Conor Murphy – IR Rob Henrikson – Chairman, President and CEO Steve Kandarian – EVP and Chief Investment Officer Bill Wheeler – EVP and CFO Bill Mullaney – President, Institutional Business Lisa Weber – President, Individual Business Stan Talby [ph]

Suneet Kamath – Sanford Bernstein Andrew Kligerman – UBS Tom Gallagher – Credit Suisse Edward Spehar – Merrill Lynch Mark Finkelstein – Fox-Pitt Kelton Jimmy Bhullar – JPMorgan Randy Binner – FBR Capital Markets Colin Devine – Citigroup

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If you should require assistance during the call, (Operator instructions). And 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 and 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 Inc.'s filings with the U.S. Securities and Exchange Commission. MetLife Inc. specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. With that, I'd like to turn the call over to Conor Murphy, Head of Investor Relations. Please go ahead.

Thank you, Julie. Good morning everyone. Welcome to MetLife's fourth quarter 2008 earnings call. We are delighted to be here this morning to talk with you about our results. We will be discussing certain financial measures not based on generally accepted accounting principles, or so called non-GAAP measures. We have reconciled these non-GAAP measures to the most directly comparable GAAP measures in our earnings press release and in our quarterly financial supplements, both of which are available at metlife.com, on our Investor Relations page. A reconciliation of forward-looking financial information to the most directly comparable GAAP measures is not accessible, because MetLife believes it is not possible to provide a reliable forecast of the net investment related 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 Rob Henrikson, our Chairman and Chief Executive Officer; Steve Kandarian, our Chief Investment Officer; and Bill Wheeler, our Chief Financial Officer. After our brief prepared comments, we will take your questions. And here with us today to participate in the discussion are Bill Mullaney, President of our Institutional businesses; Lisa Weber, President of Individual; Will Toppeta, President of International; and Bill Moore, President of Auto and Home. With that, I would like to turn the call over to Rob Henrikson.

Thank you, Conor, and good morning everyone. In both the fourth quarter and full-year 2008, MetLife generated strong topline results amid the current backdrop of broad weakness in the economy and market uncertainty. While operating earnings are being impacted, our core operating fundamentals remain strong, as premiums, fees and other revenues grew 6% this quarter over the fourth quarter of 2007 and are up 11% year-to-date. In this environment, we are benefiting from a well balanced mix of businesses, and without question we are experiencing a flight to quality and a flight to safety. Let me highlight a few examples. Institutional business continued to generate significant topline growth across all of its segments, as premiums, fees and other revenues for the year grew 19% to reach $16.6 billion. Driving this was a topline increase of 7% in Group Life and 14% in non-medical health, driven mainly by organic growth, especially in dental. In Retirement and Savings, we doubled our revenue, due to a strong demand in structured settlement sales as well as significant pension closeout sales in both the US and the UK. Individual business continues to be impacted by the declining equity markets. However, variable annuity and positives remain strong at $3.4 billion in the fourth quarter. In addition, we saw significant demand for our fixed annuity products with deposits of $4.1 billion. Annuity net flows remained positive by almost $1 billion in variable annuities and $3 billion in fixed annuities. In International, we continued to see strong growth across all regions as premiums, fees and other revenues for the full year grew 11%. Latin America, our largest region grew 11%. Asia-Pacific grew 7% despite the challenging equity markets and our emerging European region, which includes India, grew 38%. Like our domestic businesses, our international operations continued to grow in a diversified and well balanced manner. In a few moments, you will hear from Bill Wheeler and Steve Kandarian, but let me just say I am very pleased with the strength and composition of our balance sheet. Our investment portfolio is well-balanced and defensively positioned and our excess capital provides us with tremendous financial flexibility and positions us well for the future. Looking ahead to 2009, we will remain focused on fundamentals, including underwriting and expense management, and let me just say through our Operational Excellence initiative, we have already achieved in excess of $150 million of annualized pretax savings and I remain confident that we will reach our stated goal of at least $400 million of total future cost savings. As we continue to do what we do best, I believe we will set ourselves apart in the marketplace as the strong, trusted, and valued company we are. With that, let me turn it over to Steve.

