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Historical Results Financial Supplement
Presented in Revised Format
for the Quarters Ended
September 30, 2011, December 31, 2011,
March 31, 2012 and June 30, 2012
and for the Year Ended December 31, 2011
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NOTE TO FINANCIALS
This Quarterly Financial Supplement (“QFS”) includes certain operating and statistical measures, such as sales and product spreads, among others, to provide supplemental data regarding the performance of our current business. Operating earnings is the measure of segment profit or loss we use to evaluate segment performance and allocate resources. Consistent with accounting principles generally accepted in the United States of America (“GAAP”) accounting guidance for segment reporting, operating earnings is our measure of segment performance. Operating earnings is also a measure by which senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans.
Operating earnings is defined as operating revenues less operating expenses, both net of income tax. Operating earnings available to common shareholders is defined as operating earnings less preferred stock dividends.
Operating revenues and operating expenses exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife, Inc. (“Divested businesses”). Operating revenues also excludes net investment gains (losses) (“NIGL”) and net derivative gains (losses) (“NDGL”).
The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues: | ||||||||
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Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to NIGL and NDGL (“Unearned revenue adjustments”) and certain variable annuity guaranteed minimum income benefits (“GMIB”) fees (“GMIB fees”); | |||||||
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Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment (“Investment hedge adjustments”), (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method (“Joint venture adjustments”), (iv) excludes certain amounts related to contractholder-directed unit-linked investments (“Unit-linked contract income”), and (v) excludes certain amounts related to securitization entities that are variable interest entities (“VIEs”) consolidated under GAAP (“Securitization entities income”); and | |||||||
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Other revenues are adjusted for settlements of foreign currency earnings hedges. | |||||||
The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses: | ||||||||
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Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to NIGL and NDGL (“PDO adjustments”), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets (“Inflation adjustments and pass through adjustments”), (iii) benefits and hedging costs related to GMIBs (“GMIB costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”); | |||||||
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Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment (“PAB hedge adjustments”) and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments (“Unit-linked contract costs”); | |||||||
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Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) NIGL and NDGL, (ii) GMIB fees and GMIB costs, and (iii) Market value adjustments; | |||||||
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Amortization of negative VOBA excludes amounts related to Market value adjustments; | |||||||
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Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP (“Securitization entities debt expense”); and | |||||||
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Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements (“Regulatory implementation costs”), and (iii) acquisition and integration costs. | |||||||
