Fair Value of Assets and Liabilities (Tables)

The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.



	As of December 31, 2017
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	26,086	$	52	$			$	26,138
Obligations of U.S. states and their political subdivisions	0		10,466		5					10,471
Foreign government bonds	0		103,271		148					103,419
U.S. corporate public securities	0		90,115		109					90,224
U.S. corporate private securities(2)	0		31,845		1,889					33,734
Foreign corporate public securities	0		29,329		79					29,408
Foreign corporate private securities	0		23,528		699					24,227
Asset-backed securities(3)	0		5,629		6,604					12,233
Commercial mortgage-backed securities	0		13,268		13					13,281
Residential mortgage-backed securities	0		3,547		98					3,645
Subtotal	0		337,084		9,696					346,780
Trading account assets:(4)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		328		0					328
Obligations of U.S. states and their political subdivisions	0		208		0					208
Foreign government bonds	0		857		223					1,080
Corporate securities	0		16,712		552					17,264
Asset-backed securities(3)	0		697		788					1,485
Commercial mortgage-backed securities	0		2,321		0					2,321
Residential mortgage-backed securities	0		1,029		1					1,030
Equity securities	2,015		274		509					2,798
All other(5)	56		10,763		8		(9,601		)	1,226
Subtotal	2,071		33,189		2,081		(9,601		)	27,740
Equity securities, available-for-sale	5,344		540		290					6,174
Commercial mortgage and other loans	0		593		0					593
Other long-term investments(6)	24		111		136		1			272
Short-term investments	3,906		1,850		8					5,764
Cash equivalents	1,900		6,398		0					8,298
Other assets	0		1		13					14
Separate account assets(7)(8)	45,397		232,874		2,122					280,393
Total assets	$	58,642	$	612,640	$	14,346	$	(9,600	)	$	676,028
Future policy benefits(9)	$	0	$	0	$	8,720	$			$	8,720
Other liabilities	4		5,946		50		(5,312		)	688
Notes issued by consolidated VIEs	0		0		1,196					1,196
Total liabilities	$	4	$	5,946	$	9,966	$	(5,312	)	$	10,604



	As of December 31, 2016
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	23,784	$	0	$			$	23,784
Obligations of U.S. states and their political subdivisions	0		9,687		5					9,692
Foreign government bonds	0		96,132		124					96,256
U.S. corporate public securities	0		81,350		261					81,611
U.S. corporate private securities(2)	0		30,434		1,354					31,788
Foreign corporate public securities	0		28,166		71					28,237
Foreign corporate private securities	0		20,393		487					20,880
Asset-backed securities(3)	0		7,591		4,344					11,935
Commercial mortgage-backed securities	0		12,690		14					12,704
Residential mortgage-backed securities	0		4,335		197					4,532
Subtotal	0		314,562		6,857					321,419
Trading account assets:(4)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		301		0					301
Obligations of U.S. states and their political subdivisions	0		194		0					194
Foreign government bonds	0		714		227					941
Corporate securities	0		16,992		188					17,180
Asset-backed securities(3)	0		1,086		329					1,415
Commercial mortgage-backed securities	0		2,061		1					2,062
Residential mortgage-backed securities	0		1,208		2					1,210
Equity securities	1,690		214		487					2,391
All other(5)	208		13,259		1		(11,708		)	1,760
Subtotal	1,898		36,029		1,235		(11,708		)	27,454
Equity securities, available-for-sale	6,033		3,450		265					9,748
Commercial mortgage and other loans	0		519		0					519
Other long-term investments(6)	44		106		7		(8		)	149
Short-term investments	5,623		1,558		1					7,182
Cash equivalents	3,885		4,421		0					8,306
Other assets	0		0		0					0
Separate account assets(7)(8)	38,915		221,253		1,849					262,017
Total assets	$	56,398	$	581,898	$	10,214	$	(11,716	)	$	636,794
Future policy benefits(9)	$	0	$	0	$	8,238	$			$	8,238
Other liabilities	8		6,284		22		(5,945		)	369
Notes issued by consolidated VIEs	0		0		1,839					1,839
Total liabilities	$	8	$	6,284	$	10,099	$	(5,945	)	$	10,446

__________


(1)	“Netting” amounts represent cash collateral of $4,288 million and $5,771 million as of December 31, 2017 and 2016, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.


