Credit Risk. See Note 9 of the Notes to Consolidated Financial Statements for information about how we manage credit risk related to its freestanding derivatives, including the use of master netting agreements and collateral arrangements. Our policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. This policy applies to the recognition of derivatives in the consolidated balance sheets, and does not affect our legal right of offset. The estimated fair value of our net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at December 31, 2012: December 31, 2012 Net Derivative Assets Net Derivative Liabilities (In millions) Estimated Fair Value of OTC Derivatives After Application of Master Netting Agreements(1) ......... $9,486 $ 918 Cash collateral on OTC Derivatives .................................................... (5,960) (1) Estimated Fair Value of OTC Derivatives After Application of Master Netting Agreements and Cash Collateral(1) ..................................................................... 3,526 917 Securities Collateral on OTC Derivatives(2) .............................................. (3,687) (875) Estimated Fair Value of OTC Derivatives After Application of Master Netting Agreements and Cash and Securities Collateral(1) ......................................................... (161) 42 Estimated Fair Value of Exchange-Traded Derivatives ...................................... — 151 Total Estimated Fair Value of Derivatives After Application of Master Netting Agreements and Cash and Securities Collateral(1), (3) ..................................................... $ (161) $193 (1) Includes income accruals on derivatives. (2) The collateral is held in separate custodial accounts and is not recorded on our consolidated balance sheets. (3) The negative asset value is due to the customary delay in the timing of collateral movements. Credit Derivatives. See Note 9 of the Notes to Consolidated Financial Statements for information about the estimated fair value and maximum amount at risk related to our written credit default swaps. Embedded Derivatives. See Note 10 of the Notes to the Consolidated Financial Statements for information about embedded derivatives measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy. See Note 10 of the Notes to the Consolidated Financial Statements for a rollforward of the fair value measurements for net embedded derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs. See Note 9 of the Notes to the Consolidated Financial Statements for information about the nonperformance risk adjustment included in the valuation of guaranteed minimum benefits accounted for as embedded derivatives. See “— Summary of Critical Accounting Estimates — Derivatives” for further information on the estimates and assumptions that affect embedded derivatives. Off-Balance Sheet Arrangements Credit and Committed Facilities Collateral for Securities Lending, Repurchase Program and Derivatives We maintain unsecured credit facilities and committed facilities with various financial institutions. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Sources — Credit and Committed Facilities” for further descriptions of such arrangements. We participate in a securities lending program in the normal course of business for the purpose of enhancing the total return on our investment portfolio. We have non-cash collateral for securities lending from counterparties on deposit from customers, which cannot be sold or repledged, and which has not been recorded on our consolidated balance sheets. The amount of this collateral was $104 million and $371 million at estimated fair value at December 31, 2012 and 2011, respectively. See “— Investments — Securities Lending” and “Securities Lending” in Note 1 of the Notes to the Consolidated Financial Statements for discussion of our securities lending program and the classification of revenues and expenses and the nature of the secured financing arrangement and associated liability. We also participate in a third-party custodian administered repurchase program for the purpose of enhancing the total return on our investment portfolio. We loan certain of our fixed maturity securities to financial institutions and, in exchange, non-cash collateral is put on deposit by the financial institutions on our behalf with the third-party custodian. The estimated fair value of securities loaned in connection with these transactions was $729 million and $506 million at December 31, 2012 and 2011, respectively. Non-cash collateral on deposit with the third-party custodian on our behalf was $785 million and $551 million at December 31, 2012 and 2011, respectively, which cannot be sold or repledged, and which has not been recorded on our consolidated balance sheets. We enter into derivatives to manage various risks relating to our ongoing business operations. We have non-cash collateral from counterparties for derivatives, which can be sold or repledged subject to certain constraints, and which has not been recorded on our consolidated balance sheets. The amount of this collateral was $3.7 billion and $2.5 billion at December 31, 2012 and 2011, respectively. See “— Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Pledged Collateral” and “Derivatives” in Note 9 of the Notes to the Consolidated Financial Statements for information on the earned income on and the gross notional amount, estimated fair value of assets and liabilities and primary underlying risk exposureof our derivatives. As lessee, we have entered into various lease and sublease agreements for office space, information technology and other equipment. Our commitments under such lease agreements are included within the contractual obligations table. See “— Liquidity and Capital Resources — The Company — Contractual Obligations” and Note 21 of the Notes to the Consolidated Financial Statements. See “Guarantees” in Note 21 of the Notes to the Consolidated Financial Statements. Lease Commitments Guarantees MetLife, Inc. 48