Exhibit 99.2
(METLIFE LOGO)
FIRST QUARTER
FINANCIAL SUPPLEMENT
MARCH 31, 2005
(SNOOPY GRAPHIC)
(GRAPHIC OF THE NUMBER 1)
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TABLE OF CONTENTS
HIGHLIGHTS
CORPORATE OVERVIEW 2
METLIFE, INC.
CONSOLIDATED BALANCE SHEETS 3
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 4
CONSOLIDATING BALANCE SHEET 5
CONSOLIDATING STATEMENT OF OPERATING EARNINGS 6
SUMMARY OF SEGMENT OPERATING EARNINGS 8
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS 9
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION 13
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND
SEPARATE ACCOUNT LIABILITIES 14
OTHER EXPENSES BY MAJOR CATEGORY 15
SPREADS BY PRODUCT 16
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS 17
PREMIUMS AND DEPOSITS BY PRODUCT AND MUTUAL FUND SALES 22
ADDITIONAL STATISTICAL INFORMATION 23
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND
SEPARATE ACCOUNT LIABILITIES 24
INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY 25
SPREADS BY PRODUCT 26
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS 27
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA 31
INTERNATIONAL OPERATIONS
STATEMENT OF OPERATING EARNINGS 32
REINSURANCE OPERATIONS
STATEMENT OF OPERATING EARNINGS 33
PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION 34
CORPORATE, OTHER & ELIMINATIONS
STATEMENT OF OPERATING EARNINGS 35
METLIFE, INC.
INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS 36
FIXED MATURITIES AND EQUITY SECURITIES GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE 38
SUMMARY OF FIXED MATURITIES AVAILABLE FOR SALE BY SECTOR AND QUALITY DISTRIBUTION,
AND SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE 39
SUMMARY OF REAL ESTATE, SUMMARY OF MORTGAGES AND CONSUMER LOANS AND DISTRIBUTION
OF ASSETS UNDER MANAGEMENT 40
OTHER INFORMATION
COMPANY RATINGS 41
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 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. 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 MAY 3, 2005, FOR THE QUARTER
ENDED MARCH 31, 2005, WHICH ARE AVAILABLE AT WWW.METLIFE.COM.
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CORPORATE OVERVIEW
Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended
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March 31, June 30, September 30, December 31, March 31,
2004 2004 2004 2004 2005
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Net income (1) $ 598 $ 954 $ 695 $ 511 $ 987
Net investment gains (losses) 123 157 178 (214) (21)
Minority interest - net investment
gains (losses) (8) (8) 2 5 (9)
Net investment gains (losses) tax
benefit (provision) (39) (47) (62) 71 9
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Net investment gains (losses), net of
income taxes (2) (3) (4) 76 102 118 (138) (21)
Adjustments related to policyholder
benefits and dividends 31 116 (74) (9) 70
Adjustments related to other expenses (17) (5) 6 5 (15)
Adjustments related to tax benefit
(provision) (5) (39) 24 1 (19)
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Adjustments related to net investment gains
(losses), net of income taxes (5) 9 72 (44) (3) 36
Cumulative effect of a change in accounting,
net of income taxes (6) (86) 0 0 0 0
Discontinued operations, net of income taxes 4 14 5 (4) 151
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Operating earnings $ 595 $ 766 (8) $ 616 (9) $ 656 $ 821
================================================================
Net income per share - diluted $ 0.79 $ 1.26 $ 0.92 $ 0.68 $ 1.33
Net investment gains (losses), net of
income taxes 0.10 0.13 0.15 (0.18) (0.03)
Adjustments related to net investment
gains (losses), net of income taxes 0.01 0.10 (0.06) (0.01) 0.05
Cumulative effect of a change in
accounting, net of income taxes (0.11) 0.00 0.00 0.00 0.00
Discontinued operations, net of income taxes 0.01 0.02 0.01 (0.01) 0.20
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Operating earnings per share - diluted $ 0.78 $ 1.01 $ 0.82 $ 0.88 $ 1.11
================================================================
Weighted average common shares outstanding - diluted 760.3 758.0 753.4 747.7 739.6
Book value per common share (actual shares outstanding) $ 29.58 $ 28.53 $ 30.86 $ 31.16 $31.43
Book value per common share, excluding accumulated other
comprehensive income (actual shares outstanding) $ 25.03 $ 26.24 $ 27.11 $ 27.12 $28.48
Book value per common share - diluted $ 29.39 $ 28.23 $ 30.50 $ 30.53 $31.15
Book value per common share, excluding
accumulated other comprehensive income - diluted $ 24.86 $ 25.96 $ 26.79 $ 26.57 $28.23
For the Three Months Ended
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March 31, June 30, September 30, December 31, March 31,
2004 2004 2004 2004 2005
--------- -------- ------------- ------------ ---------
Shares outstanding, beginning of period 757.2 755.4 750.0 744.5 732.5
Treasury stock (1.8) (5.4) (5.5) (12.0) 0.6
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Shares outstanding, end of period 755.4 750.0 744.5 732.5 733.1
Weighted average common shares outstanding - basic 757.2 754.5 749.2 742.3 734.0
Dilutive effect of convertible securities 0.0 0.0 0.0 0.0 0.0
Dilutive effect of stock options 3.1 3.5 4.2 5.4 5.6
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Weighted average common shares outstanding - diluted 760.3 758.0 753.4 747.7 739.6
============================================================
Policyholder Trust Shares 347.2 335.0 325.1 321.3 315.4
SUPPLEMENTAL DATA
Adjusted long-term debt to total capital excluding
accumulated other comprehensive income (7) 20.5% 21.9% 22.8% 25.2% 24.2%
(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.
(2) Net investment gains (losses), net of income taxes, excludes scheduled
settlement payments on derivative instruments not qualifying for hedge
accounting treatment of $9 million, $14 million, $8 million, $2 million
and $16 million, for the three months ended March 31, 2004, June 30, 2004,
September 30, 2004, December 31, 2004 and March 31, 2005, respectively.
For QFS purposes, these settlements are included in net investment income.
(3) Net investment gains (losses), net of income taxes, from real estate and
real estate joint ventures include discontinued operations of $13 million,
$85 million, ($10) million, $2 million and $12 million, for the three
months ended March 31, 2004, June 30, 2004, September 30, 2004, December
31, 2004 and March 31, 2005, respectively.
(4) Net investment gains (losses), net of income taxes, for the three months
ended December 31, 2004 includes a charge 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.
(5) Adjustments related to net investment gains (losses), net of income taxes,
include amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(6) 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.
(7) Adjusted long-term debt at March 31, 2004, June 30, 2004, September 30,
2004, December 31, 2004 and March 31, 2005 consists of $4,907 million,
$5,503 million, $6,004 million, $6,669 million and $6,657 million of
long-term debt, respectively, and $36 million, $36 million, $36 million,
$111 million and $113 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.
(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.
(9) 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.
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METLIFE, INC.
CONSOLIDATED BALANCE SHEETS
As of
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March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
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ASSETS (1)
Fixed maturities, at fair value $ 174,100 $ 170,192 $ 176,091 $ 176,763 $ 182,653
Equity securities, at fair value 1,741 1,715 1,869 2,188 2,516
Mortgage and consumer loans 26,562 28,118 29,620 32,406 31,977
Policy loans 8,758 8,766 8,801 8,899 8,953
Real estate and real estate joint ventures 4,696 4,150 4,263 4,233 4,306
Other limited partnership interests 2,549 2,806 2,846 2,907 3,051
Short-term investments 1,987 2,077 2,451 2,663 2,551
Other invested assets 5,083 5,108 4,394 4,926 4,960
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Total Investments 225,476 222,932 230,335 234,985 240,967
Cash and cash equivalents 3,111 4,424 3,592 4,051 3,925
Accrued investment income 2,337 2,330 2,491 2,338 2,433
Premiums and other receivables 7,397 7,370 7,089 6,696 7,515
Deferred policy acquisition costs 12,961 13,828 13,920 14,336 14,798
Assets of subsidiaries held-for-sale 159 196 217 379 0
Other assets 7,236 7,185 7,352 7,254 7,247
Separate account assets 78,336 79,747 81,181 86,769 85,786
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Total Assets $ 337,013 $ 338,012 $ 346,177 $ 356,808 $ 362,671
=============================================================
LIABILITIES AND EQUITY (1)
LIABILITIES
-----------
Future policy benefits $ 96,333 $ 95,731 $ 98,197 $ 100,159 $ 100,630
Policyholder account balances 77,981 79,943 81,798 83,570 85,802
Other policyholder funds 6,608 6,721 6,812 6,984 7,226
Policyholder dividends payable 986 1,064 1,125 1,071 1,048
Policyholder dividend obligation 2,667 1,330 2,161 2,243 1,737
Short-term debt 3,068 3,218 1,566 1,445 1,120
Long-term debt 5,707 6,226 6,695 7,412 7,414
Shares subject to mandatory redemption 277 277 277 278 278
Liabilities of subsidiaries held-for-sale 41 65 80 240 0
Current income tax payable 637 751 501 421 31
Deferred income tax payable 2,889 1,972 2,468 2,473 2,414
Payables under securities loaned transactions 28,045 28,132 28,662 28,678 31,713
Other liabilities 11,090 11,437 11,679 12,241 14,434
Separate account liabilities 78,336 79,747 81,181 86,769 85,786
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Total Liabilities 314,665 316,614 323,202 333,984 339,633
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EQUITY
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Common stock, at par value 8 8 8 8 8
Additional paid-in capital 15,001 15,013 15,027 15,037 15,043
Retained earnings 4,791 5,745 6,440 6,608 7,595
Treasury stock (896) (1,085) (1,294) (1,785) (1,764)
Accumulated other comprehensive income 3,444 1,717 2,794 2,956 2,156
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Total Equity 22,348 21,398 22,975 22,824 23,038
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Total Liabilities and Stockholders' Equity $ 337,013 $ 338,012 $ 346,177 $ 356,808 $ 362,671
=============================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
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METLIFE, INC.
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
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March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
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REVENUES
Premiums (1) $5,386 $5,337 $5,679 $ 5,802 $ 6,002
Universal life and investment-type product policy fees (1) 663 721 737 747 791
Investment income, net 3,000 3,157 3,107 3,346 3,280
Other revenues 313 283 292 310 299
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9,362 9,498 9,815 10,205 10,372
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EXPENSES
Policyholder benefits and dividends (1) 5,931 5,914 6,260 6,291 6,447
Interest credited to policyholder account balances 738 743 739 778 795
Interest expense 99 108 113 116 119
Other expenses 1,728 1,754 1,829 2,068 1,830
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8,496 8,519 8,941 9,253 9,191
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Operating earnings before provision for income taxes 866 979 874 952 1,181
Provision for income taxes 271 213 258 296 360
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OPERATING EARNINGS $ 595 $ 766(4) $ 616 (5) $ 656 $ 821
==========================================================
NET INCOME RECONCILIATION
- ----------------------------------------------------------------
Operating earnings $ 595 $ 766 $ 616 $ 656 $ 821
Net investment gains (losses) 123 157 178 (214) (21)
Minority interest - net investment gains (losses) (8) (8) 2 5 (9)
Net investment gains (losses) tax benefit (provision) (39) (47) (62) 71 9
----------------------------------------------------------
Net investment gains (losses), net of income taxes 76 102 118 (138) (21)
Adjustments related to policyholder benefits and dividends 31 116 (74) (9) 70
Adjustments related to other expenses (17) (5) 6 5 (15)
Adjustments related to tax benefit (provision) (5) (39) 24 1 (19)
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Adjustments related to net investment gains (losses), net of
income taxes (2) 9 72 (44) (3) 36
Cumulative effect of a change in accounting, net of income
taxes (3) (86) 0 0 0 0
Discontinued operations, net of income taxes 4 14 5 (4) 151
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Net income $ 598 $ 954 $ 695 $ 511 $ 987
==========================================================
(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.
