MetLife 2012 Annual Report Download - page 164

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Net Derivatives: (7)
Interest
Rate
Foreign
Currency
Exchange
Rate Credit Equity Market
Net
Embedded
Derivatives (8)
Separate
Account
Assets (9)
Long-term
Debt of
CSEs (10)
(In millions)
Year Ended December 31, 2010:
Balance, January 1, .................................. $ 7 $ 108 $ 42 $ 199 $ (1,455) $ 1,797 $ —
Total realized/unrealized gains
(losses) included in:
Net income (loss): (1), (2)
Net investment income ........................... ———— ———
Net investment gains (losses) ...................... ———— —13248
Net derivative gains (losses) ........................ 36 46 4 (88) (343) — —
Other revenues ................................. 1 — — — — — —
Policyholder benefits and claims .................... ———— 8——
Other expenses ................................. — (4) — — — — —
Other comprehensive income (loss) ................... (107) 2 13 11 (226) — —
Purchases, sales, issuances and settlements (3) ........... (23) (57) (15) 20 (422) 242 (232)
Transfers into Level 3 (4) .............................. ———— —46—
Transfers out of Level 3 (4) ............................ — (22) — — — (234) —
Balance, December 31, .............................. $ (86) $ 73 $ 44 $ 142 $ (2,438) $ 1,983 $ (184)
Changes in unrealized gains (losses)
included in net income (loss): (5)
Net investment income ........................... $ — $ — $ — $ — $ — $ — $ —
Net investment gains (losses) ...................... $ — $ — $ — $ — $ — $ — $ 48
Net derivative gains (losses) ........................ $ 36 $ 45 $ 6 $ (82) $ (363) $ — $ —
Other revenues ................................. $ 5 $ — $ — $ — $ — $ — $ —
Policyholder benefits and claims .................... $ — $ — $ — $ — $ 8 $ — $ —
Other expenses ................................. $ — $ — $ — $ — $ — $ — $ —
(1) Amortization of premium/discount is included within net investment income. Impairments charged to net income (loss) on securities and certain
mortgage loans are included in net investment gains (losses) while changes in the estimated fair value of certain mortgage loans and MSRs are
included in other revenues. Lapses associated with net embedded derivatives are included 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) The amount reported within purchases, sales, issuances and settlements is the purchase or issuance price and the sales or settlement proceeds
based upon the actual date purchased or issued and sold or settled, respectively. Items purchased/issued and sold/settled in the same period are
excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements.
(4) Gains and losses, in net income (loss) and other comprehensive income (loss), are calculated assuming transfers into and/or out of Level 3 occurred
at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.
(5) Relates to assets and liabilities still held at the end of the respective periods.
(6) Other revenues represent the changes in estimated fair value due to changes in valuation model inputs or assumptions. For the years ended
December 31, 2012, 2011 and 2010, there were no other changes in estimated fair value affecting MSRs.
(7) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(8) Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
(9) 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. For the purpose of this disclosure, these changes
are presented within net investment gains (losses).
(10) The long-term debt of the CSEs consolidated as of January 1, 2010 is reported within the purchases, sales, issuances and settlements caption of
the rollforward.
Fair Value Option
The following table presents information for certain assets and liabilities accounted for under the FVO. These assets and liabilities are initially
measured at fair value.
158 MetLife, Inc.