We believe the presentation of operating earnings and operating earnings available to common shareholders as we measure it for management purposes enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of our business. Operating revenues, operating expenses, operating earnings, operating earnings available to common shareholders, operating earnings available to common shareholders per diluted common share, book value per common share, excluding accumulated other comprehensive income (loss) (“AOCI”), and book value per diluted common share, excluding AOCI, should not be viewed as substitutes for the following financial measures calculated in accordance with GAAP: GAAP revenues, GAAP expenses, GAAP income (loss) from continuing operations, net of income tax, GAAP net income (loss) available to MetLife, Inc.’s common shareholders, GAAP net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share, book value per common share and book value per diluted common share, respectively. |
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THE AMERICAS RETAIL - LIFE & OTHER (1) STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL
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For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||
Unaudited (In millions, except ratios) | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | December 31, 2011 | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Premiums | $ | 1,488 | $ | 1,596 | $ | 1,447 | $ | 1,476 | $ | 6,000 | ||||||||||||||
Universal life and investment-type product policy fees | 407 | 412 | 413 | 410 | 1,634 | |||||||||||||||||||
Net investment income | 1,128 | 1,093 | 1,151 | 1,144 | 4,544 | |||||||||||||||||||
Other revenues | 127 | 116 | 124 | 129 | 472 | |||||||||||||||||||
Total operating revenues | 3,150 | 3,217 | 3,135 | 3,159 | 12,650 | |||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends | 2,110 | 1,891 | 1,940 | 1,980 | 8,067 | |||||||||||||||||||
Interest credited to policyholder account balances | 209 | 211 | 216 | 213 | 819 | |||||||||||||||||||
Capitalization of DAC | (210 | ) | (221 | ) | (194 | ) | (198 | ) | (848 | ) | ||||||||||||||
Amortization of DAC and VOBA | 202 | 278 | 219 | 219 | 930 | |||||||||||||||||||
Amortization of negative VOBA | - | - | - | - | - | |||||||||||||||||||
Interest expense on debt | - | - | - | (1 | ) | - | ||||||||||||||||||
Other expenses | 669 | 706 | 679 | 675 | 2,737 | |||||||||||||||||||
Total operating expenses | 2,980 | 2,865 | 2,860 | 2,888 | 11,705 | |||||||||||||||||||
Operating earnings before provision for income tax | 170 | 352 | 275 | 271 | 945 | |||||||||||||||||||
Provision for income tax expense (benefit) | 49 | 117 | 88 | 89 | 299 | |||||||||||||||||||
Operating earnings | 121 | 235 | 187 | 182 | 646 | |||||||||||||||||||
Preferred stock dividends | - | - | - | - | - | |||||||||||||||||||
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS | $ | 121 | $ | 235 | $ | 187 | $ | 182 | $ | 646 | ||||||||||||||
Reconciliation to Net Income (Loss) and Financial Statement Line Item Adjustments from GAAP | ||||||||||||||||||||||||
Operating earnings | $ | 121 | $ | 235 | $ | 187 | $ | 182 | $ | 646 | ||||||||||||||
Adjustments from operating earnings to income (loss) from continuing operations: | ||||||||||||||||||||||||
Net investment gains (losses) | 25 | 9 | 37 | 23 | 70 | |||||||||||||||||||
Net derivative gains (losses) | 556 | 44 | (169 | ) | 322 | 634 | ||||||||||||||||||
Premiums | - | - | - | - | - | |||||||||||||||||||
Universal life and investment-type product policy fees | 16 | - | (5 | ) | 8 | 14 | ||||||||||||||||||
Net investment income | (25 | ) | (25 | ) | (24 | ) | (32 | ) | (89 | ) | ||||||||||||||
Other revenues | - | - | - | - | - | |||||||||||||||||||
Policyholder benefits and claims and policyholder dividends | - | - | - | - | - | |||||||||||||||||||
Interest credited to policyholder account balances | - | - | - | - | - | |||||||||||||||||||
