William Mullaney - President of the U.S. Business organization Conor Murphy - IR William Toppeta - President of International and President of International - Metropolitan Life Insurance Company C. Henrikson - Chairman, Chief Executive Officer, President, Chairman of Executive Committee, Member of Investment Committee, Chief Executive Officer of Metropolitan Life, President of Metropolitan Life and Director of Metropolitan Life Insurance Company Steven Kandarian - Chief Investment Officer, Executive Vice President, Chief Investment Officer of Metropolitan Life and Executive Vice President of Metropolitan Life William Wheeler - Chief Financial Officer, Executive Vice President, Chief Financial Officer of Metropolitan Life and Executive Vice President of Metropolitan Life

Thomas Gallagher - Crédit Suisse AG Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc. John Nadel - Sterne Agee & Leach Inc. John Hall - Wells Fargo Securities, LLC A. Mark Finkelstein - Macquarie Research Suneet Kamath - Sanford C. Bernstein & Co., Inc. Edward Spehar - BofA Merrill Lynch Christopher Giovanni - Goldman Sachs Group Inc. Colin Devine - Citigroup Inc

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter Earnings Release Conference Call. [Operator Instructions] 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 statement 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.

Thank you, Roxanne. Good morning, everyone, and welcome to MetLife's Fourth Quarter 2010 Earnings Call. We're delighted to be here this morning to talk about our results for the quarter. We will be discussing certain financial measures not based on Generally Accepted Accounting Principles, 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. A reconciliation of forward-looking financial information to the most directly comparable GAAP measure 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 in 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 other members of management, including Bill Mullaney, President of U.S. business; Bill Toppeta, President of International; Bill Moore, President of Auto & Home; and Donna DeMaio, President of MetLife Bank. With that, I would like to turn the call over to Rob. C. Henrikson: Thank you, Conor, and good morning, everyone. Before we get into our earnings results, I'd like to say that 2010 was a very good year for MetLife. We had strong top line growth, and our operating earnings increased significantly. We remained committed to the fundamentals of our business, and we're continuing to gain market share. In addition, we are proud to have completed the largest, most strategic and transformational acquisition in MetLife's history, which has propelled us into becoming the leading global life insurance company. Now let's get started on our results. Overall, for the fourth quarter, MetLife delivered very strong performance, growing premiums, fees and other revenues to $9.7 billion, up 4% over the prior year and 12% sequentially. Operating earnings grew significantly to $1.2 billion, up 46% over the prior year and 32% over the third quarter of 2010. Our book value increased year-over-year by 16% primarily attributable to strong operating earnings and investment performance. Our businesses are performing well. Our underwriting results are very stable, and we continue our commitment to expense management as evidenced by the $700 million in annualized savings we highlighted at Investor Day. And also, our investment portfolio remains strong and experienced an excellent quarter. Steve will discuss investments in more detail in a moment. Now let me share a few highlights from each of our businesses. In U.S. business, premiums, fees and other revenues were $7.2 billion, down from the prior year and flat versus the prior quarter. Operating earnings grew by 10% over the prior quarter, and we were down slightly over the prior year period. I'm pleased with the financial results in U.S. business, a direct result of our disciplined pricing and continued focus on risk management. Within our Insurance Products segment, premiums, fees and other revenues were $5.1 billion, down 4% over the prior year and up 4% over the prior quarter. Group life earnings were down somewhat year-over-year as expected. Individual life earnings were down $74 million versus the prior year. The earnings decline is almost entirely attributable to the net difference in DAC [Dental Advisory Council] unlocking and other adjustments between years. Non-medical health premiums, fees and others declined by 4% from the prior year period. Lower earnings in individual disability offset improvements in dental and in group disability, where incidents remained elevated but recoveries are improving. In Retirement Products, the top line was strong at $812 million primarily due to continued momentum in our third-party distribution channel and improving investment margins. Total annuity sales were solid again at $5.5 billion, driven mostly by another record-setting quarter, where we reached $5.1 billion of variable annuity sales, up 38% from the prior year period and 10% from the prior quarter. Operating earnings were $175 million, up sequentially but down year-over-year. In Corporate Benefit Funding, operating earnings were very strong at $283 million, up 51% versus the prior year period and up 55% sequentially mostly due to higher core and variable investment income. Revenues are down from the year-ago period due to lower structured settlement sales and lower pension closeouts. However, fourth quarter saw an increase in pension closeout sales as compared with the first three quarters in 2010. Rounding out the U.S. business segments. Auto & Home had another very solid quarter with net written premium up 4%. The combined ratio, excluding catastrophes, was 90.0% compared with 91.8% in the prior year quarter. Turning to International. Fourth quarter premiums, fees and other revenues of $2.1 billion grew 75% over the prior period and 70% over the prior quarter. The notable increase is largely due to the addition of one month of Alico results in the quarter. The pre-transaction MetLife International operations continue to perform very well, again, achieving double-digit sales growth across all the regions. Beginning with our Latin America region, the sales grew 24%, driven by strong growth in Mexico and Brazil. Asia Pacific grew 12% due to higher sales in Korea and China. And in our European region, sales increased by 47%. MetLife Bank achieved operating earnings of $46 million, bringing the total for the year to $267 million, down 10% over last year due to lower mortgage servicing revenues. But still a great result. Looking back at the full year of 2010, I'm pleased with our strong and consistence performance every quarter. Overall, we grew our premiums, fees and other revenues to $36 billion, up 5% over 2009. We achieved operating earnings of $3.9 billion, an increase of 65% from the prior year. Furthermore, the acquisition of Alico has brought MetLife to the forefront as the leading global insurance provider of income and protection products and services and employee benefit programs. As we proceed in 2011, the continued integration of Alico will be a high priority. And let me assure you, we also will remain extremely focused on all of our operations. Backed by solid financial position, strong brand and momentum in the marketplace, we have the opportunity to create an even stronger, more valued and more profitable MetLife. And with that, let me turn it over to Steve.

