John Hall - Head of Investor Relations Steven Kandarian - Chairman, President and Chief Executive Officer John Hele - Chief Financial Officer Christopher Townsend - President, Asia Maria Morris - Executive Vice President, Head, Global Employee Benefits

Tom Gallagher - Evercore Ryan Krueger - KBW Jimmy Bhullar - JP Morgan Erik Bass - Autonomous Sean Dargan - Wells Fargo John Nadel - Credit Suisse Suneet Kamath - Citi Humphrey Lee - Dowling & Partners

Ladies and gentlemen thank you for standing by. Welcome to the MetLife First Quarter 2017 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Before we get started, I would like to read the following statement on behalf of MetLife. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of the federal securities laws, including statements relating to trends in the company's operations and financial results in the business and the products of the Company and its subsidiaries. MetLife's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties, including those described from time to time in MetLife's filings with the U.S. Securities and Exchange Commission, including in the risks factors section of those filings. MetLife specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. With that, I would like to turn the call over to John Hall, Head of Investor Relations.

Thank you, Greg and good morning, everyone. Welcome to MetLife's first quarter 2017 earnings call. On this call, we will be discussing certain financial measures not based on generally accepted accounting principles, so-called non-GAAP measures. Reconciliations of these non-GAAP measures and related definitions to the most directly comparable GAAP measures may be found on the Investor Relations portion of MetLife.com in our earnings release and on our quarterly financial supplement. A reconciliation of forward-looking financial information to the most directly comparable GAAP measure is not accessible because of MetLife believes it is not possible to provide a reliable forecast of net investment and that derivative gains and losses, which can fluctuate from period to period and may have a significant impact on GAAP net income. Joining me this morning on the call are Steve Kandarian, Chairman, President and Chief Executive Officer and John Hele, Chief Financial Officer. Also here with us today to participate in the discussions are other members of Senior Management. After prepared remarks, we will have a Q&A session. In fairness to all participants, please limit yourself to one question and one follow-up. With that, I'd like to turn the call over to Steve.