Thanks, Rob. With the continued volatility in the financial markets, I would like to spend a few minutes reviewing variable investment income for the quarter, realized and unrealized losses in certain asset classes that have been receiving attention in the news. First, let me start with a comment on variable investment income. Pretax variable income was approximately $540 million lower than planned for the fourth quarter, primarily driven by negative hedge fund and real estate fund returns. We expect the income from these sectors will remain weak at least through the first half of 2009. On the other hand, income from our securities lending program continued to outperform plan due to the steeper yield curve and higher spreads in the reinvestment portfolio. As of December 31, our securities lending book was approximately $23.3 billion, down from $26.8 billion on November 30 as discussed on Investor Day. As of December 31, the amount of assets unopened has been reduced to $5.1 billion from approximately $15.8 billion on November 30. Of the $5.1 billion of securities unopened, about $4.5 billion were treasuries and agency securities, which if put to us, can be immediately sold and satisfy the cash requirements. While the demand for securities lending from our counterparties has stabilized for now, we're maintaining sufficient liquidity to meet any further reductions. Now let me cover investment losses for the quarter. Gross investment losses were $664 million. Of this amount, $176 million were credit-related sales. Write-downs in this quarter were $546 million, including $444 million of credit related impairments. These impairments were experienced across a variety of sectors, primarily driven by corporate credit, increased mortgage reserves, and commercial mortgage backed securities. No single issuary accounted for more than 10% of total impairments. Non-credit related write-downs of $102 million consisted of certain equity-related holdings, which were impaired because of length of time and the extent to which the market value has been below amortized cost. When added together, total credit-related losses from sales and write-downs were $620 million before tax or $403 million after-tax. Net unrealized losses for fixed maturities were $21.3 billion at December 31, down from $26.9 billion on November 30. This consisted of $28.9 billion of gross unrealized losses and $7.6 billion of gross unrealized gains. The decline in net unrealized losses since November 30 was driven by both tighter spreads and lower interest rates. For example, CNBS spreads declined more than 280 basis points from November 30 to year end. Interest rates also declined across the curve with ten year rates dipping 71 basis points below between November 30 and year-end. Next, I would like to discuss our real estate related holdings. As of December 31, we held Alt-A residential mortgage-backed securities with a fair value of $3.4 billion and an amortized cost of $5.3 billion. Recently, rating agencies have downgraded a number of Alt-A securities. As of December 31, 59% of our Alt-A portfolio was rated AAA; 4% was AA; 3% A; 13% BBB; and 21% was below investment grade. We expect that Moody’s will be downgrading virtually all 2006 and 2007 vintage Alt-A securities to below investment grade. If this occurs, obviously the percentage of our portfolio that will be rated below investment grade will increase. Our analysis suggests that Moody’s is applying essentially the same standard to all bonds, regardless of underlying collateral. As I discussed at Investor Day, we believe our portfolio has superior structure to the overall Alt-A market. For example, 88% of our Alt-A portfolio is fixed-rate versus 35% for the market. Furthermore, we hold no option ARM mortgages as compared to 29% for the market. Fixed rate mortgages have performed far better than both option ARMs and hybrid ARMs and we expect this trend to continue. In addition, 83% of our Alt-A holdings have super senior credit enhancement, which typically provides double the credit enhancement of a standard AAA rated bond. At year-end, MetLife’s commercial mortgage portfolio was $36 billion. We have the concern for some time that the commercial real estate market was getting overheated. During 2008, we sold approximately $650 million of higher risk commercial mortgages from our portfolio, resulting in a pretax loss of $85 million. As of December 31, we had only $3 million of delinquencies, which represents less than one basis point on this portfolio. Approximately $2.6 billion of our commercial mortgage portfolio is scaled to mature in 2009. We are very comfortable with this level of rollover and expect to refinance and hold the vast majority of these mortgages at market rates. Finally, let me say a few words about our hybrid holdings, a sector which has been the news recently. Lately, non-US perpetual hybrid debentures, also known as Tier-1 and upper Tier-2 securities have come under pressure due to concerns regarding the potential nationalization of UK and Irish banks and the possible deferral of interest payments. At December 31, our Tier-1 securities had an amortized cost of $3.6 billion and a fair value of $2 billion; and our upper Tier-2 securities had an amortized cost of $2 billion and a fair value of $1.3 billion. It is important to note that MetLife's hybrid portfolio is highly focused on top tier banking institutions. Moreover, our entire hybrid portfolio remains current and all interest in principal payments. As I have stated before, while a portfolio of our size will not be immune to losses, we believe the portfolio is defensively positioned for the current environment. With that, I will turn the call over to Bill Wheeler.