Thanks, Rob. I would like to spend a few minutes reviewing the key components of our investment results for the quarter. First, let me start with a comment on variable investment income. Pretax variable investment income for the fourth quarter was $423 million, which is $223 million above the top of the planned range. Returns this quarter were driven by both strong private equity results and the increase in corporate bond prepayments. Our outlook for 2011 variable investment income remains in the $225 million to $235 million per quarter range that we provided at our recent Investor Day. Now let me cover investment portfolio gains and losses for the quarter. Gross investment gains for the fourth quarter were $301 million. Gross investment losses were $184 million and write-downs were $126 million, for a net pretax investment portfolio loss of $9 million. Write-downs included $58 million in structured finance securities and $55 million from corporate credit. Overall, loss levels remain modest given the current economic environment. Gross unrealized gains in fixed maturities and equity securities were $14.1 billion, down from $19.7 billion last quarter. Gross unrealized losses increased to $6.9 billion from $4.8 billion last quarter driven by a significant increase in interest rates. For example, the 10-year U.S. Treasury increased by 78 basis points during the quarter. Overall, the fixed maturity and equity security portfolio was a net unrealized gain position of $7.3 billion at quarter end. Please keep in mind that interest rate-driven unrealized gains and losses are generally offset by changes in the economic value of our liabilities. Next, I would like to briefly touch upon our commercial mortgage holdings. First, the loan-to-value ratio of our portfolio improved again this quarter to 66% from 67% due to improving property values. Delinquencies increased to $58 million during the quarter driven by one delinquent loan. We do not expect to incur a loss on this loan. The overall delinquency rate for the portfolio remains low at 15 basis points. While the real estate sector remains challenged and our delinquency rate will likely fluctuate for some period of time, we expect losses to be manageable, particularly given our commercial mortgage valuation allowance of $562 million. Now let me turn to a few matters relating to our acquisition of Alico. First, I'd like to comment on the overall decrease in our portfolio yield resulting from consolidating Alico. For example, our fixed maturity yield declined during the quarter by 49 basis points to 5.3%. This was driven by lower yield in Japanese assets, which back liabilities with correspondingly low crediting rates. Next, I'm delighted to report that our integration of the Alico investments portfolio is going well. We have been able to successfully leverage the existing MetLife investment systems and processes to supplement Alico's investment infrastructure. From a portfolio perspective, we continue to manage down certain European sovereign and financial holdings. Finally, given the recent events in the Middle East, I want to mention that we hold approximately $1.4 billion in assets across 13 countries in the region. The vast majority of these holdings are sovereign debt and bank deposits, supporting insurance liabilities in these countries. As you'd expect, we are monitoring the developments in the region very closely. In summary, while uncertainty in global capital markets continues, we are comfortable that our portfolio remains healthy and is well positioned to deliver strong shareholder value. With that, I will turn the call over to Bill Wheeler.

