(METLIFE LOGO)
EXHIBIT 99.2
SECOND QUARTER
FINANCIAL SUPPLEMENT
JUNE 30, 2005
2
(SNOOPY GRAPHIC)
PEANUTS (C) United Feature Syndicate, Inc.
(METLIFE LOGO)
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 10
INSTITUTIONAL OPERATIONS
Statements of Operating Earnings 11
Premiums, Fees and Other Revenues by Product and Additional Statistical Information 15
Future Policy Benefits and Policyholder Account Balances and
Separate Account Liabilities 16
Other Expenses by Major Category 17
Spreads by Product 18
INDIVIDUAL OPERATIONS
Statements of Operating Earnings 19
Premiums and Deposits by Product and Mutual Fund Sales 24
Additional Statistical Information 25
Future Policy Benefits and Policyholder Account Balances and
Separate Account Liabilities 26
Insurance Expenses and Other Expenses by Major Category 27
Spreads by Product 28
AUTO & HOME OPERATIONS
Statements of Operating Earnings 29
Written Premiums by Product and Selected Financial Information and Supplemental Data 33
INTERNATIONAL OPERATIONS
Statement of Operating Earnings 34
REINSURANCE OPERATIONS
Statement of Operating Earnings 35
Pre-Tax and Pre-Minority Interest Operating Earnings by Region and Reserves by Region 36
CORPORATE, OTHER & ELIMINATIONS
Statement of Operating Earnings 37
METLIFE, INC.
Investment Results by Asset Category and Annualized Yields 38
Fixed Maturities and Equity Securities Gross Unrealized Gains and Losses Aging Schedule 40
Summary of Fixed Maturities Available for Sale by Sector and Quality Distribution, and
Summary of Commercial Mortgage Loans by Region and Property Type 41
Summary of Real Estate, Summary of Mortgages and Consumer Loans and Distribution of
Assets Under Management 42
OTHER INFORMATION
Company Ratings 43
NOTE:
THE QUARTERLY FINANCIAL SUPPLEMENT ("QFS") INCLUDES FINANCIAL MEASURES,
"OPERATING EARNINGS," "OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS" AND
"OPERATING EARNINGS PER DILUTED COMMON 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 AVAILABLE TO COMMON
SHAREHOLDERS" IS DEFINED AS OPERATING EARNINGS LESS PREFERRED STOCK DIVIDENDS.
"OPERATING EARNINGS PER DILUTED COMMON SHARE" IS CALCULATED BY DIVIDING
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS BY THE NUMBER OF WEIGHTED
AVERAGE DILUTED COMMON 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, OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS AND
OPERATING EARNINGS PER DILUTED COMMON SHARE SHOULD NOT BE VIEWED AS SUBSTITUTES
FOR GAAP NET INCOME, GAAP NET INCOME AVAILABLE TO COMMON SHAREHOLDERS AND GAAP
NET INCOME PER DILUTED COMMON SHARE, RESPECTIVELY. RECONCILIATIONS OF OPERATING
EARNINGS TO GAAP NET INCOME, OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS
TO GAAP NET INCOME AVAILABLE TO COMMON SHAREHOLDERS AND OPERATING EARNINGS PER
DILUTED COMMON SHARE TO GAAP NET INCOME PER DILUTED COMMON SHARE, THE MOST
DIRECTLY COMPARABLE GAAP MEASURES, ARE INCLUDED IN THE QFS AND IN METLIFE'S
EARNINGS PRESS RELEASE, DATED JULY 28, 2005, FOR THE QUARTER ENDED JUNE 30,
2005, WHICH ARE AVAILABLE AT WWW.METLIFE.COM.
1
(METLIFE LOGO)
CORPORATE OVERVIEW
Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended
------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
2004 2004 2004 2005 2005
------------------------------------------------------------------
Net income (1) $954 $695 $511 $987 $2,245
Preferred stock dividend 0 0 0 0 0
------------------------------------------------------------------
Net income available to common shareholders 954 695 511 987 2,245
Net investment gains (losses) 157 178 (214) (21) 2,225
Minority interest - net investment gains (losses) (8) 2 5 (9) (2)
Net investment gains (losses) tax benefit (provision) (47) (62) 71 9 (784)
------------------------------------------------------------------
Net investment gains (losses), net of income taxes (2) (3) (4) 102 118 (138) (21) 1,439
Adjustments related to policyholder benefits and
dividends 116 (74) (9) 70 (86)
Adjustments related to other expenses (5) 6 5 (15) (9)
Adjustments related to tax benefit (provision) (39) 24 1 (19) 32
------------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes (5) 72 (44) (3) 36 (63)
Cumulative effect of a change in accounting, net of income
taxes (6) 0 0 0 0 0
Discontinued operations, net of income taxes 14 5 (4) 151 0
------------------------------------------------------------------
Operating earnings available to common shareholders $766 (7) $616 (8) $656 $821 $869(9)
Net income available to common shareholders per common
share - diluted $1.26 $0.92 $0.68 $1.33 $3.02
Net investment gains (losses), net of income taxes 0.13 0.15 (0.18) (0.03) 1.94
Adjustments related to net investment gains (losses), net of
income taxes 0.10 (0.06) (0.01) 0.05 (0.09)
Cumulative effect of a change in accounting, net of income
taxes 0.00 0.00 0.00 0.00 0.00
Discontinued operations, net of income taxes 0.02 0.01 (0.01) 0.20 0.00
------------------------------------------------------------------
Operating earnings available to common shareholders - diluted $1.01 $0.82 $0.88 $1.11 $1.17
==================================================================
Weighted average common shares outstanding - diluted 758.0 753.4 747.7 739.6 743.1
Book value per common share (actual common shares
outstanding) $28.53 $30.86 $31.16 $31.43 $35.60
Book value per common share, excluding accumulated other
comprehensive income (actual common shares outstanding) $26.24 $27.11 $27.12 $28.48 $31.41
Book value per common share - diluted (weighted average
common shares outstanding) $28.23 $30.50 $30.53 $31.15 $35.16
Book value per common share, excluding accumulated other
comprehensive income - diluted (weighted average
common shares outstanding) $25.96 $26.79 $26.57 $28.23 $31.02
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For the Three Months Ended
------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
2004 2004 2004 2005 2005
------------------------------------------------------------------
Common shares outstanding, beginning of period 755.4 750.0 744.5 732.5 733.1
Treasury stock (5.4) (5.5) (12.0) 0.6 0.8
------------------------------------------------------------------
Common shares outstanding, end of period 750.0 744.5 732.5 733.1 733.9
Weighted average common shares outstanding - basic 754.5 749.2 742.3 734.0 736.5
Dilutive effect of convertible securities 0.0 0.0 0.0 0.0 0.0
Dilutive effect of stock options 3.5 4.2 5.4 5.6 6.4
Dilutive effect of LTPCP shares 0.0 0.0 0.0 0.0 0.2
------------------------------------------------------------------
Weighted average common shares outstanding - diluted 758.0 753.4 747.7 739.6 743.1
==================================================================
Policyholder Trust Shares 335.0 325.1 321.3 315.4 310.9
SUPPLEMENTAL DATA
Adjusted long-term debt to total capital (6) 21.9% 22.8% 25.2% 24.2% 29.4%
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(1) Presentation of net income throughout the QFS differs from other public
filings with respect to discontinued operations and scheduled settlement
payments on derivatives not qualifying for hedge accounting treatment.
Presentation of discontinued operations in other public filings is in
accordance with the Statement of Financial Accounting Standards ("SFAS")
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
Presentation of scheduled settlement payments on derivatives not
qualifying for hedge accounting treatment in other public filings is in
accordance with SFAS No.133, Accounting for Derivative Instruments and
Hedging Activities.
(2) Net investment gains (losses), net of income taxes, excludes scheduled
settlement payments on derivative instruments not qualifying for hedge
accounting treatment of $14 million, $8 million, $2 million, $16 million
and $8 million, for the three months ended June 30, 2004, September 30,
2004, December 31, 2004, March 31, 2005 and June 30, 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 includes discontinued operations of $85
million, ($10) million, $2 million $12 million and $1,219 million, for the
three months ended June 30, 2004, September 30, 2004, December 31, 2004,
March 31, 2005 and June 30, 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,
includes amortization of deferred policy acquisition costs, adjustments
related to the policyholder dividend obligation and amounts allocable to
certain participating contracts.
(6) Adjusted long-term debt at June 30, 2004, September 30, 2004, December 31,
2004, March 31, 2005 and June 30, 2005 consists of $5,503 million, $6,004
million, $6,669 million $6,657 million and $8,319 million of long-term
debt, respectively, $0, $0, $0, $0 and $2,134 million of junior
subordinated debt securities underlying common equity units, and $36
million, $36 million, $111 million, $113 million and $115 million of
adjusted short-term debt, respectively. Non-recourse debt not included in
adjusted long-term debt consists of $723 million, $691 million, $743
million, $757 million and $985 million, respectively. Non-core borrowing
not included in adjusted short-term debt consists of $3,182 million,
$1,530 million, $1,334 million, $1,007 million and $1,864 million,
respectively. Total capital is defined as adjusted long-term debt, shares
subject to mandatory redemption and stockholders' equity net of
accumulated other comprehensive income.
(7) Operating earnings available to common shareholders and net income for the
three months ended June 30, 2004 includes a $32 million charge, net of
income taxes ($0.04 per diluted common 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 common share),
from a reduction of a previously established premium tax liability and a
$105 million benefit ($0.14 per diluted common share) related to a
previously disclosed resolution of an IRS audit.
(8) Operating earnings available to common shareholders for the three months
ended September 30, 2004 includes a $9 million benefit ($0.01 per diluted
common share), from a revision of the estimate of income taxes for 2003.
(9) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes
($0.04 per diluted common share), associated with the reduction of a
previously established liability for settlement death benefits related to
the Company's sales practices class action settlement recorded in 1999, an
$18 million benefit, net of income taxes ($0.02 per diluted common share),
associated with the reduction of a previously established liability
related to the Company's demutualization in 2000, and an $8 million
charge, net of income taxes ($0.01 per diluted common share), associated
with establishment of a liability associated with the Argentine pension
business.
