Steven A. Kandarian - Chairman, President and CEO John C. R. Hele - EVP and CFO Steven Jeffrey Goulart - EVP and CIO William J. Wheeler - President, Americas Michel Khalaf - President, EMEA Chris Townsend - President, Asia. Edward A. Spehar - Head of Investor Relations

Ryan Krueger - Keefe, Bruyette, & Woods, Inc. Thomas Gallagher - Crédit Suisse AG Suneet Kamath - UBS Securities LLC Erik Bass - Citigroup Inc. Jimmy Bhullar - J.P. Morgan Securities Inc. Yaron Kinar - Deutsche Bank AG Nigel Dally - Morgan Stanley Seth Weiss - Bank of America Merrill Lynch Eric Berg - RBC Capital Markets

Welcome to the MetLife Fourth quarter 2014 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before we get started, I’d 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 related to trends in the Company's operations and financial results and the businesses and the products of the Company and its subsidiaries. MetLife's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties, including those described from time to time in MetLife's filings with the U.S. Securities and Exchange Commission, including in the Risk Factors section of those filings. MetLife specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise. With that, I’d like to turn the call over to Ed Spehar, Head of Investor Relations. Edward A. Spehar: Thank you, Brad. Good morning, everyone, and welcome to MetLife's fourth quarter 2014 earnings call. We will be discussing certain financial measures not based on generally accepted accounting principles, so called non-GAAP measures. Reconciliations of these non-GAAP measures and related definitions to the most directly comparable GAAP measures may be found on the Investor Relations portion of metlife.com, in our earnings release and our quarterly financial supplements. A reconciliation of forward-looking information to the most directly comparable GAAP measure is not accessible because MetLife believes it's not possible to provide a reliable forecast of net investment and net derivative gains and losses, which can fluctuate from period to period and may have a significant impact on GAAP net income. Now joining me this morning on the call are Steve Kandarian, Chairman, President and Chief Executive Officer; and John Hele, Chief Financial Officer. After their prepared remarks, we will take your questions. Also here with us today to participate in the discussions are other members of management, including Bill Wheeler, President of Americas; Steve Goulart, Chief Investment Officer; Michel Khalaf, President of EMEA; and Chris Townsend, President of Asia. During the Q&A session, in fairness to all participants, please limit yourself to one question and one follow-up. With that, I'd like to turn the call over to Steve. Steven A. Kandarian: Thank you, Ed, and good morning, everyone. We are pleased to report solid results for the fourth quarter of 2014. Operating earnings were $1.6 billion, up 2% from the fourth quarter of 2013. And operating earnings per share were $1.38, a 1% increase over the prior year period. Full-year 2014 operating earnings were $6.6 billion, a 5% increase over 2013. In operating earnings per share we are up 2% from the prior year period. Operating return on equity was 12% for the full-year 2014 and tangible operating ROE was 15.2%. We believe tangible ROE is a better measure of the business returns for MetLife, because it excludes purchase accounting adjustments, primarily goodwill. Our strong 2014 operating earnings came on top of above plan results for 2013. And we once again achieved an operating ROE at the low end of our 2016 target of 12% to 14%. I am even more pleased with MetLife's multi year performance which is a better measure of success in our long-term business. MetLife's operating earnings increase at a compound annual rate of 12.1% from 2011 to 2014. Over the same period, operating EPS grew at a compound annual rate of 9.6%. Operating return on equity averaged 11.8% from 2012 through 2014, only slightly below the low end of 2016 target range. Close to double-digit operating EPS growth, and 12% operating ROE, during the past three years our noteworthy accomplishments given that the 10-year treasury yield has averaged 2.2% since the summer of 2011 and our capital management actions have been conservative due to regulatory uncertainty. With a 10-year treasury yield now at 2%, the low interest rate environment remains a challenge for life insurance -- for the life insurance business. Over the long-term, we believe the 10-year treasury yield should be 4% to 4.5%, based on the Federal Reserve’s 2% inflation target and expectations for long-term economic growth. However, if interest rates remain low indefinitely, there would likely be a downward reset in return expectations across asset classes. Because equity returns are measured against a risk-free rate, the spread between MetLife's operating ROE and the 10-year treasury yield is a key metric. From 2012 to 2014, the spread between MetLife’s ROE and the 10-year treasury yield has averaged 9.6%. This compares favorably to an average spread of 6.9% from 2000 the year MetLife’s initial public offering to 2011. I’d now like to comment on capital management. We repurchased $557 million of stock in the fourth quarter, completing the $1 billion share repurchase program we announced in June. For the year-to-date, we’ve taken advantage of share price weakness and repurchased $693 million of the $1 billion program we announced in December. Given where the stock is trading today, it is likely that we will complete this $1 billion program soon. While we continue to believe that MetLife is well capitalized, uncertainties surrounding potential capital rules makes us cautious about share repurchases in excess of $1 billion in 2015. Turning to strategy. In 2014, we achieved two key elements of the strategy that we announced in May of 2012. We have derisked the retail business, which was a large part of our refocus the U.S business cornerstone of our strategy and we achieved net expense savings of $600 million pre-tax. Our retail business has undergone a transformation during the past few years as we’ve