Thank you, John and good morning everyone. Last night, we reported first quarter operating earnings per share of $1.41up from a $1.20 per share a year ago. Overall it was a strong quarter across most business segments with favorable results from a variable investment income, expense management and underwriting. Equity markets which rose by 5.5% in the quarter as measured by the S&P 500 create a tailwind for earnings. Well, low interest rates in a strong U.S. dollar remain as headwinds. Adjusting for notable items operating earnings were $1.46 per share, which compares to $1.31 per share on the same basis in the prior year period. Net notable items of $0.05 per share in the quarter including higher catastrophe losses, expenses to support our unit cost initiative, illegal settlement and a Penn Treaty guarantee fund assessment. These are offset in part by a retail life insurance reserve release. As noted in my annual letter to shareholders. MetLife has a leading position in group benefits with a market share of 25% among the large employers. We are also experiencing strong growth in the mid-market and have over 40,000 small employer relationships. What we pioneered this business as century ago, we consider group benefits an avenue for future growth and highlighted the segment as one of our growth engines and our November Investor Day. During the quarter sales of Group Benefits were up by 29% with strength across all market segments and product lines. Our national accounts sales were particularly strong especially among clients with more than 25,000 employees. We continue to invest in this business to create differentiated customer experiences, supported by strong enabling technology and leading data protection capabilities. Over the years our group customers have put their confidence in us, because of our financial strength and strong service capabilities. Today they're also trusting us to protect claim privacy in an uncertain world. The macroeconomic environment in the last eight years has affected our business units in different ways. Our group for example, is correlated to the health of the U.S. employment market. We have been able to grow premiums and fees in the group business at a compound annual rate to 4.5% over the past five years. Despite modest U.S. labor force and wage growth among large employers, all else being equal a stronger U.S. job market would drive faster growth in our Group Benefits business. I have also made note of our shift away from capital intensive [indiscernible] Life Insurance in Japan. This decision was driven by our requirement for appropriate internal rates of return and payback periods for the products we sell. The shift in our product mix resulted in lower Japanese sales for most in 2016, but we have started to turn the corner, in the first quarter 2017, Japan sales grew by 8% which strengthened foreign currency denominated whole life as well as accident & health products. Although this is too early to declare a trend from a single quarter, we are pleased with the overall direction or sales transition in Japan. MetLife's net derivative losses in the quarter totaled $602 million. With interest rates ending in the first quarter of roughly where they started, much of the derivatives loss were driven by strength in the U.S. equity markets and costs associated with executing the separation of Brighthouse Financial. As part of a supplemental disclosure we've again included an exhibit that details that firm value movement of our derivative portfolio. As promised at meetings with investors throughout the first quarter, we are providing on this call an update on RemainCo MetLife hedging strategy. We refreshed our hedging strategy to protect free cash flow from both falling and rising interest rates. This was accomplished through a process that sought to optimize free cash flow, well balancing several key statutory economic and GAAP metrics. While the restructuring of the RemainCo hedge program is largely complete the program is dynamic. You actively monitor and rebound when market conditions warrant. John Hele offer more detail on this topic. Moving to investments, variable investment income totaled $343 million in the quarter, of this amount $272 million is attributable to RemainCo MetLife, which is above the high end of the quarterly guidance range of $250 million provided our outlook call in December, private equity investments for the largest contributor to the outperformance. In addition, hedge fund returns improved significantly from a year ago. In the quarter, our global new money yields stood at 3.34%, this comparison average rollout of 4.45% over the past four quarters. In the fourth quarter, our new money rate was 3.15%. Lower yields continued to pressure the life insurance industry. I would now like to provide an update on our plan to separate a substantial portion of our U.S. retail business. Maybe you have asked whether the separation of Brighthouse Financial will still occur in the first half of 2017. Given the complexity of the transaction we do not believe we have the necessary approvals to complete the separation in that timeframe. The MetLife and Brighthouse Financial teams continue to work diligently with our regulators in all aspects of the disaffiliation. While we did not have an exact estimate of when that work will be complete. We are hopeful it will be in the coming months. Operationally the separation is proceeding on schedule and we have reached several important milestones. In January, Brighthouse Financial began to operate as in Penn Treaty under MetLife. In March, most significantly Brighthouse Financial began doing business under its own name. In April, Brighthouse Financial launched its first broadcast advertising campaign called predictability. You may have seen some of the ads during March Madness, the Masters or on Squawk Box. And most recently, we finalized a form of financing for Brighthouse captive to hold you ULSG liabilities. This captive will aid Brighthouse's capital efficiency and reduce statutory capital volatility. Looking ahead, the next regulatory milestone will be the declaration of a hearing date by the Delaware Department of Insurance. We remain confident that the separation will position both companies for success in the respective marketplaces. For MetLife the separation remains the cornerstone of our transformation to a company with lower market sensitivity in a higher and more sustainable free cash flow ratio. Turning to regulatory matters, I would like to provide a brief update on the government's appeal of the court ruling that rescinded our status as a Systemically Important Financial Institution or SIFI. On April 21st the Trump Administration issued a memorandum directing the Secretary of the Treasury to report within 180 days of the SIFI designation process used by the Financial Stability Oversight Council or FSOC. On April 24th MetLife filed a motion in the U.S. Court of Appeals for the District of Columbia Circuit, asking the court to hold the appeal in abeyance until that report is complete. As we said in our filing, we believe in abeyance will enable the new administration to determine whether any of FSOC's positions in this case should be reconsidered and whether it is appropriate for the government to continue pressing the appeal. The timing for a ruling on our emotion is at the discretion of the Court of Appeals. Before I close, I want to update you on our share repurchase program. During the first quarter, we repurchased $858 million of our common shares. To date, we have bought back approximately $1.5 billion of our common shares, well roughly half of our $3 billion authorization that we announced in November 2016. We are on track to fully execute this authorization by year end 2017. With that I will turn the call over John to discuss our Q1 financial results in greater detail.

