(METLIFE LOGO)
FINANCIAL SUPPLEMENT
SEPTEMBER 30, 2004
(SNOOPY GRAPHIC)
(GRAPHIC OF THE NUMBER 3)
(METLIFE LOGO)
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
HIGHLIGHTS
CORPORATE OVERVIEW 2
METLIFE, INC.
CONSOLIDATED BALANCE SHEETS 3
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 4
TOTAL COMPANY HEADCOUNT 5
CONSOLIDATING BALANCE SHEET 6
CONSOLIDATING STATEMENT OF OPERATING EARNINGS 7
INSURANCE OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 11
CONSOLIDATING STATEMENT OF OPERATING EARNINGS 12
SUMMARY OF SEGMENT OPERATING EARNINGS 16
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS 17
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION 21
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND
SEPARATE ACCOUNT LIABILITIES 22
EXPENSES BY MAJOR CATEGORY 23
SPREADS BY PRODUCT 24
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS 25
PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES 30
ADDITIONAL STATISTICAL INFORMATION 31
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND
SEPARATE ACCOUNT LIABILITIES 32
INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY 33
SPREADS BY PRODUCT 34
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS 35
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA 39
INTERNATIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS 40
REINSURANCE OPERATIONS
STATEMENTS OF OPERATING EARNINGS 41
PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION 42
ASSET MANAGEMENT OPERATIONS
STATEMENTS OF OPERATING EARNINGS
CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT 43
44
CORPORATE, OTHER & ELIMINATIONS
STATEMENTS OF OPERATING EARNINGS 45
METLIFE, INC.
INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS 46
FIXED MATURITIES AND EQUITY SECURITIES GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE 48
SUMMARY OF FIXED MATURITIES BY SECTOR AND QUALITY DISTRIBUTION, AND
SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE 49
SUMMARY OF REAL ESTATE, SUMMARY OF MORTGAGES AND DISTRIBUTION OF
ASSETS UNDER MANAGEMENT 50
OTHER INFORMATION
COMPANY RATINGS 51
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 NET INVESTMENT GAINS AND LOSSES, NET OF
INCOME TAXES, ADJUSTMENTS RELATED TO INVESTMENT GAINS AND LOSSES, NET OF INCOME
TAXES AND THE IMPACT FROM THE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING, NET
OF INCOME TAXES. SCHEDULED 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 INVESTMENT GAINS AND LOSSES, NET OF
INCOME TAXES, AND ADJUSTMENTS RELATED TO INVESTMENT GAINS AND LOSSES, NET OF
INCOME TAXES, BOTH OF WHICH CAN FLUCTUATE SIGNIFICANTLY FROM PERIOD TO PERIOD,
AS WELL AS THE IMPACT OF THE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING, NET OF
INCOME TAXES, 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 OCTOBER 27, 2004, FOR THE QUARTER ENDED SEPTEMBER 30, 2004,
WHICH ARE AVAILABLE AT WWW.METLIFE.COM.
1
(METLIFE LOGO)
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CORPORATE OVERVIEW
Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended
------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2004 2004 2004 2003 2003 2003 2003
------------------------------------------------------------------------------------------
Net income (1) $695 $954 (8) $598 (9) $701 $574 $580 $362
Net investment gains (losses) 178 157 123 139 (151) (54) (170)
Minority interest - net investment
gains (losses) 2 (8) (8) (9) (2) (2) 4
Net investment gains (losses) tax
benefit (provision) (62) (47) (39) (58) 85 16 57
------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes (2) (3) 118 102 76 72 (68) (40) (109)
Adjustments related to policyholder
benefits and dividends (74) 116 31 132 29 (5) 28
Adjustments related to other expenses 6 (5) (17) 6 10 5 10
Adjustments related to tax benefit
(provision) 24 (39) (5) (48) (13) 0 (13)
------------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (4) (44) 72 9 90 26 0 25
Cumulative effect of a change in
accounting, net of income taxes (5) 0 0 (86) (26) 0 0 0
------------------------------------------------------------------------------------------
Operating earnings $621 (7) $780 (8) $599 (9) $565 $616 (10) $620 (11) $446
==========================================================================================
Net income per share - diluted $0.92 $1.26 $0.79 $0.92 $0.75 $0.79 $0.47 (12)
Net investment gains (losses), net of
income taxes 0.16 0.13 0.10 0.09 (0.09) (0.05) (0.15)
Adjustments related to net investment
gains (losses), net of income taxes (0.06) 0.09 0.01 0.12 0.03 0.00 0.03
Cumulative effect of a change in
accounting, net of income taxes 0.00 0.00 (0.11) (0.03) 0.00 0.00 0.00
Impact of conversion of securities 0.00 0.00 0.00 0.00 0.00 0.00 (0.03)
------------------------------------------------------------------------------------------
Operating earnings per share - diluted $0.82 $1.03 $0.79 $0.74 $0.81 $0.84 $0.62
==========================================================================================
Weighted average common shares
outstanding - diluted 753.4 758.0 760.3 761.3 760.9 731.3 722.4
Book value per common share (actual
shares outstanding) $30.86 $28.28 $29.48 $27.93 $27.50 $27.13 $25.76
Book value per common share, excluding
accumulated other comprehensive
income (actual shares outstanding) $27.11 $25.99 $24.93 $24.24 $23.54 $22.78 $22.45
Book value per common share - diluted $30.49 $27.98 $29.29 $27.78 $27.47 $28.20 $24.97
Book value per common share, excluding
accumulated other comprehensive
income - diluted $26.79 $25.72 $24.76 $24.11 $23.52 $23.68 $21.77
------------------------------------------------------------------------------------------
At or for the Three Months Ended
------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2004 2004 2004 2003 2003 2003 2003
------------------------------------------------------------------------------------------
Shares outstanding, beginning of period 750.0 755.4 757.2 760.2 760.2 700.4 700.3
Treasury stock (5.5) (5.4) (1.8) (3.0) 0.0 59.8 0.1
------------------------------------------------------------------------------------------
Shares outstanding, end of period 744.5 750.0 755.4 757.2 760.2 760.2 700.4
Weighted average common shares
outstanding - basic 748.0 753.3 756.5 759.0 760.1 731.3 700.3
Dilutive effect of convertible
securities 0.0 0.0 0.0 0.0 0.0 0.0 22.1
Dilutive effect of stock options 4.2 3.5 3.1 1.6 0.0 0.0 0.0
Dilutive effect of deferred stock
compensation 1.2 1.2 0.7 0.7 0.8 0.0 0.0
------------------------------------------------------------------------------------------
Weighted average common shares
outstanding - diluted 753.4 758.0 760.3 761.3 760.9 731.3 722.4
==========================================================================================
Policyholder Trust Shares 325.1 335.0 347.2 362.5 372.7 382.4 386.4
SUPPLEMENTAL DATA
Adjusted long-term debt to total
capital excluding accumulated other
comprehensive income (6) 22.8% 21.9% 20.5% 21.3% 21.4% 22.0% 23.7%
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(1) Presentation of net income throughout the QFS differs from other public
filings with respect to discontinued operations and scheduled 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 scheduled settlement payments on derivatives not
qualifying for hedge accounting treatment in other public filings is in
accordance with SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities ("SFAS 133").
(2) Net investment gains (losses), net of income taxes, excludes scheduled
settlement payments on derivative instruments not qualifying for hedge
accounting treatment of $8 million, $14 million, $9 million, $18 million,
$22 million, $8 million and $5 million for the three months ended
September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003,
September 30, 2003, June 30, 2003 and March 31, 2003, respectively.
(3) Net investment gains (losses), net of income taxes, from real estate and
real estate joint ventures include discontinued operations of
($10) million, $85 million, $13 million, $205 million, $4 million, $0
million, and $57 million for the three months ended September 30, 2004,
June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, June
30, 2003, and March 31, 2003, respectively.
(4) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(5) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by a $72 million benefit in accordance with the SOP 03-1
Technical Practice Aid. For the period ended December 31, 2003, the
cumulative effect of a change in accounting, net of income taxes, 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.
(6) Adjusted long-term debt at September 30, 2004, June 30, 2004, March 31,
2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31,
2003 consists of $6,004 million, $5,503 million, $4,907 million, $4,909
million, $4,912 million, $4,917 million and $4,919 million of long-term
debt, respectively, and $36 million, $36 million, $36 million, $142
million, $36 million, $35 million, and $49 million of short-term debt,
respectively. Total capital is defined as equity less accumulated other
comprehensive income plus adjusted long-term debt and company obligated
mandatorily redeemable capital securities.
(7) Operating earnings for the three months ended September 30, 2004 includes
a $9 million benefit, ($0.01 per diluted share) from a revision of the
estimate of income taxes for 2003.
(8) Operating earnings and net income for the three months ended June 30, 2004
includes a $32 million charge, net of income taxes ($0.04 per diluted
share), from a contribution to the MetLife Foundation made by Metropolitan
Life Insurance Company, a $31 million benefit, net of income taxes ($0.04
per diluted share), from a reduction of a previously established premium
tax liability and a $105 million benefit ($0.14 per diluted share) related
to a previously disclosed resolution of an IRS audit. Additionally,
earnings for the three months ended June 30, 2004 was adjusted by a $7
million benefit, net of income taxes ($0.01 per diluted share), as a
result of the SOP 03-1 Technical Practice Aid which clarifies recognition
of certain liabilities in accordance with SOP 03-1.
(9) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes (less than
$0.01 per diluted share), as a result of the SOP 03-1 Technical Practice
Aid which clarifies recognition of certain liabilities in accordance with
SOP 03-1.
(10) Operating earnings for the three months ended September 30, 2003 includes
a $28 million benefit, net of income taxes ($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.
(11) Operating earnings for the three months ended June 30, 2003 includes a $64
million benefit, net of income taxes ($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 earnings, net of
income taxes ($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 charge, net of
income taxes ($0.05 per diluted share), related to previously deferred
expenses.
(12) 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 charge, net
of income taxes ($0.03 per diluted share), associated with the Company's
redemption of MetLife Capital Trust I's mandatorily redeemable capital
securities.
2
[METLIFE LOGO]
METLIFE, INC.
CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------------------
As of
---------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
--------- --------- --------- --------- --------- --------- ---------
ASSETS (1)
Fixed maturities available-for-sale, at
fair value $ 176,091 $ 170,192 $ 174,100 $ 167,752 $ 159,940 $ 158,822 $ 144,341
Equity securities, at fair value 1,897 1,744 1,756 1,598 1,659 1,617 1,474
Mortgage loans on real estate 29,620 28,118 26,562 26,249 25,535 25,288 25,046
Real estate and real estate joint ventures 4,281 4,154 4,699 4,680 5,255 4,491 4,475
Policy loans 8,801 8,766 8,758 8,749 8,668 8,627 8,615
Other limited partnership interests 2,846 2,805 2,549 2,600 2,559 2,500 2,393
Short-term investments 2,464 2,089 1,998 1,826 2,718 2,640 3,188
Other invested assets 4,405 5,119 5,094 4,645 4,617 4,261 3,948
--------- --------- --------- --------- --------- --------- ---------
Investments 230,405 222,987 225,516 218,099 210,951 208,246 193,480
Cash and cash equivalents 3,631 4,459 3,146 3,733 5,372 5,714 4,938
Accrued investment income 2,491 2,330 2,337 2,186 2,265 2,241 2,179
Premiums and other receivables 7,122 7,406 7,412 7,047 7,107 7,486 6,768
Deferred policy acquisition costs 13,920 13,828 12,961 12,943 12,367 11,899 11,889
Goodwill and other intangible assets 643 638 638 643 654 652 745
Other 6,786 6,617 6,666 6,434 6,269 6,123 6,303
Separate account assets 81,181 79,747 78,336 75,756 69,998 67,460 60,620
--------- --------- --------- --------- --------- --------- ---------
$ 346,179 $ 338,012 $ 337,012 $ 326,841 $ 314,983 $ 309,821 $ 286,922
========= ========= ========= ========= ========= ========= =========
LIABILITIES AND EQUITY (1)
LIABILITIES
Future policy benefits $ 100,357 $ 97,061 $ 99,000 $ 96,278 $ 95,095 $ 95,360 $ 92,744
Policyholder account balances 81,798 79,943 77,981 75,901 74,857 72,207 69,060
Short-term debt 1,566 3,218 3,068 3,642 2,935 3,443 2,441
Long-term debt 6,695 6,226 5,707 5,703 5,703 5,562 5,481
Shares subject to mandatory redemption 277 277 277 277 277 0 0
Payables under securities loaned transactions 28,662 28,132 28,045 27,083 24,666 23,028 19,566
Other 22,668 22,010 22,250 21,052 20,547 21,861 18,694
Separate account liabilities 81,181 79,747 78,336 75,756 69,998 67,460 60,620
--------- --------- --------- --------- --------- --------- ---------
323,204 316,614 314,664 305,692 294,078 288,921 268,606
--------- --------- --------- --------- --------- --------- ---------
Company-obligated mandatorily redeemable
capital securities 0 0 0 0 0 277 277
--------- --------- --------- --------- --------- --------- ---------
EQUITY
Common stock, at par value 8 8 8 8 8 8 8
Capital in excess of par value 15,027 15,013 15,001 14,991 14,960 14,956 14,952
Retained earnings 6,440 5,745 4,791 4,193 3,667 3,093 3,169
Treasury stock (1,294) (1,085) (896) (835) (739) (740) (2,402)
Accumulated other comprehensive income 2,794 1,717 3,444 2,792 3,009 3,306 2,312
--------- --------- --------- --------- --------- --------- ---------
22,975 21,398 22,348 21,149 20,905 20,623 18,039
--------- --------- --------- --------- --------- --------- ---------
$ 346,179 $ 338,012 $ 337,012 $ 326,841 $ 314,983 $ 309,821 $ 286,922
========= ========= ========= ========= ========= ========= =========
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
3
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $5,736 $5,331 $5,367 $5,679 $5,079 $5,083 $4,832
Universal life and investment-type
product policy fees 738 726 679 698 623 603 572
Investment income, net 3,108 3,157 3,001 3,070 2,914 2,889 2,899
Other revenues 341 356 353 354 335 355 298
-------------------------------------------------------------------------------------------
9,923 9,570 9,400 9,801 8,951 8,930 8,601
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 6,318 5,913 5,928 6,244 5,651 5,472 5,456
Interest credited to policyholder
account balances 739 743 738 760 767 761 747
Interest expense 113 109 99 109 104 112 116
Other expenses 1,869 1,802 1,762 1,897 1,585 1,732 1,637
-------------------------------------------------------------------------------------------
9,039 8,567 8,527 9,010 8,107 8,077 7,956
-------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 884 1,003 873 791 844 853 645
Provision for income taxes 263 223 274 226 228 233 199
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $621 (4) $780 (5) $599 (6) $565 $616 (7) $620 (8) $446
===========================================================================================
NET INCOME RECONCILIATION (2)
- -----------------------------
Operating earnings $621 $780 $599 $565 $616 $620 $446
Net investment gains (losses) 178 157 123 139 (151) (54) (170)
Minority interest - net investment
gains (losses) 2 (8) (8) (9) (2) (2) 4
Net investment gains (losses) tax
benefit (provision) (62) (47) (39) (58) 85 16 57
-------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 118 102 76 72 (68) (40) (109)
Adjustments related to policyholder
benefits and dividends (74) 116 31 132 29 (5) 28
Adjustments related to other expenses 6 (5) (17) 6 10 5 10
Adjustments related to tax benefit
(provision) 24 (39) (5) (48) (13) 0 (13)
-------------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (44) 72 9 90 26 0 25
Cumulative effect of a change in
accounting, net of income taxes(1)(3) 0 0 (86) (26) 0 0 0
-------------------------------------------------------------------------------------------
Net income $695 $954 (5) $598 (6) $701 $574 $580 $362
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $16,434 $10,698 $20,673 $14,994 $9,915
Universal life and investment-type
product policy fees 2,143 1,405 2,496 1,798 1,175
Investment income, net 9,266 6,158 11,772 8,702 5,788
Other revenues 1,050 709 1,342 988 653
-------------------------------------------------------------------
28,893 18,970 36,283 26,482 17,531
-------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 18,159 11,841 22,823 16,579 10,928
Interest credited to policyholder
account balances 2,220 1,481 3,035 2,275 1,508
Interest expense 321 208 441 332 228
Other expenses 5,433 3,564 6,851 4,954 3,369
-------------------------------------------------------------------
26,133 17,094 33,150 24,140 16,033
-------------------------------------------------------------------
Operating earnings before provision for
income taxes 2,760 1,876 3,133 2,342 1,498
Provision for income taxes 760 497 886 660 432
-------------------------------------------------------------------
OPERATING EARNINGS $2,000 (4) $1,379 (5) $2,247 $1,682 (7) $1,066 (8)
===================================================================
NET INCOME RECONCILIATION (2)
- -----------------------------
Operating earnings $2,000 $1,379 $2,247 $1,682 $1,066
Net investment gains (losses) 458 280 (236) (375) (224)
Minority interest - net investment
gains (losses) (14) (16) (9) 0 2
Net investment gains (losses) tax
benefit (provision) (148) (86) 100 158 73
-------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 296 178 (145) (217) (149)
Adjustments related to policyholder
benefits and dividends 73 147 184 52 23
Adjustments related to other expenses (16) (22) 31 25 15
Adjustments related to tax benefit
(provision) (20) (44) (74) (26) (13)
-------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes 37 81 141 51 25
Cumulative effect of a change in
accounting, net of income taxes(1)(3) (86) (86) (26) 0 0
-------------------------------------------------------------------
Net income $2,247 $1,552 (5) $2,217 $1,516 $942
===================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(3) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by a $72 million benefit in accordance with the SOP 03-1
Technical Practice Aid. For the period ended December 31, 2003, the
cumulative effect of a change in accounting, net of income taxes, 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.
(4) Operating earnings for the three months ended September 30, 2004 includes
a $9 million benefit, from a revision of the estimate of income taxes for
2003.
(5) Operating earnings and net income for the three months ended June 30, 2004
includes a $32 million charge, net of income taxes, from a contribution to
the MetLife Foundation made by Metropolitan Life Insurance Company, a $31
million benefit, net of income taxes, from a reduction of a previously
established premium tax liability and a $105 million benefit related to a
previously disclosed resolution of an IRS audit. Additionally, earnings
for the three months ended June 30, 2004 was adjusted by a $7 million
benefit, net of income taxes, as a result of the SOP 03-1 Technical
Practice Aid which clarifies recognition of certain liabilities in
accordance with SOP 03-1.
