(METLIFE LOGO)
FOURTH QUARTER
FINANCIAL SUPPLEMENT
DECEMBER 31, 2003
(SNOOPY GRAPHIC)
(GRAPHIC OF THE NUMBER 4)
.
.
.
(METLIFE LOGO)
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TABLE OF CONTENTS
HIGHLIGHTS
Corporate Overview 2
METLIFE, INC.
Consolidated Balance Sheets 3
Consolidated Statements of Operating Earnings and Total Company Headcount 4
Consolidating Balance Sheet 5
Consolidating Statement of Operating Earnings 6
INSURANCE OPERATIONS
Consolidated Statements of Operating Earnings 10
Consolidating Statement of Operating Earnings 11
SUMMARY OF SEGMENT OPERATING EARNINGS 15
INSTITUTIONAL OPERATIONS
Statements of Operating Earnings 16
Premiums, Fees and Other Revenues by Product and Additional Statistical
Information 18
Future Policy Benefits and Policyholder Account Balances and
Separate Account Liabilities 19
Insurance Expense Ratios and Other Expenses by Major Category 20
Spreads by Product 21
INDIVIDUAL OPERATIONS
Statements of Operating Earnings 22
Premiums and Deposits by Product and Manufacturer and Mutual Fund Sales 25
Additional Statistical Information 26
Future Policy Benefits and Policyholder Account Balances and
Separate Account Liabilities 27
Insurance Expense Ratios and Other Expenses by Major Category 28
Spreads by Product 29
AUTO & HOME
Statements of Operating Earnings 30
Written Premiums by Product and Selected Financial Information and
Supplemental Data 32
INTERNATIONAL OPERATIONS
Statements of Operating Earnings 33
REINSURANCE OPERATIONS
Statements of Operating Earnings, Pre-Tax and Pre-Minority Interest
Operating Earnings by Region and Reserves by Region 34
ASSET MANAGEMENT
Statements of Operating Earnings, Change in Assets Under Management and
Composition of Assets Under Management 35
CORPORATE, OTHER & ELIMINATIONS
Statements of Operating Earnings 36
METLIFE, INC.
Investment Results by Asset Category and Annualized Yields 37
Fixed Maturities and Equity Securities Gross Unrealized Loss Aging Schedule 39
Summary of Fixed Maturities by Sector and by Quality Distribution, and
Summary of Commercial Mortgage Loans by Region and Property Type 40
Summary of Real Estate, Summary of Mortgages and Distribution of
Assets Under Management 41
OTHER INFORMATION
Company Ratings 42
Capital Allocation Based on Risk Based Capital vs. Economic Capital 2002
through 2000 43
NOTE:
THE QUARTERLY FINANCIAL SUPPLEMENT ("QFS") INCLUDES FINANCIAL MEASURES,
OPERATING EARNINGS AND OPERATING EARNINGS PER DILUTED SHARE, THAT ARE NOT BASED
ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). OPERATING EARNINGS IS
DEFINED AS GAAP NET INCOME EXCLUDING CERTAIN AFTER-TAX NET INVESTMENT GAINS AND
LOSSES, AND THE AFTER-TAX IMPACT FROM THE CUMULATIVE EFFECT OF ACCOUNTING
CHANGES. SETTLEMENT PAYMENTS ON DERIVATIVE INSTRUMENTS NOT QUALIFYING FOR HEDGE
ACCOUNTING TREATMENT ARE INCLUDED IN OPERATING EARNINGS. OPERATING EARNINGS PER
DILUTED SHARE IS CALCULATED BY DIVIDING OPERATING EARNINGS AS DEFINED ABOVE BY
THE NUMBER OF WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING FOR THE PERIOD
INDICATED. METLIFE USES OPERATING EARNINGS AND OPERATING EARNINGS PER DILUTED
SHARE IN ANALYZING ITS PERFORMANCE; IT BELIEVES THAT THESE MEASURES ENHANCE THE
UNDERSTANDING AND COMPARABILITY OF ITS PERFORMANCE BY EXCLUDING THE NET EFFECT
OF CERTAIN INVESTMENT GAINS AND LOSSES, WHICH CAN FLUCTUATE SIGNIFICANTLY FROM
PERIOD TO PERIOD, AND THE AFTER-TAX IMPACT OF THE CUMULATIVE EFFECT OF
ACCOUNTING CHANGES, THEREBY HIGHLIGHTING THE RESULTS FROM OPERATIONS AND THE
UNDERLYING PROFITABILITY DRIVERS OF THE BUSINESS. OPERATING EARNINGS AND
OPERATING EARNINGS PER DILUTED SHARE SHOULD NOT BE VIEWED AS SUBSTITUTES FOR
GAAP NET INCOME AND GAAP NET INCOME PER DILUTED SHARE, RESPECTIVELY.
RECONCILIATIONS OF OPERATING EARNINGS TO GAAP NET INCOME AND OPERATING EARNINGS
PER DILUTED SHARE TO GAAP NET INCOME PER DILUTED SHARE, THE MOST DIRECTLY
COMPARABLE GAAP MEASURES, ARE INCLUDED IN THE QFS AND IN METLIFE'S EARNINGS
PRESS RELEASE, DATED FEBRUARY 10, 2004, FOR THE QUARTER ENDED DECEMBER 31, 2003,
WHICH ARE AVAILABLE AT WWW.METLIFE.COM.
(METLIFE LOGO)
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CORPORATE OVERVIEW
Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended
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December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2003 2003 2003 2003 2002 2002 2002 2002
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Net income (1) $701 $574 $580 $362 $561 $328 $387 $329
Net investment gains
(losses) (2)(3) 139 (151) (54) (170) 310 (286) (266) (105)
Minority interest - net
investment gains (losses) (9) (2) (2) 4 2 (1) 4 1
Adjustments to net investment
gains (losses) (4) 138 39 0 38 43 16 73 13
Net investment gains (losses)
tax benefit (provision) (106) 72 16 44 (132) 102 72 15
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After-tax net investment gains
(losses) 162 (42) (40) (84) 223 (169) (117) (76)
After-tax cumulative effect of a
change in accounting (12) (26) 0 0 0 0 (5) 0 5
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Operating earnings $565 $616 (5) $620 (6) $446 $338 (7) $502 $504 (8) $400 (9)
===============================================================================================
Net income per share - diluted $0.92 $0.75 $0.79 $0.47 (10) $0.78 $0.45 $0.53 $0.44
After-tax net investment gains
(losses) 0.21 (0.06) (0.05) (0.12) 0.31 (0.23) (0.16) (0.10)
After-tax cumulative effect of a
change in accounting (0.03) 0.00 0.00 0.00 0.00 (0.01) 0.00 0.00
Impact of conversion of securities 0.00 0.00 0.00 (0.03) 0.00 0.00 0.00 0.00
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Operating earnings per share -
diluted $0.74 $0.81 $0.84 $0.62 $0.47 $0.69 $0.69 $0.54
===============================================================================================
Weighted average common shares
outstanding - diluted 761.3 760.9 731.3 722.4 720.9 722.7 733.9 739.5
Book value per common share
(actual shares outstanding) $27.93 $27.50 $27.13 $25.76 $24.83 $24.39 $23.00 $21.64
Book value per common share,
excluding other accumulated
comprehensive income (actual
shares outstanding) $24.24 $23.54 $22.78 $22.45 $21.96 $21.37 $20.91 $20.45
Book value per common share -
diluted $27.78 $27.47 $28.20 $24.97 $24.12 $23.63 $22.00 $20.72
Book value per common share,
excluding other accumulated
comprehensive income - diluted $24.11 $23.52 $23.68 $21.77 $21.33 $20.70 $20.00 $19.58
At or for the Three Months Ended
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December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2003 2003 2003 2003 2002 2002 2002 2002
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Shares outstanding, beginning
of period 760.2 760.2 700.4 700.3 700.3 701.9 707.8 715.5
Treasury stock (3.0) 0.0 59.8 0.1 0.0 (1.6) (5.9) (7.7)
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Shares outstanding, end of period 757.2 760.2 760.2 700.4 700.3 700.3 701.9 707.8
Weighted average common shares
outstanding - basic 759.0 760.1 731.3 700.3 700.3 701.5 704.7 712.1
Dilutive effect of convertible
securities 0.0 0.0 0.0 22.1 20.6 21.2 28.3 27.1
Dilutive effect of stock options 1.6 0.0 0.0 0.0 0.0 0.0 0.9 0.3
Dilutive effect of deferred stock
compensation 0.7 0.8 0.0 0.0 0.0 0.0 0.0 0.0
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Weighted average common shares
outstanding - diluted 761.3 760.9 731.3 722.4 720.9 722.7 733.9 739.5
===============================================================================================
Policyholder Trust Shares 362.5 372.7 382.4 386.4 390.0 400.6 403.2 409.4
SUPPLEMENTAL DATA
Adjusted long-term debt to total
capital excluding other
accumulated comprehensive
income (11) 21.3% 21.4% 22.0% 23.7% 19.2% 15.4% 15.4% 15.5%
(1) Presentation of net income throughout the QFS differs from other public
filings with respect to discontinued operations and settlement payments on
derivatives not qualifying for hedge accounting treatment. Presentation of
discontinued operations in other public filings is in accordance with the
Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets. Presentation of
settlement payments on derivatives not qualifying for hedge accounting
treatment is in accordance with SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133").
(2) After-tax net investment gains and losses excludes settlement payments on
derivative instruments not qualifying for hedge accounting treatment of
$17 million, $23 million, $8 million, $5 million, $7 million, $12 million,
$1 million and $1 million for the three months ended December 31, 2003,
September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002,
September 30, 2002, June 30, 2002 and March 31,2002, respectively.
(3) After-tax net investment gains and losses from real estate and real estate
joint ventures include discontinued operations of $205 million, $5
million, $1 million, $36 million, $375 million, $(1) million, $(5) million
and $0 million for the three months ended December 31, 2003, September 30,
2003, June 30, 2003, March 31, 2003, December 31, 2002, September 30,
2002, June 30, 2002 and March 31, 2002, respectively.
(4) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(5) Operating earnings for the three months ended September 30, 2003 includes
a $28 million after-tax benefit ($0.04 per diluted share) from a reduction
of a previously established liability related to the Company's race
conscious underwriting settlement and a $36 million benefit ($0.05 per
diluted share) from a revision of the estimate of income taxes for 2002.
(6) Operating earnings for the three months ended June 30, 2003 includes a $64
million after-tax benefit ($0.09 per diluted share) from a reduction of a
previously established liability related to the Company's race conscious
underwriting settlement, $62 million of after-tax earnings ($0.08 per
diluted share) from the merger of the Company's Mexican operations and a
reduction in policyholder liabilities resulting from a change in reserve
methodology, and a $31 million after-tax charge ($0.05 per diluted share)
related to previously deferred expenses.
(7) Operating earnings for the three months ended December 31, 2002 includes a
$169 million after-tax ($0.23 per diluted share) charge to cover costs
associated with personal injury liabilities caused by exposure to asbestos
or asbestos-containing products, a $20 million after-tax ($0.03 per
diluted share) reduction of a previously established liability related to
the Company's business realignment initiatives, and a $17 million
after-tax ($0.02 per diluted share) reduction of a previously established
disability insurance liability related to the September 11, 2001
tragedies.
(8) Operating earnings for the three months ended June 30, 2002 includes a $30
million after-tax ($0.04 per diluted share) reduction of a previously
established liability related to the Company's sales practices class
action settlement in 1999.
(9) Operating earnings for the three months ended March 31, 2002 includes a
$48 million after-tax ($0.07 per diluted share) charge to cover costs
associated with the resolution of a federal government investigation of
General American Life Insurance Company's former Medicare business.
(10) Accounting standards require gains or losses resulting from the redemption
of a subsidiary's redeemable preferred stock be excluded from the income
statement. Rather, such gains or losses are recorded in capital in excess
of par value on the balance sheet. However, such gains or losses are
included in the calculation of net income per share. During the first
quarter of 2003, net income per share includes a $21 million after-tax
($0.03 per diluted share) charge associated with the Company's redemption
of MetLife Capital Trust I's mandatorily redeemable capital securities.
(11) Adjusted long-term debt at December 31, 2003, September 30, 2003, June 30,
2003, March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002
and March 31, 2002, consists of $4,909 million, $4,912 million, $4,917
million, $4,919 million, $3,899 million, $2,911 million, $2,903 million
and $2,898 million, of long-term debt, respectively, and $142 million, $36
million, $35 million, $49 million, $47 million, $52 million, $0 million
and $0 million of short-term debt, respectively. Total capital is defined
as equity less accumulated other comprehensive income plus adjusted
long-term and company obligated mandatorily redeemable capital securities.
(12) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
2
(METLIFE LOGO)
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METLIFE, INC.
CONSOLIDATED BALANCE SHEETS
As of
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December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
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ASSETS (1)
INVESTMENTS
- -----------
Fixed maturities available-for-sale,
at fair value $167,752 $159,940 $158,822 $144,341 $140,288 $132,906 $123,796 $118,236
Equity securities, at fair value 1,598 1,659 1,617 1,474 1,613 2,212 1,932 1,735
Mortgage loans on real estate 26,249 25,535 25,289 25,046 25,086 23,885 23,733 23,684
Real estate and real estate
joint ventures 4,803 5,364 4,585 4,569 4,725 5,663 5,963 5,862
Policy loans 8,749 8,668 8,627 8,615 8,580 8,366 8,316 8,310
Other limited partnership interests 2,477 2,450 2,406 2,299 2,395 1,747 1,785 1,817
Short-term investments 1,826 2,718 2,640 3,188 1,921 2,658 2,233 2,410
Other invested assets 4,645 4,617 4,261 3,948 3,727 3,214 3,271 3,512
---------------------------------------------------------------------------------------------
218,099 210,951 208,247 193,480 188,335 180,651 171,029 165,566
Cash and cash equivalents 3,733 5,372 5,714 4,938 2,323 3,647 3,563 4,024
Accrued investment income 2,186 2,265 2,241 2,179 2,088 2,224 2,215 2,186
Premiums and other receivables 7,047 7,107 7,486 6,768 6,445 7,373 7,318 7,257
Deferred policy acquisition costs 12,943 12,367 11,899 11,889 11,727 11,553 11,774 11,436
Goodwill and other intangible assets 643 654 652 745 753 792 807 648
Other 6,434 6,269 6,123 6,303 6,062 5,758 5,294 5,105
Separate account assets 75,756 69,998 67,460 60,620 59,693 56,049 59,283 62,538
---------------------------------------------------------------------------------------------
$326,841 $314,983 $309,822 $286,922 $277,426 $268,047 $261,283 $258,760
=============================================================================================
LIABILITIES AND EQUITY (1)
LIABILITIES
- -----------
Future policy benefits $96,278 $95,095 $95,360 $92,744 $91,697 $89,734 $88,200 $86,020
Policyholder account balances 75,901 74,857 72,207 69,060 66,830 65,011 63,005 60,236
Short-term debt 3,642 2,935 3,443 2,441 1,161 878 52 546
Long-term debt 5,703 5,703 5,562 5,481 4,425 3,428 3,436 3,434
Shares subject to mandatory
redemption 277 277 0 0 0 0 0 0
Payables under securities loaned
transactions 27,083 24,666 23,028 19,566 17,862 16,251 13,486 13,665
Other 21,052 20,547 21,862 18,694 17,108 18,356 16,417 15,743
Separate account liabilities 75,756 69,998 67,460 60,620 59,693 56,049 59,283 62,538
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305,692 294,078 288,922 268,606 258,776 249,707 243,879 242,182
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Company-obligated mandatorily
redeemable capital securities 0 0 277 277 1,265 1,263 1,260 1,258
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EQUITY
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Common stock, at par value 8 8 8 8 8 8 8 8
Capital in excess of par value 14,991 14,960 14,956 14,952 14,968 14,967 14,967 14,966
Retained earnings 4,193 3,667 3,093 3,169 2,807 2,393 2,065 1,678
Treasury stock (835) (739) (740) (2,402) (2,405) (2,405) (2,365) (2,174)
Accumulated other comprehensive income 2,792 3,009 3,306 2,312 2,007 2,114 1,469 842
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21,149 20,905 20,623 18,039 17,385 17,077 16,144 15,320
---------------------------------------------------------------------------------------------
$326,841 $314,983 $309,822 $286,922 $277,426 $268,047 $261,283 $258,760
=============================================================================================
(1) Certain amounts in prior periods presented throughout the quarterly
financial supplement have been reclassified to conform with current period
presentation.
3
(METLIFE LOGO)
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METLIFE, INC.