Thank you, Steve and good morning. Today, I'll cover our first quarter results including a discussion of our insurance underwriting margins, investment spreads, expenses and business highlights. I will then conclude with some comments on cash and capital. In addition to our earnings release and quarterly financial supplement, last evening we released disclosure labeled 1Q 2017 supplemental slides. That addresses the net derivative loss in the quarter. I will speak to these slides later my presentation. We will continue to release additional supplemental slides when we have complex elements in a quarter. Operating earnings for the first quarter were $1.5 billion or a $1.41 share. This quarter included five notable items totaling the negative $61 million that we highlighted in our news release and quarterly financial supplement. First, unfavorable catastrophe experience net of prior year development in Property & Casualty, decreased operating earnings by $45 million, or $0.04 per share, after tax. Second, Corporate & Other was negatively impacted by a guaranty fund assessment for the Penn Treaty insolvency and an increase in litigation reserves, which decreased operating earnings by $44 million, or $0.04 per share, after tax. Third, expenses related to a cost initiative also in Corporate & Other decreased operating earnings by $21 million, or $0.02 per share, after tax. Fourth, reserve adjustments primarily resulting from modeling improvements of individual life products, which increased operating earnings in MetLife Holdings by $34 million or $0.3 per share after tax. In addition, activity related to separation resulted in an increase to operating earnings of $42 million in MetLife Holdings and offsetting $42 million decrease to operating earnings in Brighthouse Financial. Finally, variable investment income was above the company's 2017 quarterly business plan range excluding Brighthouse Financial, increased in operating earnings by $15 million, or $0.01 per share, after tax, and the impact of deferred acquisition costs or DAC. Adjusted for all notable items in both periods, operating earnings were up 11% year-over-year and 12% on a constant currency basis. On a per share basis operating earnings adjusted for all notable items or $1.46 up 11% percent year-over-year and 12% on a constant currency basis. Turning to our bottom line results. We had first quarter net income of $820 million or $0.75 per share. Net income was $726 million lower than operating earnings, primarily because of net derivative losses of $602 million after tax. For more details about the difference between net income and operator earnings please reference Page 3 in our supplemental slide disclosure this quarter. Page 4 in the supplemental slides shows the attribution of the after tax derivative loss. As Steve noted, the derivative losses driven by strength in the U.S. equity market and the repositioning of our hedging strategies. For the total company, the $602 million GAAP derivative net loss included, number one, $402 million or two thirds of the total for asymmetrical and non-economic accounting, which including cost to reposition to remain co-hedges to protect from changes in interest rates on a statutory basis. Number two, $139 million of VA hedge ineffectiveness primarily in Brighthouse Financial including the impact of the transition to their new hedging strategy, with number three, the balance of $61 million largely driven by other risks in VA embedded derivatives. The asymmetrical non-economic accounting it's a recurring feature under U.S. GAAP, as the derivative assets and mark-to-market, but a significant portion of MetLife's VA and life liabilities are not. As Steve mentioned, we've made significant progress at RemainCo with protecting our statutory capital and thus free cash flow from future changes in interest rates. We have obtained further hedge accounting treatment on a statutory basis and restructured the hedges such that our free cash flow percentage is expected to stay within a 65% to 75% band on average over two years with a range of the 10 year Treasury rate from 1.5% to 4%. As stated in the recently filed Form 10 Amendment, Brighthouse Financial has made significant progress in repositioning to its new strategy. This strategy targets hedging to the statutory measurement of CTE (95) while also holding a targeted buffer of $2 billion to $3 billion. The new hedges protect on the downside using a portion of buffer, but on the upside potential of the Brighthouse Financial. Brighthouse Financial believes this new strategy will reduce hedging cost overtime and improve statutory results. Brighthouse Financial and MetLife share a common philosophy of preserving free cash flow to the hedging strategies and protecting statutory capital. But the circumstances of the companies are bit different. Brighthouse Financial is hedging to CTE(95), Brighthouse Financial has a greater concentration of variable annuity business than RemainCo and this capital measured better reflects Brighthouse Financial's business. This Brighthouse Financial maintains a large capital buffering it can retain some risk like a deductible reducing hedge costs. In contrast RemainCo has a more diverse business with a lower concentration in variable annuities and no longer rights new variable annuity business in the U.S. Book value per share excluding AOCI other FCTA with $50.52 as of March 31st down 5% year-over-year primarily due to the impact of derivative losses as well as the actual assumption review in the second quarter of 2016. Tangible book value per share was $41.64 of March 31st down 6% year-over-year. With respect to first quarter underwriting margins, total company earnings were lower by approximately $0.13 per share versus the prior quarter after adjusting for notable items in both periods. Underwriting in Brighthouse Financial accounted for approximately $0.10 of the total decrease. This is primarily due to the previously disclosed impact from the loss of the aggregation benefit, in variable in universal life and the second quarter 2016 modeling changes. Excluding Brighthouse Financial underwriting earnings were lower by proximately $0.03 per share year-over-year. This is primarily due to higher claim volumes in Mexico and the impact of DAC assumption change in the company's Chile pension business, as well as a one-time reserve adjustment in Japan. In the U.S. underwriting results were essentially in line with the prior