Thanks, Steve; and good morning everyone. MetLife reported $0.19 of operating earnings per share for the fourth quarter and $3.67 for all of 2008, which is consistent with our Investor Day estimates. As I think you can see, our businesses performed well in the quarter, but our investment margins narrowed considerably and our DAC amortization significantly accelerated due to the decline in the equity markets. This morning, I will walk through our financial results and plans and highlights as well as some unusual items which occurred in the fourth quarter. In the fourth quarter, we had topline revenues, which we define as premiums, fees and other income of $8.2 billion. This represents an increase of 6.3% over the fourth quarter of 2007. For the year, our topline revenues totaled $32.9 billion, a 10.7% increase over 2007. By the way, all results and comparisons exclude RGA, which was split off near the end of the third quarter. In Institutional, topline revenue growth of 18% over the year ago period was driven by strong increases across all its major product areas. High pension close up sales during the quarter increased Retirement and Savings revenue by 80% to $689 million. Non-medical health and Other had a 13% increase in premiums over the fourth quarter of 2007, driven by dental, which was bolstered by a recent dental HMO acquisition. Growth in Group Life resulted in an increase of revenues of 8.7% over the year ago period. International had reported revenues of $1 billion in the fourth quarter compared to $1.1 billion in the year ago period. Changes and exchange rates had a significant impact on reported revenue. On a constant dollar basis, revenue actually increased by 11% compared to the fourth quarter of 2007. Turning to our operating margins, let's start with our underwriting results, which were in line with our expectations. In Institutional, the Group Life mortality ratio for the quarter was 93.3%, bringing the full-year ratio to 92.3%, consistent with our estimated range of 91% to 93%. Disabilities morbidity ratio for the quarter was 92.9%, bringing the full-year ratio to 89.7%, also consistent with our estimated range of 88% to 90%. The morbidity ratio is being driven by lower recoveries and a modest increase in incidence rates. Auto and Home turned in a very strong performance this quarter. The combined ratio, including catastrophes, was 84.9%. Included in this result is a prior accident year reserve release of $27 million after-tax, compared to a $25 million after-tax release in the prior period. Catastrophe losses came in slightly more favorable than planned and the combined ratio excluding the impact of catastrophes and prior year development was 88.6%, which is clearly an excellent result. Moving to investment spreads, with regard to variable investment income, as Steve explained, we again saw mixed performance of certain variable alternative asset classes this quarter. We experienced losses in hedge and real estate funds, but securities lending margins were strong. For the quarter, variable investment income was $370 million or $0.40 per share after DAC, tax, and other offsets lower than the 2008 plan. If you recall, on Investor Day, Steve explained that our 2009 plan for variable investment income is $150 million per quarter, which is obviously a lower baseline than the 2008 plan. Compared to the 2009 baseline, variable investment income this quarter was lower by approximately $175 million after DAC, tax, and other offsets or $.22 per share. Another important factor with regard to investment spreads are cash levels. During the fourth quarter, we held much higher levels of liquidity due to market conditions, which adversely affected investment spreads. Moving to expenses, our overall expense level was higher this quarter, but that was driven by high DAC amortization as well as some one time expenses. The equity market decline of over 20% in the fourth quarter reduced earnings in Individual business by approximately $335 million after-tax or $0.42 per share. Most of this reduction was due to higher DAC amortization, which shows up in operating expenses. Also this quarter, we incurred $24 million after-tax in operational excellence charges, which consisted mainly of severance payments. We also had some one-time real estate expenses and made a contribution to MetLife’s foundation in this quarter. All of these expenses appear in the Corporate and Other segment. Turning to our bottom line results, we earned $148 million in operating income or $0.19 per share. With regard to investment gains and losses, in the fourth quarter we had net realized investment gains of $768 million after tax, DAC, and other adjustments. Included in these results were credit losses and impairments of $403 million after-tax, which Steve has already explained in some detail. We also had significant derivative gains of $1.6 billion after-tax, which arose primarily from the decrease of interest rates in the fourth quarter, as well as other factors. Remember that we use derivates as economic hedges, so there is an offset to these derivatives gains, which is not necessarily showing up in the income statements. For the full year 2008, we had statutory net income of approximately $1.1 billion. Total adjusted statutory capital at year end is approximately $24.3 billion. We have not finished our RBC calculations for year-end 2008, but based on our work to date, the range of 365 to 400 from Investor Day is still valid. Therefore, we believe that our excess capital position is still between $3.6 billion to $5.7 billion. In summary, the fundamentals of our business remain strong, and I believe we are successfully dealing with the challenging market environment. And with that, I would like to turn it back to the operator for your questions.

(Operator instructions) And our first question comes from Suneet Kamath with Sanford Bernstein. Please go ahead. Suneet Kamath – Sanford Bernstein: Thank you and good morning. Two questions if I could, first for Rob just on the M&A environment, I know you talked at length about your interest in doing deals and it had to be right deals, but just generally we haven't really seen anything in US life insurance sort of across the sector despite the market conditions and the attractive pricing, just wondering what you're seeing in terms of opportunities? And perhaps any thoughts in terms of why we hadn't seen anything, or the price is too high or people waiting for the capital markets to open up, just any thoughts on that. And then second for Bill. There's been a lot of talk about impairments of security on a stat basis versus a GAAP basis. Can you just talk about your approach and any lags that may exist between the two? Thanks.

Yes, let me – I will take the M&A question. And I’ve said this publicly as recently as last week in a broad meeting. We are in a very unusual position relative to our capital strength in our position and so forth, I would say as good a position as anyone to take advantages of M&A opportunities. Having said that I am very focused as we all are on running our own business and making sure that any steps we take do nothing to in any way weaken our position our cause us to change even slightly what our strategic moment would be. That coupled with the economic conditions led me to say something that was picked up by notice on Bloomberg, which was rather nice I thought, where I said I'm really not interested in stepping into a lily pond if I don't know how deep it is. So we see no reason to be in a hurry. There is no M&A fever here, let me put it that way, and we will continue to watch the market.

Suneet, it’s Bill. The answer to your question about impairments, the difference between stat and GAAP is very simple. There are no differences, perhaps. As far as – no there have never been any differences between stat and GAAP for us. And so there is no lag where our true up, if you will, sometime in 2009 where we are going to true up our stat impairments, because they've always been the same. Suneet Kamath – Sanford Bernstein: Thanks, and just one quick follow-up on that, just as it relates to the hybrids, the perpetual debentures, I guess there is another bank in Europe that is not redeeming a security, as you think about the statutory capital implication to that is there any change in how you treat that security from a stat perspective, meaning moving from debt to equity if an issuer decides not to redeem. Thanks.

It’s Steve. I think you are probably referring to Deutsche Bank, which back in December had an implied call date on one of their hybrid securities, which they didn't call in, and that results in extension of that security and the potential for reclassification that are redeemed. So, yet those securities potentially being downgraded obviously, there'll be some RBC impact. We did a similar worst-case analysis what if the entire portfolio were downgraded to below investment grade, and we don't think that's the case, but just picked the worst case. We think it's roughly 5 RBC points. So again, we don't think we’ll get anywhere close to that. Suneet Kamath – Sanford Bernstein: Thanks, Steve. It was actually a different bank, Banco Sabadell, I guess, a Spanish bank. But thanks for the clarity.

You know, I guess we didn’t hold that one.

Thank you. We’ll go to the line of Andrew Kligerman with UBS. Please go ahead. Andrew Kligerman – UBS: Hi, good morning. Let me ask one question, and then a follow-up. With regard to the DAC, it looks like there were about $376 million in unlocking in the quarter, but you didn't put out a prospective DAC unlocking number. Could you give a little color around what might hit that, what might generate a prospective DAC unlocking, and what the potential magnitude is? And then I'll follow-up.