Thanks, Steve, and good morning, everybody. MetLife reported $1.14 of operating earnings per share for the fourth quarter and $4.38 per share for the full year 2010. This morning, I will walk through our financial results and point out some highlights, as well as some unusual items which occurred during the fourth quarter. Let's begin with premiums, fees and other revenues. Total premiums, fees and other revenues, which were $9.7 billion in the fourth quarter, were up 4% from the fourth quarter of last year and up 12% over the third quarter of 2010. For the full year, our top line revenues totaled $35.8 billion, up 5% over 2009. For the quarter, International revenues, excluding Alico, were up 7% versus the fourth quarter of 2009 driven largely by growth in Mexico and Brazil. International's results also included one month of results from Alico, which significantly impacted MetLife's overall revenue growth. So let me take this opportunity to briefly discuss Alico's recent financial performance. One month of data is not a very useful way to analyze Alico's results. However, if you look at Alico's overall fourth quarter of 2010 compared to the fourth quarter of 2009, sales are up 39%, and premiums, fees and other income are up almost 13%. So we are seeing some good top line momentum at Alico. In terms of profitability, Alico reported $114 million of operating earnings for the one month of its results in our fourth quarter. Alico had some unusual expenses in this month, and we think its normalized operating earnings were more like one $128 million. This figure is consistent with our profit expectations at Alico, although, again, I will caution you that no one should rely very much on one month's results. Okay, enough about Alico for the moment. With regard to MetLife's domestic businesses, there was a decline in revenue for the fourth quarter. There a number of reasons for this. However, the performance is consistent with the guidance we gave you on Investor Day last December. Turning to our operating margins, let's start with our underwriting results. In U.S. business, our mortality results were favorable across the board this quarter. The group life mortality ratio for the quarter was 89.7%, which was flat versus the prior year period and in line with our expectations. For the full year, group life's mortality ratio was 88.7%, right in the middle of the 2010 Investor Day guidance range of 88% to 90%, which is a good result. Our individual life mortality ratio for the quarter was 82.9%. This quarter's results were a little higher than the very favorable prior year quarter of 81.1%, but it's still very favorable to our plan. The non-medical health total benefits ratio for the quarter was 89.7%, which was down from the prior year quarter of 90.2%. In dental, our underwriting results continue to improve, demonstrating that with better claim activity, combined with our pricing strategy, is working well. Disability results improved versus last year, but continued to be below plan. We saw meaningful improvement in recovery experience in the quarter but incidence remained elevated. For the full year, non-medical health's benefits ratio was 89.2%, which was well within our 2010 Investor Day guidance range of 88% to 90%. Turning to our Auto & Home business. The combined ratio, including catastrophes, was 95.2% for the fourth quarter, which was up over the prior year quarter's results of 92.3% due to higher catastrophe levels this year. The combined ratio, excluding catastrophes, was 90% in the fourth quarter versus 91.8% in the prior year period. A non-catastrophe prior-accident year reserve release of $16 million after tax was taken in this quarter compared to a $9 million after-tax release in the prior year period. Moving to investment spreads. We saw continued strong investment spreads this quarter driven by both strong variable investment income and solid core results. For the quarter, variable investment income after tax and the impact of deferred acquisition costs was $138 million or $0.17 per share above the top end of the 2010 quarterly guidance range. Remember, we have now raised our variable investment income guidance range for 2011. Moving to expenses. Our operating expense ratio for the quarter was 23.8%. While our operational excellence initiatives continued to prove successful, the ratio was negatively impacted by the Alico acquisition and lower premiums in our domestic business in the quarter. For the full year, the operating expense ratio was 22.6%, which was within our Investor Day guidance range of 22.4% to 22.8%. Turning to our bottom line results. We earned $1.2 billion in operating earnings or $1.14 per share in the quarter. Remember that this includes one month of Alico operating earnings of $114 million and both higher interest expense and shares outstanding related to the acquisition. The result of these items is a net dilutive impact of $0.15 per share in this quarter. Included in our fourth quarter results was an unfavorable market impact of $48 million, or $0.06 per share, as the DAC amortization adjustment, increase of 10% in the S&P 500 in this quarter, was more than offset by the impact from our variable annuity hedge program. In addition, the completion of our annual review of DAC assumptions resulted in a reduction of U.S. business operating earnings by $17 million or $0.02 per share this quarter. With regard to investment gains and losses, in the fourth quarter, we had after tax net realized investment losses of $42 million, which included net investment portfolio losses of $4 million after tax. With regard to derivatives, we had after-tax losses of $1 billion driven primarily by higher interest rates, changes in currency exchange rates and an improvement in MetLife's own credit spread in the quarter. From an interest rate risk standpoint, MetLife uses long-dated, receive fixed and pay-floating interest rate swaps to extend the duration of our asset portfolio. This is done to maintain the desired duration match against our long-dated liabilities. These swaps behave just like bonds in response to interest rate changes. That is, they lose value when rates rise. And this change in value runs through our income statement. Additionally, owned credit continues to drive accounting volatility and derivative gains losses related to our VA [variable annuity] program. As a reminder, the accounting rules require that we consider MetLife's owned credit when fair valuing the FAS 133 embedded liabilities in our VA products. The key point here is that the accounting volatility that this requirement brings to our income statement is truly non-economic in nature. Our preliminary statutory operating earnings for the fourth quarter of 2010, excluding Alico, were approximately $1.8 billion, and our preliminary stat [statutory] net income was approximately $1.7 billion. Obviously, a terrific result. For the full year 2010, preliminary statutory operating earnings and statutory net income were both approximately $3.4 billion as we recorded only $21 million in realized stat losses in 2010. Total adjusted capital at year end is approximately $26 billion, up 8% for the year. We have not finished our RBC [risk-based capital] calculations for 2010. But based on our work to date, we estimate that our consolidated RBC ratio will end the year at approximately 450%, which is above the 2010 Investor Day guidance range of 410% to 440%. Also, a very good result. Cash and liquid assets at the holding company at year end were $2.7 billion. During the fourth quarter, the holding company paid our annual common stock dividend amounting to approximately $780 million. In summary, MetLife had a very good fourth quarter and full year 2010. Our investment performance continues to improve. Our operating margins remained strong driven by disciplined underwriting and expense management, and our earnings continue to grow. Also, our Alico acquisition seems to be up to a good start. And with that, I will turn it back to the operator for your questions.

[Operator Instructions] Our first question comes from the line of Tom Gallagher with Crédit Suisse. Thomas Gallagher - Crédit Suisse AG: Bill, I just wanted to follow up on your comment on statutory results. Did you say you had $1.8 billion of stat earnings in 4Q?