Capitalization of DAC | - | - | - | - | - | |||||||||||||||||||
Amortization of DAC and VOBA | (51 | ) | 117 | 11 | (25 | ) | 63 | |||||||||||||||||
Amortization of negative VOBA | - | - | - | - | - | |||||||||||||||||||
Interest expense on debt | - | - | - | - | - | |||||||||||||||||||
Other expenses | - | - | - | - | - | |||||||||||||||||||
Provision for income tax (expense) benefit | (184 | ) | (51 | ) | 53 | (104 | ) | (244 | ) | |||||||||||||||
Income (loss) from continuing operations, net of income tax | 458 | 329 | 90 | 374 | 1,094 | |||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | 8 | (2 | ) | 9 | - | 35 | ||||||||||||||||||
Net income (loss) | 466 | 327 | 99 | 374 | 1,129 | |||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | - | 2 | - | - | 2 | |||||||||||||||||||
Net income (loss) attributable to MetLife, Inc. | 466 | 325 | 99 | 374 | 1,127 | |||||||||||||||||||
Less: Preferred stock dividends | - | - | - | - | - | |||||||||||||||||||
Less: Preferred stock redemption premium | - | - | - | - | - | |||||||||||||||||||
Net income (loss) available to MetLife, Inc.'s common shareholders | $ | 466 | $ | 325 | $ | 99 | $ | 374 | $ | 1,127 | ||||||||||||||
Total Operating Premiums, Fees and Other Revenues | $ | 2,022 | $ | 2,124 | $ | 1,984 | $ | 2,015 | $ | 8,106 | ||||||||||||||
(1) Certain amounts in prior periods have been revised. In the third quarter of 2012, MetLife, Inc. further realigned certain products among its existing segments to better conform to the way it manages and assesses its business, and began reporting certain individual disability income and property & casualty products in the Retail segment, which were previously reported in the Group, Voluntary & Worksite Benefits segment. |
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THE AMERICAS | ||||||||||||||||||||||||
RETAIL - ANNUITIES | ||||||||||||||||||||||||
STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL
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For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||
Unaudited (In millions, except ratios) | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | December 31, 2011 | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Premiums | $ | 282 | $ | 208 | $ | 177 | $ | 100 | $ | 711 | ||||||||||||||
Universal life and investment-type product policy fees | 620 | 634 | 701 | 709 | 2,462 | |||||||||||||||||||
Net investment income | 714 | 736 | 760 | 750 | 2,870 | |||||||||||||||||||
Other revenues | 77 | 80 | 85 | 88 | 307 | |||||||||||||||||||
Total operating revenues | 1,693 | 1,658 | 1,723 | 1,647 | 6,350 | |||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Policyholder benefits and claims and policyholder dividends | 413 | 316 | 288 | 232 | 1,153 | |||||||||||||||||||
Interest credited to policyholder account balances | 408 | 398 | 380 | 377 | 1,593 | |||||||||||||||||||
Capitalization of DAC | (450 | ) | (390 | ) | (282 | ) | (248 | ) | (1,491 | ) | ||||||||||||||
Amortization of DAC and VOBA | 319 | 204 | 185 | 258 | 915 | |||||||||||||||||||
Amortization of negative VOBA | - | - | - | - | - | |||||||||||||||||||
Interest expense on debt | - | 1 | - | 1 | 1 | |||||||||||||||||||
Other expenses | 858 | 808 | 718 | 680 | 3,117 | |||||||||||||||||||
Total operating expenses | 1,548 | 1,337 | 1,289 | 1,300 | 5,288 | |||||||||||||||||||
Operating earnings before provision for income tax | 145 | 321 | 434 | 347 | 1,062 | |||||||||||||||||||
Provision for income tax expense (benefit) | 52 | 112 | 152 | 121 | 373 | |||||||||||||||||||
Operating earnings | 93 | 209 | 282 | 226 | 689 | |||||||||||||||||||
Preferred stock dividends | - | - | - | - | - | |||||||||||||||||||
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS | $ | 93 | $ | 209 | $ | 282 | $ | 226 | $ | 689 | ||||||||||||||
Reconciliation to Net Income (Loss) and Financial Statement Line Item Adjustments from GAAP | ||||||||||||||||||||||||