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
AND TOTAL COMPANY HEADCOUNT
For the Three Months Ended
---------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
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REVENUES (1)
Premiums $5,679 $5,079 $5,083 $4,832 $5,222 $4,672 $4,697 $4,486
Universal life and investment-type
product policy fees 698 623 603 572 586 591 518 452
Investment income, net 3,070 2,914 2,889 2,899 2,964 2,839 2,861 2,789
Other revenues 354 335 355 298 302 320 343 367
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9,801 8,951 8,930 8,601 9,074 8,422 8,419 8,094
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EXPENSES (1)
Policyholder benefits and dividends 6,244 5,651 5,472 5,456 5,737 5,243 5,370 5,115
Interest credited to policyholder
account balances 760 767 761 747 773 736 727 714
Interest expense 109 104 112 116 98 95 93 94
Other expenses 1,897 1,585 1,732 1,637 1,987 1,611 1,483 1,560
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9,010 8,107 8,077 7,956 8,595 7,685 7,673 7,483
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Operating earnings before provision
for income taxes 791 844 853 645 479 737 746 611
Provision for income taxes 226 228 233 199 141 235 242 211
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OPERATING EARNINGS $565 $616(2) $620(3) $446 $338(4) $502 $504(5) $400(6)
=============================================================================================
NET INCOME RECONCILIATION
- -------------------------------
Operating earnings $565 $616 $620 $446 $338 $502 $504 $400
Net investment gains (losses) 139 (151) (54) (170) 310 (286) (266) (105)
Minority interest - net investment
gains (losses) (9) (2) (2) 4 2 (1) 4 1
Adjustments to net investment
gains (losses) (7) 138 39 0 38 43 16 73 13
Net investment gains (losses) tax
benefit (provision) (106) 72 16 44 (132) 102 72 15
---------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) 162 (42) (40) (84) 223 (169) (117) (76)
After-tax cumulative effect of a
change in accounting (9) (26) 0 0 0 0 (5) 0 5
---------------------------------------------------------------------------------------------
Net income $701 $574 $580 $362 $561 $328 $387 $329
=============================================================================================
As of
---------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2003 2003 2003 2003 2002 2002 2002 2002
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TOTAL COMPANY HEADCOUNT (1)
DOMESTIC
SALES
Individual (8) 11,191 11,585 11,949 12,030 12,580 12,678 12,784 12,570
Institutional 795 802 809 735 720 731 687 672
Auto & Home (8) 79 77 78 83 76 61 57 62
Asset Management 69 68 69 72 68 72 95 99
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Total domestic sales 12,134 12,532 12,905 12,920 13,444 13,542 13,623 13,403
OTHER THAN SALES
Individual 2,696 2,775 2,798 2,842 2,873 2,912 2,952 2,929
Institutional 5,624 5,528 5,613 5,616 5,476 5,486 5,509 5,554
Auto & Home 3,456 3,505 3,497 3,526 3,536 3,491 3,510 3,570
Reinsurance 656 642 637 630 622 621 606 599
Asset Management 504 501 503 516 521 570 630 648
Operations 3,883 3,880 3,842 3,885 3,816 3,827 3,932 4,040
Technology 3,448 3,434 3,459 3,506 3,677 3,721 3,704 3,728
Corporate 3,381 3,393 3,350 3,390 3,440 3,509 3,531 3,545
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Total domestic other than sales 23,648 23,658 23,699 23,911 23,961 24,137 24,374 24,613
---------------------------------------------------------------------------------------------
TOTAL DOMESTIC HEADCOUNT 35,782 36,190 36,604 36,831 37,405 37,679 37,997 38,016
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INTERNATIONAL
SALES
Professional sales 1,602 1,240 1,240 1,146 1,146 732 732 732
Other 8,808 8,048 7,932 7,894 8,337 8,153 8,289 5,628
Other than sales 2,837 2,821 2,789 2,761 2,904 2,903 3,069 2,250
---------------------------------------------------------------------------------------------
TOTAL INTERNATIONAL HEADCOUNT 13,247 12,109 11,961 11,801 12,387 11,788 12,090 8,610
---------------------------------------------------------------------------------------------
TOTAL COMPANY HEADCOUNT 49,029 48,299 48,565 48,632 49,792 49,467 50,087 46,626
=============================================================================================
(1) Certain amounts in prior periods presented throughout the quarterly
financial supplement have been reclassified to conform with current period
presentation.
(2) Operating earnings for the three months ended September 30, 2003 includes
a $28 million after-tax benefit from a reduction of a previously
established liability related to the Company's race conscious underwriting
settlement and a $36 million benefit from a change of the estimate of
income taxes for 2002.
(3) Operating earnings for the three months ended June 30, 2003 includes a $64
million after-tax benefit from a reduction of a previously established
liability related to the Company's race conscious underwriting settlement,
$62 million of after-tax earnings from the merger of the Company's Mexican
operations and a reduction in policyholder liabilities resulting from a
change in reserve methodology, and a $31 million after-tax charge related
to previously deferred expenses.
(4) Operating earnings for the three months ended December 31, 2002 includes a
$169 million after-tax charge to cover costs associated with personal
injury liabilities caused by exposure to asbestos or asbestos-containing
products, a $20 million after-tax reduction of a previously established
liability related to the Company's business realignment initiatives, and a
$17 million after-tax reduction of a previously established disability
insurance liability related to the September 11, 2001 tragedies.
(5) Operating earnings for the three months ended June 30, 2002 includes a $30
million after-tax reduction of a previously established liability related
to the Company's sales practices class action settlement in 1999.
(6) Operating earnings for the three months ended March 31, 2002 includes a
$48 million after-tax charge to cover costs associated with the resolution
of a federal government investigation of General American Life Insurance
Company's former Medicare business.
(7) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(8) P&C Specialists have been moved from the Auto & Home sales headcount to
the Individual Business headcount. Prior periods have been restated to
conform with this change in presentation.
(9) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
4
(METLIFE LOGO)
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METLIFE, INC.
CONSOLIDATING BALANCE SHEET
AT DECEMBER 31, 2003
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
Total investments $218,099 $192,018 $8,978 $165 $16,938
Deferred policy acquisition costs 12,943 10,782 2,160 0 1
Goodwill and other intangible assets 643 522 99 18 4
Other 19,400 15,073 1,583 119 2,625
Separate account assets 75,756 75,755 13 0 (12)
-------------------------------------------------------------------------
$326,841 $294,150 $12,833 $302 $19,556
=========================================================================
LIABILITIES AND EQUITY
LIABILITIES
- -----------
Future policy benefits $96,278 $93,765 $3,974 $0 ($1,461)
Policyholder account balances 75,901 72,166 4,289 0 (554)
Debt 9,345 2,322 398 0 6,625
Shares subject to mandatory redemption 277 0 158 0 119
Payables under securities loaned transactions 27,083 21,304 0 0 5,779
Other 21,052 12,458 3,245 71 5,278
Separate account liabilities 75,756 75,755 13 0 (12)
-------------------------------------------------------------------------
305,692 277,770 12,077 71 15,774
EQUITY
- ------
Common stock, at par value 8 0 0 0 8
Allocated equity (1) 19,184 14,017 615 226 4,326
Treasury stock (835) 0 0 0 (835)
Accumulated other comprehensive income 2,792 2,363 141 5 283
-------------------------------------------------------------------------
21,149 16,380 756 231 3,782
-------------------------------------------------------------------------
$326,841 $294,150 $12,833 $302 $19,556
=========================================================================
(1) Allocated equity includes additional paid-in capital and retained
earnings.
5
(METLIFE LOGO)
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METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2003
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,679 $4,735 $949 $0 ($5)
Universal life and investment-type product policy fees 698 698 0 0 0
Investment income, net 3,070 2,856 120 17 77
Other revenues 354 305 14 41 (6)
-----------------------------------------------------------------------
9,801 8,594 1,083 58 66
-----------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 6,244 5,456 788 0 0
Interest credited to policyholder account balances 760 711 49 0 0
Other expenses 2,006 1,631 215 48 112
-----------------------------------------------------------------------
9,010 7,798 1,052 48 112
-----------------------------------------------------------------------
Operating earnings (loss) before provision (benefit)
for income taxes 791 796 31 10 (46)
Provision (benefit) for income taxes 226 259 11 4 (48)
-----------------------------------------------------------------------
OPERATING EARNINGS $565 $537 $20 $6 $2
=======================================================================
NET INCOME RECONCILIATION
- --------------------------------------
Operating earnings $565 $537 $20 $6 $2
Net investment gains (losses) 139 (305) 25 (1) 420
Minority interest - net investment gains (losses) (9) 0 (9) 0 0
Adjustments to net investment gains (losses) (1) 138 186 0 0 (48)
Net investment gains (losses) tax benefit (provision) (106) 39 (5) 0 (140)
-----------------------------------------------------------------------
After-tax net investment gains (losses) 162 (80) 11 (1) 232
After-tax cumulative effect of a change in accounting (2) (26) (26) 0 0 0
-----------------------------------------------------------------------
Net income $701 $431 $31 $5 $234
=======================================================================
(1) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(2) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
6
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,222 $4,629 $597 $0 ($4)
Universal life and investment-type product policy fees 586 586 0 0 0
Investment income, net 2,964 2,803 125 13 23
Other revenues 302 225 8 39 30
-----------------------------------------------------------------------
9,074 8,243 730 52 49
-----------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,737 5,287 448 0 2
Interest credited to policyholder account balances 773 724 49 0 0
Other expenses 2,085 1,442 213 49 381
-----------------------------------------------------------------------
8,595 7,453 710 49 383
-----------------------------------------------------------------------
Operating earnings (loss) before provision (benefit)
for income taxes 479 790 20 3 (334)
Provision (benefit) for income taxes 141 268 5 2 (134)
-----------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $338(1) $522(2) $15 $1 ($200)(3)
=======================================================================
NET INCOME (LOSS) RECONCILIATION
- --------------------------------------
Operating earnings (loss) $338 $522 $15 $1 ($200)
Net investment gains (losses) 310 209 (8) 1 108
Minority interest - net investment gains (losses) 2 0 2 0 0
Adjustments to net investment gains (losses) (4) 43 39 4 0 0
Net investment gains (losses) tax benefit (provision) (132) (98) 1 0 (35)
-----------------------------------------------------------------------
After-tax net investment gains (losses) 223 150 (1) 1 73
-----------------------------------------------------------------------
Net income (loss) $561 $672 $14 $2 ($127)
=======================================================================
(1) Consolidated operating earnings for the three months ended December 31,
2002 includes a $169 million after-tax charge to cover costs associated
with personal injury liabilities caused by exposure to asbestos or
asbestos-containing products, a $20 million after-tax reduction of a
previously established liability related to the Company's business
realignment initiatives, and a $17 million after-tax reduction of a
previously established disability insurance liability related to the
September 11, 2001 tragedies.
(2) Insurance Operations operating earnings for three months ended December
31, 2002 includes a $20 million after-tax reduction of previously
established liability related to the Company's business realignment
initiatives, and a $17 million after-tax reduction of a previously
established disability insurance liability related to the September 11,
2001 tragedies.
(3) Corporate, Other & Eliminations operating earnings for the three months
ended December 31, 2002 includes a $169 million after-tax charge to cover
costs associated with personal injury liabilities caused by exposure to
asbestos or asbestos-containing products.
(4) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
7
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2003
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $20,673 $18,023 $2,668 $0 ($18)
Universal life and investment-type product policy fees 2,496 2,496 0 0 0
Investment income, net 11,772 10,981 473 66 252
Other revenues 1,342 1,111 49 143 39
-----------------------------------------------------------------------
36,283 32,611 3,190 209 273
-----------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 22,823 20,662 2,157 0 4
Interest credited to policyholder account balances 3,035 2,851 184 0 0
Other expenses 7,292 6,079 731 182 300
-----------------------------------------------------------------------
33,150 29,592 3,072 182 304
-----------------------------------------------------------------------
Operating earnings (loss) before provision (benefit)
for income taxes 3,133 3,019 118 27 (31)
Provision (benefit) for income taxes 886 976 41 11 (142)
-----------------------------------------------------------------------
OPERATING EARNINGS $2,247(1) $2,043(2) $77 $16 $111(3)
=======================================================================
OPERATING RETURN ON EQUITY ("ROE") (5) 13.3% 14.6% 12.5% 12.3%
OPERATING ROE EXCLUDING FOOTNOTE ITEMS BELOW 12.4%(1) 14.8%(2) 12.5% 12.3%
NET INCOME RECONCILIATION
- --------------------------------------
Operating earnings $2,247 $2,043 $77 $16 $111
Net investment gains (losses) (236) (595) 31 9 319
Minority interest - net investment gains (losses) (9) 0 (9) 0 0
Adjustments to net investment gains (losses) (4) 215 263 0 0 (48)
Net investment gains (losses) tax benefit (provision) 26 130 (7) (3) (94)
-----------------------------------------------------------------------
After-tax net investment gains (losses) (4) (202) 15 6 177
After-tax cumulative effect of a change in accounting(6) (26) (26) 0 0 0
-----------------------------------------------------------------------
Net income $2,217 $1,815 $92 $22 $288
=======================================================================
(1) Consolidated operating earnings for the year ended December 31, 2003
includes a $92 million after-tax benefit from a reduction of a previously
established liability related to the Company's race conscious underwriting
settlement, $62 million of after-tax earnings from the merger of the
Company's Mexican operations and a reduction in policyholder liabilities
resulting from a change in reserve methodology, a $31 million after-tax
charge related to previously deferred expenses, and a $36 million benefit
from a revision of the estimate of income taxes for 2002.
(2) Insurance Operations operating earnings for the year ended December 31,
2003 includes $62 million of after-tax earnings from the merger of the
Company's Mexican operations and a reduction in policyholder liabilities
resulting from a change in reserve methodology, and a $31 million
after-tax charge related to previously deferred expenses.
(3) Corporate, Other & Eliminations operating earnings for the year ended
December 31, 2003 includes a $92 million after-tax benefit from a
reduction of a previously established liability to the Company's race
conscious underwriting settlement, and a $36 million benefit from a
revision of the estimate of income taxes for 2002.
(4) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(5) Consolidated operating return on equity is defined as operating earnings
divided by average GAAP equity excluding accumulated other comprehensive
income. Segment operating return on equity is defined as segment operating
earnings divided by allocated equity.
(6) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
8
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2002
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $19,077 $17,091 $2,005 $0 ($19)
Universal life and investment-type product policy fees 2,147 2,147 0 0 0
Investment income, net 11,453 10,915 421 59 58
Other revenues 1,332 1,067 43 166 56
-----------------------------------------------------------------------
34,009 31,220 2,469 225 95
-----------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 21,465 19,886 1,576 0 3
Interest credited to policyholder account balances 2,950 2,804 146 0 0
Other expenses 7,021 5,460 628 211 722
-----------------------------------------------------------------------
31,436 28,150 2,350 211 725
-----------------------------------------------------------------------
Operating earnings (loss) before provision (benefit)
for income taxes 2,573 3,070 119 14 (630)
Provision (benefit) for income taxes 829 1,063 40 6 (280)
-----------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $1,744(1) $2,007(2) $79 $8 ($350)(3)
=======================================================================
OPERATING RETURN ON EQUITY ("ROE") (4) 11.7% 14.3% 9.5% 6.2%
OPERATING ROE EXCLUDING FOOTNOTE ITEMS BELOW 12.7%(1) 14.1%(2) 9.5% 6.2%
NET INCOME (LOSS) RECONCILIATION
- --------------------------------------
Operating earnings (loss) $1,744 $2,007 $79 $8 ($350)
Net investment gains (losses) (347) (446) (2) (4) 105
Minority interest - net investment gains (losses) 6 0 6 0 0
Adjustments to net investment gains (losses) (5) 145 141 4 0 0
Net investment gains (losses) tax benefit (provision) 57 99 (3) 2 (41)
-----------------------------------------------------------------------
After-tax net investment gains (losses) (139) (206) 5 (2) 64
-----------------------------------------------------------------------
Net income (loss) $1,605 $1,801 $84 $6 ($286)
=======================================================================
(1) Consolidated operating earnings for the year ended December 31, 2002
includes a $169 million after-tax charge to cover costs associated with
personal injury liabilities caused by exposure to asbestos or
asbestos-containing products, a $20 million reduction of a previously
established liability related to the Company's business realignment
initiatives, a $17 million reduction of a previously established
disability insurance liability related to the September 11, 2001
tragedies, a $30 million after-tax reduction of a previously established
liability related to the Company's sales practices class action settlement
in 1999, as well as a $48 million after-tax charge to cover costs
associated with the resolution of a federal government investigation of
General American Life Insurance Company's former Medicare business.
(2) Insurance Operations operating earnings for the year ended December 31,
2002 includes a $20 million after-tax reduction of a previously
established disability insurance liability related to the Company's
business realignment initiatives, and a $17 million reduction of a
previously established disability insurance liability related to the
September 11, 2001 tragedies.
(3) Corporate, Other, & Eliminations operating earnings for the year ended
December 31, 2002 includes a $169 million after-tax charge to cover costs
associated with personal injury liabilities caused by exposure to asbestos
or asbestos-containing products, a $30 million after-tax reduction of a
previously established liability related to the Company's sales practices
class action settlement in 1999, as well as a $48 million after-tax charge
to cover costs associated with the resolution of a federal government
investigation of General American Life Insurance Company's former medicare
business.
(4) Consolidated operating return on equity is defined as operating earnings
divided by average GAAP equity excluding accumulated other comprehensive
income. Segment operating return on equity is defined as segment operating
earnings divided by allocated equity.
