For purposes of this discussion, "MetLife" or the "Company" refers to MetLife, Inc., a Delaware corporation incorporated in 1999 (the "Holding Company"), and its subsidiaries, including Metropolitan Life Insurance Company ("MLIC"). Following this summary is a discussion addressing the consolidated results of operations and financial condition of the Company for the periods indicated. This discussion should be read in conjunction with MetLife, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008, as amended on Form 8-K on June 12, 2009, ("2008 Annual Report") filed with the U.S. Securities and Exchange Commission ("SEC"), the forward-looking statement information included below, the "Risk Factors" set forth in Part II, Item 1A and the additional risk factors referred to therein, and the Company's interim condensed consolidated financial statements included elsewhere herein.

This Management's Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining MetLife's actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife, Inc.'s filings with the SEC. These factors include: (i) difficult and adverse conditions in the global and domestic capital and credit markets; (ii) continued volatility and further deterioration of the capital and credit markets, which may affect the Company's ability to seek financing or access its credit facilities; (iii) uncertainty about the effectiveness of the U.S. government's plan to stabilize the financial system by injecting capital into financial institutions, purchasing large amounts of illiquid, mortgage-backed and other securities from financial institutions, or otherwise; (iv) the impairment of other financial institutions;
(v) potential liquidity and other risks resulting from MetLife's participation in a securities lending program and other transactions; (vi) exposure to financial and capital market risk; (vii) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect the Company's ability to raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require the Company to pledge collateral or make payments related to declines in value of specified assets; (viii) defaults on the Company's mortgage and consumer loans; (ix) investment losses and defaults, and changes to investment valuations; (x) impairments of goodwill and realized losses or market value impairments to illiquid assets; (xi) unanticipated changes in industry trends;
(xii) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors and for personnel; (xiii) discrepancies between actual claims experience and assumptions used in setting prices for the Company's products and establishing the liabilities for the Company's obligations for future policy benefits and claims; (xiv) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xv) ineffectiveness of risk management policies and procedures, including with respect to guaranteed benefit riders (which may be affected by fair value adjustments arising from changes in our own credit spread) on certain of the Company's variable annuity products;
(xvi) increased expenses relating to pension and post-retirement benefit plans;
(xvii) catastrophe losses; (xviii) changes in assumptions related to deferred policy acquisition costs ("DAC"), value of business acquired ("VOBA") or goodwill; (xix) downgrades in MetLife, Inc.'s and its affiliates' claims paying ability, financial strength or credit ratings; (xx) economic, political, currency and other risks relating to the Company's international operations;
(xxi) availability and effectiveness of reinsurance or indemnification arrangements; (xxii) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company's products or services; (xxiii) changes in accounting standards, practices and/or policies; (xxiv) adverse results or other consequences from litigation, arbitration or regulatory investigations;
(xxv) deterioration

in the experience of the "closed block" established in connection with the reorganization of MLIC; (xxvi) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes;
(xxvii) MetLife's ability to identify and consummate on successful terms any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; (xxviii) MetLife, Inc.'s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; and (xxix) other risks and uncertainties described from time to time in MetLife, Inc.'s filings with the SEC.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the SEC.

The following discussion includes references to operating earnings, which for purposes of this discussion should be read as operating earnings available to common shareholders. Operating earnings is not based on accounting principles generally accepted in the United States of America ("GAAP"). Operating earnings is defined as GAAP net income (loss) available to MetLife, Inc.'s common shareholders, excluding net investment gains (losses); adjustments related to net investment gains (losses); adjustments related to net investment gains (losses) of consolidated entities and operating joint ventures reported under the equity method of accounting and the impact of MetLife's credit spread; adjustments related to acquisition costs incurred to effect a business combination after January 1, 2009; and discontinued operations other than discontinued real estate, all net of income tax. Scheduled periodic settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in operating earnings. MetLife believes that operating earnings enhances the understanding and comparability of its performance by excluding net investment gains (losses), net of income tax, adjustments related to net investment gains (losses), net of income tax, and adjustments related to net investment gains (losses) of consolidated entities and operating joint ventures reported under the equity method of accounting and the impact of MetLife's credit spread, net of income tax, each of which can fluctuate significantly from period to period, and adjustments related to acquisition costs incurred to effect a business combination after January 1, 2009, net of income tax, and discontinued operations other than discontinued real estate, net of income tax, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings should not be viewed as a substitute for GAAP net income (loss) available to MetLife, Inc.'s common shareholders. A reconciliation of operating earnings to GAAP net income (loss) available to MetLife, Inc.'s common shareholders, the most directly comparable GAAP measure, is provided below.

