MetLife 2013 Annual Report Download - page 176

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
10. Fair Value (continued)
(1) Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if
the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral
or the present value of the expected future cash flows.
(2) For these cost method investments, estimated fair value is determined from information provided in the financial statements of the underlying entities
including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic
and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment
grade debt and mezzanine debt funds. Distributions 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 two to 10 years. Unfunded commitments for these investments at both December 31, 2013 and 2012 were not significant.
(3) For these cost method investments, estimated fair value is determined from information provided in the financial statements of the underlying entities
including NAV data. These investments include several real estate funds that typically invest primarily in commercial real estate and mezzanine debt.
Distributions 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 one to 10 years. Unfunded
commitments for these investments at both December 31, 2013 and 2012 were not significant.
(4) As discussed in Note 11, in 2012, the Company recorded an impairment of goodwill associated with the Retail Annuities reporting unit. In addition,
in 2011, the Company recorded an impairment of goodwill associated with MetLife Bank. This impairment has been categorized as Level 3 due to
the significant unobservable inputs used in the determination of the estimated fair value.
(5) As discussed in Note 5, in 2012, the Company recorded an impairment of VOCRA, which is included in other assets.
Fair Value of Financial Instruments Carried at Other Than Fair Value
The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value.
These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities
loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not
included in the three level hierarchy table disclosed in the “— Recurring Fair Value Measurements” section. The estimated fair value of the excluded
financial instruments, which are primarily classified in Level 2 and, to a lesser extent, in Level 1, approximates carrying value as they are short-term in
nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts
excluded from the table below are not considered financial instruments subject to this disclosure.
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are
summarized as follows at:
December 31, 2013
Fair Value Hierarchy
Carrying
Value Level 1 Level 2 Level 3
Total
Estimated
Fair Value
(In millions)
Assets
Mortgage loans:
Held-for-investment ...................................................... $ 55,767 $ — $ — $ 57,921 $ 57,921
Held-for-sale ........................................................... 3 — — 3 3
Mortgage loans, net ................................................... $ 55,770 $ — $ — $ 57,924 $ 57,924
Policy loans .............................................................. $ 11,764 $ — $ 1,694 $ 11,512 $ 13,206
Real estate joint ventures ................................................... $ 102 $ — $ — $ 169 $ 169
Other limited partnership interests ............................................. $ 950 $ — $ — $ 1,109 $ 1,109
Other invested assets ...................................................... $ 844 $322 $ 163 $ 359 $ 844
Premiums, reinsurance and other receivables ................................... $ 3,116 $ — $ 728 $ 2,382 $ 3,110
Other assets ............................................................. $ 324 $ — $ 210 $ 142 $ 352
Liabilities
PABs ................................................................... $139,735 $ — $ — $144,631 $144,631
Bank deposits ............................................................ $ — $ — $ — $ — $ —
Long-term debt ........................................................... $ 17,170 $ — $ 18,564 $ — $ 18,564
Collateral financing arrangements ............................................. $ 4,196 $ — $ — $ 3,984 $ 3,984
Junior subordinated debt securities ........................................... $ 3,193 $ — $ 3,789 $ — $ 3,789
Other liabilities ............................................................ $ 2,239 $ — $ 948 $ 1,292 $ 2,240
Separate account liabilities .................................................. $117,562 $ — $117,562 $ — $117,562
168 MetLife, Inc.