(5) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
9
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,735 $4,504 $4,500 $4,284 $4,629 $4,218 $4,229 $4,015
Universal life and investment-type
product policy fees 698 623 603 572 586 591 517 453
Investment income, net 2,856 2,711 2,710 2,704 2,803 2,752 2,724 2,636
Other revenues 305 270 291 245 225 262 270 310
--------------------------------------------------------------------------------------------
8,594 8,108 8,104 7,805 8,243 7,823 7,740 7,414
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,456 5,179 5,006 5,021 5,287 4,900 4,983 4,716
Interest credited to policyholder
account balances 711 720 716 704 724 705 696 679
Capitalization of deferred policy
acquisition costs (531) (517) (502) (476) (480) (473) (434) (417)
Amortization of deferred policy
acquisition costs 349 339 415 344 379 393 308 284
Other expenses 1,813 1,605 1,684 1,556 1,543 1,462 1,442 1,453
--------------------------------------------------------------------------------------------
7,798 7,326 7,319 7,149 7,453 6,987 6,995 6,715
--------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 796 782 785 656 790 836 745 699
Provision for income taxes 259 268 230 219 268 288 261 246
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $537 $514 $555(1) $437 $522(2) $548 $484 $453
============================================================================================
NET INCOME RECONCILIATION
- ------------------------------------
Operating earnings $537 $514 $555 $437 $522 $548 $484 $453
Net investment gains (losses) (305) (126) (23) (141) 209 (246) (281) (128)
Adjustments to net investment
gains (losses) (3) 186 39 0 38 39 16 73 13
Net investment gains (losses) tax
benefit (provision) 39 49 5 37 (98) 85 85 27
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) (80) (38) (18) (66) 150 (145) (123) (88)
After-tax cumulative effect of a
change in accounting (4) (26) 0 0 0 0 (5) 0 5
--------------------------------------------------------------------------------------------
Net income $431 $476 $537 $371 $672 $398 $361 $370
============================================================================================
(1) Operating earnings for the three months ended June 30, 2003 includes $62
million of after-tax earnings from the merger of the Company's Mexican
operations and a reduction in policyholder liabilities resulting from a
change in reserve methodology, and a $31 million after-tax charge related
to previously deferred expenses.
(2) Operating earnings for the three months ended December 31, 2002 includes a
$20 million after-tax reduction of a previously established liability
related to the Company's business realignment initiatives, and a $17
million after-tax reduction of a previously established disability
insurance liability related to the September 11, 2001 tragedies.
(3) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(4) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31,
2002, the after-tax cumulative effect of an accounting change is in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets.
10
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2003
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,735 $2,363 $1,184 $740 $448
Universal life and investment-type
product policy fees 698 153 465 0 80
Investment income, net 2,856 1,103 1,585 39 129
Other revenues 305 154 116 9 26
------------------------------------------------------------------------
8,594 3,773 3,350 788 683
------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,456 2,629 1,863 536 428
Interest credited to policyholder account balances 711 229 446 0 36
Capitalization of deferred policy acquisition costs (531) (55) (279) (107) (90)
Amortization of deferred policy acquisition costs 349 (6) 174 108 73
Other expenses 1,813 546 880 183 204
------------------------------------------------------------------------
7,798 3,343 3,084 720 651
------------------------------------------------------------------------
Operating earnings before provision (benefit)
for income taxes 796 430 266 68 32
Provision (benefit) for income taxes 259 153 93 15 (2)
------------------------------------------------------------------------
OPERATING EARNINGS $537 $277 $173 $53 $34
========================================================================
NET INCOME RECONCILIATION
- ----------------------------------
Operating earnings $537 $277 $173 $53 $34
Net investment losses (305) (164) (130) (11) 0
Adjustments to net investment gains (losses) (1) 186 89 100 0 (3)
Net investment losses tax benefit 39 16 19 4 0
------------------------------------------------------------------------
After-tax net investment losses (80) (59) (11) (7) (3)
After-tax cumulative effect of a change
in accounting (2) (26) (26) 0 0 0
------------------------------------------------------------------------
Net income $431 $192 $162 $46 $31
========================================================================
(1) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(2) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31,
2002, the after-tax cumulative effect of an accounting change is in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets.
11
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,629 $2,176 $1,249 $723 $481
Universal life and investment-type product policy fees 586 153 367 0 66
Investment income, net 2,803 1,005 1,598 42 158
Other revenues 225 127 93 (1) 6
------------------------------------------------------------------------
8,243 3,461 3,307 764 711
------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,287 2,428 1,894 510 455
Interest credited to policyholder account balances 724 236 461 0 27
Capitalization of deferred policy acquisition costs (480) (41) (273) (115) (51)
Amortization of deferred policy acquisition costs 379 24 183 117 55
Other expenses 1,543 406 769 185 183
------------------------------------------------------------------------
7,453 3,053 3,034 697 669
------------------------------------------------------------------------
Operating earnings before provision for income taxes 790 408 273 67 42
Provision for income taxes 268 146 99 19 4
------------------------------------------------------------------------
OPERATING EARNINGS $522 (1) $262 (1) $174 $48 $38
========================================================================
NET INCOME RECONCILIATION
- ----------------------------------
Operating earnings $522 $262 $174 $48 $38
Net investment gains (losses) 209 48 168 (6) (1)
Adjustments to net investment gains (losses) (2) 39 (4) 43 0 0
Net investment gains (losses) tax benefit (provision) (98) (19) (85) 2 4
------------------------------------------------------------------------
After-tax net investment gains (losses) 150 25 126 (4) 3
------------------------------------------------------------------------
Net income $672 $287 $300 $44 $41
========================================================================
(1) Insurance Operations and Institutional Operations operating earnings for
the three months ended December 31, 2002 includes a $20 million after-tax
reduction of previously established liability related to the Company's
business realignment initiatives, and a $17 million after-tax reduction of
a previously established disability insurance liability related to the
September 11, 2001 tragedies.
(2) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
12
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2003
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $18,023 $9,093 $4,344 $2,908 $1,678
Universal life and investment-type product policy fees 2,496 635 1,589 0 272
Investment income, net 10,981 4,094 6,227 158 502
Other revenues 1,111 592 407 32 80
-------------------------------------------------------------------------
32,611 14,414 12,567 3,098 2,532
-------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 20,662 10,130 6,883 2,140 1,509
Interest credited to policyholder account balances 2,851 915 1,793 0 143
Capitalization of deferred policy acquisition costs (2,026) (199) (1,099) (441) (287)
Amortization of deferred policy acquisition costs 1,447 68 718 436 225
Other expenses 6,658 1,915 3,261 761 721
-------------------------------------------------------------------------
29,592 12,829 11,556 2,896 2,311
-------------------------------------------------------------------------
Operating earnings before provision for income taxes 3,019 1,585 1,011 202 221
Provision for income taxes 976 565 356 35 20
-------------------------------------------------------------------------
OPERATING EARNINGS $2,043 (1) $1,020 $655 (2) $167 $201 (3)
=========================================================================
OPERATING RETURN ON EQUITY ("ROE") (4) 14.6% 20.1% 9.9% 15.6% 16.0%
OPERATING ROE EXCLUDING FOOTNOTE ITEMS BELOW 14.8%(1) 20.1% 10.4%(2) 15.6% 11.0%(3)
NET INCOME RECONCILIATION
- ----------------------------------
Operating earnings $2,043 $1,020 $655 $167 $201
Net investment gains (losses) (595) (302) (285) (15) 7
Adjustments to net investment gains (losses) (5) 263 89 177 0 (3)
Net investment gains (losses) tax provision 130 68 54 5 3
-------------------------------------------------------------------------
After-tax net investment gains (losses) (202) (145) (54) (10) 7
After-tax cumulative effect of a change in accounting (6) (26) (26) 0 0 0
-------------------------------------------------------------------------
Net income $1,815 $849 $601 $157 $208
=========================================================================
(1) Insurance Operations operating earnings for the year ended December 31,
2003 includes $62 million of after-tax earnings from the merger of the
Company's Mexican operations and a reduction in policyholder liabilities
resulting from a change in reserve methodology, and a $31 million
after-tax charge related to previously deferred expenses.
(2) Individual Operations operating earnings for the year ended December 31,
2003 includes a $31 million after-tax charge related to previously
deferred expenses.
(3) International Operations operating earnings for the year ended December
31, 2003 includes $62 million of after-tax earnings from the merger of the
Company's Mexican operations and a reduction in policyholder liabilities
resulting from a change in reserve methodology.
(4) Segment operating return on equity is defined as segment operating
earnings divided by allocated equity.
(5) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(6) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
13
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2002
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $17,091 $8,245 $4,507 $2,828 $1,511
Universal life and investment-type product policy fees 2,147 624 1,379 0 144
Investment income, net 10,915 3,963 6,314 177 461
Other revenues 1,067 609 418 26 14
-----------------------------------------------------------------------
31,220 13,441 12,618 3,031 2,130
-----------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 19,886 9,454 6,990 2,019 1,423
Interest credited to policyholder account balances 2,804 932 1,793 0 79
Capitalization of deferred policy acquisition costs (1,804) (149) (1,037) (427) (191)
Amortization of deferred policy acquisition costs 1,364 61 744 431 128
Other expenses 5,900 1,619 2,922 789 570
-----------------------------------------------------------------------
28,150 11,917 11,412 2,812 2,009
-----------------------------------------------------------------------
Operating earnings before provision for income taxes 3,070 1,524 1,206 219 121
Provision for income taxes 1,063 543 436 57 27
-----------------------------------------------------------------------
OPERATING EARNINGS $2,007 (1) $981 (1) $770 $162 $94
=======================================================================
OPERATING RETURN ON EQUITY ("ROE") (3) 14.3% 23.0% 10.3% 12.9% 6.4%
OPERATING ROE EXCLUDING FOOTNOTE ITEMS BELOW 14.1%(1) 22.2%(1) 10.3% 12.9% 6.4%
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $2,007 $981 $770 $162 $94
Net investment losses (446) (342) (49) (46) (9)
Adjustments to net investment gains (losses) (2) 141 (6) 147 0 0
Net investment losses tax benefit (provision) 99 126 (42) 16 (1)
-----------------------------------------------------------------------
After-tax net investment gains (losses) (206) (222) 56 (30) (10)
-----------------------------------------------------------------------
Net income $1,801 $759 $826 $132 $84
=======================================================================
(1) Insurance Operations and Institutional Operations operating earnings for
the three months ended December 31, 2002 includes a $20 million after-tax
reduction of a previously established liability related to the Company's
business realignment initiatives, and a $17 million after-tax reduction of
a previously established disability insurance liability related to the
September 11, 2001 tragedies.
(2) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(3) Segment operating return on equity is defined as segment operating
earnings divided by allocated equity.
14
(METLIFE LOGO)
- --------------------------------------------------------------------------------
SUMMARY OF SEGMENT OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS $277 $264 $260 $219 $262 $234 $250 $235
INDIVIDUAL OPERATIONS 173 171 151 160 174 226 196 174
AUTO & HOME 53 42 42 30 48 48 36 30
INTERNATIONAL OPERATIONS 34 37 102 28 38 40 2 14
REINSURANCE OPERATIONS 20 18 19 20 15 23 19 22
ASSET MANAGEMENT 6 4 5 1 1 1 5 1
CORPORATE, OTHER &
ELIMINATIONS 2 80 41 (12) (200) (70) (4) (76)
------------------------------------------------------------------------------------------------------
CONSOLIDATED $565 $616 (1) $620 (2) $446 $338 (3) $502 $504 (4) $400 (5)
======================================================================================================
(1) Operating earnings for the three months ended September 30, 2003 includes
a $28 million after-tax benefit ($0.04 per diluted share) from a
reduction of a previously established liability related to the Company's
race conscious underwriting settlement and a $36 million benefit ($0.05
per diluted share) from a revision of the estimate of income taxes for
2002.
(2) Operating earnings for the three months ended June 30, 2003 includes a $64
million after-tax benefit ($0.09 per diluted share) from a reduction of a
previously established liability related to the Company's race conscious
underwriting settlement, $62 million of after-tax earnings ($0.08 per
diluted share) from the merger of the Company's Mexican operations and a
reduction in policyholder liabilities resulting from a change in reserve
methodology, and a $31 million after-tax charge ($0.05 per diluted share)
related to previously deferred expenses.
(3) Operating earnings for the three months ended December 31, 2002 includes a
$169 million after-tax ($0.23 per diluted share) charge to cover costs
associated with personal injury liabilities caused by exposure to asbestos
or asbestos-containing products, a $20 million after-tax ($0.03 per
diluted share) reduction of a previously established liability related to
the Company's business realignment initiatives, and a $17 million
after-tax ($0.02 per diluted share) reduction of a previously established
disability insurance liability related to the September 11, 2001
tragedies.
(4) Operating earnings for the three months ended June 30, 2002 includes a $30
million after-tax ($0.04 per diluted share) reduction of a previously
established liability related to the Company's sales practices class
action settlement in 1999.
(5) Operating earnings for the three months ended March 31, 2002 includes a
$48 million after-tax ($0.07 per diluted share) charge to cover costs
associated with the resolution of a federal government investigation of
General American Life Insurance Company's former Medicare business.
15
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Institutional Operations 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2,363 $2,260 $2,334 $2,136 $2,176 $2,046 $2,158 $1,865
Universal life and investment-type
product policy fees 153 167 154 161 153 152 172 147
Investment income, net 1,103 1,003 1,009 979 1,005 970 1,003 985
Other revenues 154 144 152 142 127 154 156 172
--------------------------------------------------------------------------------------------
3,773 3,574 3,649 3,418 3,461 3,322 3,489 3,169
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 2,629 2,523 2,560 2,418 2,428 2,360 2,475 2,191
Interest credited to policyholder
account balances 229 234 228 224 236 236 232 228
Other expenses 485 407 456 436 389 363 394 385
--------------------------------------------------------------------------------------------
3,343 3,164 3,244 3,078 3,053 2,959 3,101 2,804
--------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 430 410 405 340 408 363 388 365
Provision for income taxes 153 146 145 121 146 129 138 130
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $277 $264 $260 $219 $262 (1) $234 $250 $235
============================================================================================
NET INCOME RECONCILIATION
- ---------------------------------
Operating earnings $277 $264 $260 $219 $262 $234 $250 $235
Net investment gains (losses) (164) (59) (9) (70) 48 (199) (109) (82)
Adjustments to net investment
gains (losses) (2) 89 0 0 0 (4) (2) 0 0
Net investment gains (losses)
tax benefit (provision) 16 23 3 26 (19) 72 49 24
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) (59) (36) (6) (44) 25 (129) (60) (58)
After-tax cumulative effect of a change
in accounting (3) (26) 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Net income $192 $228 $254 $175 $287 $105 $190 $177
============================================================================================
(1) Institutional Operations operating earnings for the year ended December
31, 2002 includes a $20 million after-tax reduction of a previously
established disability insurance liability related to the September 11,
2001 tragedies, and a $17 million reduction of a previously established
disability insurance liability related to September 11, 2001 tragedies.
(2) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(3) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and
March 31, 2002, the after-tax cumulative effect of an accounting change is
in accordance with SFAS No. 142, Goodwill and Other Intangible Assets.
16
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,223 $1,167 $1,175 $1,163 $1,169 $1,141 $1,091 $1,089
Universal life and investment-
type product policy fees 153 167 154 161 153 152 172 147
Investment income, net 271 262 248 242 246 245 241 242
Other revenues 18 17 13 16 7 13 10 14
--------------------------------------------------------------------------------------------
1,665 1,613 1,590 1,582 1,575 1,551 1,514 1,492
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,272 1,237 1,229 1,234 1,208 1,201 1,171 1,178
Interest credited to policyholder
account balances 100 113 104 106 110 107 106 102
Other expenses 138 116 133 121 128 111 121 105
--------------------------------------------------------------------------------------------
1,510 1,466 1,466 1,461 1,446 1,419 1,398 1,385
--------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 155 147 124 121 129 132 116 107
Provision for income taxes 56 53 45 43 47 48 42 39
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $99 $94 $79 $78 $82 $84 $74 $68
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) (53) 3 (8) (13) (15) (52) (50) (22)
After-tax cumulative effect of a change
in accounting(2) 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Net income $46 $97 $71 $65 $67 $32 $24 $46
============================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $305 $289 $351 $174 $257 $200 $388 $98
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0 0
Investment income, net 732 653 674 642 674 641 673 655
Other revenues 58 48 52 45 46 55 62 70
-------------------------------------------------------------------------------------------
1,095 990 1,077 861 977 896 1,123 823
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 682 641 681 531 627 547 723 443
Interest credited to policyholder
account balances 129 121 124 118 126 129 126 126
Other expenses 90 68 87 86 41 63 68 81
-------------------------------------------------------------------------------------------
901 830 892 735 794 739 917 650
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 194 160 185 126 183 157 206 173
Provision for income taxes 69 56 65 44 63 54 71 59
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $125 $104 $120 $82 $120 (1) $103 $135 $114
-------------------------------------------------------------------------------------------
After-tax net investment gains (losses) 0 (48) 2 (25) 52 (69) 10 (44)
After-tax cumulative effect of a change
in accounting (2) (26) 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $99 $56 $122 $57 $172 $34 $145 $70
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $835 $804 $808 $799 $750 $705 $679 $678
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0 0
Investment income, net 100 88 87 95 85 84 89 88
Other revenues 78 79 87 81 74 86 84 88
-------------------------------------------------------------------------------------------
1,013 971 982 975 909 875 852 854
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 675 645 650 653 593 612 581 570
Interest credited to policyholder
account balances 0 0 0 0 0 0 0 0
Other expenses 257 223 236 229 220 189 205 199
-------------------------------------------------------------------------------------------
932 868 886 882 813 801 786 769
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 81 103 96 93 96 74 66 85
Provision for income taxes 28 37 35 34 36 27 25 32
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $53 $66 $61 $59 $60(1) $47 $41 $53
-------------------------------------------------------------------------------------------
After-tax net investment
gains (losses) (6) 9 0 (6) (12) (8) (20) 8
After-tax cumulative effect of a change
in accounting(2) 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $47 $75 $61 $53 $48 $39 $21 $61
===========================================================================================
(1) Operating earnings for the three months ended December 31, 2002 includes a
$20 million after-tax benefit in Retirement & Savings for the reduction of
a previously established liability associated with the 2001 business
realignment initiatives, as well as a $17 million after-tax benefit in
Non-Medical Health & Other for the reduction of a previously established
disability insurance liability associated with the September 11, 2001
tragedies.