(6) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes, as a
result of the SOP 03-1 Technical Practice Aid which clarifies recognition
of certain liabilities in accordance with SOP 03-1.
(7) Operating earnings for the period ended September 30, 2003 includes a $28
million benefit, net of income taxes, 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.
(8) Operating earnings for the period ended June 30, 2003 includes a $64
million benefit, net of income taxes, from a reduction of a previously
established liability related to the Company's race-conscious underwriting
settlement, $62 million of earnings, net of income taxes, 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 charge, net of income taxes, related to previously deferred
expenses.
4
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
TOTAL COMPANY HEADCOUNT
As of
------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
2004 2004 2004 2003 2003 2003 2003
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL COMPANY HEADCOUNT (1)(2)
DOMESTIC
SALES
Individual 11,034 11,045 10,994 11,196 11,590 11,954 12,035
Institutional 779 794 786 789 797 804 730
Auto & Home 80 88 88 79 77 78 83
Asset Management 72 77 66 69 68 69 72
------------------------------------------------------------------------------------------
Total domestic sales 11,965 12,004 11,934 12,133 12,532 12,905 12,920
OTHER THAN SALES
Individual 4,551 4,523 4,481 4,535 4,628 4,667 4,745
Institutional 5,994 5,787 5,671 5,579 5,498 5,584 5,591
Auto & Home 3,388 3,348 3,365 3,376 3,424 3,422 3,450
Reinsurance 713 706 682 656 642 637 630
Asset Management 861 861 870 960 989 996 992
Operations 1,991 2,002 2,019 2,030 1,987 1,926 1,944
Technology 3,531 3,535 3,534 3,431 3,427 3,457 3,500
Corporate 3,703 3,653 3,638 3,538 3,551 3,503 3,535
------------------------------------------------------------------------------------------
Total domestic other than sales 24,732 24,415 24,260 24,105 24,146 24,192 24,387
------------------------------------------------------------------------------------------
TOTAL DOMESTIC HEADCOUNT 36,697 36,419 36,194 36,238 36,678 37,097 37,307
------------------------------------------------------------------------------------------
INTERNATIONAL
SALES
Professional sales 3,222 1,810 1,602 1,602 1,240 1,240 1,146
Other 10,240 10,521 9,707 8,808 8,048 7,932 7,894
Other than sales 3,001 2,874 2,762 2,837 2,821 2,789 2,761
------------------------------------------------------------------------------------------
TOTAL INTERNATIONAL HEADCOUNT 16,463 15,205 14,071 13,247 12,109 11,961 11,801
------------------------------------------------------------------------------------------
TOTAL COMPANY HEADCOUNT 53,160 51,624 50,265 49,485 48,787 49,058 49,108
==========================================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) In July 2004, the Client Service organization moved from Operations to
Individual.
5
[METLIFE LOGO]
METLIFE, INC.
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 2004
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------- ------------ ---------- ---------- ---------- --------------
ASSETS
Total investments $ 230,405 $ 201,212 $ 10,250 $ 255 $ 18,688
Deferred policy acquisition costs 13,920 11,435 2,486 0 (1)
Goodwill and other intangible assets 643 520 99 18 6
Other 20,030 16,116 1,232 134 2,548
Separate account assets 81,181 81,180 13 0 (12)
--------- --------- --------- --------- ---------
$ 346,179 $ 310,463 $ 14,080 $ 407 $ 21,229
========= ========= ========= ========= =========
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits $ 100,357 $ 97,566 $ 4,218 $ 0 ($ 1,427)
Policyholder account balances 81,798 77,061 5,018 0 (281)
Debt 8,261 662 402 31 7,166
Shares subject to mandatory redemption 277 (1) 158 0 120
Payables under securities loaned transactions 28,662 22,245 0 0 6,417
Other 22,668 14,190 3,425 49 5,004
Separate account liabilities 81,181 81,178 13 0 (10)
--------- --------- --------- --------- ---------
323,204 292,901 13,234 80 16,989
EQUITY
Common stock, at par value 8 0 0 0 8
Allocated equity (1) 21,467 15,203 703 322 5,239
Treasury stock (1,294) 0 0 0 (1,294)
Accumulated other comprehensive income 2,794 2,359 143 5 287
--------- --------- --------- --------- ---------
22,975 17,562 846 327 4,240
--------- --------- --------- --------- ---------
$ 346,179 $ 310,463 $ 14,080 $ 407 $ 21,229
========= ========= ========= ========= =========
(1) Allocated equity includes additional paid-in capital and retained
earnings.
6
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,736 $4,919 $822 $0 ($5)
Universal life and investment-type product policy fees 738 736 0 0 2
Investment income, net 3,108 2,834 144 18 112
Other revenues 341 271 14 49 7
----------------------------------------------------------------------------
9,923 8,760 980 67 116
----------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 6,318 5,642 675 0 1
Interest credited to policyholder account balances 739 691 48 0 0
Capitalization of deferred policy acquisition costs (751) (557) (194) 0 0
Amortization of deferred policy acquisition costs 482 381 101 0 1
Other expenses 2,251 1,746 327 55 123
----------------------------------------------------------------------------
9,039 7,903 957 55 123
----------------------------------------------------------------------------
Operating earnings before provision (benefit)
for income taxes 884 857 23 12 (7)
Provision (benefit) for income taxes 263 283 9 5 (33)
----------------------------------------------------------------------------
OPERATING EARNINGS $621 $574 $14 $7 $26
============================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $621 $574 $14 $7 $26
Net investment gains (losses) 178 212 (17) 0 (17)
Minority interest - net investment gains (losses) 2 0 2 0 0
Net investment gains (losses) tax benefit
(provision) (62) (71) 6 0 3
----------------------------------------------------------------------------
Net investment gains (losses), net of income taxes 118 141 (9) 0 (14)
Adjustments related to policyholder benefits and
dividends (74) (74) 0 0 0
Adjustments related to other expenses 6 (8) 14 0 0
Adjustments related to tax benefit (provision) 24 28 (5) 0 1
----------------------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes (44) (54) 9 0 1
Cumulative effect of a change in accounting, net of
income taxes 0 0 0 0 0
----------------------------------------------------------------------------
Net income $695 $661 $14 $7 $13
============================================================================
(1) Adjustments related to net investment gains (losses), net of income
taxes, includes amortization of deferred policy acquisition costs,
adjustments to the policyholder dividend obligation, and amounts
allocable to certain participating contracts.
7
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,079 $4,504 $579 $0 ($4)
Universal life and investment-type product policy fees 623 623 0 0 0
Investment income, net 2,914 2,711 122 17 64
Other revenues 335 270 11 36 18
----------------------------------------------------------------------------
8,951 8,108 712 53 78
----------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,651 5,179 470 0 2
Interest credited to policyholder account balances 767 720 47 0 0
Capitalization of deferred policy acquisition costs (683) (517) (166) 0 0
Amortization of deferred policy acquisition costs 415 339 76 0 0
Other expenses 1,957 1,605 258 47 47
----------------------------------------------------------------------------
8,107 7,326 685 47 49
----------------------------------------------------------------------------
Operating earnings before provision (benefit)
for income taxes 844 782 27 6 29
Provision (benefit) for income taxes 228 268 9 2 (51)
----------------------------------------------------------------------------
OPERATING EARNINGS $616 $514 $18 $4 $80
============================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $616 $514 $18 $4 $80
Net investment gains (losses) (151) (126) 5 2 (32)
Minority interest - net investment gains (losses) (2) 0 (2) 0 0
Net investment gains (losses) tax benefit
(provision) 85 63 (2) 0 24
----------------------------------------------------------------------------
Net investment gains (losses), net of income taxes (68) (63) 1 2 (8)
Adjustments related to policyholder benefits
and dividends 29 29 0 0 0
Adjustments related to other expenses 10 10 0 0 0
Adjustments related to tax benefit (provision) (13) (14) 0 0 1
----------------------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes 26 25 0 0 1
Cumulative effect of a change in accounting, net of
income taxes 0 0 0 0 0
----------------------------------------------------------------------------
Net income $574 $476 $19 $6 $73
============================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
8
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $16,434 $13,999 $2,445 $0 ($10)
Universal life and investment-type product policy fees 2,143 2,141 0 0 2
Investment income, net 9,266 8,478 410 54 324
Other revenues 1,050 840 41 162 7
----------------------------------------------------------------------------
28,893 25,458 2,896 216 323
----------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 18,159 16,169 1,985 0 5
Interest credited to policyholder account balances 2,220 2,069 151 0 0
Capitalization of deferred policy acquisition costs (2,368) (1,739) (629) 0 0
Amortization of deferred policy acquisition costs 1,401 1,067 334 0 1
Other expenses 6,721 5,195 969 169 388
----------------------------------------------------------------------------
26,133 22,761 2,810 169 392
----------------------------------------------------------------------------
Operating earnings before provision (benefit) for
income taxes 2,760 2,697 86 47 (70)
Provision (benefit) for income taxes 760 883 31 19 (173)
----------------------------------------------------------------------------
OPERATING EARNINGS $2,000 $1,814 $55 $28 $103
============================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $2,000 $1,814 $55 $28 $103
Net investment gains (losses) 458 352 36 0 70
Minority interest - net investment gains (losses) (14) 0 (14) 0 0
Net investment gains (losses) tax benefit
(provision) (148) (111) (7) 0 (30)
----------------------------------------------------------------------------
Net investment gains (losses), net of income taxes 296 241 15 0 40
Adjustments related to policyholder benefits and
dividends 73 73 0 0 0
Adjustments related to other expenses (16) (13) (3) 0 0
Adjustments related to tax benefit (provision) (20) (22) 1 0 1
----------------------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes 37 38 (2) 0 1
Cumulative effect of a change in accounting, net of
income taxes (2) (86) (90) 5 0 (1)
----------------------------------------------------------------------------
Net income $2,247 $2,003 $73 $28 $143
============================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended September 30, 2004, is in accordance with AICPA Statement
of Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
9
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
Insurance Reinsurance Asset Corporate, Other
Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $14,994 $13,288 $1,719 $0 ($13)
Universal life and investment-type product policy fees 1,798 1,798 0 0 0
Investment income, net 8,702 8,125 353 49 175
Other revenues 988 806 35 102 45
----------------------------------------------------------------------------
26,482 24,017 2,107 151 207
----------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 16,579 15,206 1,369 0 4
Interest credited to policyholder account balances 2,275 2,140 135 0 0
Capitalization of deferred policy acquisition costs (1,951) (1,495) (456) 0 0
Amortization of deferred policy acquisition costs 1,318 1,098 220 0 0
Other expenses 5,919 4,845 752 134 188
----------------------------------------------------------------------------
24,140 21,794 2,020 134 192
----------------------------------------------------------------------------
Operating earnings before provision (benefit) for
income taxes 2,342 2,223 87 17 15
Provision (benefit) for income taxes 660 717 30 7 (94)
----------------------------------------------------------------------------
OPERATING EARNINGS $1,682 $1,506 $57 $10 $109
============================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $1,682 $1,506 $57 $10 $109
Net investment gains (losses) (375) (290) 6 10 (101)
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit
(provision) 158 118 (2) (3) 45
----------------------------------------------------------------------------
Net investment gains (losses), net of income taxes (217) (172) 4 7 (56)
Adjustments related to policyholder benefits and
dividends 52 52 0 0 0
Adjustments related to other expenses 25 25 0 0 0
Adjustments related to tax benefit (provision) (26) (27) 0 0 1
----------------------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes 51 50 0 0 1
Cumulative effect of a change in accounting, net of
income taxes 0 0 0 0 0
----------------------------------------------------------------------------
Net income $1,516 $1,384 $61 $17 $54
============================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments
to the policyholder dividend obligation and amounts allocable to certain
participating contracts.
10
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $4,919 $4,528 $4,552 $4,735 $4,504 $4,500 $4,284
Universal life and investment-type
product policy fees 736 726 679 698 623 603 572
Investment income, net 2,834 2,858 2,786 2,856 2,711 2,710 2,704
Other revenues 271 275 294 305 270 291 245
-------------------------------------------------------------------------------------------
8,760 8,387 8,311 8,594 8,108 8,104 7,805
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 5,642 5,260 5,267 5,456 5,179 5,006 5,021
Interest credited to policyholder
account balances 691 691 687 711 720 716 704
Capitalization of deferred policy
acquisition costs (557) (648) (534) (531) (517) (502) (476)
Amortization of deferred policy
acquisition costs 381 350 336 349 339 415 344
Other expenses 1,746 1,777 1,672 1,813 1,605 1,684 1,556
-------------------------------------------------------------------------------------------
7,903 7,430 7,428 7,798 7,326 7,319 7,149
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 857 957 883 796 782 785 656
Provision for income taxes 283 311 289 259 268 230 219
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $574 $646 (4) $594 (5) $537 $514 $555 (6) $437
===========================================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $574 $646 $594 $537 $514 $555 $437
Net investment gains (losses) 212 42 98 (305) (126) (23) (141)
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (71) (7) (33) 104 63 6 49
-------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 141 35 65 (201) (63) (17) (92)
Adjustments related to policyholder
benefits and dividends (74) 116 31 178 29 (5) 28
Adjustments related to other
expenses (8) 8 (13) 8 10 5 10
Adjustments related to tax benefit
(provision) 28 (44) (6) (65) (14) (1) (12)
-------------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (54) 80 12 121 25 (1) 26
Cumulative effect of a change in
accounting, net of income taxes (1)(3) 0 0 (90) (26) 0 0 0
-------------------------------------------------------------------------------------------
Net income $661 $761 (4) $581 (5) $431 $476 $537 $371
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $13,999 $9,080 $18,023 $13,288 $8,784
Universal life and investment-type
product policy fees 2,141 1,405 2,496 1,798 1,175
Investment income, net 8,478 5,644 10,981 8,125 5,414
Other revenues 840 569 1,111 806 536
-------------------------------------------------------------------
25,458 16,698 32,611 24,017 15,909
-------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 16,169 10,527 20,662 15,206 10,027
Interest credited to policyholder
account balances 2,069 1,378 2,851 2,140 1,420
Capitalization of deferred policy
acquisition costs (1,739) (1,182) (2,026) (1,495) (978)
Amortization of deferred policy
acquisition costs 1,067 686 1,447 1,098 759
Other expenses 5,195 3,449 6,658 4,845 3,240
-------------------------------------------------------------------
22,761 14,858 29,592 21,794 14,468
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 2,697 1,840 3,019 2,223 1,441
Provision for income taxes 883 600 976 717 449
-------------------------------------------------------------------
OPERATING EARNINGS $1,814 $1,240 (4) $2,043 $1,506 $992 (6)
===================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $1,814 $1,240 $2,043 $1,506 $992
Net investment gains (losses) 352 140 (595) (290) (164)
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (111) (40) 222 118 55
-------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 241 100 (373) (172) (109)
Adjustments related to policyholder
benefits and dividends 73 147 230 52 23
Adjustments related to other
expenses (13) (5) 33 25 15
Adjustments related to tax benefit
(provision) (22) (50) (92) (27) (13)
-------------------------------------------------------------------
Adjustments related
to net investment gains (losses),
net of income taxes 38 92 171 50 25
Cumulative effect of a change in
accounting, net of income taxes (1)(3) (90) (90) (26) 0 0
-------------------------------------------------------------------
Net income $2,003 $1,342 (4) $1,815 $1,384 $908
===================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(3) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, and AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by a $70 million benefit in accordance with the SOP 03-1
Technical Practice Aid. For the period ended December 31, 2003, the
cumulative effect of a change in accounting, net of income taxes, 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.
(4) Operating earnings and net income for the period ended June 30, 2004
includes a $31 million benefit, net of income taxes, from a reduction of a
previously established premium tax liability. Additionally, earnings for
the three months ended June 30, 2004 was adjusted by a $7 million benefit,
net of income taxes, as a result of the SOP 03-1 Technical Practice Aid
which clarifies recognition of certain liabilities in accordance with SOP
03-1.
(5) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes, as a
result of the SOP 03-1 Technical Practice Aid which clarifies recognition
of certain liabilities in accordance with SOP 03-1.
(6) Operating earnings for the period ended June 30, 2003 includes $62 million
of earnings, net of income taxes, 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 charge, net of income
taxes, related to previously deferred expenses.
11
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,919 $2,711 $1,023 $740 $445
Universal life and investment-type product policy fees 736 178 467 0 91
Investment income, net 2,834 1,115 1,528 40 151
Other revenues 271 152 109 8 2
----------------------------------------------------------------
8,760 4,156 3,127 788 689
----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,642 2,976 1,681 553 432
Interest credited to policyholder account balances 691 242 412 0 37
Capitalization of deferred policy acquisition costs (557) (69) (268) (117) (103)
Amortization of deferred policy acquisition costs 381 29 210 110 32
Other expenses 1,746 534 789 201 222
----------------------------------------------------------------
7,903 3,712 2,824 747 620
----------------------------------------------------------------
Operating earnings before provision for income taxes 857 444 303 41 69
Provision for income taxes 283 150 102 7 24
----------------------------------------------------------------
OPERATING EARNINGS $574 $294 $201 $34 $45
================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $574 $294 $201 $34 $45
Net investment gains (losses) 212 105 105 (1) 3
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (71) (33) (37) 0 (1)
----------------------------------------------------------------
Net investment gains (losses), net of income taxes 141 72 68 (1) 2
Adjustments related to policyholder benefits and dividends (74) (35) (25) 0 (14)
Adjustments related to other expenses (8) 0 (8) 0 0
Adjustments related to tax benefit (provision) 28 11 12 0 5
----------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes (54) (24) (21) 0 (9)
Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0
----------------------------------------------------------------
Net income $661 $342 $248 $33 $38
================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
12
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,504 $2,260 $1,064 $735 $445
Universal life and investment-type product policy fees 623 167 386 0 70
Investment income, net 2,711 1,003 1,550 39 119
Other revenues 270 144 96 10 20
----------------------------------------------------------------
8,108 3,574 3,096 784 654
----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,179 2,523 1,703 543 410
Interest credited to policyholder account balances 720 234 452 0 34
Capitalization of deferred policy acquisition costs (517) (53) (280) (112) (72)
Amortization of deferred policy acquisition costs 339 30 162 106 41
Other expenses 1,605 430 795 193 187
----------------------------------------------------------------
7,326 3,164 2,832 730 600
----------------------------------------------------------------
Operating earnings before provision for income taxes 782 410 264 54 54
Provision for income taxes 268 146 93 12 17
----------------------------------------------------------------
OPERATING EARNINGS $514 $264 $171 $42 $37
================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $514 $264 $171 $42 $37
Net investment gains (losses) (126) (59) (77) 2 8
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) 63 23 35 (1) 6
----------------------------------------------------------------
Net investment gains (losses), net of income taxes (63) (36) (42) 1 14
Adjustments related to policyholder benefits and dividends 29 0 29 0 0
Adjustments related to other expenses 10 0 10 0 0
Adjustments related to tax benefit (provision) (14) 0 (14) 0 0
----------------------------------------------------------------
Adjustments related to net investment gains (losses),
net of income taxes 25 0 25 0 0
Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0
----------------------------------------------------------------
Net income $476 $228 $154 $43 $51
================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments
to the policyholder dividend obligation and amounts allocable to certain
participating contracts.