Andrew, you kind of came in and out, I think I understood your question, which was that I'm not sure everybody on the phone heard it, which was that there was a lot of DAC amortization and some unlockings this quarter, is there some kind of big perspective DAC unlocking that might be coming? And I assuming you're relating to whether or not, that would be linked. Obviously, we do have DAC unlockings based on changes in the assumptions. Andrew Kligerman – UBS: It's 76 in the quarter.

But this is based on the market, right? I don’t know if we really do this is any differently than everybody else, but we do explain it differently, okay. So, we obviously adjust DAC for market conditions every quarter, okay. So, whatever the stock market performance core to that was we always adjust DAC accordingly. Some companies don't do that. They wait and do it sort of annually. We don't, we do it every quarter. That said, we have this mean reversion formula that allow us to sort of smooth results, if you will, for sort of up and downs that you might have in any given year. And our mean reversion formula is we are very clearly at one end of the spectrum. In terms of – because the stock market has declined so much. So it's not really – so the formula is no longer smoothing results. So changes in the stock market are just flowing right through. There is no smoothing over some period of time. So as of now that's how that's working. So we aren’t currently anticipating any additional backend or some one big time adjustment because of where the current market conditions are. You know, I can't say that we won't ever do that, I mean, I guess, if the S&P environment got bad enough we may have to consider that, but obviously that would be a significant down from here. So we are not anticipating any big back unlock, if we were we would tell you. Andrew Kligerman – UBS: Got it. And then just shifting over to the credit, about 600 million in realized investment losses in the quarter, you mentioned, no credit had greater than a 10% hit, but maybe just – and I know you said it was broad too. But just maybe more color on this, maybe what were the two biggest credits that were hit even if they weren’t 10%? And how much of it related to RMBS versus CMBS? Maybe a little more granularity would be helpful in getting a feel for this.

It's Steve. It really is very, very equal across a whole bunch of different asset sectors. And we don't give out names of issuers, unless they go bankrupt or something. But CMBS was in there. I would say most of that was really in the corporate bond side, but a variety of different industries, including Media-NonCable was one of the larger ones, there were some real estate list, but it really nothing jumps out if it did I would tell you. But maybe be the most would be financial institution related, but nothing really downturn. There's no big numbers. Andrew Kligerman – UBS: And it was primarily corporate debt?

Yes, it was primarily corporate debt. Some CMBS, some Alt-A, but little bit of subprime, but we don't hold very much. So, it really was scattered this quarter. In the previous quarter it wasn't that way, but this quarter it was scattered. Andrew Kligerman – UBS: And then just operationally, the big pickup and pension close out activity in the UK, what's the big driver there? And, with regards to the fixed annuity, that's the last question, what type of returns were you generating on that last uptick in fixed annuity sales?

Andrew, it’s Bill Mullaney. I’ll just comment on the pension close out activity. We saw strong close out activity in the UK in the fourth quarter, as you know, we been in the business in UK for about a year-and-a-half continuing to build our business there. The pipeline continued to be strong in the fourth quarter. There were a lot opportunities to write business, but we were pretty selective about what we wrote making sure that we got the appropriate return for the deals that we do. So, we been very happy with our foray into the UK market, and we think the pipeline is going to continue to be strong entering 2009. Andrew Kligerman – UBS: Any particular reason why it's just picking up so suddenly or –

Well, I think there may be a couple of reasons. The first is having been in the market now for over a year we are getting more well-known and our expertise is starting to show. I can't tell you for sure whether some of the competitors in the UK may be pulling back, not being as aggressive quoting on some deals. But we’ve been seeing a lot of deals. We been putting our prices out there to get the returns that we want and we were able to write some deals in the quarter.

Andrew, it’s Bill. About the fixed annuities, (inaudible) in just a second. With regard to returns because spreads are widen so much, and obviously the fixed annuity business has picked up a lot just I think for the industry, not just for us. But because spreads are widen so much we now have an ability to earn a pretty respectable double-digit ROE in fixed annuities. And so the stuff we sold this quarter we really are ultimately even though we haven't got it all fully invested yet we do expect to get double-digit returns on it. And I don't know (inaudible).

Yes, so let me just add a little color to what Bill said. The industry has more than doubled and we are pleased to see that the flight to quantity has largely been to us. And so as spreads widen, we kept our consistent pricing discipline and picked up market share as some of the competitors faltered. The other piece that happened here this is that we got footing into the bank channel, which was something that we didn't have really up until towards the fourth quarter. And so that momentum has really picked up for the last seven rating cycles there were only two where we were at the top in terms of competitiveness, the rest we were competitive, but we were not at the top and yet the applications and the money continues to flow in. So we've seen great momentum far exceeding our obvious Investor Day forecasts and that momentum we expect will continue here as the flight to quality in consumers go with the flight to safety. Andrew Kligerman – UBS: Thanks very much.

The next question is from Tom Gallagher with Credit Suisse. Please go ahead. Tom Gallagher – Credit Suisse: Hi, a few questions. First on liquidity. Bill can you just comment on how much you would define as excess liquidity, any plans to put that to work. And timing point question two, I noticed there didn't appear to be much of a shadow DAC write-up quarter to partially offset the impact of unrealized credit losses. And the last question, for Steve, any risk of impairments to private equity and real estate partnerships, because I believe there is a lag of returns there. Can we expect any major impairments, prospectively there?