(2)	Excludes notes with both fair value and carrying amount of $2,660 million and $1,456 million, as of December 31, 2017 and 2016, respectively, which have been offset with the associated payables under a netting agreement.


(3)	Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.


(4)	Includes “Trading account assets supporting insurance liabilities” and “Other trading account assets.”


(5)	Level 1 represents cash equivalents and short term investments. All other amounts primarily represent derivative assets.


(6)	Other long-term investments excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at NAV per share (or its equivalent) as a practical expedient. At December 31, 2017 and 2016, the fair values of such investments were $1,969 million and $1,579 million respectively.

(7)

Separate account assets included in the fair value hierarchy exclude investments in entities that calculate net asset value per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets, for which fair value is measured at NAV per share (or its equivalent). At December 31, 2017 and 2016, the fair value of such investments was $26,224 million and $25,619 million, respectively.

(8)

Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statements of Financial Position.

(9)

As of December 31, 2017, the net embedded derivative liability position of $8.7 billion includes $0.9 billion of embedded derivatives in an asset position and $9.6 billion of embedded derivatives in a liability position. As of December 31, 2016, the net embedded derivative liability position of $8.2 billion includes $1.2 billion of embedded derivatives in an asset position and $9.4 billion of embedded derivatives in a liability position.

The following table presents the transfers between Level 1 and Level 2 for dates indicated below:



	Year Ended December 31,
	2017		2016
	(in millions)
Transferred from Level 1 to Level 2	$	111	$	86
Transferred from Level 2 to Level 1	$	207	$	40

The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.



	As of December 31, 2017
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average		Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,352	Discounted cash flow	Discount rate	0.65%	—	22%	7.20	%	Decrease
			Market comparables	EBITDA multiples(3)	7.4X	—	7.4X	7.4X		Increase
			Liquidation	Liquidation value	13.10%	—	25.00%	14.68	%	Increase
Separate account assets-commercial mortgage loans(4)	$	821	Discounted cash flow	Spread	1.08%	—	2.78%	1.20	%	Decrease
Liabilities:
Future policy benefits(5)	$	8,720	Discounted cash flow	Lapse rate(6)	1%	—	12%			Decrease
				Spread over LIBOR(7)	0.12%	—	1.10%			Decrease
				Utilization rate(8)	52%	—	97%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	—	14%			Decrease
				Equity volatility curve	13%	—	24%			Increase



	As of December 31, 2016
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,848	Discounted cash flow	Discount rate	0.70%	—	20%	7.12%	Decrease
			Market comparables	EBITDA multiples(3)	4.0X	—	4.0X	4.0X	Increase
			Liquidation	Liquidation value	15.19%	—	98.68%	91.72%	Increase
Separate account assets-commercial mortgage loans(4)	$	971	Discounted cash flow	Spread	1.19%	—	2.90%	1.37%	Decrease
Liabilities:
Future policy benefits(5)	$	8,238	Discounted cash flow	Lapse rate(6)	0%	—	13%		Decrease
				Spread over LIBOR(7)	0.25%	—	1.50%		Decrease
				Utilization rate(8)	52%	—	96%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	—	14%		Decrease
				Equity volatility curve	16%	—	25%		Increase

__________


(1)	Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.


(2)	Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.


(3)	Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.


(4)	Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Consolidated Statements of Operations.

(5)

Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.


(6)	Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(7)

The spread over LIBOR swap curve represents the premium added to the risk-free discount rate (i.e., LIBOR) to reflect our estimates of rates that a market participant would use to value the living benefit contracts in both the accumulation and payout phases. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because both funding agreements and living benefit contracts are insurance liabilities and are therefore senior to debt.

(8)

The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status, and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9)

The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of December 31, 2017 and 2016, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10)

Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.