(2) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
17
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT
AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS, FEES AND OTHER REVENUES
BY PRODUCT
Group Life $1,394 $1,351 $1,342 $1,340 $1,329 $1,306 $1,273 $1,250
Retirement & Savings 363 337 403 219 303 255 450 168
Non-Medical Health & Other 913 883 895 880 824 791 763 766
-------------------------------------------------------------------------------------------
Total Premiums, Fees and Other
Revenues $2,670 $2,571 $2,640 $2,439 $2,456 $2,352 $2,486 $2,184
===========================================================================================
Group Disability (Included in
Non-Medical Health & Other) $237 $227 $238 $241 $236 $210 $212 $198
ADDITIONAL STATISTICAL INFORMATION
INCURRED LOSS RATIO (MORTALITY
EXPERIENCE):
Term Life 91.4% 91.3% 92.0% 93.2% 92.4% 93.3% 94.4% 94.5%
INCURRED LOSS RATIO (MORBIDITY
EXPERIENCE):
Group Disability (1) 102.7% 99.8% 95.1% 96.5% 97.7% 97.5% 99.5% 97.2%
(1) In the third quarter of 2001, the Company established a group disability
insurance liability as a result of the September 11th tragedies. The group
disability incurred loss ratio for all periods reflects the release of
such liabilities against incurred claims stemming from the events of
September 11th. The fourth quarter 2002 incurred loss ratio excludes the
impact of a $17 million after-tax reduction of such liability not stemming
from claims activity. Including the impact of this reduction in the
liability, the fourth quarter 2002 incurred loss ratio was 88.7%.
18
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
AND SEPARATE ACCOUNT LIABILITIES
UNAUDITED (DOLLARS IN MILLIONS)
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
- --------------------------------------------------------
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $14,453 $14,189 $13,993 $13,756 $13,269 $13,004 $12,800 $12,475
Premiums and deposits 2,935 2,728 2,676 2,877 2,673 2,251 2,536 2,018
Interest on reserves 132 141 134 136 139 137 135 134
Surrenders and withdrawals (1,344) (1,078) (1,103) (1,426) (909) (760) (978) (456)
Benefit payments (1,203) (1,238) (1,197) (1,223) (950) (1,198) (1,165) (1,175)
Other (295) (289) (314) (127) (466) (165) (324) (196)
--------------------------------------------------------------------------------------------
Balance, end of period $14,678 $14,453 $14,189 $13,993 $13,756 $13,269 $13,004 $12,800
============================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $40,191 $39,111 $36,206 $35,548 $35,553 $34,618 $33,313 $33,502
Premiums and deposits 1,763 3,156 3,040 1,060 1,387 1,907 2,281 1,465
Interest on reserves 537 526 526 518 525 526 522 523
Surrenders and withdrawals (1,330) (1,396) (1,113) (602) (1,943) (1,598) (996) (1,331)
Benefit payments (468) (471) (521) (465) (540) (486) (439) (422)
Other (395) (735) 973 147 566 586 (63) (424)
--------------------------------------------------------------------------------------------
Balance, end of period $40,298 $40,191 $39,111 $36,206 $35,548 $35,553 $34,618 $33,313
============================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $4,621 $4,552 $4,483 $4,396 $4,349 $4,286 $4,227 $4,169
Premiums and deposits 762 727 728 736 699 662 645 638
Interest on reserves 56 56 55 55 58 57 56 56
Surrenders and withdrawals 16 17 24 12 18 22 9 18
Benefit payments (615) (591) (591) (609) (558) (589) (562) (553)
Other (132) (140) (147) (107) (170) (89) (89) (101)
--------------------------------------------------------------------------------------------
Balance, end of period $4,708 $4,621 $4,552 $4,483 $4,396 $4,349 $4,286 $4,227
============================================================================================
SEPARATE ACCOUNT LIABILITIES
- ----------------------------
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $6,951 $6,953 $6,376 $6,011 $5,529 $5,770 $5,860 $5,551
Premiums and deposits 85 298 169 299 1,033 248 363 785
Investment performance 113 23 582 175 270 (291) (278) 105
Surrenders and withdrawals (104) (323) (174) (109) (821) (198) (175) (581)
--------------------------------------------------------------------------------------------
Balance, end of period $7,045 $6,951 $6,953 $6,376 $6,011 $5,529 $5,770 $5,860
============================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $26,570 $26,526 $25,105 $24,775 $23,593 $23,050 $23,804 $24,667
Premiums and deposits 1,103 726 1,008 752 1,087 996 547 760
Investment performance 661 206 1,481 393 884 316 (232) 38
Surrenders and withdrawals (1,235) (874) (1,050) (793) (772) (753) (1,047) (1,639)
Policy charges (18) (14) (18) (22) (17) (16) (22) (22)
--------------------------------------------------------------------------------------------
Balance, end of period $27,081 $26,570 $26,526 $25,105 $24,775 $23,593 $23,050 $23,804
============================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $1,462 $1,348 $1,241 $1,150 $1,086 $1,042 $1,015 $962
Premiums and deposits 73 76 80 63 51 43 35 39
Investment performance 15 63 58 47 38 26 11 39
Surrenders and withdrawals (16) (17) (23) (12) (18) (22) (9) (18)
Policy charges (29) (8) (8) (7) (7) (3) (10) (7)
---------------------------------------------------------------------------------------------
Balance, end of period $1,505 $1,462 $1,348 $1,241 $1,150 $1,086 $1,042 $1,015
=============================================================================================
19
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
INSURANCE EXPENSE RATIOS
AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE EXPENSES TO PREMIUMS, FEES
AND OTHER REVENUES RATIO
Insurance Expenses $429 $356 $401 $382 $371 $322 $355 $347
===========================================================================================
Premiums, Fees and Other Revenues $2,670 $2,571 $2,640 $2,439 $2,456 $2,352 $2,486 $2,184
===========================================================================================
RATIO 16.1% 13.8% 15.2% 15.7% 15.1% 13.7% 14.3% 15.9%
OTHER EXPENSES BY MAJOR CATEGORY
Direct and allocated expenses $370 $303 $327 $320 $333 $275 $296 $300
Pension and other post-retirement
benefit costs 31 23 35 26 3 12 12 12
Premium taxes and other taxes,
licenses and fees 28 30 39 36 35 35 47 35
-------------------------------------------------------------------------------------------
Subtotal Insurance Expenses $429 $356 $401 $382 $371 $322 $355 $347
Commissions and other expenses 56 51 55 54 48 41 39 38
4th quarter 2001 charges (1) 0 0 0 0 (30) 0 0 0
-------------------------------------------------------------------------------------------
Total Other Expenses $485 $407 $456 $436 $389 $363 $394 $385
===========================================================================================
(1) In the fourth quarter of 2001, the Company undertook several business
realignment initiatives that resulted in a liability of $399 million. In
the fourth quarter of 2002, $30 million of this liability was released.
20
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
------------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 6.11% 5.83% 5.57% 5.62% 5.98% 6.07% 6.05% 6.21%
Average crediting rate 3.56% 3.85% 3.72% 3.87% 4.08% 4.16% 4.16% 4.33%
------------------------------------------------------------------------------------------------------
Spread 2.55% 1.98% 1.85% 1.75% 1.90% 1.91% 1.89% 1.88%
======================================================================================================
For the Three Months Ended
-----------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 7.35% 6.82% 7.37% 7.22% 7.63% 7.33% 7.79% 7.80%
Average crediting rate 5.58% 5.62% 5.92% 6.05% 6.12% 6.11% 6.21% 6.36%
-----------------------------------------------------------------------------------------------------
Spread 1.77% 1.20% 1.45% 1.17% 1.51% 1.22% 1.58% 1.44%
=====================================================================================================
For the Three Months Ended
------------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 7.48% 6.49% 6.60% 7.27% 7.41% 7.54% 7.81% 8.00%
Average crediting rate 5.38% 5.43% 5.49% 5.52% 5.86% 5.89% 5.87% 6.05%
------------------------------------------------------------------------------------------------------
Spread 2.10% 1.06% 1.11% 1.75% 1.55% 1.65% 1.94% 1.95%
======================================================================================================
21
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Individual Operations 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,184 $1,064 $1,055 $1,041 $1,249 $1,080 $1,095 $1,083
Universal life and investment-type
product policy fees 465 386 378 360 367 375 338 299
Investment income, net 1,585 1,550 1,529 1,563 1,598 1,605 1,580 1,531
Other revenues 116 96 109 86 93 95 102 128
--------------------------------------------------------------------------------------------
3,350 3,096 3,071 3,050 3,307 3,155 3,115 3,041
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends $1,863 $1,703 $1,625 $1,692 $1,894 $1,681 $1,723 $1,692
Interest credited to policyholder
account balances 446 452 452 443 461 437 453 442
Capitalization of deferred policy (279) (280) (280) (260) (273) (262) (258) (244)
acquisition costs
Amortization of deferred policy 174 162 207 175 183 247 177 137
acquisition costs
Other expenses 880 795 833 753 769 698 714 741
--------------------------------------------------------------------------------------------
3,084 2,832 2,837 2,803 3,034 2,801 2,809 2,768
--------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 266 264 234 247 273 354 306 273
Provision for income taxes 93 93 83 87 99 128 110 99
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $173 $171 $151 (1) $160 $174 $226 $196 $174
============================================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $173 $171 $151 $160 $174 $226 $196 $174
Net investment gains (losses) (130) (77) (11) (67) 168 (45) (162) (10)
Adjustments to net investment gains
(losses) (2) 100 39 0 38 43 18 73 13
Net investment gains (losses) tax
benefit (provision) 19 21 4 10 (85) 11 33 (1)
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) (11) (17) (7) (19) 126 (16) (56) 2
--------------------------------------------------------------------------------------------
Net income $162 $154 $144 $141 $300 $210 $140 $176
============================================================================================
(1) Operating earnings for the three months ended June 30, 2003 include a $31
million after-tax charge related to previously deferred expenses.
(2) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
22
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Traditional Life 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,159 $1,037 $1,025 $1,010 $1,197 $1,064 $1,049 $1,040
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0 0
Investment income, net 873 847 846 869 877 900 891 873
Other revenues 6 0 10 0 (3) 4 4 6
------------------------------------------------------------------------------------------
2,038 1,884 1,881 1,879 2,071 1,968 1,944 1,919
------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,684 1,564 1,512 1,529 1,710 1,569 1,576 1,539
Interest credited to policyholder
account balances 0 0 0 0 0 0 0 0
Capitalization of deferred policy
acquisition costs (42) (39) (43) (47) (52) (42) (51) (49)
Amortization of deferred policy 54 56 62 58 47 66 62 65
acquisition costs
Other expenses 236 200 233 221 223 175 205 210
------------------------------------------------------------------------------------------
1,932 1,781 1,764 1,761 1,928 1,768 1,792 1,765
------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 106 103 117 118 143 200 152 154
Provision for income taxes 38 37 42 42 51 73 55 56
------------------------------------------------------------------------------------------
OPERATING EARNINGS $68 $66 $75(1) $76 $92 $127 $97 $98
------------------------------------------------------------------------------------------
After-tax net investment gains (losses) 14 5 (13) 6 178 39 27 27
------------------------------------------------------------------------------------------
Net income $82 $71 $62 $82 $270 $166 $124 $125
==========================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $0 $0 $0 $0 $0 $0 $0 $0
Universal life and investment-type
product policy fees 301 256 262 255 264 267 230 196
Investment income, net 143 145 144 142 150 149 148 139
Other revenues 4 (1) (1) (2) 0 1 0 4
--------------------------------------------------------------------------------------------
448 400 405 395 414 417 378 339
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 126 69 57 87 66 51 60 71
Interest credited to policyholder
account balances 118 122 117 117 119 120 115 115
Capitalization of deferred policy
acquisition costs (88) (82) (86) (81) (95) (106) (102) (100)
Amortization of deferred policy 64 47 102 59 85 95 54 22
acquisition costs
Other expenses 205 196 205 177 202 197 195 192
--------------------------------------------------------------------------------------------
425 352 395 359 377 357 322 300
--------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 23 48 10 36 37 60 56 39
Provision for income taxes 8 18 4 13 14 20 20 14
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $15 $30 $6(1) $23 $23 $40 $36 $25
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) (4) (8) 7 (5) (22) (1) (3) 2
--------------------------------------------------------------------------------------------
Net income $11 $22 $13 $18 $1 $39 $33 $27
============================================================================================
(1) Traditional Life and Variable & Universal Life operating earnings for the
three months ended June 30, 2003 includes a $2 million and $29 million
after-tax charge related to previously deferred expenses, respectively.
23
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
---------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $20 $19 $23 $24 $44 $37 $28 $20
Universal life and investment-type
product policy fees 137 106 95 82 78 82 79 81
Investment income, net 503 489 479 487 510 496 478 457
Other revenues 7 3 7 1 7 2 5 7
---------------------------------------------------------------------------------------------
667 617 604 594 639 617 590 565
---------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 53 55 46 64 104 76 60 48
Interest credited to policyholder
account balances 299 303 307 296 312 290 309 297
Capitalization of deferred policy
acquisition costs (148) (158) (149) (131) (124) (113) (103) (93)
Amortization of deferred policy
acquisition costs 53 55 41 55 46 80 58 47
Other expenses 281 261 274 234 228 216 188 204
---------------------------------------------------------------------------------------------
538 516 519 518 566 549 512 503
---------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 129 101 85 76 73 68 78 62
Provision for income taxes 44 34 29 26 26 24 28 22
---------------------------------------------------------------------------------------------
OPERATING EARNINGS $85 $67 $56 $50 $47 $44 $50 $40
---------------------------------------------------------------------------------------------
After-tax net investment losses (24) (14) (1) (15) (20) (46) (67) (31)
---------------------------------------------------------------------------------------------
Net income (loss) $61 $53 $55 $35 $27 ($2) ($17) $9
=============================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Other 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5 $8 $7 $7 $8 ($21) $18 $23
Universal life and investment-
type product policy fees 27 24 21 23 25 26 29 22
Investment income, net 66 69 60 65 61 60 63 62
Other revenues 99 94 93 87 89 88 93 111
--------------------------------------------------------------------------------------------
197 195 181 182 183 153 203 218
--------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 0 15 10 12 14 (15) 27 34
Interest credited to policyholder
account balances 29 27 28 30 30 27 29 30
Capitalization of deferred policy
acquisition costs (1) (1) (2) (1) (2) (1) (2) (2)
Amortization of deferred policy
acquisition costs 3 4 2 3 5 6 3 3
Other expenses 158 138 121 121 116 110 126 135
--------------------------------------------------------------------------------------------
189 183 159 165 163 127 183 200
--------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 8 12 22 17 20 26 20 18
Provision for income taxes 3 4 8 6 8 11 7 7
--------------------------------------------------------------------------------------------
OPERATING EARNINGS $5 $8 $14 $11 $12 $15 $13 $11
--------------------------------------------------------------------------------------------
After-tax net investment gains (losses) 3 0 0 (5) (10) (8) (13) 4
--------------------------------------------------------------------------------------------
Net income $8 $8 $14 $6 $2 $7 $0 $15
============================================================================================
24
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER
AND MUTUAL FUND SALES
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS AND DEPOSITS BY PRODUCT (1)
TOTAL (2)
Traditional Life
1st Year (3) $53 $50 $49 $53 $60 $46 $57 $51
Renewal 1,228 1,052 1,053 1,000 1,291 1,069 1,075 1,002
Variable & Universal Life
Variable 1st Year excluding
Single Premium COLI/BOLI (3) 53 86 59 91 108 97 115 112
Universal 1st Year excluding
Single Premium COLI/BOLI (3) 91 82 71 55 66 63 49 35
Single Premium COLI/BOLI 27 18 3 13 1 50 0 2
Renewal 431 392 393 455 429 387 390 415
Annuities (3) 2,844 2,843 2,933 2,611 2,352 1,988 1,849 1,704
Other 335 287 301 281 276 316 374 371
-------------------------------------------------------------------------------------------
Total Premiums and Deposits $5,062 $4,810 $4,862 $4,559 $4,583 $4,016 $3,909 $3,692
===========================================================================================
PREMIUMS AND DEPOSITS TO SEPARATE
ACCOUNTS
Variable & Universal Life $275 $294 $273 $301 $304 $294 $300 $298
Annuities 1,782 1,437 1,229 940 1,056 703 818 654
Other 258 171 191 167 195 215 275 251
-------------------------------------------------------------------------------------------
Total Separate Accounts $2,315 $1,902 $1,693 $1,408 $1,555 $1,212 $1,393 $1,203
===========================================================================================
FIRST YEAR LIFE PREMIUMS AND DEPOSITS BY
MANUFACTURER (4)
MetLife $81 $74 $70 $73 $81 $71 $86 $83
New England Financial 35 26 29 32 44 41 51 54
General American 102 128 76 99 105 139 81 61
MetLife Investors Group 6 8 7 8 5 5 3 2
-------------------------------------------------------------------------------------------
Total First Year Life Premiums
and Deposits $224 $236 $182 $212 $235 $256 $221 $200
===========================================================================================
ANNUITY DEPOSITS BY TYPE
Fixed Annuity Deposits $257 $320 $340 $424 $464 $452 $283 $268
Variable Annuity Deposits 2,587 2,523 2,593 2,187 1,888 1,536 1,566 1,436
-------------------------------------------------------------------------------------------
Total Annuity Deposits $2,844 $2,843 $2,933 $2,611 $2,352 $1,988 $1,849 $1,704
===========================================================================================
ANNUITY DEPOSITS BY MANUFACTURER (5)
MetLife $870 $950 $1,053 $974 $963 $836 $952 $843
New England Financial 249 235 233 211 206 179 197 162
General American 13 9 11 10 9 10 13 10
MetLife Investors Group 1,712 1,649 1,636 1,416 1,174 963 687 689
-------------------------------------------------------------------------------------------
Total Annuity Deposits $2,844 $2,843 $2,933 $2,611 $2,352 $1,988 $1,849 $1,704
===========================================================================================
MUTUAL FUND SALES
Proprietary $59 $47 $48 $38 $48 $60 $113 $107
Third Party 1,196 725 817 759 713 706 852 890
-------------------------------------------------------------------------------------------
Total Mutual Fund Sales $1,255 $772 $865 $797 $761 $766 $965 $997
===========================================================================================
(1) Statutory premiums direct and assumed.