worked to reduce risk, create a more efficient operation, and improve the productivity of our distribution force. Derisking meant pulling back from the variable annuity market and exiting the lifetime secondary guarantee universal life market. Both of these initiatives had a material negative impact on sales. We believe that 2014 will prove to be an inflection point for annuity sales and anticipate profitable growth in 2015 and beyond. In variable annuities I am pleased to announce that we will launch a new guaranteed lifetime minimum withdrawal benefit product, Flex Choice on February 17. The income benefit for this product meets the current expectations of the marketplace. As we communicated on our December outlook call, we anticipate more than a 50% increase in total annuity sales in 2015. However, a projected rebound in annuity sales does not mean we are changing our overall strategy, which is to emphasize growth and less capital intensive protection oriented product lines. First, the projected sales increase is from a low base. Variable annuity sales were $6.3 billion in 2014, down dramatically from $28.4 billion in 2011. Second, we estimate that retail annuities will count for a smaller percentage of enterprise capital over time. Another key strategy milestone in 2014 was achieving our net expense savings targets of $600 million pre-tax. Our gross expense savings were $910 million last year close to the $1 billion strategy target. We are highly confident that we will realize the $1 billion gross savings target in 2015. The difference between gross and net savings in 2014 was a combination of one-time costs and reinvestment in the business. One-time costs will fade, but there will be a substantial increase in the reinvestment spend, which is largely technology related. Expenditures that represent an investment in the future including much of the work we are doing to update our technology may reduce current period earnings, but are necessary to drive profitable growth over time. Turning to regulatory issues, as you know MetLife has filed a legal challenge to its designation as a systemically important financial institution by the Financial Stability Oversight Council. As I said when we filed the challenge last month, MetLife had hope to avoid litigation in light of the substantial and compelling evidence we presented to FSOC demonstrating the company is not systemically important. The Dodd Frank Act is clear that size alone does not make a company systemic and we believe FSOC erred in designating MetLife. We believe we’ve a strong legal case to present to the court and look for to its eventual decision. As a former regulator, I want to emphasize that MetLife as always supported robust regulation for the life insurance industry. It has operated under a stringent state regulatory system for decades. However, adding a new federal standard for just the largest life insurers, while retaining a different standard for everyone else will harm competition. This will drive up the cost of financial protection for consumers without making the financial system safer. We believe the government should preserve a level playing field in the life insurance industry. If additional regulation is necessary, the government has a superior tool at its disposal, an approach that focuses on potentially systemic activities regardless of the size of the firm. FSOC has already embraced this activities based approach for the asset management industry. Litigation takes time to resolve. In the meantime, the Federal Reserve is now one of MetLife’s regulators. We are cooperating fully with representatives from the New York Fed, as they carryout their supervisory duties. At the same time, we continue to discuss with regulators and lawmakers in Washington the need for capital rules that reflect the business of insurance. With the enactment of the Insurance Capital Standards Clarification Act in December, the Federal Reserve now has the flexibility it needs to properly tailor capital rules for life insurers. In closing, let me reiterate MetLife's commitment to creating long-term value for shareholders. We are focused on maintaining the appropriate risk profile, selling business at attractive rates of return relative to our cost of capital and most important improving free cash flow so MetLife can return additional capital to shareholders. With that, I'll turn the call over to John Hele, to discuss our financial results in detail. John? John C. R. Hele: Thank you, Steve, and good morning. Today, I'll cover our fourth quarter results, including a discussion of insurance margins, investment spreads, expenses and business highlights. I’ll then conclude with some comments on cash and capital. Operating earnings in the fourth quarter were $1.6 billion, up 2% from the prior year period. And operating earnings per share were $1.38, up 1%. This quarter included 4 notable items, which were disclosed by business segment in the appendix of our quarterly financial supplement or QFS. First, consistent with the guidance from our December outlook call, we’ve strengthened our asbestos legal reserves in the quarter to reflect higher frequency and severity of claims. This resulted in an after-tax charge of $170 million or $0.10 per share. Second, we had favorable one-time tax adjustments in Latin America and EMEA, which increased operating earnings by $27 million or $0.02 per share. Third, we had lower than budgeted catastrophe experience and favorable prior year development, which increased operating earnings by $16 million or $0.01 per share. Finally, we had three actuarial related items that increased operating earnings by a net $5 million or less than a penny per share. The first actuarial related item a $66 million reduction in operating earnings was related to interest on unclaimed funds from life policies where we cannot locate the beneficiaries. These unclaimed funds are held by state government and a multi-state audit determined that MetLife owed interest on these policies. The impact was a $57 million in retail life and other and $9 million in group voluntary and worksite benefit. The second, a $48 