Ladies and gentlemen, thank you for standing by, and welcome to the MetLife Incorporated First Quarter Earnings Release. [Operator Instructions].As a reminder, today’s call is being recorded. Before we get started, I would like to read the following statement on behalf of MetLife. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of the federal securities laws, including statements related to trends in the company’s operations and financial results, the markets for its products and the future development of its business. 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 in MetLife Inc.’s filings with the SEC, including its S-1 and S-3 registration statements. MetLife Incorporated 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, Ken. Good morning, everyone. Welcome to MetLife’s first quarter 2008 earnings call. We are 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 supplement, both of which are available on our website at MetLife.com, on our investor relations page. 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 on the call are Rob Henrikson, our Chairman and Chief Executive Officer; Steve Kandarian, our Chief Investment Officer; and Bill Wheeler, our Chief Financial Officer. After our brief prepared comments, we will take your questions. Here with us today to participate in the discussion are Bill Mullaney, President of Institutional; Lisa Weber, President of Individual Business; Bill Toppeta, President of International, and Bill Moore, President of Auto and Home. With that, I would like to turn the call over to Rob.

Thank you, Conor, and good morning, everyone. MetLife had a strong first quarter. We grew our top line results by 11.5% to reach a record of $9.4 billion in premiums, fees and other revenues. We increased operating earnings per share by almost 8% and grew our book value despite the challenges posed by the credit and equity markets. The fundamentals of our business are strong and I want to share a few specific examples with you. With our leading position in the group marketplace, Institutional Business continues to demonstrate its ability to generate outstanding results. Across the board, Institutional performed extremely well as it benefited from solid underwriting, strong investment spreads and continued expense discipline. Operating earnings grew 23% over the prior year period with each segment growing at a double-digit rate. Institutional’s operating ROE was an impressive 22.5% for the quarter. In terms of our overall group insurance, I’m pleased with the 2008 sales season so far. In general, quote volumes are consistent with, or up from 2007 levels. We have also been through the January 1 renewal season and are seeing persistency that is well inline with our expectations. In retirement and savings, we won closeout cases both in the US and the UK. I’m also particularly pleased with non-medical health where revenue grew 13%, and operating earnings increased 49% year-over-year. This double-digit growth was driven by very strong results in disability and dental. Our organic growth in dental was complemented by our recent acquisition of SafeGuard, which, as I mentioned last quarter, gives MetLife dental HMO capabilities rounding out our offerings in several key growing local markets. Total earnings for Individual Business were relatively flat year-over-year impacted by lower market performance and an increase in mortality, invariable and universal life. Despite the turbulence in the economy, however,…

Thanks, Rob. I would like to provide you with an update on our portfolio and its performance of the last quarter. During this period of strong headwinds, our portfolio performed well, and we remain comfortable with the overall strength and diversification of our assets. While recent market volatility impacts the current value of our holdings, it also presents us opportunities to purchase high quality assets at very attractive spreads. First, let me start with a comment on variable income. Pre-tax variable income was approximately $20 million higher than planned for Q1. We experienced higher corporate joint venture and securities lending income versus planned. While corporate joint ventures continued to perform well, we expect these returns to moderate during the remainder of the year due to tighter credit conditions, volatile equity markets and general economic conditions. Securities lending income was also strong due to the steepening at the front end of the yield curve and higher spreads in the reinvestment portfolio. We anticipate that securities lending will outperform plan for the remainder of the year. On the negative side, hedge fund returns were below plan, reflecting weak performance for the sector generally. Now, let me cover investment losses for the quarter. Gross investment losses, as noted on page 34 of the QFS, were $532 million, in line with the previous three quarters. Of this amount, only $45 million were credit-related sales. Write-downs were relatively modest $186 million. Of this amount, $80 million was related to financial institutions and $24 million to structured finance CDOs. In addition, there were $43 million of real estate reserve adjustments due to mortgage sales as we continually review and upgrade our portfolio. The remaining $39 million of write-downs were connected to a variety of fixed maturity and equity securities. When added together, total credit-related losses from…

Thanks, Steve, and good morning, everybody. MetLife reported $1.52 of operating earnings per share for the first quarter, which was a 7.8% increase over the first quarter of last year. This morning I will walk you through our financial results and point out some highlights, as well as some unusual items which occurred during the quarter. We had top line revenues, which we define as premiums, fees and other income of $9.4 billion, a record. This represents an increase of 11.5% over the first quarter of 2007. Institutional had a strong quarter with revenue growth of 13.7% year-over-year. All three product areas in Institutional, group life, non-medical health, and retirement and savings, had excellent growth. International’s revenues grew by 24.6% over the year ago period. Foreign exchange rates positively affected revenue growth by approximately 6 points. Excluding the currency impact, International revenues grew by about 19% over the year ago period, led by stronger annuity sales in Chile. Turning to our operating margins, let’s start with our underwriting results. Underwriting experience was somewhat mixed this quarter. We had some very good results and also some weaker areas among our various product lines. In Institutional, group life mortality of 93.8% was within our guidance range of 91% to 95%. In non-medical health and other, group disabilities morbidity ratio improved to 80.6% for the quarter, well below our target range of 89% to 94%. This strong result was not due to an unusual reserve release, but instead was primarily caused by favorable disability recoveries. We had much higher than normal mortality experience in both our reinsurance business, which is RGA, and in Individual. Individual’s mortality ratio of 93.4% was driven mainly by higher frequency in older blocks as opposed to highlight cases. Turning to Auto and Home, the combined ratio, including catastrophes,…

[Operator Instructions]. And our first question will come from Jimmy Bhullar. One moment please.

