Ladies and gentlemen, thank you for standing by, and welcome to the MetLife Third Quarter 2016 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 would like to read the following statement on behalf of MetLife. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of the federal securities laws including statements relating to trends in the company's operations and financial results, and the business and the products of the company and its subsidiaries. MetLife's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties including those described from time to time in MetLife's filings with the U.S. Securities and Exchange Commission, including in the Risk Factors sections of those filings. MetLife specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments, or otherwise. With that, I would like to turn the call over to John Hall, Head of Investor Relations.

Thank you, Greg. Good morning, everyone, and welcome to MetLife's third quarter 2016 earnings call. I'm John Hall, MetLife's Head of Investor Relations. On this call, we will be discussing certain financial measures not based on generally accepted accounting principles, so-called non-GAAP measures. Reconciliations of these non-GAAP measures and related definitions to the most directly comparable GAAP measures may be found on the Investor Relations portion of metlife.com, in our earnings release, and our quarterly financial supplements. A reconciliation of forward-looking financial information to the most directly comparable GAAP measures 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. Also here with us today to participate in the discussions are other members of senior management. After prepared remarks, we will have a Q&A session. In fairness to all participants, please limit yourself to one question and one follow-up. And finally, given the busy insurance earnings calendar this morning, we will end the call promptly at the top of the hour. With that, I'd like to turn the call over to Steve.

Thank you, John, and good morning, everyone. Last night, we reported third quarter operating earnings per share of $1.28. The quarter was characterized by a rebound in variable investment income and solid expense control. Adjusting for notable items, operating earnings were $1.53 per share, which compares to $1.36 per share on the same basis in the prior-year period. Two actions account for most of the notable items – the re-segmentation of our business and our annual actuarial assumption review. First, following re-segmentation, the Brighthouse segment will no longer receive an aggregation benefit associated with GAAP reserve testing of its variable and universal life policies. This previously-announced charge lowered operating earnings by $254 million. Second, we completed our annual actuarial assumption review in the third quarter. This review covered all of our global businesses with the exception of variable annuities, which we updated last quarter. The actuarial assumption review lowered operating earnings by $65 million. Compared to a year ago, equity markets, which were up 3.3% in the quarter as measured by the S&P 500, had a favorable impact of $80 million, while most other market factors had little impact. Among other earnings items, underwriting results were weaker in Individual and Group Life as well as in Property & Casualty. John Hele will discuss underwriting in greater detail. In addition to generating more of our earnings in lower tax jurisdictions, the settlement of several income tax audits benefited normalized results and reduced our quarterly effective tax rate to 20.6%. Finally, a below-the-line goodwill write-off served to eliminate Brighthouse's remaining goodwill. Moving to investments, variable investment income totaled $409 million in the quarter, which is above the high end of our quarterly guidance range of $375 million. Higher returns associated with private equity and real estate joint ventures contributed to the outperformance.…

Thank you, Steve, and good morning. Today, I'll cover our third quarter results including a discussion of our insurance underwriting margins, investment spreads, expenses and business highlights. I will then conclude with some comments on cash and capital. Operating earnings in third quarter were $1.4 billion or $1.28 per share. This quarter included four notable items, which were highlighted in our news release and disclosed by business segment in the appendix of our quarterly financial supplement or QFS. First, the establishment of a Brighthouse Financial segment resulted in the loss of an aggregation benefit associated with the GAAP reserve testing of variable and universal life or V&UL policies. This decreased operating earnings by $254 million or $0.23 per share after tax. Second, results of the actuarial assumption review completed in the third quarter for all products other than U.S. variable annuities resulted in a decrease to net income of $59 million and along with other insurance adjustments, decreased operating earnings by $65 million or $0.06 per share after tax. This charge was primarily due to a change in the earned rate assumption for the traditional life closed block in MetLife Holdings as well as deferred acquisition costs or DAC unlockings in EMEA and Asia. These were partially offset by favorable DAC unlockings in Brighthouse and Latin America. For long-term care, the annual loss recognition testing continues to reflect positive margins. Third, variable investment income was above the 2016 quarterly plan range by $22 million or $0.02 per share after tax and the impact of DAC. And fourth, favorable catastrophe experience and prior year development increased operating earnings by $16 million or $0.01 per share after tax. Adjusting for all notable items in both periods, operating earnings were up 11% year-over-year and 10% on a constant currency basis. On a per-share…

Thank you. Your first question comes from the line of Ryan Krueger from KBW. Please go ahead. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Hey. Thanks, good morning. My first question was on the $1 billion of investments to achieve the cost saves. Should we expect those to, I guess, one, be fairly gradual over the four-year period? And then two, will they be reported in the operating earnings like you did with your prior cost save program?