million benefit to operating earnings was a reserve adjustment to correct the treatment of the disability premium waiver wider in a number of term life contracts in retail life and other. You may recall, we had a positive adjustment for this item in the second quarter of 2014 as well. The third, a $23 million benefit to operating earnings in Asia was an unlocking of deferred acquisition costs or DAC. This unlocking resulted from a lower expense assumption for certain life products in Japan. Adjusting for notable items in both periods, operating earnings were up 5% year-over-year and 9% on a constant currency basis. The key drivers on a constant currency basis were underwriting improvement, business growth, and lower taxes, which were partially offset by less favorable equity market performance. Turning to our bottom-line results. Fourth-quarter net income was $1.5 billion or $1.30 per share. Net income was $93 million, below operating earnings in the quarter. Four items that explain most of this difference are: number one, charges of $140 million after-tax associated with asymmetrical accounting treatment for insurance contracts and other market value adjustments. Number two, derivative net losses of $40 million after-tax, which reflects changes in foreign currencies partially offset by gains from lower interest rates in the quarter. Number three, a loss of $25 million after-tax related to certain variable annuity guarantees where the hedge assets are more sensitive to market fluctuations than the GAAP treatment for guaranteed liabilities. And these were partially offset by number four, investment portfolio net gains of $129 million after-tax as credit related losses continue to be modest in the portfolio. Book value per share excluding AOCI other than FCTA was $49.53 as of December 30, up 5% year-over-year. Tangible book value per share was $40.36 at year-end, up 9% year-over-year. In the fourth quarter, operating ROE was 11.3% and tangible operating ROE was 14.1%.As Steve noted, we believe tangible operating ROE provides a better measure of the underlying business returns for MetLife. Turning to fourth quarter margins. Underwriting results improved sequentially and year-over-year by approximately $0.06 after adjusting for notable items in both periods. Year-over-year highlights include improvement in mortality and morbidity experience in the U.S., as well as strong results in property and casualty. Retail life's interest-adjusted benefit ratio was 53.9% in the fourth quarter, and 53.0% after adjusting for the net impact of the notable items discussed earlier. This result compared favorably to the prior year quarter of 54.2% and within our targeted range of 50% to 55%. This marked the second consecutive quarter of normal claim activity for retail life after four volatile quarters. The mortality ratio in group life was 88.4% and 87.4% after adjusting for the interest and unclaimed funds. The adjusted ratio was favorable to 87.9% in the prior year quarter as well -- and well within the targeted range of 85% to 90%. The non-medical health interest adjusted loss ratio was 77.4%, favorable to the prior year quarter of 80.9% and the low end of the targeted range of 77% to 82%. Disability underwriting improved, while dental margins were favorable to the prior year as utilization returned to a normal level. In our P&C business, the combined ratio including catastrophes was 85.8% in Retail and 92.3% in Group. The combined ratios, excluding catastrophes, were 81.5% in Retail and 90.8% in Group. Overall, P&C underwriting results were favorable versus the prior year due to the lower non-cat losses and expenses as well as favorable prior year reserve development. Moving to fourth quarter investment margins, the average of the 4 U.S. product spreads in our QFS was 215 basis points, down 26 basis points year-over-year and 21 sequentially. Product spreads, excluding variable investment income, were 186 basis points, down 13 basis points versus the prior year and five sequentially. The sequential decline in spreads can be attributed to three primary factors. First, pre-tax variable investment income was $325 million at the top end of our 2014 quarterly guidance range. After taxes in the impact to DAC, VII was $211 million, down $62 million sequentially due to weaker private equity and hedge fund returns. Second, core yields declined as a result of the low interest rate environment. Average new money yields are running roughly 100 to 150 basis points below the average roll off yield on the portfolio. And third, there was a transfer of cash into retail annuity upon the completion of the four-way merger in November, which accounts for the majority of the 20 basis point decline in deferred annuity spreads in the quarter. We would expect to reinvest this cash in [indiscernible] securities over time. With regard to expenses, the operating expense ratio was 25.0% in the fourth quarter as compared to 25.3% in the year-ago quarter. Adjusting for asbestos and other legal reserves in both quarters, the operating expense ratio was 23.7% in the fourth quarter of 2014 and 23.6% in the prior year period. Gross expense saves were $259 million in the fourth quarter, and net saves were $163 million after adjusting for reinvestment of $33 million and one-time costs of $63 million. I’ll now discuss the business highlights in the quarter. Retail operating earnings were $683 million, up 4% versus the prior year quarter and up 7% after adjusting for notable items in both periods. Growth in Retail was driven by Life & Other, which reported operating earnings of $321 million, up 13% versus the prior year quarter and 14% after adjusting for notable items in both periods. The primary drivers were lower expenses and favorable underwriting. Life & Other PFOs were $2.2 billion, up 2% year-over-year primarily due to growth in the open block and P&C, partially offset by the run-off of the closed block. Annuities reported operating earnings of $362 million, down 3% versus the prior year quarter and essentially flat after adjusting for excess variable investment in the prior year. Annuities PFOs were $1.2 