2
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATED BALANCE SHEETS
As of
------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
ASSETS (1)
Fixed maturities, at fair value $170,192 $176,091 $176,763 $182,653 $185,218
Equity securities, at fair value 1,715 1,869 2,188 2,516 2,632
Mortgage and consumer loans 28,118 29,620 32,406 31,977 33,586
Policy loans 8,766 8,801 8,899 8,953 8,975
Real estate and real estate joint ventures 4,150 4,263 4,233 4,306 3,803
Other limited partnership interests 2,806 2,846 2,907 3,051 3,383
Short-term investments 2,077 2,451 2,663 2,551 2,170
Other invested assets 5,108 4,394 4,926 4,960 6,079
------------------------------------------------------------
TOTAL INVESTMENTS 222,932 230,335 234,985 240,967 245,846
Cash and cash equivalents 4,424 3,592 4,051 3,925 13,608
Accrued investment income 2,330 2,491 2,338 2,433 2,450
Premiums and other receivables 7,370 7,089 6,696 7,515 7,822
Deferred policy acquisition costs 13,828 13,920 14,336 14,798 14,874
Assets of subsidiaries held-for-sale 196 217 379 0 0
Other assets 7,185 7,352 7,254 7,247 7,372
Separate account assets 79,747 81,181 86,769 85,786 89,459
------------------------------------------------------------
TOTAL ASSETS $338,012 $346,177 $356,808 $362,671 $381,431
============================================================
LIABILITIES AND EQUITY (1)
LIABILITIES
Future policy benefits $95,731 $98,197 $100,159 $100,630 $103,181
Policyholder account balances 79,943 81,798 83,570 85,802 $86,528
Other policyholder funds 6,920 7,036 7,258 7,530 7,657
Policyholder dividends payable 919 954 898 896 939
Policyholder dividend obligation 1,330 2,161 2,243 1,737 2,477
Short-term debt 3,218 1,566 1,445 1,120 1,979
Long-term debt 6,226 6,695 7,412 7,414 9,304
Junior subordinated debt securities underlying common
equity units 0 0 0 0 2,134
Shares subject to mandatory redemption 277 277 278 278 278
Liabilities of subsidiaries held-for-sale 65 80 240 0 0
Current income tax payable 751 501 421 31 635
Deferred income tax payable 1,972 2,468 2,473 2,414 3,201
Payables under securities loaned transactions 28,132 28,662 28,678 31,713 31,632
Other liabilities 11,383 11,626 12,140 14,282 13,856
Separate account liabilities 79,747 81,181 86,769 85,786 89,459
------------------------------------------------------------
TOTAL LIABILITIES 316,614 323,202 333,984 339,633 353,260
------------------------------------------------------------
EQUITY
Preferred stock, at par value 0 0 0 0 1
Common stock, at par value 8 8 8 8 8
Additional paid-in capital 15,013 15,027 15,037 15,043 16,974
Retained earnings 5,745 6,440 6,608 7,595 9,841
Treasury stock (1,085) (1,294) (1,785) (1,764) (1,733)
Accumulated other comprehensive income 1,717 2,794 2,956 2,156 3,080
------------------------------------------------------------
TOTAL EQUITY 21,398 22,975 22,824 23,038 28,171
------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $338,012 $346,177 $356,808 $362,671 $381,431
============================================================
(1) Certain amounts in prior periods presented throughout the QFS have been
reclassified to conform with current period presentation.
3
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended
------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,337 $5,679 $5,802 $6,002 $6,019
Universal life and investment-type product policy fees 721 737 747 791 814
Investment income, net 3,157 3,107 3,346 3,280 3,507
Other revenues 283 292 310 299 301
------------------------------------------------------------------
9,498 9,815 10,205 10,372 10,641
------------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 5,914 6,260 6,291 6,447 6,572
Interest credited to policyholder account balances 743 739 778 795 820
Interest expense 108 113 116 119 125
Other expenses 1,754 1,829 2,068 1,830 1,872
------------------------------------------------------------------
8,519 8,941 9,253 9,191 9,389
------------------------------------------------------------------
Operating earnings before provision for income taxes 979 874 952 1,181 1,252
Provision for income taxes 213 258 296 360 383
------------------------------------------------------------------
Operating earnings 766 616 656 821 869
Preferred stock dividend 0 0 0 0 0
------------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $766 (2) $616 (3) $656 $821 $869 (4)
==================================================================
NET INCOME RECONCILIATION
Operating earnings available to common shareholders $766 $616 $656 $821 $869
Net investment gains (losses) 157 178 (214) (21) 2,225
Minority interest - net investment gains (losses) (8) 2 5 (9) (2)
Net investment gains (losses) tax benefit (provision) (47) (62) 71 9 (784)
------------------------------------------------------------------
Net investment gains (losses), net of income taxes 102 118 (138) (21) 1,439
Adjustments related to policyholder benefits and dividends 116 (74) (9) 70 (86)
Adjustments related to other expenses (5) 6 5 (15) (9)
Adjustments related to tax benefit (provision) (39) 24 1 (19) 32
------------------------------------------------------------------
Adjustments related to net investment gains (losses), net of
income taxes (1) 72 (44) (3) 36 (63)
Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0
Discontinued operations, net of income taxes 14 5 (4) 151 0
------------------------------------------------------------------
Net income available to common shareholders 954 695 511 987 2,245
Preferred stock dividend 0 0 0 0 0
------------------------------------------------------------------
Net income $954 $695 $511 $987 $2,245
------------------------------------------------------------------
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation, and amounts allocable to certain
participating contracts.
(2) Operating earnings available to common shareholders 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 available to common shareholders for the three months
ended September 30, 2004 includes a $9 million benefit from a revision of
the estimate of income taxes for 2003.
(4) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes,
associated with the reduction of a previously established liability for
settlement death benefits related to the Company's sales practices class
action settlement recorded in 1999, an $18 million benefit, net of income
taxes, associated with the reduction of a previously established liability
related to the company's demutualization in 2000, and an $8 million
charge, net of income taxes, associated with establishment of a liability
associated with the Argentine pension business.
4
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATING BALANCE SHEET
AT JUNE 30, 2005
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Total investments $245,846 $90,497 $114,697 $3,908 $9,290 $11,057 $16,397
Cash and cash equivalents 13,608 (719) (291) (82) (236) 471 14,465
Accrued investment income 2,450 710 1,088 58 106 98 390
Premiums and other receivables 7,822 2,420 4,240 810 383 1,064 (1,095)
Deferred policy acquisition
costs 14,874 1,029 9,483 181 1,446 2,733 2
Assets of subsidiaries
held-for-sale 0 0 0 0 0 0 0
Other assets 7,372 1,625 2,428 560 361 151 2,247
Separate account assets 89,459 37,208 50,892 0 1,345 14 0
--------------------------------------------------------------------------------------------------
Total Assets $381,431 $132,770 $182,537 $5,435 $12,695 $15,588 $32,406
==================================================================================================
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits $103,181 $37,307 $54,226 $3,233 $5,099 $4,640 ($1,324)
Policyholder account balances 86,528 34,399 44,034 0 2,987 5,112 (4)
Other policyholder funds 7,657 2,521 2,630 19 746 1,708 33
Policyholder dividends payable 939 0 938 0 1 9 (9)
Policyholder dividend
obligation 2,477 0 2,477 0 0 0 0
Short-term debt 1,979 72 717 0 0 0 1,190
Long-term debt 9,304 0 70 0 35 478 8,721
Junior subordinated debt
securities underlying common
equity units 2,134 0 0 0 0 0 2,134
Shares subject to mandatory
redemption 278 0 0 0 0 158 120
Liabilities of subsidiaries
held-for-sale 0 0 0 0 0 0 0
Current income tax payable 635 156 68 (1) (42) (121) 575
Deferred income tax payable 3,201 155 1,451 47 113 927 508
Payables under securities
loaned transactions 31,632 11,169 14,179 99 0 0 6,185
Other liabilities 13,856 2,165 2,307 687 559 1,332 6,806
Separate account liabilities 89,459 37,208 50,892 0 1,346 13 0
--------------------------------------------------------------------------------------------------
Total Liabilities 353,260 125,152 173,989 4,084 10,844 14,256 24,935
EQUITY
Preferred stock, at par value 1 0 0 0 0 0 1
Common stock, at par value 8 0 0 0 0 0 8
Allocated equity (1) 26,815 6,589 7,624 1,167 1,447 1,077 8,911
Treasury stock (1,733) 0 0 0 0 0 (1,733)
Accumulated other comprehensive
income 3,080 1,029 924 184 404 255 284
--------------------------------------------------------------------------------------------------
Total Stockholders' Equity 28,171 7,618 8,548 1,351 1,851 1,332 7,471
--------------------------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $381,431 $132,770 $182,537 $5,435 $12,695 $15,588 $32,406
==================================================================================================
(1) Allocated equity includes additional paid-in capital and retained
earnings.
5
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 2005
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $6,019 $2,833 $1,058 $738 $455 $932 $3
Universal life and
investment-type product
policy fees 814 180 506 0 126 2 0
Investment income, net 3,507 1,332 1,592 46 194 151 192
Other revenues 301 157 111 8 (1) 21 5
---------------------------------------------------------------------------------------------------
10,641 4,502 3,267 792 774 1,106 200
---------------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 6,572 3,130 1,746 448 451 842 (45)
Interest credited to
policyholder account balances 820 312 409 0 55 44 0
Capitalization of deferred
policy acquisition costs (858) (68) (279) (119) (138) (254) 0
Amortization of deferred policy
acquisition costs 556 35 173 115 56 177 0
Other expenses 2,299 551 802 208 277 294 167
---------------------------------------------------------------------------------------------------
9,389 3,960 2,851 652 701 1,103 122
---------------------------------------------------------------------------------------------------
Operating earnings before
provision (benefit) for
income taxes 1,252 542 416 140 73 3 78
Provision (benefit) for income
taxes 383 184 138 39 23 0 (1)
---------------------------------------------------------------------------------------------------
Operating earnings 869 358 278 101 50 3 79
Preferred stock dividend 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $869 (2) $358 $278 $101 $50 $3 $79
===================================================================================================
NET INCOME RECONCILIATION
Operating earnings available to
common shareholders $869 $358 $278 $101 $50 $3 $79
Net investment gains
(losses) 2,225 423 492 (4) 7 (7) 1,314
Minority interest - net
investment gains (losses) (2) 0 0 0 0 (2) 0
Net investment gains
(losses) tax benefit
(provision) (784) (150) (171) 1 (2) 6 (468)
---------------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 1,439 273 321 (3) 5 (3) 846
Adjustments related to
policyholder benefits and
dividends (86) (37) (33) 0 (16) 0 0
Adjustments related to
other expenses (9) 0 (21) 0 0 12 0
Adjustments related to tax
benefit (provision) 32 13 19 0 6 (6) 0
---------------------------------------------------------------------------------------------------
Adjustments related to net
investment gains (losses),
net of income taxes (1) (63) (24) (35) 0 (10) 6 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 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------
Net income available to common
shareholders 2,245 607 564 98 45 6 925
Preferred stock dividend 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------
Net income $2,245 $607 $564 $98 $45 $6 $925
===================================================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(2) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes,
associated with the reduction of a previously established liability for
settlement death benefits related to the Company's sales practices class
action settlement recorded in 1999, an $18 million benefit, net of income
taxes, associated with the reduction of a previously established liability
related to the company's demutualization in 2000, and an $8 million
charge, net of income taxes, associated with establishment of a liability
associated with the Argentine pension business.