13
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $13,999 $7,518 $3,008 $2,211 $1,262
Universal life and investment-type product policy fees 2,141 536 1,345 0 260
Investment income, net 8,478 3,339 4,598 130 411
Other revenues 840 471 332 23 14
----------------------------------------------------------------
25,458 11,864 9,283 2,364 1,947
----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 16,169 8,374 4,978 1,584 1,233
Interest credited to policyholder account balances 2,069 701 1,262 0 106
Capitalization of deferred policy acquisition costs (1,739) (272) (859) (341) (267)
Amortization of deferred policy acquisition costs 1,067 86 546 336 99
Other expenses 5,195 1,571 2,446 590 588
----------------------------------------------------------------
22,761 10,460 8,373 2,169 1,759
----------------------------------------------------------------
Operating earnings before provision for income taxes 2,697 1,404 910 195 188
Provision for income taxes 883 476 305 44 58
----------------------------------------------------------------
OPERATING EARNINGS $1,814 $928 $605 $151 $130
================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $1,814 $928 $605 $151 $130
Net investment gains (losses) 352 223 108 (6) 27
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (111) (78) (27) 2 (8)
----------------------------------------------------------------
Net investment gains (losses), net of income taxes 241 145 81 (4) 19
Adjustments related to policyholder benefits and dividends 73 26 9 0 38
Adjustments related to other expenses (13) 0 (13) 0 0
Adjustments related to tax benefit (provision) (22) (10) 1 0 (13)
----------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes 38 16 (3) 0 25
Cumulative effect of a change in accounting, net of income
taxes (2) (90) (60) 0 0 (30)
----------------------------------------------------------------
Net income $2,003 $1,029 $683 $147 $144
================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended September 30, 2004, is in accordance with AICPA Statement
of Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
14
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSURANCE OPERATIONS
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
Insurance Institutional Individual Auto & International
Unaudited (Dollars in millions) Operations Operations Operations Home Operations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $13,288 $6,730 $3,160 $2,168 $1,230
Universal life and investment-type product policy fees 1,798 482 1,124 0 192
Investment income, net 8,125 2,991 4,642 119 373
Other revenues 806 438 291 23 54
----------------------------------------------------------------
24,017 10,641 9,217 2,310 1,849
----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 15,206 7,501 5,020 1,604 1,081
Interest credited to policyholder account balances 2,140 686 1,347 0 107
Capitalization of deferred policy acquisition costs (1,495) (144) (820) (334) (197)
Amortization of deferred policy acquisition costs 1,098 74 544 328 152
Other expenses 4,845 1,369 2,381 578 517
----------------------------------------------------------------
21,794 9,486 8,472 2,176 1,660
----------------------------------------------------------------
Operating earnings before provision (benefit) for income taxes 2,223 1,155 745 134 189
Provision (benefit) for income taxes 717 412 263 20 22
----------------------------------------------------------------
OPERATING EARNINGS $1,506 $743 $482 $114 $167
================================================================
NET INCOME RECONCILIATION (1)
- ---------------------------------
Operating earnings $1,506 $743 $482 $114 $167
Net investment gains (losses) (290) (138) (155) (4) 7
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) 118 52 62 1 3
----------------------------------------------------------------
Net investment gains (losses), net of income taxes (172) (86) (93) (3) 10
Adjustments related to policyholder benefits and dividends 52 0 52 0 0
Adjustments related to other expenses 25 0 25 0 0
Adjustments related to tax benefit (provision) (27) 0 (27) 0 0
----------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes 50 0 50 0 0
Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0
----------------------------------------------------------------
Net income $1,384 $657 $439 $111 $177
================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments
to the policyholder dividend obligation and amounts allocable to certain
participating contracts.
15
(METLIFE LOGO)
- --------------------------------------------------------------------------------
SUMMARY OF SEGMENT OPERATING EARNINGS (1)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS $294 $317 $317 $277 $264 $260 $219
INDIVIDUAL OPERATIONS 201 217 187 173 171 151 160
AUTO & HOME OPERATIONS 34 71 46 53 42 42 30
INTERNATIONAL OPERATIONS 45 41 44 34 37 102 28
REINSURANCE OPERATIONS 14 23 18 20 18 19 20
ASSET MANAGEMENT OPERATIONS 7 16 5 6 4 5 1
CORPORATE, OTHER & ELIMINATIONS 26 95 (18) 2 80 41 (12)
-------------------------------------------------------------------------------------------
CONSOLIDATED $621 (2) $780 (3) $599 (4) $565 $616 (5) $620 (6) $446
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS $928 $634 $1,020 $743 $479
INDIVIDUAL OPERATIONS 605 404 655 482 311
AUTO & HOME OPERATIONS 151 117 167 114 72
INTERNATIONAL OPERATIONS 130 85 201 167 130
REINSURANCE OPERATIONS 55 41 77 57 39
ASSET MANAGEMENT OPERATIONS 28 21 16 10 6
CORPORATE, OTHER & ELIMINATIONS 103 77 111 109 29
-------------------------------------------------------------------
CONSOLIDATED $2,000 (2) $1,379 (3) $2,247 $1,682 (5) $1,066 (6)
===================================================================
(1) A reconciliation of operating earnings to net income for each segment
appears in this QFS as follows: (i) Institutional Operations, page 17;
(ii) Individual Operations, page 25; (iii) Auto & Home Operations, page
35; (iv) International Operations, page 40; (v) Reinsurance Operations,
page 41; and (vi) Asset Management Operations, page 43, and for Corporate,
Other and Eliminations, on page 45. A reconciliation of operating earnings
to net income for MetLife, Inc., Consolidated, appears on Page 4.
(2) Operating earnings for the three months ended September 30, 2004 includes
a $9 million benefit, from a revision of the estimate of income taxes for
2003.
(3) Operating earnings and net income for the three months ended June 30, 2004
includes a $32 million charge, net of income taxes, from a contribution to
the MetLife Foundation made by Metropolitan Life Insurance Company, a $31
million benefit, net of income taxes, from a reduction of a previously
established premium tax liability and a $105 million benefit related to a
previously disclosed resolution of an IRS audit. Additionally, earnings
for the three months ended June 30, 2004 was adjusted by a $7 million
benefit, net of income taxes, as a result of the SOP 03-1 Technical
Practice Aid which clarifies recognition of certain liabilities in
accordance with SOP 03-1.
(4) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes, as a
result of the SOP 03-1 Technical Practice Aid which clarifies recognition
of certain liabilities in accordance with SOP 03-1.
(5) Operating earnings for the period ended September 30, 2003 includes a $28
million benefit, net of income taxes, 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.
(6) Operating earnings for the period ended June 30, 2003 includes a $64
million benefit, net of income taxes, from a reduction of a previously
established liability related to the Company's race-conscious underwriting
settlement, $62 million of earnings, net of income taxes, 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 charge, net of income taxes, related to previously deferred
expenses.
16
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Institutional Operations 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $2,711 $2,382 $2,425 $2,363 $2,260 $2,334 $2,136
Universal life and investment-type
product policy fees 178 187 171 153 167 154 161
Investment income, net 1,115 1,128 1,096 1,103 1,003 1,009 979
Other revenues 152 155 164 154 144 152 142
-------------------------------------------------------------------------------------------
4,156 3,852 3,856 3,773 3,574 3,649 3,418
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 2,976 2,699 2,699 2,629 2,523 2,560 2,418
Interest credited to policyholder
account balances 242 232 227 229 234 228 224
Other expenses 494 440 451 485 407 456 436
-------------------------------------------------------------------------------------------
3,712 3,371 3,377 3,343 3,164 3,244 3,078
-------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 444 481 479 430 410 405 340
Provision for income taxes 150 164 162 153 146 145 121
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $294 $317 (4) $317 $277 $264 $260 $219
===========================================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $294 $317 $317 $277 $264 $260 $219
Net investment gains (losses) 105 18 100 (164) (59) (9) (70)
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (33) (9) (36) 47 23 3 26
-------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 72 9 64 (117) (36) (6) (44)
Adjustments related to policyholder
benefits and dividends (35) 78 (17) 89 0 0 0
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) 11 (27) 6 (31) 0 0 0
-------------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (24) 51 (11) 58 0 0 0
Cumulative effect of a change in
accounting, net of income taxes (3) 0 0 (60) (26) 0 0 0
-------------------------------------------------------------------------------------------
Net income $342 $377 $310 $192 $228 $254 $175
===========================================================================================
For the Year-to-Date Period Ended
----------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Institutional Operations 2004 2004 2003 2003 2003
- ---------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $7,518 $4,807 $9,093 $6,730 $4,470
Universal life and investment-type
product policy fees 536 358 635 482 315
Investment income, net 3,339 2,224 4,094 2,991 1,988
Other revenues 471 319 592 438 294
----------------------------------------------------------------
11,864 7,708 14,414 10,641 7,067
----------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 8,374 5,398 10,130 7,501 4,978
Interest credited to policyholder
account balances 701 459 915 686 452
Other expenses 1,385 891 1,784 1,299 892
----------------------------------------------------------------
10,460 6,748 12,829 9,486 6,322
----------------------------------------------------------------
Operating earnings before provision for
income taxes 1,404 960 1,585 1,155 745
Provision for income taxes 476 326 565 412 266
----------------------------------------------------------------
OPERATING EARNINGS $928 $634 (4) $1,020 $743 $479
================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $928 $634 $1,020 $743 $479
Net investment gains (losses) 223 118 (302) (138) (79)
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (78) (45) 99 52 29
----------------------------------------------------------------
Net investment gains (losses), net of
income taxes 145 73 (203) (86) (50)
Adjustments related to policyholder
benefits and dividends 26 61 89 0 0
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit
(provision) (10) (21) (31) 0 0
----------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes 16 40 58 0 0
Cumulative effect of a change in
accounting, net of income taxes (3) (60) (60) (26) 0 0
----------------------------------------------------------------
Net income $1,029 $687 $849 $657 $429
================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs and amounts
allocable to certain participating contracts.
(3) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by zero in accordance with the SOP 03-1 Technical Practice
Aid. For the period ended December 31, 2003, the cumulative effect of a
change in accounting, net of income taxes, 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.
(4) Operating earnings for the period ended June 30, 2004 includes a $31
million benefit, net of income taxes, from a reduction of a previously
established premium tax liability.
17
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,271 $1,244 $1,282 $1,223 $1,167 $1,175 $1,163
Universal life and investment-type
product policy fees 178 187 171 153 167 154 161
Investment income, net 250 269 259 271 262 248 242
Other revenues 10 13 19 18 17 13 16
-------------------------------------------------------------------------------------------
1,709 1,713 1,731 1,665 1,613 1,590 1,582
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,331 1,326 1,392 1,272 1,237 1,229 1,234
Interest credited to policyholder
account balances 100 101 100 100 113 104 106
Other expenses 126 88 123 138 116 133 121
-------------------------------------------------------------------------------------------
1,557 1,515 1,615 1,510 1,466 1,466 1,461
-------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 152 198 116 155 147 124 121
Provision for income taxes 52 68 39 56 53 45 43
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $100 $130 (1) $77 $99 $94 $79 $78
-------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 4 (4) 17 (53) 3 (8) (13)
Adjustments related to net
investment gains (losses),
net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $104 $126 $94 $46 $97 $71 $65
===========================================================================================
For the Year-to-Date Period Ended
----------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Group Life 2004 2004 2003 2003 2003
- ---------------------------------------------------------------------------------------------------------
REVENUES
Premiums $3,797 $2,526 $4,728 $3,505 $2,338
Universal life and investment-type
product policy fees 536 358 635 482 315
Investment income, net 778 528 1,023 752 490
Other revenues 42 32 64 46 29
----------------------------------------------------------------
5,153 3,444 6,450 4,785 3,172
----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 4,049 2,718 4,972 3,700 2,463
Interest credited to policyholder
account balances 301 201 423 323 210
Other expenses 337 211 508 370 254
----------------------------------------------------------------
4,687 3,130 5,903 4,393 2,927
----------------------------------------------------------------
Operating earnings before provision for
income taxes 466 314 547 392 245
Provision for income taxes 159 107 197 141 88
----------------------------------------------------------------
OPERATING EARNINGS $307 $207 (1) $350 $251 $157
----------------------------------------------------------------
Net investment gains (losses), net of
income taxes 17 13 (71) (18) (21)
Adjustments related to net investment
gains (losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0
----------------------------------------------------------------
Net income $324 $220 $279 $233 $136
================================================================
(1) Operating earnings for the period ended June 30, 2004 includes a $31
million benefit, net of income taxes, from a reduction of a previously
established premium tax liability.
18
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $504 $225 $265 $305 $289 $351 $174
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0
Investment income, net 750 736 730 732 653 674 642
Other revenues 54 55 57 58 48 52 45
-------------------------------------------------------------------------------------------
1,308 1,016 1,052 1,095 990 1,077 861
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 868 598 589 682 641 681 531
Interest credited to policyholder
account balances 142 131 127 129 121 124 118
Other expenses 83 84 69 90 68 87 86
-------------------------------------------------------------------------------------------
1,093 813 785 901 830 892 735
-------------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 215 203 267 194 160 185 126
Provision for income taxes 71 68 89 69 56 65 44
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $144 $135 $178 $125 $104 $120 $82
-------------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 49 28 32 (58) (48) 2 (25)
Adjustments related to net investment
gains (losses), net of income taxes (3) 20 0 58 0 0 0
Cumulative effect of a change in
accounting, net of income taxes (2) 0 0 (40) (26) 0 0 0
-------------------------------------------------------------------------------------------
Net income $190 $183 $170 $99 $56 $122 $57
===========================================================================================
For the Year-to-Date Period Ended
----------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Retirement & Savings 2004 2004 2003 2003 2003
- ---------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $994 $490 $1,119 $814 $525
Universal life and investment-type
product policy fees 0 0 0 0 0
Investment income, net 2,216 1,466 2,701 1,969 1,316
Other revenues 166 112 203 145 97
----------------------------------------------------------------
3,376 2,068 4,023 2,928 1,938
----------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 2,055 1,187 2,535 1,853 1,212
Interest credited to policyholder
account balances 400 258 492 363 242
Other expenses 236 153 331 241 173
----------------------------------------------------------------
2,691 1,598 3,358 2,457 1,627
----------------------------------------------------------------
Operating earnings before provision for
income taxes 685 470 665 471 311
Provision for income taxes 228 157 234 165 109
----------------------------------------------------------------
OPERATING EARNINGS $457 $313 $431 $306 $202
----------------------------------------------------------------
Net investment gains (losses), net of
income taxes 109 60 (129) (71) (23)
Adjustments related to net investment
gains (losses), net of income taxes 17 20 58 0 0
Cumulative effect of a change in
accounting, net of income taxes (2) (40) (40) (26) 0 0
----------------------------------------------------------------
Net income $543 $353 $334 $235 $179
================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by zero in accordance with the SOP 03-1 Technical Practice
Aid. For the period ended December 31, 2003, the cumulative effect of a
change in accounting, net of income taxes, 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.
19
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $936 $913 $878 $835 $804 $808 $799
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0
Investment income, net 115 123 107 100 88 87 95
Other revenues 88 87 88 78 79 87 81
-------------------------------------------------------------------------------------------
1,139 1,123 1,073 1,013 971 982 975
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 777 775 718 675 645 650 653
Interest credited to policyholder
account balances 0 0 0 0 0 0 0
Other expenses 285 268 259 257 223 236 229
-------------------------------------------------------------------------------------------
1,062 1,043 977 932 868 886 882
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 77 80 96 81 103 96 93
Provision for income taxes 27 28 34 28 37 35 34
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $50 $52 $62 $53 $66 $61 $59
-------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 19 (15) 15 (6) 9 0 (6)
Adjustments related to net investment
gains (losses), net of income taxes (21) 31 (11) 0 0 0 0
Cumulative effect of a change in
accounting, net of income taxes (1) 0 0 (20) 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $48 $68 $46 $47 $75 $61 $53
===========================================================================================
For the Year-to-Date Period Ended
-----------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Non-Medical Health & Other 2004 2004 2003 2003 2003
- ----------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2,727 $1,791 $3,246 $2,411 $1,607
Universal life and investment-type
product policy fees 0 0 0 0 0
Investment income, net 345 230 370 270 182
Other revenues 263 175 325 247 168
-----------------------------------------------------------------
3,335 2,196 3,941 2,928 1,957
-----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 2,270 1,493 2,623 1,948 1,303
Interest credited to policyholder
account balances 0 0 0 0 0
Other expenses 812 527 945 688 465
-----------------------------------------------------------------
3,082 2,020 3,568 2,636 1,768
-----------------------------------------------------------------
Operating earnings before provision
for income taxes 253 176 373 292 189
Provision for income taxes 89 62 134 106 69
-----------------------------------------------------------------
OPERATING EARNINGS $164 $114 $239 $186 $120
-----------------------------------------------------------------
Net investment gains (losses),
net of income taxes 19 0 (3) 3 (6)
Adjustments related to net investment
gains (losses), net of income taxes (1) 20 0 0 0
Cumulative effect of a change in
accounting, net of income taxes (1) (20) (20) 0 0 0
-----------------------------------------------------------------
Net income $162 $114 $236 $189 $114
=================================================================
(1) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by zero in accordance with the SOP 03-1 Technical Practice
Aid.