	As of December 31, 2017
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average		Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,352	Discounted cash flow	Discount rate	0.65%	—	22%	7.20	%	Decrease
			Market comparables	EBITDA multiples(3)	7.4X	—	7.4X	7.4X		Increase
			Liquidation	Liquidation value	13.10%	—	25.00%	14.68	%	Increase
Separate account assets-commercial mortgage loans(4)	$	821	Discounted cash flow	Spread	1.08%	—	2.78%	1.20	%	Decrease
Liabilities:
Future policy benefits(5)	$	8,720	Discounted cash flow	Lapse rate(6)	1%	—	12%			Decrease
				Spread over LIBOR(7)	0.12%	—	1.10%			Decrease
				Utilization rate(8)	52%	—	97%			Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	—	14%			Decrease
				Equity volatility curve	13%	—	24%			Increase



	As of December 31, 2016
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,848	Discounted cash flow	Discount rate	0.70%	—	20%	7.12%	Decrease
			Market comparables	EBITDA multiples(3)	4.0X	—	4.0X	4.0X	Increase
			Liquidation	Liquidation value	15.19%	—	98.68%	91.72%	Increase
Separate account assets-commercial mortgage loans(4)	$	971	Discounted cash flow	Spread	1.19%	—	2.90%	1.37%	Decrease
Liabilities:
Future policy benefits(5)	$	8,238	Discounted cash flow	Lapse rate(6)	0%	—	13%		Decrease
				Spread over LIBOR(7)	0.25%	—	1.50%		Decrease
				Utilization rate(8)	52%	—	96%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	—	14%		Decrease
				Equity volatility curve	16%	—	25%		Increase

__________


(1)	Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.


(2)	Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.


(3)	Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.


(4)	Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Consolidated Statements of Operations.

(5)


(6)	Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(7)

(8)

(9)

(10)

–The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.



	Year Ended December 31, 2017
	Fixed Maturities Available-For-Sale
	U.S. Government		U.S. States			Foreign Government			Corporate Securities(1)			Structured Securities(2)
	(in millions)
Fair Value, beginning of period	$	0	$	5		$	124		$	2,173		$	4,555
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			(93		)	70
Included in other comprehensive income (loss)	0		0			(1		)	(22		)	11
Net investment income	0		0			0			19			7
Purchases	42		7			0			525			4,967
Sales	0		0			0			(173		)	(645		)
Issuances	0		0			0			0			0
Settlements	0		0			0			(781		)	(2,756		)
Foreign currency translation	0		0			3			7			38
Other(4)	10		0			0			(55		)	(2		)
Transfers into Level 3(5)	0		0			39			1,498			3,933
Transfers out of Level 3(5)	0		(7		)	(17		)	(322		)	(3,463		)
Fair Value, end of period	$	52	$	5		$	148		$	2,776		$	6,715
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	(154	)	$	0



	Year Ended December 31, 2017
	Trading Account Assets
	Foreign Government			Corporate Securities			Structured Securities(2)			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	227		$	188		$	332		$	487		$	1
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0
Other income	(5		)	(32		)	0			25			0
Net investment income	5			3			1			0			0
Purchases	0			154			656			28			46
Sales	0			(7		)	(25		)	(17		)	0
Issuances	0			0			0			0			0
Settlements	(4		)	(119		)	(355		)	(47		)	(39		)
Foreign currency translation	0			0			5			6			0
Other(4)	0			0			1			29			0
Transfers into Level 3(5)	0			383			602			31			0
Transfers out of Level 3(5)	0			(18		)	(428		)	(33		)	0
Fair Value, end of period	$	223		$	552		$	789		$	509		$	8
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0
Other income	$	(5	)	$	(33	)	$	3		$	38		$	0



	Year Ended December 31, 2017
	Equity Securities Available- For-Sale			Other Long-term Investments			Short-term Investments			Cash Equivalents			Other Assets
	(in millions)
Fair Value, beginning of period	$	265		$	7		$	1		$	0		$	0
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	2			1			0			0			(20		)
Included in other comprehensive income (loss)	17			0			0			0			0
Net investment income	0			0			0			2			0
Purchases	33			0			30			93			33
Sales	(35		)	0			0			0			0
Issuances	0			39			0			0			0
Settlements	0			(1		)	(23		)	(99		)	0
Foreign currency translation	3			(1		)	0			0			0
Other(4)	(1		)	77			(1		)	0			0
Transfers into Level 3(5)	7			14			1			4			0
Transfers out of Level 3(5)	(1		)	0			0			0			0
Fair Value, end of period	$	290		$	136		$	8		$	0		$	13
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	(4	)	$	0		$	0		$	0		$	(21	)