6
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 2004
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $5,337 $2,401 $1,007 $734 $392 $807 ($4)
Universal life and
investment-type product
policy fees 721 182 453 0 86 0 0
Investment income, net 3,157 1,128 1,549 44 137 136 163
Other revenues 283 155 106 6 8 15 (7)
--------------------------------------------------------------------------------------------------
9,498 3,866 3,115 784 623 958 152
--------------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 5,914 2,713 1,653 495 400 651 2
Interest credited to
policyholder account balances 743 232 427 0 32 52 0
Capitalization of deferred
policy acquisition costs (852) (141) (298) (116) (93) (204) 0
Amortization of deferred policy
acquisition costs 456 33 170 112 36 105 0
Other expenses 2,258 548 837 197 194 318 164
--------------------------------------------------------------------------------------------------
8,519 3,385 2,789 688 569 922 166
--------------------------------------------------------------------------------------------------
Operating earnings before
provision (benefit) for
income taxes 979 481 326 96 54 36 (14)
Provision (benefit) for income
taxes 213 164 109 25 13 13 (111)
--------------------------------------------------------------------------------------------------
Operating earnings 766 317 217 71 41 23 97
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $766 $317 $217 $71 $41 $23 $97
==================================================================================================
NET INCOME RECONCILIATION
Operating earnings available to
common shareholders $766 $317 $217 $71 $41 $23 $97
Net investment gains
(losses) 157 18 31 (5) (2) 32 83
Minority interest - net
investment gains (losses) (8) 0 0 0 0 (8) 0
Net investment gains
(losses) tax benefit
(provision) (47) (9) 1 2 (1) (9) (31)
--------------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 102 9 32 (3) (3) 15 52
Adjustments related to
policyholder benefits and
dividends 116 78 (11) 0 49 0 0
Adjustments related to
other expenses (5) 0 8 0 0 (13) 0
Adjustments related to tax
benefit (provision) (39) (27) 0 0 (17) 5 0
--------------------------------------------------------------------------------------------------
Adjustments related to net
investment gains (losses),
net of income taxes (1) 72 51 (3) 0 32 (8) 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 14 0 0 0 0 0 14
--------------------------------------------------------------------------------------------------
Net income available to common
shareholders 954 377 246 68 70 30 163
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Net income $954 $377 $246 $68 $70 $30 $163
==================================================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
7
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $12,021 $5,676 $2,079 $1,466 $957 $1,839 $4
Universal life and
investment-type product
policy fees 1,605 367 991 0 245 2 0
Investment income, net 6,787 2,547 3,153 89 344 312 342
Other revenues 600 313 228 17 2 32 8
--------------------------------------------------------------------------------------------------
21,013 8,903 6,451 1,572 1,548 2,185 354
--------------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 13,019 6,263 3,381 926 897 1,592 (40)
Interest credited to
policyholder account balances 1,615 598 816 0 102 99 0
Capitalization of deferred
policy acquisition costs (1,625) (132) (533) (222) (263) (475) 0
Amortization of deferred policy
acquisition costs 1,084 67 359 226 112 320 0
Other expenses 4,487 1,076 1,535 399 523 606 348
--------------------------------------------------------------------------------------------------
18,580 7,872 5,558 1,329 1,371 2,142 308
--------------------------------------------------------------------------------------------------
Operating earnings before
provision (benefit) for
income taxes 2,433 1,031 893 243 177 43 46
Provision (benefit) for income
taxes 743 349 297 66 60 13 (42)
--------------------------------------------------------------------------------------------------
Operating earnings 1,690 682 596 177 117 30 88
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $1,690(2) $682 $596 $177 $117 $30 $88
==================================================================================================
NET INCOME RECONCILIATION
Operating earnings available to
common shareholders $1,690 $682 $596 $177 $117 $30 $88
Net investment gains
(losses) 2,204 428 551 (4) 7 21 1,201
Minority interest - net
investment gains (losses) (11) 0 (4) 0 0 (7) 0
Net investment gains
(losses) tax benefit
(provision) (775) (153) (194) 1 (2) (2) (425)
--------------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 1,418 275 353 (3) 5 12 776
Adjustments related to
policyholder benefits and
dividends (16) (2) (12) 0 (2) 0 0
Adjustments related to
other expenses (24) 0 (19) 0 0 (5) 0
Adjustments related to tax
benefit (provision) 13 1 11 0 1 0 0
--------------------------------------------------------------------------------------------------
Adjustments related to net
investment gains (losses),
net of income taxes (1) (27) (1) (20) 0 (1) (5) 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
--------------------------------------------------------------------------------------------------
Net income available to common
shareholders 3,232 956 929 174 121 37 1,015
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Net income $3,232 $956 $929 $174 $121 $37 $1,015
==================================================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(2) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes,
associated with the reduction of a previously established liability for
settlement death benefits related to the Company's sales practices class
action settlement recorded in 1999, an $18 million benefit, net of income
taxes, associated with the reduction of a previously established liability
related to the Company's demutualization in 2000, and an $8 million
charge, net of income taxes, associated with establishment of a liability
associated with the Argentine pension business.
8
(METLIFE LOGO)
METLIFE, INC.
CONSOLIDATING STATEMENT OF OPERATING EARNINGS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
Corporate, Other
Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $10,723 $4,855 $1,985 $1,471 $794 $1,623 ($5)
Universal life and
investment-type product
policy fees 1,384 337 878 0 169 0 0
Investment income, net 6,157 2,224 3,070 90 260 266 247
Other revenues 596 319 223 15 12 27 0
--------------------------------------------------------------------------------------------------
18,860 7,735 6,156 1,576 1,235 1,916 242
--------------------------------------------------------------------------------------------------
EXPENSES
Policyholder benefits and
dividends 11,845 5,425 3,297 1,031 778 1,310 4
Interest credited to
policyholder account balances 1,481 459 850 0 69 103 0
Capitalization of deferred
policy acquisition costs (1,616) (202) (591) (224) (164) (435) 0
Amortization of deferred policy
acquisition costs 919 57 336 226 67 233 0
Other expenses 4,386 1,036 1,657 389 366 642 296
--------------------------------------------------------------------------------------------------
17,015 6,775 5,549 1,422 1,116 1,853 300
--------------------------------------------------------------------------------------------------
Operating earnings before
provision (benefit) for
income taxes 1,845 960 607 154 119 63 (58)
Provision (benefit) for
income taxes 484 326 203 37 34 22 (138)
--------------------------------------------------------------------------------------------------
Operating earnings 1,361 634 404 117 85 41 80
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $1,361 $634 $404 $117 $85 $41 $80
==================================================================================================
NET INCOME RECONCILIATION
Operating earnings available to
common shareholders $1,361 $634 $404 $117 $85 $41 $80
Net investment gains
(losses) 280 118 3 (5) 24 53 87
Minority interest - net
investment gains (losses) (16) 0 0 0 0 (16) 0
Net investment gains
(losses) tax benefit
(provision) (86) (45) 10 2 (7) (13) (33)
--------------------------------------------------------------------------------------------------
Net investment gains (losses),
net of income taxes 178 73 13 (3) 17 24 54
Adjustments related to
policyholder benefits and
dividends 147 61 34 0 52 0 0
Adjustments related to
other expenses (22) 0 (5) 0 0 (17) 0
Adjustments related to tax
benefit (provision) (44) (21) (11) 0 (18) 6 0
--------------------------------------------------------------------------------------------------
Adjustments related to net
investment gains (losses),
net of income taxes (1) 81 40 18 0 34 (11) 0
Cumulative effect of a change
in accounting, net of income
taxes (2) (86) (60) 0 0 (30) 5 (1)
Discontinued operations, net of
income taxes 18 0 0 0 0 0 18
--------------------------------------------------------------------------------------------------
Net income available to common
shareholders 1,552 687 435 114 106 59 151
Preferred stock dividend 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Net income $1,552 $687 $435 $114 $106 $59 $151
==================================================================================================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended 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.
9
(METLIFE LOGO)
SUMMARY OF SEGMENT OPERATING EARNINGS (1)
For Three Months Ended
-----------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ----------------------------------------------------------------------------------------------------------
INSTITUTIONAL OPERATIONS $317 $294 $308 $324 $358
INDIVIDUAL OPERATIONS 217 201 200 318 278
AUTO & HOME OPERATIONS 71 34 63 76 101
INTERNATIONAL OPERATIONS 41 45 26 67 50
REINSURANCE OPERATIONS 23 14 31 27 3
CORPORATE, OTHER & ELIMINATIONS 97 28 28 9 79
-----------------------------------------------------------------------
CONSOLIDATED $766(2) $616(3) $656 $821 $869(4)
=======================================================================
(1) A reconciliation of operating earnings available to common shareholders to
net income for each segment appears in this QFS as follows: (i)
Institutional Operations, page 11; (ii) Individual Operations, page 19;
(iii) Auto & Home Operations, page 29; (iv) International Operations, page
34; (v) Reinsurance Operations, page 35; and Corporate, Other and
Eliminations, page 37. A reconciliation of operating earnings to net
income for MetLife, Inc., Consolidated, appears on Page 4.