20
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT
AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS, FEES AND OTHER REVENUES
BY PRODUCT
Group Life $1,459 $1,444 $1,472 $1,394 $1,351 $1,342 $1,340
Retirement & Savings 558 280 322 363 337 403 219
Non-Medical Health & Other 1,024 1,000 966 913 883 895 880
-------------------------------------------------------------------------------------------
Total Premiums, Fees and Other Revenues $3,041 $2,724 $2,760 $2,670 $2,571 $2,640 $2,439
===========================================================================================
Group Disability (Included in
Non-Medical Health & Other) $254 $250 $246 $237 $227 $238 $241
ADDITIONAL STATISTICAL INFORMATION
INCURRED LOSS RATIO
(MORTALITY EXPERIENCE):
Term Life 91.3% 93.3% 95.7% 91.4% 91.3% 92.0% 93.2%
INCURRED LOSS RATIO
(MORBIDITY EXPERIENCE):
Group Disability 92.0% 92.7% 93.3% 102.7% 99.8% 95.1% 96.5%
- ------------------------------------------------------------------------------------------------------------------------------------
21
(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
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $14,834 $14,642 $14,678 $14,453 $14,189 $13,993 $13,756
Premiums and deposits 2,543 2,621 2,719 2,935 2,728 2,676 2,877
Interest on reserves 131 131 130 132 141 134 136
Surrenders and withdrawals (1,081) (1,118) (1,144) (1,344) (1,078) (1,103) (1,426)
Benefits and reserves (1,296) (1,297) (1,387) (1,203) (1,238) (1,197) (1,223)
Other (172) (145) (354) (295) (289) (314) (127)
-------------------------------------------------------------------------------------------
Balance, end of period $14,959 $14,834 $14,642 $14,678 $14,453 $14,189 $13,993
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $42,287 $42,634 $40,298 $40,191 $39,111 $36,206 $35,548
Premiums and deposits 2,525 2,003 2,424 1,763 3,156 3,040 1,060
Interest on reserves 567 551 542 537 526 526 518
Surrenders and withdrawals (1,361) (928) (1,222) (1,330) (1,396) (1,113) (602)
Benefits and reserves (504) (470) (468) (468) (471) (521) (465)
Other (1) 983 (1,503) 1,060 (395) (735) 973 147
-------------------------------------------------------------------------------------------
Balance, end of period $44,497 $42,287 $42,634 $40,298 $40,191 $39,111 $36,206
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $6,407 $6,003 $4,708 $4,621 $4,552 $4,483 $4,396
Premiums and deposits 846 831 795 762 727 728 736
Interest on reserves 63 60 57 56 56 55 55
Surrenders and withdrawals 27 25 24 16 17 24 12
Benefits and reserves (753) (728) (693) (615) (591) (591) (609)
Other (1) 11 216 1,112 (132) (140) (147) (107)
-------------------------------------------------------------------------------------------
Balance, end of period $6,601 $6,407 $6,003 $4,708 $4,621 $4,552 $4,483
===========================================================================================
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $8,066 $7,754 $7,045 $6,951 $6,953 $6,376 $6,011
Premiums and deposits 182 156 160 85 298 169 299
Investment performance 166 239 645 113 23 582 175
Surrenders and withdrawals (77) (86) (92) (104) (323) (174) (109)
Policy charges 0 0 0 0 0 0 0
Other 0 3 (4) 0 0 0 0
-------------------------------------------------------------------------------------------
Balance, end of period $8,337 $8,066 $7,754 $7,045 $6,951 $6,953 $6,376
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $26,962 $27,376 $27,081 $26,570 $26,526 $25,105 $24,775
Premiums and deposits 834 694 1,369 1,103 726 1,008 752
Investment performance 732 (277) 802 661 206 1,481 393
Surrenders and withdrawals (818) (842) (1,262) (1,235) (874) (1,050) (793)
Policy charges (19) (20) (21) (18) (14) (18) (22)
Other (1) (25) 31 (593) 0 0 0 0
-------------------------------------------------------------------------------------------
Balance, end of period $27,666 $26,962 $27,376 $27,081 $26,570 $26,526 $25,105
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $160 $139 $1,505 $1,462 $1,348 $1,241 $1,150
Premiums and deposits 89 82 84 73 76 80 63
Investment performance 62 14 16 15 63 58 47
Surrenders and withdrawals (27) (25) (24) (16) (17) (23) (12)
Policy charges (9) (9) (15) (29) (8) (8) (7)
Other (1) (75) (41) (1,427) 0 0 0 0
-------------------------------------------------------------------------------------------
Balance, end of period $200 $160 $139 $1,505 $1,462 $1,348 $1,241
===========================================================================================
(1) Beginning with the period ended March 31, 2004, the balances include
liabilities recorded in accordance with AICPA Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts.
22
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES BY MAJOR CATEGORY
Direct and allocated expenses $355 $361 $352 $370 $303 $327 $320
Pension and other post-retirement
benefit costs 17 21 18 31 23 35 26
Premium taxes and other taxes,
licenses and fees 38 (11) 35 28 30 39 36
-------------------------------------------------------------------------------------------
Subtotal Insurance Expenses $410 $371 $405 $429 $356 $401 $382
Commissions and other expenses 84 69 46 56 51 55 54
-------------------------------------------------------------------------------------------
Total Expenses $494 $440 $451 $485 $407 $456 $436
===========================================================================================
23
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Group Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 5.32% 5.87% 5.66% 6.11% 5.83% 5.57% 5.62%
Average crediting rate 3.45% 3.44% 3.49% 3.56% 3.85% 3.72% 3.87%
-------------------------------------------------------------------------------------------
Spread 1.87% 2.43% 2.17% 2.55% 1.98% 1.85% 1.75%
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Retirement & Savings (1) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 6.85% 6.93% 7.06% 7.35% 6.82% 7.37% 7.22%
Average crediting rate 5.29% 5.33% 5.42% 5.58% 5.62% 5.92% 6.05%
-------------------------------------------------------------------------------------------
Spread 1.56% 1.60% 1.64% 1.77% 1.20% 1.45% 1.17%
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Medical Health & Other 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 6.86% 7.77% 6.96% 7.48% 6.49% 6.60% 7.27%
Average crediting rate 5.43% 5.33% 5.35% 5.38% 5.43% 5.49% 5.52%
-------------------------------------------------------------------------------------------
Spread 1.43% 2.44% 1.61% 2.10% 1.06% 1.11% 1.75%
===========================================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
24
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Individual Operations 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $1,023 $1,007 $978 $1,184 $1,064 $1,055 $1,041
Universal life and investment-type
product policy fees 467 453 425 465 386 378 360
Investment income, net 1,528 1,549 1,521 1,585 1,550 1,529 1,563
Other revenues 109 106 117 116 96 109 86
-------------------------------------------------------------------------------------------
3,127 3,115 3,041 3,350 3,096 3,071 3,050
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 1,681 1,653 1,644 1,863 1,703 1,625 1,692
Interest credited to policyholder
account balances 412 427 423 446 452 452 443
Capitalization of deferred policy
acquisition costs (268) (298) (293) (279) (280) (280) (260)
Amortization of deferred policy
acquisition costs 210 170 166 174 162 207 175
Other expenses 789 837 820 880 795 833 753
-------------------------------------------------------------------------------------------
2,824 2,789 2,760 3,084 2,832 2,837 2,803
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 303 326 281 266 264 234 247
Provision for income taxes 102 109 94 93 93 83 87
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $201 $217 (4) $187 (5) $173 $171 $151 (6) $160
===========================================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $201 $217 $187 $173 $171 $151 $160
Net investment gains (losses) 105 31 (28) (130) (77) (11) (67)
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (37) 1 9 54 35 5 22
-------------------------------------------------------------------------------------------
Net investment gains (losses), net
of income taxes 68 32 (19) (76) (42) (6) (45)
Adjustments related to policyholder
benefits and dividends (25) (11) 45 92 29 (5) 28
Adjustments related to other expenses (8) 8 (13) 8 10 5 10
Adjustments related to tax benefit
(provision) 12 0 (11) (35) (14) (1) (12)
-------------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (21) (3) 21 65 25 (1) 26
Cumulative effect of a change in
accounting, net of income
taxes (1) (3) 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $248 $246 (4) $189 (5) $162 $154 $144 $141
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Individual Operations 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $3,008 $1,985 $4,344 $3,160 $2,096
Universal life and investment-type
product policy fees 1,345 878 1,589 1,124 738
Investment income, net 4,598 3,070 6,227 4,642 3,092
Other revenues 332 223 407 291 195
-------------------------------------------------------------------
9,283 6,156 12,567 9,217 6,121
-------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 4,978 3,297 6,883 5,020 3,317
Interest credited to policyholder
account balances 1,262 850 1,793 1,347 895
Capitalization of deferred policy
acquisition costs (859) (591) (1,099) (820) (540)
Amortization of deferred policy
acquisition costs 546 336 718 544 382
Other expenses 2,446 1,657 3,261 2,381 1,586
-------------------------------------------------------------------
8,373 5,549 11,556 8,472 5,640
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 910 607 1,011 745 481
Provision for income taxes 305 203 356 263 170
-------------------------------------------------------------------
OPERATING EARNINGS $605 $404 (4) $655 $482 $311 (6)
===================================================================
NET INCOME RECONCILIATION (2)
- ---------------------------------
Operating earnings $605 $404 $655 $482 $311
Net investment gains (losses) 108 3 (285) (155) (78)
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (27) 10 116 62 27
-------------------------------------------------------------------
Net investment gains (losses), net
of income taxes 81 13 (169) (93) (51)
Adjustments related to policyholder
benefits and dividends 9 34 144 52 23
Adjustments related to other expenses (13) (5) 33 25 15
Adjustments related to tax benefit
(provision) 1 (11) (62) (27) (13)
-------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (3) 18 115 50 25
Cumulative effect of a change in
accounting, net of income
taxes (1) (3) 0 0 0 0 0
-------------------------------------------------------------------
Net income $683 $435 (4) $601 $439 $285
===================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(3) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by a $70 million benefit in accordance with the SOP 03-1
Technical Practice Aid.
(4) Operating earnings and net income for the three months ended June 30, 2004
was adjusted by a $7 million benefit, net of income taxes ($0.01 per
diluted share), as a result of the SOP 03-1 Technical Practice Aid which
clarifies recognition of certain liabilities in accordance with SOP 03-1.
(5) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes (less than
$0.01 per diluted share), as a result of the SOP 03-1 Technical Practice
Aid which clarifies recognition of certain liabilities in accordance with
SOP 03-1.
(6) Operating earnings for the period ended June 30, 2003 includes a $31
million charge, net of income taxes, related to previously deferred
expenses.
25
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Traditional Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $989 $980 $959 $1,159 $1,037 $1,025 $1,010
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0
Investment income, net 831 848 843 873 847 846 869
Other revenues 1 0 1 6 0 10 0
-------------------------------------------------------------------------------------------
1,821 1,828 1,803 2,038 1,884 1,881 1,879
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,517 1,496 1,480 1,684 1,564 1,512 1,529
Interest credited to policyholder
account balances 0 0 0 0 0 0 0
Capitalization of deferred policy
acquisition costs (44) (42) (41) (42) (39) (43) (47)
Amortization of deferred policy
acquisition costs 51 51 56 54 56 62 58
Other expenses 213 206 211 236 200 233 221
-------------------------------------------------------------------------------------------
1,737 1,711 1,706 1,932 1,781 1,764 1,761
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 84 117 97 106 103 117 118
Provision for income taxes 29 40 33 38 37 42 42
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $55 $77 $64 $68 $66 $75 (1) $76
-------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 60 20 (15) (43) (20) (13) (13)
Adjustments related to net investment
gains (losses), net of income taxes (18) (4) 22 57 25 0 19
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $97 $93 $71 $82 $71 $62 $82
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Traditional Life 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2,928 $1,939 $4,231 $3,072 $2,035
Universal life and investment-type
product policy fees 0 0 0 0 0
Investment income, net 2,522 1,691 3,435 2,562 1,715
Other revenues 2 1 16 10 10
-------------------------------------------------------------------
5,452 3,631 7,682 5,644 3,760
-------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 4,493 2,976 6,289 4,605 3,041
Interest credited to policyholder
account balances 0 0 0 0 0
Capitalization of deferred policy
acquisition costs (127) (83) (171) (129) (90)
Amortization of deferred policy
acquisition costs 158 107 230 176 120
Other expenses 630 417 890 654 454
-------------------------------------------------------------------
5,154 3,417 7,238 5,306 3,525
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 298 214 444 338 235
Provision for income taxes 102 73 159 121 84
-------------------------------------------------------------------
OPERATING EARNINGS $196 $141 $285 $217 151 (1)
-------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 65 5 (89) (46) (26)
Adjustments related to net investment
gains (losses), net of income taxes 0 18 101 44 19
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0
-------------------------------------------------------------------
Net income $261 $164 $297 $215 $144
===================================================================
(1) Operating earnings for the period ended June 30, 2003 includes a $2
million charge, net of income taxes, related to previously deferred
expenses.
26
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $0 $0 $0 $0 $0 $0 $0
Universal life and investment-type
product policy fees 279 264 245 301 256 262 255
Investment income, net 147 143 140 143 145 144 142
Other revenues 1 (3) 4 4 (1) (1) (2)
-------------------------------------------------------------------------------------------
427 404 389 448 400 405 395
-------------------------------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 76 88 87 126 69 57 87
Interest credited to policyholder
account balances 117 116 113 118 122 117 117
Capitalization of deferred policy
acquisition costs (74) (86) (70) (88) (82) (86) (81)
Amortization of deferred policy
acquisition costs 73 52 48 64 47 102 59
Other expenses 176 186 175 205 196 205 177
-------------------------------------------------------------------------------------------
368 356 353 425 352 395 359
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 59 48 36 23 48 10 36
Provision for income taxes 20 16 12 8 18 4 13
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $39 $32 (3) $24 (4) $15 $30 $6 (5) $23
-------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 5 (5) 3 (5) (8) 7 (5)
Adjustments related to net investment
gains (losses), net of income taxes (2) 2 (1) 1 0 0 0
Cumulative effect of a change in
accounting, net of income
taxes (1) (2) 0 0 (11) 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $42 $29 (3) $15 (4) $11 $22 $13 $18
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Variable & Universal Life 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES (1)
Premiums $0 $0 $0 $0 $0
Universal life and investment-type
product policy fees 788 509 1,074 773 517
Investment income, net 430 283 574 431 286
Other revenues 2 1 0 (4) (3)
-------------------------------------------------------------------
1,220 793 1,648 1,200 800
-------------------------------------------------------------------
EXPENSES (1)
Policyholder benefits and dividends 251 175 339 213 144
Interest credited to policyholder
account balances 346 229 474 356 234
Capitalization of deferred policy
acquisition costs (230) (156) (337) (249) (167)
Amortization of deferred policy
acquisition costs 173 100 272 208 161
Other expenses 537 361 783 578 382
-------------------------------------------------------------------
1,077 709 1,531 1,106 754
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 143 84 117 94 46
Provision for income taxes 48 28 43 35 17
-------------------------------------------------------------------
OPERATING EARNINGS $95 $56 (3) $74 $59 $29 (5)
-------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 3 (2) (11) (6) 2
Adjustments related to net investment
gains (losses), net of income taxes (1) 1 1 0 0
Cumulative effect of a change in
accounting, net of income
taxes (1) (2) (11) (11) 0 0 0
-------------------------------------------------------------------
Net income $86 $44 (3) $64 $53 $31
===================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by a $70 million benefit in accordance with the SOP 03-1
Technical Practice Aid.
(3) Operating earnings and net income for the three months ended June 30, 2004
was adjusted by a $7 million benefit, net of income taxes as a result of
the SOP 03-1 Technical Practice Aid which clarifies recognition of certain
liabilities in accordance with SOP 03-1.
(4) Operating earnings and net income for the three months ended March 31,
2004 was adjusted by a $3 million benefit, net of income taxes as a result
of the SOP 03-1 Technical Practice Aid which clarifies recognition of
certain liabilities in accordance with SOP 03-1.
(5) Operating earnings for the period ended June 30, 2003 includes a $29
million charge, net of income taxes, related to previously deferred
expenses.
27
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $34 $26 $18 $20 $19 $23 $24
Universal life and investment-type
product policy fees 156 156 151 137 106 95 82
Investment income, net 491 494 475 503 489 479 487
Other revenues 11 10 7 7 3 7 1
-------------------------------------------------------------------------------------------
692 686 651 667 617 604 594
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 78 58 68 53 55 46 64
Interest credited to policyholder
account balances 266 281 280 299 303 307 296
Capitalization of deferred policy
acquisition costs (149) (169) (181) (148) (158) (149) (131)
Amortization of deferred policy
acquisition costs 84 64 59 53 55 41 55
Other expenses 268 302 299 281 261 274 234
-------------------------------------------------------------------------------------------
547 536 525 538 516 519 518
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 145 150 126 129 101 85 76
Provision for income taxes 47 49 41 44 34 29 26
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $98 $101 $85 $85 $67 $56 $50
-------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 9 17 2 (31) (15) (1) (21)
Adjustments related to net investment
gains (losses), net of income taxes (1) (1) 0 7 1 0 6
Cumulative effect of a change in
accounting, net of income taxes (1) 0 0 11 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $106 $117 $98 $61 $53 $55 $35
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Annuities 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $78 $44 $86 $66 $47
Universal life and investment-type
product policy fees 463 307 420 283 177
Investment income, net 1,460 969 1,958 1,455 966
Other revenues 28 17 18 11 8
-------------------------------------------------------------------
2,029 1,337 2,482 1,815 1,198
-------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 204 126 218 165 110
Interest credited to policyholder
account balances 827 561 1,205 906 603
Capitalization of deferred policy
acquisition costs (499) (350) (586) (438) (280)
Amortization of deferred policy
acquisition costs 207 123 204 151 96
Other expenses 869 601 1,050 769 508
-------------------------------------------------------------------
1,608 1,061 2,091 1,553 1,037
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 421 276 391 262 161
Provision for income taxes 137 90 133 89 55
-------------------------------------------------------------------
OPERATING EARNINGS $284 $186 $258 $173 $106
-------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 28 19 (68) (37) (22)
Adjustments related to net investment
gains (losses), net of income taxes (2) (1) 14 7 6
Cumulative effect of a change in
accounting, net of income taxes (1) 11 11 0 0 0
-------------------------------------------------------------------
Net income $321 $215 $204 $143 $90
===================================================================
(1) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
In September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain
liabilities to comply with SOP 03-1. The cumulative effect of a change in
accounting, net of income taxes, for the three months ended March 31, 2004
was adjusted by zero in accordance with the SOP 03-1 Technical Practice
Aid.
