$	1,861	$	1,822	$	414	$	422

The carrying amounts for guarantees included in policyholder account balances above include nonperformance risk adjustments of $124 million and $120 million at June 30, 2022 and December 31, 2021, respectively. These nonperformance risk adjustments represent the impact of including a credit spread when discounting the underlying risk-neutral cash flows to determine the estimated fair values. The nonperformance risk adjustment does not have an economic impact on us as it cannot be monetized given the nature of these policyholder liabilities. The change in valuation arising from the nonperformance risk adjustment is not hedged.

The carrying values of these guarantees can change significantly during periods of sizable and sustained shifts in equity market performance, equity volatility, interest rates or foreign currency exchange rates. Carrying values are also impacted by our assumptions around mortality, separate account returns and policyholder behavior, including lapse rates.

As discussed below, we use a combination of product design, hedging strategies, reinsurance, and other risk management actions to mitigate the risks related to these benefits. Within each type of guarantee, there is a range of product offerings reflecting the changing nature of these products over time. Changes in product features and terms are in part driven by customer demand but, more importantly, reflect our risk management practices of continuously evaluating the guaranteed benefits and their associated asset-liability matching. We continue to diversify the concentration of income benefits in our portfolio by focusing on withdrawal benefits, variable annuities without living benefits and index-linked annuities.

The sections below provide further detail by total account value for certain of our most popular guarantees. Total account values include amounts not reported on the interim condensed consolidated balance sheets from assumed business, Unit-linked investments that do not qualify for presentation as separate account assets, and amounts included in our general account. The total account values and the net amounts at risk include direct and assumed business, but exclude offsets from hedging or ceded reinsurance, if any.

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GMDBs

We offer a range of GMDBs to our contractholders. The table below presents GMDBs, by benefit type, at June 30, 2022:


	Total Account Value (1)
	Asia & EMEA		MetLife Holdings
	(In millions)
Return of premium or five to seven year step-up	$	5,835	$	36,544
Annual step-up	—		2,426
Roll-up and step-up combination	—		4,187
Total	$	5,835	$	43,157

__________________

(1)Total account value excludes $524 million for contracts with no GMDBs. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantees are not mutually exclusive.

Based on total account value, less than 18% of our GMDBs included enhanced death benefits such as the annual step-up or roll-up and step-up combination products at June 30, 2022.

Living Benefit Guarantees

The table below presents our living benefit guarantees based on total account values at June 30, 2022:


	Total Account Value (1)
	Asia & EMEA		MetLife Holdings
	(In millions)
GMIB	$	—	$	15,503
GMWB - non-life contingent (2)	730		1,547
GMWB - life-contingent	2,361		6,489
GMAB	1,184		109
Total	$	4,275	$	23,648

__________________

(1)Total account value excludes $21.6 billion for contracts with no living benefit guarantees. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantee amounts are not mutually exclusive.

(2)The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of $729 million with a guarantee at annuitization.

In terms of total account value, GMIBs are our most significant living benefit guarantee. Our primary risk management strategy for our GMIB products is our derivatives hedging program as discussed below. Additionally, we have engaged in certain reinsurance agreements covering some of our GMIB business. As part of our overall risk management approach for living benefit guarantees, we continually monitor the reinsurance markets for the right opportunity to purchase additional coverage for our GMIB business. We stopped selling GMIBs in February 2016.

The table below presents our GMIB associated total account values, by their guaranteed payout basis, at June 30, 2022:


	Total Account Value
	(In millions)
7-year setback, 2.5% interest rate	$	4,620
7-year setback, 1.5% interest rate	936
10-year setback, 1.5% interest rate	3,099
10-year mortality projection, 10-year setback, 1.0% interest rate	5,818
10-year mortality projection, 10-year setback, 0.5% interest rate	1,030
	$	15,503

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The annuitization interest rates on GMIBs have been decreased from 2.5% to 0.5% over time, partially in response to the low interest rate environment in effect at the time the GMIBs were sold, accompanied by an increase in the setback period from seven years to 10 years and the introduction of a 10-year mortality projection.

Additionally, 34% of the $15.5 billion of GMIB total account value has been invested in managed volatility funds as of June 30, 2022. These funds seek to manage volatility by adjusting the fund holdings within certain guidelines based on capital market movements. Such activity reduces the overall risk of the underlying funds while maintaining their growth opportunities. These risk mitigation techniques reduce or eliminate the need for us to manage the funds’ volatility through hedging or reinsurance.

Our GMIB products typically have a waiting period of 10 years to be eligible for annuitization. As of June 30, 2022, only 40% of our contracts with GMIBs were eligible for annuitization. The remaining contracts are not eligible for annuitization for an average of three years.

Once eligible for annuitization, contractholders would be expected to annuitize only if their contracts were in-the-money. We calculate in-the-moneyness with respect to GMIBs consistent with net amount at risk as discussed in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements, by comparing the contractholders’ income benefits based on total account values and current annuity rates versus the guaranteed income benefits. The net amount at risk was $616 million at June 30, 2022, of which $569 million was related to GMIBs. For those contracts with GMIB, the table below presents details of contracts that are in-the-money and out-of-the-money at June 30, 2022:


	In-the- Moneyness	Total Account Value		% of Total
		(In millions)
In-the-money	30% or greater	$	533	3	%
	20% to less than 30%	320		2	%
	10% to less than 20%	615		4	%
	0% to less than 10%	1,375		9	%
		2,843
Out-of-the-money	-10% to 0%	2,966		19	%
	-20% to less than -10%	3,196		21	%
	Greater than -20%	6,498		42	%
		12,660
Total GMIBs		$	15,503

Derivatives Hedging Variable Annuity Guarantees

Our risk mitigating hedging strategy uses various over-the-counter and exchange traded derivatives. The table below presents the gross notional amount, estimated fair value and primary underlying risk exposure of the derivatives hedging our variable annuity guarantees:


	Instrument Type	June 30, 2022						December 31, 2021
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	$	7,341	$	54	$	561	$	8,663	$	52	$	75
	Interest rate futures	1,071		1		7		1,087		3		—
	Interest rate options	50		4		—		100		1		—
Foreign currency exchange rate	Foreign currency forwards	969		3		24		1,149		4		13


Equity market	Equity futures	2,655		29		7		3,641		11		5
	Equity index options	4,110		255		310		4,161		513		362
	Equity variance swaps	692		17		12		699		17		13
	Equity total return swaps	2,798		198		—		2,763		11		44
	Total	$	19,686	$	561	$	921	$	22,263	$	612	$	512

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The change in estimated fair values of our derivatives is recorded in policyholder benefits and claims if such derivatives are hedging guarantees included in future policy benefits, and in net derivative gains (losses) if such derivatives are hedging guarantees included in policyholder account balances.

Our hedging strategy involves the significant use of static longer-term derivative instruments to avoid the need to execute transactions during periods of market disruption or higher volatility. We continually monitor the capital markets for opportunities to adjust our liability coverage, as appropriate. Futures are also used to dynamically adjust the daily coverage levels as markets and liability exposures fluctuate.

We remain liable for the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or unwilling to pay. Certain of our reinsurance agreements and all derivative positions are collateralized and derivatives positions are subject to master netting agreements, both of which significantly reduce the exposure to counterparty risk. In addition, we are subject to the risk that hedging and other risk management actions prove ineffective or that unanticipated policyholder behavior or mortality, combined with adverse market events, produces economic losses beyond the scope of the risk management techniques employed.

Liquidity and Capital Resources

Overview

Our business and results of operations are materially affected by conditions in the global capital markets and the economy generally due to our market presence in numerous countries, large investment portfolio and the sensitivity of our insurance liabilities and derivatives to changing market factors. Changing conditions in the global capital markets and the economy may affect our financing costs and market interest for our debt or equity securities. For further information regarding market factors that could affect our ability to meet liquidity and capital needs, see “— Industry Trends” and “— Investments — Current Environment.”

Liquidity Management

Based upon the strength of our franchise, diversification of our businesses, strong financial fundamentals and the substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously monitor and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well as changing needs and opportunities.

Short-term Liquidity

We maintain a substantial short-term liquidity position, which was $12.6 billion and $12.4 billion at June 30, 2022 and December 31, 2021, respectively. Short-term liquidity includes cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed, including amounts received in connection with securities lending, repurchase agreements, derivatives, and secured borrowings, as well as amounts held in the closed block.

Liquid Assets

An integral part of our liquidity management includes managing our level of liquid assets, which was $179.3 billion and $223.0 billion at June 30, 2022 and December 31, 2021, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with securities lending, repurchase agreements, derivatives, regulatory deposits, the collateral financing arrangement, funding agreements and secured borrowings, as well as amounts held in the closed block.

Capital Management

We have established several senior management committees as part of our capital management process. These committees, including the Capital Management Committee and the Enterprise Risk Committee (“ERC”), regularly review actual and projected capital levels (under a variety of scenarios including stress scenarios) and our annual capital plan in accordance with our capital policy. The Capital Management Committee is comprised of members of senior management, including MetLife, Inc.’s Chief Financial Officer (“CFO”), Treasurer, and Chief Risk Officer (“CRO”). The ERC is also comprised of members of senior management, including MetLife, Inc.’s CFO, CRO and Chief Investment Officer.

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MetLife, Inc.’s Board of Directors (“Board of Directors”) and senior management are directly involved in the development and maintenance of our capital policy. The capital policy sets forth, among other things, minimum and target capital levels and the governance of the capital management process. All capital actions, including proposed changes to the annual capital plan, capital targets or capital policy, are reviewed by the Finance and Risk Committee of the Board of Directors prior to obtaining full Board of Directors approval. The Board of Directors approves the capital policy and the annual capital plan and authorizes capital actions, as required.

See “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for information regarding restrictions on payment of dividends and stock repurchases. See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases” for information regarding MetLife, Inc.’s common stock repurchase authorizations.

The Company

Liquidity

Liquidity refers to the ability to generate adequate amounts of cash to meet our needs. In the event of significant cash requirements beyond anticipated liquidity needs, we have various alternatives available depending on market conditions and the amount and timing of the liquidity need. These available alternatives include cash flows from operations, sales of liquid assets, global funding sources including commercial paper and various credit and committed facilities. See “Management’s Discussion and Analysis of Financial Condition — Liquidity and Capital Resources — The Company — Liquidity” included in the 2021 Annual Report.

Capital

We manage our capital position to maintain our financial strength and credit ratings. Our capital position is supported by our ability to generate strong cash flows within our operating companies and borrow funds at competitive rates, as well as by our demonstrated ability to raise additional capital to meet operating and growth needs despite adverse market and economic conditions.

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Summary of the Company’s Primary Sources and Uses of Liquidity and Capital

Our primary sources and uses of liquidity and capital are summarized as follows:


	Six Months Ended June 30,
	2022		2021
	(In millions)
Sources:
Operating activities, net	$	6,392	$	3,750
Investing activities, net	1,689		—
Net change in policyholder account balances	3,681		3,870
Net change in payables for collateral under securities loaned and other transactions	—		506
Long-term debt issued	6		15
Financing element on certain derivative instruments and other derivative related transactions, net	121		318
Other, net	—		58
Total sources	11,889		8,517
Uses:
Investing activities, net	—		45
Net change in payables for collateral under securities loaned and other transactions	7,809		—
Cash paid for other transactions with tenors greater than three months	—		100
Long-term debt repaid	23		28
Collateral financing arrangement repaid	25		27
Treasury stock acquired in connection with share repurchases	2,056		2,112
Redemption of preferred stock	—		494
Preferred stock redemption premium	—		6
Dividends on preferred stock	92		103
Dividends on common stock	805		829
Other, net	180		—
Effect of change in foreign currency exchange rates on cash and cash equivalents	467		192
Total uses	11,457		3,936
Net increase (decrease) in cash and cash equivalents	$	432	$	4,581

Cash Flows from Operations

The principal cash inflows from our insurance activities come from insurance premiums, net investment income, annuity considerations and deposit funds. The principal cash outflows are the result of various life insurance, annuity and pension products, operating expenses and income tax, as well as interest expense.