That's right. Thomas Gallagher - Crédit Suisse AG: Did that include the impact of those derivative losses? Or is that in the captive and treated separately?

Well, the answer is it's complicated, as everything with regard to stat accounting is. So most of the changes in derivative values, if they come through on our stat statement at all, will come through sort of, I would say, below the income statement or there'll be changes in our stat surplus numbers. Now a lot of the changes in derivatives don't affect our stat accounting. It sort of depends on what kind of derivatives they are. Also, part of the reason that stat earnings are so good this quarter is because the environment got a lot better. And so some of our reserves, which are really driven by interest rates or where the S&P 500 is, obviously, those reserves declined during the quarter. And so that drove the number up. Thomas Gallagher - Crédit Suisse AG: So, Bill, suffice to say that if I looked at your surplus number, that would have gone up by less than what would be reported on net income because there's a below-the-line element for stat accounting.

Yes, there's other things, too. So for instance, our total stat surplus, and again these are domestic Insurance businesses, it's up 8% year-over-year. Now remember, one thing we took out is very substantial dividend up to the holding company this year, roughly at $1.7 billion. So you have to factor that in as well. Thomas Gallagher - Crédit Suisse AG: So with the 450% RBC, with the dividend you took, what's the update on your overall capital position?

Well, I hesitate to kind of give the same kind of chart that we did on Investor Day. We don't like to kind of just chew that up every quarter. But I would say that, look, the capital levels and excess capital that we showed on Investor Day, the numbers are better. And mainly because this improvement in the RBC ratio versus what we estimated on Investor Day equates to and another $1 billion plus of higher capital versus where we were a couple of months ago. Thomas Gallagher - Crédit Suisse AG: Can you comment at all about visibility on alternative returns, at least for 1Q? Because I know there's a lag element, so I assume 4Q and 1Q may not look too dissimilar?

Tom, I'd say that the range we gave you at Investor Day, which actually I misspoke in my script, I said $225 million to $235 million per quarter, I meant to say was $225 million to $325 million per quarter. That range is something we still feel comfortable with at this point in time. I know we've had a good couple of quarters here with variable investment income, but our view is that some of that, certainly, was driven by a couple of factors you might not see in the current year. One would be some sales that were in anticipation of tax changes; try and pull forward some sales into 2010 when the tax situation might be more favorable. That's sort of off the table for now. The second is, you saw some remarks on the cost basis funds, and that was off the real lows we saw in 2008 when things are marked down. That's driven by a couple of factors. One, a major bounce back in the equity markets and improvements in the below investment-grade market, which drives a lot of these valuations. So we think that the guidance we gave you at Investor Day in December still is appropriate for today.

Our next question comes from the line of Suneet Kamath with Sanford Bernstein. Suneet Kamath - Sanford C. Bernstein & Co., Inc.: To follow up with Steve, if I go back to the Investor Day and your presentation, you laid out your interest rate outlook on a quarterly basis across the yield curve. And if I just zero in on the 10-year, it looked like you weren't expecting to get to sort of $345 million until really the end of 2011. Given where we are in the 10-year today, should we assume that you are sort of have been investing sort of in the course of fourth quarter of 2010 and the first part of 2011, obviously, at prevailing rates, so all else equal, those numbers should be better for operating EPS?

Well, rates have risen, but of course, as crediting rates on the liability side. And it isn't always a 1:1 relationship, but there's certainly a close correlation between the two. So overall, I'd say that somewhat higher interest rates are favorable for our business. There's no question about that. We talked about hedges we put in place to offset some of the low our interest rate environment on Investor Day. But certainly, on balance, somewhat higher interest rates is favorable for our business. Suneet Kamath - Sanford C. Bernstein & Co., Inc.: And did the crediting rates adjust sort of in line with the incremental new money investment rates? I thought there's maybe a lag or something like that.

Suneet, there is a lag. Just building on what Steve said a little bit, all of our products have different crediting rate strategies. Sometimes the crediting rate changes immediately because it's basically a floating-rate liability or, I'm sorry, sometimes it doesn't change except for maybe once a year. Then of course, we have a bunch of liabilities where the crediting rate never changes. But with regard to things like new business, stuff we're selling new today, obviously, that would be on using whatever the prevailing interest rates are. So the story is a little different depending on which sort of product and business you look at. But again, I think the punch line is, is that, yes, higher interest rates, certainly, for a while here, are going to generally have a favorable effect on our earnings. So it's early days. So we've only been enjoying these high interest rates now for, I don't know, three, four months. So it won't have that much impact yet. Suneet Kamath - Sanford C. Bernstein & Co., Inc.: The second question I had, actually, was for you, Bill, in terms of capital. You'd mentioned that the RBC is a little higher than you thought and the operating environment is a little bit better. Per your Investor Day, there's been no discussion or there was no assumption for share repurchase. Since the earning season started, we've started to see some other life insurance companies dip their toe back in the water there. Any change in terms of your thoughts on redeployment of capital this year, especially as the AIG lockup expires in August?

There's nothing new to say now. Obviously, it's without a doubt, the environment continues to improve, and that's all good. But in our mind, it's still a little early to announce any kind of buyback activity.

