[METLIFE LETTERHEAD & LOGO]
Contacts: For Media: John Calagna
(212) 578-6252
For Investors: Tracey Dedrick
(212) 578-5140
METLIFE ANNOUNCES FOURTH QUARTER AND FULL YEAR 2004 RESULTS
RECORD FULL YEAR NET INCOME OF $2.76 BILLION, UP 24% FROM THE PRIOR YEAR
RECORD FULL YEAR OPERATING EARNINGS OF $2.65 BILLION, UP 18% FROM THE PRIOR YEAR
NEW YORK, February 9, 2005 - MetLife, Inc. (NYSE: MET) today reported fourth
quarter 2004 net income of $511 million, or $0.68 per diluted share, compared
with $701 million, or $0.92 per diluted share, for the fourth quarter of 2003.
The company also reported that net income for 2004 was a record $2.76 billion,
or $3.65 per diluted share, compared with net income of $2.22 billion, or $2.94
per diluted share, for 2003.
FOURTH QUARTER HIGHLIGHTS
o Earned total premiums, fees and other revenues of $7.0 billion
o Repurchased over 12 million common shares
For the fourth quarter of 2004, net income of $511 million included net
investment losses, net of income taxes, of $138 million and charges directly
related to net investment gains and losses, net of income taxes, of $3 million.
Included in the net investment losses were $174 million of losses primarily
related to derivatives which did not qualify for hedge accounting, net of income
taxes.
For the fourth quarter of 2003, net income of $701 million included net
investment gains, net of income taxes, of $72 million and credits directly
related to net investment gains and losses, net of income taxes, of $90 million.
Fourth quarter 2003 net income also included a charge for the cumulative effect
of a change in accounting, net of income taxes, of $26 million resulting from
the required application of a new accounting standard.
"For the third year in a row, MetLife had record net income and operating
earnings as we continued to deliver top-line growth in excess of our targets,"
said Robert H. Benmosche, chairman and chief executive officer of MetLife, Inc.
"During the fourth quarter, our results benefited from higher investment income
resulting from the improved equity and credit markets."
1
"Throughout 2004, we continued to deliver on our financial objectives, grow our
core businesses and build upon MetLife's strengthened foundation. Looking
ahead, we are focused on achieving our 2005 goals and we are excited about the
planned acquisition of Travelers Life & Annuity. This transaction will give us
an expanded presence in the individual, retirement and savings and international
markets. All of MetLife's associates are committed to integrating this
acquisition on schedule," added Benmosche.
MetLife analyzes its performance using non-GAAP measures called operating
earnings and operating earnings per diluted share. Operating earnings is
defined as GAAP net income, excluding net investment gains and losses and
directly related charges or credits, net of income taxes, and the impact from
the cumulative effect of a change in accounting, net of income taxes.
Discontinued operations and 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 believes these
measures enhance the understanding and comparability of its performance by
excluding the net effect of investment gains and losses and directly related
charges or credits, which can fluctuate significantly from period to period, and
the impact of the cumulative effect of accounting changes, 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.
Operating earnings for the fourth quarter of 2004 were $652 million, or $0.87
per diluted share, compared with $565 million, or $0.74 per diluted share, for
the prior year period.
A reconciliation of net income and net income per diluted share to operating
earnings and operating earnings per diluted share follows:
2
For the three months ended December 31,
---------------------------------------
2004 2003
------------------ -------------------
(Dollars in millions, except per share data)
Net income $511 $0.68 $701 $0.92
Net investment (gains) losses,
net of income taxes(1) 138 0.19 (72) (0.09)
Adjustments related to net investment
(gains) losses, net of income taxes(2) 3 -- (90) (0.12)
Cumulative effect of a change in
accounting, net of income taxes(3) -- -- 26 0.03
---------------------------------------
Operating earnings $652 $0.87 $565 $0.74
================== ===================
(1) Net investment gains (losses), net of income taxes, include gains (losses)
on sales of real estate and real estate joint ventures related to discontinued
operations of $2 million and $205 million for the three months ended December
31, 2004 and 2003, respectively. Net investment gains (losses), net of income
taxes, exclude gains of $2 million and $18 million for the three months ended
December 31, 2004 and 2003, respectively, from scheduled settlement payments on
derivative instruments not qualifying for hedge accounting treatment. Net
investment gains (losses), net of income taxes, for the three months ended
December 31, 2004 include a loss of $17 million related to the value of an
embedded derivative associated with a funds withheld reinsurance treaty that was
converted to a coinsurance agreement.