28
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Other 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $0 $1 $1 $5 $8 $7 $7
Universal life and investment-type
product policy fees 32 33 29 27 24 21 23
Investment income, net 59 64 63 66 69 60 65
Other revenues 96 99 105 99 94 93 87
-------------------------------------------------------------------------------------------
187 197 198 197 195 181 182
-------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 10 11 9 0 15 10 12
Interest credited to policyholder
account balances 29 30 30 29 27 28 30
Capitalization of deferred policy
acquisition costs (1) (1) (1) (1) (1) (2) (1)
Amortization of deferred policy
acquisition costs 2 3 3 3 4 2 3
Other expenses 132 143 135 158 138 121 121
-------------------------------------------------------------------------------------------
172 186 176 189 183 159 165
-------------------------------------------------------------------------------------------
Operating earnings before provision
for income taxes 15 11 22 8 12 22 17
Provision for income taxes 6 4 8 3 4 8 6
-------------------------------------------------------------------------------------------
OPERATING EARNINGS $9 $7 $14 $5 $8 $14 $11
-------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes (6) 0 (9) 3 1 0 (6)
Adjustments related to net investment
gains (losses), net of income taxes 0 0 0 0 (1) 0 1
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Net income $3 $7 $5 $8 $8 $14 $6
===========================================================================================
For the Year-to-Date Period Ended
-------------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Other 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2 $2 $27 $22 $14
Universal life and investment-type
product policy fees 94 62 95 68 44
Investment income, net 186 127 260 194 125
Other revenues 300 204 373 274 180
-------------------------------------------------------------------
582 395 755 558 363
-------------------------------------------------------------------
EXPENSES 0
Policyholder benefits and dividends 30 20 37 37 22
Interest credited to policyholder
account balances 89 60 114 85 58
Capitalization of deferred policy
acquisition costs (3) (2) (5) (4) (3)
Amortization of deferred policy
acquisition costs 8 6 12 9 5
Other expenses 410 278 538 380 242
-------------------------------------------------------------------
534 362 696 507 324
-------------------------------------------------------------------
Operating earnings before provision
for income taxes 48 33 59 51 39
Provision for income taxes 18 12 21 18 14
-------------------------------------------------------------------
OPERATING EARNINGS $30 $21 $38 $33 $25
-------------------------------------------------------------------
Net investment gains (losses),
net of income taxes (15) (9) (2) (5) (6)
Adjustments related to net investment
gains (losses), net of income taxes 0 0 0 0 1
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0
-------------------------------------------------------------------
Net income $15 $12 $36 $28 $20
===================================================================
29
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER
AND MUTUAL FUND SALES
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS AND DEPOSITS BY PRODUCT (1)
TOTAL (2)
Traditional Life
1st Year (3) $44 $47 $45 $53 $50 $49 $53
Renewal $1,017 1,030 965 1,228 1,052 1,053 1,000
Variable & Universal Life
Variable 1st Year excluding Single
Premium COLI/BOLI (3) 51 61 51 53 86 59 91
Universal 1st Year excluding Single
Premium COLI/BOLI (3) 125 116 104 108 82 71 55
Single Premium COLI/BOLI 20 49 3 27 18 3 13
Renewal 447 418 471 414 392 393 455
Annuities (3) 2,410 2,882 3,436 2,844 2,843 2,933 2,611
Other 245 251 258 335 287 301 281
-------------------------------------------------------------------------------------------
Total Premiums and Deposits $4,359 $4,854 $5,333 $5,062 $4,810 $4,862 $4,559
===========================================================================================
PREMIUMS AND DEPOSITS TO SEPARATE
ACCOUNTS
Variable & Universal Life $300 $287 $284 $275 $294 $273 $301
Annuities 1,352 1,523 2,120 1,782 1,437 1,229 940
Other 152 157 160 258 171 191 167
-------------------------------------------------------------------------------------------
Total Separate Accounts $1,804 $1,967 $2,564 $2,315 $1,902 $1,693 $1,408
===========================================================================================
FIRST YEAR LIFE PREMIUMS AND DEPOSITS
BY MANUFACTURER (4)
MetLife $78 $85 $79 $81 $74 $70 $73
New England Financial 28 38 28 35 26 29 32
General American 128 143 90 119 128 76 99
MetLife Investors Group 6 7 6 6 8 7 8
-------------------------------------------------------------------------------------------
Total First Year Life Premiums and
Deposits $240 $273 $203 $241 $236 $182 $212
===========================================================================================
ANNUITY DEPOSITS BY TYPE
Fixed Annuity Deposits $403 $659 $506 $257 $320 $340 $424
Variable Annuity Deposits 2,007 2,223 2,930 2,587 2,523 2,593 2,187
-------------------------------------------------------------------------------------------
Total Annuity Deposits $2,410 $2,882 $3,436 $2,844 $2,843 $2,933 $2,611
===========================================================================================
ANNUITY DEPOSITS BY MANUFACTURER (5)
MetLife $927 $965 $1,030 $870 $950 $1,053 $974
New England Financial 169 197 252 249 235 233 211
General American 13 11 10 13 9 11 10
MetLife Investors Group 1,301 1,709 2,144 1,712 1,649 1,636 1,416
-------------------------------------------------------------------------------------------
Total Annuity Deposits $2,410 $2,882 $3,436 $2,844 $2,843 $2,933 $2,611
===========================================================================================
MUTUAL FUND SALES (6)
Proprietary $38 $53 $65 $59 $47 $49 $38
Third Party 651 811 980 1,192 722 809 753
-------------------------------------------------------------------------------------------
Total Mutual Fund Sales $689 $864 $1,045 $1,251 $769 $858 $791
===========================================================================================
(1) Statutory premiums direct and assumed.
(2) Includes premiums and deposits to separate accounts.
(3) Excludes company-sponsored internal exchanges.
(4) Approximately 8% of MetLife manufactured life insurance premiums and
deposits were sold by other-than MetLife Financial Services agents during
the three months ended September 30, 2004 (4% sold by General American and
4% were sold by New England Financial). Approximately 10% of New England
Financial manufactured life insurance premiums and deposits were sold by
other-than New England Financial agents during the three months ended
September 30, 2004 (10% sold by MetLife Financial Services). Approximately
72% of General American manufactured life insurance premiums and deposits
were sold by other-than General American agents during the three months
ended September 30, 2004 (51% sold by MetLife Financial Services and 21%
by New England Financial). Approximately 3% of MetLife Investors Group
manufactured life insurance premiums and deposits were sold by other-than
MetLife Investors Group Wholesalers during the three months ended
September 30, 2004 (1% sold by MetLife Financial Services and 2% sold by
General American).
(5) Approximately 21% of MetLife manufactured annuity deposits were sold by
other-than MetLife Financial Services agents during the three months ended
September 30, 2004 (21% MetLife Resources). Approximately 7% of MetLife
Investors Group manufactured annuity deposits were sold by other-than
MetLife Investors Group Wholesalers during the three months ended
September 30, 2004 (4% Walnut Street Securities and 3% MetLife Resources).
(6) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
30
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS AND DEPOSITS
TO SEPARATE ACCOUNTS, EXCLUDING
TRANSFERS FROM GENERAL ACCOUNT:
Variable & Universal Life 46.4% 44.1% 45.0% 45.6% 50.8% 52.0% 49.1%
Annuities 56.1% 52.9% 61.7% 62.6% 50.6% 41.9% 36.0%
Other 62.2% 62.5% 62.1% 77.3% 59.5% 63.3% 59.5%
MORTALITY AS A PERCENTAGE OF EXPECTED 78.8% 78.1% 85.4% 84.2% 80.3% 99.4%(4) 87.2%
LAPSES / SURRENDERS (GENERAL AND
SEPARATE ACCOUNT) (1)
Traditional Life 6.2% 6.2% 6.3% 6.1% 6.0% 6.0% 5.8%
Variable & Universal Life 7.0% 7.1% 7.0% 7.0% 7.2% 7.2% 6.8%
Variable Annuities 7.5% 7.7% 7.8% 8.2% 8.7% 9.0% 9.2%
Fixed Annuities 7.6% 8.0% 7.4% 6.6% 6.7% 6.4% 6.7%
NUMBER OF SALES REPRESENTATIVES
MetLife Financial Services 5,700 5,633 5,594 5,531 5,587 5,728 5,798
New England Financial 2,504 2,553 2,531 2,845 2,992 3,004 2,916
General American (2) 430 448 448 429 471 522 557
Independent Distribution Wholesalers 102 101 95 91 91 89 83
MetLife Resources 399 397 397 401 384 379 362
Walnut Street Securities (3) 1,370 1,413 1,468 1,462 1,649 1,823 1,923
P&C Specialists 529 500 461 437 416 409 396
-------------------------------------------------------------------------------------------
Total Agents 11,034 11,045 10,994 11,196 11,590 11,954 12,035
===========================================================================================
(1) Lapses/Surrenders rates are calculated for the most recent 12 months of
experience.
(2) Based on minimum annual production of $25,000 in life insurance sales.
(3) At September 30, 2004, the number of Walnut Street Securities
representatives includes 150 brokers who are also reported as General
American agents above.
(4) Includes a $45 million pre-tax death benefit that was 100% reinsured.
Excluding this item, the mortality ratio was 88.4%.
31
(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 (1)
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Traditional Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $48,828 $48,613 $48,503 $48,140 $47,835 $47,572 $47,397
Premiums and deposits (2) 1,069 1,067 1,038 1,246 975 1,043 1,026
Interest on reserves 493 491 489 486 483 479 476
Surrenders and withdrawals (466) (462) (477) (478) (407) (402) (395)
Benefit payments (464) (437) (486) (420) (456) (492) (484)
Other (567) (444) (454) (471) (290) (365) (448)
-------------------------------------------------------------------------------------------
Balance, end of period $48,893 $48,828 $48,613 $48,503 $48,140 $47,835 $47,572
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $9,797 $9,644 $9,475 $9,327 $9,221 $9,140 $8,993
Premiums and deposits (2) (3) 340 370 346 318 272 247 287
Interest on reserves 114 115 119 122 121 120 118
Surrenders and withdrawals (153) (158) (233) (137) (117) (122) (113)
Net transfers from (to) separate
account 44 56 75 83 54 65 66
Policy charges (224) (204) (199) (199) (195) (184) (198)
Benefit payments (25) (27) (34) (22) (22) (24) (25)
Other (6) 1 95 (17) (7) (21) 12
-------------------------------------------------------------------------------------------
Balance, end of period $9,887 $9,797 $9,644 $9,475 $9,327 $9,221 $9,140
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $31,908 $31,491 $31,350 $31,258 $30,772 $29,917 $28,935
Premiums and deposits (2) (3) 1,120 1,432 1,426 1,126 1,492 1,836 1,766
Interest on reserves 297 390 298 343 361 357 359
Surrenders and withdrawals (517) (740) (797) (647) (678) (665) (667)
Net transfers from (to) separate
account (339) (566) (610) (653) (562) (517) (171)
Policy charges (8) (4) (6) 2 0 (3) (1)
Benefit payments (235) (99) (128) (70) (129) (143) (168)
Other (271) 4 (42) (9) 2 (10) (136)
-------------------------------------------------------------------------------------------
Balance, end of period $31,955 $31,908 $31,491 $31,350 $31,258 $30,772 $29,917
===========================================================================================
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Variable & Universal Life 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $7,130 $6,989 $6,835 $6,424 $6,149 $5,482 $5,489
Premiums and deposits (2) 299 287 284 275 294 273 301
Investment performance (123) 85 191 376 177 603 (105)
Surrenders and withdrawals (98) (104) (177) (87) (74) (72) (71)
Net transfers from (to) fixed account (44) (56) (75) (83) (54) (65) (66)
Policy charges (69) (71) (69) (70) (68) (72) (66)
Other 163 0 0 0 0 0 0
-------------------------------------------------------------------------------------------
Balance, end of period $7,258 $7,130 $6,989 $6,835 $6,424 $6,149 $5,482
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Annuities 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $32,989 $31,505 $28,667 $24,310 $22,133 $18,464 $18,270
Premiums and deposits (2) 1,353 1,524 2,120 1,782 1,438 1,229 940
Investment performance (413) 144 834 2,520 734 2,500 (435)
Surrenders and withdrawals (668) (642) (617) (508) (475) (508) (423)
Net transfers from (to) fixed account 339 566 610 653 562 517 171
Policy charges (109) (112) (105) (90) (82) (69) (59)
Other 0 4 (4) 0 0 0 0
-------------------------------------------------------------------------------------------
Balance, end of period $33,491 $32,989 $31,505 $28,667 $24,310 $22,133 $18,464
===========================================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) Includes company-sponsored internal exchanges.
(3) Includes premiums and deposits directed to the General Account investment
option of a variable life or variable annuity product.
32
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
INSURANCE EXPENSES AND OTHER
EXPENSES BY MAJOR CATEGORY
Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE EXPENSES (NET OF
CAPITALIZATION OF DAC)
Insurance Expenses $ 705 $ 752 $ 757 $ 775 $ 709 $ 758 $ 682
DAC Capitalization (1) (300) (333) (324) (336) (309) (304) (285)
-------------------------------------------------------------------------------------------
Net $ 405 $ 419 $ 433 $ 439 $ 400 $ 454 $ 397
===========================================================================================
OTHER EXPENSES BY MAJOR CATEGORY
Commissions $ 218 $ 241 $ 252 $ 244 $ 220 $ 214 $ 195
Other deferrable expenses 103 114 92 108 101 107 113
Direct and allocated expenses,
not deferred 327 335 353 347 322 371 310
Pension and other post-retirement
benefit costs 28 32 31 50 41 40 36
Premium taxes and other taxes,
licenses and fees 29 30 29 26 25 26 28
-------------------------------------------------------------------------------------------
Subtotal Insurance Expenses $ 705 $ 752 $ 757 $ 775 $ 709 $ 758 $ 682
Broker-dealer and other expenses 126 134 116 150 124 118 110
Reinsurance allowances (42) (49) (53) (45) (38) (43) (39)
-------------------------------------------------------------------------------------------
Total Other Expenses $ 789 $ 837 $ 820 $ 880 $ 795 $ 833 $ 753
===========================================================================================
(1) Excludes $32 million, $35 million, $31 million, $57 million, $29 million,
$24 million, and $25 million, of DAC capitalization related to reinsurance
allowances for the three months ended September 30, 2004, June 30, 2004,
March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and
March 31, 2003, respectively.