billion, up 7% year-over-year primarily due to the higher income annuity sales. Group, Voluntary & Worksite Benefits or GVWB reported operating earnings of $235 million, up 2% versus the prior year quarter and 9% after adjusting for notable items in both periods. Underwriting was the key driver with improved results in disability, dental, group life and P&C. GVWB PFOs were $4.2 billion, up 3% year-over-year and sales increased 17% due to strong growth across all products. Corporate Benefit Funding reported operating earnings of $374 million, up 5% versus the prior year quarter and 10% after adjusting for notable items. The key drivers were favorable underwriting and business growth. CBF PFOs were $1.5 billion, down 5% year-over-year due to lower income annuities and pension closeouts. On closeouts, we remain active, but disciplined and continue to see a good pipeline of small to mid-sized cases. Latin America reported operating earnings of $187 million, up 8% from the prior year quarter and 26% on a constant currency basis. Adjusting for the notable tax item in this quarter, operating earnings were up 17% on a constant currency basis driven by business growth across the region partially offset by higher expenses. Overall, Latin American taxes were unusually low in the quarter even after adjusting for the notable tax item. Latin America PFOs were $1 billion, down 5% from the prior year quarter and up 6% on a constant currency basis, driven by growth across the region. Turning to Asia. Operating earnings were $335 million, up 3% from the prior year quarter and 9% on a constant currency basis. After adjusting for notable items in both quarters, operating earnings were up 7% on a constant currency basis. Improvement in investment margins and business growth in the region were the primary drivers. Asia PFOs were $2.3 billion, down 3% from the prior year quarter, but up 6% on a constant currency basis, primarily due to growth in Japan, Korea, and Australia. Asia sales were down 30% from the fourth quarter of 2013. The decline was expected. As the prior year quarter had a large group employee benefit sale in Australia and elevated yen life sales in Japan in advance of pricing changes. Adjusting for these items, Asia sales were up 1%. In Japan, total A&H sales were up 21% year-over-year and 52% sequentially. We have seen good traction from our two new medical products launched in September which we announced touring the 2014 Asia Investor Day. In EMEA, operating earnings were $85 million, down 4%, but at 9% year-over-year on a constant currency basis. Adjusting for notable tax items in both periods, operating earnings were up 7% on a constant currency basis due to business growth in the Middle East and a $7 million from the conversion of certain operations to calendar year reporting. EMEA PFOs were up $671 million, down 4% from the prior year period, but up 3% on a constant currency basis. Total sales increased 22%, with 40% growth in emerging markets, including strong employee benefits sales in the Middle East and A&H across the region. Finally, the operating loss in Corporate & Other was $316 million, as compared to an operating loss of $278 million in the prior year quarter. Adjusting for the increase in asbestos legal reserves this quarter, the operating loss was $199 million, which was within the $175 million to $225 million operating loss range that we guided to during our third quarter earnings call. I’ll now discuss our cash and capital position. Cash and liquid assets at the holding companies were approximately $6.1 billion at December 31. In addition, our 2014 free cash flow ratio was 44% better than our updated December estimate of approximately 40%. Next I’d like to provide you with an update on our capital position. While we have not yet completed our risk-based capital calculations for 2014, we estimate our combined RBC ratio will be in a range of 400% to 420%. Our Japan solvency margin ratio which we file quarterly was 1,003% as of the third quarter and we estimate that our fourth quarter ratio will be comparable. For our U.S insurance companies preliminary fourth quarter statutory operating earnings were approximately $2.4 billion and statutory net income was approximately $1.7 billion. For the full-year of 2014, statutory operating earnings were approximately $5.2 billion and U.S statutory net income was approximately $3.8 billion. U.S statutory operating earnings on a comparable basis were down $1.2 billion versus the prior year primarily due to less favorable equity markets and reserve strengthening. We said in our December outlook call, that we thought statutory insurance reserve increases at our New York subsidiary would be $400 million to $600 million more than we had initially contemplated. Although we’re still finalizing year-end statutory statements, we anticipate the increase in reserves will be in line with its revised expectation. Even though the assumptions for cash flow testing reflected the lower interest rate environment since the December outlook call. The year-end financials will also show capital contributed to our life insurance captives driven by low interest rates. This increase in capital will be funded by $670 million of cash from the holding company with a $225 million contribution last year and a planned $445 million contribution in 2015. Despite this cash contributions from the holding company, free cash flow was better than our forecast in 2014 and we still believe a 45% to 55% ratio is a reasonable expectation for 2015. We estimate that our total U.S statutory adjusted capital was approximately $28 billion as of December 31, up 13% on a comparable basis to the prior year. In conclusion, MetLife had a good fourth-quarter to close out a strong year. Investment margins remain healthy despite pressure from low rates. Expenses are well controlled and underwriting improved for the second consecutive quarter. In addition, our cash and capital position remains strong and we continue to successfully execute on our strategy as we seek to maximize shareholder value. And with that, I'll turn it back to the operator, for your questions.