(2) Operating earnings available to common shareholders 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 available to common shareholders for the three months
ended September 30, 2004 includes a $9 million benefit, from a revision of
the estimate of income taxes for 2003.
(4) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes,
associated with the reduction of a previously established liability for
settlement death benefits related to the Company's sales practices class
action settlement recorded in 1999, an $18 million benefit, net of income
taxes, associated with the reduction of a previously established liability
related to the Company's demutualization in 2000, and an $8 million
charge, net of income taxes, associated with establishment of a liability
associated with the Argentine pension business.
10
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
---------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Institutional Operations 2004 2004 2004 2005 2005
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2,401 $2,662 $2,515 $2,843 $2,833
Universal life and investment-type product policy fees 182 177 171 187 180
Investment income, net 1,128 1,115 1,180 1,215 1,332
Other revenues 155 152 161 156 157
---------------------------------------------------------------
3,866 4,106 4,027 4,401 4,502
---------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 2,713 2,926 2,780 3,133 3,130
Interest credited to policyholder account balances 232 242 259 286 312
Other expenses 440 494 522 493 518
---------------------------------------------------------------
3,385 3,662 3,561 3,912 3,960
---------------------------------------------------------------
Operating earnings before provision for income taxes 481 444 466 489 542
Provision for income taxes 164 150 158 165 184
---------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $317 (3) $294 $308 $324 $358
===============================================================
NET INCOME RECONCILIATION
- -----------------------------------------------------
Operating earnings available to common shareholders $317 $294 $308 $324 $358
Net investment gains (losses) $18 105 (69) 5 423
Minority interest - net investment gains (losses) 0 0 0 0 0
Net investment gains (losses) tax benefit (provision) (9) (33) 24 (3) (150)
---------------------------------------------------------------
Net investment gains (losses), net of income taxes 9 72 (45) 2 273
Adjustments related to policyholder benefits and dividends 78 (35) (33) 35 (37)
Adjustments related to other expenses 0 0 0 0 0
Adjustments related to tax benefit (provision) (27) 11 12 (12) 13
---------------------------------------------------------------
Adjustments related to net investment
gains (losses), net of income taxes (1) 51 (24) (21) 23 (24)
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 available to common shareholders 377 342 242 349 607
Preferred stock dividend 0 0 0 0 0
---------------------------------------------------------------
Net income $377 $342 $242 $349 $607
---------------------------------------------------------------
For the Year-to-Date Period Ended
---------------------------------------
June 30, June 30,
Institutional Operations 2004 2005
- -----------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $4,855 $5,676
Universal life and investment-type product policy fees 337 367
Investment income, net 2,224 2,547
Other revenues 319 313
---------------------------------------
7,735 8,903
---------------------------------------
EXPENSES
Policyholder benefits and dividends 5,425 6,263
Interest credited to policyholder account balances 459 598
Other expenses 891 1,011
---------------------------------------
6,775 7,872
---------------------------------------
Operating earnings before provision for income taxes 960 1,031
Provision for income taxes 326 349
---------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 634 (3) 682
=======================================
NET INCOME RECONCILIATION
- -----------------------------------------------------
Operating earnings available to common shareholders $634 $682
Net investment gains (losses) 118 428
Minority interest - net investment gains (losses) 0 0
Net investment gains (losses) tax benefit (provision) (45) (153)
---------------------------------------
Net investment gains (losses), net of income taxes 73 275
Adjustments related to policyholder benefits and dividends 61 (2)
Adjustments related to other expenses 0 0
Adjustments related to tax benefit (provision) (21) 1
---------------------------------------
Adjustments related to net investment gains (losses), net of income taxes (1) 40 (1)
Cumulative effect of a change in accounting, net of income taxes (2) (60) 0
Discontinued operations, net of income taxes 0 0
---------------------------------------
Net income available to common shareholders 687 956
Preferred stock dividend 0 0
---------------------------------------
Net income $687 $956
---------------------------------------
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs and amounts
allocable to certain participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
(3) Operating earnings available to common shareholders 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.
11
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Group Life 2004 2004 2004 2005 2005
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,261 $1,225 $1,242 $1,318 $1,385
Universal life and investment-type product policy fees 182 177 171 187 180
Investment income, net 269 250 252 268 278
Other revenues 13 10 14 13 13
--------------------------------------------------------------
1,725 1,662 1,679 1,786 1,856
--------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,338 1,284 1,296 1,408 1,486
Interest credited to policyholder account balances 101 100 101 99 105
Other expenses 88 126 136 129 142
--------------------------------------------------------------
1,527 1,510 1,533 1,636 1,733
--------------------------------------------------------------
Operating earnings before provision for income taxes 198 152 146 150 123
Provision for income taxes 68 52 50 50 43
--------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $130 $100 $96 $100 $80
==============================================================
Net investment gains (losses), net of income taxes (4) 4 (44) (10) 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 available to common shareholders 126 104 52 90 80
Preferred stock dividend 0 0 0 0 0
--------------------------------------------------------------
Net income $126 $104 $52 $90 $80
--------------------------------------------------------------
For the Year-to-Date Period Ended
------------------------------------------
June 30, June 30,
Group Life 2004 2005
- --------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $2,577 2,703
Universal life and investment-type product policy fees 337 367
Investment income, net 528 546
Other revenues 32 26
------------------------------------------
3,474 3,642
------------------------------------------
EXPENSES
Policyholder benefits and dividends 2,748 2,894
Interest credited to policyholder account balances 201 204
Other expenses 211 271
------------------------------------------
3,160 3,369
------------------------------------------
Operating earnings before provision for income taxes 314 273
Provision for income taxes 107 93
------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $207 $180
==========================================
Net investment gains (losses), net of income taxes 13 (10)
Adjustments related to net investment gains
(losses), net of income taxes 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0
Discontinued operations, net of income taxes 0 0
------------------------------------------
Net income available to common shareholders 220 170
Preferred stock dividend 0 0
------------------------------------------
Net income $220 $170
------------------------------------------
12
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Retirement & Savings 2004 2004 2004 2005 2005
- --------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $225 $504 $298 $495 $383
Universal life and investment-type product policy fees 0 0 0 0 0
Investment income, net 736 750 803 817 898
Other revenues 55 54 55 57 56
------------------------------------------------------------
1,016 1,308 1,156 1,369 1,337
------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 598 868 675 862 750
Interest credited to policyholder account balances 131 142 158 187 207
Other expenses 84 83 88 78 73
------------------------------------------------------------
813 1,093 921 1,127 1,030
------------------------------------------------------------
Operating earnings before provision for income taxes 203 215 235 242 307
Provision for income taxes 68 71 78 81 103
------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $135 $144 $157 $161 $204
============================================================
Net investment gains (losses), net of income taxes 28 49 4 13 237
Adjustments related to net investment gains
(losses), net of income taxes 20 (3) (15) 11 (10)
Cumulative effect of a change in accounting,
net of income taxes (1) 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
------------------------------------------------------------
Net income available to common shareholders 183 190 146 185 431
Preferred stock dividend 0 0 0 0 0
------------------------------------------------------------
Net income $183 $190 $146 $185 $431
------------------------------------------------------------
For the Year-to-Date Period Ended
------------------------------------------
June 30, June 30,
Retirement & Savings 2004 2005
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $490 $878
Universal life and investment-type product policy fees 0 0
Investment income, net 1,466 1,715
Other revenues 112 113
------------------------------------------
2,068 2,706
------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,187 1,612
Interest credited to policyholder account balances 258 394
Other expenses 153 151
------------------------------------------
1,598 2,157
------------------------------------------
Operating earnings before provision for income taxes 470 549
Provision for income taxes 157 184
------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $313 $365
==========================================
Net investment gains (losses), net of income taxes 60 250
Adjustments related to net investment gains
(losses), net of income taxes 20 1
Cumulative effect of a change in accounting,
net of income taxes (1) (40) 0
Discontinued operations, net of income taxes 0 0
------------------------------------------
Net income available to common shareholders 353 616
Preferred stock dividend 0 0
------------------------------------------
Net income $353 $616
------------------------------------------
(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.
13
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
---------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Non-Medical Health & Other 2004 2004 2004 2005 2005
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $915 $933 $975 $1,030 $1,065
Universal life and investment-type product policy fees 0 0 0 0 0
Investment income, net 123 115 125 130 156
Other revenues 87 88 92 86 88
--------------------------------------------------------------
1,125 1,136 1,192 1,246 1,309
--------------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 777 774 809 863 894
Interest credited to policyholder account balances 0 0 0 0 0
Other expenses 268 285 298 286 303
--------------------------------------------------------------
1,045 1,059 1,107 1,149 1,197
--------------------------------------------------------------
Operating earnings before provision for income taxes 80 77 85 97 112
Provision for income taxes 28 27 30 34 38
--------------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $52 $50 $55 $63 $74
==============================================================
Net investment gains (losses), net of income taxes (15) 19 (5) (1) 36
Adjustments related to net investment gains
(losses), net of income taxes 31 (21) (6) 12 (14)
Cumulative effect of a change in accounting,
net of income taxes (1) 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
--------------------------------------------------------------
Net income available to common shareholders 68 48 44 74 96
Preferred stock dividend 0 0 0 0 0
--------------------------------------------------------------
Net income $68 $48 $44 $74 $96
--------------------------------------------------------------
For the Year-to-Date Period Ended
--------------------------------------------
June 30, June 30,
Non-Medical Health & Other 2004 2005
- -----------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1,788 $2,095
Universal life and investment-type product policy fees 0 0
Investment income, net 230 286
Other revenues 175 174
--------------------------------------------
2,193 2,555
--------------------------------------------
EXPENSES
Policyholder benefits and dividends 1,490 1,757
Interest credited to policyholder account balances 0 0
Other expenses 527 589
--------------------------------------------
2,017 2,346
--------------------------------------------
Operating earnings before provision for income taxes 176 209
Provision for income taxes 62 72
--------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $114 $137
============================================
Net investment gains (losses), net of income taxes 0 35
Adjustments related to net investment gains
(losses), net of income taxes 20 (2)
Cumulative effect of a change in accounting,
net of income taxes (1) (20) 0
Discontinued operations, net of income taxes 0 0
--------------------------------------------
Net income available to common shareholders 114 170
Preferred stock dividend 0 0
--------------------------------------------
Net income $114 $170
--------------------------------------------
(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.