Alright, thank you. I have a couple of questions. The first one is on your outlook for variable investment income. You mentioned you feel okay for the rest of the year. But if you can talk about dynamics in securities lending, the margins picking up, is that enough to offset a potential for no improvement in private equity for the rest of the year? And then the second question that I have is on your retirement and savings business. On spreads they were relatively good this quarter despite the fact that variable investment income was slightly short of plan in that segment. And most of that was driven by I think a 45 basis point sequential decline in crediting rates. I’m assuming that would sustain if interest rates remain where they are right now, but if you could talk about that?

Jimmy, I will take the variable income question, Steve here.

Hi.

Hi. Our view is that our guidance still is pretty good guidance going forward. Obviously it’s hard to predict variable income, that’s why we call it variable. But, as we look at the different components, securities lending appears to have some pretty good wind to us back for the rest of the year. Just given the shape of the yield curve, which was actually hurting us last year, now it’s really turned around and is helping us. Our liability costs have gone way down in that program. Given high spreads, reinvestment rates are attractive compared to liability costs for us. So we think that’s going to perform well for the remaining three quarters of the year. We’ve been talking about CJV income being extremely high in the past and questioning whether that would continue. We had a pretty good quarter here still in Q1 of ‘08, but we do have some visibility in terms of how these markets work. And we think that and remainder of the year will probably be a lot tougher for CJV income. A lot of what they do in terms of realizing gains is recapping deals, which right now is pretty hard to do in this marketplace with the credit problems. Selling companies to others who are leveraging up and that’s hard to do as well. So I think that see CJV income is likely to tail off here for a period of time, and we think the offset from sec lending will pretty much neutralize that.

Jimmy, its Bill Mullaney. With regard to your question on spreads, you recall at investor day for RNS, we said that we have spreads between 115 and 130 bps. This quarter we came in at 151. My expectation for the balance of the year is that, we should be coming in somewhere between 130 and 150 basis points. So I would say we’re more sustainable in terms of where our spreads are than what we had originally said we would be at investor day.

Okay. Thank you.

Your next question will come from the line of Darin Arita. Please go ahead.

Hi, good morning. A question again on the securities lending income, to what extent would you say this is the normal level of income you would expect to earn given an upward sloping yield curve at the short end? And also, are you buying hedges to protect this income should the yield curve flatten?

It’s hard to say what’s kind of normal in sec lending because, there are different components to how you make money. The positive right now is not just the upwards sloping curve but also the spread levels, which are very high. You’re seeing those spread levels impact other things and negatively to us, but at least in the reported balance sheet basis, we talked about that, but certainly providing us good opportunities to buy safe assets at very attractive spreads. So as long as those spread remain very wide, we’re going to have sec lending. But I would say that it’s hard to know what happens to spreads over the course of the year. Overall, we think the program is going to be attractive in terms of income for the remainder of the year. We do put on hedges. We pretty much run the program with trying to cut off, if you will, some of the downside risk to the program. When you do that, you do lop off some of the upside gain during certain periods. So yes, we do have hedges on. They remain in place. We have caps. We have floors. We have interest rate swaps. We’ve reduced the amount of interest rate swaps for strategic reasons, just given what our view is of rates right now. But we still have swaps in place. So the program is hedged. It runs kind of, if you will, within some band. There is variability within that band, but we do lop off the bottoms and the tops with our hedges.

And how far out is it hedged?

You’re asking how far out the hedges go?

Yes.

There are a variety of hedges that go up through early 2010 I believe, but it depends on the specific kinds of hedges we’re talking about. There are some caps, floors and swaps, and it is not one for each of those three categories. There is a whole series of these hedges that we put in place over a period of time. So they kind of roll off and we put more on as time goes on. So we put hedges on in Q1, for example that didn’t exist when we last talked to you. And some of the others have rolled off or been sold. It is kind of an ongoing dynamic process that we engaged in with our hedges.

All right. Great, thank you very much.

Your next question will come from the line of Tammy Kravec - Banc of America. Please go ahead.