(2) Adjustments related to net investment gains (losses), net of income taxes,
include amortization of deferred policy acquisition costs, adjustments related
to the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(3) Cumulative effect of a change in accounting, net of income taxes, for the
three months ended December 31, 2003 is in accordance with FASB Statement 133
Implementation Issue B36 ("Issue B36").
FULL YEAR HIGHLIGHTS
o Increased total premiums, fees and other revenues to $26.7 billion, up 9% from
the prior year
o Continued strong investment spreads
o Grew book value, excluding other comprehensive income, 8% from the prior year
to $19.9 billion
FULL YEAR RESULTS
Net income for 2004 was a record $2.76 billion, or $3.65 per diluted share,
compared with net income of $2.22 billion, or $2.94 per diluted share, for 2003.
For 2004, net income includes net investment gains, net of income taxes, of $158
million and credits directly related to net investment gains and losses, net of
income taxes, of $34 million. The 2004 period also included an approximate $86
million charge, net of income taxes, in the first quarter of 2004 for the
cumulative effect of a change in accounting resulting from the required
application of a new accounting standard.
Net income for 2003 included net investment losses, net of income taxes, of $145
million, mostly offset by credits directly related to net investment gains and
losses, net of income taxes, of $141 million. In addition, the 2003 period
included a charge for the cumulative effect of a change in accounting, net of
income taxes, of $26 million resulting from the required application of a new
accounting standard.
3
Operating earnings, as defined above, for 2004 were a record $2.65 billion, or
$3.51 per diluted share, compared with $2.25 billion, or $3.01 per diluted
share, in 2003.
A reconciliation of net income and net income per diluted share to operating
earnings and operating earnings per diluted share follows:
For the year ended December 31,
--------------------------------------------
2004 2003
--------------------- ----------------------
(Dollars in millions, except per share data)
Net income $2,758 $3.65 $2,217 $2.94
Net investment (gains) losses,
net of income taxes(1) (158) (0.21) 145 0.19
Adjustments related to net investment
(gains) losses, net of income taxes(2) (34) (0.04) (141) (0.18)
Cumulative effect of a change in
accounting, net of income taxes(3) 86 0.11 26 0.03
Impact of conversion of securities -- -- -- 0.03
--------------------- ----------------------
Operating earnings $2,652 $3.51 $2,247 $3.01
===================== ======================
(1) Net investment gains (losses), net of income taxes, include gains on sales
of real estate and real estate joint ventures related to discontinued operations
of $90 million and $266 million for the years ended December 31, 2004 and 2003,
respectively. Net investment gains (losses), net of income taxes, exclude gains
of $33 million and $53 million for the years ended December 31, 2004 and 2003,
respectively, from scheduled settlement payments on derivative instruments not
qualifying for hedge accounting treatment. Net investment gains (losses), net
of income taxes, for the year ended December 31, 2004 include a loss of $17
million related to the value of an embedded derivative associated with a funds
withheld reinsurance treaty that was converted to a coinsurance agreement.
(2) Adjustments related to net investment gains (losses), net of income taxes,
include amortization of deferred policy acquisition costs, adjustments related
to the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(3) Cumulative effect of a change in accounting, net of income taxes, for the
year ended December 31, 2004 relates to the adoption of AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Non-Traditional Long-Duration Contracts and for Separate Accounts. Cumulative
effect of a change in accounting, net of income taxes, for the year ended
December 31, 2003 is in accordance with Issue B36.
For 2004, net income and operating earnings also included a $105 million benefit
($0.14 per diluted share) from the resolution of an IRS audit in the second
quarter of 2004. In addition, net income for the third quarter of 2004 included
a $9 million ($0.01 per diluted share) benefit from a revision of the estimate
of income taxes for 2003.