	Year Ended December 31, 2017
	Separate Account Assets(3)			Future Policy Benefits			Other Liabilities			Notes Issued by Consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	1,849		$	(8,238	)	$	(22	)	$	(1,839	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			637			(37		)	(4		)
Interest credited to policyholders’ account balances	81			0			0			0
Net investment income	2			0			0			0
Purchases	1,122			0			0			0
Sales	(98		)	0			0			0
Issuances	0			(1,117		)	0			0
Settlements	(725		)	0			4			0
Foreign currency translation	0			(2		)	0			0
Other(4)	0			0			5			647
Transfers into Level 3(5)	353			0			0			0
Transfers out of Level 3(5)	(462		)	0			0			0
Fair Value, end of period	$	2,122		$	(8,720	)	$	(50	)	$	(1,196	)
Unrealized gains (losses) for assets/liabilities still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	372		$	(37	)	$	(4	)
Interest credited to policyholders’ account balances	$	78		$	0		$	0		$	0



	Year Ended December 31, 2016
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate Securities(1)			Structured Securities(2)
	(in millions)
Fair Value, beginning of period	$	6		$	123		$	1,222		$	4,269
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(131		)	10
Included in other comprehensive income (loss)	0			(3		)	76			(23		)
Net investment income	0			0			11			13
Purchases	0			0			318			3,582
Sales	0			0			(18		)	(444		)
Issuances	0			0			0			0
Settlements	(1		)	0			(323		)	(700		)
Foreign currency translation	0			3			5			35
Other(4)	0			0			0			159
Transfers into Level 3(5)	0			1			1,486			1,787
Transfers out of Level 3(5)	0			0			(473		)	(4,133		)
Fair Value, end of period	$	5		$	124		$	2,173		$	4,555
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(110	)	$	0



	Year Ended December 31, 2016
	Trading Account Assets
	Foreign Government			Corporate Securities			Structured Securities(2)			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	34		$	203		$	603		$	589		$	5
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0
Other income	(5		)	(9		)	(12		)	8			1
Net investment income	1			2			2			0			0
Purchases	201			11			185			20			0
Sales	0			(3		)	(49		)	(65		)	0
Issuances	0			0			0			0			0
Settlements	(4		)	(41		)	(122		)	(108		)	0
Foreign currency translation	0			0			(2		)	31			0
Other(4)	0			(15		)	141			14			(5		)
Transfers into Level 3(5)	0			151			252			28			0
Transfers out of Level 3(5)	0			(111		)	(666		)	(30		)	0
Fair Value, end of period	$	227		$	188		$	332		$	487		$	1
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0
Other income	$	(5	)	$	(10	)	$	(4	)	$	3		$	1



	Year Ended December 31, 2016
	Equity Securities Available- For-Sale			Other Long-term Investments			Short-term Investments		Other Assets
	(in millions)
Fair Value, beginning of period	$	266		$	49		$	0	$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	52			(1		)	0		(30		)
Other income	0			0			0		0
Included in other comprehensive income (loss)	(75		)	0			0		0
Net investment income	0			(1		)	0		0
Purchases	99			1			1		23
Sales	(79		)	0			0		0
Issuances	0			0			0		0
Settlements	(13		)	0			0		0
Foreign currency translation	13			0			0		0
Other(4)	0			(33		)	0		0
Transfers into Level 3(5)	9			0			0		0
Transfers out of Level 3(5)	(7		)	(8		)	0		0
Fair Value, end of period	$	265		$	7		$	1	$	0
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(1	)	$	0	$	(30	)
Other income	$	0		$	0		$	0	$	0



	Year Ended December 31, 2016
	Separate Account Assets(3)			Future Policy Benefits			Other Liabilities			Notes Issued by Consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	1,995		$	(8,434	)	$	(2	)	$	(8,597	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	1			1,252			(8		)	(23		)
Other income	0			0			0			(14		)
Interest credited to policyholders’ account balances	22			0			0			0
Net investment income	17			0			0			0
Purchases	555			0			0			0
Sales	(141		)	0			0			0
Issuances	0			(1,056		)	0			(2,187		)
Settlements	(485		)	0			(6		)	697
Foreign currency translation	0			0			0			0
Other(4)	0			0			(6		)	8,285
Transfers into Level 3(5)	344			0			0			0
Transfers out of Level 3(5)	(459		)	0			0			0
Fair Value, end of period	$	1,849		$	(8,238	)	$	(22	)	$	(1,839	)
Unrealized gains (losses) for assets/liabilities still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	1,046		$	(9	)	$	(23	)
Other income	$	0		$	0		$	0		$	(14	)
Interest credited to policyholders’ account balances	$	3		$	0		$	0		$	0

The following tables summarize the portion of changes in fair values of Level 3 assets and liabilities included in earnings and other comprehensive income for the year ended December 31, 2015, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held as of December 31, 2015.