Executive Summary

MetLife is a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries, MetLife offers life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. MetLife is currently organized into four operating segments: Institutional, Individual, Auto & Home and International, as well as Corporate & Other.

                                                 Three Months                Nine Months
                                                     Ended                      Ended
                                                 September 30,              September 30,
                                               2009         2008          2009         2008
                                                              (In millions)

Net income (loss) available to MetLife,
Inc.'s common shareholders                   $   (650 )    $   600      $ (2,657 )    $ 2,130
Less: Net investment gains (losses), net
of income tax                                  (1,420 )        483        (4,573 )       (217 )
Less: Adjustments related to net
investment gains (losses), net of income
tax                                                66          (61 )         331          134
Less: Adjustments related to acquisition
costs, net of income tax                          (12 )          -           (21 )          -
Less: Discontinued operations, net of
income tax                                         (2 )       (430 )          34         (349 )

Operating earnings available to MetLife,
Inc.'s common shareholders                   $    718      $   608      $  1,572      $ 2,562

Unless otherwise stated, all amounts are net of income tax.

During the three months ended September 30, 2009, MetLife, Inc.'s net income
(loss) available to common shareholders decreased $1.3 billion to a loss of $650 million from income of $600 million in the comparable 2008 period. The period over period change is predominantly due to an unfavorable change of $1.8 billion in net investment gains (losses), resulting from a $1.4 billion net investment loss, net of related adjustments, in the current period compared with a net investment gain of $422 million, net of related adjustments, in the comparable 2008 period. The change in net investment losses was partially offset by a reduction of $428 million in losses from discontinued operations and an increase in operating earnings of $110 million.

The trends noted above were also drivers of results for the nine months ended September 30, 2009, as net income (loss) available to common shareholders decreased $4.8 billion to a loss of $2.7 billion from income of $2.1 billion in the comparable 2008 period. The increase in net investment losses was $4.2 billion to a loss of $4.3 billion, net of related adjustments, in the current period compared with a loss of $83 million, net of related adjustments, in the comparable 2008 period. In addition, operating earnings declined $990 million and income from discontinued operations of $34 million increased from a loss of $349 million.

The $1.4 billion in net investment losses, net of related adjustments, in the three months ended September 30, 2009, includes an $857 million loss on derivatives. MetLife uses derivatives in connection with its broader investment portfolio management efforts to hedge a number of risks, including changes in interest rates and foreign currencies. During the current quarter, an improvement, or tightening, in MetLife's credit spread, which impacts the valuation of certain insurance liabilities, contributed $582 million to the $857 million in derivative losses. Changes in the value of foreign-currency related derivatives, driven by the weakening of the U.S. Dollar against other major currencies, also contributed to the loss and are, in general, offset on an economic basis by gains recognized on various assets and liabilities. The balance of the net investment losses was primarily due to credit-related losses and impairments across a broad range of invested asset classes and was consistent with the Company's expectations.

For the nine months ended September 30, 2009, the $4.3 billion of net investment losses, net of related adjustments, reflects a $2.6 billion loss on derivatives, including an $1.0 billion loss from improvement, or tightening, in MetLife's credit spread.