We have a question from the line of Colin Devine with Citi. Colin Devine - Citigroup Inc: First, Bill, with respect to the derivatives losses, could you just give us a little more granularity as to how those break out and what sort of liabilities they're matched against? Second with Steve, what was the impact on your RBC, the NAIC's [National Association of Insurance Commissioners] changes to the factors on CMBS [commercial mortgage-backed securities]? And then lastly, Bill Wheeler, back to you, with respect to RBC, are you factoring in your International businesses for that and doing some sort of consolidation? Or is that really now just stand-alone on the U.S. and less applicable as a number as we think about Met's capital position?

So with regard to derivative losses. Now you can kind of break it -- there's really three buckets. The first is changes in interest rates, and I mentioned these a little bit in my remarks. Many of our long-dated liability portfolios, we extend the duration of the assets effectively by buying swaps. And so probably like roughly 40-plus percent of the derivative loss this quarter was driven either by the decline in value of those swaps or interest rate floors that we've also purchased to protect against that low interest rate environment and we talked about, on previous calls, we've talked a lot about those floors in the last year or so. So that's a big piece of it. A comparable piece is driven by changes in the evaluation of the embedded derivatives in our variable annuity program, where when we change -- so that would be another 40-plus percent of the decline in derivative value. And that's really where we have to value this derivative under GAAP accounting. The discount rate that we used to value that derivative, it has to be tied to our owned credit. MetLife's owned credit -- this is all, of course, good news. Our credit default swap spread declined from basically, roughly, a little over 200 bps at the beginning of the fourth quarter to something like a little under 150 bps at the end of the fourth quarter. So that's a 60-plus basis point move in our credit default swap spreads. It's a pretty big move. And because of that, the change in the discount rate, when you value the embedded derivative, comes down. That means the liability is worth more. And that has a big impact, too. Hopefully, you followed all that. Finally, the currency, we did have some fluctuation in currency. We use derivatives to protect ourselves in many different areas regarding currency moves. And the value of those -- and sometimes those qualify for hedge accounting but sometimes they don't. It's the match between what's being hedged and the terms of the derivative aren’t perfect. So there, some adjustments in the value of the yen versus the dollar triggered maybe roughly a 15% decline in derivative value. So the big three reasons that we purchase derivatives, interest rates, currency moves and, of course, this thing with the VA program, they all kind of moved in the same direction this quarter in a very meaningful way. And so that's what drove the numbers. So that gives you a little more granularity, hopefully. I can do the RBC one. You want me to do that one, too, because it's a very simple answer. The change in RBC driven by the PIMCO program was worth literally one point. I'm sorry, BlackRock, not PIMCO, sorry. PIMCO was last year. Yes, the BlackRock adjustment was worth one RBC point, literally one, one good guy. And then finally, you're absolutely right about the RBC calculation. RBC is a domestic concept for measuring solvency for U.S. insurance companies; so that 450% that we talk about is our U.S. insurance companies consolidated number. By the way, even though Alico, technically, is a U.S. statutory insurance company, we don't include that number. And remember, I said this on Investor Day, that we don't -- the right way to evaluate Alico's capital adequacy is not to talk about its RBC ratio, it's to look through the business to the capital adequacy numbers in each of the various countries. And actually today and, certainly, on Investor Day, we talked about Alico having an excess capital of over $1 billion based on when we bought the company. So that its capital position, also, is in a very good shape. And then, of course, our own International operations also, in aggregate, have excess capital over and above what they need. So whether you're talking about internationally or domestically, we're in very good shape from a capital point of view. Colin Devine - Citigroup Inc: So where would Alico's Japanese capital ratio then have ended the year, since that is one thing we can sort of compare to other companies?

So the SMR, the solvency margin ratio, which is sort of like the U.S. RBC -- and this is under the old basis, which is still the basis that's being used in Japan. I think the rules are going to change, I think, at the end of 2011. But the SMR in Japan was approximately 1,400, which, again, is obviously quite good.

We have a question from the line of John Hall with Wells Fargo. John Hall - Wells Fargo Securities, LLC: I just want to stay on the issue with statutory RBC for a second. What was the big delta from the range that you were talking about at the analyst meeting in December and the 450% that you're talking about now?

Well, I would say the biggest thing is, remember, we did the Investor Day on early December. And if you remember, December was a pretty fun month from a move in the S&P 500. And also, interest rates moved up during that month, too. So the macro environment changed for just in being at one month, the macro environment changed pretty materially. And so that allowed us to release some of these contra reserves that we sometimes have to hold against our VA product and stuff like that. So that would probably be a big driver. I think, too, when I got quizzed on Investor Day about the RBC ratio, I admitted that maybe our guidance was a little conservative. We always tend to do that, because it is the number we only calculate fully once a year. And so we always want to make sure we're conservative in terms of our estimate. John Hall - Wells Fargo Securities, LLC: Since the Investor Day, the strong macro environment that you talk about, a couple of other things that you've spoke about in the past, i. e. the interest rate sensitivity and the impact that low interest rates might have other on the company, as well as embedded equity market guidance that you've built into your or the assumption you built into your guidance, the environment has changed. What's that doing to your expectations on those items?