	Year Ended December 31, 2015
	Fixed Maturities Available-For-Sale
	Foreign Government			Corporate Securities(1)			Structured Securities(2)
	(in millions)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(95	)	$	41
Included in other comprehensive income (loss)	$	(3	)	$	7		$	(40	)
Net investment income	$	0		$	17		$	20
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(87	)	$	4



	Year Ended December 31, 2015
	Trading Account Assets
	Corporate Securities			Structured Securities(2)			Equity			All Other Activity
	(in millions)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0
Other income	$	(28	)	$	(7	)	$	(15	)	$	(1	)
Net investment income	$	1		$	1		$	0		$	0
Unrealized gains (losses) for assets still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0
Other income	$	9		$	(7	)	$	6		$	(1	)



	Year Ended December 31, 2015
	Equity Securities Available- For-Sale			Other Long-term Investments			Other Assets
	(in millions)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	$	15		$	21		$	0
Included in other comprehensive income (loss)	$	1		$	0		$	0
Net investment income	$	0		$	(1	)	$	0
Unrealized gains (losses) for assets/liabilities still held(6):
Included in earnings:
Realized investment gains (losses), net	$	(3	)	$	19		$	2



	Year Ended December 31, 2015
	Separate Account Assets(3)			Future Policy Benefits		Other Liabilities		Notes Issued by Consolidated VIEs
	(in millions)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	$	0		$	717	$	1	$	287
Other income	$	0		$	0	$	0	$	146
Interest credited to policyholders’ account balances	$	(38	)	$	0	$	0	$	0
Net investment income	$	24		$	0	$	0	$	0
Unrealized gains (losses) for assets/liabilities still held(6):
Included in earnings:
Realized investment gains (losses), net	$	0		$	485	$	1	$	287
Other income	$	0		$	0	$	0	$	146
Interest credited to policyholders’ account balances	$	318		$	0	$	0	$	0

__________


(1)	Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities. Prior period amounts were aggregated to conform to current period presentation.


(2)	Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities. Prior period information has been revised to conform to current period presentation.

(3)


(4)	Other, for the period ended December 31, 2017 primarily represents deconsolidations of certain previously consolidated collateralized loan obligations and reclassifications of certain assets between reporting categories. Other, for the period ended December 31, 2016 primarily represents deconsolidations of certain previously consolidated collateralized loan obligations.


(5)	Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfers occur for any such assets still held at the end of the quarter.


(6)	Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

The following tables present the balance of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying. These tables include NPR and exclude embedded derivatives and associated reinsurance recoverables. The derivative assets and liabilities shown below are included in “Trading account assets-All Other Activity,” “Other long-term investments” or “Other liabilities” in the tables contained within the section “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities”, above.



	As of December 31, 2017
	Level 1		Level 2		Level 3		Netting(1)			Total

	(in millions)
Derivative assets:
Interest Rate	$	25	$	8,399	$	0	$			$	8,424
Currency	0		165		0					165
Credit	0		21		0					21
Currency/Interest Rate	0		1,588		0					1,588
Equity	2		595		10					607
Commodity	0		0		0					0
Netting(1)							(9,600		)	(9,600		)
Total derivative assets	$	27	$	10,768	$	10	$	(9,600	)	$	1,205
Derivative liabilities:
Interest Rate	$	1	$	3,800	$	3	$			$	3,804
Currency	0		262		0					262
Credit	0		5		0					5
Currency/Interest Rate	0		1,149		0					1,149
Equity	2		733		0					735
Commodity	0		0		0					0
Netting(1)							(5,312		)	(5,312		)
Total derivative liabilities	$	3	$	5,949	$	3	$	(5,312	)	$	643