(2) Includes premiums and deposits to separate accounts.
(3) Excludes company-sponsored internal exchanges.
(4) Approximately 5% of MetLife manufactured life insurance premiums and
deposits were sold by other-than MetLife Financial Services agents during
the three months ended December 31, 2003 (2% sold by General American, 2%
sold by New England Financial, and 1% sold by MetLife Resources).
Approximately 5% of New England Financial manufactured life insurance
premiums and deposits were sold by other-than New England Financial agents
during the three months ended December 31, 2003 (5% sold by MetLife
Financial Services). Approximately 75% of General American manufactured
life insurance premiums and deposits were sold by other-than General
American agents during the three months ended December 31, 2003 (53% sold
by MetLife Financial Services, and 22% sold by New England Financial).
(5) Approximately 25% of MetLife manufactured annuity deposits were sold by
other-than MetLife agents during the three months ended December 31, 2003
(22% MetLife Resources, 3% MetLife Investors Group). Approximately 9% of
MetLife Investors Group manufactured annuity deposits were sold by
other-than MetLife Investors Group Wholesalers during the three months
ended December 31, 2003 (6% Walnut Street Securities, 3% MetLife
Resources).
25
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended
---------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS AND DEPOSITS
TO SEPARATE ACCOUNTS, EXCLUDING
TRANSFERS FROM GENERAL ACCOUNT:
Variable & Universal Life 45.6% 50.8% 52.0% 49.1% 50.4% 49.1% 54.1% 52.2%
Annuities 62.6% 50.6% 41.9% 36.0% 44.9% 35.4% 44.2% 38.4%
Other 77.3% 59.5% 63.3% 59.5% 70.6% 68.1% 73.4% 67.6%
MORTALITY AS A PERCENTAGE OF EXPECTED 84.2% 80.3% 99.4%(1) 87.2% 87.4% 81.4% 56.1% 89.8%
LAPSES / SURRENDERS (GENERAL AND
SEPARATE ACCOUNT) (2)
Traditional Life 6.1% 6.0% 6.0% 5.8% 6.0% 6.1% 6.4% 6.5%
Variable & Universal Life 7.0% 7.2% 7.2% 6.8% 6.6% 6.4% 6.0% 6.3%
Variable Annuities 8.0% 8.5% 8.1% 8.3% 8.0% 8.3% 7.9% 7.8%
Fixed Annuities 7.9% 7.9% 8.1% 8.8% 8.8% 9.7% 9.3% 9.4%
NUMBER OF SALES REPRESENTATIVES
MetLife Financial Services 5,531 5,587 5,728 5,798 5,846 6,063 6,139 6,171
New England Financial 2,845 2,992 3,004 2,916 3,234 3,053 2,965 2,856
General American (3) 429 471 522 557 616 607 633 482
Independent Distribution Wholesalers 86 86 84 78 69 66 68 65
MetLife Resources 401 384 379 362 375 376 391 397
Walnut Street Securities (4)(5) 1,462 1,649 1,823 1,923 2,049 2,139 2,202 2,218
P&C Specialists 437 416 409 396 391 374 386 381
---------------------------------------------------------------------------------------------
Total Agents 11,191 11,585 11,949 12,030 12,580 12,678 12,784 12,570
=============================================================================================
(1) Includes a $45 million pre-tax death benefit that was 100% reinsured.
Excluding this item, the mortality ratio was 88.4%.
(2) Lapses/Surrenders rates are calculated for the most recent 12 months of
experience.
(3) Based on minimum annual production of $25,000 in life insurance sales.
Prior periods have been restated to conform with this change in annual
minimum production requirements.
(4) At December 31, 2003, the number of Walnut Street Securities
representatives includes 152 brokers who are also reported as General
American agents above.
(5) The number of Walnut Street Securities representatives at September 30,
2003 has been restated to reflect the actual number of former Nathan &
Lewis representatives appointed and still active on that date.
26
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
AND SEPARATE ACCOUNT LIABILITIES
UNAUDITED (DOLLARS IN MILLIONS)
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
- --------------------------------------------------------
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Traditional Life 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $48,140 $47,835 $47,572 $47,397 $46,888 $46,520 $46,205 $45,828
Premiums and deposits (1) 1,246 975 1,043 1,026 1,208 1,067 1,078 1,079
Interest on reserves 486 483 479 476 475 466 462 460
Surrenders and withdrawals (478) (407) (402) (395) (398) (392) (385) (478)
Benefit payments (420) (456) (492) (484) (415) (430) (414) (452)
Other (471) (290) (365) (448) (361) (343) (426) (232)
--------------------------------------------------------------------------------------------
Balance, end of period $48,503 $48,140 $47,835 $47,572 $47,397 $46,888 $46,520 $46,205
============================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $9,327 $9,221 $9,140 $8,993 $8,878 $8,682 $8,630 $8,694
Premiums and deposits (1) (2) 318 272 247 287 274 277 226 265
Interest on reserves 122 121 120 118 119 120 118 117
Surrenders and withdrawals (137) (117) (122) (113) (108) (97) (124) (123)
Net transfers from (to)
separate account 83 54 65 66 29 157 8 (3)
Policy charges (199) (195) (184) (198) (193) (239) (150) (149)
Benefit payments (22) (22) (24) (25) (22) (20) (20) (20)
Other (17) (7) (21) 12 16 (2) (6) (151)
-------------------------------------------------------------------------------------------
Balance, end of period $9,475 $9,327 $9,221 $9,140 $8,993 $8,878 $8,682 $8,630
===========================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $31,258 $30,772 $29,917 $28,935 $27,813 $26,695 $26,180 $25,365
Premiums and deposits (1) (2) 1,126 1,492 1,836 1,766 1,438 1,170 1,199 1,138
Interest on reserves 343 361 357 359 368 358 334 336
Surrenders and withdrawals (647) (678) (665) (667) (474) (563) (589) (551)
Net transfers from (to)
separate account (653) (562) (517) (171) (212) 51 (172) (219)
Policy charges 2 0 (3) (1) (4) (9) 1 (1)
Benefit payments (70) (129) (143) (168) (8) 95 (269) (251)
Other (9) 2 (10) (136) 14 16 11 363
--------------------------------------------------------------------------------------------
Balance, end of period $31,350 $31,258 $30,772 $29,917 $28,935 $27,813 $26,695 $26,180
============================================================================================
SEPARATE ACCOUNT LIABILITIES
- ----------------------------
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $6,424 $6,149 $5,482 $5,489 $5,088 $5,462 $6,062 $5,914
Premiums and deposits (1) 275 294 273 301 316 294 300 298
Investment performance 376 177 603 (105) 264 (559) (595) (38)
Surrenders and withdrawals (87) (74) (72) (71) (73) (62) (62) (51)
Net transfers from (to)
fixed account (83) (54) (65) (66) (29) (157) (8) 3
Policy charges (70) (68) (72) (66) (77) (55) (70) (64)
Other 0 0 0 0 0 165 (165) 0
-------------------------------------------------------------------------------------------
Balance, end of period $6,835 $6,424 $6,149 $5,482 $5,489 $5,088 $5,462 $6,062
===========================================================================================
For the Three Months Ended
--------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2003 2003 2003 2003 2002 2002 2002 2002
---------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $24,310 $22,133 $18,464 $18,270 $16,651 $19,279 $20,987 $20,577
Premiums and deposits (1) 1,782 1,438 1,229 940 1,060 704 817 654
Investment performance 2,520 734 2,500 (435) 1,011 (2,757) (2,131) 2
Surrenders and withdrawals (508) (475) (508) (423) (588) (467) (499) (405)
Net transfers from (to)
fixed account 653 562 517 171 212 (51) 172 219
Policy charges (90) (82) (69) (59) (76) (57) (67) (60)
--------------------------------------------------------------------------------------------
Balance, end of period $28,667 $24,310 $22,133 $18,464 $18,270 $16,651 $19,279 $20,987
============================================================================================
(1) Includes company-sponsored internal exchanges.
(2) Includes premiums and deposits directed to the General Account investment
option of a variable life or variable annuity product.
27
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
INSURANCE EXPENSE RATIOS AND OTHER
EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
INSURANCE EXPENSES (NET OF
CAPITALIZATION OF DAC) TO
PREMIUMS AND DEPOSITS RATIO
Insurance Expenses $775 $709 $758 $682 $698 $634 $643 $653
DAC Capitalization (1) (336) (309) (304) (285) (298) (290) (282) (267)
-------------------------------------------------------------------------------------------
Net $439 $400 $454 $397 $400 $344 $361 $386
===========================================================================================
Premiums and Deposits (2) $5,062 $4,810 $4,862 $4,559 $4,583 $4,018 $3,908 $3,700
===========================================================================================
RATIO 8.7% 8.3% 9.3% 8.7% 8.7% 8.6% 9.2% 10.4%
OTHER EXPENSES BY MAJOR
CATEGORY
Commissions $244 $220 $214 $195 $213 $195 $185 $177
Other deferrable expenses 108 101 107 113 102 113 111 104
Direct and allocated expenses,
not deferred 347 322 371 310 340 279 296 321
Pension and other post-
retirement benefit costs 50 41 40 36 21 28 28 23
Premium taxes and other taxes,
licenses and fees 26 25 26 28 22 19 23 28
-------------------------------------------------------------------------------------------
Subtotal Insurance Expenses $775 $709 $758 $682 $698 $634 $643 $653
Broker-dealer and other expenses 150 124 118 110 113 100 117 132
Reinsurance allowances (45) (38) (43) (39) (42) (36) (46) (44)
-------------------------------------------------------------------------------------------
Total Other Expenses $880 $795 $833 $753 $769 $698 $714 $741
===========================================================================================
(1) Excludes $57 million, $29 million, $24 million, $25 million, $24 million,
$28 million, $24 million and $23 million of DAC capitalization related to
reinsurance allowances for the three months ended December 31, 2003,
September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002,
September 30, 2002, June 30, 2002 and March 31, 2002, respectively.
(2) Statutory premiums and deposits direct and assumed; also includes
company-sponsored internal exchanges.
28
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
VARIABLE & UNIVERSAL LIFE 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 7.23% 7.25% 7.31% 7.39% 7.23% 7.41% 7.47% 7.29%
Average crediting rate 5.50% 5.63% 5.57% 5.64% 5.75% 5.77% 5.85% 5.80%
-------------------------------------------------------------------------------------------
Spread 1.73% 1.62% 1.74% 1.75% 1.48% 1.64% 1.62% 1.49%
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
ANNUITIES 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 6.50% 6.50% 6.31% 6.64% 7.20% 7.09% 7.14% 7.02%
Average crediting rate 4.16% 4.28% 4.36% 4.47% 4.91% 4.81% 5.00% 5.09%
-------------------------------------------------------------------------------------------
Spread 2.34% 2.22% 1.95% 2.17% 2.29% 2.28% 2.14% 1.93%
===========================================================================================
29
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Auto & Home Operations 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $740 $735 $721 $712 $723 $711 $702 $692
Investment income, net 39 39 41 39 42 44 46 45
Other revenues 9 10 4 9 (1) 11 9 7
-------------------------------------------------------------------------------------------
788 784 766 760 764 766 757 744
-------------------------------------------------------------------------------------------
EXPENSES
Losses 447 465 446 452 443 423 444 422
Loss adjustment expense 89 78 81 82 67 74 73 73
Other expenses 184 187 186 199 187 205 193 208
-------------------------------------------------------------------------------------------
720 730 713 733 697 702 710 703
-------------------------------------------------------------------------------------------
Operating earnings before
provision for income taxes 68 54 53 27 67 64 47 41
Provision (benefit) for income
taxes 15 12 11 (3) 19 16 11 11
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $53 $42 $42 $30 $48 $48 $36 $30
===========================================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $53 $42 $42 $30 $48 $48 $36 $30
Net investment gains (losses) (11) 2 (2) (4) (6) (8) (18) (14)
Net investment gains (losses)
tax benefit (provision) 4 (1) 1 1 2 3 6 5
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) (7) 1 (1) (3) (4) (5) (12) (9)
-------------------------------------------------------------------------------------------
Net income $46 $43 $41 $27 $44 $43 $24 $21
===========================================================================================
30
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Auto 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $545 $545 $535 $530 $535 $533 $525 $519
Investment income, net 26 27 29 27 31 32 34 33
Other revenues 5 7 7 6 6 9 6 4
-------------------------------------------------------------------------------------------
576 579 571 563 572 574 565 556
-------------------------------------------------------------------------------------------
EXPENSES
Losses 357 359 347 366 360 308 343 325
Loss adjustment expense 76 61 68 75 55 61 64 64
Other expenses 126 131 131 143 130 150 138 147
-------------------------------------------------------------------------------------------
559 551 546 584 545 519 545 536
-------------------------------------------------------------------------------------------
Operating earnings (loss) before
provision (benefit) for
income taxes 17 28 25 (21) 27 55 20 20
Provision (benefit) for income
taxes (2) 5 4 (17) 6 14 3 5
-------------------------------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $19 $23 $21 ($4) $21 $41 $17 $15
-------------------------------------------------------------------------------------------
After-tax net investment losses (5) 0 0 (2) (3) (4) (8) (7)
-------------------------------------------------------------------------------------------
Net income (loss) $14 $23 $21 ($6) $18 $37 $9 $8
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Homeowners 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $183 $177 $173 $167 $175 $165 $164 $160
Investment income, net 11 12 10 10 10 11 10 11
Other revenues 2 1 2 1 2 1 1 1
-------------------------------------------------------------------------------------------
196 190 185 178 187 177 175 172
-------------------------------------------------------------------------------------------
EXPENSES
Losses 82 95 96 76 78 106 95 93
Loss adjustment expense 12 16 13 8 12 13 8 9
Other expenses 52 52 50 48 52 51 50 55
-------------------------------------------------------------------------------------------
146 163 159 132 142 170 153 157
-------------------------------------------------------------------------------------------
Operating earnings (loss) before
provision 50 27 26 46 45 7 22 15
Provision for income taxes 16 8 6 14 15 1 7 4
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $34 $19 $20 $32 $30 $6 $15 $11
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) (2) 1 (1) (1) (1) (1) (3) (2)
-------------------------------------------------------------------------------------------
Net income $32 $20 $19 $31 $29 $5 $12 $9
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Other 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $12 $13 $13 $15 $13 $13 $13 $13
Investment income, net 2 0 2 2 1 1 2 1
Other revenues 2 2 (5) 2 (9) 1 2 2
-------------------------------------------------------------------------------------------
16 15 10 19 5 15 17 16
-------------------------------------------------------------------------------------------
EXPENSES
Losses 8 11 3 10 5 9 6 4
Loss adjustment expense 1 1 0 (1) 0 0 1 0
Other expenses 6 4 5 8 5 4 5 6
-------------------------------------------------------------------------------------------
15 16 8 17 10 13 12 10
-------------------------------------------------------------------------------------------
Operating earnings (loss) before
provision (benefit) for
income taxes 1 (1) 2 2 (5) 2 5 6
Provision (benefit) for income
taxes 1 (1) 1 0 (2) 1 1 2
-------------------------------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $0 $0 $1 $2 ($3) $1 $4 $4
-------------------------------------------------------------------------------------------
After-tax net investment losses 0 0 0 0 0 0 (1) 0
-------------------------------------------------------------------------------------------
Net income (loss) $0 $0 $1 $2 ($3) $1 $3 $4
===========================================================================================
31
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION
AND SUPPLEMENTAL DATA
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
WRITTEN PREMIUMS BY PRODUCT
Preferred/Standard Automobile $514 $538 $524 $505 $498 $526 $512 $489
Non-Standard Automobile 21 23 23 24 25 23 29 29
Homeowners 183 204 192 149 176 189 179 138
Other 9 11 12 20 9 11 15 18
-------------------------------------------------------------------------------------------
Total $727 $776 $751 $698 $708 $749 $735 $674
===========================================================================================