[Operator Instructions] The first question will come from the line of Ryan Krueger, KBW.

Hey, thanks. Good morning. MetLife is unique among the public U.S life insurers, in that your largest subsidiary is domiciled in New York and subject to some more conservative reserving standards. We’ve seen a lot of life companies in the last couple of years take statutory charges in New York that they do not have to take in their other subsidiaries. So I guess, given that it seems like your 400% to 420% RBC ratio might not be directly comparable to the other company, so I was hoping can you give us any sense of how much more is statutory reserve that you hold at this point, because you’re domiciled in New York? Is there anything you can help us quantify there? John C. R. Hele: Hi, Ryan. This is John. Well, as we’ve mentioned I think on prior calls, New York we believe is more conservative than other states. And we have had added reserves over the years. We haven’t exactly quantified that for the market, but suffice to say that our 400% to 420% we believe is quite strong.

Okay. All right. I guess, second one on the variable annuity hedging strategy so -- now that you can got rid of the captive and you have to use traditional statutory VACARVM rather than the modified GAAP I think that you used in the captive. Have you changed your hedging strategy at all because of that? John C. R. Hele: Hi, Ryan. This is John again. We’ve changed it slightly sort of to optimize for the VACARVM and how it moves. But much of it remains the same with some regular delta hedging as well as some tail type hedging going on, on an ongoing basis. The overall cost of program has not materially changed. We fine tuned it as we have done continuously since the start of the program.

Okay. And is it accurate to say to think about it as the traditional statutory rules are less sensitive to interest rate movements than kind of a fair value GAAP approach? John C. R. Hele: Yes, that is true.

Okay. Thank you.

And our next question will come from Tom Gallagher with Crédit Suisse.

Hey, good morning. John, you discuss the capital ratios in the subs, can you comment on the holding company cash liquidity position capital that sits there right now? John C. R. Hele: Hi, Tom. As I said, we’ve got approximately $6.1 billion of cash at our holding companies and this is the amount that’s free and clear. We have not given what is capital or required capital or excess capital; because we really don't know what the binding capital rules will be on us. And so our strategy has been to be conservative when it comes to overall capital management and to have a good balance in cash at the holding companies.