Hi, Ryan. This is John. We expect those to be spread over the period of time, a little less in 2016 and then sort of roughly evenly over the time period remaining, and we'll give you some more details next week on all of this, and this will be in operating. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Got it. Okay. And then just to clarify, did you say that your expectation for the consolidated tax rate going forward is 22.1%?

I couldn't quite hear, I think you asked if the ongoing – if the tax rate for this year will be 22.1%, and that's correct. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Is that your expectation going forward as well, though?

Yes. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. All right. Thank you.

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

Hi. I have a question about Brighthouse Financial while it's being reported within MetLife. I'm just wondering if there will be any headwinds from the loss of aggregation benefit in the next couple of quarters that we should expect to see while that's part of MetLife.

Hi, Sean, this is John. As I mentioned in my remarks, I said we had $42 million in this quarter from it and we expect about $40 million a quarter, gradually declining over time. So, yes, there will be an impact.

Okay, yes. I'm sorry about that. And then I'm just wondering, did not see any charges in MetLife Holdings from – attributable to long-term care. I'm just wondering how the margins are holding up as you review the actuarial assumptions in that product in the quarter.

Right. We just finished our GAAP loss recognition testing for that and it's still quite sufficient. Our GAAP reserves and our stat reserves are very solid there too. As you may have seen, we have been putting through price increases and have been getting what we expect. We don't expect to get them in all states at all times, but it has been within our expectations and our plans for the rate actions that we filed.

Okay. Thank you.

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

Hi. Good morning. I had a question on just sales in Asia, they were down 11%. So just wondering what your outlook is for the Asian business in terms of sales growth, and specifically in Japan, given the pullback from the yen whole life market and also the weakness in third sector sales there.

It's Chris Townsend here. Let me just sort of run through the sales overall in Asia. So, the high-level number was minus 11% for the quarter. So the shortfall there really was all about Japan and Korea. The high points were emerging markets were up 24%, and Asia ex-Japan and Korea was up 10%. For Japan, all the sales shortfall really is around the A&H business, which was down 31%. And you should think about that in terms of a third, a third, a third in terms of the shortfall, a third being due to the withdrawal of single premium A&H products, a third in terms of the package yen life sales. As we flip the life business effectively from yen whole life to foreign currency, we lose some of those package sales, and a third is also for a reduction in terms of the sponsor direct marketing business where the economics weren't appropriate for us. On the life side, whilst you see a number of about minus 3%, you should note the comments that John made earlier in terms of the really big shift we've made from yen life to foreign currency, which has higher value overall. And the other shortfall was Korea. The whole market is down in Korea in terms of the economic situation in that market, and we've pulled back in some of the independent agency business there again, because the commissions are too high and the value is too low. So, that's sort of the overall story for Asia. I think you'll see that continue for the fourth quarter, although A&H sales in Japan will recover slightly as compared to the prior three quarters.

On the yen whole life, are you completely done making the product changes and pulling the products that you – from all the distribution channels or is that an ongoing process and could result in a further slowdown in the fourth quarter?

Well, you should note that we made significant changes in that portfolio well before the negative interest rate policy came to bear and we were one of the first movers to close down a bunch of that business. The yen whole life sales for us are about 6% of our total sales this quarter. We've made very significant changes. There's a couple more changes we made recently in terms of stopping yen life sales in the bank channel and also stopping sales for the younger cohort. So, that's really the final changes. There will be a re-pricing of all of the yen life products in the market next year in April when the standard interest rate changes come in, but as John mentioned, we're pretty much out of the yen life business – the yen whole life business in Japan right now.

Okay. And then if I could ask one more just for John, you mentioned the $1.53 earnings number ex some of the unusuals you highlighted. Obviously, there's a tax benefit in there. But even if you take out, let's say, $0.10 for taxes, it's still a fairly high number. So, to what extent do you view maybe a $1.40 to $1.45-ish number normalized for taxes as indicative of your earnings power going forward or do you feel that some of the businesses over-earned this quarter?

Well, Jimmy, that sounds a bit like an earnings guidance question.

No, not necessarily guidance, but I realize results move around, but maybe you could talk about if you feel that maybe P&C margins were unusually strong, or some of the businesses that were...