(4) 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.
(5) 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.
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METLIFE, INC.
CONSOLIDATING BALANCE SHEET
AT MARCH 31, 2005
Corporate,
Auto & Other &
Unaudited (Dollars in millions) Consolidated Institutional Individual Home International Reinsurance Eliminations
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ASSETS
Total investments $ 240,967 $ 87,208 $ 110,872 $4,155 $ 8,288 $ 11,343 $ 19,101
Cash and cash equivalents 3,925 (143) 1,303 (53) (167) 194 2,791
Accrued investment income 2,433 712 1,090 64 110 87 370
Premiums and other receivables 7,515 2,428 3,953 796 387 934 (983)
Deferred policy acquisition costs 14,798 998 9,589 178 1,356 2,677 0
Assets of subsidiaries held-for-sale 0 0 0 0 0 0 0
Other assets 7,247 1,578 2,343 578 349 150 2,249
Separate account assets 85,786 35,521 49,148 0 1,104 13 0
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Total Assets $ 362,671 $ 128,302 $ 178,298 $5,718 $ 11,427 $ 15,398 $ 23,528
==========================================================================================
LIABILITIES AND EQUITY
LIABILITIES
- -----------
Future policy benefits $ 100,630 $35,435 $ 53,899 $3,196 $ 4,907 $ 4,517 ($ 1,324)
Policyholder account balances 85,802 34,142 43,907 0 2,749 5,007 (3)
Other policyholder funds 7,226 2,188 2,621 (4) 686 1,650 85
Policyholder dividends payable 1,048 152 894 0 2 9 (9)
Policyholder dividend obligation 1,737 0 1,737 0 0 0 0
Short-term debt 1,120 0 1 0 0 0 1,119
Long-term debt 7,414 (2) 466 0 34 480 6,436
Shares subject to mandatory redemption 278 0 0 0 0 159 119
Liabilities of subsidiaries
held-for-sale 0 0 0 0 0 0 0
Current income tax payable 31 117 (319) 18 (35) (47) 297
Deferred income tax payable 2,414 (57) 1,368 17 76 794 216
Payables under securities loaned
transactions 31,713 10,626 13,664 129 0 0 7,294
Other liabilities 14,434 2,517 2,783 1,069 576 1,201 6,288
Separate account liabilities 85,786 35,521 49,148 0 1,104 13 0
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Total Liabilities 339,633 120,639 170,169 4,425 10,099 13,783 20,518
EQUITY
- ------
Common stock, at par value 8 0 0 0 0 0 8
Allocated equity (1) 22,638 6,589 7,624 1,167 1,077 1,446 4,735
Treasury stock (1,764) 0 0 0 0 0 (1,764)
Accumulated other comprehensive income 2,156 1,074 505 126 251 169 31
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Total Stockholders' Equity 23,038 7,663 8,129 1,293 1,328 1,615 3,010
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Total Liabilities and Stockholders'
Equity $ 362,671 $ 128,302 $ 178,298 $5,718 $ 11,427 $ 15,398 $ 23,528
==========================================================================================
(1) Allocated equity includes additional paid-in capital and retained earnings.
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METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2005
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
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REVENUES
Premiums $ 6,002 $ 2,843 $ 1,021 $ 728 $ 502 $ 907 $ 1
Universal life and investment-type
product policy fees 791 187 485 0 119 0 0
Investment income, net 3,280 1,215 1,561 43 150 161 150
Other revenues 299 156 117 9 3 11 3
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10,372 4,401 3,184 780 774 1,079 154
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EXPENSES
Policyholder benefits and dividends 6,447 3,133 1,635 478 446 750 5
Interest credited to policyholder
account balances 795 286 407 0 47 55 0
Capitalization of deferred policy
acquisition costs (767) (64) (254) (103) (125) (221) 0
Amortization of deferred policy
acquisition costs 528 32 186 111 56 143 0
Other expenses 2,188 525 733 191 246 312 181
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9,191 3,912 2,707 677 670 1,039 186
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Operating earnings before provision
(benefit)for income taxes 1,181 489 477 103 104 40 (32)
Provision (benefit) for income taxes 360 165 159 27 37 13 (41)
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OPERATING EARNINGS $ 821 $ 324 $ 318 $ 76 $ 67 $ 27 $ 9
====================================================================================
NET INCOME RECONCILIATION
- -------------------------------------
Operating earnings $ 821 $ 324 $ 318 $ 76 $ 67 $ 27 $ 9
Net investment gains (losses) (21) 5 59 0 0 28 (113)
Minority interest - net
investment gains (losses) (9) 0 (4) 0 0 (5) 0
Net investment gains (losses)
tax benefit (provision) 9 (3) (23) 0 0 (8) 43
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Net investment gains (losses), net of
income taxes (21) 2 32 0 0 15 (70)
Adjustments related to
policyholder benefits and
dividends 70 35 21 0 14 0 0
Adjustments related to other
expenses (15) 0 2 0 0 (17) 0
Adjustments related to tax
benefit (provision) (19) (12) (8) 0 (5) 6 0
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Adjustments related to net investment
gains (losses), net of income taxes
(1) 36 23 15 0 9 (11) 0
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
Discontinued operations, net of income
taxes 151 0 0 0 0 0 151
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Net income $ 987 $ 349 $ 365 $ 76 $ 76 $ 31 $ 90
====================================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
include amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
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METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2004
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums (1) $ 5,386 $ 2,454 $ 978 $ 737 $ 402 $ 816 ($ 1)
Universal life and investment-type
product policy fees (1) 663 155 425 0 83 0 0
Investment income, net 3,000 1,096 1,521 46 123 130 84
Other revenues 313 164 117 9 4 12 7
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9,362 3,869 3,041 792 612 958 90
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EXPENSES
Policyholder benefits and dividends (1) 5,931 2,712 1,644 536 378 659 2
Interest credited to policyholder
account balances 738 227 423 0 37 51 0
Capitalization of deferred policy
acquisition costs (764) (61) (293) (108) (71) (231) 0
Amortization of deferred policy
acquisition costs 464 25 166 114 31 128 0
Other expenses 2,127 487 820 192 172 324 132
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8,496 3,390 2,760 734 547 931 134
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Operating earnings before provision
(benefit) for income taxes 866 479 281 58 65 27 (44)
Provision (benefit) for income taxes 271 162 94 12 21 9 (27)
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OPERATING EARNINGS $ 595 $ 317 $ 187 $ 46 $ 44 $ 18 ($ 17)
====================================================================================
NET INCOME RECONCILIATION
- --------------------------------------
Operating earnings $ 595 $ 317 $ 187 $ 46 $ 44 $ 18 ($ 17)
Net investment gains (losses) 123 100 (28) 0 26 21 4
Minority interest - net investment
gains (losses) (8) 0 0 0 0 (8) 0
Net investment gains (losses) tax
benefit (provision) (39) (36) 9 0 (6) (4) (2)
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Net investment gains (losses), net of
income taxes 76 64 (19) 0 20 9 2
Adjustments related to policyholder
benefits and dividends 31 (17) 45 0 3 0 0
Adjustments related to other
expenses (17) 0 (13) 0 0 (4) 0
Adjustments related to tax benefit
(provision) (5) 6 (11) 0 (1) 1 0
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Adjustments related to net investment
gains (losses), net of income taxes
(2) 9 (11) 21 0 2 (3) 0
Cumulative effect of a change in
accounting, net of income taxes (3) (86) (60) 0 0 (30) 5 (1)
Discontinued operations, net of income
taxes 4 0 0 0 0 0 4
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Net income $ 598 $ 310 $ 189 $ 46 $ 36 $ 29 ($ 12)
====================================================================================
(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,
include 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.
7
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SUMMARY OF SEGMENT OPERATING EARNINGS (1)
For Three Months Ended
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March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS $ 317 $ 317 $ 294 $ 308 $ 324
INDIVIDUAL OPERATIONS 187 217 201 200 318
AUTO & HOME OPERATIONS 46 71 34 63 76
INTERNATIONAL OPERATIONS 44 41 45 26 67
REINSURANCE OPERATIONS 18 23 14 31 27
CORPORATE, OTHER & ELIMINATIONS (17) 97 28 28 9
------------------------------------------------------------------
CONSOLIDATED $ 595 $ 766 (2) $ 616 (3) $ 656 $ 821
==================================================================
(1) A reconciliation of operating earnings to net income for each segment
appears in this QFS as follows: (i) Institutional Operations, page 9; (ii)
Individual Operations, page 17; (iii) Auto & Home Operations, page 27;
(iv) International Operations, page 32; (v) Reinsurance Operations, page
33; and for Corporate, Other and Eliminations, on page 35. A
reconciliation of operating earnings to net income for MetLife, Inc.,
Consolidated, appears on Page 4.
(2) 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.
(3) 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.
8
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Institutional Operations 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums (1) $2,454 $2,401 $2,662 $2,515 $2,843
Universal life and investment-type product policy fees (1) 155 182 177 171 187
Investment income, net 1,096 1,128 1,115 1,180 1,215
Other revenues 164 155 152 161 156
------------------------------------------------------------
3,869 3,866 4,106 4,027 4,401
------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends (1) 2,712 2,713 2,926 2,780 3,133
Interest credited to policyholder account balances 227 232 242 259 286
Other expenses 451 440 494 522 493
------------------------------------------------------------
3,390 3,385 3,662 3,561 3,912
------------------------------------------------------------
Operating earnings before provision for income taxes 479 481 444 466 489
Provision for income taxes 162 164 150 158 165
------------------------------------------------------------
OPERATING EARNINGS $ 317 $ 317(4) $ 294 $ 308 $ 324
============================================================
NET INCOME RECONCILIATION
- --------------------------------------------------------------------
Operating earnings $ 317 $ 317 $ 294 $ 308 $ 324
Net investment gains (losses) 100 18 105 (69) 5
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (36) (9) (33) 24 (3)
------------------------------------------------------------
Net investment gains (losses), net of income taxes 64 9 72 (45) 2
Adjustments related to policyholder benefits and dividends (17) 78 (35) (33) 35
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit (provision) 6 (27) 11 12 (12)
------------------------------------------------------------
Adjustments related to net investment gains (losses), net of income
taxes (2) (11) 51 (24) (21) 23
Cumulative effect of a change in accounting, net of income taxes (3) (60) 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------------
Net income $ 310 $ 377 $ 342 $ 242 $ 349
============================================================
(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.