SELECTED FINANCIAL INFORMATION
AND SUPPLEMENTAL DATA
TOTAL AUTO & HOME
Loss and loss adjustment expense
ratio 72.2% 73.8% 73.2% 75.0% 70.6% 69.9% 73.7% 71.5%
Other expense ratio 25.1% 25.5% 25.6% 28.0% 25.8% 28.9% 27.4% 30.1%
-------------------------------------------------------------------------------------------
Total combined ratio 97.3% 99.3% 98.8% 103.0% 96.4% 98.8% 101.1% 101.6%
Effect of catastrophe losses 1.9% 3.4% 3.2% 1.8% 2.3% 0.8% 2.8% 2.0%
-------------------------------------------------------------------------------------------
Combined ratio excluding
catastrophes 95.4% 95.9% 95.6% 101.2% 94.1% 98.0% 98.3% 99.6%
===========================================================================================
AUTO
Loss and loss adjustment expense
ratio 79.3% 77.0% 77.5% 83.3% 77.6% 69.2% 77.5% 75.0%
Other expense ratio 23.5% 24.1% 24.2% 27.2% 24.3% 28.2% 26.2% 28.4%
-------------------------------------------------------------------------------------------
Total combined ratio 102.8% 101.1% 101.7% 110.5% 101.9% 97.4% 103.7% 103.4%
Effect of catastrophe losses 0.5% 0.2% 1.2% 0.2% 0.4% 0.1% 0.8% 0.0%
-------------------------------------------------------------------------------------------
Combined ratio excluding
catastrophes 102.3% 100.9% 100.5% 110.3% 101.5% 97.3% 102.9% 103.4%
===========================================================================================
HOMEOWNERS
Loss and loss adjustment expense
ratio 51.4% 62.3% 63.4% 50.2% 51.4% 72.0% 63.6% 63.2%
Other expense ratio 28.7% 29.3% 29.2% 28.5% 29.8% 30.9% 30.8% 34.2%
-------------------------------------------------------------------------------------------
Total combined ratio 80.1% 91.6% 92.6% 78.7% 81.2% 102.9% 94.4% 97.4%
Effect of catastrophe losses 6.3% 13.4% 9.7% 6.9% 8.2% 3.3% 9.4% 8.7%
-------------------------------------------------------------------------------------------
Combined ratio excluding
catastrophes 73.8% 78.2% 82.9% 71.8% 73.0% 99.6% 85.0% 88.7%
===========================================================================================
OTHER
Loss and loss adjustment expense
ratio 68.4% 99.5% 24.1% 57.7% 39.8% 71.9% 47.4% 33.9%
Other expense ratio 42.7% 34.2% 38.8% 52.0% 37.3% 31.6% 35.3% 49.2%
-------------------------------------------------------------------------------------------
Total combined ratio 111.1% 133.7% 62.9% 109.7% 77.1% 103.5% 82.7% 83.1%
Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
-------------------------------------------------------------------------------------------
Combined ratio excluding
catastrophes 111.1% 133.7% 62.9% 109.7% 77.1% 103.5% 82.7% 83.1%
===========================================================================================
PRE-TAX CATASTROPHE LOSSES
Auto $3 $1 $7 $1 $2 $1 $4 $0
Homeowners 12 24 17 12 14 5 15 14
Other 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Total $15 $25 $24 $13 $16 $6 $19 $14
===========================================================================================
Catastrophe points on combined
ratios 1.9 3.4 3.2 1.8 2.3 0.8 2.8 2.0
-------------------------------------------------------------------------------------------
32
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INTERNATIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $448 $445 $390 $395 $481 $381 $274 $375
Universal life and investment-
type product policy fees 80 70 71 51 66 64 7 7
Investment income, net 129 119 131 123 158 133 95 75
Other revenues 26 20 26 8 6 2 3 3
-------------------------------------------------------------------------------------------
683 654 618 577 711 580 379 460
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 428 410 294 377 455 362 268 338
Interest credited to
policyholder account balances 36 34 36 37 27 32 11 9
Capitalization of deferred
policy acquisition costs (90) (72) (59) (66) (51) (60) (40) (40)
Amortization of deferred policy
acquisition costs 73 41 77 34 55 24 22 27
Other expenses 204 187 177 153 183 167 114 106
-------------------------------------------------------------------------------------------
651 600 525 535 669 525 375 440
-------------------------------------------------------------------------------------------
Operating earnings before
provision (benefit) for
income taxes 32 54 93 42 42 55 4 20
Provision (benefit) for income
taxes (2) 17 (9) 14 4 15 2 6
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $34 $37 $102(1) $28 $38 $40 $2 $14
===========================================================================================
NET INCOME (LOSS) RECONCILIATION
- --------------------------------
Operating earnings $34 $37 $102 $28 $38 $40 $2 $14
Net investment gains (losses) 0 8 (1) 0 (1) 6 8 (22)
Adjustments to net
investments gains
(losses)(2) (3) 0 0 0 0 0 0 0
Net investment gains (losses)
tax benefit (provision) 0 6 (3) 0 4 (1) (3) (1)
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) (3) 14 (4) 0 3 5 5 (23)
After-tax cumulative effect of a
change in accounting (3) 0 0 0 0 0 (5) 0 5
-------------------------------------------------------------------------------------------
Net income (loss) $31 $51 $98 $28 $41 $40 $7 ($4)
===========================================================================================
(1) Operating earnings for the three months ended June 30, 2003 includes $62
million of after-tax earnings from the merger of the Company's Mexican
operations and a reduction in policyholder liabilities resulting from a
change in reserve methodology.
(2) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
(3) The after-tax cumulative effect of a change in accounting for the period
ended December 31, 2003, is in accordance with FASB 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. For the period ended September 30, 2002 and March 31, 2002,
the after-tax cumulative effect of an accounting change is in accordance
with SFAS No. 142, Goodwill and Other Intangible Assets.
33
(METLIFE LOGO)
- --------------------------------------------------------------------------------
REINSURANCE OPERATIONS
STATEMENTS OF OPERATING EARNINGS,
PRE-TAX AND PRE-MINORITY INTEREST OPERATING
EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums, net $949 $579 $588 $552 $597 $461 $472 $475
Investment income, net 120 122 121 110 125 95 102 99
Other revenues 14 11 12 12 8 16 11 8
-------------------------------------------------------------------------------------------
1,083 712 721 674 730 572 585 582
-------------------------------------------------------------------------------------------
EXPENSES
Claims and other policy benefits 788 470 466 433 448 343 385 400
Interest credited to
policyholder account balances 49 47 45 43 49 31 32 34
Policy acquisition costs and
other insurance expenses 130 112 116 108 153 102 82 68
Other expenses 54 33 38 36 40 39 36 27
-------------------------------------------------------------------------------------------
1,021 662 665 620 690 515 535 529
-------------------------------------------------------------------------------------------
Operating earnings before
provision for income taxes
and minority interest 62 50 56 54 40 57 50 53
Provision for income taxes 11 9 11 10 5 13 10 12
-------------------------------------------------------------------------------------------
Operating earnings before
minority interest 51 41 45 44 35 44 40 41
Elimination of minority
interest, before tax 31 23 26 24 20 21 21 19
-------------------------------------------------------------------------------------------
CONTRIBUTION TO METLIFE $20 $18 $19 $20 $15 $23 $19 $22
===========================================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $20 $18 $19 $20 $15 $23 $19 $22
Net investment gains (losses) 25 5 5 (4) (8) 4 0 2
Minority interest - net
investment gains (losses) (9) (2) (2) 4 2 (1) 4 1
Adjustments to net investment
gains (losses) (1) 0 0 0 0 4 0 0 0
Net investment gains (losses)
tax benefit (provision) (5) (2) 0 0 1 (1) (2) (1)
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) 11 1 3 0 (1) 2 2 2
-------------------------------------------------------------------------------------------
Net income $31 $19 $22 $20 $14 $25 $21 $24
===========================================================================================
PRE-TAX AND PRE-MINORITY INTEREST
OPERATING EARNINGS BY REGION
United States $52 $38 $49 $45 $39 $59 $42 $45
Canada 14 13 12 11 12 9 10 9
Latin America 0 0 0 0 1 (1) 0 1
Asia-Pacific 7 7 4 2 1 1 3 2
Other international markets 8 3 3 2 (1) 3 0 1
Corporate (19) (11) (12) (6) (12) (14) (5) (5)
-------------------------------------------------------------------------------------------
Total pre-tax and pre-
minority interest
operating earnings $62 $50 $56 $54 $40 $57 $50 $53
===========================================================================================
POLICY BENEFITS AND INTEREST
SENSITIVE CONTRACT
LIABILITIES BY REGION
Traditional U.S. $4,386 $3,743 $3,721 $3,653 $3,532 $3,209 $3,138 $2,916
Asset intensive 3,201 3,029 2,918 2,718 2,477 1,608 1,569 1,718
Other 112 113 110 112 55 57 57 57
-------------------------------------------------------------------------------------------
Total U.S. 7,699 6,885 6,749 6,483 6,064 4,874 4,764 4,691
-------------------------------------------------------------------------------------------
Canada 1,270 1,049 1,049 972 837 862 882 752
Latin America 0 0 0 0 69 61 80 83
Asia-Pacific 409 376 344 302 197 164 163 166
Other international markets 405 368 316 271 220 188 156 99
-------------------------------------------------------------------------------------------
Total International 2,084 1,793 1,709 1,545 1,323 1,275 1,281 1,100
-------------------------------------------------------------------------------------------
Total policy benefits and
interest sensitive
contract liabilities $9,783 $8,678 $8,458 $8,028 $7,387 $6,149 $6,045 $5,791
===========================================================================================
(1) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
34
(METLIFE LOGO)
- --------------------------------------------------------------------------------
ASSET MANAGEMENT
STATEMENTS OF OPERATING EARNINGS, CHANGE IN ASSETS
UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------ -------------------------------------------------------------------------------------------
REVENUES
Investment and advisory service fees
Mutual funds $20 $20 $17 $16 $17 $19 $24 $21
MetLife and affiliates
separately managed accounts 9 9 9 9 9 10 10 10
Third party client separate
accounts 16 13 16 10 17 15 17 11
Other revenues 13 11 11 10 9 10 14 12
-------------------------------------------------------------------------------------------
58 53 53 45 52 54 65 54
-------------------------------------------------------------------------------------------
EXPENSES
Employee compensation and
benefits 26 25 24 26 27 31 31 29
Promoting and servicing 11 6 7 7 7 8 11 11
General and administrative 11 16 13 10 15 14 15 12
-------------------------------------------------------------------------------------------
48 47 44 43 49 53 57 52
-------------------------------------------------------------------------------------------
Operating earnings before
provision for income taxes 10 6 9 2 3 1 8 2
Provision for income taxes 4 2 4 1 2 0 3 1
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $6 $4 $5 $1 $1 $1 $5 $1
===========================================================================================
NET INCOME (LOSS) RECONCILIATION
- --------------------------------
Operating earnings $6 $4 $5 $1 $1 $1 $5 $1
Net investment gains (losses) (1) 2 0 8 1 (1) 0 (4)
Net investment gains (losses)
tax benefit (provision) 0 0 0 (3) 0 0 0 2
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) (1) 2 0 5 1 (1) 0 (2)
-------------------------------------------------------------------------------------------
Net income (loss) $5 $6 $5 $6 $2 $0 $5 ($1)
===========================================================================================
At or for the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------ -------------------------------------------------------------------------------------------
CHANGE IN ASSETS
Beginning assets $45,711 $46,130 $43,552 $44,577 $45,100 $48,850 $50,898 $51,278
Contributions 1,983 1,190 1,564 1,004 1,851 1,417 1,825 1,594
Redemptions (2,215) (2,039) (2,040) (2,063) (3,303) (3,241) (2,521) (1,661)
Market appreciation
(depreciation) 2,039 430 3,054 34 929 (1,926) (1,352) (313)
-------------------------------------------------------------------------------------------
Ending Carrying Value $47,518 $45,711 $46,130 $43,552 $44,577 $45,100 $48,850 $50,898
===========================================================================================
ASSETS UNDER MANAGEMENT
STATE STREET RESEARCH
MetLife Separate Account $16,762 $17,244 $17,499 $17,160 $18,463 $18,653 $18,035 $18,187
MetLife Retail Funds 7,362 6,894 6,759 5,618 4,353 4,200 5,255 6,617
Third Party Individual and
Retail Funds 9,255 8,140 7,854 6,966 7,724 8,448 10,434 10,970
Third Party Institutional 14,139 13,433 14,018 13,808 14,037 13,799 15,126 15,124
-------------------------------------------------------------------------------------------
Total State Street Research $47,518 $45,711 $46,130 $43,552 $44,577 $45,100 $48,850 $50,898
===========================================================================================
35
(METLIFE LOGO)
- --------------------------------------------------------------------------------
CORPORATE, OTHER & ELIMINATIONS
STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
-------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums ($5) ($4) ($5) ($4) ($4) ($7) ($4) ($4)
Universal life and investment-
type product policy fees 0 0 0 0 0 0 1 (1)
Investment income, net 77 64 42 69 23 (25) 20 40
Other revenues (6) 18 15 12 30 5 12 9
-------------------------------------------------------------------------------------------
66 78 52 77 49 (27) 29 44
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 0 2 0 2 2 0 2 (1)
Interest credited to
policyholder account balances 0 0 0 0 0 0 (1) 1
Interest expense 91 77 88 94 77 76 74 78
Other expenses 21 (30) (65) 24 304 33 (10) 90
-------------------------------------------------------------------------------------------
112 49 23 120 383 109 65 168
-------------------------------------------------------------------------------------------
Operating earnings (loss) before
benefit for income taxes (46) 29 29 (43) (334) (136) (36) (124)
Benefit for income taxes (48) (51) (12) (31) (134) (66) (32) (48)
-------------------------------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $2 $80(1) $41(2) ($12) ($200)(3) ($70) ($4)(4) ($76)(5)
===========================================================================================
NET INCOME (LOSS) RECONCILIATION
- --------------------------------
Operating earnings (loss) $2 $80 $41 ($12) ($200) ($70) ($4) ($76)
Net investment gains (losses) 420 (32) (36) (33) 108 (43) 15 25
Adjustments to net
investments gains
(losses)(6) (48) 0 0 0 0 0 0 0
Net investment gains (losses)
tax benefit (provision) (140) 25 11 10 (35) 18 (11) (13)
-------------------------------------------------------------------------------------------
After-tax net investment gains
(losses) 232 (7) (25) (23) 73 (25) 4 12
-------------------------------------------------------------------------------------------
Net income (loss) $234 $73 $16 ($35) ($127) ($95) $0 ($64)
===========================================================================================
(1) Operating earnings for the three months ended September 30, 2003 includes
a $28 million after-tax benefit from a reduction of a previously
established liability related to the Company's race conscious underwriting
settlement and a $36 million benefit from a revision of the estimate of
income taxes for 2002.
(2) Operating earnings for the three months ended June 30, 2003 includes a $64
million after-tax benefit from a reduction of a previously established
liability related to the Company's race-conscious underwriting settlement.
(3) Operating loss for the three months ended December 31, 2002 includes a
$169 million after-tax charge to cover costs associated with personal
injury liabilities caused by exposure to asbestos or asbestos-containing
products.
(4) Operating loss for the three months ended June 30, 2002 includes a $30
million after-tax reduction of a previously established liability related
to the Company's sales practices class action settlement in 1999.
(5) Operating loss for the three months ended March 31, 2002 includes a $48
million after-tax charge to cover costs associated with the resolution of
a federal government investigation of General American Life Insurance
Company's former Medicare business.
(6) Adjustments to net investment gains and losses include amortization of
deferred policy acquisition costs, charges and credits to participating
contracts, and adjustments to the policyholder dividend obligation
resulting from investment gains and losses.
