MetLife 2012 Annual Report Download - page 42

purchased credit default protection across Europe’s perimeter region, by country, and Cyprus. We have not written any credit default swaps with an
underlying risk related to any of these countries. The information below is presented on a country of risk basis (e.g. the country where the issuer primarily
conducts business).
Summary of Select European Country Investment Exposure at December 31, 2012
Fixed maturity securities (1)
Sovereign Financial Services Non-Financial Services Total
All Other
General Account
Investment
Exposure (2) Total Exposure (3) %
Purchased
Credit Default
Protection (4) Net Exposure %
(In millions)
Europe’s
perimeter region:
Portugal ................ $ — $ — $ 55 $ 55 $ 8 $ 63 2% $ — $ 63 2%
Italy ................... 4 81 727 812 73 885 25 (3) 882 25
Ireland ................. — 18 218 236 1,383 1,619 45 — 1,619 45
Greece ................ 69 — — 69 160 229 6 — 229 6
Spain .................. — 95 527 622 43 665 19 — 665 19
Total Europe’s perimeter
region ................. 73 194 1,527 1,794 1,667 3,461 97 (3) 3,458 97
Cyprus ................ 75 — — 75 21 96 3 — 96 3
Total .................... $148 $194 $1,527 $1,869 $1,688 $3,557 100% $ (3) $3,554 100%
As percent of total cash and
invested assets .......... 0.0% 0.0% 0.3% 0.3% 0.3% 0.6% 0.0% 0.6%
Investment grade percent .... 3% 94% 90% 84%
Non investment grade
percent ................ 97% 6% 10% 16%
(1) Presented at estimated fair value. The par value and amortized cost of the fixed maturity securities were $2.1 billion and $1.8 billion, respectively, at
December 31, 2012.
(2) Comprised of equity securities, FVO general account securities, real estate and real estate joint ventures, other limited partnership interests, cash,
cash equivalents and short-term investments, and other invested assets at carrying value. See Note 1 of the Notes to the Consolidated Financial
Statements for an explanation of the carrying value for these invested asset classes. Excludes FVO contractholder-directed unit-linked investments
of $730 million, which support unit-linked variable annuity type liabilities and do not qualify for separate account summary total assets and liabilities.
The contractholder, and not the Company, directs the investment of these funds. The related variable annuity type liability is satisfied from the
contractholder’s account balance and not from our general account investments.
(3) For Greece, the Company had $1 million of commitments to fund partnership investments at December 31, 2012.
(4) Purchased credit default protection is stated at the estimated fair value of the swap. For Italy, the purchased credit default protection relates to
financial services corporate securities and these swaps had a notional amount of $80 million and an estimated fair value of $3 million at
December 31, 2012. The counterparties to these swaps are financial institutions with Standard & Poor’s Ratings Services (“S&P”) credit ratings
ranging from A+ to A as of December 31, 2012.
Rating Actions — U.S. Treasury Securities. As a result of a special Congressional committee failing to agree on certain deficit-reduction measures in
August 2011, S&P downgraded the AAA rating on U.S. Treasury securities to AA+. We continue to closely evaluate the implications on our investment
portfolio of further rating agency downgrades of U.S. Treasury securities and believe our investment portfolio is well positioned.
Current Environment - 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, 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 – Economic Environment and Capital Markets-Related Risks – If Difficult Conditions in the Global Capital Markets and the Economy Generally
Persist, They May Materially Adversely Affect Our Business and Results of Operations” in the 2012 Form 10-K.
36 MetLife, Inc.