EXHIBIT 99.1
PUBLIC RELATIONS
For Immediate Release News MetLife, Inc.
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
(METLIFE LOGO) (SNOOPY GRAPHIC)
Contacts: For Media: John Calagna
(212) 578-6252
For Investors: Tracey Dedrick
(212) 578-5140
METLIFE ANNOUNCES FIRST QUARTER 2005 RESULTS
REPORTS RECORD NET INCOME OF $1.33 PER SHARE, A 68% INCREASE
REPORTS RECORD OPERATING EARNINGS OF $1.11 PER SHARE, A 42% INCREASE
UPDATES FULL YEAR 2005 OPERATING EARNINGS GUIDANCE AND
PROVIDES GUIDANCE FOR 2006
ANNOUNCES FINANCING DETAILS FOR TRAVELERS ACQUISITION
NEW YORK, May 3, 2005 - MetLife, Inc. (NYSE: MET) today reported first quarter
2005 net income of $987 million, or $1.33 per diluted share, compared with $598
million, or $0.79 per diluted share, for the first quarter of 2004.
For the three months ended March 31,
------------------------------------
2005 2004
---- ----
(Dollars in millions, except per share data)
Net income $ 987 $ 598
Net income per diluted share $ 1.33 $ 0.79
Operating earnings(1) $ 821 $ 595
Operating earnings per diluted share(1) $ 1.11 $ 0.78
Book value per common share $31.15 $29.39
Book value per common share, excluding accumulated other
comprehensive income per diluted share(1) $28.23 $24.86
(1) Operating earnings, operating earnings per diluted share and book value per
common share (excluding accumulated other comprehensive income per diluted
share) are not calculated based on generally accepted accounting principles
("GAAP"). Information regarding non-GAAP financial measures and the
reconciliation to GAAP measures in this press release are provided in the
non-GAAP and Other Financial Disclosures section below.
FIRST QUARTER HIGHLIGHTS
- - Achieved record quarterly net income of $987 million
- - Earned total premiums, fees and other revenues of $7.1 billion, an 11%
increase over the prior year period
- - Continued strong investment spreads
"MetLife had a remarkable first quarter," said Robert H. Benmosche, chairman and
chief executive officer of MetLife, Inc. "We generated record quarterly net
income, record operating earnings and grew our top-line results. We continue to
leverage MetLife's leading market positions to identify growth opportunities in
the marketplace that not only enable us to provide comprehensive financial
solutions for our customers, but also generate strong returns for shareholders."
Operating earnings for the first quarter of 2005 were $821 million, or $1.11 per
diluted share, compared with $595 million, or $0.78 per diluted share, for the
prior year period.
EARNINGS GUIDANCE
"We are revising our full year 2005 operating earnings guidance of between $3.50
and $3.65 per share, which we announced last December on Investor Day, to
between $3.90 and $4.05 per share. Our new guidance reflects our very strong
results this quarter, anticipated strong results for the remainder of 2005 and
our expectation that MetLife's acquisition of Citigroup's Travelers Life &
Annuity and substantially all of Citigroup's international insurance businesses
will close this summer and be accretive to earnings during the second half of
2005," added Benmosche.
"At this time, we are also announcing preliminary guidance for full year 2006
operating earnings, which we expect to be between $4.25 and $4.50 per share,"
continued Benmosche.
FIRST QUARTER SEGMENT OVERVIEW
Reconciliations of segment net income to operating earnings are provided in the
tables that accompany this release.
INSTITUTIONAL BUSINESS EARNINGS REMAIN STRONG
Institutional Business operating earnings for the first quarter of 2005 were
$324 million, compared with $317 million in the prior year period. Operating
earnings in both periods were strong. The improvement in earnings in the segment
was primarily due to growth in the business and continued strong, but lower,
interest spreads in the group life and Retirement & Savings businesses. This was
partially offset by higher expenses, which are largely attributable to the
impact of unusually low expenses in the prior year period. Excluding the
favorable prior year period underwriting results in the Retirement & Savings
business, underwriting results generally improved across most products.
During the quarter, Retirement & Savings net investment income grew 12% compared
to the prior year period 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. In addition to growth in group life premiums,
fees and other revenues during the quarter, non-medical health premiums, fees
and other revenues increased 16% over the prior year period due
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to continued growth in the small 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 and sales growth in the Individual Business independent
channels.