Okay, Tom, I will take your first two. With regard to liquidity, I'm sure you’ve noticed between cash and short-term investments we have $38 billion of short-term liquidity on our balance sheet right now, that's a lot. Now that number is sort of a little high. There is some unusual reasons why that's high. Some of that is with regard to collateral balances with regard to some of our derivatives contracts, just quickly before somebody asked a lot of questions about that. When we are counterparties on derivatives we true up the contracts every day. And their money therefore sits in a trust account. And so that shows up on our balance sheet as ours, but it's really collateral, so it is us on a derivative. So, you kind of have to take that $8 billion of the top. So we are really talking about $30 million of cash and liquidity. How much is excess? Well, it's funny. You can define that a lot of ways these days. You know in a normal world certainly a year ago we would have held maybe $10 billion of liquidity on a normal basis. So you could say well the excess therefore is 20. And that might be right, but we are not going to go back down to $10 billion any time soon, I don't think. You are going to hold higher levels of liquidity for a while here until things get calmer. We have been building a lot of liquidity, mainly because we wanted to make sure that securities lending balance is stabilized, which it appears they have. And we also, you know, we just wanted to make sure that things were okay generally. You can see across our balance sheet, all insurance liabilities, in terms of lapse rates and stuff, things are very stable. So we feel good about that. So we will take the liquidity, the cash balances down. I'm not sure exactly how much we will take them down in the first quarter. But we will be investing some of that money out. I would also just add, you know, obviously holding this much liquidity hurts earnings, operating earnings and it clearly had an effect in the fourth quarter. We should get some pickup from that in the first. So we are going to invest all $20 billion next quarter, that's for sure. We are going to stay really liquid here in this environment. So hopefully that gives you a little color. With regard to shadow DAC and you know that you might write up. You know, they do obviously have, when we adjust the LTI for unrealized losses there is a small shadow DAC offset, but it is just small. And I think we’ve been doing – there is no change there on policy. I mean, we’ve been doing it consistently. A lot of our businesses, you know, you have appreciate most of the DAC in MetLife is in the annuity business or in individual life and annuity business. Though we have obviously unrealized losses across – some bonds across a lot of different product areas where we frankly don't have a lot of DAC. So I don’t know if that's sort of wise, maybe our business mix says, that's why we don't have much of a DAC offset. But we do recognize shadow DAC, but it's just a modest number.

Tom, I will take the question about the impairments on private equity and real estate partnerships. As you pointed out there is a lag there. The year-end statements aren't yet in from these LBO funds and real estate partnerships. But we will be getting them over the course of the quarter, and I think that it's probably fair to say that there will be some marks on those portfolios and some impairments taken by them, which under the equity method will flow through to us in the first half of 2009. And I would say that the biggest area where we will see the harshest marks will be the large LBO funds. And we’ve been picking up some market intelligence on that. And that's why we think we will see some of the most significant marks. And I don't have the number in terms of dollars, but I think it could be in percentage wise in terms of what kind of marks they might take I'm hearing things in the marketplace of 10%, maybe as much as 20%, it depends upon their deals. And that's driven a large LBO space because of lack of exit opportunities for them, certainly in the IPO market right now, and even in terms of selling businesses in this environment, the lack of credit being available. So, that's a sort of thing we are anticipating. We don't have the numbers yet. So I can't be specific. But generally speaking that's where the pressure is coming from. Tom Gallagher – Credit Suisse: And Steve, just a follow up, rough carrying value of allocation to LBO funds from MetLife.

Our overall portfolio is $3.1 billion I believe. And large I think is around 40% of that. Certainly I got the number here, let’s see. (inaudible) broken down in terms of large in terms of dollars. But let's say about 40% of $3.1 billion, will get to about $1.2 billion, $1.3 billion, somewhere near. Tom Gallagher – Credit Suisse: Okay, thanks.

Thank you. We will go to the line of Edward Spehar with Merrill Lynch. Please go ahead. Edward Spehar – Merrill Lynch: Thank you. Good morning. Steve, I was wondering if you could talk about the non-agency trough in RMBS, the size of the portfolio and some of the concern in the market about this cram down legislation that could cause first losses to be spread across all tranches. And I guess the issues – what you think the impact would be on your portfolio from both the potential law standpoint and ratings downgrade standpoint? And then I have one quick follow-up.

Okay. The size of the non-agency prime is $10.5 billion market value at year end. And in terms of the legislation, without going to all the details. The effect would be that the stock would not be traded at the same way as we are anticipating from the point of view of where those losses would be first absorbed. So normally if we are holding AAA rated securities the securities below us would absorb the losses first, this would make some of those loss, if not all of it pro rata across the entire various tranches. So, that would impact us in a way that we and others did not expect since this legislation is obviously is still pending and wasn't contemplated when we bought the securities. In terms of the economic impact we've done some analysis, we think it's small, in fact quite small, maybe less than $30 million to us in terms of ultimate sort of lack of cash flows coming into our securities. So, from pure economic point of view it does not have a large impact. The larger potential impact would be the ratings downgrade. Even that is relatively small in terms of RBC points if you want to translate to that, we are thinking it's just a couple of RBC points on a worst-case basis. Edward Spehar – Merrill Lynch: And what does that assume in terms of downgrade, like how far – do you assume that the rate rating agency see that there's going to be $1 of principal loss? Where do they take securities under that scenario?