14
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT
AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended
-------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT (1)
Group Life $1,456 $1,412 $1,427 $1,518 $1,578
Retirement & Savings 280 558 353 552 439
Non-Medical Health & Other 1,002 1,021 1,067 1,116 1,153
-------------------------------------------------------------------
Total Premiums, Fees and Other Revenues $2,738 $2,991 $2,847 $3,186 $3,170
===================================================================
Group Disability (Included in Non-Medical Health & Other) $252 $253 $276 $282 $291
ADDITIONAL STATISTICAL INFORMATION
INCURRED LOSS RATIO (MORTALITY EXPERIENCE):
Term Life 93.2% 90.9% 90.7% 94.9% 96.2%
INCURRED LOSS RATIO (MORBIDITY EXPERIENCE):
Group Disability 92.8% 91.9% 98.8% 91.1% 88.0%
NUMBER OF SALES REPRESENTATIVES 794 779 762 783 778
(1) 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 $1,444 $1,459 $1,513 $1,602 $1,582
Retirement & Savings 280 558 353 552 439
Non-Medical Health & Other 1,000 1,024 1,061 1,123 1,152
-------------------------------------------------------------------
Total Premiums, Fees and Other Revenues $2,724 $3,041 $2,927 $3,277 $3,173
===================================================================
15
(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
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Group Life 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $14,642 $14,834 $14,959 $15,022 $15,174
Premiums and deposits 2,638 2,497 2,446 2,697 2,869
Interest on reserves 131 131 135 135 142
Surrenders and withdrawals (1,118) (1,081) (1,115) (1,159) (1,324)
Benefits and reserves (1,338) (1,287) (1,288) (1,409) (1,487)
Other (121) (135) (115) (112) (102)
---------------------------------------------------------------------------------------------
Balance, end of period $14,834 $14,959 $15,022 $15,174 $15,272
=============================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Retirement & Savings 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $42,634 $42,287 $44,497 $45,979 $47,472
Premiums and deposits 2,003 2,525 2,696 2,699 2,095
Interest on reserves 551 567 595 613 634
Surrenders and withdrawals (928) (1,361) (1,566) (807) (1,743)
Benefits and reserves (470) (504) (495) (484) (494)
Other (1) (1,503) 983 252 (528) 1,310
---------------------------------------------------------------------------------------------
Balance, end of period $42,287 $44,497 $45,979 $47,472 $49,274
=============================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Non-Medical Health & Other 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $6,003 $6,407 $6,601 $6,784 $6,931
Premiums and deposits 835 843 899 942 981
Interest on reserves 60 63 64 67 68
Surrenders and withdrawals 25 27 18 19 23
Benefits and reserves (739) (753) (791) (839) (868)
Other (1) 223 14 (7) (42) 25
---------------------------------------------------------------------------------------------
Balance, end of period $6,407 $6,601 $6,784 $6,931 $7,160
=============================================================================================
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Group Life 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $7,754 $8,066 $8,337 $8,192 $7,976
Premiums and deposits 156 182 133 114 120
Investment performance 239 166 63 168 40
Surrenders and withdrawals (86) (77) (341) (498) (86)
Policy charges 0 0 0 0 0
Other 3 0 0 0 0
---------------------------------------------------------------------------------------------
Balance, end of period $8,066 $8,337 $8,192 $7,976 $8,050
=============================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Retirement & Savings 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $27,376 $26,962 $27,666 $28,507 $27,302
Premiums and deposits 694 834 758 1,426 828
Investment performance (277) 732 971 (1,105) 1,851
Surrenders and withdrawals (842) (818) (883) (1,511) (1,051)
Policy charges (20) (19) (19) (20) (21)
Other (1) 31 (25) 14 5 (27)
---------------------------------------------------------------------------------------------
Balance, end of period $26,962 $27,666 $28,507 $27,302 $28,882
=============================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Non-Medical Health & Other 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $139 $160 $200 $214 $243
Premiums and deposits 82 89 76 88 85
Investment performance 14 62 (45) (108) 191
Surrenders and withdrawals (25) (27) (18) (19) (23)
Policy charges (9) (9) (28) (17) (18)
Other (1) (41) (75) 29 85 (202)
---------------------------------------------------------------------------------------------
Balance, end of period $160 $200 $214 $243 $276
=============================================================================================
16
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended
----------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- --------------------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES BY MAJOR CATEGORY
Direct and allocated expenses $361 $355 $394 $358 $372
Pension and other post-retirement benefit costs 21 17 17 19 19
Premium taxes and other taxes, licenses and fees (11) 38 33 31 41
----------------------------------------------------------------------------
Sub-total Insurance Expenses 371 410 444 408 432
Commissions and other expenses 69 84 78 85 86
----------------------------------------------------------------------------
Total Other Expenses $440 $494 $522 $493 $518
============================================================================
17
(METLIFE LOGO)
INSTITUTIONAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
For the Three Months Ended
---------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Group Life 2004 2004 2004 2005 2005
- -------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 5.87% 5.32% 5.34% 5.58% 5.75%
Average crediting rate 3.44% 3.45% 3.58% 3.59% 3.75%
---------------------------------------------------------------------------------
Spread 2.43% 1.87% 1.76% 1.99% 2.00%
=================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Retirement & Savings 2004 2004 2004 2005 2005
- -------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 6.93% 6.85% 7.17% 6.91% 7.43%
Average crediting rate 5.33% 5.29% 5.34% 5.44% 5.48%
---------------------------------------------------------------------------------
Spread 1.60% 1.56% 1.83% 1.47% 1.95%
=================================================================================
For the Three Months Ended
---------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Non-Medical Health & Other 2004 2004 2004 2005 2005
- -------------------------------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY SEGMENT (%)
Investment income yield 7.77% 6.86% 7.53% 7.34% 9.05%
Average crediting rate 5.33% 5.43% 5.47% 5.45% 5.44%
---------------------------------------------------------------------------------
Spread 2.44% 1.43% 2.06% 1.89% 3.61%
=================================================================================
18
(METLIFE LOGO)
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date
For the Three Months Ended Period Ended
------------------------------------------------------------ -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Individual Operations 2004 2004 2004 2005 2005 2004 2005
- ---------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Premiums $1,007 $1,023 $1,164 $1,021 $1,058 $1,985 $2,079
Universal life and investment-type
product policy fees 453 467 486 485 506 878 991
Investment income, net 1,549 1,528 1,552 1,561 1,592 3,070 3,153
Other revenues 106 109 112 117 111 223 228
------------------------------------------------------------ -----------------------
3,115 3,127 3,314 3,184 3,267 6,156 6,451
------------------------------------------------------------ -----------------------
EXPENSES
Policyholder benefits and dividends 1,653 1,681 1,801 1,635 1,746 3,297 3,381
Interest credited to policyholder
account balances 427 412 412 407 409 850 816
Capitalization of deferred policy
acquisition costs (298) (268) (284) (254) (279) (591) (533)
Amortization of deferred policy
acquisition costs 170 210 228 186 173 336 359
Other expenses 837 789 857 733 802 1,657 1,535
------------------------------------------------------------ -----------------------
2,789 2,824 3,014 2,707 2,851 5,549 5,558
------------------------------------------------------------ -----------------------
Operating earnings before provision
for income taxes 326 303 300 477 416 607 893
Provision for income taxes 109 102 100 159 138 203 297
------------------------------------------------------------ -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $217 $201 $200 $318 $278 $404 $596
============================================================ =======================
NET INCOME RECONCILIATION
Operating earnings $217 $201 $200 $318 $278 $404 $596
Net investment gains (losses) 31 105 (50) 59 492 3 551
Minority interest - net investment
gains (losses) 0 0 4 (4) 0 0 (4)
Net investment gains (losses) tax
benefit (provision) 1 (37) 11 (23) (171) 10 (194)
------------------------------------------------------------ -----------------------
Net investment gains (losses), net of
income taxes 32 68 (35) 32 321 13 353
Adjustments related to policyholder
benefits and dividends (11) (25) 30 21 (33) 34 (12)
Adjustments related to other expenses 8 (8) 4 2 (21) (5) (19)
Adjustments related to tax benefit
(provision) 0 12 (12) (8) 19 (11) 11
------------------------------------------------------------ -----------------------
Adjustments related to net investment gains
(losses), net of income taxes (1) (3) (21) 22 15 (35) 18 (20)
Cumulative effect of a change in accounting,
net of income taxes (2) 0 0 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------ -----------------------
Net income available to common shareholders 246 248 187 365 564 435 929
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------ -----------------------
Net income $246 $248 $187 $365 $564 $435 $929
============================================================ =======================
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs, adjustments to
the policyholder dividend obligation and amounts allocable to certain
participating contracts.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended 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 Year-to-Date
For the Three Months Ended Period Ended
------------------------------------------------------------ -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Traditional Life 2004 2004 2004 2005 2005 2004 2005
- ---------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Premiums $980 $989 $1,113 $957 $984 $1,939 $1,941
Universal life and investment-type
product policy fees 0 0 0 0 0 0 0
Investment income, net 848 831 825 832 821 1,691 1,653
Other revenues 0 1 4 2 0 1 2
------------------------------------------------------------ -----------------------
1,828 1,821 1,942 1,791 1,805 3,631 3,596
------------------------------------------------------------ -----------------------
EXPENSES
Policyholder benefits and dividends 1,496 1,517 1,629 1,433 1,507 2,976 2,940
Interest credited to policyholder
account balances 0 0 0 0 0 0 0
Capitalization of deferred policy
acquisition costs (42) (44) (50) (43) (60) (83) (103)
Amortization of deferred policy
acquisition costs 51 51 74 53 48 107 101
Other expenses 206 213 240 184 208 417 392
------------------------------------------------------------ -----------------------
1,711 1,737 1,893 1,627 1,703 3,417 3,330
------------------------------------------------------------ -----------------------
Operating earnings before provision
for income taxes 117 84 49 164 102 214 266
Provision for income taxes 40 29 17 55 35 73 90
------------------------------------------------------------ -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $77 $55 $32 $109 $67 $141 $176
============================================================ =======================
Net investment gains (losses), net of
income taxes 20 60 15 45 223 5 268
Adjustments related to net investment gains
(losses), net of income taxes (4) (18) 18 15 (22) 18 (7)
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------ -----------------------
Net income available to common shareholders 93 97 65 169 268 164 437
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------ -----------------------
Net income $93 $97 $65 $169 $268 $164 $437
============================================================ =======================
20
(METLIFE LOGO)
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Variable & Universal Life 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 0 $ 0 $ 0 $ 0 $ 0
Universal life and investment-type product policy fees 264 279 272 265 277
Investment income, net 143 147 149 152 151
Other revenues (3) 1 (1) 0 (3)
-------------------------------------------------------
404 427 420 417 425
-------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 88 76 56 93 97
Interest credited to policyholder account balances 116 117 114 114 117
Capitalization of deferred policy acquisition costs (86) (74) (79) (65) (72)
Amortization of deferred policy acquisition costs 52 73 82 49 64
Other expenses 186 176 186 148 160
-------------------------------------------------------
356 368 359 339 366
-------------------------------------------------------
Operating earnings before provision for income taxes 48 59 61 78 59
Provision for income taxes 16 20 21 27 20
-------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 32 $ 39 $ 40 $ 51 $ 39
=======================================================
Net investment gains (losses), net of income taxes (5) 5 (1) (8) 9
Adjustments related to net investment gains (losses), net of income taxes 2 (2) 0 (2) (2)
Cumulative effect of a change in accounting, net of income taxes (1) 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
-------------------------------------------------------
Net income available to common shareholders 29 42 39 41 46
Preferred stock dividend 0 0 0 0 0
-------------------------------------------------------
Net income $ 29 $ 42 $ 39 $ 41 $ 46
-------------------------------------------------------
For the Year-to-Date Period Ended
------------------------------------
June 30, June 30,
2004 2005
------------------------------------
REVENUES
Premiums $ 0 $ 0
Universal life and investment-type product policy fees 509 542
Investment income, net 283 303
Other revenues 1 (3)
------------------------------------
793 842
------------------------------------
EXPENSES
Policyholder benefits and dividends 175 190
Interest credited to policyholder account balances 229 231
Capitalization of deferred policy acquisition costs (156) (137)
Amortization of deferred policy acquisition costs 100 113
Other expenses 361 308
------------------------------------
709 705
------------------------------------
Operating earnings before provision for income taxes 84 137
Provision for income taxes 28 47
------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 56 $ 90
====================================
Net investment gains (losses), net of income taxes (2) 1
Adjustments related to net investment gains (losses), net of income taxes 1 (4)
Cumulative effect of a change in accounting, net of income taxes (1) (11) 0
Discontinued operations, net of income taxes 0 0
------------------------------------
Net income available to common shareholders 44 87
Preferred stock dividend 0 0
------------------------------------
Net income $ 44 $ 87
------------------------------------
(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.