I'm not sure what to say other than it's better. Yes, because the good news, of course, is that so far this year, the environment continues to improve in terms of both view of how the equity markets are going and where interest rates are. So obviously, we feel very positive about that. John Hall - Wells Fargo Securities, LLC: And I guess the final question has to do with the very strong variable annuity sales and deposits. How much is enough? Is there a point where you have to put on a governor to control the growth to some degree?

John, it's Bill Mullaney. Just to give some comment on the quarter overall for VA sales, obviously, a strong quarter, up 38%. We think the market grew fairly significantly in the quarter too. We don't have the full fourth quarter numbers, but we think year-over-year, the market could be up somewhere between 10% and 20%. And so obviously, we saw our share improve. We continue, we believe, to be the number two player in VAs, and we've talked about the fact that we want to be in the top three. We feel very comfortable with the level of business we wrote in the fourth quarter. I think some of the changes to the macroeconomic environment, that you reference, have helped. The improvement in the S&P and improvement in the interest rates have brought the returns on the business that we're writing now up into the target range. So we feel pretty good about that. As we've talked about before, there is some risk associated with this product, and it's a product that we continue to look at very closely and look at the risks that we're taking. We continue to hedge, and we're also continuing to look at what product features we might bring in to continue to manage the risk appropriately. But we fee pretty good about the business we're writing right now.

The next question comes from the line of Chris Giovanni with Goldman Sachs. Christopher Giovanni - Goldman Sachs Group Inc.: Can you guys talk some about the impact that the move up in rates had on C-3 Phase 2 calculation? I think in December you talked about it maybe being a 20-point drag given where rates were at the time?

Chris, I'm just trying to remember when I would have said that what the C-3 Phase 2 impact would have been a 20-point drag. That's not my recollection. C-3 Phase 2, for everybody's benefit, is a stochastic model, stochastic calculation we have to do at year end. And it's complicated. And then obviously, it takes into effect the things like interest rate movements and given -- for our overall domestic business. I can't tell you off the top of my head exactly where C-3 Phase 2 came out of for this year, though it was pretty benign. And you would expect it to be given the move up in interest rates. So, Chris, I think we'll have to get back to you with something more specific about that. Christopher Giovanni - Goldman Sachs Group Inc.: And then maybe one for Bill Toppeta in terms of the conversion from branches to subsidiaries of Alico, how that process is going and timeline?

Sure, Chris. I would say it's going according to plan. It's a project that's going to take a number of years. So I would say, certainly, two years and maybe plus. And as you may recall, the agreement that we have, the closing agreement, gives us three years to complete the process. So I'd say we're on track, and it's going well, particularly in the more significant jurisdictions. Christopher Giovanni - Goldman Sachs Group Inc.: One quick one for Bill Mullaney. Just in terms of the ROIs that you pointed to and the VAs being weaker in the back half of the year and leading to some repricing. Can you comment sort of the move up in rates, some of the repricing? What you expect that to do to the ROIs?

Sure, Chris. What I said in an earlier call, it was either for the second quarter or the third, was when interest rates were down and equity markets were not performing -- we thought that the ROIs were in the low teens but we were covering our cost of capital. Since the macroeconomic environments have improved, we're seeing our ROIs now in the mid-teens.

We have a question from the line of John Nadel with Sterne Agee. John Nadel - Sterne Agee & Leach Inc.: I want to come back to the capital and potential for capital management, maybe slightly differently, Bill. Given the credit performance, especially in the quarter, if we look past the derivatives and look at the true credit metrics, can you give us a sense for how that performance, maybe it's for the full year 2010 but certainly in the back half of the year, is comparing against some of the expectations from the key rating agencies and whether you think that could potentially alter the outlook here?

Yes. Well, I would hope it would alter the outlook, let me put it that way. Just for everybody's benefit, obviously, we've gone through -- two years ago, we went through a pretty difficult credit cycle. And no, I think, our losses were -- given where people's expectations are, our losses ended up being, obviously, on the low end of that. And really, for the last three quarters of 2010, our credit loss expectations, our actual results were way below that. And so the credit story was really quite good. If you recall, last summer, when we commenced our equity financing for Alico, we ended up having to raise incremental $1 billion of common as part of the financing mix to kind of satisfy some of the rating agency concerns about potential losses, especially in the real estate area. And I think we said at the time, and we've been pretty consistent on this, that we did not expect material losses in real estate. And of course, in the two-plus quarters since then, the story has been fantastic in terms of delinquencies and how our reserve has built up. We've actually been forced to release some of our loss reserve in the real estate area. So the story just couldn't be much better. So certainly, those fears that some of the rating agencies had about losses have not occurred. And our outlook for 2011 is that our investment performance, from a loss perspective, is going to be pretty consistent to what it's been the last couple of quarters, two, three quarters. So we think just as a capital adequacy issue, this is really -- it's not a big deal, and we're doing very well. So I think that will probably help influence the rating agency outlook. So to go kind of to your base question, is this going to change views about capital management, I think it will. But I think it does take a little time to have that happen, but I suspect it will change how the rating agencies feel. John Nadel - Sterne Agee & Leach Inc.: Put that together with the expectation that the federal government sort of stress tests, too. Is that still expected to be -- have you guys submitted your information? Is that supposed to be sort of done here in the next couple of months?