(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.
9
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Group Life 2004 2004 2004 2004 2005
- --------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums (1) $ 1,316 $1,261 $1,225 $1,242 $1,318
Universal life and investment-type product policy fees (1) 155 182 177 171 187
Investment income, net 259 269 250 252 268
Other revenues 19 13 10 14 13
-----------------------------------------------------------
1,749 1,725 1,662 1,679 1,786
-----------------------------------------------------------
EXPENSES
Policyholder benefits and dividends (1) 1,410 1,338 1,284 1,296 1,408
Interest credited to policyholder account balances 100 101 100 101 99
Other expenses 123 88 126 136 129
-----------------------------------------------------------
1,633 1,527 1,510 1,533 1,636
-----------------------------------------------------------
Operating earnings before provision for income taxes 116 198 152 146 150
Provision for income taxes 39 68 52 50 50
-----------------------------------------------------------
OPERATING EARNINGS $ 77 $ 130(2) $ 100 $ 96 $ 100
===========================================================
Net investment gains (losses), net of income taxes 17 (4) 4 (44) (10)
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
Discontinued operations, net of income taxes 0 0 0 0 0
-----------------------------------------------------------
Net income $ 94 $ 126 $ 104 $ 52 $ 90
===========================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) 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.
10
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Retirement & Savings 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 265 $ 225 $ 504 $ 298 $ 495
Universal life and investment-type product policy fees 0 0 0 0 0
Investment income, net 730 736 750 803 817
Other revenues 57 55 54 55 57
--------------------------------------------------------
1,052 1,016 1,308 1,156 1,369
--------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 589 598 868 675 862
Interest credited to policyholder account balances 127 131 142 158 187
Other expenses 69 84 83 88 78
--------------------------------------------------------
785 813 1,093 921 1,127
--------------------------------------------------------
Operating earnings before provision for income taxes 267 203 215 235 242
Provision for income taxes 89 68 71 78 81
--------------------------------------------------------
OPERATING EARNINGS $ 178 $ 135 $ 144 $ 157 $ 161
========================================================
Net investment gains (losses), net of income taxes 32 28 49 4 13
Adjustments related to net investment gains (losses), net of
income taxes 0 20 (3) (15) 11
Cumulative effect of a change in accounting, net of income taxes (1) (40) 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
--------------------------------------------------------
Net income $ 170 $ 183 $ 190 $ 146 $ 185
========================================================
(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.
11
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Non-Medical Health & Other 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums (1) $ 873 $ 915 $ 933 $ 975 $ 1,030
Universal life and investment-type product policy fees 0 0 0 0 0
Investment income, net 107 123 115 125 130
Other revenues 88 87 88 92 86
----------------------------------------------------------
1,068 1,125 1,136 1,192 1,246
----------------------------------------------------------
EXPENSES
Policyholder benefits and dividends (1) 713 777 774 809 863
Interest credited to policyholder account balances 0 0 0 0 0
Other expenses 259 268 285 298 286
----------------------------------------------------------
972 1,045 1,059 1,107 1,149
----------------------------------------------------------
Operating earnings before provision for income taxes 96 80 77 85 97
Provision for income taxes 34 28 27 30 34
----------------------------------------------------------
OPERATING EARNINGS $ 62 $ 52 $ 50 $ 55 $ 63
==========================================================
Net investment gains (losses), net of income taxes 15 (15) 19 (5) (1)
Adjustments related to net investment gains (losses), net of income
taxes (11) 31 (21) (6) 12
Cumulative effect of a change in accounting, net of income taxes (2) (20) 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
----------------------------------------------------------
Net income $ 46 $ 68 $ 48 $ 44 $ 74
==========================================================
(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.
12
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- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT
AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------------------------
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT (1)
Group Life $ 1,490 $ 1,456 $ 1,412 $ 1,427 $ 1,518
Retirement & Savings 322 280 558 353 552
Non-Medical Health & Other 961 1,002 1,021 1,067 1,116
---------------------------------------------------------
Total Premiums, Fees and Other Revenues $ 2,773 $ 2,738 $ 2,991 $ 2,847 $ 3,186
=========================================================
Group Disability (Included in Non-Medical Health & Other) $ 245 $ 252 $ 253 $ 276 $ 282
ADDITIONAL STATISTICAL INFORMATION
INCURRED LOSS RATIO (MORTALITY EXPERIENCE): (1)
Term Life 95.8% 93.2% 90.9% 90.7% 94.9%
INCURRED LOSS RATIO (MORBIDITY EXPERIENCE): (1)
Group Disability 93.3% 92.8% 91.9% 98.8% 91.1%
NUMBER OF SALES REPRESENTATIVES 786 794 779 762 783
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation. With respect to
premiums, fees and other revenues, certain experience rating refunds and
changes to premium stabilization reserves are included in premiums and
fees. The following table excludes these amounts:
Group Life $1,472 $1,444 $1,459 $1,513 $1,602
Retirement & Savings 322 280 558 353 552
Non-Medical Health & Other 966 1,000 1,024 1,061 1,123
--------------------------------------
Total Premiums, Fees and Other Revenues $2,760 $2,724 $3,041 $2,927 $3,277
======================================
13
[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
------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Group Life 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------
Balance, beginning of period $14,678 $14,642 $14,834 $14,959 $15,022
Premiums and deposits (1) 2,753 2,638 2,497 2,446 2,697
Interest on reserves 130 131 131 135 135
Surrenders and withdrawals (1,144) (1,118) (1,081) (1,115) (1,159)
Benefits and reserves (1) (1,411) (1,338) (1,287) (1,288) (1,409)
Other (1) (364) (121) (135) (115) (112)
-----------------------------------------------------------
Balance, end of period $14,642 $14,834 $14,959 $15,022 $15,174
===========================================================
For the Three Months Ended
------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Retirement & Savings 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------
Balance, beginning of period $ 40,298 $ 42,634 $ 42,287 $ 44,497 $ 45,979
Premiums and deposits 2,424 2,003 2,525 2,696 2,699
Interest on reserves 542 551 567 595 613
Surrenders and withdrawals (1,222) (928) (1,361) (1,566) (807)
Benefits and reserves (468) (470) (504) (495) (484)
Other (2) 1,060 (1,503) 983 252 (528)
------------------------------------------------------------
Balance, end of period $ 42,634 $ 42,287 $ 44,497 $ 45,979 $ 47,472
============================================================
For the Three Months Ended
------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Non-Medical Health & Other 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------
Balance, beginning of period $ 4,708 $ 6,003 $ 6,407 $ 6,601 $ 6,784
Premiums and deposits (1) 789 835 843 899 942
Interest on reserves 57 60 63 64 67
Surrenders and withdrawals 24 25 27 18 19
Benefits and reserves (1) (690) (739) (753) (791) (839)
Other (1) (2) 1,115 223 14 (7) (42)
-----------------------------------------------------------
Balance, end of period $ 6,003 $ 6,407 $ 6,601 $ 6,784 $ 6,931
===========================================================
SEPARATE ACCOUNT LIABILITIES
- ----------------------------
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Group Life 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------
Balance, beginning of period $ 7,045 $ 7,754 $ 8,066 $ 8,337 $ 8,192
Premiums and deposits 160 156 182 133 114
Investment performance 645 239 166 63 168
Surrenders and withdrawals (92) (86) (77) (341) (498)
Policy charges 0 0 0 0 0
Other (4) 3 0 0 0
---------------------------------------------------------
Balance, end of period $ 7,754 $ 8,066 $ 8,337 $ 8,192 $ 7,976
=========================================================
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Retirement & Savings 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------
Balance, beginning of period $ 27,081 $27,376 $ 26,962 $ 27,666 $ 28,507
Premiums and deposits 1,369 694 834 758 1,426
Investment performance 802 (277) 732 971 (1,105)
Surrenders and withdrawals (1,262) (842) (818) (883) (1,511)
Policy charges (21) (20) (19) (19) (20)
Other (2) (593) 31 (25) 14 5
----------------------------------------------------------
Balance, end of period $ 27,376 $26,962 $ 27,666 $ 28,507 $ 27,302
==========================================================
For the Three Months Ended
------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Non-Medical Health & Other 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------
Balance, beginning of period $ 1,505 $ 139 $ 160 $ 200 $ 214
Premiums and deposits 84 82 89 76 88
Investment performance 16 14 62 (45) (108)
Surrenders and withdrawals (24) (25) (27) (18) (19)
Policy charges (15) (9) (9) (28) (17)
Other (2) (1,427) (41) (75) 29 85
-----------------------------------------------------------
Balance, end of period $ 139 $ 160 $ 200 $ 214 $ 243
===========================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
(2) 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.
14
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
OTHER EXPENSES BY MAJOR CATEGORY
Direct and allocated expenses $ 352 $ 361 $ 355 $ 394 $ 358
Pension and other post-retirement benefit costs 18 21 17 17 19
Premium taxes and other taxes, licenses and fees 35 (11) 38 33 31
-------------------------------------------------------
Subtotal Insurance Expenses 405 371 410 444 408
Commissions and other expenses 46 69 84 78 85
-------------------------------------------------------
Total Other Expenses $ 451 $ 440 $ 494 $ 522 $ 493
=======================================================
15
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
--------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Group Life 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 5.66% 5.87% 5.32% 5.34% 5.58%
Average crediting rate 3.49% 3.44% 3.45% 3.58% 3.59%
----------------------------------------------------------------
Spread 2.17% 2.43% 1.87% 1.76% 1.99%
================================================================
For the Three Months Ended
---------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Retirement & Savings 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 7.06% 6.93% 6.85% 7.17% 6.91%
Average crediting rate 5.42% 5.33% 5.29% 5.34% 5.44%
----------------------------------------------------------------
Spread 1.64% 1.60% 1.56% 1.83% 1.47%
================================================================
For the Three Months Ended
--------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Non-Medical Health & Other 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 6.96% 7.77% 6.86% 7.53% 7.34%
Average crediting rate 5.35% 5.33% 5.43% 5.47% 5.45%
----------------------------------------------------------------
Spread 1.61% 2.44% 1.43% 2.06% 1.89%
================================================================
16
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
---------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Individual Operations 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 978 $ 1,007 $ 1,023 $ 1,164 $ 1,021
Universal life and investment-type product policy fees 425 453 467 486 485
Investment income, net 1,521 1,549 1,528 1,552 1,561
Other revenues 117 106 109 112 117
-------------------------------------------------------------
3,041 3,115 3,127 3,314 3,184
-------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,644 1,653 1,681 1,801 1,635
Interest credited to policyholder account balances 423 427 412 412 407
Capitalization of deferred policy acquisition costs (293) (298) (268) (284) (254)
Amortization of deferred policy acquisition costs 166 170 210 228 186
Other expenses 820 837 789 857 733
-------------------------------------------------------------
2,760 2,789 2,824 3,014 2,707
-------------------------------------------------------------
Operating earnings before provision for income taxes 281 326 303 300 477
Provision for income taxes 94 109 102 100 159
-------------------------------------------------------------
OPERATING EARNINGS $ 187 $ 217 $ 201 $ 200 $ 318
=============================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $ 187 $ 217 $ 201 $ 200 $ 318
Net investment gains (losses) (28) 31 105 (50) 59
Minority interest - net investment gains (losses) 0 0 0 4 (4)
Net investment gains (losses) tax benefit (provision) 9 1 (37) 11 (23)
-------------------------------------------------------------
Net investment gains (losses), net of income taxes (19) 32 68 (35) 32
Adjustments related to policyholder benefits and dividends 45 (11) (25) 30 21
Adjustments related to other expenses (13) 8 (8) 4 2
Adjustments related to tax benefit (provision) (11) 0 12 (12) (8)
-------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes (1) 21 (3) (21) 22 15
Cumulative effect of a change in accounting, net of income
taxes (2) 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------------
Net income $ 189 $ 246 $ 248 $ 187 $ 365
=============================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
include 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 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.