Operating earnings | $ | 93 | $ | 209 | $ | 282 | $ | 226 | $ | 689 | ||||||||||||||
Adjustments from operating earnings to income (loss) from continuing operations: | ||||||||||||||||||||||||
Net investment gains (losses) | 23 | 15 | 30 | 35 | 88 | |||||||||||||||||||
Net derivative gains (losses) | 918 | 518 | (357 | ) | 650 | 1,687 | ||||||||||||||||||
Premiums | - | - | - | - | - | |||||||||||||||||||
Universal life and investment-type product policy fees | 74 | 66 | 72 | 74 | 256 | |||||||||||||||||||
Net investment income | (45 | ) | (57 | ) | (60 | ) | (62 | ) | (169 | ) | ||||||||||||||
Other revenues | - | - | - | - | - | |||||||||||||||||||
Policyholder benefits and claims and policyholder dividends | 407 | (449 | ) | (393 | ) | 50 | (201 | ) | ||||||||||||||||
Interest credited to policyholder account balances | - | - | - | - | - | |||||||||||||||||||
Capitalization of DAC | - | - | - | - | - | |||||||||||||||||||
Amortization of DAC and VOBA | (484 | ) | (44 | ) | 293 | (275 | ) | (583 | ) | |||||||||||||||
Amortization of negative VOBA | - | - | - | - | - | |||||||||||||||||||
Interest expense on debt | - | - | - | - | - | |||||||||||||||||||
Other expenses | - | - | - | - | - | |||||||||||||||||||
Provision for income tax (expense) benefit | (310 | ) | (18 | ) | 145 | (165 | ) | (375 | ) | |||||||||||||||
Income (loss) from continuing operations, net of income tax | 676 | 240 | 12 | 533 | 1,392 | |||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | - | - | 1 | - | - | |||||||||||||||||||
Net income (loss) | 676 | 240 | 13 | 533 | 1,392 | |||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | 1 | (2 | ) | - | - | (1 | ) | |||||||||||||||||
Net income (loss) attributable to MetLife, Inc. | 675 | 242 | 13 | 533 | 1,393 | |||||||||||||||||||
Less: Preferred stock dividends | - | - | - | - | - | |||||||||||||||||||
Less: Preferred stock redemption premium | - | - | - | - | - | |||||||||||||||||||
Net income (loss) available to MetLife, Inc.'s common shareholders | $ | 675 | $ | 242 | $ | 13 | $ | 533 | $ | 1,393 | ||||||||||||||
Total Operating Premiums, Fees and Other Revenues | $ | 979 | $ | 922 | $ | 963 | $ | 897 | $ | 3,480 |
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INVESTMENTS INVESTMENT PORTFOLIO RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
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At or For the Year-to-Date Period Ended | ||||||||||||||||||||||
Unaudited (In millions) | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | ||||||||||||||||||
Fixed Maturity Securities | ||||||||||||||||||||||
Yield (1) | 4.95% | 4.94% | 4.96% | 4.86% | ||||||||||||||||||
Investment income (2), (3), (4) | $ | 11,208 | $ | 15,016 | $ | 3,840 | $ | 7,560 | ||||||||||||||
Investment gains (losses) (3) | (454 | ) | (932 | ) | (136 | ) | (155 | ) | ||||||||||||||
Ending carrying value (2), (3) | 354,611 | 351,011 | 355,269 | 367,138 | ||||||||||||||||||
Mortgage Loans | ||||||||||||||||||||||
Yield (1) | 5.54% | 5.53% | 5.62% | 5.53% | ||||||||||||||||||
Investment income (3), (4) | 2,330 | 3,162 | 830 | 1,594 | ||||||||||||||||||
Investment gains (losses) (3) | 160 | 175 | 36 | 49 | ||||||||||||||||||
Ending carrying value (3) | 59,722 | 61,303 | 57,281 | 55,750 | ||||||||||||||||||
Real Estate and Real Estate Joint Ventures | ||||||||||||||||||||||
Yield (1) | 4.15% | 3.76% | 3.76% | 6.25% | ||||||||||||||||||
Investment income (3) | 252 | 307 | 80 | 265 | ||||||||||||||||||
Investment gains (losses) (3) | 241 | 230 | 17 | 5 | ||||||||||||||||||
Ending carrying value | 8,197 | 8,563 | 8,472 | 8,477 | ||||||||||||||||||
Policy Loans | ||||||||||||||||||||||
Yield (1) | 5.46% | 5.43% | 5.30% | 5.28% | ||||||||||||||||||
Investment income | 482 | 641 | 158 | 314 | ||||||||||||||||||
Ending carrying value | 11,932 | 11,892 | 11,896 | 11,912 | ||||||||||||||||||