33
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
VARIABLE & UNIVERSAL LIFE 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT SPREADS
BY PRODUCT (%)
Investment income yield 7.04% 7.05% 6.98% 7.23% 7.25% 7.31% 7.39%
Average crediting rate 5.17% 5.25% 5.26% 5.50% 5.63% 5.57% 5.64%
-------------------------------------------------------------------------------------------
Spread 1.87% 1.80% 1.72% 1.73% 1.62% 1.74% 1.75%
===========================================================================================
For the Three Months Ended
-------------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
ANNUITIES 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT SPREADS
BY PRODUCT (%)
Investment income yield 6.08% 6.23% 5.85% 6.50% 6.50% 6.31% 6.64%
Average crediting rate 3.64% 3.79% 3.90% 4.16% 4.28% 4.36% 4.47%
-------------------------------------------------------------------------------------------
Spread 2.44% 2.44% 1.95% 2.34% 2.22% 1.95% 2.17%
===========================================================================================
34
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Auto & Home Operations 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $740 $734 $737 $740 $735 $721 $712
Investment income, net 40 44 46 39 39 41 39
Other revenues 8 6 9 9 10 4 9
------------------------------------------------------------------------------------
788 784 792 788 784 766 760
------------------------------------------------------------------------------------
EXPENSES
Losses 460 413 446 447 465 446 452
Loss adjustment expense 93 82 90 89 78 81 82
Other expenses 194 193 198 184 187 186 199
------------------------------------------------------------------------------------
747 688 734 720 730 713 733
------------------------------------------------------------------------------------
Operating earnings before provision
(benefit) for income taxes 41 96 58 68 54 53 27
Provision (benefit) for income taxes 7 25 12 15 12 11 (3)
------------------------------------------------------------------------------------
OPERATING EARNINGS $34 $71 $46 $53 $42 $42 $30
====================================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $34 $71 $46 $53 $42 $42 $30
Net investment gains (losses) (1) (5) 0 (11) 2 (2) (4)
Minority interest - net investment gains
(losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) 0 2 0 4 (1) 1 1
------------------------------------------------------------------------------------
Net investment gains (losses), net of income
taxes (1) (3) 0 (7) 1 (1) (3)
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0 0 0
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Net income $33 $68 $46 $46 $43 $41 $27
====================================================================================
For the Year-to-Date Period Ended
---------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Auto & Home Operations 2004 2004 2003 2003 2003
- --------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $2,211 $1,471 $2,908 $2,168 $1,433
Investment income, net 130 90 158 119 80
Other revenues 23 15 32 23 13
--------------------------------------------------------------
2,364 1,576 3,098 2,310 1,526
---------------------------------------------------------------
EXPENSES
Losses 1,319 859 1,810 1,363 898
Loss adjustment expense 265 172 330 241 163
Other expenses 585 391 756 572 385
---------------------------------------------------------------
2,169 1,422 2,896 2,176 1,446
---------------------------------------------------------------
Operating earnings before provision
(benefit) for income taxes 195 154 202 134 80
Provision (benefit) for income taxes 44 37 35 20 8
---------------------------------------------------------------
OPERATING EARNINGS $151 $117 $167 $114 $72
===============================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $151 $117 $167 $114 $72
Net investment gains (losses) (6) (5) (15) (4) (6)
Minority interest - net investment gains
(losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) 2 2 5 1 2
---------------------------------------------------------------
Net investment gains (losses), net of income
taxes (4) (3) (10) (3) (4)
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit
(provision) 0 0 0 0 0
---------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0
---------------------------------------------------------------
Net income $147 $114 $157 $111 $68
===============================================================
35
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Auto 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $539 $538 $542 $545 $545 $535 $530
Investment income, net 30 34 36 26 27 29 27
Other revenues 6 5 6 5 7 7 6
----------------------------------------------------------------------------------
575 577 584 576 579 571 563
----------------------------------------------------------------------------------
EXPENSES
Losses 299 296 351 357 359 347 366
Loss adjustment expense 67 63 72 76 61 68 75
Other expenses 136 135 139 126 131 131 143
----------------------------------------------------------------------------------
502 494 562 559 551 546 584
----------------------------------------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 73 83 22 17 28 25 (21)
Provision (benefit) for income taxes 21 22 0 (2) 5 4 (17)
----------------------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $52 $61 $22 $19 $23 $21 ($4)
----------------------------------------------------------------------------------
Net investment gains (losses), net of income
taxes (1) (3) 0 (5) 0 0 (2)
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0 0 0
----------------------------------------------------------------------------------
Net income $51 $58 $22 $14 $23 $21 ($6)
==================================================================================
For the Year-to-Date Period Ended
--------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Auto 2004 2004 2003 2003 2003
- -------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $1,619 $1,080 $2,155 $1,610 $1,065
Investment income, net 100 70 109 83 56
Other revenues 17 11 25 20 13
---------------------------------------------------------------
1,736 1,161 2,289 1,713 1,134
---------------------------------------------------------------
EXPENSES
Losses $946 647 1,429 1,072 713
Loss adjustment expense 202 135 280 204 143
Other expenses 410 274 531 405 274
---------------------------------------------------------------
1,558 1,056 2,240 1,681 1,130
---------------------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 178 105 49 32 4
Provision (benefit) for income taxes 43 22 (10) (8) (13)
---------------------------------------------------------------
OPERATING EARNINGS (LOSS) $135 $83 $59 $40 $17
-------------------------------------------------------------
Net investment gains (losses), net of income
taxes (4) (3) (7) (2) (2)
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0
---------------------------------------------------------------
Net income $131 $80 $52 $38 $15
===============================================================
36
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Homeowners 2004 2004 2004 2003 2003 2003 2003
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $188 $185 $182 $183 $177 $173 $167
Investment income, net 10 9 9 11 12 10 10
Other revenues 1 1 1 2 1 2 1
-------------------------------------------------------------------------------
199 195 192 196 190 185 178
-------------------------------------------------------------------------------
EXPENSES
Losses 153 106 89 82 95 96 76
Loss adjustment expense 26 19 18 12 16 13 8
Other expenses 52 54 52 52 52 50 48
-------------------------------------------------------------------------------
231 179 159 146 163 159 132
-------------------------------------------------------------------------------
Operating earnings before provision
for income taxes (32) 16 33 50 27 26 46
Provision for income taxes (14) 4 11 16 8 6 14
-------------------------------------------------------------------------------
OPERATING EARNINGS ($18) $12 $22 $34 $19 $20 $32
-------------------------------------------------------------------------------
Net investment gains (losses), net of income taxes 0 0 0 (2) 1 (1) (1)
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in accounting, net
of income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------------------
Net income ($18) $12 $22 $32 $20 $19 $31
===============================================================================
For the Year-to-Date Period Ended
--------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Homeowners 2004 2004 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $555 $367 $700 $517 $340
Investment income, net 28 18 43 32 20
Other revenues 3 2 6 4 3
-------------------------------------------------------------
586 387 749 553 363
-------------------------------------------------------------
EXPENSES
Losses $348 195 349 267 172
Loss adjustment expense 63 37 49 37 21
Other expenses 158 106 202 150 98
-------------------------------------------------------------
569 338 600 454 291
-------------------------------------------------------------
Operating earnings before provision
for income taxes 17 49 149 99 72
Provision for income taxes 1 15 44 28 20
-------------------------------------------------------------
OPERATING EARNINGS $16 $34 $105 $71 $52
-------------------------------------------------------------
Net investment gains (losses), net of income taxes 0 0 (3) (1) (2)
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in accounting, net
of income taxes 0 0 0 0 0
-------------------------------------------------------------
Net income $16 $34 $102 $70 $50
=============================================================
37
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Other 2004 2004 2004 2003 2003 2003 2003
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $12 $11 $13 $12 $13 $13 $15
Investment income, net (1) 1 1 2 0 2 2
Other revenues 0 0 2 2 2 (5) 2
------------------------------------------------------------------------------
11 12 16 16 15 10 19
------------------------------------------------------------------------------
EXPENSES
Losses 4 11 6 8 11 3 10
Loss adjustment expense 1 0 0 1 1 0 (1)
Other expenses 6 4 7 6 4 5 8
------------------------------------------------------------------------------
11 15 13 15 16 8 17
------------------------------------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 0 (3) 3 1 (1) 2 2
Provision (benefit) for income taxes 0 (1) 1 1 (1) 1 0
------------------------------------------------------------------------------
OPERATING EARNINGS $0 ($2) $2 $0 $0 $1 $2
------------------------------------------------------------------------------
Net investment gains (losses), net of income taxes 0 0 0 0 0 0 0
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in accounting, net
of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------------------------
Net income $0 ($2) $2 $0 $0 $1 $2
==============================================================================
For the Year-to-Date Period Ended
--------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Other 2004 2004 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $36 $24 $53 $41 $28
Investment income, net 1 2 6 4 4
Other revenues 2 2 1 (1) (3)
--------------------------------------------------------------
39 28 60 44 29
--------------------------------------------------------------
EXPENSES
Losses $21 17 32 24 13
Loss adjustment expense 1 0 1 0 (1)
Other expenses 17 11 23 17 13
--------------------------------------------------------------
39 28 56 41 25
--------------------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 0 0 4 3 4
Provision (benefit) for income taxes 0 0 1 0 1
--------------------------------------------------------------
OPERATING EARNINGS $0 $0 $3 $3 $3
--------------------------------------------------------------
Net investment gains (losses), net of income taxes 0 0 0 0 0
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in accounting, net
of income taxes 0 0 0 0 0
--------------------------------------------------------------
Net income $0 $0 $3 $3 $3
==============================================================
38
(METLIFE LOGO)
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION
AND SUPPLEMENTAL DATA
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ----------------------------------------------------------------------------------------------------------------------------
WRITTEN PREMIUMS BY PRODUCT
Preferred/Standard Automobile $534 $521 $517 $514 $538 $524 $505
Non-Standard Automobile 19 19 21 21 23 23 24
Homeowners 212 199 155 183 204 192 149
Other 11 9 20 9 11 12 20
------------------------------------------------------------------------------------
Total $776 $748 $713 $727 $776 $751 $698
====================================================================================
SELECTED FINANCIAL INFORMATION AND
SUPPLEMENTAL DATA
TOTAL AUTO & HOME
Loss and loss adjustment expense ratio 74.6% 67.5% 72.7% 72.2% 73.8% 73.2% 75.0%
Other expense ratio 25.5% 25.6% 26.1% 25.1% 25.5% 25.6% 28.0%
------------------------------------------------------------------------------------
Total combined ratio (1) 100.1% 93.1% 98.8% 97.3% 99.3% 98.8% 103.0%
Effect of catastrophe losses 15.3% 5.0% 2.3% 1.9% 3.4% 3.2% 1.8%
------------------------------------------------------------------------------------
Combined ratio excluding catastrophes 84.8% 88.1% 96.5% 95.4% 95.9% 95.6% 101.2%
====================================================================================
AUTO
Loss and loss adjustment expense ratio 68.0% 66.9% 78.1% 79.3% 77.0% 77.5% 83.3%
Other expense ratio 24.3% 24.3% 24.8% 23.5% 24.1% 24.2% 27.2%
------------------------------------------------------------------------------------
Total combined ratio (1) 92.3% 91.2% 102.9% 102.8% 101.1% 101.7% 110.5%
Effect of catastrophe losses 1.7% 1.1% 0.1% 0.5% 0.2% 1.2% 0.2%
------------------------------------------------------------------------------------
Combined ratio excluding catastrophes 90.6% 90.1% 102.8% 102.3% 100.9% 100.5% 110.3%
====================================================================================
HOMEOWNERS
Loss and loss adjustment expense ratio 96.0% 67.3% 58.7% 51.4% 62.3% 63.4% 50.2%
Other expense ratio 27.6% 28.8% 28.2% 28.7% 29.3% 29.2% 28.5%
------------------------------------------------------------------------------------
Total combined ratio (1) 123.6% 96.1% 86.9% 80.1% 91.6% 92.6% 78.7%
Effect of catastrophe losses 55.4% 16.6% 9.0% 6.3% 13.4% 9.7% 6.9%
------------------------------------------------------------------------------------
Combined ratio excluding catastrophes 68.2% 79.5% 77.9% 73.8% 78.2% 82.9% 71.8%
====================================================================================
OTHER
Loss and loss adjustment expense ratio 40.3% 100.9% 44.6% 68.4% 99.5% 24.1% 57.7%
Other expense ratio 39.9% 35.4% 50.7% 42.7% 34.2% 38.8% 52.0%
------------------------------------------------------------------------------------
Total combined ratio (1) 80.2% 136.3% 95.3% 111.1% 133.7% 62.9% 109.7%
Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
------------------------------------------------------------------------------------
Combined ratio excluding catastrophes 80.2% 136.3% 95.3% 111.1% 133.7% 62.9% 109.7%
====================================================================================
PRE-TAX CATASTROPHE LOSSES
Auto $9 $6 $0 $3 $1 $7 $1
Homeowners 104 31 16 12 24 17 12
Other 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Total $113 $37 $16 $15 $25 $24 $13
====================================================================================
Catastrophe points on combined ratios 15.3 5.0 2.3 1.9 3.4 3.2 1.8
------------------------------------------------------------------------------------
(1) The combined ratio reflects payment fees as a credit to Other Expenses, for
the three months ended September 30, 2004, June 30, 2004 and March 31, 2004,
which resulted in a 0.7, 0.7 and 0.8 of a percentage point decrease in the
combined ratio for the periods ended, respectively. The decreases for Auto,
Homeowners & Other were 0.8, 0.4, 0.7, of a percentage point, respectively,
for September 30, 2004, 0.8, 0.5 and 0.6 of a percentage point,
respectively, for June 30, 2004 and 0.9, 0.5 and 0.4 of a percentage point,
respectively, for March 31, 2004.
39
(METLIFE LOGO)
- --------------------------------------------------------------------------------
INTERNATIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $445 $405 $412 $448 $445 $390 $395
Universal life and investment-type product
policy fees 91 86 83 80 70 71 51
Investment income, net 151 137 123 129 119 131 123
Other revenues 2 8 4 26 20 26 8
------------------------------------------------------------------------------------
689 636 622 683 654 618 577
------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 432 413 388 428 410 294 377
Interest credited to policyholder account
balances 37 32 37 36 34 36 37
Capitalization of deferred policy acquisition
costs (103) (93) (71) (90) (72) (59) (66)
Amortization of deferred policy acquisition
costs 32 36 31 73 41 77 34
Other expenses 222 194 172 204 187 177 153
------------------------------------------------------------------------------------
620 582 557 651 600 525 535
------------------------------------------------------------------------------------
Operating earnings before provision (benefit)
for income taxes 69 54 65 32 54 93 42
Provision (benefit) for income taxes 24 13 21 (2) 17 (9) 14
------------------------------------------------------------------------------------
OPERATING EARNINGS $45 $41 $44 $34 $37 $102 (3) $28
====================================================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $45 $41 $44 $34 $37 $102 $28
Net investment gains (losses) 3 (2) 26 0 8 (1) 0
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (1) (1) (6) (1) 6 (3) 0
------------------------------------------------------------------------------------
Net investment gains (losses), net of income
taxes 2 (3) 20 (1) 14 (4) 0
Adjustments related to policyholder
benefits and dividends (14) 49 3 (3) 0 0 0
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) 5 (17) (1) 1 0 0 0
------------------------------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes (9) 32 2 (2) 0 0 0
Cumulative effect of a change in accounting,
net of income taxes (2) 0 0 (30) 0 0 0 0
------------------------------------------------------------------------------------
Net income $38 $70 $36 $31 $51 $98 $28
====================================================================================
For the Year-to-Date Period Ended
---------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- --------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,262 $817 $1,678 $1,230 $785
Universal life and investment-type product
policy fees 260 169 272 192 122
Investment income, net 411 260 502 373 254
Other revenues 14 12 80 54 34
---------------------------------------------------------------
1,947 1,258 2,532 1,849 1,195
---------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,233 801 1,509 1,081 671
Interest credited to policyholder account
balances 106 69 143 107 73
Capitalization of deferred policy acquisition
costs (267) (164) (287) (197) (125)
Amortization of deferred policy acquisition
costs 99 67 225 152 111
Other expenses 588 366 721 517 330
---------------------------------------------------------------
1,759 1,139 2,311 1,660 1,060
---------------------------------------------------------------
Operating earnings before provision (benefit)
for income taxes 188 119 221 189 135
Provision (benefit) for income taxes 58 34 20 22 5
---------------------------------------------------------------
OPERATING EARNINGS $130 $85 $201 $167 $130 (3)
===============================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $130 $85 $201 $167 $130
Net investment gains (losses) 27 24 7 7 (1)
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (8) (7) 2 3 (3)
---------------------------------------------------------------
Net investment gains (losses), net of income
taxes 19 17 9 10 (4)
Adjustments related to policyholder
benefits and dividends 38 52 (3) 0 0
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit
(provision) (13) (18) 1 0 0
---------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 25 34 (2) 0 0
Cumulative effect of a change in accounting,
net of income taxes (2) (30) (30) 0 0 0
---------------------------------------------------------------
Net income $144 $106 $208 $177 $126
===============================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs and amounts
allocable to certain participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts. In
September, 2004, an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain liabilities
to comply with SOP 03-1. The cumulative effect of a change in accounting,
net of income taxes, for the three months ended March 31, 2004 was adjusted
by zero in accordance with the SOP 03-1 Technical Practice Aid.
(3) Operating earnings for the period ended June 30, 2003 includes $62 million
earnings, net of income taxes, from the merger of the Company's Mexican
operations and a reduction in policyholder liabilities resulting from a
change in reserve methodology.
40
(METLIFE LOGO)
- --------------------------------------------------------------------------------
REINSURANCE OPERATIONS
STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums, net $822 $807 $816 $949 $579 $588 $552
Investment income, net 144 136 130 120 122 121 110
Other revenues 14 15 12 14 11 12 12
------------------------------------------------------------------------------------
980 958 958 1,083 712 721 674
------------------------------------------------------------------------------------
EXPENSES
Claims and other policy benefits 675 651 659 788 470 466 433
Interest credited to policyholder account
balances 48 52 51 49 47 45 43
Policy acquisition costs and other
insurance expenses 156 133 139 130 112 116 108
Other expenses 47 46 45 54 33 38 36
------------------------------------------------------------------------------------
926 882 894 1,021 662 665 620
------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes and minority interest 54 76 64 62 50 56 54
Provision for income taxes 9 13 9 11 9 11 10
------------------------------------------------------------------------------------
Operating earnings before minority interest 45 63 55 51 41 45 44
Elimination of minority interest, before tax 31 40 37 31 23 26 24
------------------------------------------------------------------------------------
CONTRIBUTION TO METLIFE $14 $23 $18 $20 $18 $19 $20
====================================================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $14 $23 $18 $20 $18 $19 $20
Net investment gains (losses) (17) 32 21 25 5 5 (4)
Minority interest - net investment
gains (losses) 2 (8) (8) (9) (2) (2) 4
Net investment gains (losses) tax
benefit (provision) 6 (9) (4) (5) (2) 0 0
------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes (9) 15 9 11 1 3 0
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0 0 0
Adjustments related to other expenses 14 (13) (4) 0 0 0 0
Adjustments related to tax benefit
(provision) (5) 5 1 0 0 0 0
------------------------------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 9 (8) (3) 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes (2) 0 0 5 0 0 0 0
------------------------------------------------------------------------------------
Net income $14 $30 $29 $31 $19 $22 $20
====================================================================================
For the Year-to-Date Period Ended
--------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- -------------------------------------------------------------------------------------------------------------
REVENUES
Premiums, net $2,445 $1,623 $2,668 $1,719 $1,140
Investment income, net 410 266 473 353 231
Other revenues 41 27 49 35 24
--------------------------------------------------------------
2,896 1,916 3,190 2,107 1,395
--------------------------------------------------------------
EXPENSES
Claims and other policy benefits 1,985 1,310 2,157 1,369 899
Interest credited to policyholder account
balances 151 103 184 135 88
Policy acquisition costs and other
insurance expenses 428 272 466 336 224
Other expenses 138 91 161 107 74
--------------------------------------------------------------
2,702 1,776 2,968 1,947 1,285
--------------------------------------------------------------
Operating earnings before provision for
income taxes and minority interest 194 140 222 160 110
Provision for income taxes 31 22 41 30 21
--------------------------------------------------------------
Operating earnings before minority interest 163 118 181 130 89
Elimination of minority interest, before tax 108 77 104 73 50
--------------------------------------------------------------
CONTRIBUTION TO METLIFE $55 $41 $77 $57 $39
==============================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $55 $41 $77 $57 $39
Net investment gains (losses) 36 53 31 6 1
Minority interest - net investment
gains (losses) (14) (16) (9) 0 2
Net investment gains (losses) tax
benefit (provision) (7) (13) (7) (2) 0
--------------------------------------------------------------
Net investment gains (losses), net of
income taxes 15 24 15 4 3
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0
Adjustments related to other expenses (3) (17) 0 0 0
Adjustments related to tax benefit
(provision) 1 6 0 0 0
--------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes (2) (11) 0 0 0
Cumulative effect of a change in accounting,
net of income taxes (2) 5 5 0 0 0
--------------------------------------------------------------
Net income $73 $59 $92 $61 $42
==============================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts. In
September, 2004 an AICPA Technical Practice Aid ("SOP 03-1 Technical
Practice Aid") was issued which clarifies recognition of certain liabilities
to comply with SOP 03-1. The cumulative effect of a change in accounting,
net of income taxes, for the three months ended March 31, 2004 was adjusted
by a $2 million benefit in accordance with the SOP 03-1 Technical Practice
Aid.