You know, I looked at that analysis a little while ago. I don't know the exact detail how much it’s gets downgraded to lower investment grade and below investment grade (inaudible). But we did to have a worst-case analysis, and that's how our numbers came out. We are assuming sort of legislation goes through. I'm not predicting that but we would start running the numbers to see, what’s it means to us. So the economic losses and even the RBC impact is not terribly significant. By the way it's not on the entire portfolio some of these securities would not be impacted by the legislation. The only thing I would mention to is my understanding is that (inaudible) bill came through the house was passed and now it's in the Senate and probably go to conference before it probably gets passed and signed by the president. And I'm told that there is a fair amount of conversation now within the Senate about the consequences of this legislation. So the intent of the legislation obviously wasn’t to single out owners of the securities and penalize them or is to give relief to homeowners to prevent them having their mortgages floor closed up on and losing their homes. I think that people in Washington now are becoming aware of these ancillary and (inaudible) consequences, and we are hoping that the legislation will take into account those kinds of issues and perhaps come out in a better state than it went into the Senate. Edward Spehar – Merrill Lynch: Okay. Thanks. And just one quick one for Bill. Just could you tell us – I you might have missed this – statutory operating earnings in the fourth quarter and full year, and is there any reason to think that will change in ’09?

Well, statutory net income – I’ll do the numbers now. Statutory net income for the full year was $1.1 billion, statutory operating earnings for the full year were $1.3 billion. For the fourth quarter, we had three big losses in both categories – in both areas, and obviously that's because of the decline in the market and stuff like that and how it affected certain of the liabilities and uncertain reserves we fed up. We would in a normal year, in 2007 for instance, we had about $3 billion of statutory net income, which was I would think a very normal year. And my expectation is that that we will end up in 2009 somewhere between those the numbers, the $1.1 billion in net income for ‘08 and $3 billion in ’07. And so it won't be quite as weak as it was in ’08 because of certain reserves we setup. But it will be – but it should be a little better than – or it won't be as bad as ’08, but it should be – it won't be back to normal. That's for sure. Edward Spehar – Merrill Lynch: So, can we assume roughly that the sort of impact to the equity market decline on the variable annuity guarantee business. From a statutory standpoint, last year it was something in the neighborhood of 1.5 billion to 2 billion?

No, it wasn't that big. It's a little unusual. We have obviously other equity exposure, not really, but we have in our institution of business we have some equity exposure, which isn't really a guarantee or anything like that. But we aren't forced because of sort of the auditing the statutory accounting to setup additional reserves, whether we think we are going to need them or not. So this really wasn't seen very much. There was some modest increases in reserves in something called separate account carbon that we had to put up for variable annuity, but most of that actually came from other parts of the company. Edward Spehar – Merrill Lynch: Thanks.

Thank you. Next question is from Mark Finkelstein with Fox-Pitt Kelton. Please go ahead. Mark Finkelstein – Fox-Pitt Kelton: A few questions, I guess, just firstly thinking about earnings a little bit, Steve talked about kind of some pressures on variable income. I mean, obviously peers down. The core earnings $0.82, I guess really no commentary on the outlook $3.60 to $4.00, I guess, can you, Bill, just kind of talk us through the $0.82 core number, how to think about that in the context of the $3.60 to $4.00 guidance at the Investor Day, given kind of what we’ve seen since that point?

Well, we obviously reported $0.19, now that the two big adjustments would be the equity market impact which we estimated at approximately $0.40. And then also the variable investment income which we estimated at sort of in that $0.82 number was worth $0.22. So, those two big things so to get to the 80s and then there is a bunch of other pluses and minus which are smaller, as they would sort of net to zero or near zero. So, I would just focus on those two big things. We had 20% drop or 20% plus drop in the S&P 500 in the fourth quarter that caused very high levels of DAC amortization obviously. And – but the quarter actually ended up with an S&P 500 at 900, which was where we estimated it would be when we held back 2009 ready for the static where we built that with 2009 plan. So, I guess I would say – so that’s sort of expands to me, obviously the S&P 500 is down so far in the first quarter, that obviously will put pressure on reported earnings. But we don’t do earnings projections for quarters. We all made assuming for 2009, the stock market goes up 5%, so we are – so we kind of feel like that sort of number that makes sense. With regard to variable investment income, and I try to give you a hint of this in my prepared remarks, we just try to – in coming up with the $0.82 run rate we didn’t really try to normalize back to the ’08, which is of course very stale now. We really normalized versus what we thought the ’09 base line would be. You’ve got a little color from Steve already about where certain alternative asset classes might come out. I am not try to kid you. I mean I think variable investment income will be very volatile this year. But again, we aren’t necessarily trying to project quarters, we project a year. And again, so $0.82 sort of relative to our full year projection, I think that’s sort ticks and ties and make sense. But it is going to be lot in the year, I don’t think that’s a big surprise to anybody. The only other thing I might add, that is an in that normalization and I addressed this a couple questions ago as liquidity. Liquidity is a pretty big drag. I think it has probably caused us at least $0.10 in the fourth quarter, probably more. We are not going to get it all back in the first, but over time I do expect that we are going to – our liquidity situation – we won’t be quite so liquid and so we will earning a little bit more on that money and that should help the numbers as well. So, hopefully that gives you a little color about projections – run rate versus earnings plan and that sort of thing. Mark Finkelstein – Fox-Pitt Kelton: Okay. And then Steve, in your comments on the nature of the credit losses, I missed the number, but you mentioned kind of some mortgage related impairments. Can you just walk though those and what specifically they were?

Those were an increase in our reserves, but the commercial mortgages be originated and hold on our balance sheet. Mark Finkelstein – Fox-Pitt Kelton: Okay. And what was that number again, please.