Yes, you got it right. We have submitted, I guess, our report about our stress test calculations based on their guidelines. We've submitted those to the fed. Well, I don't know if there's an official report back date. I think people's expectation is, is that we will hear something from them by the end of the first quarter. I don't think, however, that those results are ever -- unlike the stress test that recurred in 2009. I don't think those results are ever going to be made public. But my guess is people will be able to puzzle out who did well and who didn't. John Nadel - Sterne Agee & Leach Inc.: And then final question is just on one of the businesses. I was hoping you guys could discuss the underwriting results in non-medical in a little more depth. When I look at most of your competitors, the majority of them have seen stable to improving results in their comparable business lines this quarter. It's still not great but it's, at least, relatively stable. Your results kind of stand out in contrast to that, so maybe a little more color there.

Sure, John. It's Bill Mullaney. Let me give you some perspective on the major businesses. First of all, dental continues to perform well. Claims are stabilizing there. And as we've talked about, we implemented some price increases in late 2009 that are taking effect throughout 2010. So dental is performing at expectation. Disability, although we're seeing some modest improvement, as Bill Wheeler talked about in his comments, it continues to lag what our expectations are. Incidence continue to be high, and recoveries are starting to improve a little bit, which is helping the results. So it has improved over the year-ago quarter but still below where we would want it to be. We also had, on some of the smaller businesses in that segment that we don't talk about very much, some volatile claim activity in our accidental death business as well as our Individual disability business, some high claims there. And that had some impact on the results. And then the last thing I will say is we did have higher expenses in the quarter in that segment. There were some one-time charges that we took associated with our decision to no longer sell new business for long-term care. And so those expenses showed up in the fourth quarter, and we don't expect them to show up in 2011. So the guidance that I talked about at Investor Day for 2011 for that segment, we continue to feel very comfortable with. John Nadel - Sterne Agee & Leach Inc.: That was going to be sort of my follow-up. If you look at some of that, you used the term volatility claim activity and these higher expenses, is that enough, if that were to dissipate to get you back to your guidance range?

The next question comes from the line of Mark Finkelstein with Macquarie. A. Mark Finkelstein - Macquarie Research: I mean really since December, you've seen equity markets up, rates higher, you got the active financing exception legislation. We can all do the math on what that means for estimates and I'm not really getting at kind of changes in guidance or anything. But when we think about those items, and they are pretty meaningful, I mean, what are the offsets? I mean, what are the areas of softness that are in there that we should think about in terms of maybe moderating expectations somewhat?

Mark, well, I'm glad you asked that question. Well, obviously, we've had a lot of good news since Investor Day, both in terms of interest rates, the stock market, tax relief, a lot of good news. There are a couple of offsets, I would say. One is our PGAAP [purchase GAAP] -- on Investor Day, we said PGAAP wasn't done, it was close to done. It is now just finishing up getting finalized. I think our PGAAP accounting adjustments are going to be slightly less positive in terms of Alico accretion. It's not that material, but it's a little less positive. And the other thing I'd say is one offset from higher interest rates is the bank's profitability. MetLife Bank's profitability is probably going to be a little lower than what we originally forecast on Investor Day. And that has to do with both higher mortgage rates, there's going to be less volume, and as well as, I think, margins will be affected a little bit. So there are some offsets. Obviously, it's still in that positive story. But that, what I would say, are the two big areas of weakness. A. Mark Finkelstein - Macquarie Research: And then, I guess, you gave a good story on Alico in the month, in November, but it was one month. I guess, is there anything you can kind of give us in terms of just how December or even January looked from a sales perspective?

Mark, it's Bill Toppeta. Again, a month or two doesn't make a trend, but I would say that what we're seeing is positive and certainly consistent with the plans that we gave you on Investor Day. So I would say good, as far as we go. But again, I would underline what Bill said earlier, a month or two doesn't make a trend.

And our next question comes from the line of Jeff Schuman with KBW. Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc.: Let's go first back to Alico. You talked about the very strong sales this quarter. Can you give us a little bit of sense of what you're doing there? Is this essentially represent Alico just getting fully back on its feet and kind of reclaim its historical position with historical products? Or are there some new things that you've done there to kind of stimulate that?

Yes. It's Bill Toppeta. I think the story is mostly attributable to Alico getting back to its pre-crisis levels. You remember on Investor Day, we gave you a chart on lapses and surrenders. And we said that the trend was getting back and below pre-crisis levels. That trend, I'm happy to say, continues since Investor Day. Also, with respect to sales getting back up to pre-crisis levels, that trend continues. And I would say, as Rob said at the beginning, the focus really is on the fundamentals of the business. It's on life insurance sales, accident and health sales, through the three or four strong channels that we have, so certainly face-to-face, but also a comeback in the bank channel and in the direct marketing channel. So it's basically a focus on the fundamentals, core products, core distribution and getting back to pre-crisis levels. Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc.: And then, Bill, can we sort of go back a little bit more on the banking. You talked about 2011 guidance being at risk. And in fact, I think if we annualize the fourth quarter, it would suggest that we're below that run rate. Is the fourth quarter kind of the run rate you're thinking of now for '11, or is there downside from that level?

