MetLife 2011 Annual Report Download - page 45

redeployed and reduced some of this increased liquidity position into higher yielding investments according to our ALM discipline. Despite the
downgrade by S&P, yields on U.S. Treasury securities have decreased since these actions, causing an increase in the unrealized gain position on our
holdings of U.S. Treasury and agency securities. The S&P downgrade initially had an adverse effect on financial markets but the extent of the longer-
term impact cannot be predicted. See “Risk Factors — Concerns Over U.S. Fiscal Policy and the Trajectory of the National Debt of the U.S., as well as
Rating Agency Downgrades of U.S. Treasury Securities Could Have an Adverse Effect on Our Business, Financial Condition and Results of Operations”
in the 2011 Form 10-K.
Japan Investments. The Japanese economy, to which we face substantial exposure given our operations there, was significantly negatively
impacted by the March 2011 earthquake and tsunami. Although we expect modest growth in the Japanese economy during 2012, disruptions to the
Japanese economy are having, and will continue to have, negative impacts on the overall global economy, not all of which can be foreseen. The
Company’s investment in fixed maturity and equity securities in Japan were $28.4 billion, of which $21.0 billion, or 74%, were Japan government and
agency fixed maturity securities at December 31, 2011.
Summary. All of these factors have had and could continue to have an adverse effect on the financial results of companies in the financial services
industry, including MetLife. Such global economic conditions, as well as the global financial markets, continue to impact our net investment income, our
net investment gains (losses) and net derivative gains (losses), level of unrealized gains and (losses) within the various asset classes within our
investment portfolio and our allocation to lower yielding cash equivalents and short-term investments. See “— Industry Trends” and “Risk Factors –
Difficult Conditions in the Global Capital Markets and the Economy Generally May Materially Adversely Affect Our Business and Results of Operations
and These Conditions May Not Improve in the Near Future” in the 2011 Form 10-K.
MetLife, Inc. 41