year quarter. The Group life mortality ratio was 86.9%, unfavorable to the prior-year quarter of 85.7%, but below the midpoint of the annual target range of 85% to 90%. This is the second lowest, first quarter mortality ratio for Group life in 13 years only the first quarter of 2016 was lower. MetLife Holdings interest adjusted benefit ratio for life products was $48.6% and $53.8% after adjusting for notable items discussed earlier. This result was favorable to the prior year quarter of 56.6% and in the low end of the targeted range of 53% to 58%. Finally the Group nonmedical health interest adjusted benefit ratio was 79.9% favorable to the prior-year quarter of 81.2% and within the 2017 annual target range of 76% to 81%. Favorable underwriting results were primarily due to renewal actions and dental and lower new claims severity and disability. Turning to investment margins, the weighted average of the three products spreads presented in our QFS was 165 basis points in the quarter, up 25 basis points year-over-year. Pre-tax variable investment income or VII, was $343 million, up $178 million versus the prior year quarter, driven by strong private equity and hedge fund performance. Product spreads excluding VII were 129 basis points this quarter, down 2% year-over-year. Lower core yields accounted for most of this decline. Overall, higher investment margins in the quarter accounted for approximately $0.01 of EPS improvement year-over-year. In regards to expenses, the operating expense ratio was 22.5% and 21.6% after adjusting for the notable items this quarter related to the Penn Treaty litigation reserves and the Company's unit cost initiative. The ratio was favorable to the prior year quarter of 23.8% primarily due to the sale of MetLife Premier Client Group and expense efficiencies. Overall, better expense margins contributed approximately $0.08 of EPS improvement versus the prior-year quarter. I will now discuss the business highlights in the quarter. Group Benefits reported operating earnings of $174 million, up 37% and 34% adjustment for notable items in both quarters. The primary drivers were favorable expense margins and strong nonmedical health underwriting results. Group Benefits operating PFOs were $4.3 billion, up 5% year-over-year, driven by growth across all markets. This is the high end of our guidance of 3% to 5% which excluded the loss of one large dental contract which will occur in the second quarter. Group Benefits sales were up 29% with growth across all markets. We saw our particular strength in the jumbo case market due to more core activity and higher closing ratios, while persistency continues to be favorable. Retirement and Income Solutions or RIS, reported operating earnings of $218 million, up 16% but down 1% after adjusting for notable items in the both quarters due to less favorable underwriting. RIS operating PFOs were $479 million, essentially unchanged year-over-year. While one 1Q tends to be the seasonally the weakest for PRT transactions we continue to see a good PRT pipeline and we expect 2017 to be an active year for transactions of all sizes. Our approach will continue to balance growth with an efficient use of capital. Property & Casualty or P&C, operating earnings were $29 million, up 32% but down 3% after adjusting for notable items in both quarters. Elevated catastrophes net of prior year development reduced operating earnings by $45 million in both quarters. Nearly half of these cats were due to hail storm activity in northern Texas. We have taken steps to address this. And as a result of our homeowner policy count in this area has declined 18% year-over-year. We expect the pace of decline will accelerate to additional rate increases and management actions. Our P&C combined ratio excluding cats and private development with 89.8% modestly better than the prior year quarter of 90.0%. We continue to see improvement in our non-cat auto results, which posted a combined ratio excluding cats in prior year development of 97.2%, well below the 100.7% in the prior year quarter. Lower auto claim frequency was partially offset by higher severity as repair costs continue to increase on technology-laden vehicles. We have been taking targeted rate increases in auto over the last 12 months of 7% to 8% and expect to take similar lead actions in the immediate future. P&C operating PFOs were $875 million, down 1% year-over-year. Overall P&C sales were down 5% to due to price increases and management actions to drive value. Turning to Asia, operating earnings were $295 million, down 3% from the prior year quarter and 4% on a constant currency basis after adjusting for notable items in both quarters. Volume growth and lower expenses were offset by higher reserves and taxes due the change in the Japan effective tax rate. Asia operating PFOs were $2.1 billion, up 3% and up 1% on a constant currency basis. PFO's included in the joint ventures and ownership was up 3% on a constant currency basis. Asia sales were up 35% on the constant currency basis. In Japan, sales were up 8% driven by foreign currency life and accident & health growth. Other Asia sales were up 89% representing good growth in all markets, during particularly by China with the growth of our protection business through our professional agency channel as well as a large group case in Australia. Latin America reported earnings of $143 million down 5% and down 8% on a constant currency basis after adjusting for notable items in both quarters. The key drivers are less favorable underwriting due to higher claims in Mexico and the impact of an assumption change in a company's Chile pension business. Favorable market impact due to better yields in Mexico and time as well as volume growth will partial offsets. Latin-America operating PFOs $916 million up 5% and 6% on a constant currency basis. Total sales for the region were up 3% on a constant currency basis, driven by strong employee benefit sales, particularly offset by lower pension sales in Mexico. EMEA operating earnings were $75 million, up 19% and 34% on a constant currency basis. The key drivers were favorable expense margins and volume growth. While unit cost improvement is ahead of plan a meaningful portion of the year-over-year decline expenses is related to timing and favorable items that are not expected to repeat in subsequent quarters. EMEA operating PFOs were $614 million, essentially unchanged from the prior-year period on a 5% on a