MetLife 2013 Annual Report Download - page 50

Investment Portfolio Results
The following yield table presents the yield and investment income (loss) for our investment portfolio for the periods indicated. As described in the
footnotes below, this table reflects certain differences from the presentation of net investment income presented in the GAAP consolidated statements
of operations. This yield table presentation is consistent with how we measure our investment performance for management purposes, and we believe
it enhances understanding of our investment portfolio results.
For the Years Ended December 31,
2013 2012 2011
Yield% (1) Amount Yield% (1) Amount Yield% (1) Amount
(In millions) (In millions) (In millions)
Fixed maturity securities (2) (3) ......................................... 4.84% $15,098 4.85% $15,243 4.94% $15,016
Mortgage loans (3) .................................................. 5.58% 3,020 5.64% 3,190 5.53% 3,162
Real estate and real estate joint ventures ................................. 3.44% 347 4.59% 401 3.76% 307
Policy loans ........................................................ 5.26% 620 5.25% 626 5.43% 641
Equity securities .................................................... 4.44% 127 4.60% 133 4.44% 141
Other limited partnership interests ....................................... 13.35% 955 12.76% 845 10.58% 681
Cash and short-term investments ....................................... 0.98% 168 0.69% 143 1.04% 155
Other invested assets ................................................ 819 595 439
Total before investment fees and expenses ............................... 5.03% 21,154 4.96% 21,176 5.00% 20,542
Investment fees and expenses ......................................... (0.13) (563) (0.13) (554) (0.13) (546)
Net investment income including Divested Businesses (4) .................... 4.90% 20,591 4.83% 20,622 4.87% 19,996
Less: net investment income from Divested Businesses (4) ................... (7) (150) (358)
Net investment income (5) ............................................ $20,584 $20,472 $19,638
(1) Yields are calculated as investment income as a percent of average quarterly asset carrying values. Investment income excludes recognized gains
and losses and reflects GAAP adjustments presented in footnote (5) below. Asset carrying values exclude unrealized gains (losses), collateral
received in connection with our securities lending program, freestanding derivative assets, collateral received from derivative counterparties, the
effects of consolidating certain variable interest entities (“VIEs”) under GAAP that are treated as consolidated securitization entities (“CSEs”),
contractholder-directed unit-linked investments and securitized reverse residential mortgage loans. A yield is not presented for other invested assets,
as it is not considered a meaningful measure of performance for this asset class.
(2) Investment income (loss) includes amounts for FVO and trading securities of $65 million, $88 million and $31 million for the years ended
December 31, 2013, 2012 and 2011, respectively.
(3) Investment income from fixed maturity securities and mortgage loans includes prepayment fees.
(4) Yield calculations include the net investment income and ending carrying values of the Divested Businesses. The net investment income adjustment
for the Divested Businesses for the year ended December 31, 2012 of $150 million excludes $177 million of securitized reverse residential
mortgage loans that were included in the Divested Businesses adjustment of $327 million presented below. For further information on Divested
Businesses, see Note 3 of the Notes to the Consolidated Financial Statements.
(5) Net investment income presented in the yield table varies from the most directly comparable GAAP measure due to certain reclassifications and
excludes the effects of consolidating certain VIEs under GAAP that are treated as CSEs and contractholder-directed unit-linked investments. Such
reclassifications are presented in the table below.
Years Ended December 31,
2013 2012 2011
(In millions)
Net investment income — in the above yield table ................................... $20,584 $20,472 $19,638
Real estate discontinued operations ............................................ (9) (3) (10)
Scheduled periodic settlement payments on derivatives not qualifying for hedge
accounting .............................................................. (643) (448) (249)
Equity method operating joint ventures .......................................... (2) — (23)
Contractholder-directed unit-linked investments ................................... 2,172 1,473 (453)
Divested Businesses ........................................................ 7 327 358
Incremental net investment income from CSEs .................................... 123 163 324
Net investment income — GAAP consolidated statements of operations .................. $22,232 $21,984 $19,585
See “— Results of Operations — Consolidated Results — Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012”
and “—Results of Operations — Consolidated Results —Year Ended December 31, 2012 Compared with the Year Ended December 31, 2011,” for an
analysis of the year over year changes in net investment income.
Fixed Maturity and Equity Securities Available-for-Sale
Fixed maturity securities AFS, which consisted principally of publicly-traded and privately-placed fixed maturity securities and redeemable preferred
stock, were $350.2 billion and $374.3 billion, at estimated fair value, or 71% and 70% of total cash and invested assets, at December 31, 2013 and
2012, respectively. Publicly-traded fixed maturity securities represented $302.3 billion and $323.8 billion, at estimated fair value, or 86% and 87% of
total fixed maturity securities, at December 31, 2013 and 2012, respectively. Privately placed fixed maturity securities represented $47.9 billion and
$50.5 billion, at estimated fair value, or 14% and 13% of total fixed maturity securities at December 31, 2013 and 2012, respectively.
Equity securities AFS, which consisted principally of publicly-traded and privately-held common and non-redeemable preferred stock, including
certain perpetual hybrid securities and mutual fund interests, were $3.4 billion and $2.9 billion, at estimated fair value, or 0.7% and 0.5% of total cash
and invested assets, at December 31, 2013 and 2012, respectively. Publicly-traded equity securities represented $2.4 billion and $1.8 billion, at
42 MetLife, Inc.