We don’t give up the number, I am sorry. It’s probably whole number. Mark Finkelstein – Fox-Pitt Kelton: Okay. Great, thank you.

Thank you. The next question comes from Jimmy Bhullar with JPMorgan. Please go ahead. Jimmy Bhullar – JPMorgan: Hi, thanks. I have a couple of questions. The first one is if you can talk, it’s for Steve, just on the aging schedule, the loss on securities that are down 20% or more for six months increased by about I think 1.7 billion. In the past you’ve been pretty proactive about writing stuff down that’s crossed a certain threshold for a certain amount of period. Should we expect more write downs of these securities as they enter that bucket or is it going to be different this time around for whatever reason? And then secondly just I had a question on your strategy for the variable annuity business. You’ve mentioned in the past you are raising prices. But have you revalued at your strategy and comment to that business given the balance sheet uncertainty and sort of the perception of risk if this exposure presents overall for the company.

Okay. I’ll reverse myself to last question, I’ll give out that number. It’s $83 million of increase to mortgage reserve bond. Turning now to the six-month and 20% or more bucket, the standard applies, which is we take a look at those securities very closely if we cross that threshold of six months and a decline in value of 20% or more. But we look in determining whether or not we are still receiving all of our contractual cash flow, that status of the company, that is the issuer, meaning their ability to meet these cash flows going forward in the future. And essentially we don’t write down securities. We turn around, write them back up again if they are good securities. So, there is a double-edge sour, we are mindful that we have a real issue in terms of the ability of the borrower to payers, then obviously we are going to impair those securities and take it through the income statement in the quarter. So, the – Jimmy Bhullar – JPMorgan: You would sort of be doing that regardless of what category this halts in, right? So, what’s the distinction as the amount that’s been depressed for a longer period increases, or is there one?

There is a distinction between debt securities and equity – more stringent, our products in equity securities are largely driven by the SEC rules. So, you will often times equity securities kick over to the impairment bucket pretty quickly. But debt securities can stay in that unrealized loss position if it’s still, for example, an investment grade related company, maybe it’s interest rate partially driven, and that sort of factors. So, the extreme example is that if you have treasures and interest rates swung wildly and the treasuries were worth less because they bought them a few months ago at the all-time lows and the interest rates rose and we wouldn't impair those securities. So that is just an extreme example but that gives you some flavor as to why you wouldn't just go and automatically impair securities you believe are money-good securities, because in a bucket, that says they are down for 20% or more for six months.

Thank you. We will go to the line of –

Excuse me, Jimmy, you asked a question I think about the variable annuity business. Let me start on that and then I will pass it over to Lisa who has other comments. You know, I have been, for a long time very vocal on the fact that we love the variable annuity business. One of the reasons we love it so much is because of the solid mix of businesses we have across MetLife. It is a way to do two things by the way, tell you that we are committed and secondly, to point out and get into other areas that people don't naturally ask a lot of questions about like Institutional business. Right now, I would argue that the need for the product, both in terms of downside protection for the consumer and the increasing focus on need for a retirement income. The need is as great or greater and probably the current economic situation drives is probably the most significant catalyst toward understanding what the need for this product and service is. We are very focused on the design, the pricing, and the distribution of these products. We have been very comfortable with our continuing organic growth; we continue to be comfortable with that. I said sort of as an aside, that if someone said would you want to with the swipe of a pen, double the business on one day, I have always said that might be another issue relative to the mix of our business. So, we are comfortable with the variable annuity business. We particularly – you know, we are known as the GMIB shop. We have gone over at both meetings and Investor Day about what the both the strength of the guarantee to the individual is but the prudence of the guarantee from MetLife's position is and we continue to be pleased with the business. And I would say, by the way we have of course exported our expertise to other countries and we hedge and manage that business in the same way as we do domestically. Lisa, you might have additional comments.

Yes, let me just add a little bit to what Rob said although I think you covered most of it, which is that in addition to making the changes that we have announced in terms of our (inaudible), we will be making other structural changes as well. The good news is that what we are seeing is that clients are really valuing our guarantees and we have the pricing power. They are willing to pay for them and we are going to be making those changes. The good news also is that as the market moves up, which it will at some point in time, we will get a tremendous profit kick here as well. We are pricing at good solid ROEs. We are seeing competitors drop out, we are seeing ourselves benefit in the flight to quality. If you look just in the month of December alone, the industry was down somewhere around 25% or 26% and we were actually slightly up. So we will continue to pick up share as we did in the fourth quarter, where while the final numbers aren't out yet but it does look like we will end in the number one position here. We have the diversity of distribution plays in in a big way here are both in terms of product and distribution itself. So when the market was moving a little bit away from fixed annuities because the CS from variable annuities because of CR, we saw we moved it into six. So it is about having diversity of product and also our distribution as this location in the market in third-party distributors, we have a very solid career channel and they're performing excellently at this point in time. Jimmy Bhullar – JP Morgan: Thank you.

Thank you. We go to the line of Randy Binner with FBR capital markets. Please go ahead. Randy Binner – FBR Capital Markets: Hi, thanks, most of my questions have been answered. I just had a quick question for Rob regarding TARP and CPP funding. Do you have any updated thoughts on that as it relates to Met and maybe the industry in light of more restrictive terms that are in being laid out by the government?

Randy, I have absolutely nothing to say relative to updating on TARP. You know what my general position has been all along on in terms of commenting on it. It is a very interesting topic from an intellectual and political point of view, but beyond that, I don’t have anything to add. Randy Binner – FBR Capital Markets: All right, fair enough. Thanks.