And when you say that’s $6.1 billion, that's free and clear. Just remind us what your -- the buffer that you typically hold given interest coverage and debt considerations? John C. R. Hele: Well, prior to MetLife being, considered to being a SIFI, and now been a SIFI I believe sometime ago MetLife did give some numbers. But since we’ve been under a review and now that we’ve been picked, we’ve not given a target number because we really don’t know what the binding constraints will be, we don’t understand the capital rules. We of course do our own internal stress testing, and we have some number in mind. But to give you guidance on it would be misleading, because we just don’t know where it’s going to be. So, with regard to that we have just been conservative in how much we hold both thinking through a strong capitalized position within all of our insurance entities as well as having a strong cash position at the holding companies.

Okay. And just one follow-up for, Steve, though I guess the way you described the fact that you’re going to complete the $1 billion buyback program soon, but then you’re cautious of doing more in lieu of uncertain regulation. It’s a bit of a change in tones, and maybe it’s just that. But is there something new that’s occurred, and obviously the law suite is out there. But is there anything else going on behind the scenes that we should be thinking about if why there’s more caution now, because I think the last couple of times you’ve described capital management its been somewhat more constructive.

Tom, I think I’ve been pretty cautious right along. We didn’t engage in share repurchases for some time. Then given how long it took for the capital rules to come forward which they haven’t come forward yet. We decided to do a relatively conservative share repurchase program in 2014 of $1 billion, and we announced another $1 billion for 2015. The completion of that program will probably occur faster than we had anticipated when you put that program in place, because our share price had dropped in the marketplace or the drop in a 10 year treasury, and that accelerated our purchases because we kind of -- our purchases are based upon our view of value in the marketplace of our stock. So, I think it’s really consistent what we’ve been saying to you. I think its pretty consistent right along.

Okay. And lastly, is there any formality right now -- since the fed is you regulator now but you have this other issue going on. Is there any formality that is required to execute on our capital return programs or you just share information with them at this point? John C. R. Hele: What we share -- this is John with our fed regulator now all capital management actions we are planning to do, and we’re in active discussions with them at all times. So, if we were to at some point consider doing capital management actions we will be informing them.

Okay. Thanks.

Our next question comes from Suneet Kamath with UBS. Please go ahead.

Thanks. A quick follow-up to Ryan’s question on the RBC; so first of all -- so what's now in that RBC? Is it basically everything that you have in the U.S. x the XXX and AXXX captives? That’s my first question. Steven A. Kandarian: Yes, it would be everything in the U.S. with the exception of the XXX or AXXX life captives and -- well everything material there may be some immaterial little about there, but it’s everything that is material U.S. business.

Okay. And then, the 400% to 420% just based on your comments about the conservatism in New York, should we just -- should we assume that that’s a level that you’re comfortable running with. I know a lot of companies talk about a 400% minimum but then tend to hold more than that. But should we expect you to run at 400% to 420%? Steven A. Kandarian: We do try to target about 400%, so that’s where we are. But we do also think about the strength of the overall balance sheets that we have in particular having the New York Company.

Okay. And then I guess for Steve, I just wanted to get a sense of where you’re going with your commentary in your prepared remarks about ROE versus 10 year treasury. You kind of gave us two numbers the 2012, the ’14 and then the 2000 and 2011, and then there is obviously a delta between those. So, I’m not sure if you’re trying to suggest that we should be thinking about the 2000 to 2011 range relative to the 10 year or the ’12 to ’14 range. Just want to get a sense of where you’re going with that?

Suneet, my comments really were not MetLife specific. They were really more in terms of what investors should be thinking about in terms of return expectations by any asset class right now. I think people have now locked into certain numbers of ROE expectations for equities that may have made sense in a different environment than where we’re in today. If you have low interest rates for a long period of time, those expectations should come down. That was really my comment.

Okay. But not reflective of your ROE, I guess that was my mistake.

No, it would be reflective, I think of every ones ROE. The all asset classes, that’s my point.

Okay. I mean, I guess, so if we’re in 4% to 4.5% 10 year treasury world then using your guidance, I guess we should expect 14% to 14.5% kind of returns?

We said 12% to 14% in a normal 10 year treasury environment, and 4%, 4.5% treasury yield when there is 2% inflation which is the feds target. And I would say roughly 2.5% underlying real GDP growth would result in that kind of a level of a treasury. And then you expect something like 12% to 14% for MetLife, a large life insurance company with a diversified group of businesses, but still a large business in the United States which is a moderately growing market.