VII was at the top end of the range – or slightly over the top that we normalize a little bit for. So, that's probably a little higher than what we would expect. We would expect more at the midpoint of the range, I think, on an ongoing basis. We also had some good equity market impacts in the quarter that affected MetLife Holdings as well as BHF, and we had some good expenses. We also had some underwriting. The group life was a little higher than we'd seen so far this year. So there were some pluses and minuses throughout the quarter, but as we said, we thought this was a strong third quarter.

Okay. Thank you.

Your next question comes from the line of Tom Gallagher from Evercore ISI. Please go ahead.

Good morning. First question is on MetLife Holdings. I guess just going back to when you guys announced the sale of the MetLife Premier Client Group, I think the guide was $250 million annual reduction in expenses related to it. But if I look at MetLife Holdings, there was a much larger drop than that if I annualize it from an expense standpoint. So just curious if the earnings benefit you're going to get from that is going to be substantially greater than that $250 million or so number that you first gave out. And I think you had also said that was going to be split between Brighthouse and Met RemainCo. So was there also going to be – or was there a Brighthouse benefit to that?

Hi. This is John. We said that the $250 million was split approximately between MetLife Holdings and Brighthouse, and that would be a full year, so let's take a partial year into account. And MetLife Holdings has a lot of things in it going on, including some of the costs and strands. So I think we'll have to give you more guidance on MetLife Holdings when we get to our outlook call in December and can give you more view on MetLife Holdings.

But, John, has there been a change in, I guess, the expense benefit that you would expect to get through the transaction or is there something else going on here that's beyond that?

No. That benefit is exactly coming through as we had thought.

Okay. And then my follow-up is just on Brighthouse. Steve, I guess the comments you made about $200 million of stranded costs, is that the way we should think about the expense ramp-up? Like if we take the two businesses, Met RemainCo and Brighthouse, and then think about separation, is the ramp-up of a $200 million figure what we should expect to see from Brighthouse versus pro forma levels that we're seeing right now?

Tom, the number we gave you about stranded cost of $200 million we talked about last time relates to what would be stranded remaining with RemainCo, MetLife, if it wasn't addressed and we are addressing that in the expense initiative, the unit cost initiative that we discussed. Those numbers move around a little bit, so the $200 million may be closer to $250 million now as we refine our estimates, but the net number has not changed. Meaning, the higher the strand the more we'll have to drive the other expense saves. So the $800 million net number remains as is.

But is there anything you can say on the ramp in expense levels that you would expect as Brighthouse becomes an independent company?

We will give you more detail into certainly MetLife going forward at the outlook call in December. As to Brighthouse, these expenses really are at RemainCo – RemainCo MetLife, and not at Brighthouse. This is the overhead at MetLife that we have to deal with, that's the stranded cost.

Okay. Understood. But just curious if you could just address that question? I don't know if you are able to, but if you could address the question of expense increases that we can think about as Brighthouse separates from MetLife.

Let Eric – I'm going to give Eric a chance to address what you're talking about.

Right.

Yeah. I think you're referring to, are costs at Brighthouse going to go up and you may be referring to, there will be some public company costs at Brighthouse that previously would never, of course, exist in Brighthouse as a segment within MetLife. And the answer is yes. There are some public company costs that Brighthouse, on a standalone basis, will incur once it's public.

Okay. Thanks.

Your next question comes to the line of Seth Weiss from Bank of America. Please go ahead.

Hi. Good morning. If I could just stay on this theme of the corporate expenses. Just to clarify, the stranded overhead that's running through corporate now, is that in the number for the next two, three quarters while Brighthouse still technically remains part of MetLife or would only start to exist starting at the back half of next year?

That will happen after separation. It's John.

Okay. Great. Thanks. And then in terms of the $800 million of net benefits, can you give us a sense of how that ramps up between now and the 2019 goal?

Hi. This is John. We'll give you some more details on that next week, but it's not a hockey stick, so it does spread out over the period of time.

Okay. Thanks. And if I could just sneak in one numbers question on Brighthouse, I think last quarter you brought the GAAP long-term interest rate assumption down to 4.25%. Can you just comment on what that looks like on a statutory basis?

Well, it's John. In statutory, we do the New York's seven tests, which starts at a level rate as of year-end of the prior year. So the 10-year Treasury was at 1.70%, if I remember correctly, at year-end. So all of our reserves are tested in all our U.S. statutory entities (43:48) at that level.