36
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Three Months Ended
---------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES
Yield (1) 6.92% 6.83% 6.87% 7.01% 7.39% 7.45% 7.51% 7.56%
Income $2,245 $2,140 $2,073 $2,044 $2,092 $2,032 $1,998 $1,954
Investment losses ($183) ($23) ($43) ($149) ($219) ($323) ($210) ($165)
Ending Carrying Value $167,752 $159,940 $158,822 $144,341 $140,288 $132,906 $123,796 $118,236
MORTGAGE LOANS
Yield (2) 7.61% 7.37% 7.50% 7.51% 8.03% 7.68% 7.97% 7.81%
Income $493 $468 $472 $470 $492 $457 $472 $462
Investment losses $2 ($36) ($8) ($14) $0 $0 ($3) ($19)
Ending Carrying Value $26,249 $25,535 $25,289 $25,046 $25,086 $23,885 $23,733 $23,684
REAL ESTATE AND REAL
ESTATE JOINT
VENTURES
Yield (2) 10.96% 10.17% 10.97% 10.94% 11.79% 10.99% 11.80% 10.36%
Income (3) $139 $127 $125 $127 $153 $160 $174 $150
Investment gains
(losses) (4) $344 $10 ($6) $92 $602 ($10) ($14) ($2)
Ending Carrying Value $4,803 $5,364 $4,585 $4,569 $4,725 $5,663 $5,963 $5,862
POLICY LOANS
Yield (2) 6.15% 6.54% 6.46% 6.47% 6.42% 6.66% 6.56% 6.35%
Income $135 $141 $139 $139 $136 $139 $137 $131
Ending Carrying Value $8,749 $8,668 $8,627 $8,615 $8,580 $8,366 $8,316 $8,310
EQUITY SECURITIES AND
OTHER LIMITED
PARTNERSHIP
INTERESTS
Yield (2) 3.32% (1.42%) 3.32% 5.61% 2.07% 2.05% 5.22% 1.16%
Income $34 ($14) $32 $54 $21 $19 $47 $12
Investment gains (losses) $33 ($6) $1 ($71) ($24) $4 $81 $161
Ending Carrying Value $4,075 $4,109 $4,023 $3,773 $4,008 $3,959 $3,717 $3,552
CASH AND SHORT-TERM
INVESTMENTS
Yield (2) 1.67% 1.95% 2.23% 4.57% 5.35% 3.68% 2.85% 4.92%
Income $24 $35 $42 $64 $62 $49 $38 $83
Investment gains (losses) $5 $0 $0 ($4) ($1) $0 ($1) $2
Ending Carrying Value $5,559 $8,090 $8,354 $8,126 $4,244 $6,305 $5,796 $6,434
OTHER INVESTED
ASSETS (5)
Yield (2) 6.42% 7.59% 6.71% 6.52% 8.36% 5.44% 6.53% 5.49%
Income $74 $84 $69 $63 $72 $44 $56 $46
Investment
gains (losses) $76 ($57) $2 $14 ($5) $59 ($46) ($69)
Ending Carrying Value $4,645 $4,617 $4,261 $3,948 $3,727 $3,214 $3,271 $3,512
TOTAL INVESTMENTS
Gross investment
income yield 6.84% 6.62% 6.76% 7.04% 7.41% 7.28% 7.46% 7.31%
Investment fees and
expenses yield (0.16%) (0.15%) (0.14%) (0.15% ) (0.16%) (0.15%) (0.16%) (0.13%)
---------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME YIELD 6.68% 6.47% 6.62% 6.89% 7.25% 7.13% 7.30% 7.18%
===================================================================================================
Gross investment
income $3,144 $2,981 $2,952 $2,961 $3,028 $2,900 $2,922 $2,838
Investment fees
and expenses (74) (67) (63) (62) (64) (61) (61) (49)
---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $3,070 $2,914 $2,889 $2,899 $2,964 $2,839 $2,861 $2,789
===================================================================================================
Ending Carrying Value $221,832 $216,323 $213,961 $198,418 $190,658 $184,298 $174,592 $169,590
===================================================================================================
Gross investment gains $564 $153 $137 $221 $1,040 $412 $438 $545
Gross investment losses (280) (106) (85) (89) (348) (164) (314) (283)
Writedowns (73) (89) (103) (268) (339) (555) (269) (338)
---------------------------------------------------------------------------------------------------
Subtotal 211 (42) (51) (136) 353 (307) (145) (76)
Derivative instruments
not qualifying for
hedge accounting (72) (109) (3) (34) (43) 21 (121) (29)
---------------------------------------------------------------------------------------------------
NET INVESTMENT GAINS
(LOSSES) 139 (151) (54) (170) 310 (286) (266) (105)
Adjustments to net
investment gains
(losses) (6) 138 39 0 38 43 16 73 13
Minority interest - net
investment gains
(losses) (9) (2) (2) 4 2 (1) 4 1
Net investment gains
(losses) tax
benefit (provision) (106) 72 16 44 (132) 102 72 15
---------------------------------------------------------------------------------------------------
AFTER-TAX NET INVESTMENT
GAINS (LOSSES) $162 ($42) ($40) ($84) $223 ($169) ($117) ($76)
===================================================================================================
(1) The fixed maturity yield is annualized and is based on quarterly average
amortized cost.
(2) Yields are annualized and based on quarterly average carrying values.
(3) Included in income from real estate and real estate joint ventures is $10
million, $15 million, $12 million, $15 million, $34 million, $42 million,
$45 million and $39 million related to discontinued operations for the three
months ended December 31, 2003, September 30, 2003, June 30, 2003, March 31,
2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31,
2002, respectively.
(4) Included in investment gains (losses) from real estate and real estate joint
ventures is $322 million, $8 million, $1 million, $90 million, $591 million,
($1) million, ($8) million and $0 million related to discontinued operations
for the three months ended December 31, 2003, September 30, 2003, June 30,
2003, March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002
and March 31, 2002, respectively.
(5) Included in investment income from other invested assets are settlement
payments on derivative instruments that do not qualify for hedge accounting
under SFAS 133 of $29 million, $35 million, $12 million, $8 million, $10
million, $19 million, $1 million and $2 million for the three months ended
December 31, 2003, September 30, 2003, June 30, 2003, March 31, 2003,
December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002,
respectively. These amounts are excluded from net investment gains (losses)
from other invested assets.
(6) Adjustments to investment gains and losses include amortization of deferred
policy acquisition costs, charges and credits to participating contracts,
and adjustments to the policyholder dividend obligation resulting from
investment gains and losses.
37
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Year-to-date
---------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES
Yield (1) 6.89% 6.89% 6.91% 7.01% 7.46% 7.51% 7.54% 7.56%
Income $8,502 $6,257 $4,117 $2,044 $8,076 $5,984 $3,952 $1,954
Investment losses ($398) ($215) ($192) ($149) ($917) ($698) ($375) ($165)
Ending Carrying Value $167,752 $159,940 $158,822 $144,341 $140,288 $132,906 $123,796 $118,236
MORTGAGE LOANS
Yield (2) 7.48% 7.45% 7.50% 7.51% 7.84% 7.82% 7.89% 7.81%
Income $1,903 $1,410 $942 $470 $1,883 $1,391 $934 $462
Investment losses ($56) ($58) ($22) ($14) ($22) ($22) ($22) ($19)
Ending Carrying Value $26,249 $25,535 $25,289 $25,046 $25,086 $23,885 $23,733 $23,684
REAL ESTATE AND REAL
ESTATE JOINT VENTURES
Yield (2) 10.78% 10.51% 10.92% 10.94% 11.41% 11.13% 11.09% 10.36%
Income (3) $518 $379 $252 $127 $637 $484 $324 $150
Investment gains (losses) (4) $440 $96 $86 $92 $576 ($26) ($16) ($2)
Ending Carrying Value $4,803 $5,364 $4,585 $4,569 $4,725 $5,663 $5,963 $5,862
POLICY LOANS
Yield (2) 6.40% 6.49% 6.47% 6.47% 6.49% 6.52% 6.46% 6.35%
Income $554 $419 $278 $139 $543 $407 $268 $131
Ending Carrying Value $8,749 $8,668 $8,627 $8,615 $8,580 $8,366 $8,316 $8,310
EQUITY SECURITIES AND
OTHER LIMITED
PARTNERSHIP INTERESTS
Yield (2) 2.66% 2.43% 4.40% 5.61% 2.47% 2.60% 2.92% 0.87%
Income $106 $72 $86 $54 $99 $78 $59 $12
Investment gains (losses) ($43) ($76) ($70) ($71) $222 $246 $242 $161
Ending Carrying Value $4,075 $4,109 $4,023 $3,773 $4,008 $3,959 $3,717 $3,552
CASH AND SHORT-TERM
INVESTMENTS
Yield (2) 2.73% 2.93% 3.40% 4.57% 4.17% 3.75% 3.92% 4.92%
Income $165 $141 $106 $64 $232 $170 $121 $83
Investment gains (losses) $1 ($4) ($4) ($4) $0 $1 $1 $2
Ending Carrying Value $5,559 $8,090 $8,354 $8,126 $4,244 $6,305 $5,796 $6,434
OTHER INVESTED ASSETS (5)
Yield (2) 6.84% 6.95% 6.61% 6.52% 6.42% 5.87% 6.08% 5.49%
Income $290 $216 $132 $63 $218 $146 $102 $46
Investment gains (losses) $35 ($41) $16 $14 ($61) ($56) ($115) ($69)
Ending Carrying Value $4,645 $4,617 $4,261 $3,948 $3,727 $3,214 $3,271 $3,512
TOTAL INVESTMENTS
Gross investment income
yield 6.82% 6.81% 6.89% 7.04% 7.35% 7.33% 7.38% 7.31%
Investment fees and
expenses yield (0.15%) (0.15%) (0.15%) (0.15%) (0.15%) (0.15%) (0.14%) (0.13%)
---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
YIELD 6.67% 6.66% 6.74% 6.89% 7.20% 7.18% 7.24% 7.18%
===================================================================================================
Gross investment income $12,038 $8,894 $5,913 $2,961 $11,688 $8,660 $5,760 $2,838
Investment fees and
expenses (266) (192) (125) (62) (235) (171) (110) (49)
---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $11,772 $8,702 $5,788 $2,899 $11,453 $8,489 $5,650 $2,789
===================================================================================================
Ending Carrying Value $221,832 $216,323 $213,961 $198,418 $190,658 $184,298 $174,592 $169,590
===================================================================================================
Gross investment gains $1,075 $511 $358 $221 $2,435 $1,395 $983 $545
Gross investment losses (560) (280) (174) (89) (1,109) (761) (597) (283)
Writedowns (533) (460) (371) (268) (1,501) (1,162) (607) (338)
---------------------------------------------------------------------------------------------------
Subtotal (18) (229) (187) (136) (175) (528) (221) (76)
Derivative instruments
not qualifying
for hedge accounting (218) (146) (37) (34) (172) (129) (150) (29)
---------------------------------------------------------------------------------------------------
NET INVESTMENT LOSSES (236) (375) (224) (170) (347) (657) (371) (105)
Adjustments to net
investment gains
(losses) (6) 215 77 38 38 145 102 86 13
Minority interest - net
investment gains
(losses) (9) 0 2 4 6 4 5 1
Net investment gains
(losses) tax
benefit (provision) 26 132 60 44 57 189 87 15
---------------------------------------------------------------------------------------------------
AFTER-TAX NET INVESTMENT
LOSSES ($4) ($166) ($124) ($84) ($139) ($362) ($193) ($76)
===================================================================================================
(1) The fixed maturity yield is annualized and is based on quarterly average
amortized cost.
(2) Yields are annualized and based on year-to-date average carrying values.
(3) Included in income from real estate and real estate joint ventures is $52
million, $42 million, $27 million, $15 million, $160 million, $126 million,
$84 million and $39 million related to discontinued operations for the
year-to-date December 31, 2003, September 30, 2003, June 30, 2003, March 31,
2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31,
2002, respectively.
(4) Included in investment gains (losses) from real estate and real estate joint
ventures is $421 million, $99 million, $91 million, $90 million, $582
million, ($9) million, ($8) million and $0 million related to discontinued
operations for the year-to-date December 31, 2003, September 30, 2003, June
30, 2003, March 31, 2003, December 31, 2002, September 30, 2002, June
30,2002 and March 31, 2002, respectively.
(5) Included in investment income from other invested assets are settlement
payments on derivative instruments that do not qualify for hedge accounting
under SFAS 133 of $84 million, $55 million, $20 million, $8 million, $32
million, $22 million, $3 million and $2 million for the year-to-date
December 31, 2003, September 30, 2003, June 30, 2003, March 31, 2003,
December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002,
respectively. These amounts are excluded from net investment gains (losses)
from other invested assets.
(6) Adjustments to investment gains and losses include amortization of deferred
policy acquisition costs, charges and credits to participating contracts,
and adjustments to the policyholder dividend obligation resulting from
investment gains and losses.
38
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
GROSS UNREALIZED LOSSES AGING SCHEDULE
FIXED MATURITIES
At December 31, 2003 At September 30, 2003 At June 30, 2003
--------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------
Less than 20% $677 91.1% $826 83.4% $612 76.8%
20% or more for less than six months 22 3.0% 82 8.3% 74 9.3%
20% or more for six months or greater 44 5.9% 82 8.3% 111 13.9%
--------------------------------------------------------------------------------
Total Gross Unrealized Losses $743 100.0% $990 100.0% $797 100.0%
================================================================================
At March 31, 2003 At December 31, 2002
----------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- --------------------------------------------------------------------------------------------
Less than 20% $767 60.8% $925 54.7%
20% or more for less than six months 216 17.1% 531 31.4%
20% or more for six months or greater 279 22.1% 234 13.9%
----------------------------------------------------
Total Gross Unrealized Losses $1,262 100.0% $1,690 100.0%
====================================================
GROSS UNREALIZED LOSSES AGING SCHEDULE
EQUITY SECURITIES
At December 31, 2003 At September 30, 2003 At June 30, 2003
--------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------
Less than 20% $6 100.0% $5 100.0% $8 88.9%
20% or more for less than six months 0 0.0% 0 0.0% 1 11.1%
20% or more for six months or greater 0 0.0% 0 0.0% 0 0.0%
--------------------------------------------------------------------------------
Total Gross Unrealized Losses $6 100.0% $5 100.0% $9 100.0%
================================================================================
At March 31, 2003 At December 31, 2002
----------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- --------------------------------------------------------------------------------------------
Less than 20% $39 30.0% $25 30.1%
20% or more for less than six months 91 70.0% 58 69.9%
20% or more for six months or greater 0 0.0% 0 0.0%
----------------------------------------------------
Total Gross Unrealized Losses $130 100.0% $83 100.0%
====================================================
The Company's review of its fixed maturities and equity securities for
impairments includes an analysis of the total gross unrealized losses by
three categories of securities: (i) securities where the estimated fair
value had declined and remained below amortized cost by less than 20%; (ii)
securities where the estimated fair value had declined and remained below
amortized cost by 20% or more for less than six months; and (iii) securities
where the estimated value had declined and remained below amortized cost by
20% or more for six months or greater.
39
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
SUMMARY OF FIXED MATURITIES
BY SECTOR AND QUALITY DISTRIBUTION
At December 31, 2003 At September 30, 2003 At June 30, 2003 At March 31, 2003
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------------------
US treasuries/agencies $15,945 9.5% $14,730 9.2% $13,992 8.8% $12,489 8.7%
State & political subdivisions 3,349 2.0% 3,276 2.0% 3,022 1.9% 2,683 1.8%
Corporate bonds 60,391 36.0% 57,746 36.1% 56,548 35.6% 52,167 36.1%
Foreign government securities 8,764 5.2% 9,027 5.7% 8,938 5.6% 8,374 5.8%
Foreign corporates 23,842 14.2% 21,787 13.6% 22,030 13.9% 19,542 13.5%
Mortgage-backed securities 31,454 18.8% 31,831 19.9% 33,166 20.9% 30,260 21.0%
Commercial mortgage-backed securities 11,031 6.6% 9,318 5.8% 8,649 5.4% 7,509 5.2%
Asset-backed securities 11,863 7.1% 11,033 6.9% 11,222 7.1% 10,224 7.1%
Other fixed income assets 576 0.3% 687 0.5% 771 0.5% 655 0.5%
--------------------------------------------------------------------------------------------
Total 167,215 99.7% 159,435 99.7% 158,338 99.7% 143,903 99.7%
Redeemable preferred stock 537 0.3% 505 0.3% 484 0.3% 438 0.3%
--------------------------------------------------------------------------------------------
Total Fixed Maturities $167,752 100.0% $159,940 100.0% $158,822 100.0% $144,341 100.0%
============================================================================================
NAIC RATING AGENCY
RATING (1)(2) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $112,333 67.0% $107,284 67.1% $107,243 67.5% $97,087 67.3%
2 Baa 42,057 25.0% 39,066 24.4% 38,263 24.1% 34,326 23.8%
3 Ba 8,011 4.8% 7,913 5.0% 7,727 4.9% 7,624 5.3%
4 B 3,814 2.3% 3,962 2.5% 3,854 2.4% 3,658 2.5%
5 Caa and lower 629 0.4% 545 0.3% 724 0.5% 627 0.4%
6 In or near default 371 0.2% 665 0.4% 527 0.3% 581 0.4%
--------------------------------------------------------------------------------------------
Total 167,215 99.7% 159,435 99.7% 158,338 99.7% 143,903 99.7%
Redeemable preferred stock 537 0.3% 505 0.3% 484 0.3% 438 0.3%
--------------------------------------------------------------------------------------------
Total Fixed Maturities $167,752 100.0% $159,940 100.0% $158,822 100.0% $144,341 100.0%
============================================================================================
At December 31, 2002 At September 30, 2002 At June 30, 2002 At March 31, 2002
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------------------
US treasuries/agencies $15,934 11.4% $10,986 8.3% $9,741 7.9% $9,415 8.1%
State & political subdivisions 2,742 1.9% 2,627 2.0% 2,412 2.0% 2,308 1.9%
Corporate bonds 49,257 35.1% 47,693 35.9% 46,039 37.2% 44,431 37.6%
Foreign government securities 7,596 5.4% 7,383 5.6% 7,199 5.8% 4,666 3.9%
Foreign corporates 19,229 13.7% 18,746 14.1% 18,227 14.7% 18,372 15.5%
Mortgage-backed securities 28,026 20.0% 27,774 20.8% 23,441 18.9% 23,258 19.7%
Commercial mortgage-backed securities 6,857 4.9% 6,048 4.6% 5,526 4.5% 5,143 4.3%
Asset-backed securities 9,503 6.8% 9,738 7.3% 8,714 7.0% 8,461 7.2%
Other fixed income assets 697 0.5% 1,481 1.1% 2,025 1.6% 1,673 1.4%
--------------------------------------------------------------------------------------------
Total 139,841 99.7% 132,476 99.7% 123,324 99.6% 117,727 99.6%
Redeemable preferred stock 447 0.3% 430 0.3% 472 0.4% 509 0.4%
--------------------------------------------------------------------------------------------
Total Fixed Maturities $140,288 100.0% $132,906 100.0% $123,796 100.0% $118,236 100.0%
============================================================================================
NAIC RATING AGENCY
RATING (1)(2) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $94,225 67.2% $88,091 66.3% $78,647 63.5% $74,144 62.7%
2 Baa 33,997 24.2% 33,375 25.1% 33,614 27.2% 33,067 28.1%
3 Ba 7,437 5.3% 6,365 4.8% 6,726 5.4% 5,989 5.1%
4 B 3,408 2.4% 3,509 2.6% 3,364 2.7% 3,606 3.0%
5 Caa and lower 295 0.3% 771 0.6% 734 0.6% 643 0.5%
6 In or near default 479 0.3% 365 0.3% 239 0.2% 278 0.2%
--------------------------------------------------------------------------------------------
Total 139,841 99.7% 132,476 99.7% 123,324 99.6% 117,727 99.6%
Redeemable preferred stock 447 0.3% 430 0.3% 472 0.4% 509 0.4%
--------------------------------------------------------------------------------------------
Total Fixed Maturities $140,288 100.0% $132,906 100.0% $123,796 100.0% $118,236 100.0%
============================================================================================
(1) Amounts presented are based on rating agency designations. Comparisons
between NAIC ratings and rating agency designations are published by the
NAIC.