21
(METLIFE LOGO)
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
--------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Annuities 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $26 $34 $48 $63 $73
Universal life and investment-type product policy fees 156 156 177 185 198
Investment income, net 494 491 513 511 551
Other revenues 10 11 11 11 13
--------------------------------------------------------
686 692 749 770 835
--------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 58 78 111 96 113
Interest credited to policyholder account balances 281 266 267 261 260
Capitalization of deferred policy acquisition costs (169) (149) (154) (145) (147)
Amortization of deferred policy acquisition costs 64 84 62 81 57
Other expenses 302 268 281 259 292
--------------------------------------------------------
536 547 567 552 575
--------------------------------------------------------
Operating earnings before provision for income taxes 150 145 182 218 260
Provision for income taxes 49 47 59 71 85
--------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $101 $98 $123 $147 $175
========================================================
Net investment gains (losses), net of income taxes 17 9 (58) 1 94
Adjustments related to net investment gains (losses), net of income taxes (1) (1) 4 2 (11)
Cumulative effect of a change in accounting, net of income taxes (1) 0 0 0 0 0
Discontinued operations, net of income taxes 0 0 0 0 0
--------------------------------------------------------
Net income available to common shareholders 117 106 69 150 258
Preferred stock dividend 0 0 0 0 0
--------------------------------------------------------
Net income $117 $106 $69 $150 $258
--------------------------------------------------------
For the Year-to-Date Period Ended
---------------------------------------
June 30, June 30,
2004 2005
---------------------------------------
REVENUES
Premiums $44 $136
Universal life and investment-type product policy fees 307 383
Investment income, net 969 1,062
Other revenues 17 24
---------------------------------------
1,337 1,605
---------------------------------------
EXPENSES
Policyholder benefits and dividends 126 209
Interest credited to policyholder account balances 561 521
Capitalization of deferred policy acquisition costs (350) (292)
Amortization of deferred policy acquisition costs 123 138
Other expenses 601 551
---------------------------------------
1,061 1,127
---------------------------------------
Operating earnings before provision for income taxes 276 478
Provision for income taxes 90 156
---------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $186 $322
=======================================
Net investment gains (losses), net of income taxes 19 95
Adjustments related to net investment gains (losses), net of income taxes (1) (9)
Cumulative effect of a change in accounting, net of income taxes (1) 11 0
Discontinued operations, net of income taxes 0 0
---------------------------------------
Net income available to common shareholders 215 408
Preferred stock dividend 0 0
---------------------------------------
Net income $215 $408
---------------------------------------
(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.
22
(METLIFE LOGO)
INDIVIDUAL OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended
-------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Other 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $1 $0 $3 $1 $1
Universal life and investment-type product policy fees 33 32 37 35 31
Investment income, net 64 59 65 66 69
Other revenues 99 96 98 104 101
-------------------------------------------------------
197 187 203 206 202
-------------------------------------------------------
EXPENSES
Policyholder benefits and dividends 11 10 5 13 29
Interest credited to policyholder account balances 30 29 31 32 32
Capitalization of deferred policy acquisition costs (1) (1) (1) (1) 0
Amortization of deferred policy acquisition costs 3 2 10 3 4
Other expenses 143 132 150 142 142
-------------------------------------------------------
186 172 195 189 207
-------------------------------------------------------
Operating earnings before provision for income taxes 11 15 8 17 (5)
Provision for income taxes 4 6 3 6 (2)
-------------------------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $7 $9 $5 $11 ($3)
=======================================================
Net investment gains (losses), net of income taxes 0 (6) 9 (6) (5)
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 available to common shareholders 7 3 14 5 (8)
Preferred stock dividend 0 0 0 0 0
-------------------------------------------------------
Net income $7 $3 $14 $5 ($8)
-------------------------------------------------------
For the Year-to-Date Period Ended
------------------------------------
June 30, June 30,
2004 2005
------------------------------------
REVENUES
Premiums $2 $2
Universal life and investment-type product policy fees 62 66
Investment income, net 127 135
Other revenues 204 205
------------------------------------
395 408
------------------------------------
EXPENSES
Policyholder benefits and dividends 20 42
Interest credited to policyholder account balances 60 64
Capitalization of deferred policy acquisition costs (2) (1)
Amortization of deferred policy acquisition costs 6 7
Other expenses 278 284
------------------------------------
362 396
------------------------------------
Operating earnings before provision for income taxes 33 12
Provision for income taxes 12 4
------------------------------------
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $21 $8
====================================
Net investment gains (losses), net of income taxes (9) (11)
Adjustments related to net investment gains (losses), net of income taxes 0 0
Cumulative effect of a change in accounting, net of income taxes 0 0
Discontinued operations, net of income taxes 0 0
------------------------------------
Net income available to common shareholders 12 (3)
Preferred stock dividend 0 0
------------------------------------
Net income $12 ($3)
------------------------------------
23
(METLIFE LOGO)
================================================================================
INDIVIDUAL OPERATIONS
PREMIUMS AND DEPOSITS BY PRODUCT AND MUTUAL FUND SALES
<Table>
<Caption>
----------------------------------------------------------------------
For the Three Months Ended
----------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS AND DEPOSITS BY PRODUCT (1)
TOTAL (2)
Life First Year Premiums & Deposits
Traditional Life $47 $44 $51 $47 $52
Variable Life 1st Year excluding Single Premium COLI/BOLI 61 51 51 57 41
Universal Life 1st Year excluding Single Premium COLI/BOLI 116 125 118 102 110
Single Premium COLI/BOLI 49 20 4 1 10
----------------------------------------------------------------------
Total Life First Year Premiums & Deposits (3) 273 240 224 207 213
Life Renewal Premiums & Deposits
Traditional Life 1,030 1,017 1,163 943 1,020
Variable & Universal Life 418 447 452 472 416
Annuities (4) 2,882 2,410 2,566 2,540 2,496
Other 251 245 252 273 224
----------------------------------------------------------------------
Total Premiums and Deposits $4,854 $4,359 $4,657 $4,435 $4,369
======================================================================
PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS
Variable & Universal Life $287 $300 $294 $279 $246
Annuities 1,523 1,352 1,525 1,532 1,503
Other 157 152 157 161 137
----------------------------------------------------------------------
Total Separate Accounts $1,967 $1,804 $1,976 $1,972 $1,886
======================================================================
ANNUITY DEPOSITS BY TYPE
Fixed Annuity Deposits $659 $403 $497 $429 $356
Variable Annuity Deposits 2,223 2,007 2,069 2,111 2,140
----------------------------------------------------------------------
Total Annuity Deposits $2,882 $2,410 $2,566 $2,540 $2,496
======================================================================
----------------------------------------------------------------------
MUTUAL FUND SALES $864 $689 $935 $954 $916
----------------------------------------------------------------------
</Table>
(1) Statutory premiums direct and assumed.
(2) Includes premiums and deposits to separate accounts and excludes
company sponsored internal changes.
(3) Of the $213 million of First Year Life Premiums and Deposits received
during the three months ended June 30, 2005, approximately 60% were
distributed through MetLife agents, 19% through New England Financial
agents, 17% through MetLife's Independent Distribution channel and 4%
through other distribution channels.
(4) Of the $2,496 million of Annuity Deposits received during the three
months ended June 30, 2005, approximately 32% were distributed through
MetLife agents, 9% through New England Financial agents, 50% through
MetLife's Independent Distribution channel and 9% through MetLife's
Resources representatives.