INDIVIDUAL BUSINESS EARNINGS UP 70%
Individual Business operating earnings were $318 million in the first quarter of
2005, compared with $187 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 very strong interest spreads
and unusually low expenses due to the elimination of certain expense
liabilities. Variable/universal life results benefited from higher interest
margins, higher fee income and lower expenses. In addition, traditional life
results benefited from favorable mortality and unusually low expenses. Fees for
the investment-type products within the annuity business increased, while first
year premiums and deposits for the universal life business were down slightly
from the prior year period.
AUTO & HOME EARNINGS UP 65%
Auto & Home operating earnings were $76 million in the first quarter of 2005,
compared with $46 million in the prior year period. Auto & Home's results
benefited from lower non-catastrophe losses compared with the prior-year period
and were primarily driven by lower auto severities and homeowners frequencies.
As a result, the segment's non-catastrophe combined ratio improved to 90.9% for
the first quarter of 2005.
INTERNATIONAL EARNINGS UP 52%
International operating earnings were $67 million in the first quarter of 2005,
compared with $44 million in the prior year period. Business growth in Latin
America and Asia, including excellent underwriting and interest margins,
contributed to a very strong quarter.
INVESTMENTS
During the first quarter of 2005, corporate joint venture income, bond
prepayment fees and commercial mortgage prepayment fees were at higher than
normal levels.
TRAVELERS ACQUISITION
On January 31, 2005, MetLife announced that it would finance its planned $11.5
billion purchase of Travelers Life & Annuity and substantially all of
Citigroup's international insurance businesses with a variety of financial
instruments. MetLife now expects to finance the acquisition as follows:
($ in billions)
Cash $2.8 - $3.2
Debt $3.4 - $3.8
Mandatory convertible securities $2.0 - $2.5
Perpetual preferred securities $1.5 - $2.0
MetLife common stock issued to Citigroup $1.0
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MetLife's final financing plan for the transaction will depend upon a number of
factors including, but not limited to, market conditions, timing and valuation
considerations.
A registration statement relating to the securities described above has been
filed with the Securities and Exchange Commission but has not become effective.
Securities may not be sold and offers to buy may not be accepted prior to the
time that the registration statement becomes effective. Any offering of
securities covered by the registration statement will be made only by means of
written prospectuses and prospectus supplements. This press release shall not
constitute an offer to sell, nor the solicitation of an offer to buy, nor shall
there be any sale of securities in any state in which such offer, solicitation
or sale would be unlawful prior to the registration or qualification under the
securities laws of any such state.
Earnings Conference Call
- ------------------------
MetLife will hold its first quarter earnings conference call and audio Webcast
on Wednesday, May 4, 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) 326-1003 (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).
Non-GAAP and Other Financial Disclosures
- ----------------------------------------
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, net of income
taxes, adjustments related to net investment gains and losses, net of income
taxes, the impact from the cumulative effect of a change in accounting, net of
income taxes, and discontinued operations, 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 believes these measures enhance the understanding and
comparability of its performance by excluding net investment gains and losses,
net of income taxes, and adjustments related to net investment gains and losses,
net of income taxes, both of which can fluctuate significantly from period to
period, the impact of the cumulative effect of a change in accounting, net of
income taxes, and discontinued operations, 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.
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For the three months ended March 31,
------------------------------------
2005 2004
--------------------- ----------------------
(Dollars in millions, except per share data)
Net income $ 987 $ 1.33 $ 598 $ 0.79
Net investment (gains) losses, net of
income taxes(1) 21 0.03 (76) (0.10)
Adjustments related to net investment
(gains) losses, net of income taxes(2) (36) (0.05) (9) (0.01)
Cumulative effect of a change in
accounting, net of income taxes(3) -- -- 86 0.11
Discontinued operations, net of income taxes (151) (0.20) (4) (0.01)
------ ------- ------ -------
Operating earnings $ 821 $ 1.11 $ 595 $ 0.78
====== ======= ====== =======
Book value per common share $31.15 $29.39
Other comprehensive income 2.92 4.53
------ ------
Book value per common share, excluding accumulated other
comprehensive income $28.23 $24.86
====== ======
(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 $12 million and $13 million for the three months ended March 31,
2005 and 2004, respectively. Net investment gains (losses), net of income taxes,
exclude gains of $16 million and $9 million for the three months ended March 31,
2005 and 2004, respectively, from scheduled settlement payments on derivative
instruments not qualifying for hedge accounting treatment.
(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 March 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.