It's probably close to the run rate. I think what we're expecting for the full year now -- if you took the fourth quarter times four, I think you'd come up with about $190-plus million of earnings. It's possible it might end up a little softer than that. It’ll really, in my mind, depend a little bit on the overall macroeconomic recovery for the country in terms of what will housing starts ultimately do and new house buying activity. That'll obviously influence a little bit. People are expecting that, in terms of the new residential mortgage volume that's going to get originated in this country, like, this year is going to be the lowest it's been in 30 years. So it's not a very good environment. Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc.: Well, part of what happened in the fourth quarter -- it looks like OpEx came up quite a bit sequentially. Is that an aberration, or is that indicative?

I'm sorry, Jeff, I couldn't quite catch that. Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc.: Operating expenses came up, I think, quite a bit sequentially in banking. Is that the new level, or was that an aberration?

Well, there is a little of both. There is some unusual expenses, spending activity going on as we're revamping some administrative issues in terms of how we process new mortgage applications. So there is some spending going on there, but some of it is an aberration. It has to do with, remember, how we pay commissions and how commissions get paid in that business when volumes occurs. So at the beginning of that quarter, we had probably some of the highest volumes of the year when interest rates were still very low, and then it tapered off very quickly. But the commissions still had to get paid in that fourth quarter. Jeffrey Schuman - Keefe, Bruyette, & Woods, Inc.: And then just lastly, pension closeout sales came up in the fourth quarter, is that indicative of a trend or was it just a good quarter?

Well, it's hard to say whether it's indicative of a trend. It's Bill Mullaney. What I would say is interest rates going up certainly helps the environment for that business. And the equity markets going up certainly helps the funding level of pension plans. So I would say as the macro environment continues to improve, that's certainly good for that business. As Rob said in his remarks, closeout sales were up sequentially for the last few quarters. It's mostly a collection of smaller deals, fairly well balanced between the U.S. and the U.K. So we continue to have discussions with plan sponsors and intermediaries about pension closeouts. And so we think that, over time, that's going to continue to be a good market for us.

And our last question comes from the line of Ed Spehar with Bank of America Merrill Lynch. Edward Spehar - BofA Merrill Lynch: First, Bill, I was wondering if you could help us on the statutory earnings going into 2011, the $3.4 billion. It sounds like maybe a little bit of that was unusual. Can you tell us roughly what you think that run rate is heading into '11?

Yes, I think our estimate for 2011 is somewhere between $2.5 billion and $3 billion. Edward Spehar - BofA Merrill Lynch: And if we look at the comparable number for Alico, what would that be?

Roughly $1 billion. And so the piece you’re still not catching is MetLife International, legacy International, which I don't have a conservative number on that -- it’s for the legacy business, too. Edward Spehar - BofA Merrill Lynch: That's in the $1 billion or not in the $1 billion?

No. The $1 billion is Alico stand-alone. I'm not sure exactly what the number is for legacy International. I would think it's something like $400 million or something like that, maybe $500,000,000. Edward Spehar - BofA Merrill Lynch: And then what's the target right now in terms of what you want to hold at? The $2.7 billion at the holding company, what's the amount again that you want to hold?

I think the minimum that we have to hold is roughly $1 billion. Edward Spehar - BofA Merrill Lynch: And then one question on interest rates. Rates, obviously, have come up a lot. How high is too high for the 10-year Treasury? When does it become an issue of turning from a positive to a negative?

That's not an easy question to answer. We were discussing this last night because, obviously, somebody asked this last night. Talbi thinks that if it gets to 6%, if the 10-year Treasury gets to 6%, then maybe we should start thinking about that. So we went and looked up when the last time the 10-year Treasury was at 6%, and it was right around the year 2000, so basically, a decade ago. So needless to say, we have a long ways to go. And so it's hard to discuss that these upward moves, especially long-term rates are just anything except good. Obviously, it's a positive development for us. Edward Spehar - BofA Merrill Lynch: And I'm assuming that it would make a difference if that 6% occurred in one year versus two years.

Yes, absolutely right. I mean, a real -- a very abrupt move, probably causes some disintermediation in some blocks of business, at least for a period of time. But the net result would still be -- we'd take that and still be thrilled. Edward Spehar - BofA Merrill Lynch: Can you just remind me again why when the market's up 10% we have a negative DAC adjustment for the equity market? C. Henrikson: Well, you have a DAC true-up in terms of DAC amortization, right. So your DAC amortization should -- if you have a big move in the stock market, your DAC amortization should slow, right. That's the true-up because of the market performance. So that's a good guy. But offsetting that, and more than offsetting that for us, is our hedging activity for the SOP reserve that we have in our GMIB [guaranteed minimum income benefit] annuity, which is all above the line. We think that the reserve that GAAP makes you put up is probably not the true economic reserve. And we're trying to hedge to the economic reserves in our GMIB annuities. So you get a little mismatch between sort of what we think of our economic hedging activity versus the GAAP reserve or GAAP accounting. And we've just decided that it's more important to hedge the economic situation versus somehow -- but unfortunately, that causes us a little GAAP noise.

Okay. Thank you, everyone.

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