constant currency basis, driven by growth in Turkey as well as employee benefits in the UK and Egypt. Total EMEA sales increased 4% on a constant currency basis. We continue to see a favorable shift with higher margin products in the region. MetLife Holdings, which primarily consists of our legacy retail and long term care runoff businesses, reported operating earnings of $385 million, up 44% and 12% adjusting for notable items in both periods. The key drivers were improves underwriting and market results. MetLife Holdings operating PFOs were $1.5 billion, down 8% mostly due to the sale of MetLife Premier Client Group, which included the Company's affiliated broker dealer unit. As previously guided with operating PFOs declined by approximately 12% in 2017 versus 2016. Corporate & Other, at an operating loss of $99 million compared to an operating loss of $190 million in the first quarter 2016. Adjusting for notable items in the current period, the operating loss of $30 million, this unusually low quarterly loss for Corporate & Other is primarily due to the incremental tax benefit of $151 million reflected in the earnings by source table at the bottom of Page 28 in the QFS. The incremental tax benefit is acquired by GAAP accounting rules to adjust the Company's overall consolidated queerly tax rate to equal the Company's annual projected effective tax rate. As a result it enables the consolidated tax rate to be consistent period over a period it causes Corporate & Other to fluctuate on a quarterly basis. As with the Company's effective tax rate respected, we expected to be between 21% to 22% for 2017 down from 23% as previously guided, the primary reason is the benefit of non-U.S. operation rates lower than the U.S. tax rate of 35%. Brighthouse Financial operating earnings were $244 million down 25% and 17% of adjusting for notable items in both quarters. The key drivers of the earnings decline primarily related to the previously mentioned unfavorable, underwriting including $39 million a loss of the aggregation benefit and $10 million from the previously discussed 2Q 2016 modeling changes. As a reminder Brighthouse Financial same results within MetLife's financial statements do not match the financial statements of Brighthouse Financial Inc. and related companies shown in the most recent Brighthouse Financial Form 10 due to accounting timing differences. Brighthouse Financial PFO's were $1.1 billion compared to $1.3 billion in the first quarter 2016. Overall annuity sales are down 35% and life sales are down 54% mostly resulting from the suspension of sales through one distributor and lower sales in the MetLife Premier Client Group. Sales of the Company's index linked annuity product, Shield Level Selector remain strong in the first quarter 2017 at $455 million up 25% year-over-year. I will now discuss the cash and capital position. Cash and liquid assets at the holding companies were approximately $3.8 billion at March 31st which is down from $5.8 billion at December 31st. This decrease reflects the net effects of share repurchases, payment of our quarterly common dividend and other holding company expenses. Please note that first quarter cash at the holding companies include minimal dividends from our operating subsidiaries, and we expect operating subsidiary dividends to increase in the second quarter. Consistent with our prior guidance. We expect MetLife to receive between $3.3 billion to $3.8 billion in dividends from Brighthouse Financial prior to separation subject to regulatory approvals. Next I would like to provide you with an idea on our capital position. Our combined risk based capital ratio for our principal U.S. insurance companies excluding Alico was 465% on an ASC basis at year end 2016. For our U.S. companies preliminary first quarter statutory results were operating earnings of approximately $870 million and a net loss of $107 million. Statutory operating earnings were up 18% for the prior year quarter, primarily due to favorable underwriting and lower operating expenses. The net loss was primarily the result of losses underivatives. We estimate that our total U.S. statutory adjusted capital was approximately $24.1 billion as of March 31st down 2% from $24.6 billion at December 31st. The decrease in statutory capital is driven by Brighthouse Financial with total adjusted capital or TAC reduced by $1.2 billion. This drop was a function of certain restructuring transaction to separation, which caused the reserves to be less responsive to equity markets in the quarter. Several restructuring and capitalization actions are expected to occur prior to the separation, which possibly impact in TAC. Many of these have been completed in the month of April. As a result, Brighthouse Financial combined TAC has increased by approximately $1.5 billion since quarter end. On a pro-forma basis as of March 31st 2017 and to give effect to our restructuring and separation related transactions including those in April, we continue to estimate a buffer of approximately $2.1 billion above CTE (95). This result in a combined pro forma RBC ratio for Brighthouse Financial of approximately 650% as of March 31 2017. Further details will be included in the next amendment to the Form 10, which we expect to file in May. For Japan, a solvency margin ratio was 909% as of December 31st, which is the latest public data. Overall MetLife had a strong first quarter in 2017. Highlighted by favorable impacts in equity markets, lower expenses and solid underwriting in the U.S. Top line growth was particularly strong with sales up 15% year-over-year for MetLife as a whole and 21% for MetLife on post-separation basis. GAAP net income was negatively impacted by net derivative losses, two thirds of which were asymmetrical and non-economic. In addition, our cash and capital position remain strong, and we remain confident that the actions we are taking to implement our strategy will drive improvement in free cash flow, and driving at long term and create long term sustainable value to our shareholders. And with that I would turn it back to the operator for your question. Q - Tom Gallagher: Good morning. Steve, just a question on the separation, you've mentioned the complexity that may delay the timing, just a question on that, do you still feel confident in the structure of the transaction, in terms of the dividends, the capital for each business or do you see the delay being more administrative complexity.