24
(METLIFE LOGO)
================================================================================
INDIVIDUAL OPERATIONS
ADDITIONAL STATISTICAL INFORMATION
<Table>
<Caption>
-------------------------------------------------------------------------
At or for the Three Months Ended
-------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS,
EXCLUDING TRANSFERS FROM GENERAL ACCOUNT:
Variable & Universal
Life 44.1% 46.4% 43.0% 43.0% 41.4%
Annuities 52.9% 56.1% 58.3% 60.3% 60.2%
Other 62.5% 62.2% 62.3% 58.9% 60.9%
MORTALITY AS A PERCENTAGE OF EXPECTED 78.1% 78.8% 85.6% 85.6% 84.7%
LAPSES / SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (1)
Traditional Life 6.2% 6.2% 6.1% 6.2% 6.1%
Variable & Universal Life 7.1% 7.0% 7.0% 6.6% 6.3%
Variable Annuities 7.7% 7.5% 7.6% 7.6% 7.7%
Fixed Annuities 8.0% 7.6% 6.7% 6.3% 5.8%
NUMBER OF SALES REPRESENTATIVES
MetLife Distribution 5,633 5,700 5,597 5,718 5,773
New England Financial 2,553 2,504 2,383 2,231 2,255
General American (2) 448 430 380 343 345
Independent Distribution Wholesalers 101 102 100 116 124
MetLife Resources 397 399 427 422 428
Walnut Street Securities (3) 1,413 1,370 1,359 1,294 1,263
P&C Specialists 500 529 544 570 617
-------------------------------------------------------------------------
Total Agents 11,045 11,034 10,790 10,694 10,805
-------------------------------------------------------------------------
</Table>
(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 June 30, 2005, the number of Walnut Street Securities
representatives includes 100 brokers who are also reported as General
American agents above.
25
METLIFE
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
-------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Traditional Life 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $48,613 $48,828 $48,893 $49,209 $49,371
Premiums and deposits (1) 1,067 1,069 1,199 1,032 1,066
Interest on reserves 491 493 494 499 503
Surrenders and withdrawals (462) (466) (472) (447) (437)
Benefit payments (437) (464) (458) (484) (492)
Other (444) (567) (447) (438) (429)
-------------------------------------------------------------------------------------------
Balance, end of period $48,828 $48,893 $49,209 $49,371 $49,582
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
For the Three Months Ended
-------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Variable & Universal Life 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $9,644 $9,797 $9,887 $9,991 $10,087
Premiums and deposits (1) (2) 370 340 342 353 320
Interest on reserves 115 114 115 112 117
Surrenders and withdrawals (158) (153) (168) (161) (160)
Net transfers from (to) separate account 56 44 54 44 55
Policy charges (204) (224) (228) (225) (231)
Benefit payments (27) (25) (24) (27) (30)
Other 1 (6) 13 0 (4)
-------------------------------------------------------------------------------------
Balance, end of period $9,797 $9,887 $9,991 $10,087 $10,154
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
For the Three Months Ended
-------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Annuities 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $31,491 $31,908 $31,955 $32,184 $32,304
Premiums and deposits (1) (2) 1,432 1,120 1,182 1,089 1,101
Interest on reserves 390 297 339 312 309
Surrenders and withdrawals (740) (517) (677) (587) (679)
Net transfers from (to) separate account (566) (339) (425) (427) (346)
Policy charges (4) (8) (1) (1) (3)
Benefit payments (99) (235) (191) (277) (273)
Other 4 (271) 2 11 8
---------------------------------------------------------------------------------------
Balance, end of period $31,908 $31,955 $32,184 $32,304 $32,421
---------------------------------------------------------------------------------------
SEPARATE ACCOUNT LIABILITIES
--------------------------------------------------------------------------------------------
For the Three Months Ended
--------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Variable & Universal Life 2004 2004 2004 2005 2005
----------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $6,989 $7,130 $7,258 $7,785 $7,747
Premiums and deposits (1) 287 299 294 279 247
Investment performance 85 (123) 583 (94) 135
Surrenders and withdrawals (104) (98) (224) (109) (109)
Net transfers from (to) fixed account (56) (44) (54) (44) (55)
Policy charges (71) (69) (72) (70) (65)
Other 0 163 0 0 0
--------------------------------------------------------------------------------------
Balance, end of period $7,130 $7,258 $7,785 $7,747 $7,900
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
For the Three Months Ended
-------------------------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Annuities 2004 2004 2004 2005 2005
----------------------------------------------------------------------------------------------------------------------------------
Balance, beginning of period $31,505 $32,989 $33,491 $37,597 $38,051
Premiums and deposits (1) 1,524 1,353 1,524 1,532 1,503
Investment performance 144 (413) 3,039 (604) 806
Surrenders and withdrawals (642) (668) (744) (764) (796)
Net transfers from (to) fixed account 566 339 425 427 346
Policy charges (112) (109) (138) (137) (139)
Other 4 0 0 0 0
----------------------------------------------------------------------------------------
Balance, end of period $32,989 $33,491 $37,597 $38,051 $39,771
----------------------------------------------------------------------------------------
(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.
26
METLIFE
INDIVIDUAL OPERATIONS
INSURANCE EXPENSES AND OTHER
EXPENSES BY MAJOR CATEGORY
-------------------------------------------------------------------------
For the Three Months Ended
-------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE EXPENSES (NET OF CAPITALIZATION
OF DAC)
Insurance Expenses $752 $705 $753 $630 $698
DAC Capitalization (1) (333) (300) (308) (273) (293)
-------------------------------------------------------------------------
Net $419 $405 $445 $357 $405
=========================================================================
OTHER EXPENSES BY MAJOR CATEGORY
Commissions $241 $218 $218 $203 $213
Other deferrable expenses 114 103 114 93 103
Direct and allocated expenses, not deferred 335 327 370 276 344
Pension and other post-retirement benefit costs 32 28 27 29 29
Premium taxes and other taxes, licenses and fees 30 29 24 29 9
-------------------------------------------------------------------------
Subtotal Insurance Expenses $752 $705 $753 $630 $698
Broker-dealer and other expenses 134 126 141 132 131
Reinsurance allowances (49) (42) (37) (29) (27)
-------------------------------------------------------------------------
Total Other Expenses $837 $789 $857 $733 $802
-------------------------------------------------------------------------
(1) Excludes $35 million, $32 million, $24 million, $19 million and $14 million
of DAC capitalization related to reinsurance allowances for the three
months ended June 30, 2004, September 30, 2004, December 31, 2004, March
31, 2005 and June 30, 2005, respectively.
27
[METLIFE LOGO]
INDIVIDUAL OPERATIONS
SPREADS BY PRODUCT
UNAUDITED
--------------------------------------------------------------------
For the Three Months Ended
--------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
VARIABLE & UNIVERSAL LIFE 2004 2004 2004 2005 2005
- --------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 7.05% 7.04% 7.00% 7.07% 6.96%
Average crediting rate 5.25% 5.17% 5.08% 5.00% 5.13%
--------------------------------------------------------------------
Spread 1.80% 1.87% 1.92% 2.07% 1.83%
--------------------------------------------------------------------
--------------------------------------------------------------------
For the Three Months Ended
--------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
ANNUITIES 2004 2004 2004 2005 2005
- --------------------------------------------------------------------------------------------------
ANNUALIZED GENERAL ACCOUNT
SPREADS BY PRODUCT (%)
Investment income yield 6.23% 6.08% 6.37% 6.24% 6.69%
Average crediting rate 3.79% 3.64% 3.57% 3.44% 3.43%
--------------------------------------------------------------------
Spread 2.44% 2.44% 2.80% 2.80% 3.26%
--------------------------------------------------------------------
28
[METLIFE LOGO]
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - TOTAL
UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date
For the Three Months Ended Period Ended
-------------------------------------------------------------------- -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Auto & Home Operations 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Earned premiums $734 $740 $737 $728 $738 $1,471 $1,466
Investment income, net 44 40 41 43 46 90 89
Other revenues 6 8 12 9 8 15 17
-------------------------------------------------------------------- -----------------------
784 788 790 780 792 1,576 1,572
-------------------------------------------------------------------- -----------------------
EXPENSES
Losses 413 460 398 392 360 859 752
Loss adjustment expense 82 93 99 85 88 172 173
Other expenses 193 194 210 200 204 391 404
-------------------------------------------------------------------- -----------------------
688 747 707 677 652 1,422 1,329
-------------------------------------------------------------------- -----------------------
Operating earnings before
provision (benefit) for income
taxes 96 41 83 103 140 154 243
Provision (benefit) for income
taxes 25 7 20 27 39 37 66
-------------------------------------------------------------------- -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $71 $34 $63 $76 $101 $117 $177
==================================================================== =======================
NET INCOME RECONCILIATION
Operating earnings available to
common shareholders $71 $34 $63 $76 $101 $117 $177
Net investment gains
(losses) (5) (1) (3) 0 (4) (5) (4)
Minority interest - net
investment gains (losses) 0 0 0 0 0 0 0
Net investment gains
(losses) tax benefit
(provision) 2 0 1 0 1 2 1
-------------------------------------------------------------------- -----------------------
Net investment gains (losses), net
of income taxes (3) (1) (2) 0 (3) (3) (3)
Adjustments related to
policyholder benefits and
dividends 0 0 0 0 0 0 0
Adjustments related to
other expenses 0 0 0 0 0 0 0
Adjustments related to tax
benefit (provision) 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Adjustments related to net
investment gains (losses), net of
income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
Discontinued operations, net of
income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income available to common
shareholders 68 33 61 76 98 114 174
Preferred stock dividend 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income $68 $33 $61 $76 $98 $114 $174
-------------------------------------------------------------------- -----------------------
29
(METLIFE LOGO)
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date
For the Three Months Ended Period Ended
-------------------------------------------------------------------- -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Auto & Home Operations 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Earned premiums $538 $539 $538 $531 $533 $1,080 $1,064
Investment income, net 34 30 34 32 35 70 67
Other revenues 5 6 6 6 6 11 12
-------------------------------------------------------------------- -----------------------
577 575 578 569 574 1,161 1,143