Thank you, good morning. A couple of questions, first, on your hedging program, obviously you had a pretty big test in the first quarter with the equity market decline. Can you talk about how you feel your program is performing against your guaranteed liability? And my second question is on Japan and what you’re seeing there in terms of competition. Hartford made some commentary about the competitive environment being pretty intense. I’m also curious whether you think FIE has already played through there or whether you would expect some more effects from that? Thanks.

Tamara it’s, Bill. I’ll start with the variable annuity hedging program. It worked well again this quarter. And we obviously listen to what our peers say, and some of them seem to be having some difficulty. We think our program works well, we think we do it right. We spend a lot of money investing in the technology to make sure we do it right. So if that continues to work well even and you are right. I think this quarter was a very good challenge, and it has continued to perform.

Are you fully hedged with this?

That’s always a difficult question to answer given the nature of some of the writers we write. We do hedge all three groups, and we are hedged given sort of the accounting that we have on the way our writers work. We make sure we are hedged to offset that as best we can, so we are as fully hedged as we think we really can be.

Tamara, hi, it’s Bill Toppeta.

Hi, Bill.

Hi, how are you? On the Japan question, I would say, of course, the Japanese annuity individual annuity market is a competitive market, there is no question about that. Having said that, I think that we are doing quite well in the competitive environment. I have some preliminary results on the bank channel, which tell me that for the first quarter we were second in variable annuity sales to Tokyo Marine and second in fixed annuity sales to ALICO. So even though the market is down certainly in the variable area, we’re down consistent with the market, not more than that, but consistent with the market. So it is a challenging market, but I think that part of that, of course, is related to the performance of the equity markets in the country. As far as FIEL is concerned, I would say the effects are wearing off. I think things have gotten considerably better in this quarter, and I would expect that as we go through the remainder of the year, those effects will pretty well be a non-factor as far as we are concerned. Is that okay?

That’s great, thank you. And I also wanted to ask about personal Auto and Home, and just your general commentary on pricing and loss cost trends and what you’re seeing in frequency and severity in that business? William D. Moore - President, Auto & Home: This is Bill Moore, Tamara.

Hi. William D. Moore - President, Auto & Home: Yeah. I think clearly, and I will talk about overall pricing now, we feel pretty strongly we are closer to the end of the soft market cycle than we are the beginning. And one of the reasons for that is that, as you look at some of the margins of the companies and where they are in terms of their combined ratio, we’re starting to see rate increase activity more than we are decreases. Even for us at MetLife Auto and Home, about 70% of our rate activity in the first quarter was for rate increases versus a significantly more reduced number last year. In terms of the pricing cycle, the loss cost, our expectation in loss cost will remain in the low single-digits. That is what we’re seeing for us, and that’s just pure frequency and severities. And we’re offsetting that, as you know, if you followed our Investor Day guidance, we are mitigating that because of some initiatives we put in place to reduce our expenses.

Okay, great. Thank you.

And the next question will come from the line of Colin Devine with Citigroup. Please go ahead.

Good morning. I am going to spare, Steve, the questions, and I think I will focus on some of the others. First, for Lisa, I don’t think there is any way to sugarcoat the variable annuity sales being a disappointment this quarter. They are certainly much weaker than several of your leading competitors. What happened there? Is it one quarter is not a trend? Are there some new features coming out to sort of get these things reinvigorated, maybe tell us what was behind the disappointment? On the Institutional side, I was wondering if you have seen any pickup in quoting activity on pension closeouts since so many large corporate plans froze at the end of last year, and then finally, for Bill, you just made a comment on the hedge program that the accounting is hedged. And I just wondered if we might clarify that. Is your hedge program hedging the economics of these living benefits, or is it instead just hedging the GAAP results?

Okay. Why don’t I start with the variable annuity sales? Our variable annuity sales, compared to the industry were actually really very credible. Our deposits were down 4% year-over-year, and if you look at VARD’s preliminary results, the industry is down about 10% year-over-year. So we compared really pretty favorably. We do see that our variable annuity sales are tied to what’s going on in the equity markets, and that’s particularly true in the third-party channel where there has also been a lot of change, particularly in the wirehouses. Having said that, we are retaining the business that we have on the book, and we also -- if you saw the press release, we also announced some enhancements and changes to our variable annuity product line just this past Monday. And there is a lot of excitement in the marketplace around that, we can tell that by the number of requests that we’re getting for kits. And, of course, as with any change it takes awhile to get those changes baked in, but we are satisfied with our quarter, and we are optimistic going forward given some calming in the market and some of the new features and products that we have.

Are those features approved in New York?

We have -- our new LWG is approved in 42 states. It is not approved in New York yet. We also have changes to our investment portfolio where we have introduced American Funds, which is going over really well, Oppenheimer Funds as well and some changes to our GMIB Plus.

Thanks, Lisa.