And I'm sorry, what's the ramp-up as part of that scenario?

For standard reserves and cash flow testing, it's level. There's a shock down that then goes back up again. For the VA carbon reserves, it matches the long-term assumptions, slowly ramps up from the current 1. – year-end 10-year Treasury at year-end ramping up slowly to the 4.25% over 11 years.

Great. Thank you so much.

Your next question comes from the line of John Nadel from Credit Suisse. Please go ahead. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Thank you. Good morning. Thanks for taking the question. I have a question on Brighthouse. So you're running there with a 700% plus risk-based capital ratio, and I think versus what we would typically think would be a more normalized 400% that implies excess capital of about $3 billion. But your Form-10 also talks about a $3 billion differential if you held VA reserves of the CTE(98) versus CTE(95). I guess my question is, you know Eric, is that a coincidence or should we read into this that management expects to have to run the company supporting the CTE(98) level of reserves on an ongoing basis?

No. I think the best way to think about it is we'll bifurcate it. The non-VA business, think about a targeted RBC ratio of 400%. And then the VA business CTE(95) plus the $3 billion, which gets you in the range of CTE(98), CTE(99). The initial starting point, which we have in the F-10, says that that would be roughly at $700 million. But I think the best way to think about it is the way I just said, 400% non-VA and then CTE(95) plus the $3 billion buffer, which will obviously move around over time for the VA business. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Okay. And so if the overall risk-based capital ratio right now is over 700%, that would imply that the non-VA piece is well above 400%, I guess.

Hi. This is John. Just let me just add in here. No, so the target is 400% for non-VA. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Yeah.

VA will be run not to an RBC target, but a CTE(95) plus a buffer. The initial buffer is $3 billion, but as explained in the Form-10, that buffer will vary depending upon market conditions and is used as a buffer for the hedging strategy over time. So it will fluctuate up and down depending upon market conditions. So it's really quite a different way, I think, from looking at it, and this is quite unique, I think, to what Brighthouse is trying to do, and there's a lot of good explanation on this in the Form-10 that I know Eric looks forward to explaining to you over time. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): No. I understand, I've been through it. I guess I'm trying to follow up and understand if the overall RBC ratio for Brighthouse is at 700% plus, that would imply based on the commentary, I believe, that the non-VA is carrying excess capital while the VA piece might not be. Is it reasonable?

I would say that the – if you're thinking about what gets it to 700%, the vast majority of that is the $3 million buffer. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Yeah.

Okay. So, the non-VA 400%, 400% plus, but what gets the combined ratio now up to the 700% is when you do the calculation and bring in that $3 billion, which of course we're really thinking about on a CTE basis, but that's what gooses the RBC. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Okay. Understood. And then if I could just switch to Japan, there are some efforts underway there that looks like it might replace the SMR ratio with something closer to a Solvency II type of approach. We've heard from a few companies their views on this change, and I was hoping you could offer some thoughts around this as well, particularly given how significant the Japanese business will be as a percentage of RemainCo post the spinoff?

Hi. This is John. There have been studies underway by the Japanese regulator to think about a more Solvency II type approach. This is under study by them. With negative interest rates, we'll have to see how they think about this. Clearly, Europe is having challenges thinking about using a Solvency II mark-to-market balance sheet when you have negative rates. You'd have to scratch your head a little bit on this. So I think it will be a while before Japan gets it really going forward, although we are actively working with the government on that. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Okay. But, no. A couple of companies have provided estimates even under the approach that's under study. Anything you can provide there?

We're not prepared to discuss it at this time. We think this is still quite a bit in fluctuation. And as I said, thinking about a mark-to-market balance sheet in negative interest rates is really a strange thing to think about. John M. Nadel - Credit Suisse Securities (USA) LLC (Broker): Okay. Thank you.

Your next question comes from the line of Randy Binner from FBR. Please go ahead. Randy Binner - FBR Capital Markets & Co.: Hey. Great. Thank you. I wanted to ask you a question back on MetLife Holdings and kind of specifically what kind of flow expectations we would have for the run-off areas of that segment, if you plan to engage in active programs to accelerate the run-off or if it's just going to be more status quo. And then the follow-up from that is what free cash flow conversion expectations might look like from there over time?