In 2009, MetLife's businesses continued to perform well despite the current economic challenges, as evidenced by an increase in operating earnings of $110 million, or 18%, to $718 million in the three months ended September 30, 2009, compared to $608 million in the comparable 2008 period. Organic growth across many of the businesses, coupled with the impact of acquisitions by MetLife Bank as it entered the mortgage origination and servicing business during 2008, and the impact of the improvement of certain financial market conditions were the primary drivers of the increase in operating earnings. In addition, lower expenses resulting, in part, from an enterprise-wide cost reduction and revenue enhancement initiative contributed to the increase in operating earnings. These increases were partially offset by the impact of lower variable net investment income in several of the interest spread businesses, as well as higher pension and post retirement benefit costs.

For the nine months ended September 30, 2009, lower net investment income, specifically lower variable net investment income resulting from lower yields and negative returns realized on real estate funds and real estate joint ventures, caused significant declines in the interest spread businesses. In addition, higher non-deferrable volume-related expenses and higher pension and post retirement benefits, partially offset by cost reductions related to an enterprise-wide initiative, also contributed to the decrease in operating earnings. These items offset the impact of acquisitions by MetLife Bank, as well as business growth from many of the Company's businesses, and improved mortality in the life products.

Consolidated Company Outlook

The marketplace continues to react and adapt to the economic crisis and the unusual financial market events that began in 2008 and continue into 2009. Management expects the volatility in the financial markets experienced in the first quarter, which abated somewhat during the second and third quarters, to stabilize further in the fourth quarter of 2009. As a result, management anticipates a modest increase, on a constant exchange rate basis, in premiums, fees and other revenues in the fourth quarter of 2009, with mixed results across the various businesses. While the Company continues to gain market share in certain product lines, as management expected, premiums, fees and other revenues have been, and may continue to be, impacted by the U.S. and global recession, which may be reflected in, but is not limited to:

• Lower fee income from separate account businesses, including variable annuity and life products in Individual Business.

• A potential reduction in payroll linked revenue from Institutional group insurance customers.

• A decline in demand for certain International and Institutional retirement & savings products.

• A decrease in Auto & Home premiums resulting from a depressed housing market and auto industry.

Management believes there will be continued downward pressure on net income, specifically net investment income, resulting from lower returns from other limited partnership interests, real estate joint ventures, and securities lending. Management's decision to maintain a slightly higher than normal level of short-term liquidity has adversely impacted net investment income in 2009. In addition, the resulting impact of the financial markets and the recession on net investment gains (losses) and unrealized investment gains (losses) can and will vary greatly and therefore, is difficult to predict. Also difficult to determine is the impact of changes in our own credit standing, particularly on our net investment gains and losses, as it varies significantly and this exposure is not hedged.

Certain insurance-related liabilities, specifically those associated with guarantees, are tied to market performance, which in times of depressed investment markets may require management to establish additional liabilities. However, many of the risks associated with these guarantees are hedged. The turbulent financial markets, sustained over a period of time, may also necessitate management to strengthen insurance liabilities that are not associated with guarantees. Management does not anticipate significant changes in the underlying trends that drive underwriting results, with the possible exception of certain trends in the disability business.

Certain expenses may increase due to initiatives such as Operational Excellence. The unusual financial market conditions have caused, and may continue to cause an impact on DAC amortization patterns. As expected, the Company's pension-related expense for 2009 has increased.

In response to the challenges presented by the unusual economic environment, management continues to focus on disciplined underwriting, pricing, hedging strategies, as well as focused expense management.

Industry Trends

The Company's segments continue to be influenced by a continuing unstable financial and economic environment that affect the industry.

Financial and Economic Environment. Our results of operations are materially affected by conditions in the global capital markets and the economy, generally, both in the United States and elsewhere around the world. The stress experienced by global capital markets that began in the second half of 2007 continued and substantially

increased through the first quarter of 2009. Beginning in mid-September 2008, the global financial markets experienced unprecedented disruption, adversely affecting the business environment in general, as well as the financial services industry, in particular. This disruption has since moderated, but not all financial markets are functioning normally. The U.S. economy entered a recession in January 2008 and most economists believe this recession ended in June 2009.