41
(METLIFE LOGO)
- --------------------------------------------------------------------------------
REINSURANCE OPERATIONS
PRE-TAX AND PRE-MINORITY INTEREST OPERATING
EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PRE-TAX AND PRE-MINORITY INTEREST
OPERATING EARNINGS BY REGION
United States $69 $60 $52 $52 $38 $49 $45
Canada 16 15 16 14 13 12 11
Latin America 0 0 0 0 0 0 0
Asia-Pacific (2) 5 6 7 7 4 2
Other international markets 9 11 3 8 3 3 2
Corporate (38) (15) (13) (19) (11) (12) (6)
------------------------------------------------------------------------------------
Total pre-tax and pre-minority interest
operating earnings $54 $76 $64 $62 $50 $56 $54
====================================================================================
POLICY BENEFITS AND INTEREST
SENSITIVE CONTRACT LIABILITIES BY REGION
Traditional U.S. $4,458 $4,385 $4,636 $4,386 $3,743 $3,721 $3,653
Asset intensive 3,893 3,645 3,343 3,201 3,029 2,918 2,718
Other 58 125 120 112 113 110 112
------------------------------------------------------------------------------------
Total U.S. 8,409 8,155 8,099 7,699 6,885 6,749 6,483
------------------------------------------------------------------------------------
Canada 1,243 1,167 1,151 1,270 1,049 1,049 972
Latin America 0 0 0 0 0 0 0
Asia-Pacific 456 357 420 409 376 344 302
Other international markets 549 497 499 405 368 316 271
------------------------------------------------------------------------------------
Total International 2,248 2,021 2,070 2,084 1,793 1,709 1,545
------------------------------------------------------------------------------------
Total policy benefits and interest sensitive
contract liabilities $10,657 $10,176 $10,169 $9,783 $8,678 $8,458 $8,028
====================================================================================
42
(METLIFE LOGO)
- --------------------------------------------------------------------------------
ASSET MANAGEMENT OPERATIONS (1)
STATEMENTS OF OPERATING EARNINGS
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Asset Management Operations 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Investment and advisory service fees
Mutual funds $23 $23 $22 $20 $20 $17 $16
MetLife and affiliates separately
managed accounts 9 9 9 9 9 9 9
Third party client separate accounts 22 44 13 16 13 16 10
Other revenues 13 15 14 13 11 11 10
------------------------------------------------------------------------------------
67 91 58 58 53 53 45
------------------------------------------------------------------------------------
EXPENSES
Employee compensation and benefits 30 36 21 22 21 20 22
Promoting and servicing 10 12 8 11 6 7 7
General and administrative 15 17 20 15 20 17 14
------------------------------------------------------------------------------------
55 65 49 48 47 44 43
------------------------------------------------------------------------------------
Operating earnings before provision for
income taxes 12 26 9 10 6 9 2
Provision for income taxes 5 10 4 4 2 4 1
------------------------------------------------------------------------------------
OPERATING EARNINGS $7 $16 $5 $6 $4 $5 $1
====================================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $7 $16 $5 $6 $4 $5 $1
Net investment gains (losses) 0 0 0 (1) 2 0 8
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) 0 0 0 0 0 0 (3)
------------------------------------------------------------------------------------
Net investment gains (losses), net of
income taxes 0 0 0 (1) 2 0 5
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0 0 0
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------------------------------
Net income $7 $16 $5 $5 $6 $5 $6
====================================================================================
For the Year-to-Date Period Ended
--------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Asset Management Operations 2004 2004 2003 2003 2003
- -------------------------------------------------------------------------------------------------------------
REVENUES
Investment and advisory service fees
Mutual funds $68 $45 $73 $53 $33
MetLife and affiliates separately
managed accounts 27 18 36 27 18
Third party client separate accounts 79 57 55 39 26
Other revenues 42 29 45 32 21
--------------------------------------------------------------
216 149 209 151 98
--------------------------------------------------------------
EXPENSES
Employee compensation and benefits 87 57 85 63 42
Promoting and servicing 30 20 31 20 14
General and administrative 52 37 66 51 31
--------------------------------------------------------------
169 114 182 134 87
--------------------------------------------------------------
Operating earnings before provision for
income taxes 47 35 27 17 11
Provision for income taxes 19 14 11 7 5
--------------------------------------------------------------
OPERATING EARNINGS $28 $21 $16 $10 $6
==============================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $28 $21 $16 $10 $6
Net investment gains (losses) 0 0 9 10 8
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) 0 0 (3) (3) (3)
--------------------------------------------------------------
Net investment gains (losses), net of
income taxes 0 0 6 7 5
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit
(provision) 0 0 0 0 0
--------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 0 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0
--------------------------------------------------------------
Net income $28 $21 $22 $17 $11
==============================================================
(1) As previously reported, the Company entered into an agreement to sell its
wholly-owned subsidiary SSRM Holdings, Inc. to a third party which is
expected to close in early 2005.
43
(METLIFE LOGO)
- --------------------------------------------------------------------------------
ASSET MANAGEMENT OPERATIONS
CHANGE IN ASSETS UNDER MANAGEMENT AND
COMPOSITION OF ASSETS UNDER MANAGEMENT
At or for the Three Months Ended
-------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------
CHANGE IN ASSETS
Beginning assets $51,727 $50,443 $47,518 $45,711 $46,130 $43,552 $44,577
Contributions 1,675 3,266 3,183 1,983 1,190 1,564 1,004
Redemptions (1,930) (1,713) (1,798) (2,215) (2,039) (2,040) (2,063)
Market appreciation 668 (269) 1,540 2,039 430 3,054 34
-------------------------------------------------------------------------------------
Ending Carrying Value $52,140 $51,727 $50,443 $47,518 $45,711 $46,130 $43,552
=====================================================================================
ASSETS UNDER MANAGEMENT
STATE STREET RESEARCH
MetLife Separate Account $17,109 $16,695 $17,307 $16,762 $17,244 $17,499 $17,160
MetLife Retail Funds 7,744 7,958 7,394 7,362 6,894 6,759 5,618
Third Party Individual and Retail Funds 9,787 10,112 9,819 9,255 8,140 7,854 6,966
Third Party Institutional 17,500 16,962 15,923 14,139 13,433 14,018 13,808
-------------------------------------------------------------------------------------
Total State Street Research $52,140 $51,727 $50,443 $47,518 $45,711 $46,130 $43,552
=====================================================================================
44
(METLIFE LOGO)
- --------------------------------------------------------------------------------
CORPORATE, OTHER & ELIMINATIONS
STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums ($5) ($4) ($1) ($5) ($4) ($5) ($4)
Universal life and investment-type product
policy fees 2 0 0 0 0 0 0
Investment income, net 112 145 67 77 64 42 69
Other revenues 7 (7) 7 (6) 18 15 12
------------------------------------------------------------------------------------
116 134 73 66 78 52 77
------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1 2 2 0 2 0 2
Interest credited to policyholder account
balances 0 0 0 0 0 0 0
Interest expense 94 88 78 91 77 88 94
Other expenses 29 60 39 21 (30) (65) 24
------------------------------------------------------------------------------------
124 150 119 112 49 23 120
------------------------------------------------------------------------------------
Operating earnings before (benefit)
provision for income taxes (8) (16) (46) (46) 29 29 (43)
Benefit for income taxes (34) (111) (28) (48) (51) (12) (31)
------------------------------------------------------------------------------------
OPERATING EARNINGS (LOSS) $26 (2) $95 (3) ($18) $2 $80 (4) $41 (5) ($12)
====================================================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $26 $95 ($18) $2 $80 $41 ($12)
Net investment gains (losses) (17) 83 4 420 (32) (36) (33)
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) 3 (31) (2) (157) 24 10 11
------------------------------------------------------------------------------------
Net investment gains (losses), net of income
taxes (14) 52 2 263 (8) (26) (22)
Adjustments related to policyholder
benefits and dividends 0 0 0 (46) 0 0 0
Adjustments related to other expenses 0 0 0 (2) 0 0 0
Adjustments related to tax benefit
(provision) 1 0 0 17 1 1 (1)
------------------------------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 1 0 0 (31) 1 1 (1)
Cumulative effect of a change in accounting,
net of income taxes 0 0 (1) 0 0 0 0
------------------------------------------------------------------------------------
Net income $13 $147 ($17) $234 $73 $16 ($35)
====================================================================================
For the Year-to-Date Period Ended
---------------------------------------------------------------
September 30, June 30, December 31, September 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2003 2003 2003
- --------------------------------------------------------------------------------------------------------------
REVENUES
Premiums ($10) ($5) ($18) ($13) ($9)
Universal life and investment-type product
policy fees 2 0 0 0 0
Investment income, net 324 212 252 175 111
Other revenues 7 0 39 45 27
---------------------------------------------------------------
323 207 273 207 129
---------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5 4 4 4 2
Interest credited to policyholder account
balances 0 0 0 0 0
Interest expense 260 166 350 259 182
Other expenses 128 99 (50) (71) (41)
---------------------------------------------------------------
393 269 304 192 143
---------------------------------------------------------------
Operating earnings before (benefit)
provision for income taxes (70) (62) (31) 15 (14)
Benefit for income taxes (173) (139) (142) (94) (43)
---------------------------------------------------------------
OPERATING EARNINGS (LOSS) $103 (2) $77 (3) $111 $109 (4) $29 (5)
===============================================================
NET INCOME RECONCILIATION (1)
- -----------------------------
Operating earnings $103 $77 $111 $109 $29
Net investment gains (losses) 70 87 319 (101) (69)
Minority interest - net investment
gains (losses) 0 0 0 0 0
Net investment gains (losses) tax
benefit (provision) (30) (33) (112) 45 21
---------------------------------------------------------------
Net investment gains (losses), net of income
taxes 40 54 207 (56) (48)
Adjustments related to policyholder
benefits and dividends 0 0 (46) 0 0
Adjustments related to other expenses 0 0 (2) 0 0
Adjustments related to tax benefit
(provision) 1 0 18 1 0
---------------------------------------------------------------
Adjustments related to net investment gains
(losses), net of income taxes 1 0 (30) 1 0
Cumulative effect of a change in accounting,
net of income taxes (1) (1) 0 0 0
---------------------------------------------------------------
Net income $143 $130 $288 $54 ($19)
===============================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amounts allocable to certain participating contracts.
(2) Operating earnings for the three months ended September 30, 2004 includes a
$9 million benefit, from a revision of the estimate of income taxes for
2003.
(3) Operating earnings for the period ended June 30, 2004 includes a $32 million
charge, net of income taxes, from a contribution to the MetLife Foundation
made by Metropolitan Life Insurance Company and a $105 million benefit
related to a previously disclosed resolution of an IRS audit.
(4) Operating earnings for the period ended September 30, 2003 includes a $28
million benefit, net of income taxes, 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.
(5) Operating earnings for the period ended June 30, 2003 includes a $64 million
benefit, net of income taxes, from a reduction of a previously established
liability related to the Company's race-conscious underwriting settlement.
45
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Three Months Ended
--------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.44% 6.64% 6.62% 6.92% 6.83% 6.87% 7.01%
Income $2,246 $2,291 $2,232 $2,245 $2,140 $2,073 $2,044
Investment gains (losses) $61 ($3) $34 ($183) ($23) ($43) ($149)
Ending Carrying Value $176,091 $170,192 $174,100 $167,752 $159,940 $158,822 $144,341
MORTGAGE LOANS
Yield (3) 7.02% 6.83% 6.81% 7.61% 7.37% 7.50% 7.51%
Income $507 $468 $449 $493 $468 $472 $470
Investment gains (losses) ($8) $0 $0 $2 ($36) ($8) ($14)
Ending Carrying Value $29,620 $28,118 $26,562 $26,249 $25,535 $25,289 $25,046
REAL ESTATE AND REAL ESTATE
JOINT VENTURES (8)
Yield (3) 10.53% 13.36% 11.85% 11.06% 10.14% 11.20% 11.16%
Income (4) $111 $148 $139 $137 $124 $125 $127
Investment gains (losses) (5) ($5) $133 $21 $344 $10 ($6) $92
Ending Carrying Value $4,281 $4,154 $4,699 $4,680 $5,255 $4,491 $4,475
POLICY LOANS
Yield (3) 6.14% 6.13% 6.12% 6.15% 6.54% 6.46% 6.47%
Income $135 $134 $134 $135 $141 $139 $139
Ending Carrying Value $8,801 $8,766 $8,758 $8,749 $8,668 $8,627 $8,615
EQUITY SECURITIES AND OTHER LIMITED
PARTNERSHIP INTERESTS (1) (8)
Yield (3) 7.37% 10.27% 3.03% 3.80% (1.26%) 3.62% 6.11%
Income $76 $100 $29 $36 ($11) $32 $54
Investment gains (losses) $96 $87 $0 $33 ($6) $1 ($71)
Ending Carrying Value $4,743 $4,549 $4,305 $4,198 $4,218 $4,117 $3,867
CASH AND SHORT-TERM INVESTMENTS (1) (8)
Yield (3) 3.14% 2.37% 2.67% 1.67% 1.95% 2.23% 4.57%
Income $43 $30 $30 $24 $35 $42 $64
Investment gains (losses) $0 $0 $0 $5 $0 $0 ($4)
Ending Carrying Value $6,095 $6,548 $5,144 $5,559 $8,090 $8,354 $8,126
OTHER INVESTED ASSETS (6) (7) (8) (9)
Yield (3) 5.57% 4.35% 5.11% 7.78% 9.32% 8.47% 8.45%
Income $55 $47 $52 $74 $84 $69 $63
Investment gains (losses) (9) $34 ($60) $68 ($62) ($96) $2 ($24)
Ending Carrying Value $4,406 $5,119 $5,094 $4,645 $4,617 $4,261 $3,948
TOTAL INVESTMENTS
Gross investment income yield 6.51% 6.72% 6.56% 6.88% 6.66% 6.82% 7.10%
Investment fees and expenses yield (0.13%) (0.13%) (0.14%) (0.16%) (0.15%) (0.14%) (0.15%)
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.38% 6.59% 6.42% 6.72% 6.51% 6.68% 6.95%
======================================================================================
Gross investment income $3,173 $3,218 $3,065 $3,144 $2,981 $2,952 $2,961
Investment fees and expenses (8) (65) (61) (64) (74) (67) (63) (62)
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME $3,108 $3,157 $3,001 $3,070 $2,914 $2,889 $2,899
======================================================================================
Ending Carrying Value $234,037 $227,446 $228,662 $221,832 $216,323 $213,961 $198,418
======================================================================================
Gross investment gains $351 $411 $243 $564 $153 $137 $221
Gross investment losses (201) (126) (85) (280) (106) (85) (89)
Writedowns (44) (77) (12) (73) (89) (103) (268)
--------------------------------------------------------------------------------------
Subtotal 106 208 146 211 (42) (51) (136)
Derivative & other instruments not
qualifying for hedge accounting 72 (51) (23) (72) (109) (3) (34)
--------------------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 178 157 123 139 (151) (54) (170)
Minority interest - net investment
gains (losses) 2 (8) (8) (9) (2) (2) 4
Net investment gains (losses) tax
benefit (provision) (7) (62) (47) (39) (58) 85 16 58
--------------------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF
INCOME TAXES $118 $102 $76 $72 ($68) ($40) ($108)
======================================================================================
(1) Included in ending assets, investment income and investment gains (losses)
is $2,316 million, $22 million, and $16 million, respectively, related to
the consolidation of separate accounts under SOP 03-1 for the three months
ended September 30, 2004.
(2) The fixed maturity yield is annualized and is based on quarterly average
amortized cost.
(3) Yields are annualized and based on quarterly average carrying values.
(4) Included in income from real estate and real estate joint ventures is $2
million , $25 million, $18 million, $23 million, $23 million, $13 million,
and $18 million related to discontinued operations for the three months
ended September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003,
September 30, 2003, June 30, 2003, and March 31, 2003, respectively.
(5) Included in investment gains (losses) from real estate and real estate joint
ventures is ($16) million, $132 million, $20 million, $323 million, $7
million, $0 million, and $90 million related to discontinued operations for
the three months ended September 30, 2004, June 30, 2004, March 31, 2004,
December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003,
respectively.
(6) Included in invested income from other invested assets are scheduled
settlement payments on derivative instruments that do not qualify for hedge
accounting under SFAS 133 of $12 million, $22 million, $14 million, $29
million, $35 million, $12 million, and $8 million for the three months ended
September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003,
September 30, 2003, June 30, 2003, and March 31, 2003, respectively. These
amounts are excluded from net investment gains (losses) in other invested
assets.
(7) Certain amounts in prior periods presented have been reclassified/restated
to conform with current period presentation.
(8) Included in investment income from real estate, equity securities, cash,
other invested assets, and investment fees & expenses is a total of $16
million, $16 million, $16 million, $15 million, $14 million, $14 million,
and $13 million related to discontinued operations pertaining to the sale of
State Street Research Management for the three months ended September 30,
2004, June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003,
June 30, 2003, and March 31, 2003, respectively.
(9) Included in investment related gains (losses) from other invested assets is
$0 million , $0 million, $0 million, $0 million, $2 million, $0 million, and
$8 million related to discontinued operations pertaining to the sale of
State Street Research Management for the three months ended September 30,
2004, June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003,
June 30, 2003, and March 31, 2003, respectively.