Hi Tom, nothing changes in terms of our expectations other than the timing. In the timing I use the word months, I didn't use the word quarters. It is the complex transaction. We're working closely with our regulator. There's a lot of information to impart. We are working very diligently and providing information as fast as humanly possible. But it is a large volume of information and analysis that is going on. So that's what's resulted in the expected delay from what our initial thought was, which was made many months ago, over many quarters ago in terms of expectations around timing once you get into these transactions and you see the complexity associated with them. You see what occurs in terms of the amount of work that has to get done to make sure that everything is detailed appropriately and headlines appropriately.

Okay. Okay, thanks. That's helpful. And then just a question on expenses to make sure I have had my head wrapped around these. So John, if I'm understanding the flow of the strategic expenses for RemainCo that would imply you still have another $260 million to $270 million left for the balance of the year. That would come through operating and corporate? That was my first question on expenses. And then also on Brighthouse, I just wanted to get a sense for how much of the kind of annualized $200 million increase in expenses this year is embedded in the 1Q result?

The answer to your first question is yes, that's why you expect for the year and could you say the second question again, I quite get that?

Yeah in the Form 10 it indicates Brighthouse expenses you're expected to go up $200 million in 2017 versus 2016 levels, and I just want to understand how much of that planned increase is embedded in the 1Q number. Is any of that or is a small amount just you know some indication of how much is in the 1Q number?

Probably about $30 million of that is in Q1.

$30 million on an annualized basis?

No $30 million in the quarter, it's…

In the quarter building to like $50 million quarterly run rate?

Yeah, yeah.

Okay, so little more than half. Thank you.

Your next question comes from the line of Ryan Krueger from KBW. Please go ahead.

Hi thanks. Good morning. My first question was in regard to the changes you made to the derivatives program. Should we expect any impact to the to your ongoing benefit from some of the low interest rate hedges that would come through that would have been coming through operating earnings?

There's not a material change to the benefit that we get from those hedges, of course rates are higher now so we get less benefit, but those are still essentially there.

Okay. So no material change, other than the interest rates are moving. And then just secondly, coming into the year you had guided to $450 million to $650 million of corporate losses excluding the expense initiative costs. Does that change now that you lowered your consolidated tax rate outlook?

Yeah, so we expect still to be within that range, but we do expect the lower tax rate for the year now.

Okay. All right. Thank you.

Your next question comes from the line of Jimmy Bhullar from JP Morgan. Please go ahead.

Hi good morning. First, I just had a question on the derivatives losses. Obviously the derivatives loss declined significantly from 4Q, but was still relatively large. So I was a little surprised with the loss in interest rates and that rates were generally flat or lowered depending on which part of the curve you look at. So just wondering what caused that was that related to sales some of that depreciations or something else. And then how the GAAP loss in on the hedging program affected yours whether it had any effect on stat capital?

So there's a few things going on Jimmy. First is although the 1-year Treasury dropped a little or almost flat quarter-to-quarter swap rates were up a little bit. So some noise from that that's asymmetrical on non-economic, but you get the GAAP noise from that, and you also had some strong equity market in the quarter and you've got some GAAP noise in that as well. We also as we pointed out had some hedge ineffectiveness in the quarter and that impacted the total GAAP net income.

And then just in terms of the change is implemented I'm assuming you change from swaps to swaps and as you had discussed before, but is that correct and how if you can discuss some of the other changes that you have made and whether you changed the size of the hedge program whether made it bigger or smaller?

We actually did a variety of things. We were able to get some more statutory hedge accounting for some types of derivatives by changing their technique and structure. We did move from two different instruments like that. And we have accomplished our primary goal of making stat couple of RemainCo less sensitive to changes in interest rates. And as you can see from the numbers and the breakouts RemainCo has less sensitivity across the board in terms of equities it is relatively insensitive. I mean there's always movements and every time you look at these results every quarter there's a lot going on in a quarter when you have derivatives as well as variable annuities. There is the time decay of the derivatives is aging the portfolio your basis risk or otherwise is going to VA hedge ineffectiveness and all these get grouped together. So there are sensitivities going up and down we minimize that, but there always be some move movement here due to all these factors.