Hi, Randy. This is John. That's a great question. We are working hard on that. We have an executive now who's in charge of this whole business and his mandate is to optimize value for the shareholder from these blocks of business. We are taking some steps to lower costs. We've outsourced a good portion of the administration of this to CSC. You may have seen that announcement. That will save us money, and we'll be looking at further steps. It is complex, though. These businesses are not simple to deal with, both, say, the closed block we have. We have agreements with New York on that. We also have long-term care and this is all in our New York regulated entity, so we would need regulatory approvals on much of what we have to do, but nevertheless we will be working on this and we'll give you more guidance over time as we create plans on this. Randy Binner - FBR Capital Markets & Co.: Is it reasonable to assume that the free cash flow generation from that piece would be bigger than it was historically and probably a little bit better than the rest of RemainCo overall just because if you're winding down the required capital there, then that should free up capital?

That's right. There's a lot of interactions going on. Both next week and at our outlook call, we'll give you more detailed guidance on this, but there's a lot of factors going on. We don't have the MetLife Premier Client Group sales anymore, the strain from that, which is a help. We also have narrowing spreads on our investment portfolio on these and the closed block going on, and it is a slow run-off over time. It's very long-term business, both the life business as well as the long-term care business, so it's not a short tail-type business. So there's a lot of complexity to it. That's why we have a smart person in charge of optimizing this for us, but we will give you more guidance as we develop our plans on this. Randy Binner - FBR Capital Markets & Co.: Okay. Great. Thanks a lot.

Your next question comes from the line of Yaron Kinar from Deutsche Bank. Please go ahead.

Good morning, everybody. I have two questions. First, Steve, I think you've taken a very cautious approach regarding the SIFI designation. And as you're going through the separation process now, can you maybe talk about how you're looking at SIFI given the fact that it's still being adjudicated at this point and then maybe government's approach is still not clear, at least to us, insofar as how it would deal with RemainCo or the new structure. So maybe you could give us a little bit of color on how you're thinking about it.

Yaron, as you know, we're before the Circuit Court, when the government appealed the Lower Court ruling that designated MetLife as a SIFI. We'll have to wait and see what comes out of that court decision, and we think we'll hear that in the coming months here. As to the impact, I think you're really getting into the impact on our thinking around capital management. We certainly are taking that into account, and we'll talk more about capital management next week at our Investor Day.

Okay. But as far as your thinking is concerned, is the risk profile, the regulatory risk profile, any different going forward?

The regulatory risk?

Yes.

Oh. Once we separate out the U.S. Retail business, certainly it is a smaller company. Some of the liabilities and businesses that we're pointing to and FSOC's decision to designate us as a SIFI were concentrated in that business. So certainly it is a de-risked business going forward.

Okay. And then another one probably for you, Steve. I'm hearing some frustration around fiscal monetary policies and those seem to be real headwinds for top line growth and spread compression as well. With those in mind, what avenues or what channels do you have for growing earnings, not so much the cash generation profile, but actual earnings in the company?

Well, after the separation, the company will be less focused on the U.S. in terms of the U.S. portion of the overall business, and we're in a number of other markets outside the United States, which are more rapidly growing, so that should help our overall growth rate. We also have businesses within the United States that remain at MetLife post separation that have good growth prospects including the Group Benefits business, and we think that post separation, we will have a business that has less risk associated with it, has more predictable higher free cash flow and greater growth prospects.

Great. Thank you.

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

Hi. Thank you. First just to clarify, is the $1 billion of investments, is that factored into your free cash flow guidance of 65% to 75% for 2017 and 2018?

Yes, it is. This is John.

Okay. And this is maybe on the agenda for next week, but given all of the changes, can you provide an update to the guidance you'd given previously of kind of a $3 billion GAAP present value charge over time for low interest rates? And how much of that pertains to the business segments that are remaining with Met?

Next week.

Okay. And just finally one question for Japan. You've seen obviously a lot of increase in sales in U.S. dollar-denominated products both for you and I think the domestic companies are also beginning to offer or emphasize these products more as well. Can you just talk quick about competition there?

There are two types of foreign currency products. One is regular premium, one is single premium. We are one of any three carriers at the moment offering regular premium products, which is much harder to manage and there's about seven or eight offering the single premium products, which is easier to facilitate. So we think we've got a good competitive position there. We've been offering these products since the late 1990s and we've got pretty good scale, so we feel we are well placed, but as you see, others will come into this market as the economics around the yen whole life products diminish.

Okay. Thank you.

And at this time, there are no further questions.

Great. Thank you, everyone, for joining us today. Have a good day.