Colin its Bill Mullaney. Let me just spend a minute talking about what’s going on in the pension closeout market. I think that you saw from our results in our RNS this quarter that our revenues were up 59%. That was driven primarily by closeout sales in the first quarter. We did over $250 million of closeouts, which were reflected in that number. In terms of the overall market, you’re right that there were more plans that froze as of the end of the year. One of the things that we’re watching closely, though, is the overall funding status of those plans. Equity markets have been down fairly significantly. And so one of the things that needs to be in place in order to be able to engage in a pension closeout is the planning that needs to be funded completely or the employer needs to be able to put up some additional money to be able to make the closeout work. So that’s something that we’re watching. I would say that our pipeline for closeout activity continues to be good. We talked at Investor Day about having $1 billion in our plan in terms of pension closeouts, so and right now we are optimistic that we’re going to be able to achieve that objective.

Thanks.

Okay. And finally, on our variable annuity hedging program, we have a variety of writers for our variable annuity. Sometimes it’s more of a withdrawal benefit, sometimes it’s a GMIB or interest rate benefit. And interestingly or not interestingly, the accounting of those is different. And so when a GMIB liability is put on and we have guarantees, the accounting liability we would say does not accurately reflect the overall economic liability. So we’re left with a dilemma. Do we hedge to the accounting, or do we hedge to the economic, or do we try to somehow bridge the gap? And the reality is we try to bridge the gap because if we … the problem is, of course, if we actually hedge to the economic, that would create an incredible amount of volatility in our reported GAAP statement. So we have a baseline hedging program which hedges the accounting liability on GMIB, which is our biggest writer. But we also buy a lot of long-dated puts opportunistically to try to get to the economic liability as well. And so that is sort of … that is how we manage it, Colin if you will. That’s why I always hesitate to say, well, you are fully economically hedged. Well, not entirely on GMIB, we are not.

Okay. Then, Bill, maybe the real question is then not how the accounting optics of the hedge program performed during the quarter, but really how did the economics perform?

Well, we actually think they perform fine. And when we look at where our liability account balances are and in terms of where … and in terms of our separate accounts guarantee exposure, we think it is very manageable. The long-dated puts we have in place are helping us a lot here.

Okay.

So, now the accounting works, yes, but the long-dated puts work as well. I’m sorry, so Toppeta is going to add something here.

I’m sorry; I’m trying to whisper something to Bill. As part of our overall risk management on the variable annuity writers, we also engage in reinsurance. And we have a substantial amount of reinsurance on some of our income benefit writers, as well as the riskier elements of our guaranteed minimum debt benefits, particularly the ones that have ratchet features in them.

Right. What we have done is we have executed not with traditional reinsurers but with really investment banks. We have introduced reinsurance agreements, which also sort of bridged this problem between accounting and economic liability, if you will and so through reinsurance arrangements.

Great, thank you very much.

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

All right. Thank you, good morning. First, on your investment portfolio, as you mentioned in your prepared remarks, the gross unrealized losses rose substantially to $8.8 billion. Now, I understand most of that was spread widening in high-quality investment, but it also seems like you are now sitting on $2.7 billion of losses that are 20% or more below water. I was hoping you could review with us your impairment policies? Do you use a bright line test, and if so, if these bonds remain under water over the next quarter, will you be forced to take some impairments?

Nigel, it’s Steve. Yes, the bucket for 20% or more less than six months is now about $2.6 billion of those bonds. A lot of it obviously is based upon or virtually all of it is based upon the spread widening. Interest rates have come down, which increased the value of the bonds, while the spreads have widened more than interest rates have come down. Now we have seen since quarter-end a reversal to some degree of those spreads and interest rates both. So the question will be, does this remain in place for six months, first of all? This is very broad widening of spreads you have seen across the entire market. And my guess is you will see some moderation in that spread widening, and things will follow that bucket. I mean we looked at parts of that bucket already to see where things moved in one month, and about 20% of at least of the riskier assets have fallen out of that bucket. Now, who knows what happens over the next five or six months. These securities that show up for March 31, 2008 really got there in the month of March. So, basically the first month out of the six-month, general rule of thumb that people use in terms of looking at things like impairments. And I probably should talk a little bit about that as well, the impairing policy. The basic rule of thumb that we use is, especially for fixed-income securities, is to look at what has been 20% underwater for six months. We look at whether we intend and have the ability to hold those securities to recovery. And we look at the contractual cash flows and say, are we still receiving all of our contractual cash flows; are we likely to continue…

Thank you. And then, second question on capital. It seems like you still have got significant excess capital and holding company liquidity. At Investor Day, you commented that that $750 million of buyback beyond that necessary to offset the equity units is what you were targeting. What you did in the quarter effectively offset the equity units. So is $750 million still a good estimate for the remainder of the year, or is there a potential for that number to move higher given you haven’t been hit by any of the issues that have impacted many of your peers?