Cash Flows from Investments

The principal cash inflows from our investment activities come from repayments of principal, proceeds from maturities and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. In addition, cash inflows and outflows relate to sales and purchases of businesses. We typically have a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with our ALM discipline to fund insurance liabilities. We closely monitor and manage these risks through our comprehensive investment risk management process.

Cash Flows from Financing

The principal cash inflows from our financing activities come from issuances of debt and other securities, deposits of funds associated with policyholder account balances and lending of securities. The principal cash outflows come from repayments of debt and the collateral financing arrangement, payments of dividends on and repurchases or redemptions of MetLife, Inc.’s securities, withdrawals associated with policyholder account balances and the return of securities on loan.

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Liquidity and Capital Sources

In addition to the general description of liquidity and capital sources in “— Summary of the Company’s Primary Sources and Uses of Liquidity and Capital,” the Company’s primary sources of liquidity and capital are set forth below.

Global Funding Sources

Liquidity is provided by a variety of global funding sources, including funding agreements, credit and committed facilities and commercial paper. Capital is provided by a variety of global funding sources, including short-term and long-term debt, the collateral financing arrangement, junior subordinated debt securities, preferred securities, equity securities and equity-linked securities. MetLife, Inc. maintains a shelf registration statement with the SEC that permits the issuance of public debt, equity and hybrid securities. As a “Well-Known Seasoned Issuer” under SEC rules, MetLife, Inc.’s shelf registration statement provides for automatic effectiveness upon filing and has no stated issuance capacity. The diversity of our global funding sources enhances our funding flexibility, limits dependence on any one market or source of funds and generally lowers the cost of funds. Our primary global funding sources include:

Preferred Stock

See Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Common Stock

For the six months ended June 30, 2022 and 2021, MetLife, Inc. issued 2,980,105 and 4,317,294 new shares of its common stock, respectively, for $145 million and $174 million, respectively, to satisfy various stock option exercises and other stock-based awards.

Commercial Paper, Reported in Short-term Debt

Policyholder Account Balances

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Sources — Global Funding Sources — Policyholder Account Balances” included in the 2021 Annual Report for information regarding the Company’s contractual obligations related to future policy benefits and policyholder account balances.

Federal Home Loan Bank Funding Agreements, Reported in Policyholder Account Balances

Certain of our U.S. insurance subsidiaries are members of a regional Federal Home Loan Bank (“FHLB”). For the six months ended June 30, 2022 and 2021, we issued $17.6 billion and $18.2 billion, respectively, and repaid $17.3 billion and $18.2 billion, respectively, of funding agreements with certain regional FHLBs. At June 30, 2022 and December 31, 2021, total obligations outstanding under these funding agreements were $16.0 billion and $15.8 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances

We issue fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. For the six months ended June 30, 2022 and 2021, we issued $27.3 billion and $22.0 billion, respectively, and repaid $25.4 billion and $20.7 billion, respectively, under such funding agreements. At June 30, 2022 and December 31, 2021, total obligations outstanding under these funding agreements were $40.7 billion and $39.5 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

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Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances

We have issued funding agreements to a subsidiary of the Federal Agricultural Mortgage Corporation which are secured by a pledge of certain eligible agricultural mortgage loans. For the six months ended June 30, 2022 and 2021, we issued $350 million and $225 million, respectively, and repaid $350 million and $350 million, respectively, under such funding agreements. At both June 30, 2022 and December 31, 2021, total obligations outstanding under these funding agreements were $2.1 billion. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Debt Issuances

See Note 15 of the Notes to the Interim Condensed Consolidated Financial Statements for information about senior notes issued by MetLife, Inc. subsequent to June 30, 2022.

~~Credit~~Policyholder Account Balances

U.S.

Policyholder account balances in this segment are comprised of funding agreements, retained asset accounts, universal life policies, the fixed account of variable life insurance policies and ~~Committed Facilities~~specialized life insurance products for benefit programs.

~~We maintain an unsecured revolving credit facility,~~Group Benefits

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Group Benefits:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	5,564	$	5,435
Equal to or greater than 2% but less than 4%	$	1,531	$	1,489
Equal to or greater than 4%	$	817	$	786

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Retirement and Income Solutions

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for RIS:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	653	$	—
Equal to or greater than 2% but less than 4%	$	817	$	188
Equal to or greater than 4%	$	4,601	$	4,346

Asia

Policyholder account balances in this segment are held largely for fixed income retirement and savings plans, fixed deferred annuities, interest sensitive whole life products, universal life and, to a lesser degree, liability amounts for Unit-linked investments that do not meet the GAAP definition of separate accounts. Also included are certain ~~committed facilities,~~liabilities for retirement and savings products sold in certain countries in Asia that generally are sold with ~~various financial institutions. See “— Liquidity~~minimum credited rate guarantees. Liabilities for guarantees on certain variable annuities in Asia are accounted for as embedded derivatives and ~~Capital Resources — The Company — Liquidity~~recorded at estimated fair value and ~~Capital Sources — Global Funding Sources — Credit and Committed Facilities”~~are also included within policyholder account balances. Most of these policyholder account balances have minimum credited rate guarantees. Liabilities for ~~descriptions of such arrangements. For~~Unit-linked investments are impacted by changes in the ~~classification of expenses on such credit and committed facilities and the nature~~fair value of the associated ~~liability~~underlying investments, as the return on assets is generally passed directly to the policyholder.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for ~~letters~~Asia:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Annuities:
Greater than 0% but less than 2%	$	30,330	$	1,706
Equal to or greater than 2% but less than 4%	$	920	$	414
Equal to or greater than 4%	$	1	$	1
Life & Other:
Greater than 0% but less than 2%	$	11,414	$	10,700
Equal to or greater than 2% but less than 4%	$	34,371	$	21,276
Equal to or greater than 4%	$	277	$	277

Latin America

Policyholder account balances in this segment are held largely for investment-type products, universal life products, deferred annuities and Unit-linked investments that do not meet the GAAP definition of ~~credit issued and drawdowns on these credit and committed facilities, see Note 13~~separate accounts. Liabilities for Unit-linked investments are impacted by changes in the fair value of the ~~Notes~~associated investments, as the return on assets is generally passed directly to the ~~Consolidated Financial Statements included~~policyholder. Many of the other liabilities have minimum credited rate guarantees.

EMEA

Policyholder account balances in this segment are held mostly for universal life, deferred annuities, pension products, and Unit-linked investments that do not meet the GAAP definition of separate accounts. They are also held for endowment products without significant mortality risk. Most of these policyholder account balances have minimum credited rate guarantees. Liabilities for Unit-linked investments are impacted by changes in the ~~2020 Annual Report.~~fair value of the associated investments, as the return on assets is generally passed directly to the policyholder.

~~Collateral~~

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MetLife Holdings

Life policyholder account balances in this segment are held for ~~Securities Lending, Repurchase Agreements, Third-Party Custodian Administered Repurchase Programs~~retained asset accounts, universal life policies, the fixed account of variable life insurance policies, and ~~Derivatives~~funding agreements. For annuities, policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable annuities, non-life contingent income annuities, and embedded derivatives related to variable annuity guarantees. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums. Most of these policyholder account balances have minimum credited rate guarantees. Additionally, for our other products, policyholder account balances are held for variable annuity guarantees assumed from a former operating joint venture in Japan that are accounted for as embedded derivatives.

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the MetLife Holdings segment:


	June 30, 2022
Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
	(In millions)
Greater than 0% but less than 2%	$	1,098	$	1,069
Equal to or greater than 2% but less than 4%	$	17,108	$	15,675
Equal to or greater than 4%	$	7,248	$	6,645

Variable Annuity Guarantees

We ~~participate in securities lending transactions, repurchase agreements~~issue, directly and ~~third-party custodian administered repurchase programs in~~through assumed business, certain variable annuity products with guaranteed minimum benefits that provide the ~~normal course of business for~~policyholder a minimum return based on their initial deposit (i.e., the ~~purpose of enhancing~~benefit base) less withdrawals. In some cases, the ~~total return on our investment portfolio.~~benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets. See Note 64 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as ~~“Summary of Significant Accounting Policies — Investments — Securities Lending, Repurchase Agreements~~Notes 1 and ~~FHLB of Boston Advance Agreements” in Note 1~~4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for ~~further discussion~~additional information.

Certain guarantees, including portions thereof, have insurance liabilities established that are included in future policy benefits. Guarantees accounted for in this manner include GMDBs, the life-contingent portion of ~~our securities lending transactions and repurchase agreements, the classification of revenues and expenses,~~guaranteed minimum withdrawal benefits (“GMWBs”), elective guaranteed minimum income benefit (“GMIB”) annuitizations, and the ~~nature~~life contingent portion of GMIBs that require annuitization when the account balance goes to zero. These liabilities are accrued over the life of the ~~secured financing arrangements~~contract in proportion to actual and ~~associated liabilities.~~future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future benefits exceed those previously projected or when current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the current estimates of future benefits are lower than those previously projected or when current estimates of future assessments exceed those previously projected. At the end of each reporting period, we update the actual amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current period charge or increase to earnings.

Third-party custodian administered repurchase programs: We loan certain of our fixed maturity securities AFS to unaffiliated financial institutions and, in exchange, non-cash collateral is put on deposit by the unaffiliated financial institutions on our behalf with third-party custodians. The estimated fair value of securities loaned in connection with these transactions was ~~$59 million~~ ~~and $19 million at September 30, 2021 and December 31, 2020, respectively. Non-cash collateral on deposit with third-party custodians held on our behalf was~~ ~~$64 million~~ ~~and $20 million,~~Certain guarantees, including portions thereof, accounted for as embedded derivatives, are recorded at estimated fair value and included in policyholder account balances. Guarantees accounted for as embedded derivatives include guaranteed minimum accumulation benefits (“GMABs”), the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs. The estimated fair values of guarantees accounted for as embedded derivatives are determined based on the present value of projected future benefits minus the present value of projected future fees. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk-neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital market scenarios to determine an economic liability. The reported estimated fair value is then determined by taking the present value of these risk-free generated cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin. For more information on the determination of estimated fair value, see Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements.

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The table below presents the carrying value for guarantees at:


	Future Policy Benefits				Policyholder Account Balances
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
	(In millions)
Asia
GMDB	$	4	$	4	$	—	$	—
GMAB	—		—		10		14
GMWB	28		32		75		107
EMEA
GMDB	5		3		—		—
GMAB	—		—		15		6
GMWB	28		19		(37)		(58)
MetLife Holdings
GMDB	542		561		—		—
GMIB	1,054		1,029		189		180
GMAB	—		—		(1)		—
GMWB	200		174		163		173
Total	$	1,861	$	1,822	$	414	$	422

The carrying amounts for guarantees included in policyholder account balances above include nonperformance risk adjustments of $124 million and $120 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020, respectively, which~~2021, respectively. These nonperformance risk adjustments represent the impact of including a credit spread when discounting the underlying risk-neutral cash flows to determine the estimated fair values. The nonperformance risk adjustment does not have an economic impact on us as it cannot be ~~sold or re-pledged, and which~~monetized given the nature of these policyholder liabilities. The change in valuation arising from the nonperformance risk adjustment is not ~~reflected~~hedged.

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GMDBs

We offer a range of GMDBs to our contractholders. The table below presents GMDBs, by benefit type, at June 30, 2022:


	Total Account Value (1)
	Asia & EMEA		MetLife Holdings
	(In millions)
Return of premium or five to seven year step-up	$	5,835	$	36,544
Annual step-up	—		2,426
Roll-up and step-up combination	—		4,187
Total	$	5,835	$	43,157

__________________

Based on total account value, less than 18% of our GMDBs included enhanced death benefits such as the annual step-up or roll-up and step-up combination products at June 30, 2022.

Living Benefit Guarantees

The table below presents our living benefit guarantees based on total account values at June 30, 2022:


	Total Account Value (1)
	Asia & EMEA		MetLife Holdings
	(In millions)
GMIB	$	—	$	15,503
GMWB - non-life contingent (2)	730		1,547
GMWB - life-contingent	2,361		6,489
GMAB	1,184		109
Total	$	4,275	$	23,648

__________________

(2)The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of $729 million with a guarantee at annuitization.