Throughout 2008 and continuing in 2009, Congress, the Federal Reserve Bank of New York, the U.S. Treasury and other agencies of the Federal government took a number of increasingly aggressive actions (in addition to continuing a series of interest rate reductions that began in the second half of 2007) intended to provide liquidity to financial institutions and markets, to avert a loss of investor confidence in particular troubled institutions, to prevent or contain the spread of the financial crisis and to spur economic growth. How and to whom these governmental institutions distribute amounts available under the governmental programs could have the effect of supporting some aspects of the financial services industry more than others or provide advantages to some of our competitors. Governments in many of the foreign markets in which MetLife operates have also responded to address market imbalances and have taken meaningful steps intended to restore market confidence. We cannot predict whether the U.S. or foreign governments will establish additional governmental programs or the impact any additional measures or existing programs will have on the financial markets, whether on the levels of volatility currently being experienced, the levels of lending by financial institutions, the prices buyers are willing to pay for financial assets or otherwise. See "Business - Regulation - Governmental Responses to Extraordinary Market Conditions" in the 2008 Annual Report.

The economic crisis and the resulting recession have had and will continue to have an adverse effect on the financial results of companies in the financial services industry, including the Company. The declining financial markets and economic conditions have negatively impacted our investment income, our net investment gains (losses), and the demand for and the cost and profitability of certain of our products, including variable annuities and guarantee riders. See ''- Results of Operations" and "- Liquidity and Capital Resources."

Acquisitions and Dispositions

On March 2, 2009, the Company sold Cova Corporation ("Cova"), the parent company of Texas Life Insurance Company ("Texas Life") to a third party for $134 million in cash consideration, excluding $1 million of transaction costs. The net assets sold were $101 million, resulting in a gain on disposal of $32 million, net of income tax. The Company also reclassified $4 million, net of income tax, of the 2009 operations of Texas Life into discontinued operations in the consolidated financial statements. As a result, the Company recognized income from discontinued operations of $36 million, net of income tax, during the first quarter of 2009.

As more fully described in Note 18 to the September 30, 2009 Interim Condensed Consolidated Financial Statements, the Company recognized loss from discontinued operations for the three months and nine months ended September 30, 2008 of $404 million and $251 million, respectively, both net of income tax.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements. The most critical estimates include those used in determining:

(i) the estimated fair value of investments in the absence of quoted market values;

(ii) investment impairments;

(iii) the recognition of income on certain investment entities;

(iv) the application of the consolidation rules to certain investments;

(v) the existence and estimated fair value of embedded derivatives requiring bifurcation;

(vi) the estimated fair value of and accounting for derivatives;

(vii) the capitalization and amortization of DAC and the establishment and amortization of VOBA;

(viii) the measurement of goodwill and related impairment, if any;

(ix) the liability for future policyholder benefits;

(x) accounting for income taxes and the valuation of deferred income tax assets;

(xi) accounting for reinsurance transactions;

(xii) accounting for employee benefit plans; and

(xiii) the liability for litigation and regulatory matters.

In applying the Company's accounting policies, which are more fully described in the 2008 Annual Report, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's businesses and operations. Actual results could differ from these estimates.

The above critical accounting estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary of Critical Accounting Estimates and Note 1 of our 2008 Annual Report. We have updated the disclosures below due to the adoption of new accounting guidance on the recognition and measurement of impaired securities.

Investment Impairments

One of the significant estimates related to available-for-sale securities is the evaluation of investments for other-than-temporary impairments ("OTTI"). The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value. The Company's review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%;
(ii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for less than six months; and
(iii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for six months or greater. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company's evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for certain equity securities, greater weight and consideration are given by the Company to a decline in estimated fair value and the likelihood such estimated fair value decline will recover.

Additionally, management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the impairment evaluation process include, but are not limited to:

(i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost;

(ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties;

(iii) the potential for impairments in an entire industry sector or sub-sector;

(iv) the potential for impairments in certain economically depressed geographic locations;

(v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources;

(vi) with respect to equity securities, whether the Company's ability and . . .