17
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Traditional Life 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 959 $ 980 $ 989 $ 1,113 $ 957
Universal life and investment-type product policy fees 0 0 0 0 0
Investment income, net 843 848 831 825 832
Other revenues 1 0 1 4 2
-------------------------------------------------------------------
1,803 1,828 1,821 1,942 1,791
-------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,480 1,496 1,517 1,629 1,433
Interest credited to policyholder account balances 0 0 0 0 0
Capitalization of deferred policy acquisition costs (41) (42) (44) (50) (43)
Amortization of deferred policy acquisition costs 56 51 51 74 53
Other expenses 211 206 213 240 184
-------------------------------------------------------------------
1,706 1,711 1,737 1,893 1,627
-------------------------------------------------------------------
Operating earnings before provision for income taxes 97 117 84 49 164
Provision for income taxes 33 40 29 17 55
-------------------------------------------------------------------
OPERATING EARNINGS $ 64 $ 77 $ 55 $ 32 $ 109
===================================================================
Net investment gains (losses), net of income taxes (15) 20 60 15 45
Adjustments related to net investment gains (losses),
net of income taxes 22 (4) (18) 18 15
Cumulative effect of a change in accounting, net of
income taxes 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------------------
Net income $ 71 $ 93 $ 97 $ 65 $ 169
===================================================================
18
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Variable & Universal Life 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 0 $ 0 $ 0 $ 0 $ 0
Universal life and investment-type product policy fees 245 264 279 272 265
Investment income, net 140 143 147 149 152
Other revenues 4 (3) 1 (1) 0
-------------------------------------------------------------
389 404 427 420 417
-------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 87 88 76 56 93
Interest credited to policyholder account balances 113 116 117 114 114
Capitalization of deferred policy acquisition costs (70) (86) (74) (79) (65)
Amortization of deferred policy acquisition costs 48 52 73 82 49
Other expenses 175 186 176 186 148
-------------------------------------------------------------
353 356 368 359 339
-------------------------------------------------------------
Operating earnings before provision for income taxes 36 48 59 61 78
Provision for income taxes 12 16 20 21 27
-------------------------------------------------------------
OPERATING EARNINGS $ 24 $ 32 $ 39 $ 40 $ 51
=============================================================
Net investment gains (losses), net of income taxes 3 (5) 5 (1) (8)
Adjustments related to net investment gains (losses), net
of income taxes (1) 2 (2) 0 (2)
Cumulative effect of a change in accounting, net of income
taxes (1) (11) 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------------
Net income $ 15 $ 29 $ 42 $ 39 $ 41
=============================================================
(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.
19
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Annuities 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 18 $ 26 $ 34 $ 48 $ 63
Universal life and investment-type product policy fees 151 156 156 177 185
Investment income, net 475 494 491 513 511
Other revenues 7 10 11 11 11
-------------------------------------------------------------
651 686 692 749 770
-------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 68 58 78 111 96
Interest credited to policyholder account balances 280 281 266 267 261
Capitalization of deferred policy acquisition costs (181) (169) (149) (154) (145)
Amortization of deferred policy acquisition costs 59 64 84 62 81
Other expenses 299 302 268 281 259
-------------------------------------------------------------
525 536 547 567 552
-------------------------------------------------------------
Operating earnings before provision for income taxes 126 150 145 182 218
Provision for income taxes 41 49 47 59 71
-------------------------------------------------------------
OPERATING EARNINGS $ 85 $ 101 $ 98 $ 123 $ 147
=============================================================
Net investment gains (losses), net of income taxes 2 17 9 (58) 1
Adjustments related to net investment gains (losses),
net of income taxes 0 (1) (1) 4 2
Cumulative effect of a change in accounting, net of
income taxes (1) 11 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------------
Net income $ 98 $ 117 $ 106 $ 69 $ 150
=============================================================
(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.
20
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Other 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 1 $ 1 $ 0 $ 3 $ 1
Universal life and invesment-type product policy fees 29 33 32 37 35
Investment income, net 63 64 59 65 66
Other revenues 105 99 96 98 104
------------------------------------------------------------------
198 197 187 203 206
------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 9 11 10 5 13
Interest credited to policyholder account balances 30 30 29 31 32
Capitalization of deferred policy acquisition costs (1) (1) (1) (1) (1)
Amortization of deferred policy acquisition costs 3 3 2 10 3
Other expenses 135 143 132 150 142
------------------------------------------------------------------
176 186 172 195 189
------------------------------------------------------------------
Operating earnings before provision for income taxes 22 11 15 8 17
Provision for income taxes 8 4 6 3 6
------------------------------------------------------------------
OPERATING EARNINGS $ 14 $ 7 $ 9 $ 5 $ 11
==================================================================
Net investment gains (losses), net of income taxes (9) 0 (6) 9 (6)
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
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------------------
Net income $ 5 $ 7 $ 3 $ 14 $ 5
==================================================================
21
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- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
PREMIUMS AND DEPOSITS BY PRODUCT AND MUTUAL FUND SALES
For the Three Months Ended
-------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------------
PREMIUMS AND DEPOSITS BY PRODUCT (1)
TOTAL (2)
Life First Year Premiums & Deposits
Traditional Life $ 45 $ 47 $ 44 $ 51 $ 47
Variable Life 1st Year excluding Single Premium COLI/BOLI 51 61 51 51 57
Universal Life 1st Year excluding Single Premium COLI/BOLI 104 116 125 118 102
Single Premium COLI/BOLI 3 49 20 4 1
------------------------------------------------------------
Total Life First Year Premiums & Deposits (3) 203 273 240 224 207
Life Renewal Premiums & Deposits
Traditional Life 965 1,030 1,017 1,163 943
Variable & Universal Life 471 418 447 452 472
Annuities (4) 3,436 2,882 2,410 2,566 2,540
Other 258 251 245 252 273
------------------------------------------------------------
Total Premiums and Deposits $ 5,333 $ 4,854 $ 4,359 $ 4,657 $ 4,435
============================================================
PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS
Variable & Universal Life $ 284 $ 287 $ 300 $ 294 $ 279
Annuities 2,120 1,523 1,352 1,525 1,532
Other 160 157 152 157 161
------------------------------------------------------------
Total Separate Accounts $ 2,564 $ 1,967 $ 1,804 $ 1,976 $ 1,972
============================================================
ANNUITY DEPOSITS BY TYPE
Fixed Annuity Deposits $ 506 $ 659 $ 403 $ 497 $ 429
Variable Annuity Deposits 2,930 2,223 2,007 2,069 2,111
------------------------------------------------------------
Total Annuity Deposits $ 3,436 $ 2,882 $ 2,410 $ 2,566 $ 2,540
============================================================
------------------------------------------------------------
MUTUAL FUND SALES $ 1,045 $ 864 $ 689 $ 935 $ 954
(1) Statutory premiums direct and assumed.
(2) Includes premiums and deposits to separate accounts and excludes company
sponsored internal changes.
(3) Of the $207 million of First Year Life Premiums and Deposits received
during the three months ended March 31, 2005, approximately 55% were
distributed through MetLife agents, 21% through New England Financial
agents, 21% through MetLife's Independent Distribution channel and 3%
through other distribution channels.
(4) Of the $2,540 million of Annuity Deposits received during the three months
ended March 31, 2005, approximately 31% were distributed through MetLife
agents, 7% through New England Financial agents, 51% through MetLife's
Independent Distribution channel and 11% through MetLife Resources
representatives.
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INDIVIDUAL OPERATIONS
ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS,
EXCLUDING TRANSFERS FROM GENERAL ACCOUNT:
Variable & Universal Life 45.0% 44.1% 46.4% 43.0% 43.0%
Annuities 61.7% 52.9% 56.1% 58.3% 60.3%
Other 62.1% 62.5% 62.2% 62.3% 58.9%
MORTALITY AS A PERCENTAGE OF EXPECTED 85.4% 78.1% 78.8% 85.6% 85.6%
LAPSES / SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (1)
Traditional Life 6.3% 6.2% 6.2% 6.1% 6.2%
Variable & Universal Life 7.0% 7.1% 7.0% 7.0% 6.6%
Variable Annuities 7.8% 7.7% 7.5% 7.6% 7.6%
Fixed Annuities 7.4% 8.0% 7.6% 6.7% 6.3%
NUMBER OF SALES REPRESENTATIVES
MetLife Distribution 5,594 5,633 5,700 5,597 5,718
New England Financial 2,531 2,553 2,504 2,383 2,231
General American (2) 448 448 430 380 343
Independent Distribution Wholesalers 95 101 102 100 116
MetLife Resources 397 397 399 427 422
Walnut Street Securities (3) 1,468 1,413 1,370 1,359 1,294
P&C Specialists 461 500 529 544 570
--------------------------------------------------------
Total Agents 10,994 11,045 11,034 10,790 10,694
========================================================
(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 March 31, 2005, the number of Walnut Street Securities representatives
includes 130 brokers who are also reported as General American agents
above.