The table below presents our GMIB associated total account values, by their guaranteed payout basis, at June 30, 2022:


	Total Account Value
	(In millions)
7-year setback, 2.5% interest rate	$	4,620
7-year setback, 1.5% interest rate	936
10-year setback, 1.5% interest rate	3,099
10-year mortality projection, 10-year setback, 1.0% interest rate	5,818
10-year mortality projection, 10-year setback, 0.5% interest rate	1,030
	$	15,503

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	In-the- Moneyness	Total Account Value		% of Total
		(In millions)
In-the-money	30% or greater	$	533	3	%
	20% to less than 30%	320		2	%
	10% to less than 20%	615		4	%
	0% to less than 10%	1,375		9	%
		2,843
Out-of-the-money	-10% to 0%	2,966		19	%
	-20% to less than -10%	3,196		21	%
	Greater than -20%	6,498		42	%
		12,660
Total GMIBs		$	15,503

Derivatives Hedging Variable Annuity Guarantees


	Instrument Type	June 30, 2022						December 31, 2021
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	$	7,341	$	54	$	561	$	8,663	$	52	$	75
	Interest rate futures	1,071		1		7		1,087		3		—
	Interest rate options	50		4		—		100		1		—
Foreign currency exchange rate	Foreign currency forwards	969		3		24		1,149		4		13


Equity market	Equity futures	2,655		29		7		3,641		11		5
	Equity index options	4,110		255		310		4,161		513		362
	Equity variance swaps	692		17		12		699		17		13
	Equity total return swaps	2,798		198		—		2,763		11		44
	Total	$	19,686	$	561	$	921	$	22,263	$	612	$	512

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Liquidity and Capital Resources

Overview

Liquidity Management

Based upon the strength of our franchise, diversification of our businesses, strong financial ~~statements.~~fundamentals and the substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously monitor and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well as changing needs and opportunities.

Short-term Liquidity

Liquid Assets

Capital Management

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The Company

Liquidity

Capital

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Summary of the Company’s Primary Sources and Uses of Liquidity and Capital

Our primary sources and uses of liquidity and capital are summarized as follows:


	Six Months Ended June 30,
	2022		2021
	(In millions)
Sources:
Operating activities, net	$	6,392	$	3,750
Investing activities, net	1,689		—
Net change in policyholder account balances	3,681		3,870
Net change in payables for collateral under securities loaned and other transactions	—		506
Long-term debt issued	6		15
Financing element on certain derivative instruments and other derivative related transactions, net	121		318
Other, net	—		58
Total sources	11,889		8,517
Uses:
Investing activities, net	—		45
Net change in payables for collateral under securities loaned and other transactions	7,809		—
Cash paid for other transactions with tenors greater than three months	—		100
Long-term debt repaid	23		28
Collateral financing arrangement repaid	25		27
Treasury stock acquired in connection with share repurchases	2,056		2,112
Redemption of preferred stock	—		494
Preferred stock redemption premium	—		6
Dividends on preferred stock	92		103
Dividends on common stock	805		829
Other, net	180		—
Effect of change in foreign currency exchange rates on cash and cash equivalents	467		192
Total uses	11,457		3,936
Net increase (decrease) in cash and cash equivalents	$	432	$	4,581

Cash Flows from Operations

Cash Flows from Investments

Cash Flows from Financing

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Derivatives: We enter into derivatives to manage various risks relating to our ongoing business operations. We receive non-cash collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not reflected in our consolidated financial statements. The amount of this non-cash collateral was $1.3 billion and $1.7 billion, at estimated fair value, at September 30, 2021 and December 31, 2020, respectively. See “— Liquidity and Capital ~~Resources — The Company —~~Sources

In addition to the general description of liquidity and capital sources in “— Summary of the Company’s Primary Sources and Uses of Liquidity and Capital, ~~Uses — Pledged Collateral”~~” the Company’s primary sources of liquidity and capital are set forth below.

Global Funding Sources

Preferred Stock

See Note 716 of the Notes to the ~~Interim Condensed~~ Consolidated Financial Statements ~~for information regarding the earned income on and the gross notional amount, estimated fair value of assets and liabilities and primary underlying risk exposure of our derivatives.~~

~~InvestmentCommitments~~

~~We enter into the following commitments~~included in the ~~normal course~~2021 Annual Report.

Common Stock

For the six months ended June 30, 2022 and 2021, MetLife, Inc. issued 2,980,105 and 4,317,294 new shares of ~~business~~its common stock, respectively, for $145 million and $174 million, respectively, to satisfy various stock option exercises and other stock-based awards.

Commercial Paper, Reported in Short-term Debt

MetLife, Inc. and MetLife Funding, Inc. (“MetLife Funding”), a subsidiary of MLIC, each have a commercial paper program that is supported by our unsecured revolving credit facility (see “— Credit and Committed Facilities”). MetLife Funding raises cash from its commercial paper program and uses the ~~purpose~~proceeds to extend loans through MetLife Credit Corp., another subsidiary of ~~enhancing~~MLIC, to affiliates in order to enhance the ~~total return on our investment portfolio: mortgage loan commitments~~financial flexibility and ~~commitments to fund partnerships, bank credit facilities, bridge loans and private corporate bond investments. See Note 15~~liquidity of ~~the Notes to the Interim Condensed Consolidated Financial Statements for further information about~~ these investment commitments. See “Net Investment Income” and “Net Investment Gains (Losses)” in Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for information on the investment income, investment expense, gains and losses from such investments and the liability for credit loss for unfunded mortgage loan commitments. See also “— Investments — Fixed Maturity Securities AFS and Equity Securities,” “— Investments — Mortgage Loans,” “— Investments — Real Estate and Real Estate Joint Ventures” and “— Investments — Other Limited Partnership Interests.”companies.

~~Lease Commitments~~Policyholder Account Balances

As lessee, we have entered into various lease and sublease agreements for office space and equipment. Our commitments under such lease agreements are included within the contractual obligations table inSee “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — ~~Contractual Obligations” in the 2020 Annual Report. See also Note 11 of the Notes to the Consolidated Financial Statements~~Liquidity and Capital Sources — Global Funding Sources — Policyholder Account Balances” included in the ~~2020 Annual Report.~~

~~Guarantees~~

~~See “Guarantees” in Note 15 of the Notes to the Interim Condensed Consolidated Financial Statements.~~

~~Policyholder Liabilities~~

~~See “Business — Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy Analysis” and “Risk Factors — Business Risks” included in the 2020~~2021 Annual Report for ~~further~~ information regarding ~~required analyses of~~ the ~~adequacy of statutory reserves of our insurance operations.~~

~~The following discussion on~~Company’s contractual obligations related to future policy benefits and policyholder account ~~balances should be read~~balances.

Federal Home Loan Bank Funding Agreements, Reported in ~~conjunction with “Management’s Discussion and Analysis~~Policyholder Account Balances

Certain of ~~Financial Condition and Results of Operations — Industry Trends — Impact~~our U.S. insurance subsidiaries are members of a ~~Sustained Low Interest Rate Environment” included in~~regional Federal Home Loan Bank (“FHLB”). For the ~~2020 Annual Report, as amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q~~six months ended June 30, 2022 and 2021, we issued $17.6 billion and $18.2 billion, respectively, and repaid $17.3 billion and $18.2 billion, respectively, of funding agreements with certain regional FHLBs. At June 30, 2022 and December 31, 2021, total obligations outstanding under ~~similarly captioned sections,~~these funding agreements were $16.0 billion and ~~“— Variable Annuity Guarantees.”~~$15.8 billion, respectively. See ~~also Notes 1 and~~Note 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual ~~Report~~Report.

Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances

We issue fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for ~~additional information.~~which payment of interest and principal is secured by such funding agreements. For the six months ended June 30, 2022 and 2021, we issued $27.3 billion and $22.0 billion, respectively, and repaid $25.4 billion and $20.7 billion, respectively, under such funding agreements. At June 30, 2022 and December 31, 2021, total obligations outstanding under these funding agreements were $40.7 billion and $39.5 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

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~~Future Policy Benefits~~Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances

We ~~establish liabilities for amounts payable~~have issued funding agreements to a subsidiary of the Federal Agricultural Mortgage Corporation which are secured by a pledge of certain eligible agricultural mortgage loans. For the six months ended June 30, 2022 and 2021, we issued $350 million and $225 million, respectively, and repaid $350 million and $350 million, respectively, under ~~insurance policies. A discussion~~such funding agreements. At both June 30, 2022 and December 31, 2021, total obligations outstanding under these funding agreements were $2.1 billion. See Note 4 of ~~future policy benefits by segment (as well as Corporate & Other) follows.~~

~~U.S.~~

Amounts payable under insurance policies for this segment are comprised of group insurance and annuities. For group insurance, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium policy provisions, liabilities for survivor income benefit insurance, active life policies and premium stabilization and other contingency liabilities held under life insurance contracts. For group annuity contracts, future policyholder benefits are primarily relatedthe Notes to ~~payout annuities, including pension risk transfers, structured settlement annuities and institutional income annuities. There is no interest rate crediting flexibility on these liabilities.~~

~~Asia~~

~~Future policy benefits for this segment are held primarily for traditional life, endowment, annuity and accident & health contracts. They are also held for total return pass-through provisions~~the Consolidated Financial Statements included in ~~certain universal life and savings products. They include certain liabilities for variable annuity and variable life guarantees~~the 2021 Annual Report.

Debt Issuances

See Note 15 of minimum death benefits, and longevity guarantees. Factors impacting these liabilities include sustained periods of lower than expected yields, lower than expected asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and actual mortality or morbidity resulting in higher than expected benefit payments.

~~Latin America~~

~~EMEA~~

~~MetLife Holdings~~

Future policy benefits for the life insurance business are comprised mainly of liabilities for traditional life insurance contracts. For the annuities business, future policy benefits are comprised mainly of liabilities for life-contingent income annuities and liabilities for the variable annuity guaranteed minimum benefits that are accounted for as insurance. For the long-term care business, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of premium policy provisions, and active life policies. In addition, for our other products, future policyholder benefits relatedNotes to the ~~reinsurance of our former Japan joint venture are comprised of liabilities~~Interim Condensed Consolidated Financial Statements for ~~the variable annuity guaranteed minimum benefits that are accounted for as insurance.~~information about senior notes issued by MetLife, Inc. subsequent to June 30, 2022.

~~Corporate & Other~~

~~Future policy benefits primarily include liabilities for other reinsurance business.~~

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Policyholder Account Balances

U.S.

