MetLife 2006 Annual Report Download - page 161

Amounts related to the Company’s financial instruments are as follows:
December 31, 2006
Notional
Amount Carrying Value Estimated Fair Value
(In millions)
Assets:
Fixedmaturitysecurities ........................................... $243,428 $243,428
Tradingsecurities................................................ $ 759 $ 759
Equitysecurities................................................. $ 5,131 $ 5,131
Mortgageandconsumerloans ....................................... $ 42,239 $ 42,451
Policyloans ................................................... $ 10,228 $ 10,228
Short-terminvestments............................................ $ 2,709 $ 2,709
Cashandcashequivalents ......................................... $ 7,107 $ 7,107
Accruedinvestmentincome......................................... $ 3,347 $ 3,347
Mortgageloancommitments......................................... $4,022 $ — $ 4
Commitmentstofundbankcreditfacilitiesandbridgeloans .................... $1,908 $ — $ —
Liabilities:
Policyholderaccountbalances ....................................... $112,438 $108,318
Short-termdebt................................................. $ 1,449 $ 1,449
Long-termdebt................................................. $ 9,979 $ 10,149
Juniorsubordinateddebtsecurities.................................... $ 3,780 $ 3,759
Sharessubjecttomandatoryredemption................................. $ 278 $ 357
Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . $ 45,846 $ 45,846
December 31, 2005
Notional
Amount Carrying Value Estimated Fair Value
(In millions)
Assets:
Fixedmaturitysecurities ........................................... $230,050 $230,050
Tradingsecurities................................................ $ 825 $ 825
Equitysecurities................................................. $ 3,338 $ 3,338
Mortgageandconsumerloans ....................................... $ 37,190 $ 37,820
Policyloans ................................................... $ 9,981 $ 9,981
Short-terminvestments............................................ $ 3,306 $ 3,306
Cashandcashequivalents ......................................... $ 4,018 $ 4,018
Accruedinvestmentincome......................................... $ 3,036 $ 3,036
Mortgageloancommitments......................................... $2,974 $ — $ (4)
Commitmentstofundbankcreditfacilitiesandbridgeloans .................... $ 346 $ — $ —
Liabilities:
Policyholderaccountbalances ....................................... $108,591 $106,237
Short-termdebt................................................. $ 1,414 $ 1,414
Long-termdebt................................................. $ 9,489 $ 9,890
Juniorsubordinateddebtsecurities.................................... $ 2,533 $ 2,504
Sharessubjecttomandatoryredemption................................. $ 278 $ 362
Payables for collateral under securities loaned and other transactions . . . . . . . . . . . . . . $ 34,515 $ 34,515
The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:
Fixed Maturity Securities, Trading Securities and Equity Securities
The fair values of publicly held fixed maturity securities and publicly held equity securities are based on quoted market prices or
estimates from independent pricing services. However, in cases where quoted market prices are not available, such as for private fixed
maturity securities, fair values are estimated using present value or valuation techniques. The determination of fair values is based on:
(i) valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the
circumstances. The fair value estimates based on available market information and judgments about financial instruments, including
estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Factors
considered in estimating fair value include; coupon rate, maturity, estimated duration, call provisions, sinking fund requirements, credit
rating, industry sector of the issuer, and quoted market prices of comparable securities.
Mortgage and Consumer Loans, Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities and
Bridge Loans
Fair values for mortgage and consumer loans are estimated by discounting expected future cash flows, using current interest rates for
similar loans with similar credit risk. For mortgage loan commitments and commitments to fund bank credit facilities and bridge loans, the
estimated fair value is the net premium or discount of the commitments.
Policy Loans
The carrying values for policy loans approximate fair value.
F-78 MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)