46
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Year-to-date
----------------------------------------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.58% 6.64% 6.62% 6.89% 6.89% 6.91% 7.01%
Income $6,769 $4,523 $2,232 $8,502 $6,257 $4,117 $2,044
Investment gains (losses) $92 $31 $34 ($398) ($215) ($192) ($149)
Ending Carrying Value $176,091 $170,192 $174,100 $167,752 $159,940 $158,822 $144,341
MORTGAGE LOANS
Yield (3) 6.87% 6.80% 6.81% 7.48% 7.45% 7.50% 7.51%
Income $1,424 $917 $449 $1,903 $1,410 $942 $470
Investment gains (losses) ($8) $0 $0 ($56) ($58) ($22) ($14)
Ending Carrying Value $29,620 $28,118 $26,562 $26,249 $25,535 $25,289 $25,046
REAL ESTATE AND REAL ESTATE
JOINT VENTURES (8)
Yield (3) 11.91% 12.71% 11.85% 10.90% 10.63% 11.14% 11.16%
Income (4) $398 $287 $139 $513 $376 $252 $127
Investment gains (losses) (5) $149 $154 $21 $440 $96 $86 $92
Ending Carrying Value $4,281 $4,154 $4,699 $4,680 $5,255 $4,491 $4,475
POLICY LOANS
Yield (3) 6.13% 6.12% 6.12% 6.40% 6.49% 6.47% 6.47%
Income $403 $268 $134 $554 $419 $278 $139
Ending Carrying Value $8,801 $8,766 $8,758 $8,749 $8,668 $8,627 $8,615
EQUITY SECURITIES AND OTHER LIMITED
PARTNERSHIP INTERESTS (1) (8)
Yield (3) 6.92% 6.70% 3.03% 3.02% 2.73% 4.80% 6.11%
Income $205 $129 $29 $111 $75 $86 $54
Investment gains (losses) $183 $87 $0 ($43) ($76) ($70) ($71)
Ending Carrying Value $4,743 $4,549 $4,305 $4,198 $4,218 $4,117 $3,867
CASH AND SHORT-TERM INVESTMENTS (1) (8)
Yield (3) 2.75% 2.45% 2.67% 2.73% 2.93% 3.40% 4.57%
Income $103 $60 $30 $165 $141 $106 $64
Investment gains (losses) $0 $0 $0 $1 ($4) ($4) ($4)
Ending Carrying Value $6,095 $6,548 $5,144 $5,559 $8,090 $8,354 $8,126
OTHER INVESTED ASSETS (6) (7) (8) (9)
Yield (3) 5.10% 4.76% 5.11% 8.53% 8.75% 8.43% 8.45%
Income $154 $99 $52 $290 $216 $132 $63
Investment gains (losses) (9) $42 $8 $68 ($180) ($118) ($22) ($24)
Ending Carrying Value $4,406 $5,119 $5,094 $4,645 $4,617 $4,261 $3,948
TOTAL INVESTMENTS
Gross investment income yield 6.60% 6.64% 6.56% 6.86% 6.85% 6.94% 7.10%
Investment fees and expenses yield (0.13%) (0.13%) (0.14%) (0.15%) (0.15%) (0.15%) (0.15%)
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.47% 6.51% 6.42% 6.71% 6.70% 6.79% 6.95%
========================================================================================
Gross investment income $9,456 $6,283 $3,065 $12,038 $8,894 $5,913 $2,961
Investment fees and expenses (8) (190) (125) (64) (266) (192) (125) (62)
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME $9,266 $6,158 $3,001 $11,772 $8,702 $5,788 $2,899
========================================================================================
Ending Carrying Value $234,037 $227,446 $228,662 $221,832 $216,323 $213,961 $198,418
========================================================================================
Gross investment gains $1,005 $654 $243 $1,075 $511 $358 $221
Gross investment losses (412) (211) (85) (560) (280) (174) (89)
Writedowns (133) (89) (12) (533) (460) (371) (268)
----------------------------------------------------------------------------------------
Subtotal 460 354 146 (18) (229) (187) (136)
Derivative & other instruments not
qualifying for hedge accounting (2) (74) (23) (218) (146) (37) (34)
----------------------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 458 280 123 (236) (375) (224) (170)
Minority interest - net investment
gains (losses) (14) (16) (8) (9) 0 2 4
Net investment gains (losses) tax
benefit (provision) (7) (148) (86) (39) 101 159 74 58
----------------------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF
INCOME TAXES $296 $178 $76 ($144) ($216) ($148) ($108)
========================================================================================
(1) Included in ending assets, investment income and investment gains (losses)
is $2,316 million, $64 million, and $23 million, respectively, related to
the consolidation of separate accounts under SOP 03-1 for year-to-date
September 30, 2004.
(2) The fixed maturity yield is annualized and is based on quarterly average
amortized cost.
(3) Yields are annualized and based on year-to-date average carrying values.
(4) Included in income from real estate and real estate joint ventures is $44
million, $43 million, $18 million, $77 million, $54 million, $31 million,
and $18 million related to discontinued operations for year-to-date
September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003,
September 30, 2003, June 30, 2003, and March 31, 2003, respectively.
(5) Included in investment gains (losses) from real estate and real estate joint
ventures is $136 million, $152 million, $20 million, $421 million, $98
million, $90 million, and $90 million related to discontinued operations for
year-to-date September 30, 2004, June 30, 2004, March 31, 2004, December 31,
2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively.
(6) Included in invested income from other invested assets are scheduled
settlement payments on derivative instruments that do not qualify for hedge
accounting under SFAS 133 of $48 million, $36 million, $14 million, $84
million, $55 million, $20 million, and $8 million for year-to-date September
30, 2004, June 30, 2004, March 31, 2004, December 31, 2003, September 30,
2003, June 30, 2003, and March 31, 2003, respectively. These amounts are
excluded from net investment gains (losses) in other invested assets.
(7) Certain amounts in prior periods presented have been reclassified/restated
to conform with current period presentation.
(8) Included in investment income from real estate, equity securities, cash,
other invested assets, and investment fees & expenses is a total of $47
million , $31 million, $16 million, $56 million, $41 million, $27 million,
and $13 million related to discontinued operations pertaining to the sale of
State Street Research Management for year-to-date September 30, 2004, June
30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, June 30,
2003, and March 31, 2003, respectively.
(9) Included in investment related gains (losses) from other invested assets is
$0 million , $0 million, $0 million, $10 million, $10 million, $8 million,
and $8 million related to discontinued operations pertaining to the sale of
State Street Research Management for year-to-date September 30, 2004, June
30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, June 30,
2003, and March 31, 2003, respectively.
47
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
FIXED MATURITIES (1) (2)
At September 30, 2004 At June 30, 2004 At March 31, 2004 At December 31, 2003
-------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ----------------------------------------------------------------------------------------------------------------------------
Less than 20% $530 90.8% $1,735 96.6% $364 86.3% $677 91.1%
20% or more for less than six months 44 7.5% 47 2.6% 52 12.3% 22 3.0%
20% or more for six months or greater 10 1.7% 15 0.8% 6 1.4% 44 5.9%
-------------------------------------------------------------------------------------
Total Gross Unrealized Losses $584 100.0% $1,797 100.0% $422 100.0% $743 100.0%
=====================================================================================
Total Gross Unrealized Gains $9,703 $7,087 $12,137 $10,162
=====================================================================================
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
- -----------------------------------------------------------------------------------------------------
Less than 20% $826 83.4% $612 76.8% $773 61.0%
20% or more for less than six months 82 8.3% 74 9.3% 216 17.0%
20% or more for six months or greater 82 8.3% 111 13.9% 279 22.0%
--------------------------------------------------------------
Total Gross Unrealized Losses $990 100.0% $797 100.0% $1,268 100.0%
==============================================================
Total Gross Unrealized Gains $10,945 $12,563 $9,643
==============================================================
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
EQUITY SECURITIES (1) (2)
At September 30, 2004 At June 30, 2004 At March 31, 2004 At December 31, 2003
-------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- ----------------------------------------------------------------------------------------------------------------------------
Less than 20% $10 40.0% $13 44.8% $5 45.5% $6 100.0%
20% or more for less than six months 15 60.0% 16 55.2% 6 54.5% 0 0.0%
20% or more for six months or greater 0 0.0% 0 0.0% 0 0.0% 0 0.0%
-------------------------------------------------------------------------------------
Total Gross Unrealized Losses $25 100.0% $29 100.0% $11 100.0% $6 100.0%
=====================================================================================
Total Gross Unrealized Gains $305 $336 $383 $382
=====================================================================================
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
- -----------------------------------------------------------------------------------------------------
Less than 20% $5 100.0% $8 88.9% $33 26.6%
20% or more for less than six months 0 0.0% 1 11.1% 91 73.4%
20% or more for six months or greater 0 0.0% 0 0.0% 0 0.0%
--------------------------------------------------------------
Total Gross Unrealized Losses $5 100.0% $9 100.0% $124 100.0%
==============================================================
Total Gross Unrealized Gains $274 $208 $114
==============================================================
(1) 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.
(2) Certain amounts in prior periods presented have been reclassified/restated
to conform with current period presentation.
48
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
SUMMARY OF FIXED MATURITIES
BY SECTOR AND QUALITY DISTRIBUTION
At September 30, 2004 At June 30, 2004 At March 31, 2004 At December 31, 2003
-------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------------------------------
US treasuries/agencies $16,561 9.4% $16,664 9.8% $17,065 9.8% $15,945 9.5%
State & political subdivisions 3,853 2.2% 3,675 2.2% 3,580 2.0% 3,349 2.0%
Corporate bonds 63,130 35.8% 60,619 35.6% 63,215 36.3% 60,391 36.0%
Foreign government securities 8,380 4.8% 8,019 4.7% 8,444 4.8% 8,764 5.2%
Foreign corporates 27,076 15.4% 24,732 14.5% 24,654 14.2% 23,842 14.2%
Residential mortgage-backed securities 30,978 17.6% 30,698 18.0% 31,825 18.3% 31,454 18.8%
Commercial mortgage-backed securities 12,016 6.8% 12,019 7.1% 11,955 6.9% 11,031 6.6%
Asset-backed securities 12,912 7.3% 12,444 7.3% 12,327 7.1% 11,863 7.1%
Other fixed income assets 644 0.4% 780 0.5% 491 0.3% 576 0.3%
-------------------------------------------------------------------------------------------
Total 175,550 99.7% 169,650 99.7% 173,556 99.7% 167,215 99.7%
Redeemable preferred stock 541 0.3% 542 0.3% 544 0.3% 537 0.3%
-------------------------------------------------------------------------------------------
Total Fixed Maturities $176,091 100.0% $170,192 100.0% $174,100 100.0% $167,752 100.0%
===========================================================================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $117,658 66.8% $113,607 66.8% $116,165 66.7% $112,333 67.0%
2 Baa 45,728 25.9% 43,829 25.8% 44,842 25.8% 42,057 25.0%
3 Ba 7,514 4.3% 7,334 4.3% 7,731 4.4% 8,011 4.8%
4 B 4,089 2.3% 4,086 2.4% 3,929 2.3% 3,814 2.3%
5 Caa and lower 443 0.3% 583 0.3% 700 0.4% 629 0.4%
6 In or near default 118 0.1% 211 0.1% 189 0.1% 371 0.2%
-------------------------------------------------------------------------------------------
Total 175,550 99.7% 169,650 99.7% 173,556 99.7% 167,215 99.7%
Redeemable preferred stock 541 0.3% 542 0.3% 544 0.3% 537 0.3%
-------------------------------------------------------------------------------------------
Total Fixed Maturities $176,091 100.0% $170,192 100.0% $174,100 100.0% $167,752 100.0%
===========================================================================================
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
- ----------------------------------------------------------------------------------------------------------
US treasuries/agencies $14,730 9.2% $13,992 8.8% $12,489 8.7%
State & political subdivisions 3,276 2.0% 3,022 1.9% 2,683 1.8%
Corporate bonds 57,746 36.1% 56,548 35.6% 52,167 36.1%
Foreign government securities 9,027 5.7% 8,938 5.6% 8,374 5.8%
Foreign corporates 21,787 13.6% 22,030 13.9% 19,542 13.5%
Residential mortgage-backed securities 31,831 19.9% 33,166 20.9% 30,260 21.0%
Commercial mortgage-backed securities 9,318 5.8% 8,649 5.4% 7,509 5.2%
Asset-backed securities 11,033 6.9% 11,222 7.1% 10,224 7.1%
Other fixed income assets 687 0.5% 771 0.5% 655 0.5%
------------------------------------------------------------------
Total 159,435 99.7% 158,338 99.7% 143,903 99.7%
Redeemable preferred stock 505 0.3% 484 0.3% 438 0.3%
------------------------------------------------------------------
Total Fixed Maturities $159,940 100.0% $158,822 100.0% $144,341 100.0%
==================================================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $107,284 67.1% $107,243 67.5% $97,087 67.3%
2 Baa 39,066 24.4% 38,263 24.1% 34,326 23.8%
3 Ba 7,913 5.0% 7,727 4.9% 7,624 5.3%
4 B 3,962 2.5% 3,854 2.4% 3,658 2.5%
5 Caa and lower 545 0.3% 724 0.5% 627 0.4%
6 In or near default 665 0.4% 527 0.3% 581 0.4%
------------------------------------------------------------------
Total 159,435 99.7% 158,338 99.7% 143,903 99.7%
Redeemable preferred stock 505 0.3% 484 0.3% 438 0.3%
------------------------------------------------------------------
Total Fixed Maturities $159,940 100.0% $158,822 100.0% $144,341 100.0%
==================================================================
(1) Amounts presented are based on rating agency designations. Comparisons
between NAIC ratings and rating agency designations are published by the
NAIC.
METLIFE, INC.
SUMMARY OF COMMERCIAL MORTGAGE LOANS BY
REGION AND PROPERTY TYPE
At September 30, 2004 At June 30, 2004 At March 31, 2004 At December 31, 2003
-------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------------------------------
South Atlantic $5,502 23.6% $5,247 23.8% $4,929 23.8% $4,978 24.5%
Pacific 5,608 24.3% 5,327 24.2% 5,172 25.1% 5,005 24.7%
Middle Atlantic 3,704 15.9% 3,513 16.0% 3,450 16.6% 3,455 17.0%
East North Central 2,443 10.5% 2,294 10.4% 1,894 9.1% 1,821 9.0%
New England 1,285 5.5% 1,302 5.9% 1,295 6.2% 1,278 6.3%
West South Central 1,775 7.6% 1,470 6.7% 1,415 6.8% 1,370 6.8%
Mountain 741 3.2% 785 3.6% 763 3.7% 740 3.6%
West North Central 615 2.6% 625 2.8% 606 2.9% 619 3.0%
International 1,219 5.2% 1,064 4.8% 943 4.5% 836 4.1%
East South Central 276 1.2% 278 1.3% 265 1.3% 198 1.0%
Other 99 0.4% 100 0.5% 0 0.0% 0 0.0%
-------------------------------------------------------------------------------------------
Total $23,267 100.0% $22,005 100.0% $20,732 100.0% $20,300 100.0%
===========================================================================================
Office $10,826 46.6% $10,301 46.8% $9,570 46.1% $9,170 45.2%
Retail 5,288 22.7% 5,221 23.7% 4,961 23.9% 5,006 24.7%
Apartments 3,095 13.3% 3,001 13.6% 2,916 14.1% 2,832 13.9%
Industrial 2,034 8.7% 1,951 8.9% 1,852 8.9% 1,911 9.4%
Hotel 1,227 5.3% 1,098 5.0% 1,027 5.0% 1,032 5.1%
Other 797 3.4% 433 2.0% 406 2.0% 349 1.7%
-------------------------------------------------------------------------------------------
Total $23,267 100.0% $22,005 100.0% $20,732 100.0% $20,300 100.0%
===========================================================================================
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
- ----------------------------------------------------------------------------------------------------------
South Atlantic $5,027 25.2% $5,139 25.9% $5,167 26.3%
Pacific 4,587 23.0% 4,130 20.8% 4,198 21.4%
Middle Atlantic 3,522 17.6% 3,543 17.9% 3,416 17.4%
East North Central 1,808 9.1% 2,331 11.8% 2,260 11.5%
New England 1,269 6.4% 1,181 6.0% 1,168 6.0%
West South Central 1,352 6.8% 1,256 6.3% 1,149 5.9%
Mountain 798 4.0% 845 4.3% 858 4.4%
West North Central 582 2.9% 580 2.9% 598 3.0%
International 811 4.1% 631 3.2% 631 3.2%
East South Central 189 0.9% 187 0.9% 178 0.9%
Other 0 0.0% 0 0.0% 0 0.0%
------------------------------------------------------------------
Total $19,945 100.0% $19,823 100.0% $19,623 100.0%
==================================================================
Office $8,919 44.7% $9,414 47.4% $9,301 47.5%
Retail 4,825 24.2% 4,471 22.6% 4,321 22.0%
Apartments 2,932 14.7% 2,805 14.2% 2,867 14.6%
Industrial 1,940 9.7% 1,922 9.7% 1,893 9.6%
Hotel 1,038 5.2% 955 4.8% 996 5.1%
Other 291 1.5% 256 1.3% 245 1.2%
------------------------------------------------------------------
Total $19,945 100.0% $19,823 100.0% $19,623 100.0%
==================================================================
49
(METLIFE LOGO)
- --------------------------------------------------------------------------------
METLIFE, INC.
SUMMARY OF REAL ESTATE
At September 30, At June 30, At March 31, At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Wholly owned $3,911 $3,823 $4,409 $4,362 $4,927 $4,184 $4,199
Joint ventures 368 329 287 315 322 303 271
---------------------------------------------------------------------------------------------------
Subtotal 4,279 4,152 4,696 4,677 5,249 4,487 4,470
Foreclosed 2 2 3 3 6 4 5
---------------------------------------------------------------------------------------------------
Total Real Estate (1) $4,281 $4,154 $4,699 $4,680 $5,255 $4,491 $4,475
===================================================================================================
(1) Includes real estate held-for-sale and held-for-investment.
METLIFE, INC.
SUMMARY OF MORTGAGES
At September 30, At June 30, At March 31, At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2003 2003 2003 2003
- -----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL $23,267 $22,005 $20,732 $20,300 $19,945 $19,823 $19,623
AGRICULTURAL 5,593 5,377 5,226 5,327 5,131 5,090 5,052
RESIDENTIAL 760 736 604 622 459 376 371
---------------------------------------------------------------------------------------------------
TOTAL $29,620 $28,118 $26,562 $26,249 $25,535 $25,289 $25,046
===================================================================================================
METLIFE, INC.
DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At September 30, At June 30, At March 31, At December 31, At September 30, At June 30, At March 31,
Unaudited (Dollars in billions) 2004 2004 2004 2003 2003 2003 2003
- ------------------------------------------------------------------------------------------------------------------------------------
METLIFE $265.0 $258.3 $258.9 $251.0 $245.0 $242.3 $226.3
METLIFE SEPARATE ACCOUNT 81.2 79.7 78.3 75.8 70.0 67.5 60.6
STATE STREET THIRD PARTY 27.3 27.1 25.7 23.4 21.6 21.9 20.8
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TOTAL ASSETS UNDER MANAGEMENT $373.5 $365.1 $362.9 $350.2 $336.6 $331.7 $307.7
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50
(METLIFE LOGO)
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COMPANY RATINGS AS OF OCTOBER 21ST, 2004 (1)
Moody's Standard & A.M. Best Fitch
Investors Service Poor's Company Ratings
----------------- ---------- --------- -------
FINANCIAL STRENGTH RATINGS
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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
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
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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 Baa2 BBB bbb+ BBB+
(1) NR indicates not rated.
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