	As of December 31, 2016
	Level 1		Level 2		Level 3		Netting(1)			Total

	(in millions)
Derivative assets:
Interest Rate	$	55	$	9,269	$	6	$			$	9,330
Currency	0		375		0					375
Credit	0		1		0					1
Currency/Interest Rate	0		3,174		0					3,174
Equity	0		203		0					203
Commodity	0		0		0					0
Netting(1)							(11,716		)	(11,716		)
Total derivative assets	$	55	$	13,022	$	6	$	(11,716	)	$	1,367
Derivative liabilities:
Interest Rate	$	1	$	4,515	$	2	$			$	4,518
Currency	0		893		0					893
Credit	0		25		0					25
Currency/Interest Rate	0		365		0					365
Equity	6		483		0					489
Commodity	0		0		0					0
Netting(1)							(5,945		)	(5,945		)
Total derivative liabilities	$	7	$	6,281	$	2	$	(5,945	)	$	345

__________


(1)	“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities for the year ended December 31, 2017, as well as the portion of gains or losses included in income for the year ended December 31, 2017, attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2017.



	Year Ended December 31, 2017
	Net Derivative– Equity		Net Derivative– Interest Rate

	(in millions)
Fair Value, beginning of period	$	0	$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		(7		)
Other income	0		0
Purchases	0		0
Sales	0		0
Issuances	0		0
Settlements	0		0
Foreign currency translation	0		0
Other(1)	10		0
Transfers into Level 3(3)	0		0
Transfers out of Level 3(3)	0		0
Fair Value, end of period	$	10	$	(3	)
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	0	$	(7	)
Other income	$	0	$	0



	Year Ended December 31, 2016
	Net Derivative– Equity			Net Derivative– Interest Rate

	(in millions)
Fair Value, beginning of period	$	32		$	5
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			(1		)
Other income	0			0
Purchases	0			0
Sales	0			0
Issuances	0			0
Settlements	0			0
Other(2)	(32		)	0
Transfers into Level 3(3)	0			0
Transfers out of Level 3(3)	0			0
Fair Value, end of period	$	0		$	4
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	0		$	0
Other income	$	0		$	0



	Year Ended December 31, 2015
	Net Derivative– Equity			Net Derivative– Interest Rate

	(in millions)
Fair Value, beginning of period	$	6		$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	20			2
Other income	0			0
Purchases	9			0
Sales	(2		)	0
Issuances	0			0
Settlements	0			0
Other	0			0
Transfers into Level 3(3)	0			0
Transfers out of Level 3(3)	(1		)	0
Fair Value, end of period	$	32		$	5
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	20		$	2
Other income	$	0		$	0

__________


(1)	Relates to warrants received in an asset restructuring that resulted in reclassification of reporting category.


(2)	Relates to private warrants reclassified from derivatives to trading securities.


(3)	Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfer occurs.

The following table represents information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is evidence of impairment. Assets included in the table are those that were impaired, and therefore measured at fair value, during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).



	Year Ended December 31,
	2017			2016			2015
	(in millions)
Commercial mortgage loans(1):
Carrying value after measurement as of period end	$	64		$	47		$	0
Realized investment gains (losses) net	$	(2	)	$	(5	)	$	0
Mortgage servicing rights(2):
Carrying value after measurement as of period end	$	60		$	84		$	90
Realized investment gains (losses) net	$	7		$	(1	)	$	(7	)
Cost method investments(3):
Carrying value after measurement as of period end	$	150		$	284		$	239
Realized investment gains (losses) net	$	(29	)	$	(85	)	$	(123	)

__________


(1)	Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2)

Mortgage servicing rights are valued using a discounted cash flow model. The model incorporates assumptions for servicing revenues, which are adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses. The discount rates incorporated into the model are determined based on the estimated returns a market participant would require for this business plus a liquidity and risk premium. This estimate includes available relevant data from any active market sales of mortgage servicing rights.


(3)	For cost method impairments, the methodologies utilized are primarily discounted cash flow and, where appropriate, valuations provided by the general partners taking into consideration investment-related expenses.

The following tables present information regarding assets and liabilities where the fair value option has been elected.