Nigel, yeah, you are right. We did do a lot of buyback activity in the first part of the year, and just sort of coincidentally it is not on purpose. We bought back 20 million shares, and that is roughly the amount of the convert … the shares that will come out of the convert in the third quarter. So yes, you would say, well, you must have 750 to go. And our philosophy is we made a commitment on Investor Day regarding buyback activity, and that is what we are going to honor. And when we get to that point, then we will see. I mean I guess obviously there’s a lot of turmoil out there, and maybe there will be an acquisition we will want to do. We are just going to be flexible. We will see where we are at and then decide what we want to do. And it also is somewhat dependent on the stock price. The reason we bought so much stock back in the first quarter is we were being very opportunistic. The stock spent a lot of time in the ‘50s in the first quarter, and our attitude is that’s a pretty big buying signal. And so we bought back about as aggressively as we possibly could to get it cheap. So, we will just have to see how … I guess my answer is, yes, we do have a lot of dry powder even after this buyback activity, and we will see … we will just have to stay flexible about what we do in the latter part of the year.

That’s great. Thanks a lot.

Hey, thank you. And we do have question then from the line of Suneet Kamath with, Sanford Bernstein. Please go ahead. Suneet Kamath - Sanford C. Bernstein & Company: Thanks. Just two questions, first, on the other temporary impairment, it seems like we are hearing different approaches across companies, and I’m just wondering why that is? Is that company-specific interpretation of GAAP accounting, or is it the auditors? Just any thoughts on that? And then second, in terms of your expense control, obviously you’re at the lower end of the expense ratio target for the year. How should we think about that trending over the balance of the year? Do you expect to pop back up? Are there any investment initiatives that you have in place that maybe were light in the first quarter, or conversely are there additional opportunities to save costs and perhaps drop below that 28%? Thanks.

So, let’s start with the accounting. I’m probably not qualified to answer this question. I don’t know what really our … obviously we let all this into the same earnings calls about what some of our peers are doing. We obviously have a very different approach. I guess my feel … and I don’t think we are inconsistent with where our outside auditors are in terms of what we should be doing regarding OTTI. So I have a hard time explaining kind of what some of our peers’ motivation is. We don’t think that is really appropriate. We think that you do need to exercise. You should not have a bright line test. You need to exercise judgment about whether or not these securities are really money good or not. And because we think that is the fairest representation of what is really going on in the company. So the idea of I will take a capital loss and then it will just accrete it back in the earnings overtime, you know that strikes me as financial engineering, not necessarily good accounting. So I guess -- I mean that is sort of I guess our take. But again, I am sure I am completely unqualified unqualified, somebody will explain to me I’m wrong. But no, that obviously what we think we’re doing is the proper interpretation, and also I think our outside auditors would agree with us. So I do not know if that helps. The second thing about expenses, yeah, it was a good number this quarter. First quarter often is a good number for us for a variety of reasons. I think we’re still basically in my mind on our plan number, which is 28 to 29% is what we said. That’s a substantial drop from last year’s number, which I think ended up at about 30.5. So we have sort of ratcheted down sort of spending levels this year already. Is it impossible that it will move more? Yeah, probably, but that is a decision we will obviously be monitoring over the course of the year. Obviously some of the spending we’re doing we’re trying to build growth for the future, and so that’s a little bit about our philosophy there. So we will clearly, yes, expense levels, we could bring them down further if we thought it was appropriate, but right now I think we’re tracking well on plan. Suneet Kamath - Sanford C. Bernstein & Company.: Thanks, maybe just one quick follow-up on the OTTIs. I guess given the current environment, I have been hearing more and seeing more analysis done on book value inclusive of AOCI. I know that you show it both ways. But can you just confirm that the rating agencies when they look at your, say, leverage ratios and those sorts of things, do they use book value including AOCI, or do they exclude it?

They exclude AOCI. And in terms of calculating leverage ratios. And you are right. I have noticed too this quarter people now are focused on book value with AOCI. The one thing you’ve got to always keep in mind here is, AOCI is a mark-to-market of our assets, or most of our assets of our investment portfolio. It is not marking liabilities. Okay? The liabilities are affected by interest rates just the same way the assets are, okay? And so I still think I would probably exclude all those AOCI in terms of looking at straight book value in terms of what is really going on, because obviously, if you’re only marking one side of the balance sheet, I think you’re getting a little distorted picture, so that’s important why we show it both ways. Suneet Kamath - Sanford C. Bernstein & Company.: Thank you.

Thanks. And we have a question then from the line of Steven Schwartz with Raymond James & Associates. Please go ahead. Steven Schwartz - Raymond James & Associates: Hey, good morning everybody. Just for what is worth, I totally agree on the AOCI comment. Lisa, I wanted to talk about the annuities. Colin touched on that, but what’s your thought here? I mean we have seen the industry is down. There was some thought that maybe various writers would protect that part of the annuity industry from market downturns. I don’t think we have really seen that. Can you kind of comment on that?