For 2003, net income and operating earnings also included a $92 million benefit,
net of income taxes, ($0.13 per diluted share) from a reduction of a previously
established liability related to Metropolitan Life Insurance Company's race
conscious underwriting settlement, as well as a $62 million benefit, net of
income taxes, ($0.08 per diluted share) in the International segment from the
merger of the company's Mexican operations and a reduction in Mexico of
policyholder liabilities resulting from a change in reserve methodology. Full
year 2003 net income and operating earnings also included a $36 million benefit
($0.05 per diluted share) from a revision of the estimate of income taxes for
2002 and a $31 million charge, net of income taxes, ($0.05 per diluted share)
related to previously deferred expenses.
4
FOURTH QUARTER SEGMENT OVERVIEW
Reconciliations of segment net income to operating earnings are provided in the
tables that accompany this release.
INSTITUTIONAL BUSINESS EARNINGS UP 11%
Institutional Business operating earnings for the fourth quarter of 2004 were
$308 million, compared with $277 million in the prior year period. The
improvement in earnings in the segment was primarily due to higher interest
spreads and continued growth in the asset base for the company's Retirement and
Savings business. Earnings in the group life and in the non-medical health and
other businesses were essentially flat compared to the prior year period.
Slightly higher underwriting and investment results were offset by higher
expenses, including costs associated with the closing of one of the company's
disability claims centers.
During the quarter, group life premiums, fees and other revenues grew 9% over
the prior year period primarily due to higher life sales and favorable
persistency. Retirement and Savings net investment income grew 10% largely due
to an increase in the asset base driven by favorable sales, particularly in the
structured settlement business, and higher corporate joint venture income.
Non-medical health premiums, fees and other revenues increased 16% over the
prior year period due to continued growth in the small business market and
long-term care. Growth in long-term care was due, in part, to the early 2004
acquisition of TIAA-CREF's long-term care insurance business.
INDIVIDUAL BUSINESS EARNINGS UP 16%
Individual Business operating earnings were $200 million in the fourth quarter
of 2004, compared with $173 million in the prior year period. Results in
Individual Business were driven by higher earnings in the annuity product line
due to overall growth in this product segment, as well as strong interest
spreads. Variable/universal life results benefited from higher interest
margins, improved mortality and higher fee income due to growth. Traditional
life results reflected adverse mortality experience and the continuing decline
in revenues from the company's closed block business. In addition, the
unlocking of deferred policy acquisition costs during the quarter reduced
earnings in the traditional, variable/universal life, and other businesses and
increased earnings in the annuity business. Fees for the investment-type
products within the annuity business increased by 29% compared with the year ago
period. In addition, first year premiums and deposits for the universal life
business were up 9% from the prior year period, while variable life sales
continued to be depressed due to market conditions.
AUTO & HOME EARNINGS UP 19%
Auto & Home operating earnings were $63 million in the fourth quarter of 2004,
compared with $53 million in the prior year period. Auto & Home's results
benefited from an improved non-catastrophe combined ratio (92.2%) including
favorable claim development related to prior accident years. These factors were
partially offset by higher catastrophe losses, including an additional $10
million, net of income taxes, for the hurricanes that occurred in the third
quarter of 2004.
5
INTERNATIONAL
International operating earnings were $26 million in the fourth quarter of 2004,
compared with $34 million in the prior year period. Earnings in the
International segment were adversely impacted by a strengthening of the
company's liabilities on its Canadian pension business, as well as continuing
investments in growth initiatives.
INVESTMENTS
During the 2004 quarter, corporate joint venture income, bond prepayment fees
and commercial mortgage prepayment fees were at higher than normal levels.
CORPORATE EVENTS
Share Repurchase
- ----------------
For the quarter ended December 31, 2004, the company repurchased through its
share repurchase program over 12 million shares of common stock at an aggregate
cost of approximately $503 million. A portion of the repurchases were made
through an accelerated share repurchase arrangement, through which the company
repurchased approximately 7.3 million shares at a cost of approximately $300
million, subject to adjustment. At December 31, 2004, the company had
approximately $710 million remaining on its existing share repurchase
authorization. As a result of the company's agreement to acquire Travelers Life
& Annuity from Citigroup, MetLife has currently suspended its share repurchase
activity.