Group Benefits

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Group Benefits:


		September 30, 2021					June 30, 2022
Guaranteed Minimum Crediting Rate	Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee		Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
		(In millions)					(In millions)
Greater than 0% but less than 2%	Greater than 0% but less than 2%	$	5,259	$	5,128	Greater than 0% but less than 2%	$	5,564	$	5,435
Equal to or greater than 2% but less than 4%	Equal to or greater than 2% but less than 4%	$	1,583	$	1,544	Equal to or greater than 2% but less than 4%	$	1,531	$	1,489
Equal to or greater than 4%	Equal to or greater than 4%	$	799	$	771	Equal to or greater than 4%	$	817	$	786

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Retirement and Income Solutions

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for RIS:


		September 30, 2021					June 30, 2022
Guaranteed Minimum Crediting Rate	Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee		Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
		(In millions)					(In millions)
Greater than 0% but less than 2%	Greater than 0% but less than 2%	$	148	$	—	Greater than 0% but less than 2%	$	653	$	—
Equal to or greater than 2% but less than 4%	Equal to or greater than 2% but less than 4%	$	827	$	184	Equal to or greater than 2% but less than 4%	$	817	$	188
Equal to or greater than 4%	Equal to or greater than 4%	$	4,585	$	4,345	Equal to or greater than 4%	$	4,601	$	4,346

Asia

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The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Asia:


		September 30, 2021					June 30, 2022
Guaranteed Minimum Crediting Rate	Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee		Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
		(In millions)					(In millions)
Annuities:	Annuities:					Annuities:
Greater than 0% but less than 2%	Greater than 0% but less than 2%	$	31,106	$	1,750	Greater than 0% but less than 2%	$	30,330	$	1,706
Equal to or greater than 2% but less than 4%	Equal to or greater than 2% but less than 4%	$	989	$	422	Equal to or greater than 2% but less than 4%	$	920	$	414
Equal to or greater than 4%	Equal to or greater than 4%	$	1	$	1	Equal to or greater than 4%	$	1	$	1
Life & Other:	Life & Other:					Life & Other:
Greater than 0% but less than 2%	Greater than 0% but less than 2%	$	12,938	$	12,397	Greater than 0% but less than 2%	$	11,414	$	10,700
Equal to or greater than 2% but less than 4%	Equal to or greater than 2% but less than 4%	$	33,448	$	21,410	Equal to or greater than 2% but less than 4%	$	34,371	$	21,276
Equal to or greater than 4%	Equal to or greater than 4%	$	281	$	281	Equal to or greater than 4%	$	277	$	277

Latin America

EMEA

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MetLife Holdings

The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the MetLife Holdings segment:


		September 30, 2021					June 30, 2022
Guaranteed Minimum Crediting Rate	Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee		Guaranteed Minimum Crediting Rate	Account Value		Account Value at Guarantee
		(In millions)					(In millions)
Greater than 0% but less than 2%	Greater than 0% but less than 2%	$	1,169	$	1,137	Greater than 0% but less than 2%	$	1,098	$	1,069
Equal to or greater than 2% but less than 4%	Equal to or greater than 2% but less than 4%	$	17,499	$	15,936	Equal to or greater than 2% but less than 4%	$	17,108	$	15,675
Equal to or greater than 4%	Equal to or greater than 4%	$	7,440	$	6,828	Equal to or greater than 4%	$	7,248	$	6,645

Variable Annuity Guarantees

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~~Table of Contents~~

Certain guarantees, including portions thereof, have insurance liabilities established that are included in future policy benefits. Guarantees accounted for in this manner include ~~guaranteed minimum death benefits (“GMDBs”),~~GMDBs, the life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”), elective guaranteed minimum income benefit (“GMIB”) annuitizations, and the life contingent portion of GMIBs that require annuitization when the account balance goes to zero. These liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future benefits exceed those previously projected or when current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the current estimates of future benefits are lower than those previously projected or when current estimates of future assessments exceed those previously projected. At the end of each reporting period, we update the actual amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current period charge or increase to earnings.

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The table below presents the carrying value for guarantees at:


		Future Policy Benefits				Policyholder Account Balances					Future Policy Benefits				Policyholder Account Balances
		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
		(In millions)									(In millions)
Asia	Asia									Asia
GMDB	GMDB	$	4	$	6	$	—	$	—	GMDB	$	4	$	4	$	—	$	—
GMAB	GMAB	—		—		12		26		GMAB	—		—		10		14
GMWB	GMWB	33		35		110		134		GMWB	28		32		75		107
EMEA	EMEA									EMEA
GMDB	GMDB	3		6		—		—		GMDB	5		3		—		—
GMAB	GMAB	—		—		11		31		GMAB	—		—		15		6
GMWB	GMWB	18		31		(66)		(23)		GMWB	28		19		(37)		(58)
MetLife Holdings	MetLife Holdings									MetLife Holdings
GMDB	GMDB	553		450		—		—		GMDB	542		561		—		—
GMIB	GMIB	1,039		954		157		323		GMIB	1,054		1,029		189		180
GMAB	GMAB	—		—		(1)		—		GMAB	—		—		(1)		—
GMWB	GMWB	175		179		204		443		GMWB	200		174		163		173
Total	Total	$	1,825	$	1,661	$	427	$	934	Total	$	1,861	$	1,822	$	414	$	422

The carrying amounts for guarantees included in policyholder account balances above include nonperformance risk adjustments of ~~$89~~$124 million and ~~$137~~$120 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. These nonperformance risk adjustments represent the impact of including a credit spread when discounting the underlying risk-neutral cash flows to determine the estimated fair values. The nonperformance risk adjustment does not have an economic impact on us as it cannot be monetized given the nature of these policyholder liabilities. The change in valuation arising from the nonperformance risk adjustment is not hedged.

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GMDBs

We offer a range of GMDBs to our contractholders. The table below presents GMDBs, by benefit type, at ~~September~~June 30, ~~2021:~~2022:


		Total Account Value (1)					Total Account Value (1)
		Asia & EMEA		MetLife Holdings			Asia & EMEA		MetLife Holdings
		(In millions)					(In millions)
Return of premium or five to seven year step-up	Return of premium or five to seven year step-up	$	7,591	$	46,305	Return of premium or five to seven year step-up	$	5,835	$	36,544
Annual step-up	Annual step-up	—		3,112		Annual step-up	—		2,426
Roll-up and step-up combination	Roll-up and step-up combination	—		5,364		Roll-up and step-up combination	—		4,187
Total	Total	$	7,591	$	54,781	Total	$	5,835	$	43,157

__________________

(1)Total account value excludes ~~$592~~$524 million for contracts with no GMDBs. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantees are not mutually exclusive.

Based on total account value, less than 18% of our GMDBs included enhanced death benefits such as the annual step-up or roll-up and step-up combination products at ~~September~~June 30, ~~2021.~~2022.

Living Benefit Guarantees

The table below presents our living benefit guarantees based on total account values at ~~September~~June 30, ~~2021:~~2022:


		Total Account Value (1)					Total Account Value (1)
		Asia & EMEA		MetLife Holdings			Asia & EMEA		MetLife Holdings
		(In millions)					(In millions)
GMIB	GMIB	$	—	$	20,143	GMIB	$	—	$	15,503
GMWB - non-life contingent (2)	GMWB - non-life contingent (2)	1,003		2,130		GMWB - non-life contingent (2)	730		1,547
GMWB - life-contingent	GMWB - life-contingent	3,228		8,546		GMWB - life-contingent	2,361		6,489
GMAB	GMAB	1,647		157		GMAB	1,184		109
Total	Total	$	5,878	$	30,976	Total	$	4,275	$	23,648

__________________

(1)Total account value excludes ~~$26.1~~$21.6 billion for contracts with no living benefit guarantees. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantee amounts are not mutually exclusive.

(2)The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of ~~$1.0 billion~~$729 million with a guarantee at annuitization.

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The table below presents our GMIB associated total account values, by their guaranteed payout basis, at ~~September~~June 30, ~~2021:~~2022:


	Total Account Value
	(In millions)
7-year setback, 2.5% interest rate	$	~~5,946~~4,620
7-year setback, 1.5% interest rate	~~1,193~~936
10-year setback, 1.5% interest rate	~~4,022~~3,099
10-year mortality projection, 10-year setback, 1.0% interest rate	~~7,627~~5,818
10-year mortality projection, 10-year setback, 0.5% interest rate	~~1,355~~1,030
	$	~~20,143~~15,503

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Additionally, ~~39%~~34% of the ~~$20.1~~$15.5 billion of GMIB total account value has been invested in managed volatility funds as of ~~September~~June 30, ~~2021.~~2022. These funds seek to manage volatility by adjusting the fund holdings within certain guidelines based on capital market movements. Such activity reduces the overall risk of the underlying funds while maintaining their growth opportunities. These risk mitigation techniques reduce or eliminate the need for us to manage the funds’ volatility through hedging or reinsurance.

Our GMIB products typically have a waiting period of 10 years to be eligible for annuitization. As of ~~September~~June 30, ~~2021,~~2022, only ~~35%~~40% of our contracts with GMIBs were eligible for annuitization. The remaining contracts are not eligible for annuitization for an average of three years.

Once eligible for annuitization, contractholders would be expected to annuitize only if their contracts were in-the-money. We calculate in-the-moneyness with respect to GMIBs consistent with net amount at risk as discussed in Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements, by comparing the contractholders’ income benefits based on total account values and current annuity rates versus the guaranteed income benefits. The net amount at risk was ~~$519~~$616 million at ~~September~~June 30, ~~2021,~~2022, of which ~~$477~~$569 million was related to GMIBs. For those contracts with GMIB, the table below presents details of contracts that are in-the-money and out-of-the-money at ~~September~~June 30, ~~2021:~~2022:

In-the-
Moneyness Total
Account Value % of Total
(In millions)
In-the-money 30% or greater $ 476 2 %
20% to less than 30% 259 1 %
10% to less than 20% 434 2 %
0% to less than 10% 813 4 %
1,982
Out-of-the-money -10% to 0% 2,527 13 %
-20% to less than -10% 4,312 22 %
Greater than -20% 11,322 56 %
18,161
Total GMIBs $ 20,143

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	In-the- Moneyness	Total Account Value		% of Total
		(In millions)
In-the-money	30% or greater	$	533	3	%
	20% to less than 30%	320		2	%
	10% to less than 20%	615		4	%
	0% to less than 10%	1,375		9	%
		2,843
Out-of-the-money	-10% to 0%	2,966		19	%
	-20% to less than -10%	3,196		21	%
	Greater than -20%	6,498		42	%
		12,660
Total GMIBs		$	15,503

Derivatives Hedging Variable Annuity Guarantees


		Instrument Type	September 30, 2021						December 31, 2020								Instrument Type	June 30, 2022						December 31, 2021
Primary Underlying Risk Exposure	Primary Underlying Risk Exposure		Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value				Primary Underlying Risk Exposure			Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
					Instrument Type		Liabilities				Assets		Liabilities							Instrument Type		Liabilities				Assets		Liabilities
			(In millions)														(In millions)
Interest rate	Interest rate	Interest rate swaps	$	10,984			$	79	$	14,188	$	85	$	21	Interest rate		Interest rate swaps	$	7,341			$	561	$	8,663	$	52	$	75
		Interest rate futures	1,419				3		—		1,442		—			2		Interest rate futures				1,071		1		7		1,087		3	—
		Interest rate options	151		1		—		637		134		—				Interest rate options	50		4		—		100		1		—
Foreign currency exchange rate	Foreign currency exchange rate	Foreign currency forwards	1,206		4		9		1,834		27		13		Foreign currency exchange rate		Foreign currency forwards	969		3		24		1,149		4		13

Equity market	Equity market	Equity futures	3,838		47		10		4,891		12		38		Equity market		Equity futures	2,655		29		7		3,641		11		5
		Equity index options	4,571		402		374		5,360		558		408				Equity index options	4,110		255		310		4,161		513		362
		Equity variance swaps	733		17		15		716		15		12				Equity variance swaps	692		17		12		699		17		13
		Equity total return swaps	3,220		15		11		1,533		3		124				Equity total return swaps	2,798		198		—		2,763		11		44
		Total	$	26,122	$	539	$	498	$	30,601	$	834	$	618			Total	$	19,686	$	561	$	921	$	22,263	$	612	$	512

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Liquidity and Capital Resources

Overview

Our business and results of operations are materially affected by conditions in the global capital markets and the economy ~~generally. Stressed conditions, volatility and disruptions~~generally due to our market presence in ~~global capital markets, particular markets, or financial asset classes can have an adverse effect on us, in part because we have a~~numerous countries, large investment portfolio and the sensitivity of our insurance liabilities and derivatives ~~are sensitive~~ to changing market factors. Changing conditions in the global capital markets and the economy may affect our financing costs and market interest for our debt or equity securities. For further information regarding market factors that could affect our ability to meet liquidity and capital needs, see “— Industry Trends” and “— Investments — Current Environment.”

Liquidity Management

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Short-term Liquidity

We maintain a substantial short-term liquidity position, which was ~~$11.3~~$12.6 billion and ~~$9.4~~$12.4 billion at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Short-term liquidity includes cash and cash equivalents and short-term investments, excluding assets that are pledged or otherwise committed, including amounts received in connection with securities lending, repurchase agreements, derivatives, and secured borrowings, as well as amounts held in the closed block.

Liquid Assets

An integral part of our liquidity management includes managing our level of liquid assets, which was ~~$222.6~~$179.3 billion and ~~$235.1~~$223.0 billion at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with securities lending, repurchase agreements, derivatives, regulatory deposits, the collateral financing arrangement, funding agreements and secured borrowings, as well as amounts held in the closed block.