Yes. I mean I think that the market downturn -- the resulting impact is a temporary dip. And that’s what we have all seen in the marketplace, and frankly, that’s what we have experienced some of ourselves. Having said that, we really believe that now more than ever is the time when people are looking for guarantees, and they want our guarantees. And so it’s not ever going to be a product or a writer in and of itself that is going to make the difference, but really the whole package. And that’s what we’re seeing. And so yes, while we have some of our new products and features that are coming out, it is the content of what they are that are going to make a difference. And so when you look at features like age banding and American Funds, they give people more confidence. And so I think it is temporary and as I’ve said before, fortunately we fared better than most of the industry this quarter in our variable annuity sales. And it’s the business that we’re keeping that we feel especially good about. Steven Schwartz - Raymond James & Associates: Okay. Thank you. And can we touch on the adverse mortality in the V WELL? Maybe flesh that out a bit. You said it was older blocks of business, which I think is consistent with what RGA said if I remember correctly, but could you flesh that out? RGA mentioned on its call that they had not seen anything adverse so far during the second quarter. Also, may be if you could just flesh it out maybe there was more in January, and that is what affected it. You did not see it in February or March or maybe vice versa if we can just get some sense.

So let me just start, and then I’m sure that Tim or Bill will pick up. In terms of our adverse mortality, we typically see Q1 as more adverse than any other quarter. And so again, we saw that. And yes, it was especially worse than we are used to. But as I said, always Q1 we have the worst mortality. Having said that, it is older blocks of business, business that has been on our books for quite some time. It’s across the board, so it is not in -- while I think you will it’s not in any one particular channel. So whether it is MetLife or the old GenAm block of business, New England Financial, it is really across the board. It is at all face amounts, so there’s not the older ages that are jumping out. The other comment that I would make is that what is consistent is the mortality those blocks, there was less reinsurance. And so that’s what you are seeing the effect of. Steven Schwartz - Raymond James & Associates: Okay.

This is Tim. I’ll just add one thing, Seven. I think we’ve basically covered all the points. But we do see the first quarter blip as she mentioned. We do see volatility quarter-to-quarter, and we have taken a look at recent history in terms of that volatility, and we’re comfortable that it is still within our expected ranges. And so we really think it is just a first quarter phenomenon that we’re seeing in the industry, as well as the lack of reinsurance on specific policies this quarter which also moves around from quarter-to-quarter and it was also still within our acceptable bands. Steven Schwartz - Raymond James & Associates: Tim, could you point to any causes of death, flu, maybe something like that?

Not specifically, there has been speculation about that. But since it has not been industry-wide phenomenon, but we haven’t seen anything specific yet. Steven Schwartz - Raymond James & Associates: Okay. Thank you.

Thanks. And our next question then comes from the line of Tom Gallagher with Credit Suisse. Please go ahead.

Good morning. First, just to follow-up I guess more philosophical on the AOCI question. Bill, I agree with you in terms of the accounting disconnect between the mark on assets versus liabilities. I think that’s particularly true when it’s due to interest rate swings. Do you think that still applies, though, when we’re in an environment where interest rates decline and your book value still goes down because of widening credit spreads? That’s my first question.

Well, you’re right. Base interest rates decline, but obviously credit spreads have gone up. And that’s most of the reason why our -- that is what most of the reason why our -- we have had the effect our AOCI has gone negative and stuff like that. I should stop. We should not even go there in terms of accounting discussion, but all of your employers are obviously marking to market more and more of their liabilities, which means they are marking to market their debt. Because our credit spreads and obviously almost every financial institution’s credit spreads have also gapped out. And so people are marking them -- in certain cases people are marking to market their liabilities and, of course, recording big gains. You know, I don’t know. I’m not sure what the answer is to deal with that. I mean obviously that seems like an odd distortion too, where if our credit worthiness seems to improve, therefore, we are going to have a loss on our income statement. So I think it is, without getting too philosophical about AOCI, I guess I sort of feel like, look, you’ll have market volatility. We are obviously having a lot of market volatility right now. I think if you want to get a clearer picture of what is really happening to our book value, I think you have to look beyond that, right? Because spreads will tighten, they have already tightened this quarter, and I think obviously some spreads are really credit spreads are really historically wide numbers, and we know that will tighten in. And so you have to kind of look at it on a normalized basis. So that is a little bit why I would say my advice would be, you got to look beyond the AOCI.

Okay. Fair enough. On that comment you made about spreads tightening so far this quarter that was sort of my follow-up. I know part of the sec lending strength has been driven by slope of the curve. Part has been wider credit spreads. Now that it seems like corporate spreads are tightening by the day here so far this quarter, does that potentially start to at least take some of the steam out of the sec lending spreads, or have we gotten wide enough or steep enough on the yield curve side where we still have good momentum?

