EXHIBIT 99.1
Part II
Item 6. | Selected Financial Data |
The following selected financial data has been derived from the Company’s audited consolidated financial statements which have been updated as described in Item 8.01 of this Current Report onForm 8-K as well as from the Consolidated Financial Statements and Financial Statement Schedules included within Item 8 of Part II of the Company’s Annual Report onForm 10-K for the year ended December 31, 2007 (the “2007 Annual Report”), as updated by Exhibit 99.3 to this Current Report onForm 8-K. The statement of income data for the years ended December 31, 2007, 2006 and 2005 and the balance sheet data as of December 31, 2007 and 2006 have been derived from the Company’s audited financial statements included as Exhibit 99.3 to this Current Report onForm 8-K. The statement of income data for the years ended December 31, 2004 and 2003 and the balance sheet data as of December 31, 2005, 2004 and 2003 have been derived from the Company’s audited financial statements not included herein. The selected financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as included in the Company’s 2007 Annual Report, portions of which have been updated by Exhibit 99.2 to this Current Report onForm 8-K.
Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Statement of Income Data (1) | ||||||||||||||||||||
Revenues (2)(3): | ||||||||||||||||||||
Premiums | $ | 22,985 | $ | 22,066 | $ | 20,990 | $ | 18,853 | $ | 17,928 | ||||||||||
Universal life and investment-type product policy fees | 5,310 | 4,779 | 3,827 | 2,866 | 2,495 | |||||||||||||||
Net investment income | 18,086 | 16,302 | 14,117 | 11,675 | 10,904 | |||||||||||||||
Other revenues | 1,466 | 1,302 | 1,221 | 1,150 | 1,171 | |||||||||||||||
Net investment gains (losses) | (561 | ) | (1,387 | ) | (110 | ) | 115 | (614 | ) | |||||||||||
Total revenues | 47,286 | 43,062 | 40,045 | 34,659 | 31,884 | |||||||||||||||
Expenses (2)(3): | ||||||||||||||||||||
Policyholder benefits and claims | 23,839 | 22,942 | 22,298 | 19,969 | 18,701 | |||||||||||||||
Interest credited to policyholder account balances | 5,478 | 4,916 | 3,667 | 2,783 | 2,851 | |||||||||||||||
Policyholder dividends | 1,726 | 1,700 | 1,680 | 1,665 | 1,731 | |||||||||||||||
Other expenses | 10,458 | 9,565 | 8,281 | 6,853 | 6,405 | |||||||||||||||
Total expenses | 41,501 | 39,123 | 35,926 | 31,270 | 29,688 | |||||||||||||||
Income from continuing operations before provision for income tax | 5,785 | 3,939 | 4,119 | 3,389 | 2,196 | |||||||||||||||
Provision for income tax (2) | 1,668 | 1,018 | 1,161 | 932 | 529 | |||||||||||||||
Income from continuing operations | 4,117 | 2,921 | 2,958 | 2,457 | 1,667 | |||||||||||||||
Income from discontinued operations, net of income tax (2) | 200 | 3,372 | 1,756 | 387 | 576 | |||||||||||||||
Income before cumulative effect of a change in accounting, net of income tax | 4,317 | 6,293 | 4,714 | 2,844 | 2,243 | |||||||||||||||
Cumulative effect of a change in accounting, net of income tax (3) | — | — | — | (86 | ) | (26 | ) | |||||||||||||
Net income | 4,317 | 6,293 | 4,714 | 2,758 | 2,217 | |||||||||||||||
Preferred stock dividends | 137 | 134 | 63 | — | — | |||||||||||||||
Charge for conversion of company-obligated mandatorily redeemable securities of a subsidiary trust | — | — | — | — | 21 | |||||||||||||||
Net income available to common shareholders | $ | 4,180 | $ | 6,159 | $ | 4,651 | $ | 2,758 | $ | 2,196 | ||||||||||
1
December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Balance Sheet Data (1) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
General account assets | $ | 398,994 | $ | 383,746 | $ | 354,048 | $ | 270,327 | $ | 251,721 | ||||||||||
Separate account assets | 160,142 | 144,349 | 127,855 | 86,755 | 75,743 | |||||||||||||||
Total assets (2) | $ | 559,136 | $ | 528,095 | $ | 481,903 | $ | 357,082 | $ | 327,464 | ||||||||||
Liabilities: | ||||||||||||||||||||
Life and health policyholder liabilities (4) | $ | 263,319 | $ | 253,913 | $ | 245,623 | $ | 183,368 | $ | 169,518 | ||||||||||
Property and casualty policyholder liabilities (4) | 3,324 | 3,453 | 3,490 | 3,180 | 2,943 | |||||||||||||||
Short-term debt | 667 | 1,449 | 1,414 | 1,445 | 3,642 | |||||||||||||||
Long-term debt | 9,100 | 8,822 | 9,088 | 7,006 | 5,305 | |||||||||||||||
Collateral financing arrangements | 4,882 | — | — | — | — | |||||||||||||||
Junior subordinated debt securities | 4,075 | 3,381 | 2,134 | — | — | |||||||||||||||