Earnings Conference Call
- ------------------------
MetLife will hold its fourth quarter and full year 2004 earnings conference call
and audio Webcast on Thursday, February 10, 2005, from 8:00 to 9:00 a.m. (ET).
The conference call will be available live via telephone and the Internet. To
listen over the telephone, dial (612) 332-0720 (domestic and international
callers). To listen to the conference call over the Internet, visit
www.metlife.com (through a link on the Investor Relations page). Those who want
to listen to the call on the telephone or via the Internet should dial in or go
to the Web site at least fifteen minutes prior to the call to register, and/or
download and install any necessary audio software.
The conference call will be available for replay via telephone and the Internet
beginning at 11:30 a.m. (ET) on Thursday, February 10, 2005, until Thursday,
February 17, 2005, at 11:59 p.m. (ET). To listen to a replay of the conference
call over the telephone, dial (320) 365-3844 (domestic and international
callers). The access code for the replay is 764942. To access the replay of
the conference call over the Internet, visit the above-mentioned Web site.
MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of
insurance and other financial services to individual and institutional
customers. The MetLife companies serve individuals in approximately 13 million
households in the U.S. and provide benefits to 37 million employees and family
members through their plan sponsors. Outside the U.S., the MetLife companies
serve approximately 9 million customers through direct insurance operations in
Argentina, Brazil, Chile, China, Hong Kong, India, Indonesia, Mexico, South
Korea, Taiwan and Uruguay. For more information about MetLife, please visit the
company's Web site at www.metlife.com.
This release contains statements which constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to trends in the company's operations and
financial results and the business and the products of the company and its
subsidiaries, as well as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend" and other similar
6
expressions. Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects on the company. Such forward-looking statements are not guarantees of
future performance.
Actual results may differ materially from those included in the forward-looking
statements as a result of risks and uncertainties including, but not limited to
the following: (i) changes in general economic conditions, including the
performance of financial markets and interest rates; (ii) heightened
competition, including with respect to pricing, entry of new competitors and the
development of new products by new and existing competitors; (iii) unanticipated
changes in industry trends; (iv) the company's primary reliance, as a holding
company, on dividends from its subsidiaries to meet debt payment obligations and
the applicable regulatory restrictions on the ability of the subsidiaries to pay
such dividends; (v) deterioration in the experience of the "closed block"
established in connection with the reorganization of Metropolitan Life Insurance
Company; (vi) catastrophe losses; (vii) adverse results or other consequences
from litigation, arbitration or regulatory investigations; (viii) regulatory,
accounting or tax changes that may affect the cost of, or demand for, the
company's products or services; (ix) downgrades in the company's and its
affiliates' claims paying ability, financial strength or credit ratings; (x)
changes in rating agency policies or practices; (xi) discrepancies between
actual claims experience and assumptions used in setting prices for the
company's products and establishing the liabilities for the company's
obligations for future policy benefits and claims; (xii) discrepancies between
actual experience and assumptions used in establishing liabilities related to
other contingencies or obligations; (xiii) the effects of business disruption or
economic contraction due to terrorism or other hostilities; (xiv) the company's
ability to identify and consummate on successful terms any future acquisitions,
and to successfully integrate acquired businesses with minimal disruption; and
(xv) other risks and uncertainties described from time to time in the company's
filings with the Securities and Exchange Commission, including its S-1 and S-3
registration statements. The company specifically disclaims any obligation to
update or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
For a copy of MetLife's Quarterly Financial Supplement, please visit
www.metlife.com.
# # #
7
MetLife, Inc.