All right. Thanks.

And we do have a question from the line of Erik Bass with Citigroup. Please go ahead.

Hi. Thank you. I just wanted to come back to the interest rate disclosure you’ve given in your outlook presentation where you show the potential present value GAAP interest rate charge of $3 billion if rates stay at 2% forever. Just had two questions there, I guess first, how narrowly do you define interest rate impact and is it just the direct impact of low rates on reserves or do you also include DAC and second derivative impacts like policy holder behavior? And then secondly, how sensitive is that number to a drop in interest rates below 2%? John C. R. Hele: Hi, Erik, it’s John. So that number is total GAAP impact. It would include DAC. It would include any GAAP reserve strength in that might be required. Policy holder behavior is I don’t know how people annuitize more or less or enact their rights more or less depending upon where the 10 year treasury is. We haven’t seen any indication of that so far in our experience. So that’s something that we would just have to see how things develop on that. And we haven’t given more sensitivities to this than the two, it’s highly complex to do calculation and get all this done. We think this is pretty good disclosure giving you a sensitivity.

Okay. I appreciate that. And I guess, just the one follow-up. How do movements in interest rates affect your expected free cash flow generation in 2015 and I know you reiterated the 45% to 55% target range. I believe in the past there has been some fluctuation based on kind of derivative marks and other things that have had an impact. So, is this how should we think about that? John C. R. Hele: Well clearly a big piece of our free cash flow comes in particular from our U.S. statutory entities, and the statutory accounting, the operating earnings is more sensitive to movements in interest rates due to derivative movements than say GAAP is. So, that does impact it. It impacts at the following year though, because our dividend capacity is based on your earnings in a year, and that’s how much you can take up the next year. So, it’s kind of a bit of a delayed item. So in any one year interest rate moves will have an impact on the following year. That’s why we give you a range around this, but over a two or three year period we believe these things average out. Once you have the derivative gain or loss, if rates stay the same then you don’t have that repeating. But as we’ve seen rates have gone up and gone down in the past few years. So, there’ll always be some fluctuation with regard to this and that’s why we give you a range.

Got it. But the 45% to 55% is still a pretty comfortable range for 2015? John C. R. Hele: Right. As I said we are even with the reserved strengthening that we’ve taken due to low rates. We are still at the 45% to 55% for 2015.

Great. Thank you.

And we do have a question from the line of Jimmy Bhullar with J.P. Morgan. Please go ahead.

Hi, good morning. I had a couple of questions on your group business. First, if you can just discuss your comfort with your GAAP and stat reserves for the long-term inner block. We have seen a number of companies take actions recently. And then, second on the disability business, it seems like your non-medical claims, margins were actually pretty good. So maybe if you could talk about claims, incidence and recovery trends in that market -- in the disability business? John C. R. Hele: Hi, this is John. I’ll do reserves, and turn it over to Bill for the claims. So, we have a closed block of long-term care, and we in stat the reserves are significantly higher than the GAAP reserves due to conservatism typically from the New York accounting and how we have to abide for this. The stat reserves do not assume future rate increases other than what have been already approved in the states. The GAAP assume a best estimate where we do expect to get some rate increases, but it’s not really a very material amount compared to the enforced reserves from the rate increases. And we have reserve adequacy in both the stat and GAAP reserves as of year end 2014.

And the interest rate and assumptions embedded in those; are you assuming a pick up in rates over the next few years? John C. R. Hele: Our GAAP reserves do assume a mean reversion, and the stat reserves of course are subject to cash flow testing that have a range of interest rates. William J. Wheeler: Jimmy, it’s Bill Wheeler, with regard to kind of what's going on in -- long-term disability, group disability, the number itself is quite good this quarter. It’s much better than we have had for really any quarter in the last over a year. And I guess, I would describe the pieces of it are, incidence is stable, claims revolution is much improved as you would hope given the changes we put in place regarding our claims operations because I think I talked about it couple of quarters ago. And so, that’s good news. Its somewhat offset by social security offsets are soft. And they have been soft for a while now, and I think that has a lot to do with what's going on in the social security administration more than it does with MetLife. So, those are kind of it, that I would say the big pieces that are moving around. But the net result is it’s -- it was a good number this quarter.

And pricing in that market, as you’ve gone through the renewal season for the beginning of the year, like how were overall pricing trends? William J. Wheeler: Very favorable. We asked for significant renewals obviously based on our experience we thought that was appropriate, and I would say our achievement of those renewal rate increases was very successful with very modest lapse rates.