Payables for collateral under securities loaned and other transactions | 44,136 | 45,846 | 34,515 | 28,678 | 27,083 | |||||||||||||||
Other | 34,312 | 33,084 | 28,683 | 23,826 | 22,081 | |||||||||||||||
Separate account liabilities | 160,142 | 144,349 | 127,855 | 86,755 | 75,743 | |||||||||||||||
Total liabilities (2) | 523,957 | 494,297 | 452,802 | 334,258 | 306,315 | |||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||
Preferred stock, at par value | 1 | 1 | �� | 1 | — | — | ||||||||||||||
Common stock, at par value | 8 | 8 | 8 | 8 | 8 | |||||||||||||||
Additional paid-in capital | 17,098 | 17,454 | 17,274 | 15,037 | 14,991 | |||||||||||||||
Retained earnings (5) | 19,884 | 16,574 | 10,865 | 6,608 | 4,193 | |||||||||||||||
Treasury stock, at cost | (2,890 | ) | (1,357 | ) | (959 | ) | (1,785 | ) | (835 | ) | ||||||||||
Accumulated other comprehensive income (6) | 1,078 | 1,118 | 1,912 | 2,956 | 2,792 | |||||||||||||||
Total stockholders’ equity | 35,179 | 33,798 | 29,101 | 22,824 | 21,149 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 559,136 | $ | 528,095 | $ | 481,903 | $ | 357,082 | $ | 327,464 | ||||||||||
2
Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions, expect per share data) | ||||||||||||||||||||
Other Data (1) | ||||||||||||||||||||
Net income available to common shareholders | $ | 4,180 | $ | 6,159 | $ | 4,651 | $ | 2,758 | $ | 2,196 | ||||||||||
Return on common equity (7) | 13.0 | % | 21.9 | % | 18.5 | % | 12.5 | % | 11.4 | % | ||||||||||
Return on common equity, excluding accumulated other comprehensive income | 13.2 | % | 22.6 | % | 20.4 | % | 14.4 | % | 13.0 | % | ||||||||||
EPS Data (1) | ||||||||||||||||||||
Income from Continuing Operations Available to Common Shareholders Per Common Share | ||||||||||||||||||||
Basic | $ | 5.35 | $ | 3.66 | $ | 3.87 | $ | 3.27 | $ | 2.23 | ||||||||||
Diluted | $ | 5.22 | $ | 3.62 | $ | 3.83 | $ | 3.25 | $ | 2.20 | ||||||||||
Income (Loss) from Discontinued Operations Per Common Share | ||||||||||||||||||||
Basic | $ | 0.27 | $ | 4.43 | $ | 2.34 | $ | 0.52 | $ | 0.78 | ||||||||||
Diluted | $ | 0.26 | $ | 4.38 | $ | 2.32 | $ | 0.50 | $ | 0.77 | ||||||||||
Cumulative Effect of a Change in Accounting Per Common Share (3) | ||||||||||||||||||||
Basic | $ | — | $ | — | $ | — | $ | (0.11 | ) | $ | (0.04 | ) | ||||||||
Diluted | $ | — | $ | — | $ | — | $ | (0.11 | ) | $ | (0.04 | ) | ||||||||
Net Income Available to Common Shareholders Per Common Share | ||||||||||||||||||||
Basic | $ | 5.62 | $ | 8.09 | $ | 6.21 | $ | 3.67 | $ | 2.97 | ||||||||||
Diluted | $ | 5.48 | $ | 7.99 | $ | 6.16 | $ | 3.65 | $ | 2.94 | ||||||||||
Dividends Declared Per Common Share | $ | 0.74 | $ | 0.59 | $ | 0.52 | $ | 0.46 | $ | 0.23 |
(1) | On July 1, 2005, the Company acquired Travelers. The 2005 selected financial data includes total revenues and total expenses of $966 million and $577 million, respectively, from the date of the acquisition. | |
(2) | Discontinued Operations: |
Real Estate
In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets(“SFAS 144”), income related to real estate sold or classified as held-for-sale for transactions initiated on or after January 1, 2002 is presented as discontinued operations. The following information presents the components of income from discontinued real estate operations:
Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Investment income | $ | 61 | $ | 267 | $ | 431 | $ | 686 | $ | 756 | ||||||||||
Investment expense | (32 | ) | (175 | ) | (269 | ) | (411 | ) | (444 | ) | ||||||||||
Net investment gains (losses) | 13 | 4,795 | 2,125 | 146 | 420 | |||||||||||||||
Total revenues | 42 | 4,887 | 2,287 | 421 | 732 | |||||||||||||||
Interest expense | — | — | — | 13 | 4 | |||||||||||||||
Provision for income tax | 18 | 1,725 | 814 | 143 | 265 | |||||||||||||||
Income from discontinued operations, net of income tax | $ | 24 | $ | 3,162 | $ | 1,473 | $ | 265 | $ | 463 | ||||||||||
3
Operations
In September 2007, September 2005 and January 2005, the Company sold its MetLife Insurance Limited (“MetLife Australia”) annuities and pension businesses, P.T. Sejahtera (“MetLife Indonesia”) and SSRM Holdings, Inc. (“SSRM”), respectively. In accordance with SFAS 144, the assets, liabilities and operations of MetLife Indonesia, SSRM and MetLife Australia have been reclassified into discontinued operations for all years presented. The following tables present these discontinued operations:
Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues | $ | 71 | $ | 100 | $ | 74 | $ | 333 | $ | 235 | ||||||||||