Okay. And then lastly just you mentioned the strong sales in Asia and Japan. I think up to 8% to what extent do you view this as sort of a turn in their sales since the results had been pretty weak the last few quarters versus maybe some front selling related to the discount rate changes are going into effect in the second quarter?

So let me touch, I'm Christopher Townsend here, so Japan sales were up 8% year-on-year and this driven primarily by cant see life sale growth were obliviously 1% as you know we made that shift from the end market volume for July the end of 2015, beginning of 2016, it's very strong growth in Asia is up 6%. So the foreign currency business now makes up about 70% of alternative life sales we think that fairly consistent at the mix going forward and as the number of our competitors have pulled the end life products and change pricing for the discount rate range. We think Asia is being pushed towards a foreign currency life products and we're very well positioned to provide that given the distribution we've got, so we see that as a fairly interesting team we probably did benefit from around [indiscernible] product we repriced in April, and as you know for the reserve discount price in the financial year and we expect sales with the full often in the second quarter. Overall we're very comfortable in terms of Japan sales, but it's too early to sort of break that guidance at the moment.

Thank you.

Your next question comes from the line of Erik Bass from Autonomous. Please go ahead.

Hi. Thank you. In Group benefits can you just talk about the competitive environment and where you're seeing the best opportunities and given relatively strong industry results in recent quarters you've seen any uptick in price competition?

Hi this is Maria Morris. First of all I just want to say we were very pleased with our group sales results in 2017. It's a competitive market as you know it's always competitive. But having said that, I'd say that life and disability has been rational. We've seen a little bit more of intense competition in dental, especially down market, but overall we feel very comfortable with the market that we are in. You probably saw that we had strong growth and strong persistency. We've been able to get our renewal actions. And overall it's been a rational market.

Got it. And then one thing to clarify just on the pace of buybacks, should we expect it to slow it all until you receive the dividend payment from Brighthouse and I'm assuming that $3.3 billion to $3.8 billion is contingent on the transaction being approved. And I guess also are there any restrictions to your being in the market around the time of the transaction?

No we don't anticipate any change in the program that we put in place between our existing cash reserves and earnings. We believe we're on track for the program being completed by 2017.

Got it. OK. Thank you.

Your next question comes from the line of Sean Dargan from Wells Fargo. Please go ahead.

Thank you. And just to follow up on Erik's question around the share repurchase. As I understand it there was kind of a bright line test that RBC couldn't fall below 400% and it sounds like whatever happened with hedge losses in the first quarter didn't bring you close to that. But is that 400% applied to the statutory entities related to RemainCo or are all of the current MetLife?

Well RBC as measured once a year and so were half of long term projections that we always knew that there's a lot of pluses and minuses as you do this restructuring unwinding reinsurance transaction to see the pieces moving back and forth and the Brighthouse 10 of RBC we haven't done the debt infusion yet from that. So there's a lot of moving pieces here, and you have to look and if take that into account we're strongly capitalized across the board for all our businesses.

Okay. That would be great, thanks. And then just on MetLife Holdings the results were stronger on a normalized basis than I would have thought. I mean broadly speaking should we think that in quarters and where just you have - you see favorable equity market performance that MetLife Holdings will not run off as quickly, as you guided to?

Whether it's a block of VAs in MetLife Holdings. And so for equity markets we had better fees on an ongoing basis, and that will continue to be one of the factors.

Okay. Thank you.

Your next question comes from the line of John Nadel from Credit Suisse. Please go ahead.

Thank you, good morning. My question about the group insurance business, Steve, it's been a long time since and since I can remember you sort of starting off the conference call talking about or highlighting that business. Given your size and scale there particularly at the large case market is there anything beyond further economies of scale that you think you could gain from a large acquisition within that business line. And relatedly why do you think you're seeing more success particularly in the jumbo case market has competition declined there or have you just gotten a bit more aggressive.

John the first part of your question, we always look at any opportunities out there in the marketplace. And the Group business is one of which we have a very favorable view going forward and it's been a strong part of our company for many decades. So if there's opportunities in the marketplace to make an accretive acquisition, we certainly be quite interested in looking at that. Maria you want to take the second part of the question?

Sure in terms of where we've been investing in group insurance, I think we're seeing the benefits of our investment in our growth. So as an example, we've been investing in our voluntary benefit platform, and so we're seeing large groups as well as medium sized groups really gravitate toward carriers both for their core benefit programs and to offer voluntary benefits to their employees toward a carrier like MetLife where we're in a position to do that. We've talked historically about benefiting as an example from the exchanges where we're in some cases the only non-medical carrier on the health exchanges and I think going forward the other place we really put investments in our ability to ensure that employee records are secure. So a lot of work in our security platforms that's been very helpful at market as we've look to bring on new Group life and disability business as well.