Equity Securities | ||||||||||||||||||||||
Yield (1) | 4.42% | 4.44% | 4.17% | 4.69% | ||||||||||||||||||
Investment income | 106 | 141 | 32 | 70 | ||||||||||||||||||
Investment gains (losses) | (37 | ) | (23 | ) | (9 | ) | 10 | |||||||||||||||
Ending carrying value | 3,118 | 3,023 | 3,043 | 2,882 | ||||||||||||||||||
Other Limited Partnership Interests | ||||||||||||||||||||||
Yield (1) | 12.07% | 10.58% | 11.34% | 13.74% | ||||||||||||||||||
Investment income | 582 | 681 | 182 | 448 | ||||||||||||||||||
Investment gains (losses) | 8 | 4 | (2 | ) | (11 | ) | ||||||||||||||||
Ending carrying value | 6,538 | 6,378 | 6,487 | 6,726 | ||||||||||||||||||
Cash and Short-term Investments | ||||||||||||||||||||||
Yield (1) | 1.10% | 1.04% | 0.69% | 0.67% | ||||||||||||||||||
Investment income | 122 | 155 | 32 | 66 | ||||||||||||||||||
Investment gains (losses) | 1 | 2 | - | - | ||||||||||||||||||
Ending carrying value (3) | 25,901 | 27,750 | 30,465 | 34,540 | ||||||||||||||||||
Other Invested Assets (1) | ||||||||||||||||||||||
Investment income | 331 | 439 | 132 | 329 | ||||||||||||||||||
Investment gains (losses) (3) | (3 | ) | (9 | ) | (25 | ) | (35 | ) | ||||||||||||||
Ending carrying value | 23,103 | 23,581 | 20,172 | 24,288 | ||||||||||||||||||
Total Investments | ||||||||||||||||||||||
Investment income yield (1) | 5.05% | 5.00% | 5.00% | 5.03% | ||||||||||||||||||
Investment fees and expenses yield | (0.13 | ) | (0.13 | ) | (0.13 | ) | (0.13 | ) | ||||||||||||||
Net Investment Income Yield (1), (3), (5) | 4.92% | 4.87% | 4.87% | 4.90% | ||||||||||||||||||
Investment income | $ | 15,413 | $ | 20,542 | $ | 5,286 | $ | 10,646 | ||||||||||||||
Investment fees and expenses | (403 | ) | (546 | ) | (140 | ) | (279 | ) | ||||||||||||||
Net Investment Income including Divested businesses | 15,010 | 19,996 | 5,146 | 10,367 | ||||||||||||||||||
Less: Net investment Income from Divested businesses (5), (6) | 264 | 358 | 69 | 118 | ||||||||||||||||||
Net Investment Income (3), (6) | $ | 14,746 | $ | 19,638 | $ | 5,077 | $ | 10,249 | ||||||||||||||
Ending Carrying Value (3) | $ | 493,122 | $ | 493,501 | $ | 493,085 | $ | 511,713 | ||||||||||||||
Investment portfolio gains (losses) including Divested businesses | $ | (84 | ) | $ | (553 | ) | $ | (119 | ) | $ | (137 | ) | ||||||||||
Less: Investment portfolio gains (losses) from Divested businesses (5) | (2 | ) | (140 | ) | 96 | 61 | ||||||||||||||||
Investment Portfolio Gains (Losses) (3), (5) | $ | (82 | ) | $ | (413 | ) | $ | (215 | ) | $ | (198 | ) | ||||||||||
Gross investment gains | $ | 1,107 | $ | 1,354 | $ | 278 | $ | 533 | ||||||||||||||
Gross investment losses | (730 | ) | (1,058 | ) | (335 | ) | (517 | ) | ||||||||||||||
Writedowns | (459 | ) | (709 | ) | (158 | ) | (214 | ) | ||||||||||||||
Investment Portfolio Gains (Losses) (3) | (82 | ) | (413 | ) | (215 | ) | (198 | ) | ||||||||||||||
Investment portfolio gains (losses) income tax (expense) benefit | 30 | 148 | 70 | 57 | ||||||||||||||||||
Investment Portfolio Gains (Losses), Net of Income Tax | $ | (52 | ) | $ | (265 | ) | $ | (145 | ) | $ | (141 | ) | ||||||||||
Derivative Gains (Losses) including Divested businesses | $ | 4,036 | $ | 4,545 | $ | (2,064 | ) | $ | (80 | ) | ||||||||||||
Less: Derivative gains (losses) from Divested businesses (5) | (150 | ) | (163 | ) | (5 | ) | (7 | ) | ||||||||||||||
Derivative gains (losses) (3), (5) | 4,186 | 4,708 | (2,059 | ) | (73 | ) | ||||||||||||||||
Derivative gains (losses) income tax (expense) benefit | (1,472 | ) | (1,643 | ) | 727 | 28 | ||||||||||||||||
Derivative Gains (Losses), Net of Income Tax | $ | 2,714 | $ | 3,065 | $ | (1,332 | ) | $ | (45 | ) | ||||||||||||