Consolidated Statements of Income
Unaudited
(Dollar amounts in millions)
Three months ended Year ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
-------- -------- -------- --------
Premiums $ 5,882 $ 5,679 $ 22,316 $ 20,673
Universal life and investment-type product policy fees 757 698 2,900 2,496
Net investment income 3,301 2,993 12,418 11,539
Other revenues 309 313 1,198 1,199
Net investment gains (losses) (187) (154) 182 (582)
-------- -------- -------- --------
Total revenues 10,062 9,529 39,014 35,325
-------- -------- -------- --------
Policyholder benefits and claims 5,949 5,621 22,662 20,665
Interest credited to policyholder account balances 778 760 2,998 3,035
Policyholder dividends 445 492 1,814 1,975
Other expenses 2,155 1,958 7,761 7,091
-------- -------- -------- --------
Total expenses 9,327 8,831 35,235 32,766
-------- -------- -------- --------
Income from continuing operations before provision for income taxes 735 698 3,779 2,559
Provision for income taxes 223 199 1,071 660
-------- -------- -------- --------
Income from continuing operations 512 499 2,708 1,899
Income (Loss) from discontinued operations, net of income taxes (1) 228 136 344
-------- -------- -------- --------
Income before cumulative effect of a change in accounting,
net of income taxes 511 727 2,844 2,243
Cumulative effect of a change in accounting,
net of income taxes (5) -- (26) (86) (26)
-------- -------- -------- --------
Net income $ 511 $ 701 $ 2,758 $ 2,217
======== ======== ======== ========
OPERATING EARNINGS RECONCILIATION
- ---------------------------------
Net income $ 511 $ 701 $ 2,758 $ 2,217
Net investment gains (losses) (214) 139 244 (236)
Minority interest - net investment gains (losses) 5 (9) (9) (9)
Net investment gains (losses) tax benefit (provision) 71 (58) (77) 100
-------- -------- -------- --------
Net investment gains (losses), net of income taxes (1) (2) (3) (138) 72 158 (145)
Adjustments related to policyholder benefits and dividends (9) 132 64 184
Adjustments related to other expenses 5 6 (11) 31
Adjustments related to tax benefit (provision) 1 (48) (19) (74)
-------- -------- -------- --------
Adjustments related to net investment gains (losses),
net of income taxes (4) (3) 90 34 141
Cumulative effect of a change in accounting, net of income taxes (5) -- (26) (86) (26)
-------- -------- -------- --------
Operating earnings $ 652 $ 565 $ 2,652 $ 2,247
======== ======== ======== ========
(1) Net investment gains (losses), net of income taxes, include gains (losses)
on sales of real estate and real estate joint ventures related to
discontinued operations of $2 million and $205 million for the
three months ended December 31, 2004 and 2003, respectively, and
$90 million and $266 million for the years ended December 31, 2004 and
2003, respectively.
(2) Net investment gains (losses), net of income taxes, exclude scheduled
settlement payments on derivative instruments not qualifying for hedge
accounting treatment of $2 million and $18 million for the three months
ended December 31, 2004 and 2003, respectively, and $33 million and
$53 million for the years ended December 31, 2004 and 2003, respectively.
(3) Net investment gains (losses), net of income taxes, for the three months
ended December 31, 2004 include a loss of $17 million related to the value
of an embedded derivative associated with a funds withheld reinsurance
treaty that was converted to a coinsurance agreement.
(4) Adjustments related to net investment gains (losses) include amortization
of deferred policy acquisition costs, adjustments related to the
policyholder dividend obligation and amounts allocable to certain
participating contracts.
(5) Cumulative effect of a change in accounting, net of income taxes, for the
year ended December 31, 2004 is in accordance with Statement of Position
03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts.
Cumulative effect of a change in accounting, net of income taxes, for the
year ended December 31, 2003 is in accordance with FASB Statement 133
Implementation Issue B36.
MetLife, Inc.
Financial Highlights
Unaudited
(Dollar amounts in millions, except per share data or unless otherwise noted)
At or for the
three months At or for the year
ended December 31, ended December 31,
------------------- -------------------
2004 2003 2004 2003
------- ------- ------- -------
Other Financial Data:
Net income $ 511 $ 701 $ 2,758 $ 2,217
Operating earnings $ 652 $ 565 $ 2,652 $ 2,247
Total assets under management (billions) $ 386.8 $ 350.2 $ 386.8 $ 350.2
Individual Business Sales Data:
Total first year life premiums and deposits $ 224 $ 241 $ 940 $ 871
Variable and Universal life first year premiums and deposits
(including COLI/BOLI) $ 173 $ 188 $ 753 $ 666
Total annuity deposits $ 2,566 $ 2,844 $11,294 $11,231
Mutual fund sales $ 935 $ 1,251 $ 3,533 $ 3,669
Earnings Per Share Calculation:
Weighted average common shares outstanding - diluted 747.7 761.3 754.8 746.8
Operating earnings per share - diluted $ 0.87 $ 0.74 $ 3.51 $ 3.01
Net income per share - diluted $ 0.68 $ 0.92 $ 3.65 $ 2.94(1)
(1) Accounting standards require gains or losses resulting from the redemption
of a subsidiary's redeemable preferred stock to be recorded in additional
paid-in capital. 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 ($0.03 per diluted share) charge
associated with the company's conversion of company-obligated mandatorily
redeemable securities issued by MetLife Capital Trust I into long-term
debt.