Hi, Tom it’s Steve. I think certainly for 2008, which is what I was talking about, we still have a very favorable environment, meaning and we own securities that go out over a year. And some are floating-rate, but some or fixed. And certainly these fixed-rate assets that we purchased over last quarter or two have very attractive spreads. They are locked in now for that period of time. So again for 2008 I feel pretty good about the lucky performance of that portfolio. Overtime obviously those spreads will bounce around and will have an impact, and that is again what we call it variable income. If I can just go back for one second on your AOCI comment, if you look back, for example, back in the first quarter of 2007, we had a very large unrealized gain on our books, which again goes through AOCI. And that in some ways wasn’t real either, and that is why we don’t really focus on that all the time because that was simply spreads coming to historically tight levels. We were not going to sell those securities. They were basically defeasing liabilities. We are going to hold them to maturity in most cases. And the same is in the reverse here. You were seeing some real spread widening. We’re seeing certain sectors like even Alt-A where we hold over $5 billion of Alt-A securities. 84% of what we own is enhanced AAA, super senior AAA. The chances of those things defaulting are so remote, it is minuscule. Yet those things are bouncing around all over the place in terms of the impact on unrealized losses. It’s nearly $700 million of unrealized losses in securities that to bust you would have to go into a worse decline in real estate than the depression. So how valuable is this number? I think it is worth looking at, but I think you have to look through it to understand what is behind it.

Okay, thanks.

Thank you. And our next question then comes from the line of Andrew Kligerman with UBS. Please go ahead.

Okay. Thanks. Bill, I think in maybe a month or two ago there was some concern that maybe auditors might require that MetLife take a hit on variable investment income if they became aware of losses right away as opposed to the roughly two quarter lag on private equity and other asset classes. In this quarter did you accelerate any charges relative to the lag?

You were breaking up a little bit, Andrew, but I think I got your question, which had to do with the timing of our revenue recognition in the private equity portfolio. Let me just take a step back from this for everybody. If any of you invest in private equity funds and you know you have to file your income taxes late, right, because it takes a while to get your results from the fund, and we have the same problem on a bigger scale. Private equity fund mark-to-markets or returns take awhile. And there are certainly a group of funds, and many of them are international funds we are in, where it takes … we don’t get the fund results until two quarters, effectively two quarters after the period … the time period they are marking. So we have this lag problem. Now some we get faster, but we have sort of made a rule of thumb about we don’t try to cherry-pick which ones we report faster or which ones we delay. So that is why we have this lag problem. Lag problems are bad. Okay? You should try to avoid them as much as possible. But what we’re trying to do now is see if we can get some of our general partners or GPs to try to give us our financial results faster so that we can speed up our reporting of those numbers, and that is really where our focus is. So the answer is no, we didn’t accelerate anything this quarter, but it remains a concern in terms of can we speed up the reporting of these numbers. By the way, I should just clarify here, on about half the private equity portfolio; we have this sort of lag issue. On the other half, we just record the income when it comes into us as cash. So that is sort of a good way to think about it, which is I think as timely as we can make it. So no, we didn’t speed up. We ended up not speeding up any reporting of returns this quarter, and so we do have this lag issue, which sort of means, of course, that is why we’ve continued to have sort of good results even this first quarter a little bit.

Got it. And just out of curiosity, it sounds like your OTTI methodology makes a lot of sense. But, let’s say, you were very much by the book more than 20% unrealized loss over six months, more than a 50% unrealized loss over a three-month period. Do you think that your OTTI number would have been materially larger maybe percentage wise? Any thoughts around that?

No, I don’t think it would have been materially larger because look at the way to show that is look at the aging schedule in our QFS on page 36, and what you will see is that really until very recently the numbers that we had virtually no securities lower than the 20% mark. Okay. I mean that number was a very modest number two quarters ago. It crept up a little bit last quarter and then obviously got bigger this quarter. So, I think the answer is no. I don’t think it would have been very different this quarter. But if we didn’t … and by the way, I don’t like the expression by the book, if we went by the book. We think we’re going by the book. So if we had a different methodology, if we had a bright line test, which we don’t, no, I do not think the difference this quarter would have been very much different.

Excellent, thanks.

Thank you and we have a question then from the line of Eric Berg with Lehman Brothers. Please go ahead.

Thanks very much. Good morning. Bill or Steve, continuing on the issue of other than temporary impairments, consider a case where a bond has been valued in the marketplace or less than its amortized cost, a significant discount, say trading at 60% of cost or 70% of cost, for an extended period. And you decide not to impair the security because in your analyst view it is money good to use your expression. What is typically, if there is a typical case, what is your best sense of what is going on in a situation like that? In other words, how could it be that your guy is saying, you’re going to get paid fully, and millions of investors who didn’t comprise the bond market are saying basically, no, you’re not and you say you are right? Obviously you cannot get into the heads of investors, but as best as you can sort of generalize why is it the case that you are sort of right and the rest of the market is wrong about the value of the bonds?