Capital Management

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See “Risk Factors — Capital Risks — We May ~~not~~Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for information regarding restrictions on payment of dividends and stock repurchases. See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases” for information regarding MetLife, Inc.’s common stock repurchase authorizations.

The Company

Liquidity

Capital

~~148~~138

Table of Contents

Summary of the Company’s Primary Sources and Uses of Liquidity and Capital

Our primary sources and uses of liquidity and capital are summarized as follows:


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
		(In millions)					(In millions)
Sources:	Sources:					Sources:
Operating activities, net	Operating activities, net	$	7,256	$	6,486	Operating activities, net	$	6,392	$	3,750
Investing activities, net						Investing activities, net	1,689		—
Net change in policyholder account balances	Net change in policyholder account balances	4,041		8,770		Net change in policyholder account balances	3,681		3,870
Net change in payables for collateral under securities loaned and other transactions	Net change in payables for collateral under securities loaned and other transactions	1,279		8,025		Net change in payables for collateral under securities loaned and other transactions	—		506
Cash received for other transactions with tenors greater than three months		—		150
Long-term debt issued	Long-term debt issued	29		1,124		Long-term debt issued	6		15
Financing element on certain derivative instruments and other derivative related transactions, net	Financing element on certain derivative instruments and other derivative related transactions, net	305		—		Financing element on certain derivative instruments and other derivative related transactions, net	121		318
Preferred stock issued, net of issuance costs		—		1,961
Other, net	Other, net	20		129		Other, net	—		58
Effect of change in foreign currency exchange rates on cash and cash equivalents		—		6
Total sources	Total sources	12,930		26,651		Total sources	11,889		8,517
Uses:	Uses:					Uses:
Investing activities, net	Investing activities, net	8,325		16,407		Investing activities, net	—		45
Net change in payables for collateral under securities loaned and other transactions						Net change in payables for collateral under securities loaned and other transactions	7,809		—
Cash paid for other transactions with tenors greater than three months	Cash paid for other transactions with tenors greater than three months	100		175		Cash paid for other transactions with tenors greater than three months	—		100
Long-term debt repaid	Long-term debt repaid	540		95		Long-term debt repaid	23		28
Collateral financing arrangement repaid	Collateral financing arrangement repaid	39		69		Collateral financing arrangement repaid	25		27
Financing element on certain derivative instruments and other derivative related transactions, net		—		108
Treasury stock acquired in connection with share repurchases	Treasury stock acquired in connection with share repurchases	3,127		580		Treasury stock acquired in connection with share repurchases	2,056		2,112
Redemption of preferred stock	Redemption of preferred stock	494		—		Redemption of preferred stock	—		494
Preferred stock redemption premium	Preferred stock redemption premium	6		—		Preferred stock redemption premium	—		6
Dividends on preferred stock	Dividends on preferred stock	166		168		Dividends on preferred stock	92		103
Dividends on common stock	Dividends on common stock	1,242		1,242		Dividends on common stock	805		829
Other, net						Other, net	180		—
Effect of change in foreign currency exchange rates on cash and cash equivalents	Effect of change in foreign currency exchange rates on cash and cash equivalents	392		—		Effect of change in foreign currency exchange rates on cash and cash equivalents	467		192
Total uses	Total uses	14,431		18,844		Total uses	11,457		3,936
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	$	(1,501)	$	7,807	Net increase (decrease) in cash and cash equivalents	$	432	$	4,581

Cash Flows from Operations

The principal cash inflows from our insurance activities come from insurance premiums, net investment income, annuity considerations and deposit funds. The principal cash outflows are the result of various life insurance, ~~property and casualty,~~ annuity and pension products, operating expenses and income tax, as well as interest expense.

Cash Flows from Investments

The principal cash inflows from our investment activities come from repayments of principal, proceeds from maturities and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. ~~Additional~~In addition, cash inflows and outflows relate to sales and purchases of businesses. We typically have a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with our ALM discipline to fund insurance liabilities. We closely monitor and manage these risks through our comprehensive investment risk management process.

Cash Flows from Financing

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Table of Contents

Liquidity and Capital Sources

Global Funding Sources

Preferred Stock

See Note ~~10 of the Notes to the Interim Condensed Consolidated Financial Statements and Note~~ 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Common Stock

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MetLife, Inc. issued ~~4,478,479~~2,980,105 and ~~3,040,195~~4,317,294 new shares of its common stock, respectively, for ~~$180~~$145 million and ~~$118~~$174 million, respectively, to satisfy various stock option exercises and other stock-based awards.

Commercial Paper, Reported in Short-term Debt

Policyholder Account Balances

Federal Home Loan Bank Funding Agreements, Reported in Policyholder Account Balances

Certain of our U.S. insurance subsidiaries are members of a regional Federal Home Loan Bank (“FHLB”). For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we issued ~~$27.4~~$17.6 billion and ~~$27.8~~$18.2 billion, respectively, and repaid ~~$27.4~~$17.3 billion and ~~$26.9~~$18.2 billion, respectively, of funding agreements with certain regional FHLBs. At ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, total obligations outstanding under these funding agreements were ~~$16.3 billion.~~$16.0 billion and $15.8 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

~~Federal Home Loan Bank Advance Agreements, Reported in Liabilities Held-for-Sale~~

For the nine months ended September 30, 2021 and 2020, we borrowed $0 and $2.2 billion, respectively, and repaid $700 million and $2.2 billion, respectively, under advance agreements with the FHLB of Boston. At September 30, 2021 and December 31, 2020, total obligations outstanding under these advance agreements were $0 and $700 million, respectively.

Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances

We issue fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we issued ~~$32.1~~$27.3 billion and ~~$31.7~~$22.0 billion, respectively, and repaid ~~$31.1~~$25.4 billion and ~~$27.5~~$20.7 billion, respectively, under such funding agreements. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, total obligations outstanding under these funding agreements were ~~$41.0~~$40.7 billion and ~~$39.9~~$39.5 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

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Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances

We have issued funding agreements to a subsidiary of the Federal Agricultural Mortgage ~~Corporation. The obligations under all such funding agreements~~Corporation which are secured by a pledge of certain eligible agricultural mortgage loans. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we issued ~~$425~~$350 million and ~~$250~~$225 million, respectively, and repaid ~~$750~~$350 million and ~~$425~~$350 million, respectively, under such funding agreements. At ~~September~~both June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, total obligations outstanding under these funding agreements were $2.1 ~~billion and $2.4 billion, respectively.~~billion. See Note 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Debt Issuances

See Note 15 of the Notes to the Interim Condensed Consolidated Financial Statements for information about senior notes issued by MetLife, Inc. subsequent to June 30, 2022.

Credit and Committed Facilities

At ~~September~~June 30, ~~2021,~~2022, we maintained a $3.0 billion unsecured revolving credit facility and certain committed facilities aggregating ~~$3.3~~$3.2 billion, ofto which MetLife, Inc. is a party and/or guarantor. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements.

The unsecured revolving credit facility is used for general corporate purposes, to support the borrowers’ commercial paper programs and for the issuance of letters of credit. At ~~September~~June 30, ~~2021,~~2022, we had outstanding ~~$461~~$229 million in letters of credit and no drawdowns against this facility. Remaining availability was ~~$2.5~~$2.8 billion at ~~September~~June 30, ~~2021.~~2022.

The committed facilities are used as collateral for certain of our affiliated reinsurance liabilities. At ~~September~~June 30, ~~2021,~~2022, we had outstanding ~~$2.9~~$2.8 billion in letters of credit and no drawdowns against these facilities. Remaining availability was ~~$410~~$407 million at ~~September~~June 30, ~~2021.~~2022.

See Note 13 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for further information on credit and committed facilities.

We have no reason to believe that our lending counterparties will be unable to fulfill their respective contractual obligations under these facilities. As commitments under our credit and committed facilities may expire unused, these amounts do not necessarily reflect our actual future cash funding requirements.

Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt ~~excluding long-term debt relating to CSEs,~~ at:


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
		(In millions)					(In millions)
Short-term debt (1)	Short-term debt (1)	$	346	$	393	Short-term debt (1)	$	196	$	341
Long-term debt (2)	Long-term debt (2)	$	14,010	$	14,598	Long-term debt (2)	$	13,677	$	13,933
Collateral financing arrangement	Collateral financing arrangement	$	806	$	845	Collateral financing arrangement	$	741	$	766
Junior subordinated debt securities	Junior subordinated debt securities	$	3,155	$	3,153	Junior subordinated debt securities	$	3,157	$	3,156

__________________

(1)Includes ~~$246~~$96 million and ~~$293~~$241 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Certain subsidiaries have pledged assets to secure this debt.

(2)Includes ~~$516~~$486 million and ~~$474~~$482 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Certain investment subsidiaries have pledged assets to secure this debt.

Debt and Facility Covenants

Certain of our debt instruments and committed facilities, as well as our unsecured revolving credit facility, contain various administrative, reporting, legal and financial covenants. We believe we were in compliance with all applicable financial covenants at ~~September~~June 30, ~~2021.~~2022.

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Dispositions

For information regarding ~~pending and other~~the Company’s dispositions, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.

~~151~~

~~Table of Contents~~

Liquidity and Capital Uses

In addition to the general description of liquidity and capital uses in “— Summary of the Company’s Primary Sources and Uses of Liquidity and Capital,” the Company’s primary uses of liquidity and capital are set forth below.

Preferred Stock Redemption

See Note 1016 of the Notes to the ~~Interim Condensed~~ Consolidated Financial Statements ~~for information about~~included in the ~~redemption of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C.~~2021 Annual Report.

Common Stock Repurchases

See Note 109 of the Notes to the Interim Condensed Consolidated Financial Statements for information relating to authorizations by the Board of Directors to repurchase MetLife, Inc. common stock, amounts of common stock repurchased pursuant to such authorizations for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, and the amount remaining under such authorizations at ~~September~~June 30, ~~2021.~~2022.

Common stock repurchases are subject to the discretion of our Board of Directors and will depend upon 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, applicable regulatory approvals, and other legal and accounting factors. Restrictions on the payment of dividends that may arise under so-called “Dividend Stopper” provisions would also restrict MetLife, Inc.’s ability to repurchase common stock. See “— Dividends,” as well as “Business — Regulation,” “Risk Factors — Capital Risks — We May ~~not~~Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Dividends

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MetLife, Inc. paid dividends on its preferred stock of ~~$166~~$92 million and ~~$168~~$103 million, respectively. ~~In each of~~For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MetLife, Inc. paid ~~$1.2 billion of~~ dividends on its common ~~stock.~~stock of $805 million and $829 million, respectively. See Note 109 of the Notes to the Interim Condensed Consolidated Financial Statements, ~~and~~as well as Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for information regarding the calculation and timing of these dividend payments.

The declaration and payment of common stock dividends are subject to the discretion of our Board of Directors, and will depend on MetLife, Inc.’s financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of dividends by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by the Board of Directors. See Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report for additional information.

Dividend Restrictions

The payment of dividends is also subject to restrictions under the terms of our preferred stock and junior subordinated debentures in situations where we may be experiencing financial stress. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Dividends — ~~“Dividend Stopper”~~‘Dividend Stopper’ Provisions in MetLife’s Preferred Stock and Junior Subordinated Debentures,” “Risk Factors — Capital Risks — We May ~~not~~Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Debt Repayments

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, following regulatory approval, MetLife Reinsurance Company of Charleston, a wholly-owned subsidiary of MetLife, Inc., repurchased and canceled ~~$39~~$25 million and ~~$69~~$27 million, respectively, in aggregate principal amount of its surplus notes, which were reported in collateral financing arrangement on the interim condensed consolidated balance sheets.

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Debt Repurchases, Redemptions and Exchanges

We may from time to time seek to retire or purchase our outstanding debt through cash purchases, redemptions and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases, redemptions, or exchanges will be dependent upon several factors, including our liquidity requirements, contractual restrictions, general market conditions, and applicable regulatory, legal and accounting factors. Whether or not to repurchase or redeem any debt and the size and timing of any such repurchases or redemptions will be determined at our discretion.