(1) Yields are calculated as investment income as a percent of average quarterly asset carrying values. Investment income excludes recognized gains and losses and reflects the GAAP adjustments described on Page 2 and as presented on Page 30. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, freestanding derivative assets, collateral received from derivative counterparties, the effects of consolidating under GAAP certain VIEs that are treated as CSEs, contractholder-directed unit-linked investments and securitized reverse residential mortgage loans. A yield is not presented for other invested assets, as it is not considered a meaningful measure of performance for this asset class.
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(2) Fixed maturity securities includes $684 million, $740 million, $818 million and $799 million in ending carrying value, and $6 million, $31 million, $45 million and $44 million of investment income related to trading and other securities at or for the year-to-date period ended September 30, 2011, December 31, 2011, March 31, 2012, and June 30, 2012, respectively.
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(3) The reconciliation of the remaining yield table captions to the most directly comparable measures presented in accordance with GAAP are as follows at or for the periods ended September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012, respectively: A) Trading and other securities (included within fixed maturity securities above) ending carrying value excludes contractholder-directed unit-linked investments of $17,874 million, $17,411 million, $18,119 million and $17,459 million; B) Ending carrying value excludes the effects of consolidating under GAAP certain VIEs that are treated as CSEs: trading and other securities (included within fixed maturity securities above) of $140 million, $117 million, $89 million and $70 million, mortgage loans of $3,227 million, $3,138 million, $3,024 million and $2,932 million and cash and short-term investments of $13 million, $21 million, $3 million and $21 million; C) Mortgage loans ending carrying value excludes securitized reverse residential mortgage loans of $0, $7,652 million, $8,283 million and $259 million; D) Net investment income adjustments as presented on Page 30 within the reconciliation to Net Income; E) Investment portfolio gains (losses) presented above and the GAAP adjustments as presented below; and F) Derivative gains (losses) presented above and GAAP adjustments as presented below:
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For the Year-to-Date Period Ended | ||||||||||||||||||||||
September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | |||||||||||||||||||
Investment portfolio gains (losses) including Divested businesses - in above yield table | $ | (84 | ) | $ | (553 | ) | $ | (119 | ) | $ | (137 | ) | ||||||||||
Real estate discontinued operations | (97 | ) | (96 | ) | (21 | ) | (25 | ) | ||||||||||||||
Net investment gains (losses) related to certain CSEs | 2 | 5 | (5 | ) | (1 | ) | ||||||||||||||||
Other gains (losses) reported in net investment gains (losses) on GAAP basis | (130 | ) | (223 | ) | 35 | (11 | ) | |||||||||||||||
Net investment gains (losses) - GAAP basis | $ | (309 | ) | $ | (867 | ) | $ | (110 | ) | $ | (174 | ) | ||||||||||
For the Year-to-Date Period Ended | ||||||||||||||||||||||
September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | |||||||||||||||||||
Derivative gains (losses) including Divested businesses - in above yield table | $ | 4,036 | $ | 4,545 | $ | (2,064 | ) | $ | (80 | ) | ||||||||||||
Investment hedge adjustments | 164 | 249 | 89 | 202 | ||||||||||||||||||
Joint venture adjustments | 23 | 23 | - | - | ||||||||||||||||||
Settlement of foreign currency earnings hedges | (8 | ) | (12 | ) | (5 | ) | (11 | ) | ||||||||||||||
PAB hedge adjustments | 18 | 19 | 2 | 3 | ||||||||||||||||||
Net derivative gains (losses) - GAAP basis | $ | 4,233 | $ | 4,824 | $ | (1,978 | ) | $ | 114 | |||||||||||||
(4) Investment income from fixed maturity securities and mortgage loans includes prepayment fees.