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INDIVIDUAL OPERATIONS
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
AND SEPARATE ACCOUNT LIABILITIES
UNAUDITED (DOLLARS IN MILLIONS)
FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
- --------------------------------------------------------
For the Three Months Ended
-----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Traditional Life 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
Balance, beginning of period $ 48,503 $ 48,613 $ 48,828 $ 48,893 $ 49,209
Premiums and deposits (1) 1,038 1,067 1,069 1,199 1,032
Interest on reserves 489 491 493 494 499
Surrenders and withdrawals (477) (462) (466) (472) (447)
Benefit payments (486) (437) (464) (458) (484)
Other (454) (444) (567) (447) (438)
-----------------------------------------------------------------
Balance, end of period $ 48,613 $ 48,828 $ 48,893 $ 49,209 $ 49,371
=================================================================
For the Three Months Ended
-------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Variable & Universal Life 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
Balance, beginning of period $ 9,475 $ 9,644 $ 9,797 $ 9,887 $ 9,991
Premiums and deposits (1) (2) 346 370 340 342 353
Interest on reserves 119 115 114 115 112
Surrenders and withdrawals (233) (158) (153) (168) (161)
Net transfers from (to) separate account 75 56 44 54 44
Policy charges (199) (204) (224) (228) (225)
Benefit payments (34) (27) (25) (24) (27)
Other 95 1 (6) 13 0
------------------------------------------------------------
Balance, end of period $ 9,644 $ 9,797 $ 9,887 $ 9,991 $ 10,087
============================================================
For the Three Months Ended
----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Annuities 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
Balance, beginning of period $ 31,350 $ 31,491 $ 31,908 $ 31,955 $ 32,184
Premiums and deposits (1) (2) 1,426 1,432 1,120 1,182 1,089
Interest on reserves 298 390 297 339 312
Surrenders and withdrawals (797) (740) (517) (677) (587)
Net transfers from (to) separate account (610) (566) (339) (425) (427)
Policy charges (6) (4) (8) (1) (1)
Benefit payments (128) (99) (235) (191) (277)
Other (42) 4 (271) 2 11
----------------------------------------------------------------
Balance, end of period $ 31,491 $ 31,908 $ 31,955 $ 32,184 $ 32,304
================================================================
SEPARATE ACCOUNT LIABILITIES
- ----------------------------
For the Three Months Ended
--------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Variable & Universal Life 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
Balance, beginning of period $ 6,835 $ 6,989 $ 7,130 $ 7,258 $ 7,785
Premiums and deposits (1) 284 287 299 294 279
Investment performance 191 85 (123) 583 (94)
Surrenders and withdrawals (177) (104) (98) (224) (109)
Net transfers from (to) fixed account (75) (56) (44) (54) (44)
Policy charges (69) (71) (69) (72) (70)
Other 0 0 163 0 0
-----------------------------------------------------------
Balance, end of period $ 6,989 $ 7,130 $ 7,258 $ 7,785 $ 7,747
===========================================================
For the Three Months Ended
----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Annuities 2004 2004 2004 2004 2005
- -------------------------------------------------------------------------------------------------------------
Balance, beginning of period $ 28,667 $ 31,505 $ 32,989 $ 33,491 $ 37,597
Premiums and deposits (1) 2,120 1,524 1,353 1,524 1,532
Investment performance 834 144 (413) 3,039 (604)
Surrenders and withdrawals (617) (642) (668) (744) (764)
Net transfers from (to) fixed account 610 566 339 425 427
Policy charges (105) (112) (109) (138) (137)
Other (4) 4 0 0 0
----------------------------------------------------------------
Balance, end of period $ 31,505 $ 32,989 $ 33,491 $ 37,597 $ 38,051
================================================================
(1) Includes company-sponsored internal exchanges.
(2) Includes premiums and deposits directed to the General Account investment
option of a variable life or variable annuity product.
24
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- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
INSURANCE EXPENSES AND OTHER
EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
---------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------
INSURANCE EXPENSES (NET OF CAPITALIZATION
OF DAC)
Insurance Expenses $ 757 $ 752 $ 705 $ 753 $ 630
DAC Capitalization (1) (324) (333) (300) (308) (273)
---------------------------------------------------------------
Net $ 433 $ 419 $ 405 $ 445 $ 357
===============================================================
OTHER EXPENSES BY MAJOR CATEGORY
Commissions $ 252 $ 241 $ 218 $ 218 $ 203
Other deferrable expenses 92 114 103 114 93
Direct and allocated expenses, not deferred 353 335 327 370 276
Pension and other post-retirement benefit costs 31 32 28 27 29
Premium taxes and other taxes, licenses and fees 29 30 29 24 29
---------------------------------------------------------------
Subtotal Insurance Expenses $ 757 $ 752 $ 705 $ 753 $ 630
Broker-dealer and other expenses 116 134 126 141 132
Reinsurance allowances (53) (49) (42) (37) (29)
---------------------------------------------------------------
Total Other Expenses $ 820 $ 837 $ 789 $ 857 $ 733
===============================================================
(1) Excludes $31 million, $35 million, $32 million, $24 million and $19
million of DAC capitalization related to reinsurance allowances for the
three months ended March 31, 2004, June 30, 2004, September 30, 2004,
December 31, 2004 and March 31, 2005, respectively.
25
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INDIVIDUAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
-----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
VARIABLE & UNIVERSAL LIFE 2004 2004 2004 2004 2005
- --------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 6.98% 7.05% 7.04% 7.00% 7.07%
Average crediting rate 5.26% 5.25% 5.17% 5.08% 5.00%
----------------------------------------------------------
Spread 1.72% 1.80% 1.87% 1.92% 2.07%
==========================================================
For the Three Months Ended
-----------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
ANNUITIES 2004 2004 2004 2004 2005
- --------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 5.85% 6.23% 6.08% 6.37% 6.24%
Average crediting rate 3.90% 3.79% 3.64% 3.57% 3.44%
----------------------------------------------------------
Spread 1.95% 2.44% 2.44% 2.80% 2.80%
==========================================================
26
[METLIFE LOGO]
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Auto & Home Operations 2004 2004 2004 2004 2005
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $ 737 $ 734 $ 740 $ 737 $ 728
Investment income, net 46 44 40 41 43
Other revenues 9 6 8 12 9
-------------------------------------------------------
792 784 788 790 780
-------------------------------------------------------
EXPENSES
Losses 446 413 460 398 392
Loss adjustment expense 90 82 93 99 85
Other expenses 198 193 194 210 200
-------------------------------------------------------
734 688 747 707 677
-------------------------------------------------------
Operating earnings before provision
(benefit) for income taxes 58 96 41 83 103
Provision (benefit) for income taxes 12 25 7 20 27
-------------------------------------------------------
OPERATING EARNINGS $ 46 $ 71 $ 34 $ 63 $ 76
=======================================================
NET INCOME RECONCILIATION
- --------------------------------
Operating earnings $ 46 $ 71 $ 34 $ 63 $ 76
Net investment gains (losses) 0 (5) (1) (3) 0
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) 0 2 0 1 0
-------------------------------------------------------
Net investment gains (losses), net of income taxes 0 (3) (1) (2) 0
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
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------
Net income $ 46 $ 68 $ 33 $ 61 $ 76
=======================================================
27
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- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Auto 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $542 $ 538 $ 539 $ 538 $531
Investment income, net 36 34 30 34 32
Other revenues 6 5 6 6 6
------------------------------------------------------
584 577 575 578 569
------------------------------------------------------
EXPENSES
Losses 351 296 300 312 304
Loss adjustment expense 72 63 66 85 74
Other expenses 139 135 136 148 137
------------------------------------------------------
562 494 502 545 515
------------------------------------------------------
Operating earnings before provision
for income taxes 22 83 73 33 54
Provision for income taxes 0 22 21 3 11
------------------------------------------------------
OPERATING EARNINGS $ 22 $ 61 $ 52 $ 30 $ 43
======================================================
Net investment gains (losses), net of income taxes 0 (3) (1) (1) 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
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------
Net income $ 22 $ 58 $ 51 $ 29 $ 43
======================================================
28
[METLIFE LOGO]
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Homeowners 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $182 $185 $ 188 $ 188 $184
Investment income, net 9 9 11 6 10
Other revenues 1 1 2 2 1
---------------------------------------------------
192 195 201 196 195
---------------------------------------------------
EXPENSES
Losses 89 106 155 83 82
Loss adjustment expense 18 19 26 13 11
Other expenses 52 54 52 57 56
---------------------------------------------------
159 179 233 153 149
---------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 33 16 (32) 43 46
Provision (benefit) for income taxes 11 4 (14) 15 15
---------------------------------------------------
OPERATING EARNINGS (LOSS) $ 22 $ 12 ($ 18) $ 28 $ 31
===================================================
Net investment gains (losses), net of income taxes 0 0 0 (1) 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
Discontinued operations, net of income taxes 0 0 0 0 0
---------------------------------------------------
Net income $ 22 $ 12 ($ 18) $ 27 $ 31
===================================================
29
[METLIFE LOGO]
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Other 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------
REVENUES
Earned premiums $13 $ 11 $ 13 $11 $13
Investment income, net 1 1 (1) 1 1
Other revenues 2 0 0 4 2
------------------------------------------------------
16 12 12 16 16
------------------------------------------------------
EXPENSES
Losses 6 11 5 3 6
Loss adjustment expense 0 0 1 1 0
Other expenses 7 4 6 5 7
------------------------------------------------------
13 15 12 9 13
------------------------------------------------------
Operating earnings (loss) before provision
(benefit) for income taxes 3 (3) 0 7 3
Provision (benefit) for income taxes 1 (1) 0 2 1
------------------------------------------------------
OPERATING EARNINGS (LOSS) $ 2 ($ 2) $ 0 $ 5 $ 2
======================================================
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
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------
Net income $ 2 ($ 2) $ 0 $ 5 $ 2
======================================================
30
[METLIFE LOGO]
- --------------------------------------------------------------------------------
AUTO & HOME OPERATIONS
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION
AND SUPPLEMENTAL DATA
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------
WRITTEN PREMIUMS BY PRODUCT
Preferred/Standard Automobile $ 517 $ 521 $ 534 $ 502 $ 512
Non-Standard Automobile 21 19 19 21 17
Homeowners 155 199 212 186 160
Other 20 9 11 9 17
------------------------------------------------------------------
Total $ 713 $ 748 $ 776 $ 718 $ 706
==================================================================
SELECTED FINANCIAL INFORMATION AND
SUPPLEMENTAL DATA
TOTAL AUTO & HOME
Loss and loss adjustment expense ratio 72.7% 67.5% 74.6% 67.2% 65.7%
Other expense ratio 26.1% 25.6% 25.5% 28.0% 26.7%
------------------------------------------------------------------
Total combined ratio (1) 98.8% 93.1% 100.1% 95.2% 92.4%
Effect of catastrophe losses 2.3% 5.0% 15.3% 3.0% 1.5%
------------------------------------------------------------------
Combined ratio excluding catastrophes 96.5% 88.1% 84.8% 92.2% 90.9%
==================================================================
AUTO
Loss and loss adjustment expense ratio 78.1% 66.9% 68.0% 73.7% 71.5%
Other expense ratio 24.8% 24.3% 24.3% 26.9% 25.0%
------------------------------------------------------------------
Total combined ratio (1) 102.9% 91.2% 92.3% 100.6% 96.5%
Effect of catastrophe losses 0.1% 1.1% 1.7% 0.5% 0.4%
------------------------------------------------------------------
Combined ratio excluding catastrophes 102.8% 90.1% 90.6% 100.1% 96.1%
==================================================================
HOMEOWNERS
Loss and loss adjustment expense ratio 58.7% 67.3% 96.0% 50.8% 50.2%
Other expense ratio 28.2% 28.8% 27.6% 30.1% 29.7%
------------------------------------------------------------------
Total combined ratio (1) 86.9% 96.1% 123.6% 80.9% 79.9%
Effect of catastrophe losses 9.0% 16.6% 55.4% 10.2% 4.9%
------------------------------------------------------------------
Combined ratio excluding catastrophes 77.9% 79.5% 68.2% 70.7% 75.0%
==================================================================
OTHER
Loss and loss adjustment expense ratio 44.6% 100.9% 40.3% 33.7% 49.3%
Other expense ratio 50.7% 35.4% 39.9% 43.8% 56.1%
------------------------------------------------------------------
Total combined ratio (1) 95.3% 136.3% 80.2% 77.5% 105.4%
Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0%
------------------------------------------------------------------
Combined ratio excluding catastrophes 95.3% 136.3% 80.2% 77.5% 105.4%
==================================================================
PRE-TAX CATASTROPHE LOSSES
Auto $ 0 $ 6 $ 9 $ 3 $ 2
Homeowners 16 31 104 20 9
Other 0 0 0 0 0
------------------------------------------------------------------
Total $ 16 $ 37 $ 113 $ 23 $ 11
==================================================================
CATASTROPHE POINTS ON COMBINED RATIOS 2.3 5.0 15.3 3.0 1.6
NUMBER OF SALES REPRESENTATIVES 88 88 80 87 89
==================================================================
(1) The combined ratio reflects payment fees as a credit to Other Expenses,
for the three months ended March 31, 2004, June 30, 2004, September 30,
2004, December 31, 2004 and March 31, 2005, which resulted in a 0.8, 0.7,
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 and
Other were, 0.9, 0.5 and 0.4 of a percentage point, respectively, for
March 31, 2004, 0.8, 0.5 and 0.6 of a percentage point, respectively, for
June 30, 2004, 0.8, 0.4 and 0.7 of a percentage point, respectively, for
September 30, 2004, 0.8, 0.4 and 0.7 of a percentage point, respectively,
for December 31, 2004 and 0.8, 0.5 and 0.5 of a percentage point,
respectively, for March 31, 2005.