Expenses | 58 | 89 | 89 | 310 | 206 | |||||||||||||||
Income before provision for income tax | 13 | 11 | (15 | ) | 23 | 29 | ||||||||||||||
Provision for income tax | 4 | 3 | (2 | ) | 13 | 13 | ||||||||||||||
Income (loss) from discontinued operations, net of income tax | 9 | 8 | (13 | ) | 10 | 16 | ||||||||||||||
Net investment gains, net of income tax | 10 | 52 | 182 | — | — | |||||||||||||||
Income from discontinued operations, net of income tax | $ | 19 | $ | 60 | $ | 169 | $ | 10 | $ | 16 | ||||||||||
December 31, | ||||||||||||||||
2006 | 2005 | 2004 | 2003 | |||||||||||||
(In millions) | ||||||||||||||||
General account assets | $ | 1,563 | $ | 1,621 | $ | 410 | $ | 210 | ||||||||
Total assets | $ | 1,563 | $ | 1,621 | $ | 410 | $ | 210 | ||||||||
Life and health policyholder liabilities(4) | $ | 1,595 | $ | 1,622 | $ | 24 | $ | 17 | ||||||||
Short-term debt | — | — | 19 | — | ||||||||||||
Other | — | — | 225 | 73 | ||||||||||||
Total liabilities | $ | 1,595 | $ | 1,622 | $ | 268 | $ | 90 | ||||||||
On September 12, 2008, the Company completed a tax-free split-off of its majority-owned subsidiary, Reinsurance Group of America, Incorporated (‘‘RGA”), as described in Item 8.01 of this Current Report onForm 8-K, as well as in the Consolidated Financial Statements and Financial Statement Schedules included within Item 8 of Part II of the 2007 Annual Report, as updated by Exhibit 99.3 of this Current Report onForm 8-K. In accordance with SFAS 144, the assets, liabilities and operations of RGA have been reclassified into discontinued operations for all years presented. The following tables present these discontinued operations:
Years Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues | $ | 5,895 | $ | 5,195 | $ | 4,567 | $ | 3,984 | $ | 3,163 | ||||||||||
Expenses | 5,477 | 4,971 | 4,417 | 3,876 | 3,077 | |||||||||||||||
Income before provision for income tax | 418 | 224 | 150 | 108 | 86 | |||||||||||||||
Provision for income tax | 146 | 79 | 50 | 35 | 29 | |||||||||||||||
Income from discontinued operations, net of income tax | 272 | 145 | 100 | 73 | 57 | |||||||||||||||
Net investment (losses) gains, net of income tax | (115 | ) | 5 | 14 | 39 | 40 | ||||||||||||||
Income from discontinued operations, net of income tax | $ | 157 | $ | 150 | $ | 114 | $ | 112 | $ | 97 | ||||||||||
4
December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
General account assets | $ | 22,020 | $ | 19,435 | $ | 16,617 | $ | 14,552 | $ | 12,622 | ||||||||||
Total assets | $ | 22,037 | $ | 19,451 | $ | 16,631 | $ | 14,566 | $ | 12,635 | ||||||||||
Life and health policyholder liabilities(4) | 15,113 | 13,332 | 11,751 | 10,464 | 8,983 | |||||||||||||||
Long-term debt | 528 | 307 | 401 | 406 | 399 | |||||||||||||||
Other | 4,317 | 3,929 | 2,729 | 2,084 | 1,798 | |||||||||||||||
Total liabilities | $ | 19,958 | $ | 17,568 | $ | 14,881 | $ | 12,954 | $ | 11,180 | ||||||||||
(3) | The cumulative effect of a change in accounting, net of income tax, of $86 million for the year ended December 31, 2004, resulted from the adoption of Statement of Position(“SOP”) 03-1,Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts.The cumulative effect of a change in accounting, net of income tax, of $26 million for the year ended December 31, 2003, resulted from the adoption of SFAS No. 133 Implementation Issue No. B36,Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. | |
(4) | Policyholder liabilities include future policy benefits, other policyholder funds and bank deposits. The life and health policyholder liabilities also include policyholder account balances, policyholder dividends payable and the policyholder dividend obligation. | |
(5) | The cumulative effect of changes in accounting, net of income tax, of $329 million, which decreased retained earnings at January 1, 2007, resulted from $292 million related to the adoption ofSOP 05-1,Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, and $37 million related to the adoption of Financial Accounting Standards Board Interpretation No. 48,Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109. | |
(6) | The cumulative effect of a change in accounting, net of income tax, of $744 million resulted from the adoption of SFAS No. 158,Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,and decreased accumulated other comprehensive income at December 31, 2006. | |
(7) | Return on common equity is defined as net income available to common shareholders divided by average common stockholders’ equity. |
5