MetLife 2013 Annual Report Download - page 174

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
10. Fair Value (continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Net Derivatives: (6)
Interest
Rate
Foreign
Currency
Exchange
Rate Credit Equity Market
Net
Embedded
Derivatives (7)
Separate
Account
Assets (8)
Long-term
Debt of
CSEs - FVO MSRs (9)
Liability
Related
to Securitized
Reverse
Mortgage
Loans (9)
(In millions)
Year Ended December 31, 2011:
Balance at January 1, .............$ (86) $ 73 $ 44 $ 142 $ (2,438) $ 1,983 $ (184) $ 950 $ —
Total realized/unrealized gains
(losses) included in:
Net income (loss): (1), (2)
Net investment income ........ — — — (3) — — — — —
Net investment gains (losses) . . . — — — — — 39 (8) — —
Net derivative gains (losses) .... 41 (28) (43) 601 (1,277) — — — —
Other revenues .............. 62 — — — — — — (314) —
Policyholder benefits and
claims ................... — — — 7 86 — — — —
Other expenses ............. — — — — — — — — —
OCI......................... 329 — 14 1 (119) — — — —
Purchases (3) ................... (1) — 1 228 — 284 — — —
Sales (3) ....................... — — — — — (743) — — —
Issuances (3) ................... — — (3) (4) — — — 173 (1,175)
Settlements (3) .................. (44) (1) (12) (8) (455) — 76 (143) —
Transfers into Level 3 (4) .......... (1) — — — — 19 — — —
Transfers out of Level 3 (4) ......... — — — (75) — (257) — — —
Balance at December 31, .........$ 300 $ 44 $ 1 $ 889 $ (4,203) $ 1,325 $ (116) $ 666 $ (1,175)
Changes in unrealized gains (losses)
included in net income (loss): (5)
Net investment income ........$ — $ — $ — $ — $ — $ — $ — $ — $ —
Net investment gains (losses) ...$ — $ — $ — $ — $ — $ — $ (8) $ — $ —
Net derivative gains (losses) ....$ 24 $ (24) $ (42) $ 601 $ (1,303) $ — $ — $ — $ —
Other revenues ..............$ 68 $ — $ — $ — $ — $ — $ — $ (282) $ —
Policyholder benefits and
claims ...................$ — $ — $ — $ 7 $ 94 $ — $ — $ — $ —
Other expenses .............$ — $ — $ — $ — $ — $ — $ — $ — $ —
(1) Amortization of premium/accretion of 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) Items purchased/issued and then 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 OCI, 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) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods.
(6) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(7) Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
(8) 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).
(9) See Note 3 for a discussion of the MetLife Bank Divestiture. Other revenues related to MSRs represent the changes in estimated fair value due to
changes in valuation model inputs or assumptions.
166 MetLife, Inc.