31
[METLIFE LOGO]
- --------------------------------------------------------------------------------
INTERNATIONAL OPERATIONS
STATEMENT OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums(1) $ 402 $ 392 $ 437 $ 463 $ 502
Universal life and investment-type product policy fees 83 86 91 90 119
Investment income, net 123 137 151 174 150
Other revenues 4 8 2 9 3
------------------------------------------------------------------
612 623 681 736 774
------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 378 400 424 450 446
Interest credited to policyholder account balances 37 32 37 46 47
Capitalization of deferred policy acquisition costs (71) (93) (103) (117) (125)
Amortization of deferred policy acquisition costs 31 36 32 38 56
Other expenses 172 194 222 283 246
------------------------------------------------------------------
547 569 612 700 670
------------------------------------------------------------------
Operating earnings before provision for income taxes 65 54 69 36 104
Provision for income taxes 21 13 24 10 37
------------------------------------------------------------------
OPERATING EARNINGS $ 44 $ 41 $ 45 $ 26 $ 67
==================================================================
NET INCOME RECONCILIATION
Operating earnings $ 44 $ 41 $ 45 $ 26 $ 67
Net investment gains (losses) 26 (2) 3 (4) 0
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (6) (1) (1) 1 0
------------------------------------------------------------------
Net investment gains (losses), net of income taxes 20 (3) 2 (3) 0
Adjustments related to policyholder benefits and
dividends 3 49 (14) (6) 14
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit (provision) (1) (17) 5 2 (5)
------------------------------------------------------------------
Adjustments related to net investment gains (losses), net
of income taxes (2) 2 32 (9) (4) 9
Cumulative effect of a change in accounting, net of
income taxes (3) (30) 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------------------
Net income $ 36 $ 70 $ 38 $ 19 $ 76
------------------------------------------------------------------
------------------------------------------------------------------
NUMBER OF PROFESSIONAL SALES REPRESENTATIVES 1,602 1,810 3,222 3,491 3,749
==================================================================
(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,
include 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.
32
[METLIFE LOGO]
- --------------------------------------------------------------------------------
REINSURANCE OPERATIONS
STATEMENT OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums, net $ 816 $ 807 $ 822 $ 922 $ 907
Investment income, net 130 136 144 204 161
Other revenues 12 15 14 16 11
------------------------------------------------------------------
958 958 980 1,142 1,079
------------------------------------------------------------------
EXPENSES
Claims and other policy benefits 659 651 675 760 750
Interest credited to policyholder account balances 51 52 48 61 55
Policy acquisition costs and other insurance expenses 139 133 156 192 148
Other expenses 45 46 47 44 43
------------------------------------------------------------------
894 882 926 1,057 996
------------------------------------------------------------------
Operating earnings before provision for income
taxes and minority interest 64 76 54 85 83
Provision for income taxes 9 13 9 15 13
------------------------------------------------------------------
Operating earnings before minority interest 55 63 45 70 70
Elimination of minority interest, before tax 37 40 31 39 43
------------------------------------------------------------------
CONTRIBUTION TO METLIFE $ 18 $ 23 $ 14 $ 31 $ 27
==================================================================
NET INCOME RECONCILIATION
- -------------------------
Operating earnings $ 18 $ 23 $ 14 $ 31 $ 27
Net investment gains (losses) 21 32 (17) (2) 28
Minority interest - net investment gains (losses) (8) (8) 2 1 (5)
Net investment gains (losses) tax benefit (provision) (4) (9) 6 1 (8)
------------------------------------------------------------------
Net investment gains (losses), net of income taxes 9 15 (9) 0 15
Adjustments related to policyholder benefits and dividends 0 0 0 0 0
Adjustments related to other expenses (4) (13) 14 1 (17)
Adjustments related to tax benefit (provision) 1 5 (5) 0 6
------------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes (1) (3) (8) 9 1 (11)
Cumulative effect of a change in accounting, net of income
taxes (2) 5 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------------------
Net income $ 29 $ 30 $ 14 $ 32 $ 31
==================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
include 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.
33
[METLIFE LOGO]
- --------------------------------------------------------------------------------
REINSURANCE OPERATIONS
PRE-TAX AND PRE-MINORITY INTEREST OPERATING
EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------
PRE-TAX AND PRE-MINORITY INTEREST
OPERATING EARNINGS BY REGION
United States $ 52 $ 60 $ 69 $ 82 $ 50
Canada 16 15 16 17 23
Asia-Pacific 6 5 (2) 2 5
Other international markets 3 11 9 4 15
Corporate (13) (15) (38) (20) (10)
------------------------------------------------------------------
Total pre-tax and pre-minority interest
operating earnings $ 64 $ 76 $ 54 $ 85 $ 83
==================================================================
POLICY BENEFITS AND INTEREST
SENSITIVE CONTRACT LIABILITIES BY REGION
Traditional U.S. $ 4,636 $ 4,385 $ 4,458 $ 4,253 $ 4,285
Asset intensive 3,343 3,645 3,893 4,085 4,159
Other 120 125 58 124 122
------------------------------------------------------------------
Total U.S. 8,099 8,155 8,409 8,462 8,566
------------------------------------------------------------------
Canada 1,151 1,167 1,243 1,375 1,367
Asia-Pacific 420 357 456 517 548
Other international markets 499 497 549 610 693
------------------------------------------------------------------
Total International 2,070 2,021 2,248 2,502 2,608
------------------------------------------------------------------
Total policy benefits and interest sensitive
contract liabilities $ 10,169 $ 10,176 $ 10,657 $ 10,964 $ 11,174
==================================================================
34
[METLIFE LOGO]
- --------------------------------------------------------------------------------
CORPORATE, OTHER & ELIMINATIONS
STATEMENT OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums ($ 1) ($ 4) ($ 5) $ 1 $ 1
Universal life and investment-type product policy fees 0 0 2 0 0
Investment income, net 84 163 129 195 150
Other revenues 7 (7) 7 0 3
-----------------------------------------------------------------
90 152 133 196 154
-----------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 2 2 1 3 5
Interest credited to policyholder account balances 0 0 0 0 0
Interest expense 78 88 94 97 105
Other expenses 54 76 44 75 76
-----------------------------------------------------------------
134 166 139 175 186
-----------------------------------------------------------------
Operating earnings before (benefit) provision for income taxes (44) (14) (6) 21 (32)
Benefit for income taxes (27) (111) (34) (7) (41)
-----------------------------------------------------------------
OPERATING EARNINGS (LOSS) ($ 17) $ 97(2) $ 28(3) $ 28 $ 9
=================================================================
NET INCOME RECONCILIATION
Operating earnings (loss) ($ 17) $ 97 $ 28 $ 28 $ 9
Net investment gains (losses) 4 83 (17) (86) (113)
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (2) (31) 3 33 43
-----------------------------------------------------------------
Net investment gains (losses), net of income taxes 2 52 (14) (53) (70)
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 1 (1) 0
-----------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes (1) 0 0 1 (1) 0
Cumulative effect of a change in accounting, net of income taxes (1) 0 0 0 0
Discontinued operations, net of income taxes 4 14 5 (4) 151
-----------------------------------------------------------------
Net income ($ 12) $ 163 $ 20 ($ 30) $ 90
=================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
include amounts allocable to certain participating contracts.
(2) 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.
(3) 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.