MetLife, Inc.
Balance Sheet Data
December 31, 2004 (Unaudited) and December 31, 2003 (Unaudited)
(Dollar amounts in millions)
At At
December 31, December 31,
2004 2003
----------- -----------
Balance Sheet Data:
General account assets $ 270,039 $ 251,085
Separate account assets 86,769 75,756
--------- ---------
Total assets $ 356,808 $ 326,841
========= =========
Policyholder liabilities (including amounts of closed block) $ 194,027 $ 179,571
Short-term debt 1,445 3,642
Long-term debt 7,412 5,703
Other liabilities 44,331 41,020
Separate account liabilities 86,769 75,756
--------- ---------
Total liabilities 333,984 305,692
--------- ---------
Common stock, at par value 8 8
Capital in excess of par value 15,037 14,991
Retained earnings 6,608 4,193
Treasury stock (1,785) (835)
Accumulated other comprehensive income 2,956 2,792
--------- ---------
Total stockholders' equity 22,824 21,149
--------- ---------
Total liabilities and stockholders' equity $ 356,808 $ 326,841
========= =========
MetLife, Inc.
Reconciliations of Net Income to Operating Earnings
Unaudited
(Dollar amounts in millions)
Three months ended Year ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
------- ------- ------- -------
Total Institutional Operations
Net income (loss) $ 242 $ 192 $ 1,271 $ 849
Net investment gains (losses), net of income taxes (45) (117) 100 (203)
Adjustments related to net investment gains (losses), net of income taxes (21) 58 (5) 58
Cumulative effect of a change in accounting, net of income taxes -- (26) (60) (26)
------- ------- ------- -------
Operating earnings (loss) $ 308 $ 277 $ 1,236 $ 1,020
======= ======= ======= =======
Institutional Operations
Group Life
Net income (loss) $ 52 $ 46 $ 376 $ 279
Net investment gains (losses), net of income taxes (44) (53) (27) (71)
------- ------- ------- -------
Operating earnings (loss) $ 96 $ 99 $ 403 $ 350
======= ======= ======= =======
Retirement & Savings
Net income (loss) $ 146 $ 99 $ 689 $ 334
Net investment gains (losses), net of income taxes 4 (58) 113 (129)
Adjustments related to net investment gains (losses), net of income taxes (15) 58 2 58
Cumulative effect of a change in accounting, net of income taxes -- (26) (40) (26)
------- ------- ------- -------
Operating earnings (loss) $ 157 $ 125 $ 614 $ 431
======= ======= ======= =======
Non-Medical Health & Other
Net income (loss) $ 44 $ 47 $ 206 $ 236
Net investment gains (losses), net of income taxes (5) (6) 14 (3)
Adjustments related to net investment gains (losses), net of income taxes (6) -- (7) --
Cumulative effect of a change in accounting, net of income taxes -- -- (20) --
------- ------- ------- -------
Operating earnings (loss) $ 55 $ 53 $ 219 $ 239
======= ======= ======= =======
Total Individual Operations
Net income (loss) $ 187 $ 162 $ 870 $ 601
Net investment gains (losses), net of income taxes (35) (76) 46 (169)
Adjustments related to net investment gains (losses), net of income taxes 22 65 19 115
Cumulative effect of a change in accounting, net of income taxes -- -- -- --
------- ------- ------- -------
Operating earnings (loss) $ 200 $ 173 $ 805 $ 655
======= ======= ======= =======
Individual Operations
Traditional Life
Net income (loss) $ 65 $ 82 $ 326 $ 297
Net investment gains (losses), net of income taxes 15 (43) 80 (89)
Adjustments related to net investment gains (losses), net of income taxes 18 57 18 101
------- ------- ------- -------
Operating earnings (loss) $ 32 $ 68 $ 228 $ 285