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(5) Yields are calculated including net investment income of certain Divested businesses and related carrying values. The net investment income adjustment on Page 30 for all of the Divested businesses for the year-to-date period ended March 31, 2012, and June 30, 2012, includes $85 million and $173 million, respectively, for securitized reverse residential mortgage loans that was excluded from the Mortgage Loans and Total Investments sections presented above. See Page 2 for discussion of Divested businesses.
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(6) Certain amounts in the prior periods have been revised. In the third quarter of 2012, MetLife, Inc. began reporting additional MetLife Bank operations as Divested businesses. |
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METLIFE, INC. (1) RECONCILIATION DETAIL
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For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||
Unaudited (In millions) | September 30, 2011 | December 31, 2011 | March 31, 2012 | June 30, 2012 | December 31, 2011 | |||||||||||||||||||
Reconciliation to Net Income (Loss) and Financial Statement Line Item Adjustments from GAAP | ||||||||||||||||||||||||
Operating earnings | $ | 995 | $ | 1,275 | $ | 1,494 | $ | 1,463 | $ | 4,799 | ||||||||||||||
Adjustments from operating earnings to income (loss) from continuing operations: | ||||||||||||||||||||||||
Net investment gains (losses) | (55 | ) | (558 | ) | (110 | ) | (64 | ) | (867 | ) | ||||||||||||||
Net derivative gains (losses) | 4,196 | 591 | (1,978 | ) | 2,092 | 4,824 | ||||||||||||||||||
Premiums -Divested businesses | 23 | 23 | 22 | 22 | 92 | |||||||||||||||||||
Universal life and investment-type product policy fees | ||||||||||||||||||||||||
Unearned revenue adjustments | 16 | - | (6 | ) | 20 | 14 | ||||||||||||||||||
GMIB fees | 74 | 66 | 72 | 74 | 256 | |||||||||||||||||||
Divested businesses | 2 | 2 | 3 | 4 | 8 | |||||||||||||||||||
Net investment income | ||||||||||||||||||||||||
Investment hedge adjustments | (70 | ) | (85 | ) | (89 | ) | (113 | ) | (249 | ) | ||||||||||||||
Income from discontinued real estate operations | (3 | ) | (1 | ) | - | (2 | ) | (10 | ) | |||||||||||||||
Joint venture adjustments | - | - | - | - | (23 | ) | ||||||||||||||||||
Unit-linked contract income | (824 | ) | (16 | ) | 1,015 | (517 | ) | (453 | ) | |||||||||||||||
Securitization entities income | 97 | 43 | 43 | 42 | 324 | |||||||||||||||||||
Divested businesses | 91 | 94 | 154 | 137 | 358 | |||||||||||||||||||
Other revenues | ||||||||||||||||||||||||
Settlement of foreign currency earnings hedges | 5 | 4 | 5 | 6 | 12 | |||||||||||||||||||
Divested businesses | 297 | 230 | 140 | (39 | ) | 868 | ||||||||||||||||||
Policyholder benefits and claims and policyholder dividends | ||||||||||||||||||||||||
PDO adjustments | - | - | - | - | - | |||||||||||||||||||
Inflation adjustments and pass through adjustments | (189 | ) | (24 | ) | (98 | ) | (169 | ) | (420 | ) | ||||||||||||||