35
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METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Three Months Ended
----------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.62% 6.64% 6.44% 6.46% 6.33%
Income (3) $ 2,232 $ 2,291 $ 2,246 $ 2,273 $ 2,278
Investment gains (losses) $ 34 ($ 3) $ 61 ($ 21) ($ 114)
Ending Carrying Value (3) $ 174,100 $ 170,192 $ 176,091 $ 176,763 $ 182,653
MORTGAGE AND CONSUMER LOANS
Yield (4) 6.81% 6.83% 7.02% 6.93% 6.55%
Income $ 449 $ 468 $ 507 $ 537 $ 527
Investment gains (losses) $ 0 $ 0 ($ 8) ($ 39) ($ 11)
Ending Carrying Value $ 26,562 $ 28,118 $ 29,620 $ 32,406 $ 31,977
REAL ESTATE AND REAL ESTATE JOINT VENTURES
Yield (4) 11.85% 13.37% 10.55% 11.04% 11.11%
Income (5) $ 139 $ 148 $ 111 $ 117 $ 119
Investment gains (losses) (6) $ 21 $ 133 ($ 5) $ 13 $ 18
Ending Carrying Value $ 4,696 $ 4,150 $ 4,263 $ 4,233 $ 4,306
POLICY LOANS
Yield (4) 6.12% 6.13% 6.14% 6.23% 6.17%
Income $ 134 $ 134 $ 135 $ 138 $ 138
Ending Carrying Value $ 8,758 $ 8,766 $ 8,801 $ 8,899 $ 8,953
EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP
INTERESTS (1)
Yield (4) 3.05% 10.32% 7.42% 18.26% 9.84%
Income $ 29 $ 101 $ 75 $ 199 $ 118
Investment gains (losses) $ 0 $ 87 $ 96 $ 25 $ 95
Ending Carrying Value $ 4,290 $ 4,521 $ 4,715 $ 5,095 $ 5,567
CASH AND SHORT-TERM INVESTMENTS (1)
Yield (4) 2.70% 2.39% 3.16% 3.67% 4.76%
Income $ 30 $ 30 $ 43 $ 50 $ 64
Investment gains (losses) $ 0 $ 0 $ 0 ($ 1) ($ 1)
Ending Carrying Value $ 5,098 $ 6,501 $ 6,043 $ 6,714 $ 6,476
OTHER INVESTED ASSETS
Yield (4) 5.01% 4.29% 5.51% 10.55% 9.06%
Income (7) $ 51 $ 46 $ 55 $ 104 $ 95
Investment gains (losses) (8) $ 68 ($ 60) $ 34 ($ 191) ($ 8)
Ending Carrying Value $ 5,083 $ 5,108 $ 4,395 $ 4,926 $ 4,960
TOTAL INVESTMENTS
Gross investment income yield 6.56% 6.72% 6.51% 6.88% 6.55%
Investment fees and expenses yield (0.14%) (0.13%) (0.13%) (0.14%) (0.12%)
----------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.42% 6.59% 6.38% 6.74% 6.43%
======================================================================
Gross investment income $ 3,064 $ 3,218 $ 3,172 $ 3,418 $ 3,339
Investment fees and expenses (64) (61) (65) (72) (59)
----------------------------------------------------------------------
NET INVESTMENT INCOME $ 3,000 $ 3,157 $ 3,107 $ 3,346 $ 3,280
======================================================================
Ending Carrying Value $ 228,587 $ 227,356 $ 233,928 $ 239,036 $ 244,892
======================================================================
Gross investment gains $ 243 $ 411 $ 351 $ 309 $ 373
Gross investment losses (85) (126) (201) (175) (322)
Writedowns (12) (77) (44) (79) (51)
----------------------------------------------------------------------
Subtotal 146 208 106 55 0
Derivative & other instruments not qualifying for
hedge accounting (23) (51) 72 (269) (21)
----------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 123 157 178 (214) (21)
Minority interest - net investment gains (losses) (8) (8) 2 5 (9)
Net investment gains (losses) tax benefit (provision) (39) (47) (62) 71 9
----------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $ 76 $ 102 $ 118 ($ 138) ($ 21)
======================================================================
(1) Included in ending carrying value, income and investment gains (losses)
are $2,139 million, $22 million, and $12 million, respectively, related to
the consolidation of separate accounts under AICPA Statement of Position
03-1 for the three months ended March 31, 2005.
(2) Fixed maturities yield is annualized and is based on quarterly average
amortized cost.
(3) Fixed maturities includes $134 million and $1 million in ending carrying
value and income, respectively, relating to trading securities for the
three months ended March 31, 2005.
(4) Yields are annualized and based on quarterly average carrying values.
(5) Included in income from real estate and real estate joint ventures is $48
million, $54 million, $32 million, $32 million and $39 million related to
discontinued operations for the three months ended March 31, 2004, June
30, 2004, September 30, 2004, December 31, 2004 and March 31, 2005,
respectively.
(6) Included in investment gains (losses) from real estate and real estate
joint ventures is $20 million, $132 million, ($16) million, $10 million,
and $18 million related to discontinued operations for the three months
ended March 31, 2004, June 30, 2004, September 30, 2004, December 31,
2004, and March 31, 2005, respectively.
(7) Included in income from other invested assets are scheduled settlement
payments on derivative instruments that do not qualify for hedge
accounting under Statement of Financial Accounting Standards No. 133 of
$14 million, $22 million, $12 million, $3 million and $24 million for the
three months ended March 31, 2004, June 30, 2004, September 30, 2004,
December 31, 2004 and March 31, 2005, respectively.
(8) Included in investment gains (losses) for the three months ended December
31, 2004 is a charge of $26 million related to a funds withheld
reinsurance treaty that was converted to a coinsurance agreement.
36
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METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
At or for the Year-to-date
----------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.62% 6.64% 6.58% 6.55% 6.33%
Income $ 2,232 $ 4,523 $ 6,769 $ 9,042 $ 2,278
Investment gains (losses) $ 34 $ 31 $ 92 $ 71 ($ 114)
Ending Carrying Value $ 174,100 $ 170,192 $ 176,091 $ 176,763 $ 182,653
MORTGAGE AND CONSUMER LOANS
Yield (3) 6.81% 6.80% 6.87% 6.86% 6.55%
Income $ 449 $ 917 $ 1,424 $ 1,961 $ 527
Investment gains (losses) $ 0 $ 0 ($ 8) ($ 47) ($ 11)
Ending Carrying Value $ 26,562 $ 28,118 $ 29,620 $ 32,406 $ 31,977
REAL ESTATE AND REAL ESTATE JOINT VENTURES
Yield (3) 11.85% 12.72% 11.92% 11.69% 11.11%
Income (4) $ 139 $ 287 $ 398 $ 515 $ 119
Investment gains (losses) (5) $ 21 $ 154 $ 149 $ 162 $ 18
Ending Carrying Value $ 4,696 $ 4,150 $ 4,263 $ 4,233 $ 4,306
POLICY LOANS
Yield (3) 6.12% 6.12% 6.13% 6.15% 6.17%
Income $ 134 $ 268 $ 403 $ 541 $ 138
Ending Carrying Value $ 8,758 $ 8,766 $ 8,801 $ 8,899 $ 8,953
EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP
INTERESTS (1)
Yield (3) 3.05% 6.74% 6.96% 9.96% 9.84%
Income $ 29 $ 130 $ 205 $ 404 $ 118
Investment gains (losses) $ 0 $ 87 $ 183 $ 208 $ 95
Ending Carrying Value $ 4,290 $ 4,521 $ 4,715 $ 5,095 $ 5,567
CASH AND SHORT-TERM INVESTMENTS (1)
Yield (3) 2.70% 2.47% 2.77% 3.01% 4.76%
Income $ 30 $ 60 $ 103 $ 153 $ 64
Investment gains (losses) $ 0 $ 0 $ 0 ($ 1) ($ 1)
Ending Carrying Value $ 5,098 $ 6,501 $ 6,043 $ 6,714 $ 6,476
OTHER INVESTED ASSETS
Yield (3) 5.01% 4.68% 5.03% 6.30% 9.06%
Income (6) $ 51 $ 97 $ 152 $ 256 $ 95
Investment gains (losses) (7) $ 68 $ 8 $ 42 ($ 149) ($ 8)
Ending Carrying Value $ 5,083 $ 5,108 $ 4,395 $ 4,926 $ 4,960
TOTAL INVESTMENTS
Gross investment income yield 6.56% 6.64% 6.60% 6.67% 6.55%
Investment fees and expenses yield (0.14%) (0.13%) (0.13%) (0.14%) (0.12%)
----------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.42% 6.51% 6.47% 6.53% 6.43%
======================================================================
Gross investment income $ 3,064 $ 6,282 $ 9,454 $ 12,872 $ 3,339
Investment fees and expenses (64) (125) (190) (262) (59)
----------------------------------------------------------------------
NET INVESTMENT INCOME $ 3,000 $ 6,157 $ 9,264 $ 12,610 $ 3,280
======================================================================
Ending Carrying Value $ 228,587 $ 227,356 $ 233,928 $ 239,036 $ 244,892
======================================================================
Gross investment gains $ 243 $ 654 $ 1,005 $ 1,314 $ 373
Gross investment losses (85) (211) (412) (587) (322)
Writedowns (12) (89) (133) (212) (51)
----------------------------------------------------------------------
Subtotal 146 354 460 515 0
Derivative & other instruments not qualifying for
hedge accounting (23) (74) (2) (271) (21)
----------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 123 280 458 244 (21)
Minority interest - net investment gains (losses) (8) (16) (14) (9) (9)
Net investment gains (losses) tax benefit (provision) (39) (86) (148) (77) 9
----------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $ 76 $ 178 $ 296 $ 158 ($ 21)
======================================================================
(1) Included in ending carrying value, income and investment-related gains
(losses) is $2,139 million, $22 million and $12 million, respectively,
related to the consolidation of separate accounts under AICPA Statement of
Position 03-1 for year-to-date March 31, 2005.
(2) Fixed maturities 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 $48
million, $102 million, $134 million, $166 million and $39 million related
to discontinued operations for year-to-date March 31, 2004, June 30, 2004,
September 30, 2004, December 31, 2004 and March 31, 2005, respectively.
(5) Included in investment gains (losses) from real estate and real estate
joint ventures is $20 million, $152 million, $136 million, $146 million
and $18 million related to discontinued operations for year-to-date March
31, 2004, June 30, 2004, September 30, 2004, December 31, 2004 and March
31, 2005, respectively.
(6) Included in income from other invested assets are scheduled settlement
payments on derivative instruments that do not qualify for hedge
accounting under Statement of Financial Accounting Standards No. 133 of
$14 million, $36 million, $48 million, $51 million and $24 million for
year-to-date March 31, 2004, June 30, 2004, September 30, 2004, December
31, 2004 and March 31, 2005, respectively.
(7) Included in investment gains (losses) for the three months ended December
31, 2004 is a charge of $26 million related to a funds withheld
reinsurance treaty that was converted to a coinsurance agreement.
37
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METLIFE, INC.
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
FIXED MATURITIES (1) (2)
At September 30, At December 31,
At March 31, 2004 At June 30, 2004 2004 2004 At March 31, 2005
------------------ ------------------ ------------------ ------------------ ------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------------------------------
Less than 20% $ 364 86.3% $ 1,735 96.6% $ 530 90.8% $ 463 92.4% $ 1,185 99.1%
20% or more for less than six
months 52 12.3% 47 2.6% 44 7.5% 17 3.4% 5 0.4%
20% or more for six months or
greater 6 1.4% 15 0.8% 10 1.7% 21 4.2% 6 0.5%
-------------------------------------------------------------------------------------------
Total Gross Unrealized Losses $ 422 100.0% $ 1,797 100.0% $ 584 100.0% $ 501 100.0% $ 1,196 100.0%
===========================================================================================
Total Gross Unrealized Gains $12,137 $ 7,087 $ 9,703 $10,268 $ 8,485
======= ======= ======= ======= =======
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
EQUITY SECURITIES (1) (2)
At September 30, At December 31,
At March 31, 2004 At June 30, 2004 2004 2004 At March 31, 2005
------------------ ------------------ ------------------ ------------------ ------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------------------------------
Less than 20% $ 5 45.5% $ 13 44.8% $ 10 40.0% $ 7 87.5% $ 44 78.6%
20% or more for less than six
months 6 54.5% 16 55.2% 15 60.0% 1 12.5% 12 21.4%
20% or more for six months or
greater 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%
-------------------------------------------------------------------------------------------
Total Gross Unrealized Losses $ 11 100.0% $ 29 100.0% $ 25 100.0% $ 8 100.0% $ 56 100.0%
===========================================================================================
Total Gross Unrealized Gains $ 383 $ 336 $ 305 $ 283 $ 169
======= ======= ======= ======= =======
(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.
