MetLife 2009 Annual Report Download - page 160

Residential mortgage loans held-for-sale accounted for under the fair value option are initially measured at estimated fair value. Interest
income on residential mortgage loans held-for-sale is recorded based on the stated rate of the loan and is recorded in net investment income.
Gains and losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales are recognized in other
revenues, and such changes in estimated fair value were due to the following:
2009 2008
For the
Years Ended
December 31,
(In millions)
Instrument-specific credit risk based on changes in credit spreads for non-agency loans and
adjustmentsinindividualloanquality........................................... $ (2) $ —
Otherchangesinestimatedfairvalue............................................ 600 55
Totalgains(losses)recognizedinotherrevenues .................................... $598 $ 55
Non-Recurring Fair Value Measurements
Certain assets are measured at estimated fair value on a non-recurring basis and are not included in the tables above. The amounts below
relate to certain investments measured at estimated fair value during the period and still held as of the reporting dates.
Carrying
Value Prior to
Impairment
Estimated
Fair
Value After
Impairment Gains (Losses)
Carrying
Value Prior to
Impairment
Estimated
Fair
Value After
Impairment Gains (Losses)
2009 2008
For the Years Ended December 31,
(In millions)
Mortgage loans(1):
Held-for-investment............... $294 $202 $ (92) $257 $188 $ (69)
Held-for-sale ................... 9 8 (1) 42 32 (10)
Mortgageloans,net ............. $303 $210 $ (93) $299 $220 $ (79)
Other limited partnership interests(2) . . . . . $915 $561 $(354) $242 $137 $(105)
Realestatejointventures(3)........... $175 $ 93 $ (82) $ — $ — $ —
(1) Mortgage Loans — The impaired mortgage loans presented above were written down to their estimated fair values at the date the
impairments were recognized. Estimated fair values for impaired mortgage loans are based on observable market prices or, if the loans are
in foreclosure or are otherwise determined to be collateral dependent, on the estimated fair value of the underlying collateral, or the
present value of the expected future cash flows. Impairments to estimated fair value represent non-recurring fair value measurements that
have been categorized as Level 3 due to the lack of price transparency inherent in the limited markets for such mortgage loans.
(2) Other Limited Partnership Interests — The impaired investments presented above were accounted for using the cost basis. Impairments
on these cost basis investments were recognized at estimated fair value determined from information provided in the financial statements
of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-
recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the
market for such investments. This category includes several private equity and debt funds that typically invest primarily in a diversified pool
of investments across certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber
and infrastructure development funds; venture capital funds; below investment grade debt and mezzanine debt funds. The estimated fair
values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital.
Distributions from these investments will be generated from investment gains, from operating income from the underlying investments
of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be
liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $354 million as of December 31, 2009.
(3) Real Estate Joint Ventures — The impaired investments presented above were accounted for using the cost basis. Impairments on these
cost basis investments were recognized at estimated fair value determined from information provided in the financial statements of the
underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring
fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for
such investments. This category includes several real estate funds that typically invest primarily in commercial real estate. The estimated
fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital.
Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of
the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated
over the next 2 to 10 years. Unfunded commitments for these investments were $86 million as of December 31, 2009.
F-76 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)