~~See Note 9 of the Notes to the Interim Condensed Consolidated Financial Statements for information about the redemption and cancellation of senior notes.~~

Support Agreements

MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments and guarantees with subsidiaries. Under these arrangements, each Obligor has agreed to cause the applicable entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. We anticipate that in the event these arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet such demands. See Note 5 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information included in the ~~2020~~2021 Annual Report.

Insurance Liabilities

Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, general account surrenders and withdrawals from annuity products were ~~$971~~$650 million and ~~$953~~$645 million, respectively. In the RIS business within the U.S. segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to the RIS business products that provide customers with limited rights to accelerate payments, at ~~September~~June 30, ~~2021~~2022 there were funding agreements totaling ~~$122~~$117 million that could be put back to the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Insurance Liabilities” included in the 2021 Annual Report for additional information.

Pledged Collateral

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had received pledged cash collateral from counterparties of $6.9 billion and ~~$7.6~~$7.5 billion, respectively. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we had pledged cash collateral to counterparties of ~~$183~~$234 million and ~~$266~~$142 million, respectively. See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information about collateral pledged to us, collateral we pledge and derivatives subject to credit contingent provisions.

We pledge collateral and have had collateral pledged to us, and may be required from time to time to pledge additional collateral or be entitled to have additional collateral pledged to us, in connection with the collateral financing arrangement related to the reinsurance of closed block liabilities.

We pledge collateral from time to time in connection with funding agreements and advance agreements. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as Note 4 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Securities Lending ~~and~~Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

~~We participate in a securities lending program~~See “— Investments — Securities Lending Transactions, Repurchase Agreements and in short-term repurchase agreements whereby securities are loaned and sold, respectively, to unaffiliated financial institutions. We obtain collateral, usually cash, from such institutions, which must be returned to the institution when the loaned or sold securities are returned to us. Through these arrangements, we were liable for cash collateral under our control of $24.4 billion and $21.8 billion at September 30, 2021 and December 31, 2020, respectively, including a portion that may require the immediate return of cash collateral we hold. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements.Third-Party Custodian Administered Programs.”

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Litigation

We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be reasonably possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate estimate of the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated net income or cash flows in particular quarterly or annual periods. See Note 1514 of the Notes to the Interim Condensed Consolidated Financial Statements.

~~Contractual Obligations~~

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Contractual Obligations” included in the 2020 Annual Report for additional information regarding the Company’s contractual obligations.

MetLife, Inc.

Credit and Committed Facilities

At June 30, 2022, we maintained a $3.0 billion unsecured revolving credit facility and certain committed facilities aggregating $3.2 billion, to which MetLife, Inc. is a party and/or guarantor. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements.

The unsecured revolving credit facility is used for general corporate purposes, to support the borrowers’ commercial paper programs and for the issuance of letters of credit. At June 30, 2022, we had outstanding $229 million in letters of credit and no drawdowns against this facility. Remaining availability was $2.8 billion at June 30, 2022.

The committed facilities are used as collateral for certain of our affiliated reinsurance liabilities. At June 30, 2022, we had outstanding $2.8 billion in letters of credit and no drawdowns against these facilities. Remaining availability was $407 million at June 30, 2022.

See Note 13 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for further information on credit and committed facilities.

Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt at:


	June 30, 2022		December 31, 2021
	(In millions)
Short-term debt (1)	$	196	$	341
Long-term debt (2)	$	13,677	$	13,933
Collateral financing arrangement	$	741	$	766
Junior subordinated debt securities	$	3,157	$	3,156

__________________

(1)Includes $96 million and $241 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at June 30, 2022 and December 31, 2021, respectively. Certain subsidiaries have pledged assets to secure this debt.

(2)Includes $486 million and $482 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at June 30, 2022 and December 31, 2021, respectively. Certain investment subsidiaries have pledged assets to secure this debt.

Debt and Facility Covenants

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Dispositions

For information regarding the Company’s dispositions, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.

Liquidity and Capital ~~Management~~Uses

Preferred Stock Redemption

See Note 16 of the Notes to ~~preserve stable, reliable~~the Consolidated Financial Statements included in the 2021 Annual Report.

Common Stock Repurchases

See Note 9 of the Notes to the Interim Condensed Consolidated Financial Statements for information relating to authorizations by the Board of Directors to repurchase MetLife, Inc. common stock, amounts of common stock repurchased pursuant to such authorizations for the six months ended June 30, 2022 and cost-effective sources of cash to meet all current and future financial obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix of short- and long-term funding sources from the wholesale financial markets2021, and the ability to borrow through credit and committed facilities. Liquidity is monitored through the use of internal liquidity risk metrics, including the composition and level of the liquid asset portfolio, timing differences in short-term cash flow obligations, accessamount remaining under such authorizations at June 30, 2022.

Common stock repurchases are subject to the discretion of our Board of Directors and will depend upon our capital position, liquidity, financial ~~markets for capital~~strength and ~~debt transactions and exposure to contingent draws on MetLife, Inc.’s liquidity. MetLife, Inc. is an active participant in~~credit ratings, general market conditions, the ~~global financial markets through which it obtains a significant amount of funding. These markets, which serve as cost-effective sources of funds, are critical components~~market price of MetLife, Inc.’s ~~liquidity~~common stock compared to management’s assessment of the stock’s underlying value, applicable regulatory approvals, and ~~capital management. Decisions to access these markets are based upon relative costs, prospective views~~other legal and accounting factors. Restrictions on the payment of ~~balance sheet growth and a targeted liquidity profile and capital structure. A disruption in the financial markets could limit MetLife, Inc.’s access to liquidity.~~

dividends that may arise under so-called “Dividend Stopper” provisions would also restrict MetLife, Inc.’s ability to ~~maintain regular access~~repurchase common stock. See “— Dividends,” as well as “Business — Regulation,” “Risk Factors — Capital Risks — We May Not be Able to ~~competitively priced wholesale funds~~Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Dividends

For the six months ended June 30, 2022 and 2021, MetLife, Inc. paid dividends on its preferred stock of $92 million and $103 million, respectively. For the six months ended June 30, 2022 and 2021, MetLife, Inc. paid dividends on its common stock of $805 million and $829 million, respectively. See Note 9 of the Notes to the Interim Condensed Consolidated Financial Statements, as well as Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for information regarding the calculation and timing of these dividend payments.

Dividend Restrictions

The payment of dividends is ~~fostered by its current credit ratings from~~also subject to restrictions under the ~~major credit rating agencies. We view~~terms of our ~~capital ratios, credit quality, stable~~preferred stock and ~~diverse earnings streams, diversity of liquidity sources and our liquidity monitoring procedures as critical to retaining such credit ratings.~~junior subordinated debentures in situations where we may be experiencing financial stress. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — ~~Rating Agencies” included in the 2020 Annual Report.~~

~~Liquidity~~

~~For a summary of MetLife, Inc.’s liquidity, see “— The Company — Liquidity.”~~

~~Capital~~

~~For a summary of MetLife, Inc.’s capital, see “— The Company — Capital.” See also “— The Company —~~ Liquidity and Capital Uses — ~~Common~~Dividends — ‘Dividend Stopper’ Provisions in MetLife’s Preferred Stock ~~Repurchases” for information regarding~~and Junior Subordinated Debentures,” “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Debt Repayments

For the six months ended June 30, 2022 and 2021, following regulatory approval, MetLife ~~Inc.’s common stock repurchases.~~

~~Liquid Assets~~

~~At September 30, 2021 and December 31, 2020,~~Reinsurance Company of Charleston, a wholly-owned subsidiary of MetLife, Inc., ~~collectively with other MetLife holding companies, had $5.1 billion~~repurchased and ~~$4.5 billion,~~canceled $25 million and $27 million, respectively, in ~~liquid assets. Of these amounts, $4.4 billion~~aggregate principal amount of its surplus notes, which were reported in collateral financing arrangement on the interim condensed consolidated balance sheets.

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Debt Repurchases, Redemptions and ~~$3.6 billion were held by~~ Exchanges

Support Agreements

MetLife, Inc. and ~~$703~~several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments and guarantees with subsidiaries. Under these arrangements, each Obligor has agreed to cause the applicable entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. We anticipate that in the event these arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet such demands. See Note 5 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information included in the 2021 Annual Report.

Insurance Liabilities

Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the six months ended June 30, 2022 and 2021, general account surrenders and withdrawals from annuity products were $650 million and ~~$873~~$645 million, respectively. In the RIS business within the U.S. segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to the RIS business products that provide customers with limited rights to accelerate payments, at June 30, 2022 there were held by other MetLife holding companies at September 30, 2021 and December 31, 2020, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assetsfunding agreements totaling $117 million that ~~are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with derivatives and a collateral financing arrangement.~~

could be put back to the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquid Assets” included in the 2020 Annual Report for additional information on the sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash flow for MetLife, Inc. and other MetLife holding companies.

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~~Liquidity and Capital Sources~~

~~In addition to the description of liquidity and capital sources in “— The Company — Summary of the Company’s Primary Sources and Uses of Liquidity and Capital” and “—~~ The Company — Liquidity and Capital ~~Sources,” MetLife, Inc.’s primary sources~~Uses — Insurance Liabilities” included in the 2021 Annual Report for additional information.

Pledged Collateral

~~Dividends from Subsidiaries~~

~~MetLife, Inc. relies, in part, on dividends from its subsidiaries~~$7.5 billion, respectively. At June 30, 2022 and December 31, 2021, we had pledged cash collateral to ~~meet its cash requirements. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment~~counterparties of dividends imposed by the regulators of their respective domiciles. The dividend limitation for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end of the immediately preceding calendar year$234 million and statutory net gain from operations for the immediately preceding calendar year. Statutory accounting practices, as prescribed by insurance regulators of various states in which we conduct business, differ in certain respects from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences relate to the treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation assumptions, goodwill and surplus notes.

The table below sets forth the dividends permitted to be paid in 2021 by MetLife, Inc.’s primary U.S. insurance subsidiaries without insurance regulatory approval and the actual dividends paid for the nine months ended September 30, 2021:

Company Paid (1) Permitted Without
Approval (2)
(In millions)
Metropolitan Life Insurance Company $ 2,193 $ 3,392
American Life Insurance Company $ 600 $ 800
Metropolitan Property and Casualty Insurance Company (3) $ 35 $ 222
Metropolitan Tower Life Insurance Company $ — $ 82

~~__________________~~

~~(1)Reflects all amounts paid, including those where regulatory approval was obtained as required.~~

~~(2)~~Reflects dividend amounts that may be paid during 2021 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 2021, some or all of such dividends may require regulatory approval.

~~(3)Metropolitan Property and Casualty Insurance Company paid a $35~~$142 million, ~~non-cash dividend consisting of the stock of a subsidiary.~~respectively. See Note 37 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information onabout collateral pledged to us, collateral we pledge and derivatives subject to credit contingent provisions.

~~In addition~~collateral financing arrangement related to the ~~amounts presented~~reinsurance of closed block liabilities.

We pledge collateral from time to time in connection with funding agreements and advance agreements. See Note 6 of the ~~table above, for~~Notes to the ~~nine months ended September 30, 2021, MetLife, Inc. also received from certain other subsidiaries cash dividends of $109 million,~~Interim Condensed Consolidated Financial Statements, as well as ~~cash returns of capital of $13 million.~~

The dividend capacity of our non-U.S. operations is subject to similar restrictions established by the local regulators. The non-U.S. regulatory regimes also commonly limit dividend payments to the parent company to a portion of the subsidiary’s prior year statutory income, as determined by the local accounting principles. The regulators of our non-U.S. operations, including Japan’s Financial Services Agency, may also limit or not permit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. operations, or for other reasons. Most of our non-U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S. holding companies. The capital and rating considerations applicable to our first tier subsidiaries may also impact the dividend flow into MetLife, Inc.

We proactively manage target and excess capital levels and dividend flows and forecast local capital positions as part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market. See “Risk Factors — Capital Risks — Our Subsidiaries May be Unable to Pay Dividends, a Major Component of Holding Company Free Cash Flow” and Note 164 of the Notes to the Consolidated Financial Statements included in the ~~2020~~2021 Annual Report.

Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

See “— Investments — Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs.”

~~155~~

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Litigation

We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be reasonably possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate estimate of the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated net income or cash flows in particular quarterly or annual periods. See Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements.