GMIB costs | 411 | (448 | ) | (388 | ) | 52 | (192 | ) | ||||||||||||||||
Market value adjustments | (4 | ) | - | (7 | ) | (2 | ) | (7 | ) | |||||||||||||||
Divested businesses | (16 | ) | (13 | ) | (15 | ) | (12 | ) | (57 | ) | ||||||||||||||
Interest credited to policyholder account balances | ||||||||||||||||||||||||
PAB hedge adjustments | (2 | ) | (1 | ) | (2 | ) | (1 | ) | (19 | ) | ||||||||||||||
Unit-linked contract costs | 801 | 40 | (1,016 | ) | 509 | 483 | ||||||||||||||||||
Divested businesses | (3 | ) | (2 | ) | - | (5 | ) | (10 | ) | |||||||||||||||
Capitalization of DAC - Divested businesses | 3 | 2 | 2 | 2 | 9 | |||||||||||||||||||
Amortization of DAC and VOBA | ||||||||||||||||||||||||
Related to NIGL and NDGL | (426 | ) | (16 | ) | 192 | (257 | ) | (526 | ) | |||||||||||||||
Related to GMIB fees and GMIB costs | (129 | ) | 90 | 113 | (58 | ) | (13 | ) | ||||||||||||||||
Related to market value adjustments | - | - | - | - | - | |||||||||||||||||||
Divested businesses | (1 | ) | (1 | ) | (1 | ) | (2 | ) | (4 | ) | ||||||||||||||
Amortization of negative VOBA | ||||||||||||||||||||||||
Related to market value adjustments | 19 | 17 | 17 | 16 | 74 | |||||||||||||||||||
Divested businesses | 1 | 1 | 1 | 1 | 4 | |||||||||||||||||||
Interest expense on debt | ||||||||||||||||||||||||
Securitization entities debt expense | (97 | ) | (43 | ) | (43 | ) | (42 | ) | (324 | ) | ||||||||||||||
Divested businesses | (1 | ) | - | - | (3 | ) | (1 | ) | ||||||||||||||||
Other expenses | ||||||||||||||||||||||||
Noncontrolling interest | (7 | ) | 1 | 24 | 11 | (8 | ) | |||||||||||||||||
Regulatory implementation costs | (3 | ) | (9 | ) | (7 | ) | (14 | ) | (23 | ) | ||||||||||||||
Acquisition & integration costs | (85 | ) | (133 | ) | (75 | ) | (56 | ) | (412 | ) | ||||||||||||||
Divested businesses | (325 | ) | (357 | ) | (467 | ) | (340 | ) | (1,202 | ) | ||||||||||||||
Provision for income tax (expense) benefit | (1,349 | ) | 191 | 871 | (455 | ) | (914 | ) | ||||||||||||||||
Income (loss) from continuing operations, net of income tax | 3,442 | 963 | (134 | ) | 2,300 | 6,391 | ||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | 8 | 25 | 14 | 3 | 24 | |||||||||||||||||||
Net income (loss) | 3,450 | 988 | (120 | ) | 2,303 | 6,415 | ||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | (6 | ) | (2 | ) | 24 | 8 | (8 | ) | ||||||||||||||||
Net income (loss) attributable to MetLife, Inc. | 3,456 | 990 | (144 | ) | 2,295 | 6,423 | ||||||||||||||||||
Less: Preferred stock dividends | 30 | 31 | 30 | 31 | 122 | |||||||||||||||||||
Less: Preferred stock redemption premium | - | - | - | - | 146 | |||||||||||||||||||
Net income (loss) available to MetLife, Inc.’s common shareholders | $ | 3,426 | $ | 959 | $ | (174 | ) | $ | 2,264 | $ | 6,155 | |||||||||||||
(1) Certain amounts in the prior periods have been revised. In the third quarter of 2012, MetLife, Inc. began reporting additional MetLife Bank operations as Divested businesses. |
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