38
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METLIFE, INC.
SUMMARY OF FIXED MATURITIES AVAILABLE FOR SALE
BY SECTOR AND QUALITY DISTRIBUTION
At March 31, 2004 At June 30, 2004 At September 30, 2004
-------------------- -------------------- ---------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ---------------------------------------------------------------------------------------------------------------
U.S. corporate securities $ 63,215 36.3% $ 60,619 35.6% $ 63,130 35.8%
Residential mortgage-backed securities 31,825 18.3% 30,698 18.0% 30,978 17.6%
Foreign corporate securities 24,654 14.2% 24,732 14.5% 27,076 15.4%
US treasury/agency securities 17,065 9.8% 16,664 9.8% 16,561 9.4%
Commercial mortgage-backed securities 11,955 6.9% 12,019 7.1% 12,016 6.8%
Asset-backed securities 12,327 7.1% 12,444 7.3% 12,912 7.3%
Foreign government securities 8,444 4.8% 8,019 4.7% 8,380 4.8%
State and political subdivision securities 3,580 2.0% 3,675 2.2% 3,853 2.2%
Other fixed maturity securities 491 0.3% 780 0.5% 644 0.4%
-----------------------------------------------------------------
Total bonds 173,556 99.7% 169,650 99.7% 175,550 99.7%
Redeemable preferred stock 544 0.3% 542 0.3% 541 0.3%
-----------------------------------------------------------------
Total fixed maturities $174,100 100.0% $170,192 100.0% $176,091 100.0%
=================================================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $116,165 66.7% $113,607 66.8% $117,658 66.8%
2 Baa 44,842 25.8% 43,829 25.8% 45,728 25.9%
3 Ba 7,731 4.4% 7,334 4.3% 7,514 4.3%
4 B 3,929 2.3% 4,086 2.4% 4,089 2.3%
5 Caa and lower 700 0.4% 583 0.3% 443 0.3%
6 In or near default 189 0.1% 211 0.1% 118 0.1%
-----------------------------------------------------------------
Total 173,556 99.7% 169,650 99.7% 175,550 99.7%
Redeemable preferred stock 544 0.3% 542 0.3% 541 0.3%
-----------------------------------------------------------------
Total Fixed Maturities $174,100 100.0% $170,192 100.0% $176,091 100.0%
=================================================================
At December 31, 2004 At March 31, 2005
-------------------- --------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- ----------------------------------------------------------------------------------------
U.S. corporate securities $ 61,720 34.9% $ 60,417 33.1%
Residential mortgage-backed securities 32,230 18.2% 34,650 19.0%
Foreign corporate securities 27,838 15.7% 27,766 15.2%
US treasury/agency securities 17,826 10.1% 21,770 11.9%
Commercial mortgage-backed securities 12,501 7.1% 13,372 7.3%
Asset-backed securities 10,876 6.1% 10,826 5.9%
Foreign government securities 8,585 4.9% 8,932 4.9%
State and political subdivision securities 3,899 2.2% 3,934 2.2%
Other fixed maturity securities 985 0.6% 703 0.4%
------------------------------------------
Total bonds 176,460 99.8% 182,370 99.9%
Redeemable preferred stock 303 0.2% 149 0.1%
------------------------------------------
Total fixed maturities $176,763 100.0% $182,519 100.0%
==========================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $118,779 67.2% $125,899 69.0%
2 Baa 45,311 25.6% 44,054 24.1%
3 Ba 7,500 4.2% 7,392 4.1%
4 B 4,414 2.5% 4,649 2.5%
5 Caa and lower 366 0.2% 325 0.2%
6 In or near default 90 0.1% 51 0.0%
------------------------------------------
Total 176,460 99.8% 182,370 99.9%
Redeemable preferred stock 303 0.2% 149 0.1%
------------------------------------------
Total Fixed Maturities $176,763 100.0% $182,519 100.0%
=========================================
(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 March 31, 2004 At June 30, 2004 At September 30, 2004
-------------------- -------------------- ---------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ----------------------------------------------------------------------------------------------------
Pacific $ 5,172 25.1% $ 5,327 24.2% $ 5,608 24.3%
South Atlantic 4,929 23.8% 5,247 23.8% 5,502 23.6%
Middle Atlantic 3,450 16.6% 3,513 16.0% 3,704 15.9%
East North Central 1,894 9.1% 2,294 10.4% 2,443 10.5%
West South Central 1,415 6.8% 1,470 6.7% 1,775 7.6%
New England 1,295 6.2% 1,302 5.9% 1,285 5.5%
International 943 4.5% 1,064 4.8% 1,219 5.2%
Mountain 763 3.7% 785 3.6% 741 3.2%
West North Central 606 2.9% 625 2.8% 615 2.6%
East South Central 265 1.3% 278 1.3% 276 1.2%
Other 0 0.0% 100 0.5% 99 0.4%
-----------------------------------------------------------------
Total $ 20,732 100.0% $ 22,005 100.0% $ 23,267 100.0%
=================================================================
Office $ 9,570 46.1% $ 10,301 46.8% $ 10,826 46.6%
Retail 4,961 23.9% 5,221 23.7% 5,288 22.7%
Apartments 2,916 14.1% 3,001 13.6% 3,095 13.3%
Industrial 1,852 8.9% 1,951 8.9% 2,034 8.7%
Hotel 1,027 5.0% 1,098 5.0% 1,227 5.3%
Other 406 2.0% 433 2.0% 797 3.4%
-----------------------------------------------------------------
Total $ 20,732 100.0% $ 22,005 100.0% $ 23,267 100.0%
=================================================================
At December 31, 2004 At March 31, 2005
-------------------- --------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- ------------------------------- -------- ---------- -------- ----------
Pacific $ 6,075 24.3% $ 5,888 23.9%
South Atlantic 5,696 22.8% 5,613 22.8%
Middle Atlantic 4,057 16.2% 3,898 15.8%
East North Central 2,550 10.2% 2,565 10.4%
West South Central 2,024 8.1% 2,139 8.7%
New England 1,412 5.6% 1,409 5.7%
International 1,364 5.5% 1,343 5.5%
Mountain 778 3.1% 780 3.2%
West North Central 667 2.7% 631 2.5%
East South Central 268 1.1% 267 1.1%
Other 99 0.4% 98 0.4%
------------------------------------------
Total $ 24,990 100.0% $ 24,631 100.0%
==========================================
Office $ 11,500 46.0% $ 10,798 43.8%
Retail 5,698 22.8% 5,754 23.4%
Apartments 3,264 13.1% 3,330 13.5%
Industrial 2,499 10.0% 2,749 11.2%
Hotel 1,245 5.0% 1,212 4.9%
Other 784 3.1% 788 3.2%
------------------------------------------
Total $ 24,990 100.0% $ 24,631 100.0%
==========================================
39
[METLIFE LOGO]
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METLIFE, INC.
SUMMARY OF REAL ESTATE
At March 31, At June 30, At September 30, At December 31, At March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------
Wholly owned $ 4,409 $ 3,823 $ 3,911 $ 3,843 $ 3,768
Joint ventures 284 325 350 386 534
-------------------------------------------------------------------------
Subtotal 4,693 4,148 4,261 4,229 4,302
Foreclosed 3 2 2 4 4
-------------------------------------------------------------------------
Total Real Estate (1) $ 4,696 $ 4,150 $ 4,263 $ 4,233 $ 4,306
=========================================================================
(1) Includes real estate held-for-sale and held-for-investment.
METLIFE, INC.
SUMMARY OF MORTGAGES AND CONSUMER LOANS
At March 31, At June 30, At September 30, At December 31, At March 31,
Unaudited (Dollars in millions) 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGES $ 20,732 $ 22,005 $ 23,267 $ 24,990 $ 24,631
AGRICULTURAL MORTGAGES 5,226 5,377 5,593 5,907 5,929
CONSUMER LOANS 604 736 760 1,509 1,417
------------------------------------------------------------------------
TOTAL $ 26,562 $ 28,118 $ 29,620 $ 32,406 $ 31,977
========================================================================
METLIFE, INC.
DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At March 31, At June 30, At September 30, At December 31, At March 31,
Unaudited (Dollars in billions) 2004 2004 2004 2004 2005
- ---------------------------------------------------------------------------------------------------------------------------
METLIFE $ 258.7 $ 258.3 $ 265.0 $ 270.0 $ 276.9
METLIFE SEPARATE ACCOUNT 78.3 79.7 81.2 86.8 85.8
------------------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT $ 337.0 $ 338.0 $ 346.2 $ 356.8 $ 362.7
========================================================================
40
[METLIFE LOGO]
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COMPANY RATINGS AS OF APRIL 26, 2005 (1)
Moody's Standard & A.M. Best Fitch
Investors Service Poor's Company Ratings
-----------------------------------------------------
FINANCIAL STRENGTH RATINGS
- --------------------------
Metropolitan Life Insurance Company Aa2 * AA * A+ AA
Metropolitan Life Insurance Company (Short-term rating) P-1 A-1+ NR NR
First MetLife Investors Insurance Co. NR AA * A+ NR
General American Life Insurance Company Aa2 * AA * A+ AA
MetLife Investors Insurance Company Aa2 * AA * A+ AA
MetLife Investors Insurance Company of California NR AA * A+ NR
MetLife Investors USA Insurance Company Aa3 * AA * A+ AA
New England Life Insurance Company Aa2 * AA * A+ AA
Paragon Life Insurance Company NR AA * A+ AA
Texas Life Insurance Company NR NR A NR
RGA Reinsurance Company A1 AA- * A+ AA-
Metropolitan Property and Casualty Insurance Company Aa3 * NR A NR
Metropolitan Casualty Insurance Company NR NR A NR
Metropolitan Direct Property and Casualty Insurance Co. NR NR A NR
Metropolitan General Insurance Company NR NR A NR
Metropolitan Group Property & Casualty Insurance Co. NR NR A NR
Metropolitan Lloyds Insurance Company of Texas NR NR A NR
CREDIT RATINGS
- --------------
MetLife, Inc.
Senior Unsecured A2 * A * a * A
Commercial Paper P-1 * A-1 * AMB-1+* F1
Metropolitan Life Insurance Company
Surplus Notes A1 * A+ * a+ * A+
MetLife Funding, Inc.
Commercial Paper P-1 A-1+ AMB-1+* F1+
General American Life Insurance Company
Surplus Notes A1 * A+ * a+ * NR
GenAmerica Capital I
Preferred Stock A3 * BBB+ * NR A-
Reinsurance Group of America, Incorporated
Senior Unsecured Baa1 ** A- * a- A-
RGA Capital Trust I
Preferred Stock Baa2 ** BBB * bbb+ BBB+
* Moody's outlook for these ratings is negative. Standard & Poors and A.M.
Best Company ratings are credit watch with negative implications.
** Moody's rating for Reinsurance Group of America, RGA Capital Trust I and
RGA Reinsurance are under review with "developing implications."
(1) NR indicates not rated.
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