MetLife, Inc.

Credit and Committed Facilities

The unsecured revolving credit facility is used for general corporate purposes, to support the borrowers’ commercial paper programs and for the issuance of letters of credit. At June 30, 2022, we had outstanding $229 million in letters of credit and no drawdowns against this facility. Remaining availability was $2.8 billion at June 30, 2022.

See Note 13 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for further information on credit and committed facilities.

Outstanding Debt Under Global Funding Sources

The following table summarizes our outstanding debt at:


	June 30, 2022		December 31, 2021
	(In millions)
Short-term debt (1)	$	196	$	341
Long-term debt (2)	$	13,677	$	13,933
Collateral financing arrangement	$	741	$	766
Junior subordinated debt securities	$	3,157	$	3,156

__________________

Debt and Facility Covenants

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Dispositions

For information regarding the Company’s dispositions, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.

Liquidity and Capital Uses

Preferred Stock Redemption

See Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Common Stock Repurchases

Common stock repurchases are subject to the discretion of our Board of Directors and will depend upon 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, applicable regulatory approvals, and other legal and accounting factors. Restrictions on the payment of dividends that may arise under so-called “Dividend Stopper” provisions would also restrict MetLife, Inc.’s ability to repurchase common stock. See “— Dividends,” as well as “Business — Regulation,” “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Dividends

Dividend Restrictions

The payment of dividends is also subject to restrictions under the terms of our preferred stock and junior subordinated debentures in situations where we may be experiencing financial stress. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Dividends — ‘Dividend Stopper’ Provisions in MetLife’s Preferred Stock and Junior Subordinated Debentures,” “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Debt Repayments

For the six months ended June 30, 2022 and 2021, following regulatory approval, MetLife Reinsurance Company of Charleston, a wholly-owned subsidiary of MetLife, Inc., repurchased and canceled $25 million and $27 million, respectively, in aggregate principal amount of its surplus notes, which were reported in collateral financing arrangement on the interim condensed consolidated balance sheets.

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Debt Repurchases, Redemptions and Exchanges

Support Agreements

Insurance Liabilities

Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the six months ended June 30, 2022 and 2021, general account surrenders and withdrawals from annuity products were $650 million and $645 million, respectively. In the RIS business within the U.S. segment, which includes pension risk transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to the RIS business products that provide customers with limited rights to accelerate payments, at June 30, 2022 there were funding agreements totaling $117 million that could be put back to the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Insurance Liabilities” included in the 2021 Annual Report for additional information.

Pledged Collateral

We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At June 30, 2022 and December 31, 2021, we had received pledged cash collateral from counterparties of $6.9 billion and $7.5 billion, respectively. At June 30, 2022 and December 31, 2021, we had pledged cash collateral to counterparties of $234 million and $142 million, respectively. See Note 7 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information about collateral pledged to us, collateral we pledge and derivatives subject to credit contingent provisions.

Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs

See “— Investments — Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs.”

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Litigation

We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be reasonably possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate estimate of the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated net income or cash flows in particular quarterly or annual periods. See Note 14 of the Notes to the Interim Condensed Consolidated Financial Statements.

MetLife, Inc.

Liquidity and Capital Management

Liquidity and capital are managed to preserve stable, reliable and cost-effective sources of cash to meet all current and future financial obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix of short- and long-term funding sources from the wholesale financial markets and the ability to borrow through credit and committed facilities. Liquidity is monitored through the use of internal liquidity risk metrics, including the composition and level of the liquid asset portfolio, timing differences in short-term cash flow obligations, access to the financial markets for capital and debt transactions and exposure to contingent draws on MetLife, Inc.’s liquidity. MetLife, Inc. is an active participant in the global financial markets through which it obtains a significant amount of funding. These markets, which serve as cost-effective sources of funds, are critical components of MetLife, Inc.’s liquidity and capital management. Decisions to access these markets are based upon relative costs, prospective views of balance sheet growth and a targeted liquidity profile and capital structure. A disruption in the financial markets could limit MetLife, Inc.’s access to liquidity.

MetLife, Inc.’s ability to maintain regular access to competitively priced wholesale funds is fostered by its current credit ratings from the major credit rating agencies. We view our capital ratios, credit quality, stable and diverse earnings streams, diversity of liquidity sources and our liquidity monitoring procedures as critical to retaining such credit ratings. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Rating Agencies” included in the 2021 Annual Report.

Liquidity

For a summary of MetLife, Inc.’s liquidity, see “— The Company — Liquidity.”

Capital

For a summary of MetLife, Inc.’s capital, see “— The Company — Capital.” See also “— The Company — Liquidity and Capital Uses — Common Stock Repurchases” for information regarding MetLife, Inc.’s common stock repurchases.

Liquid Assets

At June 30, 2022 and December 31, 2021, MetLife, Inc., collectively with other MetLife holding companies, had $4.5 billion and $5.4 billion, respectively, in liquid assets. Of these amounts, $3.1 billion and $4.2 billion were held by MetLife, Inc. and $1.4 billion and $1.2 billion were held by other MetLife holding companies at June 30, 2022 and December 31, 2021, respectively. Liquid assets include cash and cash equivalents, short-term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged or otherwise committed include amounts received in connection with derivatives and a collateral financing arrangement.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquid Assets” included in the 2021 Annual Report for additional information on the sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash flow for MetLife, Inc. and other MetLife holding companies.

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Liquidity and Capital Sources

In addition to the description of liquidity and capital sources in “— The Company — Summary of the Company’s Primary Sources and Uses of Liquidity and Capital” and “— The Company — Liquidity and Capital Sources,” MetLife, Inc.’s primary sources of liquidity and capital are set forth below.

Dividends from Subsidiaries

MetLife, Inc. relies, in part, on dividends from its subsidiaries to meet its cash requirements. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of their respective domiciles. The dividend limitation for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end of the immediately preceding calendar year and statutory net gain from operations for the immediately preceding calendar year. Statutory accounting practices, as prescribed by insurance regulators of various states in which we conduct business, differ in certain respects from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences relate to the treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation assumptions, goodwill and surplus notes.

The table below sets forth the dividends permitted to be paid in 2022 by MetLife, Inc.’s primary U.S. insurance subsidiaries without insurance regulatory approval and the actual dividends paid for the six months ended June 30, 2022:


Company	Paid (1)		Permitted Without Approval (2)
	(In millions)
Metropolitan Life Insurance Company	$	1,562	$	3,539
American Life Insurance Company	$	620	$	554
Metropolitan Tower Life Insurance Company	$	—	$	163

__________________

(1)Reflects all amounts paid, including those where regulatory approval was obtained as required.

(2)Reflects dividend amounts that may be paid during 2022 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 2022, some or all of such dividends may require regulatory approval.

In addition to the amounts presented in the table above, for the six months ended June 30, 2022, MetLife, Inc. also received from certain other subsidiaries cash dividends of $36 million, as well as cash returns of capital of $8 million.

We proactively manage target and excess capital levels and dividend flows and forecast local capital positions as part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market. See “Risk Factors — Capital Risks — Our Subsidiaries May be Unable to Pay Dividends, a Major Component of Holding Company Free Cash Flow” and Note 16 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report.

Credit and Committed Facilities

See “— The Company — Liquidity and Capital Sources — Global Funding Sources — Credit and Committed Facilities” for further information regarding the Company’s unsecured revolving credit facility and certain committed facilities.

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Long-term Debt Outstanding

The following table summarizes the outstanding long-term debt of MetLife, Inc. at:

September 30, 2021 December 31, 2020
(In millions)
Long-term debt — unaffiliated $ 12,852 $ 13,463
Long-term debt — affiliated (1) $ 1,937 $ 2,073
Junior subordinated debt securities $ 2,463 $ 2,461

~~__________________~~

~~(1)~~In July 2021, ¥53.7 billion 2.9725% senior unsecured notes issued to various subsidiaries matured and were refinanced with the following senior unsecured notes issued to various subsidiaries: (i) ¥13.7 billion 1.610% due July 2026, (ii) ¥14.3 billion 1.755% due July 2028 and (iii) ¥25.7 billion 1.852% due July 2031.


	June 30, 2022		December 31, 2021
	(In millions)
Long-term debt — unaffiliated	$	12,567	$	12,814
Long-term debt — affiliated	$	1,635	$	1,884
Junior subordinated debt securities	$	2,464	$	2,463

Debt and Facility Covenants

Certain of MetLife, Inc.’s debt instruments and committed facilities, as well as its unsecured revolving credit facility, contain various administrative, reporting, legal and financial covenants. MetLife, Inc. believes it was in compliance with all applicable financial covenants at ~~September~~June 30, ~~2021.~~

~~Dispositions~~

~~For information on the disposition of MetLife P&C, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.~~2022.

Liquidity and Capital Uses

The primary uses of liquidity of MetLife, Inc. include debt service, cash dividends on common and preferred stock, capital contributions to subsidiaries, common stock, preferred stock and debt repurchases and/or redemptions, payment of general operating expenses and acquisitions. Based on our analysis and comparison of our current and future cash inflows from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable MetLife, Inc. to make payments on debt, pay cash dividends on its common and preferred stock, contribute capital to its subsidiaries, repurchase its common stock and certain of its other securities, pay all general operating expenses and meet its cash needs under current market conditions and reasonably possible stress scenarios.

In addition to the description of liquidity and capital uses in “— The Company — Liquidity and Capital Uses,” MetLife, Inc.’s primary uses of liquidity and capital are set forth below.

Affiliated Capital and Debt Transactions

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, MetLife, Inc. invested a net amount of ~~$118~~$10 million and ~~$177~~$114 million, respectively, in various subsidiaries.

MetLife, Inc. lends funds, as necessary, through credit agreements or otherwise to its subsidiaries and affiliates, some of which are regulated, to meet their capital requirements or to provide liquidity. MetLife, Inc. had ~~no outstanding~~ loans to subsidiaries outstanding of $185 million and $35 million at ~~both September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Support Agreements

MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has guaranteed certain contractual obligations. See “— The Company — Liquidity and Capital Uses — Support Agreements.”

~~Adoption of New~~Adopted Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

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Future Adoption of ~~New~~ Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Non-GAAP and Other Financial Disclosures

In this report, the Company presents certain measures of its performance on a consolidated and segment basis that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance the understanding for the Company and our investors of our performance by highlighting the results of operations and the underlying profitability drivers of our business. Segment-specific financial measures are calculated using only the portion of consolidated results attributable to that specific segment.

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The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:


Non-GAAP financial measures:		Comparable GAAP financial measures:
(i)	adjusted premiums, fees and other revenues	(i)	premiums, fees and other revenues
(ii)	adjusted earnings	(ii)	net income (loss)
(iii)	adjusted earnings available to common shareholders	(iii)	net income (loss) available to MetLife, Inc.’s common shareholders
(iv)	adjusted net investment income	(iv)	net investment income

Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency exchange rates and are calculated using the average foreign currency exchange rates for the most recent period and applied to the comparable prior period (“constant currency basis”).

Reconciliations of these non-GAAP financial measures to the most directly comparable historical GAAP financial measures are included in “— Results of Operations” and “— Investments.” Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are not accessible on a forward-looking basis because we believe it is not possible without unreasonable effort to provide other than a range of net investment gains and losses and net derivative gains and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net income.

Our definitions of non-GAAP and other financial measures discussed in this report may differ from those used by other companies.

Adjusted earnings and related measures:

•adjusted earnings;

•adjusted earnings available to common shareholders; and

•adjusted earnings available to common shareholders on a constant currency basis.

These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings and components of, or other financial measures based on, adjusted earnings are also our GAAP measures of segment performance. Adjusted earnings and other financial measures based on adjusted earnings are also the measures by which senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate comparisons to industry results.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as negative adjusted earnings. Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred stock dividends. For information relating to adjusted revenues and adjusted expenses, see “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

In addition, adjusted earnings available to common shareholders excludes the impact of preferred stock redemption premium, which is reported as a reduction to net income (loss) available to MetLife, Inc.’s common shareholders.