Eric, it’s Steve. I think from a financial theory point of view, you make a good point, which is in a perfect market these things would trade reflecting true risk. At the same time, you pick up the papers and you read about investment bank melting down, major money center banks getting multibillion dollar infusions of capital because of problems on their balance sheet. And you are seeing these major financial institutions as well as hedge funds unwinding a tremendous amount of leverage that has built up over the last three or four years. In certain markets, this is resulting in some real supply and demand imbalances, and we believe they are going to be relatively temporary imbalances. And things will go back and trade closer to true risk reward kinds of trade-offs that you are talking about. But in the meantime, you are seeing things that are trading at prices that are hard to justify from a fundamental perspective. And that’s why I made a couple of comments in my prepared remarks about seeing some very attractive opportunities, especially in the AAA segment of various asset classes that we invest in, and what we are buying into some of those asset classes now because we’re seeing these imbalances from these supply and demand problems floating through two spreads that you just cannot make sense of. So to us, that is a buying opportunity, on the one hand. On the other hand, we see things like I talked about, Alt-A, where they are kind of bulletproof structures at the super senior level where you have subordination levels at 12% and historical highs of 1% or 2% losses. And if you stress that to 4% or 5%, you don’t get close to busting the structure at 12%. You’re saying this is people doing great leverage unwind, and there is no one on the buying side. So there’s a few money cash investors out there like insurance companies are coming in and sweeping up some of these assets at attractive spreads, but for a period of time, you are seeing unusually wide spreads. As we mentioned, April has seen some of these spreads come back in. Not as far as they went out, but still come in to some degree. And we think the market eventually will get to a point where the price of risk will be properly priced.

I had one follow-up question. It will be my final question related to the private equity partnerships. I noticed that in the quarter the yield on the asset class captioned equity securities and other limited partnerships fell by more than half from the December quarter to it looks like about 7% from 16%. So initially looking at these numbers, I had thought that you already were experiencing a sharp, sharp decline in private equity returns. But I just heard Bill say that you had a pretty good quarter still. So maybe you could reconcile sort of what would appear to be a sharp … the difference, a short decline in yields on the one hand with the idea that you had a fairly respectable quarter still in private equity returns. Thank you.

Yes, we had an unusually strong quarter in Q4 of 2007. It was sort of off the charts. It was like a 40% kind of return. And we’ve been signaling that some of these returns just weren’t going to hold up. So basically what we saw was things kind of falling off here. Bill was mentioning the equity method accounting on private equity, and for the year 2007 we had these unusually high returns. There is a lag effect, and now we’re seeing and the returns go back to much more moderate levels, but still in this case slightly above plan. So what Bill was referring to and I was referring to in my remarks, was that we slightly outperformed our plan for 2008. I should mention that our 2008 plan did take into account our view that this sector would moderate in terms of performance. At the same time, you did not see overall guidance go down for variable income because we thought sec lending would do better, which it has.

Good. I have some follow-up questions, but I will follow-up with Conor. Thank you very much.

Great, thank you. And our last question this morning comes from the line of John Hall with Wachovia. Please go ahead.

Great, thank you very much. I just want to talk briefly about the variable income again, but from the context of the changing mix. From the comments I get the sense is that, over the next year, we’re going to see it coming from different buckets. I’m just wondering how that’s going to affect the different business units? Are there some units that are more heavily invested in certain asset classes and are going to see their earnings as a result go down and others go up, and if you could just address that, and then I have one quick follow-up.

John, I’ll take that I guess. Yeah. It will change how variable income shows up in our business lines a little bit. But I will be honest, off the top of my head I couldn’t say which ones will go up and down. But I don’t think it is not dramatic.

Okay.

Let me put it that way. It might swing it 5, 10 million bucks in any given quarter for a given business line, but it won’t be dramatic, but it will move it around a little bit. And then obviously sometimes it moves it around this quarter. For instance, non-medical health, which has a little bit of private equity return, had a relatively poor quarter because they were not in the right funds. Okay. So that already happens a little bit, we get that kind of noise.

Great. And then just finally, Bill, you reminded us that you’ve got some reinsurance agreements out there on the variable annuities. I was just wondering if you could share the amount that you passed on to reinsurers in the quarter.

No, I can’t. I can’t do that off the top of my head. We will have to get back to you on that.

But is it a material type of number?

Well, is it material? No, it’s not. The contexts are not necessarily material, but what they are is they are important to variable annuities in terms of the liabilities that we’re pushing off. Stan [ph] will give you a little color here.

Yeah. I mean the two types of variable annuity writers which are not embedded derivatives involve our income benefit writers and our guaranteed minimum debt benefits. We have roughly half of our GMIB in force that is not part of direct hedging program reinsured. And in terms of the GMDB, as I mentioned, it is the riskier one, so it is a smaller percentage, but it is a higher amount and vega risk that is reinsured. And just another point I did not make before, which maybe I will make now, is that when you hear about some of these writer enhancements, some of those are designed so that they are treated from an accounting perspective as embedded derivatives, which gives us the ability to directly hedge them.

Great, thank you.

Thanks. And at this time then I would like to turn the conference back for any closing comments.

Thank you for bearing with us, and we will talk to you next quarter. Thank you.

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