	Year Ended December 31,
	2017		2016		2015
	(in millions)
Assets:
Commercial mortgage and other loans:
Changes in instrument-specific credit risk	$	0	$	0	$	0
Other changes in fair value	$	0	$	0	$	0
Other long-term investments:
Changes in fair value	$	147	$	58	$	2
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	4	$	37	$	(434	)



	Year Ended December 31,
	2017		2016		2015
	(in millions)
Commercial mortgage and other loans:
Interest income	$	13	$	10	$	11
Notes issued by consolidated VIEs:
Interest expense	$	75	$	120	$	351



	Year Ended December 31,
	2017		2016
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	593	$	519
Aggregate contractual principal as of period end	$	582	$	508
Other long-term investments:
Fair value as of period end	$	1,945	$	1,556
Notes issued by consolidated VIEs:
Fair value as of period end	$	1,196	$	1,839
Aggregate contractual principal as of period end	$	1,233	$	1,886

__________


(1)	As of December 31, 2017, for loans for which the fair value option has been elected, there were no loans in non-accrual status and none of the loans were more than 90 days past due and still accruing.

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.



	December 31, 2017(1)
	Fair Value								Carrying Amount(2)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(3)	$	0	$	1,484	$	946	$	2,430	$	2,049
Trading account assets	58		51		0		109		109
Commercial mortgage and other loans	0		129		56,619		56,748		55,452
Policy loans	1		0		11,890		11,891		11,891
Short-term investments	989		22		0		1,011		1,011
Cash and cash equivalents	5,997		195		0		6,192		6,192
Accrued investment income	0		3,325		0		3,325		3,325
Other assets	45		2,385		685		3,115		3,115
Total assets	$	7,090	$	7,591	$	70,140	$	84,821	$	83,144
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	33,045	$	67,141	$	100,186	$	99,948
Securities sold under agreements to repurchase	0		8,400		0		8,400		8,400
Cash collateral for loaned securities	0		4,354		0		4,354		4,354
Short-term debt	0		1,384		0		1,384		1,380
Long-term debt(4)	1,296		16,369		2,095		19,760		17,172
Notes issued by consolidated VIEs	0		0		322		322		322
Other liabilities	0		6,002		715		6,717		6,717
Separate account liabilities—investment contracts	0		71,336		30,490		101,826		101,826
Total liabilities	$	1,296	$	140,890	$	100,763	$	242,949	$	240,119



	December 31, 2016(1)
	Fair Value								Carrying Amount(2)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(3)	$	0	$	1,526	$	998	$	2,524	$	2,144
Trading account assets	0		150		0		150		150
Commercial mortgage and other loans	0		139		53,625		53,764		52,260
Policy loans	1		0		11,754		11,755		11,755
Short-term investments	0		326		0		326		326
Cash and cash equivalents	4,945		876		0		5,821		5,821
Accrued investment income	0		3,204		0		3,204		3,204
Other assets	54		1,976		658		2,688		2,688
Total assets	$	5,000	$	8,197	$	67,035	$	80,232	$	78,348
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	41,653	$	58,392	$	100,045	$	99,719
Securities sold under agreements to repurchase	0		7,606		0		7,606		7,606
Cash collateral for loaned securities	0		4,333		0		4,333		4,333
Short-term debt	0		1,077		73		1,150		1,133
Long-term debt(4)	1,267		15,705		2,957		19,929		18,041
Notes issued by consolidated VIEs(5)	0		0		311		311		311
Other liabilities	0		6,540		696		7,236		7,236
Separate account liabilities—investment contracts	0		71,010		27,578		98,588		98,588
Total liabilities	$	1,267	$	147,924	$	90,007	$	239,198	$	236,967

__________

(1)

Other long-term investments excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at NAV per share (or its equivalent) as a practical expedient. At December 31, 2017 and 2016, the fair values of these cost method investments were $1,795 million and $1,514 million, respectively. The carrying value of these investments were $1,571 million and $1,478 million as of December 31, 2017 and 2016, respectively.

(2)

Carrying values presented herein differ from those in the Company’s Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.


(3)	As of December 31, 2017, excludes notes with fair value and carrying amount of $4,913 million and $4,627 million, respectively. As of December 31, 2016, excludes notes with both fair value and carrying amount of $4,403 million. These amounts have been offset with the associated payables under a netting agreement.


(4)	As of December 31, 2017, includes notes with fair value and carrying amount of $7,577 million and $7,287 million, respectively. As of December 31, 2016, includes notes with both fair value and carrying amount of $5,859 million. These amounts have been offset with the associated receivables under a netting agreement.


(5)	The amount as of December 31, 2016 was added to the table to correct the previously reported amounts.