So Maria is it fair to say that when you talk about really strong growth in sales at the jumbo case market that a good chunk of that is actually voluntary not employer paid?

It's actually both. I would say that we've had a very strong sales quarter up and down the market. So double digit growth in the jumbo market, but we've had high single digit growth in the regional market. And as you know smart market is actually not seasonally first quarter focused, but even there we've had strong growth. We've had growth in both our core business and our voluntary business, our voluntary business is up double digits from a sales perspective. So overall very strong sales quarter Group.

Thank you. And then a question for John, on the change in the hedging strategy implemented if both Brighthouse and RemainCo. Can you give us some senses to the duration of the program that you've put in place now and how often some of these hedges need to roll. I'm just trying to understand how the new instruments compare with some of the older hedges I'm not sure if you even still have them that had extended into the 2020s?

So on RemainCo the duration is about the same and it's basically some longer term hedges mainly in that. Brighthouse is like a one to three year type restructuring of hedges that they're doing and they've made significant progress to get their hedging done now. So if you think about future sensitivities, we point out look at the Form 10 that was recently published. The sensitivity to VA as well as you ULSG in there and you can see both on a stat and a GAAP basis with expect to senses should be going forward.

No I understand that that disclosure is there, I was just trying to understand duration and you know maybe the risk of having to roll?

So for balances is about one to three years.

Thank you.

Your next question comes from the line of Suneet Kamath up from Citi. Please go ahead.

Thanks. Just want to start with the stat capital, I guess it was down about a $1 billion from year end despite not taking any dividends out. So John can you just walk the mechanics in terms of why the capital was down?

Is going down $500 million from $24.6 million to $24.1 million, and as I said most of those Brighthouse Financial and they had some of the restructuring costs, less sensitivity to the reserves. The total of CTE (95) which is what they're really hedging to in their strategy, is still as a buffer when we take into account all the transactions that will happen so on a pro forma basis, but as of March 31st you are seeing partway through the restructuring and all the steps that have to happen. So you've seen that sort of the low point and is - as I said in my script it's up significantly from March 31st and there will be a whole series of further that have to happen to get there. So we gave you sort of the pro forma view of it and expect to be in like a 650 RBC pro forma for all that as of - if all that had happened as of March 31.

Okay. And just another question on the update Form 10 to the changes or that the debt to capital of Brighthouse is now going to be 25% and then CTE (95) buffer has gone from I guess around $3 billion, to $2 billion to $3 billion so can you just discuss why - what drove those two changes?

So the first Form 10 all the calculations the values as well as all the core assumptions and projections were all done as of June 30th last year. And the updated Form 10 as of December 31st and things change a lot between June 30th and December 31st. So there's a series of changes and I think Brighthouse will be a dynamic company and how they manage their business. And that's the reason for that still strongly capitalized and will provide good value over time to shareholders.

Okay and just one last clarification question if could on the 9% ROE target for Brighthouse. Is that the guidance for sort of out of the gate or is that more of a longer term expectation?

I think what happens with Brighthouse is for the next little while it is about that type of range, because of just how kind of GAAP works and there - their key focus is to build up overtime to reduce the hedging cost to start getting cash out of the company. And that's the key focus is to run it mainly on statutory basis.

Okay, thanks.

And your final question today comes from the line of Humphrey Lee from Dowling & Partners. Please go ahead.

Good morning and thank you for taking my question. Just to follow up on John does question regarding kind of the appetite for group market acquisition given your capital position like what like what size of the transaction would you be more comfortable doing it with kind of seeking external capital?

Hi Humphrey. Well, first of all we certainly will have some capital in reserve for acquisitions, but please remember that we do acquisitions of larger size like the Travelers deal back in 2005 the Alico deal in 2010. We would access the capital markets for any funds necessary above and beyond we hold at the holding company. And it is just important to reiterate our philosophy on acquisitions they have to make sense strategically in terms of what we are planning for the company going forward direction in businesses we want to be in. And second of all they have to be creative for shareholders and create shareholder value have to earn more than their cost of capital. And any point in time when there is an acquisition opportunity we look at the capital markets, which of course is to raise capital in all kinds of returns would expect from acquisition including synergies and we make a determination in terms of what we're willing to pay for that business.

Got it. And then just a housekeeping question, do you have any updates regarding the dividends to offer in some of your debt cost right now?

Well, we do not believe that this will be a factor going forward. We have steps that we can take if we need to adjust for this. So that's something that we can plan for if we need to execute it.

Got it. Thank you.

And at this time there are no further questions. So I'll now turn the call back over to Mr. Hall.

Thank you everybody and we'll talk to you throughout the quarter. Good bye.

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