======= ======= ======= =======
Variable & Universal Life
Net income (loss) $ 39 $ 11 $ 125 $ 64
Net investment gains (losses), net of income taxes (1) (5) 2 (11)
Adjustments related to net investment gains (losses), net of income taxes -- 1 (1) 1
Cumulative effect of a change in accounting, net of income taxes -- -- (11) --
------- ------- ------- -------
Operating earnings (loss) $ 40 $ 15 $ 135 $ 74
======= ======= ======= =======
Annuities
Net income (loss) $ 69 $ 61 $ 390 $ 204
Net investment gains (losses), net of income taxes (58) (31) (30) (68)
Adjustments related to net investment gains (losses), net of income taxes 4 7 2 14
Cumulative effect of a change in accounting, net of income taxes -- -- 11 --
------- ------- ------- -------
Operating earnings (loss) $ 123 $ 85 $ 407 $ 258
======= ======= ======= =======
Other
Net income (loss) $ 14 $ 8 $ 29 $ 36
Net investment gains (losses), net of income taxes 9 3 (6) (2)
------- ------- ------- -------
Operating earnings (loss) $ 5 $ 5 $ 35 $ 38
======= ======= ======= =======
Total Auto & Home
Net income (loss) $ 61 $ 46 $ 208 $ 157
Net investment gains (losses), net of income taxes (2) (7) (6) (10)
------- ------- ------- -------
Operating earnings (loss) $ 63 $ 53 $ 214 $ 167
======= ======= ======= =======
Auto & Home
Auto
Net income (loss) $ 29 $ 14 $ 160 $ 52
Net investment gains (losses), net of income taxes (1) (5) (5) (7)
------- ------- ------- -------
Operating earnings (loss) $ 30 $ 19 $ 165 $ 59
======= ======= ======= =======
Three months ended Year ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
------- ------- ------- -------
Homeowners
Net income (loss) $ 27 $ 32 $ 43 $ 102
Net investment gains (losses), net of income taxes (1) (2) (1) (3)
------- ------- ------- -------
Operating earnings (loss) $ 28 $ 34 $ 44 $ 105
======= ======= ======= =======
Other
Net income (loss) $ 5 $ -- $ 5 $ 3
Net investment gains (losses), net of income taxes -- -- -- --
------- ------- ------- -------
Operating earnings (loss) $ 5 $ -- $ 5 $ 3
======= ======= ======= =======
International
Net income (loss) $ 19 $ 31 $ 163 $ 208
Net investment gains (losses), net of income taxes (3) (1) 16 9
Adjustments related to net investment gains (losses), net of income taxes (4) (2) 21 (2)
Cumulative effect of a change in accounting, net of income taxes -- -- (30) --
------- ------- ------- -------
Operating earnings (loss) $ 26 $ 34 $ 156 $ 201
======= ======= ======= =======
Reinsurance
Net income (loss) $ 32 $ 31 $ 105 $ 92
Net investment gains (losses), net of income taxes -- 11 15 15
Adjustments related to net investment gains (losses), net of income taxes 1 -- (1) --
Cumulative effect of a change in accounting, net of income taxes -- -- 5 --
------- ------- ------- -------
Operating earnings (loss) $ 31 $ 20 $ 86 $ 77
======= ======= ======= =======
Asset Management (1)
Net income (loss) $ (3) $ 5 $ 25 $ 22
Net investment gains (losses), net of income taxes -- (1) -- 6
------- ------- ------- -------
Operating earnings (loss) $ (3) $ 6 $ 25 $ 16
======= ======= ======= =======
(1) As previously reported, the company entered into an agreement in the third
quarter of 2004 to sell its wholly-owned subsidiary, SSRM Holdings, Inc.,
to a third party which closed on January 31, 2005. Accordingly, the
results of this segment will be reported as discontinued operations in the
company's Annual Report on Form 10-K for the year ended December 31, 2004.