In this release, MetLife provides guidance on its future earnings per share on
an operating, non-GAAP basis. A reconciliation of these measures to the most
directly comparable GAAP measures is not accessible on a forward-looking basis
because MetLife believes it is not possible to provide a reliable forecast of
net investment gains and losses, which can fluctuate significantly from period
to period and may have a significant impact on GAAP net income.
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 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
5
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.
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.
For a copy of MetLife's Quarterly Financial Supplement, please visit
www.metlife.com.
# # #
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MetLife, Inc.
Consolidated Statements of Income
Unaudited
(Dollar amounts in millions)
Three months ended March 31,
----------------------------
2005 2004
-------- --------
Premiums $ 6,002 $ 5,386
Universal life and investment-type product policy fees 791 663
Net investment income 3,217 2,939
Other revenues 299 313
Net investment gains (losses) (15) 116
-------- --------
Total revenues 10,294 9,417
-------- --------
Policyholder benefits and claims 5,962 5,475
Interest credited to policyholder account balances 795 738
Policyholder dividends 415 425
Other expenses 1,973 1,851
-------- --------
Total expenses 9,145 8,489
-------- --------
Income from continuing operations before provision for income taxes 1,149 928
Provision for income taxes 350 290
-------- --------
Income from continuing operations 799 638
Income from discontinued operations, net of income taxes 188 46
-------- --------
Income before cumulative effect of a change in accounting, net of income taxes 987 684
Cumulative effect of a change in accounting, net of income taxes (4) -- (86)
-------- --------
Net income $ 987 $ 598
======== ========
OPERATING EARNINGS RECONCILIATION
- ---------------------------------
Net income $ 987 $ 598
Net investment gains (losses) (21) 123
Minority interest - net investment gains (losses) (9) (8)
Net investment gains (losses) tax benefit (provision) 9 (39)
-------- --------
Net investment gains (losses), net of income taxes (1) (2) (21) 76
Adjustments related to policyholder benefits and dividends 70 31
Adjustments related to other expenses (15) (17)
Adjustments related to tax benefit (provision) (19) (5)
-------- --------
Adjustments related to net investment gains (losses), net of income taxes (3) 36 9
Cumulative effect of a change in accounting, net of income taxes (4) -- (86)
Discontinued operations, net income of income taxes 151 4
-------- --------
Operating earnings $ 821 $ 595
======== ========
(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 $12 million and $13 million for the three months
ended March 31, 2005 and 2004, respectively.
(2) Net investment gains (losses), net of income taxes, exclude scheduled
settlement payments on derivative instruments not qualifying for hedge
accounting treatment of $16 million and $9 million for the three months
ended March 31, 2005 and 2004, respectively.
(3) 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.
(4) Cumulative effect of a change in accounting, net of income taxes, for the
three months ended March 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.
MetLife, Inc.
Financial Highlights
Unaudited
(Dollar amounts in millions, except per share data or unless otherwise noted)
At or for the three months
ended March 31,
--------------------------
2005 2004
------ ------
Other Financial Data:
Net income $ 987 $ 598
Operating earnings $ 821 $ 595
Total assets under management (billions) $362.7 $337.0
Individual Business Sales Data:
Total first year life premiums and deposits $ 207 $ 203
Variable and Universal life first year premiums and deposits (including COLI/BOLI) $ 160 $ 158
Total annuity deposits $2,540 $3,436
Mutual fund sales $ 954 $1,045
Earnings Per Share Calculation:
Weighted average common shares outstanding - diluted 739.6 760.3
Operating earnings per share - diluted $ 1.11 $ 0.78
Net income per share - diluted $ 1.33 $ 0.79
MetLife, Inc.
Balance Sheet Data
March 31, 2005 (Unaudited) and December 31, 2004 (Audited)
(Dollar amounts in millions)
At At
March 31, December 31,
2005 2004
--------- ---------
Balance Sheet Data:
General account assets $ 276,885 $ 270,039
Separate account assets 85,786 86,769
--------- ---------
Total assets $ 362,671 $ 356,808
========= =========
Policyholder liabilities (including amounts of closed block) $ 196,443 $ 194,027
Short-term debt 1,120 1,445
Long-term debt 7,414 7,412
Other liabilities 48,870 44,331
Separate account liabilities 85,786 86,769
--------- ---------
Total liabilities 339,633 333,984
--------- ---------
Common stock, at par value 8 8
Capital in excess of par value 15,043 15,037
Retained earnings 7,595 6,608
Treasury stock (1,764) (1,785)
Accumulated other comprehensive income 2,156 2,956
--------- ---------
Total stockholders' equity 23,038 22,824
--------- ---------
Total liabilities and stockholders' equity $ 362,671 $ 356,808
========= =========
MetLife, Inc.