Okay. Thank you.

And we do have a question from Yaron Kinar with Deutsche Bank. Please go ahead.

Good morning. I have a follow-up question for Steve on the interest rate environment and kind of thoughts on ROE. I think in the past you had said that in the low ROE -- in the low interest rate environment there’s a 12% to 14% long-term target really moves down to 11% to 13%. Is that still the way we should be thinking about it? Hello? John C. R. Hele: Hi. This is, John, I’ll just answer that. Yes we had tried to give you some guidance that if rates stayed low for a long period of time that it would be slightly lower by 2016.

All right. Can you quantify that? John C. R. Hele: It was about a 100 basis points.

Okay. Thank you.

And we do have a question from the line of Nigel Dally with Morgan Stanley. Please go ahead.

Great, thanks. On annuities, can you provide some more details on your new Flex Choice product with high guarantees; is it fair to say that it has a lower return than your previous product? And if that’s true, if can you discuss where those anticipated returns come out? Steven A. Kandarian: Nigel, I’m sorry. Can you just do that one more time?

Sure. With your new Flex Choice product with a high guarantee, is it fair to say that it has a lower return, and if that’s true can you discuss where those anticipated return to come out? Steven A. Kandarian: Well, Nigel its -- so we are raising the underlying roll up rate from 4% to 5%, obviously on the 4% was our old [ph] GMIB and this is a withdrawal benefit. It does not -- we have not compromised the return on our variable annuity products. This product as you would hope meets our return expectations because there are a bunch of other features in the product which allow us to lower the capital charge, and so we’re excited about it. With the GMIB as you know there are, the policy holder has more choices about, what he wants to do. And of course we have to make assumptions about policy holder behavior and hedge accordingly, and that’s really not the case with the GMWB. There is less optionality in the product and therefore the hedging is much more straightforward. And so, and that contributes I think to the improvement in the return to lower capital allocation to the product.

Great. Thanks.

And we do have a question from the line of Seth Weiss from Bank of America. Please go ahead.

Hi, good morning. A question on the asset adequacy testing, you mentioned in line with expectations. Can you give us any color by products, how that asset adequacy testing looks? Steven A. Kandarian: Hi, Seth. Well I’m sure our actuaries would love to give you all sorts of details on this. But for the second time, New York requires us to do cash flow testing separately for long-term care because it is a closed block, and that’s driving some of the numbers that I mentioned at our December outlook calls having to raise reserves due to the asset adequacy -- the reserve testing. But we do this across all of our businesses. We use the New York seven scenarios not only in all non New York companies, but even our life insurance captives, and that again -- I mentioned some more capital that we are putting up there for lower interest rates. We did use rates that were actually lower than where we saw year end 10 year treasuries. But it’s a little more complex than that because it’s not just a 10 year treasury it’s the shape of the yield curve and the reinvestment curve. And actually compared to few years ago we actually have a flatter curve, and the 30 year treasury is actually lower than we saw even a couple of years ago when we saw low interest rates prior. So that has impacted the asset testing because of these long dated contracts, it’s a very long reinvestment fund, so it does have an impact. So, as we mentioned, the testing that we’ve now just completed for yearend does reflect some more recent conditions, and it’s within the range that we had talked about in December.

Okay, great. And to clarify the 400 to 600 that’s on top, the 200 that you expected right? So 600 to 800 is the range we should think about? Steven A. Kandarian: Yes, exactly.

Right. Thank you.

And we do have a question from the line of Eric Berg with RBC. Please go ahead.

Thanks. So, I just wanted to return to an earlier question and clarify the response of share repurchase. Is the point Steve that you have announced two share repurchases each for $1 billion, and that its your intention at this point to complete both but that with respect to the second it would be unrealistic to expect sort of an increase on top of that. Second, share repurchase, is that what I heard?

Hi, Eric. What we said is that we are going to remain cautious given the capital rules have not been drafted yet or issued by the fed. So, we have not completed the second $1 billion repurchase program. So we haven’t made a final determination. We’ll see when that program concludes, what we know more about the capital rules at that point in time. But I was signaling that we’re going to remain quite cautious here until the capital rules come out. And my best guess is those rules will not be out before the second program concludes.

Thank you. End of Q&A

And at this time, there are no further questions in queue. Please continue. Steven A. Kandarian: Okay. Thank you much for your participation. Have a good day.

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