Thank you. And our final question comes from Colin Devine with Citigroup. Please go ahead. Colin Devine – Citigroup: Thank you. Just a couple of quick ones. On the RBC numbers you gave Bill, what impact did the Reg. 128 change have on that; is question one. And question two with liquidity, how much the short-term investments and the cash ramped up in the fourth quarter. I guess it is at about $37 billion, $38 billion. When you're talking about liquidity, is that the kind of position you are continue to run here for the foreseeable future, that is number two. You broke out for the first time these mortgaging and consumer loans held for sale and I was wondering if we could just get a little bit of clarification as to what those are. Obviously they are at $2 billion at the end of the year from null the year before. And then finally, you mentioned you set up a bunch of reserve DAC bases. Was there any spillover to what you are doing on a GAAP basis and perhaps you could just elaborate a little bit on what the liabilities were in question.

I think I will get the first three and I am going to pass the last one to Talby [ph], I will be tired by then. With regard to RBC, Reg. 128, you know, if you remember on Investor Day we talked about – that the New York State allowed us to kind of change the formula a little bit for calculating your Reg. 128 reserves. Colin Devine – Citigroup: $2.3 billion or $2.1 billion.

I think it was actually $1.8 billion and then obviously that got reported in the press a lot as we got this released. It actually – the fact that we got this released, we liked getting it but obviously because the market didn't get any worse we had recovered from a hedging point of view anyway, so we probably had very immodest impact, the fact that we got the relief had a very modest impact on our RBC, because we had a hedging cover. But the amount of stat reserves we had to put up for that was lower, but we still had the hedging cover the deal with it. Colin Devine – Citigroup: Did you extend your stat capital by the $1.8 billion if you chop the reserves?

Right. Because we hedged those reserves, you know, we moved them to our reinsurance captives, they were hedged. You don’t think they would just always keep it, so the flip side of that is well, but since you have the hedging asset, you must have got – therefore because the reserve was low, you must have got credit for that. We don’t calculate the fact that our hedging assets or hedging values are higher than our reserves than our reinsurance, that doesn’t help our RBC ratio. That is not really true for others but that is the way our reinsurance portfolio is set up and it doesn't help. Colin Devine – Citigroup: You are not using your hedged to write up your RBC?

Bingo. Thank you. You said that much better than me. So, now I forgot the liquidity. Yes, it is $38 billion, it is very high; no, we don't expect to run it that high we do expect it to come down, even in the first quarter. But going back to the idea of – you know, on a really normal – in a normal environment, we would only tend sort of $10 billion in short-term liquidity. We are going to be running quite a bit higher than that. So we are going to keep excess liquidity in our balance sheet for a while. With regard to mortgages for heath for sale, you are right, that looks funny, but there is a good explanation. You know, we own a little bank, MetLife Bank; we bought a mortgage origination business from First Horizon bank. That business, that transaction closed on September 1 during the third quarter of this year and this markets origination company, we didn't get this sorts clear, we didn't buy any legacy business whatsoever, we bought assets we bought a factory and a sales force that originate mortgages. Colin Devine – Citigroup: Consumer or residential just to begin with.

All residential, all prime, all high quality and we hold those for sale. We inventory them for a month and then at month-end, we sell them to Panny or Freddy. So that is the kind of one-month production if you will that you're seeing on the December 31 balance sheet. Colin Devine – Citigroup: Thank you.

Now with regard to DAC. Colin Devine – Citigroup: Reserves, yes.

Hi, Colin, it is Stan. I will just say one more comment on Reg. 128. You know the changes that were made actually resulted in a reserve that was slightly more conservative than the VA requirements will be at the end of 2009. So even though it helped RBC, going into 2009, 2010 it is actually still slightly more conservative than the VA requirements, which New York will adopt at the end of 2009. Colin Devine – Citigroup: But didn't Bill just say it didn't help RBC?

Well, it did help a little bit. Colin Devine – Citigroup: okay.

In terms of the additional results on us on a stat basis, that was actually related to Reg. 128 too. One of the changes that New York approved was the ability to move from 104.5% of Treasury rates in valuing liabilities to the greater of 104.5% of treasuries and a LIBOR swap curve. At the time they approved that, the LIBOR swap curve was quite a bit higher so we expect it to get some relief there. In the end, what happened with the LIBOR swap curve actually dropped, so we wound up holding the reserves at the treasury curve, which in terms of valuing liabilities was in the 2% range in terms of discount rates. So that kind of bumped the reserves up quite a bit from some of our separate account business. Colin Devine – Citigroup: Given those changes and perhaps the earnings, do you still expect to take roughly the same level of stat or dividends out of the operating company this year or is that going to be down as well?

You know, I am not sure what we will do yet. I think frankly at the end of the day, we will depend a lot on how big credit losses are. I mean, we have to manage to a 350 RBC ratio and obviously depending on what happens to the overall equity market this year and what happens to the debt markets, you know, we will probably be managing our stat dividends accordingly. So it is not clear to me how much we will pick out or not, to be quite blunt about it. Colin Devine – Citigroup: All right.

And I take a look at the separate players, you know, we generally only take dividends out once a year and we generally do it towards the end of the year. Colin Devine – Citigroup: Okay, thank you very much.

And that concludes our call, thank you very much.

Thank you ladies and gentlemen. This conference will be available for replay after 10 AM today through midnight February 11. You may access the replay at any time by dialing 320-365-3844 and entering the access code. That concludes our conference call for today.