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Return on equity, allocated equity and related measures:

•Total MetLife, Inc.’s common stockholders’ equity, excluding accumulated other comprehensive income (“AOCI”) other than foreign currency translation adjustments (“FCTA”), is defined as total MetLife, Inc.’s common stockholders’ equity, excluding the net unrealized investment gains (losses) and defined benefit plans adjustment components of AOCI, net of income tax.

•Adjusted return on MetLife, Inc.’s common stockholders’ equity is defined as adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.

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•Adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA, is defined as adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’ equity, excluding AOCI other than FCTA.

•Allocated equity is the portion of MetLife, Inc.’s common stockholders’ equity that management allocates to each of its segments and sub-segments based on local capital requirements and economic capital. See “—“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Economic ~~Capital.”~~Capital” in the 2021 Annual Report. Allocated equity excludes the impact of AOCI other than FCTA.

The above measures represent a level of equity consistent with the view that, in the ordinary course of business, we do not plan to sell most investments for the sole purpose of realizing gains or losses.

Expense ratio and direct expense ratio:

•Expense ratio: other expenses, net of capitalization of DAC, divided by premiums, fees and other revenues.

•Direct expense ratio: adjusted direct expenses divided by adjusted premiums, fees and other revenues. Direct expenses are comprised of employee-related costs, third party staffing costs, and general and administrative expenses.

•Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers: adjusted direct expenses excluding total notable items related to direct expenses, divided by adjusted premiums, fees and other revenues, excluding pension risk transfers.

The following additional information is relevant to an understanding of our performance ~~results:~~results and outlook:

•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.

•Near-term represents one to three years.

•Notable items reflect the unexpected impact of events that affect the Company’s results, but that were unknown and that the Company could not anticipate when it devised its business plan. Notable items also include certain items regardless of the extent anticipated in the business plan, to help investors have a better understanding of MetLife’s results and to evaluate and forecast those results. Notable items represent a positive (negative) impact to adjusted earnings available to common shareholders.

•The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from debt to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be viewed as a substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP. The free cash flow ratio is typically expressed as a percentage of annual adjusted earnings available to common shareholders.

Risk Management

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management” in the 2021 Annual Report for information on our risk management.

Subsequent Events

See Note 15 of the Notes to the Interim Condensed Consolidated Financial Statements.

~~158~~

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We regularly analyze our exposure to interest rate, equity market price and foreign currency exchange rate risks. As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are materially exposed to changes in interest rates, foreign currency exchange rates and changes in the equity markets. We have exposure to such market ~~risk~~risks through our insurance operations and investment activities. Our exposure is and will remain elevated due to the COVID-19 Pandemic. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary — COVID-19 Pandemic.” We use a variety of strategies to manage ~~interest rate, foreign currency exchange rate and equity market risk,~~these risks, including the use of derivatives. A description of our market risk exposures may be found under “Quantitative and Qualitative Disclosures About Market Risk” included in the ~~2020~~2021 Annual Report. Further, our exposure to these market risks is expected to remain elevated due to the COVID-19 pandemic. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Summary — COVID-19 Pandemic.”

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Item 4. Controls and Procedures

Management, with the participation of the Chief Executive Officer (“CEO”) and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO have concluded that these disclosure controls and procedures are effective.

There were no changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended ~~September~~June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

See Note 1514 of the Notes to the Interim Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

Certain factors that may affect the Company’s business or operations are described under “Risk Factors” in Part I, Item 1A, of the ~~2020~~2021 Annual Report. There have been no material changes to our risk factors from the risk factors previously disclosed in the ~~2020~~2021 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Purchases of MetLife, Inc. common stock made by or on behalf of MetLife, Inc. or its affiliates during the quarter ended ~~September~~June 30, ~~2021~~2022 are set forth below:

Period Total Number
of Shares Purchased (1) Average Price Paid per Share Total Number
of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under the
Plans or Programs (2)
July 1 — July 31, 2021 4,184,289 $ 59.15 4,184,289 $ 475,046,141
August 1 — August 31, 2021 4,902,860 $ 61.69 4,902,516 $ 3,172,593,633
September 1 — September 30, 2021 7,600,028 $ 61.18 7,600,028 $ 2,707,594,981
Total 16,687,177 16,686,833


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
April 1 — April 30, 2022	1,652,938	$	70.58	1,652,938	$	475,046,250
May 1 — May 31, 2022	7,035,408	$	63.90	7,035,408	$	3,025,471,177
June 1 — June 30, 2022	8,629,772	$	63.78	8,629,772	$	2,475,053,649
Total	17,318,118			17,318,118

__________________

(1)During the periods ~~July~~April 1 ~~through July~~— April 30, 2022, May 1 — May 31, ~~2021, August~~2022 and June 1 ~~through August 31, 2021 and September 1 through September~~— June 30, ~~2021,~~2022, there were no purchases by separate account index funds ~~purchased 0 shares, 344 shares and 0 shares, respectively,~~ of MetLife, Inc. common stock on the open market in non-discretionary transactions.

(2)In ~~August 2021,~~May 2022, MetLife, Inc. announced that its Board of Directors authorized $3.0 billion of common stock repurchases. At ~~September~~June 30, ~~2021,~~2022, MetLife, Inc. had ~~$2.7~~$2.5 billion of common stock repurchases remaining under the authorization. For more information on common stock repurchases, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Common Stock Repurchases” and Note 109 of the Notes to the Interim Condensed Consolidated Financial Statements. See also “Risk Factors — Capital Risks — We May ~~not~~Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs” included in the ~~2020~~2021 Annual Report.

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Item 6. Exhibits

(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or affiliates, or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife, Inc., its subsidiaries and affiliates may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife, Inc.’s other public filings, which are available without charge through the U.S. Securities and Exchange Commission website at www.sec.gov.)

Incorporated by Reference

Exhibit No.

Description

Form

File Number

Exhibit

Filing Date

Filed or Furnished Herewith

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.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


METLIFE, INC.

By:						/s/ Tamara L. Schock
						Name: Tamara L. Schock Title: Executive Vice President and Chief Accounting Officer (Authorized Signatory and Principal Accounting Officer)

Date: ~~November 8, 2021~~August 4, 2022

~~163~~153


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fixed Maturity Securities AFS
	Corporate (6)		Foreign Government		Structured Products		Municipals		Equity Securities		Unit-linked and FVO Securities
	(In millions)
Three Months Ended September 30, 2021
Balance, beginning of period	$	23,773	$	145	$	6,003	$	—	$	143	$	849
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(22)		—		9		—		6		(9)
Total realized/unrealized gains (losses) included in AOCI	(402)		—		36		—		—		—
Purchases (3)	1,853		12		334		34		8		9
Sales (3)	(475)		(10)		(401)		—		(5)		(8)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	242		10		6		—		—		—
Transfers out of Level 3 (4)	(233)		(51)		(407)		—		(1)		(8)
Balance, end of period	$	24,736	$	106	$	5,580	$	34	$	151	$	833
Three Months Ended September 30, 2020
Balance, beginning of period	$	20,732	$	57	$	5,377	$	—	$	373	$	589
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(1)		(1)		23		—		6		35
Total realized/unrealized gains (losses) included in AOCI	673		6		96		1		—		—
Purchases (3)	1,023		12		550		10		—		7
Sales (3)	(529)		—		(305)		—		(69)		(13)
Issuances (3)	—		—		—		—		—		—
Settlements (3)	—		—		—		—		—		—
Transfers into Level 3 (4)	622		44		39		—		—		—
Transfers out of Level 3 (4)	(377)		(9)		(368)		—		(158)		(2)
Balance, end of period	$	22,143	$	109	$	5,412	$	11	$	152	$	616
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2021 (5)	$	(18)	$	—	$	9	$	—	$	6	$	(9)
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at September 30, 2020 (5)	$	(3)	$	(3)	$	13	$	—	$	3	$	35
Changes in unrealized gains (losses) included in AOCI for the instruments still held at September 30, 2021 (5)	$	(387)	$	—	$	36	$	—	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at September 30, 2020 (5)	$	665	$	3	$	95	$	1	$	—	$	—


	September 30,		December 31,		Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020		2021		2020
	Carrying Value After Measurement				Gains (Losses)
	(In millions)
Mortgage loans, net (1)	$	389	$	408	$	(16)	$	(43)	$	(41)	$	(52)


	Three Month Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Series	Per Share		Aggregate		Per Share		Aggregate		Per Share		Aggregate		Per Share		Aggregate
	(In million, except per share data)
A	$	0.256	$	6	$	0.256	$	6	$	0.762	$	18	$	0.762	$	18
C	$	—	—		$	9.940	15		$	19.085	10		$	36.190	54
D	$	29.375	14		$	29.375	15		$	58.750	29		$	58.750	30
E	$	351.563	11		$	351.563	11		$	1,054.689	34		$	1,054.689	34
F	$	296.875	12		$	296.875	12		$	890.625	36		$	791.667	32
G	$	19.250	20		$	—	—		$	39.035	39		$	—	—
Total			$	63			$	59			$	166			$	168


	Selected Sectors at September 30, 2021
Sectors	Book Value (1)		Investment Grade %		% of Total Investments
	(Dollars in millions)
Airports	$	3,234	82	%	0.6	%
Cruise Lines / Leisure	896		94	%	0.2
Airlines	465		69	%	0.1
Restaurants	421		96	%	0.1
Lodging	185		65	%	—
Fixed Maturity Securities AFS Exposure to Stressed Sectors (2)	$	5,201			1.0	%
Total Investments (3)	$	514,635


	September 30, 2021
	Aaa					Aa					A					Baa					Below Investment Grade					Total
Vintage Year	Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value
	(Dollars in millions)
2003-2014	$	1,249	$	1,322		$	1,013	$	1,059		$	576	$	588		$	183	$	175		$	151	$	133		$	3,172	$	3,277
2015	456		487			56		59			54		56			7		7			—		—			573		609
2016	270		291			65		70			53		55			—		—			—		—			388		416
2017	774		816			346		367			193		199			—		—			—		—			1,313		1,382
2018	1,823		2,005			301		318			179		191			10		10			—		—			2,313		2,524
2019	958		997			142		145			655		672			—		—			—		—			1,755		1,814
2020	534		543			232		238			216		224			27		27			—		—			1,009		1,032
2021	391		392			223		224			210		214			29		30			—		—			853		860
Total	$	6,455	$	6,853		$	2,378	$	2,480		$	2,136	$	2,199		$	256	$	249		$	151	$	133		$	11,376	$	11,914
Ratings Distribution			57.5		%			20.8		%			18.5		%			2.1		%			1.1		%			100.0		%

	December 31, 2020
	Aaa					Aa					A					Baa					Below Investment Grade					Total
Vintage Year	Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value			Amortized Cost net of ACL		Estimated Fair Value
	(Dollars in millions)
2003 - 2013	$	958	$	1,011		$	898	$	917		$	373	$	355		$	105	$	96		$	114	$	98		$	2,448	$	2,477
2014	451		480			429		449			169		171			10		9			—		—			1,059		1,109
2015	462		492			65		69			38		40			7		6			—		—			572		607
2016	282		310			56		60			54		53			—		—			—		—			392		423
2017	757		807			432		463			150		150			—		—			—		—			1,339		1,420
2018	1,704		1,891			592		647			205		214			9		9			—		—			2,510		2,761
2019	1,048		1,100			138		141			596		610			—		—			—		—			1,782		1,851
2020	734		748			280		293			186		191			29		30			—		—			1,229		1,262
Total	$	6,396	$	6,839		$	2,890	$	3,039		$	1,771	$	1,784		$	160	$	150		$	114	$	98		$	11,331	$	11,910
Ratings Distribution			57.4		%			25.5		%			15.0		%			1.3		%			0.8		%			100.0		%


	Three Months Ended September 30, 2021	Nine Months Ended September 30, 2021
Gain (loss) recognized in net income (loss) (in millions)	($279)	($490)
Approximate percentage of gain (loss) attributable to observable inputs	—%	23%
Primary drivers of observable gain (loss)	N/A	Increases in interest rates on interest rate total return swaps and increases in certain equity index levels on equity derivatives.
Approximate percentage of gain (loss) attributable to unobservable inputs	100%	77%