Reconciliations of Net Income to Operating Earnings
Unaudited
(Dollar amounts in millions)
Three months ended March 31,
----------------------------
2005 2004
----- -----
Total Institutional Operations
Net income (loss) $ 349 $ 310
Net investment gains (losses), net of income taxes 2 64
Adjustments related to net investment gains (losses), net of income taxes 23 (11)
Cumulative effect of a change in accounting, net of income taxes -- (60)
----- -----
Operating earnings (loss) $ 324 $ 317
===== =====
Institutional Operations
Group Life
Net income (loss) $ 90 $ 94
Net investment gains (losses), net of income taxes (10) 17
----- -----
Operating earnings (loss) $ 100 $ 77
===== =====
Retirement & Savings
Net income (loss) $ 185 $ 170
Net investment gains (losses), net of income taxes 13 32
Adjustments related to net investment gains (losses), net of income taxes 11 --
Cumulative effect of a change in accounting, net of income taxes -- (40)
----- -----
Operating earnings (loss) $ 161 $ 178
===== =====
Non-Medical Health & Other
Net income (loss) $ 74 $ 46
Net investment gains (losses), net of income taxes (1) 15
Adjustments related to net investment gains (losses), net of income taxes 12 (11)
Cumulative effect of a change in accounting, net of income taxes -- (20)
----- -----
Operating earnings (loss) $ 63 $ 62
===== =====
Total Individual Operations
Net income (loss) $ 365 $ 189
Net investment gains (losses), net of income taxes 32 (19)
Adjustments related to net investment gains (losses), net of income taxes 15 21
----- -----
Operating earnings (loss) $ 318 $ 187
===== =====
Individual Operations
Traditional Life
Net income (loss) $ 169 $ 71
Net investment gains (losses), net of income taxes 45 (15)
Adjustments related to net investment gains (losses), net of income taxes 15 22
----- -----
Operating earnings (loss) $ 109 $ 64
===== =====
Variable & Universal Life
Net income (loss) $ 41 $ 15
Net investment gains (losses), net of income taxes (8) 3
Adjustments related to net investment gains (losses), net of income taxes (2) (1)
Cumulative effect of a change in accounting, net of income taxes -- (11)
----- -----
Operating earnings (loss) $ 51 $ 24
===== =====
Annuities
Net income (loss) $ 150 $ 98
Net investment gains (losses), net of income taxes 1 2
Adjustments related to net investment gains (losses), net of income taxes 2 --
Cumulative effect of a change in accounting, net of income taxes -- 11
----- -----
Operating earnings (loss) $ 147 $ 85
===== =====
Other
Net income (loss) $ 5 $ 5
Net investment gains (losses), net of income taxes (6) (9)
----- -----
Operating earnings (loss) $ 11 $ 14
===== =====
Total Auto & Home
Net income (loss) $ 76 $ 46
Net investment gains (losses), net of income taxes -- --
----- -----
Operating earnings (loss) $ 76 $ 46
===== =====
Auto & Home
Auto
Net income (loss) $ 43 $ 22
Net investment gains (losses), net of income taxes -- --
----- -----
Operating earnings (loss) $ 43 $ 22
===== =====
Three months ended March 31,
----------------------------
2005 2004
----- -----
Homeowners
Net income (loss) $ 31 $ 22
Net investment gains (losses), net of income taxes -- --
----- -----
Operating earnings (loss) $ 31 $ 22
===== =====
Other
Net income (loss) $ 2 $ 2
Net investment gains (losses), net of income taxes -- --
----- -----
Operating earnings (loss) $ 2 $ 2
===== =====
International
Net income (loss) $ 76 $ 36
Net investment gains (losses), net of income taxes -- 20
Adjustments related to net investment gains (losses), net of income taxes 9 2
Cumulative effect of a change in accounting, net of income taxes -- (30)
----- -----
Operating earnings (loss) $ 67 $ 44
===== =====
Reinsurance
Net income (loss) $ 31 $ 29
Net investment gains (losses), net of income taxes 15 9
Adjustments related to net investment gains (losses), net of income taxes (11) (3)
Cumulative effect of a change in accounting, net of income taxes -- 5
----- -----
Operating earnings (loss) $ 27 $ 18
===== =====