(2) Certain amounts in prior periods presented throughout the quarterly
financial supplement have been reclassified to conform with current period
presentation.
METLIFE, INC.
SUMMARY OF COMMERCIAL MORTGAGE LOANS BY
REGION AND PROPERTY TYPE
At December 31, 2003 At September 30, 2003 At June 30, 2003 At March 31, 2003
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------------------
South Atlantic $4,978 24.5% $5,027 25.2% $5,139 25.9% $5,167 26.3%
Pacific 5,005 24.7% 4,587 23.0% 4,130 20.8% 4,198 21.4%
Middle Atlantic 3,455 17.0% 3,522 17.6% 3,543 17.9% 3,416 17.4%
East North Central 1,821 9.0% 1,808 9.1% 2,331 11.8% 2,260 11.5%
New England 1,278 6.3% 1,269 6.4% 1,181 6.0% 1,168 6.0%
West South Central 1,370 6.8% 1,352 6.8% 1,256 6.3% 1,149 5.9%
Mountain 740 3.6% 798 4.0% 845 4.3% 858 4.4%
West North Central 619 3.0% 582 2.9% 580 2.9% 598 3.0%
International 836 4.1% 811 4.1% 631 3.2% 631 3.2%
East South Central 198 1.0% 189 0.9% 187 0.9% 178 0.9%
--------------------------------------------------------------------------------------------
Total $20,300 100.0% $19,945 100.0% $19,823 100.0% $19,623 100.0%
============================================================================================
Office $9,170 45.2% $8,919 44.7% $9,414 47.4% $9,301 47.5%
Retail 5,006 24.7% 4,825 24.2% 4,471 22.6% 4,321 22.0%
Apartments 2,832 13.9% 2,932 14.7% 2,805 14.2% 2,867 14.6%
Industrial 1,911 9.4% 1,940 9.7% 1,922 9.7% 1,893 9.6%
Hotel 1,032 5.1% 1,038 5.2% 955 4.8% 996 5.1%
Other 349 1.7% 291 1.5% 256 1.3% 245 1.2%
--------------------------------------------------------------------------------------------
Total $20,300 100.0% $19,945 100.0% $19,823 100.0% $19,623 100.0%
============================================================================================
At December 31, 2002 At September 30, 2002 At June 30, 2002 At March 31, 2002
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ------------------------------------------------------------------------------------------------------------------------------------
South Atlantic $5,076 26.0% $4,832 26.3% $4,806 26.4% $4,736 26.2%
Pacific 4,180 21.4% 3,860 21.0% 3,715 20.5% 3,642 20.1%
Middle Atlantic 3,441 17.6% 3,315 18.1% 3,310 18.2% 3,309 18.3%
East North Central 2,147 11.0% 1,962 10.7% 1,956 10.8% 1,959 10.8%
New England 1,323 6.8% 1,270 6.9% 1,246 6.9% 1,286 7.1%
West South Central 1,097 5.6% 975 5.3% 982 5.4% 993 5.5%
Mountain 833 4.2% 763 4.2% 766 4.2% 795 4.4%
West North Central 645 3.3% 647 3.5% 653 3.6% 666 3.7%
International 632 3.2% 546 3.0% 540 3.0% 519 2.9%
East South Central 178 0.9% 178 1.0% 179 1.0% 180 1.0%
--------------------------------------------------------------------------------------------
Total $19,552 100.0% $18,348 100.0% $18,153 100.0% $18,085 100.0%
============================================================================================
Office $9,340 47.8% $8,431 45.9% $8,311 45.8% $8,165 45.1%
Retail 4,320 22.1% 4,332 23.6% 4,349 24.0% 4,383 24.2%
Apartments 2,793 14.3% 2,602 14.2% 2,582 14.2% 2,584 14.3%
Industrial 1,910 9.7% 1,933 10.5% 1,876 10.3% 1,912 10.6%
Hotel 942 4.8% 818 4.5% 822 4.5% 828 4.6%
Other 247 1.3% 232 1.3% 213 1.2% 213 1.2%
--------------------------------------------------------------------------------------------
Total $19,552 100.0% $18,348 100.0% $18,153 100.0% $18,085 100.0%
============================================================================================
40
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
SUMMARY OF REAL ESTATE
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003
- -------------------------------------------------------------------------------------------------
Wholly owned $4,362 $4,927 $4,184 $4,199
Joint ventures 438 431 397 365
---------------------------------------------------------------
Subtotal 4,800 5,358 4,581 4,564
Foreclosed 3 6 4 5
---------------------------------------------------------------
Total Real Estate (1) $4,803 $5,364 $4,585 $4,569
===============================================================
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------
Wholly owned $4,338 $5,302 $5,615 $5,520
Joint ventures 377 316 297 291
---------------------------------------------------------------
Subtotal 4,715 5,618 5,912 5,811
Foreclosed 10 45 51 51
---------------------------------------------------------------
Total Real Estate (1) $4,725 $5,663 $5,963 $5,862
===============================================================
(1) Includes real estate held-for-sale and held-for-investment.
METLIFE, INC.
SUMMARY OF MORTGAGES
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003
- -------------------------------------------------------------------------------------------------
COMMERCIAL $20,300 $19,945 $19,823 $19,623
AGRICULTURAL 5,327 5,131 5,090 5,052
RESIDENTIAL 622 459 376 371
---------------------------------------------------------------
TOTAL $26,249 $25,535 $25,289 $25,046
===============================================================
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------
COMMERCIAL $19,552 $18,348 $18,153 $18,085
AGRICULTURAL 5,146 5,155 5,174 5,196
RESIDENTIAL 388 382 406 403
---------------------------------------------------------------
TOTAL $25,086 $23,885 $23,733 $23,684
===============================================================
METLIFE, INC.
DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2003 2003 2003 2003
- -------------------------------------------------------------------------------------------------
METLIFE $251.0 $245.0 $242.3 $226.3
METLIFE SEPARATE ACCOUNT 75.8 70.0 67.5 60.6
STATE STREET THIRD PARTY 23.4 21.6 21.9 20.8
---------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT $350.2 $336.6 $331.7 $307.7
===============================================================
At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------------
METLIFE $217.7 $212.0 $202.0 $196.3
METLIFE SEPARATE ACCOUNT 59.7 56.0 59.3 62.5
STATE STREET THIRD PARTY 21.8 22.2 25.6 26.1
---------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT $299.2 $290.2 $286.9 $284.9
===============================================================
41
(METLIFE LOGO)
COMPANY RATINGS AS OF FEBRUARY 4, 2004 (1)
Moody's Standard & A.M. Best Fitch
Investors Service Poor's Company Ratings
----------------- ------ ------- -------
FINANCIAL STRENGTH RATINGS
- --------------------------
Metropolitan Life Insurance Company Aa2 AA A+ AA
Metropolitan Life Insurance Company (Short-term rating) P-1 A-1+ NR NR
First MetLife Investors Insurance Co. NR AA A+ NR
General American Life Insurance Company Aa2 AA A+ AA
MetLife Investors Insurance Company Aa2 AA A+ AA
MetLife Investors Insurance Company of California NR AA A+ NR
MetLife Investors USA Insurance Company Aa3 AA A+ AA
Metropolitan Insurance and Annuity Company Aa3 NR NR NR
New England Life Insurance Company Aa2 AA A+ AA
Paragon Life Insurance Company NR AA A+ AA
Texas Life Insurance Company NR NR A NR
RGA Reinsurance Company A1 AA- A+ AA-
Metropolitan Property and Casualty Insurance Company Aa3 NR A NR
Metropolitan Casualty Insurance Company NR NR A NR
Metropolitan Direct Property and Casualty Insurance Co. NR NR A NR
Metropolitan General Insurance Company NR NR A NR
Metropolitan Group Property & Casualty Insurance Co. NR NR A NR
Metropolitan Lloyds Insurance Company of Texas NR NR A NR
CREDIT RATINGS
- --------------
MetLife, Inc.
Senior Unsecured A2 A a A
Commercial Paper P-1 A-1 AMB-1+ F1
Metropolitan Life Insurance Company
Surplus Notes A1 A+ a+ A+
MetLife Funding, Inc.
Commercial Paper P-1 A-1+ AMB-1+ F1+
General American Life Insurance Company
Surplus Notes A1 A+ a+ NR
GenAmerica Capital I
Preferred Stock A3 BBB+ NR A-
Reinsurance Group of America, Incorporated
Senior Unsecured Baa1 A- a- A-
RGA Capital Trust I
Preferred Stock NR BBB bbb BBB+
(1) NR indicates not rated
42
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
2002 OPERATING EARNINGS (LOSS)
CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL
("EC")
December 31, 2002 (1) September 30, 2002 June 30, 2002 (2) March 31, 2002 (3)
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Operations
Group Life $82 $85 $84 $86 $74 $76 $68 $70
Retirement & Savings 120 121 103 106 135 137 114 118
Non-Medical Health & Other 60 65 47 52 41 46 53 58
--------------------------------------------------------------------------------------------
Total Institutional Operations 262 271 234 244 250 259 235 246
--------------------------------------------------------------------------------------------
Individual Operations
Traditional Life 92 86 127 121 97 91 98 92
Variable & Universal Life 23 19 40 35 36 32 25 20
Annuities 47 42 44 39 50 45 40 35
Other 12 13 15 16 13 14 11 12
--------------------------------------------------------------------------------------------
Total Individual Operations 174 160 226 211 196 182 174 159
--------------------------------------------------------------------------------------------
Auto & Home
Auto 21 17 41 37 17 14 15 12
Homeowners 30 31 6 6 15 15 11 12
Other (3) (3) 1 2 4 4 4 4
--------------------------------------------------------------------------------------------
Total Auto & Home 48 45 48 45 36 33 30 28
--------------------------------------------------------------------------------------------
International Operations 38 32 40 34 2 (4) 14 8
Reinsurance 15 9 23 17 19 13 22 16
Asset Management 1 3 1 3 5 7 1 3
Corporate, Other & Eliminations (200) (182) (70) (52) (4) 14 (76) (60)
--------------------------------------------------------------------------------------------
Total Operating Earnings $338 $338 $502 $502 $504 $504 $400 $400
============================================================================================
(1) Fourth quarter 2002 includes a $169 million after-tax charge to cover costs
associated with personal injury liabilities caused by exposure to asbestos
or asbestos-containing products (Corporate, Other & Eliminations), a $20
million after-tax reduction of a previously established liability related to
the Company's business realignment initiatives (Retirement & Savings), and a
$17 million after-tax reduction of a previously established disability
insurance liability related to the September 11, 2001 tragedies (Non-Medical
Health & Other).
(2) Second quarter 2002 includes a $30 million after-tax reduction of a
previously established reserve related to the Company's sales practices
class action settlement in 1999. This reserve reduction impacted the
Corporate, Other & Eliminations segment.
(3) First quarter 2002 includes a $48 million after-tax charge to cover costs
associated with the resolution of a federal government investigation of
General American Life Insurance Company's former Medicare business. This
charge impacted the Corporate, Other & Eliminations segment.
43
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
2001 OPERATING EARNINGS (LOSS)
CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL
("EC")
December 31, 2001 (1) September 30, 2001 (2) June 30, 2001 March 31, 2001
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Operations
Group Life $75 $80 ($16) ($10) $76 $80 $63 $68
Retirement & Savings (155) (154) 87 89 88 89 94 95
Non-Medical Health & Other 33 38 (44) (38) 40 45 38 43
--------------------------------------------------------------------------------------------
Total Institutional Operations (47) (36) 27 41 204 214 195 206
--------------------------------------------------------------------------------------------
Individual Operations
Traditional Life 61 52 73 64 99 90 98 89
Variable & Universal Life 23 20 23 21 32 29 33 30
Annuities 40 37 57 54 47 44 36 33
Other (72) (71) 11 12 8 9 16 17
--------------------------------------------------------------------------------------------
Total Individual Operations 52 38 164 151 186 172 183 169
--------------------------------------------------------------------------------------------
Auto & Home
Auto 24 23 25 23 39 35 (7) (11)
Homeowners 15 14 (5) (5) (25) (26) (16) (14)
Other 4 4 2 2 (3) (1) (1) 0
--------------------------------------------------------------------------------------------
Total Auto & Home 43 41 22 20 11 8 (24) (25)
--------------------------------------------------------------------------------------------
International Operations (8) (11) 11 9 11 9 18 16
Reinsurance (1) (7) 16 10 16 10 15 9
Asset Management 2 5 2 5 1 4 6 9
Corporate, Other & Eliminations (165) (154) (15) (9) (10) 2 (9) 0
--------------------------------------------------------------------------------------------
Total Operating Earnings (Loss) ($124) ($124) $227 $227 $419 $419 $384 $384
============================================================================================
(1) Fourth quarter 2001 includes business realignment costs, costs associated
with the establishment of a policyholder liability for New England Financial
and costs associated with the anticipated resolution of race-conscious
underwriting claims. By segment, the after-tax costs were as follows: Group
Life $1 million; Retirement & Savings $264 million; Non-Medical Health &
Other $2 million; Traditional Life $24 million; Variable & Universal Life
$12 million; Annuities $22 million; Individual Business - Other $77 million;
Auto $1 million; Property $1 million; and Corporate, Other & Eliminations
$159 million.
(2) Third quarter 2001 includes costs associated with the September 11
tragedies. By segment, the after-tax costs were as follows: Group Life $99
million; Non-Medical Health & Other $83 million; Traditional Life $8
million; Variable & Universal Life $7 million; Auto $1 million; Homeowners
$3 million; and Reinsurance $7 million.
44
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
2000 OPERATING EARNINGS (LOSS)
CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL
("EC")
December 31, 2000 September 30, 2000 June 30, 2000 March 31, 2000
--------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Operations
Group Life $48 $55 $63 $69 $61 $67 $62 $68
Retirement & Savings 71 80 58 67 47 56 45 54
Non-Medical Health & Other 44 51 38 45 40 47 33 40
--------------------------------------------------------------------------------------------
Total Institutional Operations 163 186 159 181 148 170 140 162
--------------------------------------------------------------------------------------------
Individual Operations
Traditional Life 155 132 105 83 98 76 101 79
Variable & Universal Life 21 16 35 31 23 19 32 28
Annuities 25 18 48 42 69 62 60 53
Other (3) (4) 6 6 4 5 3 3
--------------------------------------------------------------------------------------------
Total Individual Operations 198 162 194 162 194 162 196 163
--------------------------------------------------------------------------------------------
Auto & Home
Auto 7 8 22 20 10 8 8 7
Homeowners 24 24 (17) (16) (22) (22) (7) (6)
Other 6 6 5 6 (1) 0 7 7
--------------------------------------------------------------------------------------------
Total Auto & Home 37 38 10 10 (13) (14) 8 8
--------------------------------------------------------------------------------------------
International Operations 3 0 5 2 7 4 11 8
Reinsurance 25 20 16 11 9 4 22 17
Asset Management 3 6 9 12 10 13 11 14
Corporate, Other & Eliminations (25) (8) (9) 6 19 35 (9) 7
--------------------------------------------------------------------------------------------
Total Operating Earnings $404 $404 $384 $384 $374 $374 $379 $379
============================================================================================
45