-------------------------------------------------------------------- -----------------------
EXPENSES
Losses 296 300 312 304 272 647 576
Loss adjustment expense 63 66 85 74 70 135 144
Other expenses 135 136 148 137 141 274 278
-------------------------------------------------------------------- -----------------------
494 502 545 515 483 1,056 998
-------------------------------------------------------------------- -----------------------
Operating earnings before
provision for income
taxes 83 73 33 54 91 105 145
Provision for income taxes 22 21 3 11 24 22 35
-------------------------------------------------------------------- -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $61 $52 $30 $43 $67 $83 $110
==================================================================== =======================
$0
$0
Net investment gains (losses),
net of income taxes (3) (1) (1) 0 (2) (3) (2)
Adjustments related to net
investment gains (losses),
net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change in
accounting, net of income
taxes 0 0 0 0 0 0 0
Discontinued operations, net of
income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income available to common
shareholders 58 51 29 43 65 80 108
Preferred stock dividend 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income $58 $51 $29 $43 $65 $80 $108
-------------------------------------------------------------------- -----------------------
30
(METLIFE LOGO)
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date
For the Three Months Ended Period Ended
-------------------------------------------------------------------- -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Homeowners 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Earned premiums $185 $188 $188 $184 $193 $367 $377
Investment income, net 9 11 6 10 10 18 20
Other revenues 1 2 2 1 2 2 3
-------------------------------------------------------------------- -----------------------
195 201 196 195 205 387 400
-------------------------------------------------------------------- -----------------------
EXPENSES
Losses 106 155 83 82 82 195 164
Loss adjustment expense 19 26 13 11 17 37 28
Other expenses 54 52 57 56 58 106 114
-------------------------------------------------------------------- -----------------------
179 233 153 149 157 338 306
-------------------------------------------------------------------- -----------------------
Operating earnings (loss) before
provision (benefit) for income
taxes 16 (32) 43 46 48 49 94
Provision (benefit) for income taxes 4 (14) 15 15 15 15 30
-------------------------------------------------------------------- -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $12 ($18) $28 $31 $33 $34 $64
==================================================================== =======================
Net investment gains (losses),
net of income taxes 0 0 (1) 0 (1) 0 (1)
Adjustments related to net investment
gains (losses), net of income
taxes 0 0 0 0 0 0 0
Cumulative effect of a change in
accounting, net of income taxes 0 0 0 0 0 0 0
Discontinued operations, net of
income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income available to common
shareholders 12 (18) 27 31 32 34 63
Preferred stock dividend 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income $12 ($18) $27 $31 $32 $34 $63
-------------------------------------------------------------------- -----------------------
31
(METLIFE LOGO)
AUTO & HOME OPERATIONS
STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL
UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date
For the Three Months Ended Period Ended
-------------------------------------------------------------------- -----------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Auto & Home Operations 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------- -----------------------
REVENUES
Earned premiums $11 $13 $11 $13 $12 $24 $25
Investment income, net 1 (1) 1 1 1 2 2
Other revenues 0 0 4 2 0 2 2
-------------------------------------------------------------------- -----------------------
12 12 16 16 13 28 29
-------------------------------------------------------------------- -----------------------
EXPENSES
Losses 11 5 3 6 6 17 12
Loss adjustment expense 0 1 1 0 1 0 1
Other expenses 4 6 5 7 5 11 12
-------------------------------------------------------------------- -----------------------
15 12 9 13 12 28 25
-------------------------------------------------------------------- -----------------------
Operating earnings (loss) before
provision (benefit) for
income taxes (3) 0 7 3 1 0 4
Provision (benefit) for income
taxes (1) 0 2 1 0 0 1
-------------------------------------------------------------------- -----------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS ($2) $0 $5 $2 $1 $0 $3
==================================================================== =======================
Net investment gains (losses),
net of income taxes 0 0 0 0 0 0 0
Adjustments related to net
investment gains (losses),
net of income taxes 0 0 0 0 0 0 0
Cumulative effect of a change
in accounting, net of
income taxes 0 0 0 0 0 0 0
Discontinued operations, net of
income taxes 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income available to common
shareholders (2) 0 5 2 1 0 3
Preferred stock dividend 0 0 0 0 0 0 0
-------------------------------------------------------------------- -----------------------
Net income ($2) $0 $5 $2 $1 $0 $3
-------------------------------------------------------------------- -----------------------
32
(METLIFE LOGO)
AUTO & HOME OPERATIONS
WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION
AND SUPPLEMENTAL DATA
For the Three Months Ended
----------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- --------------------------------------------------------------------------------------------------
WRITTEN PREMIUMS BY PRODUCT
Preferred/Standard Automobile $521 $534 $502 $512 $519
Non-Standard Automobile 19 19 21 17 15
Homeowners 199 212 186 160 212
Other 9 11 9 17 12
----------------------------------------------------------
Total $748 $776 $718 $706 $758
==========================================================
SELECTED FINANCIAL INFORMATION AND
SUPPLEMENTAL DATA
TOTAL AUTO & HOME
Loss and loss adjustment expense ratio 67.5% 74.6% 67.2% 65.7% 60.4%
Other expense ratio 25.6% 25.5% 28.0% 26.7% 27.2%
----------------------------------------------------------
Total combined ratio (1) 93.1% 100.1% 95.2% 92.4% 87.6%
Effect of catastrophe losses 5.0% 15.3% 3.0% 1.5% 1.2%
----------------------------------------------------------
Combined ratio excluding catastrophes 88.1% 84.8% 92.2% 90.9% 86.4%
==========================================================
AUTO
Loss and loss adjustment expense ratio 66.9% 68.0% 73.7% 71.5% 63.6%
Other expense ratio 24.3% 24.3% 26.9% 25.0% 26.0%
----------------------------------------------------------
Total combined ratio (1) 91.2% 92.3% 100.6% 96.5% 89.6%
Effect of catastrophe losses 1.1% 1.7% 0.5% 0.4% 0.1%
----------------------------------------------------------
Combined ratio excluding catastrophes 90.1% 90.6% 100.1% 96.1% 89.5%
==========================================================
HOMEOWNERS
Loss and loss adjustment expense ratio 67.3% 96.0% 50.8% 50.2% 51.4%
Other expense ratio 28.8% 27.6% 30.1% 29.7% 29.8%
----------------------------------------------------------
Total combined ratio (1) 96.1% 123.6% 80.9% 79.9% 81.2%
Effect of catastrophe losses 16.6% 55.4% 10.2% 4.9% 4.4%
----------------------------------------------------------
Combined ratio excluding catastrophes 79.5% 68.2% 70.7% 75.0% 76.8%
==========================================================
OTHER
Loss and loss adjustment expense ratio 100.9% 40.3% 33.7% 49.3% 60.7%
Other expense ratio 35.4% 39.9% 43.8% 56.1% 38.7%
----------------------------------------------------------
Total combined ratio (1) 136.3% 80.2% 77.5% 105.4% 99.4%
Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0%
----------------------------------------------------------
Combined ratio excluding catastrophes 136.3% 80.2% 77.5% 105.4% 99.4%
==========================================================
PRE-TAX CATASTROPHE LOSSES
Auto $6 $9 $3 $2 $1
Homeowners 31 104 20 9 9
Other 0 0 0 0 0
----------------------------------------------------------
Total $37 $113 $23 $11 $10
==========================================================
CATASTROPHE POINTS ON COMBINED RATIOS 5.0 15.3 3.0 1.6 1.2
NUMBER OF SALES REPRESENTATIVES 88 80 87 89 89
----------------------------------------------------------
(1) The combined ratio reflects payment fees as a credit to Other Expenses for
the three months ended June 30, 2004, September 30, 2004, December 31,
2004, March 31, 2005 and June 30, 2005, which resulted in a 0.7, 0.7, 0.7,
0.8 and 0.7 of a percentage point decrease in the combined ratio for the
periods ended, respectively. The decreases for Auto, Homeowners and Other
were 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, 0.8, 0.5 and 0.5 of a percentage point, respectively,
for March 31, 2005 and 0.7, 0.4 and 0.8 of a percentage point,
respectively, for June 30, 2005.
33
(METLIFE LOGO)
INTERNATIONAL OPERATIONS
STATEMENT OF OPERATING EARNINGS
For the Year-to-Date
For the Three Months Ended Period Ended
------------------------------------------------------------- --------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------------- -------------------
REVENUES
Premiums $392 $437 $463 $502 $455 $794 $957
Universal life and investment-type product
policy fees 86 91 90 119 126 169 245
Investment income, net 137 151 174 150 194 260 344
Other revenues 8 2 9 3 (1) 12 2
------------------------------------------------------------- --------------------
623 681 736 774 774 1,235 1,548
------------------------------------------------------------- --------------------
EXPENSES
Policyholder benefits and dividends 400 424 450 446 451 778 897
Interest credited to policyholder account
balances 32 37 46 47 55 69 102
Capitalization of deferred policy acquisition
costs (93) (103) (117) (125) (138) (164) (263)
Amortization of deferred policy acquisition
costs 36 32 38 56 56 67 112
Other expenses 194 222 283 246 277 366 523
------------------------------------------------------------- --------------------
569 612 700 670 701 1,116 1,371
------------------------------------------------------------- --------------------
Operating earnings before provision for
income taxes 54 69 36 104 73 119 177
Provision for income taxes 13 24 10 37 23 34 60
------------------------------------------------------------- --------------------
OPERATING EARNINGS AVAILABLE TO COMMON
SHAREHOLDERS $41 $45 $26 $67 $50 $85 $117
============================================================= ====================
NET INCOME RECONCILIATION
Operating earnings available to commom
shareholders $41 $45 $26 $67 $50 $85 $117
Net investment gains (losses) (2) 3 (4) 0 7 24 7
Minority interest - net investment
gains (losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax benefit
(provision) (1) (1) 1 0 (2) (7) (2)
------------------------------------------------------------- --------------------
Net investment gains (losses), net of income
taxes (3) 2 (3) 0 5 17 5
Adjustments related to policyholder
benefits and dividends 49 (14) (6) 14 (16) 52 (2)
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) (17) 5 2 (5) 6 (18) 1
------------------------------------------------------------- --------------------
Adjustments related to net investment gains
(losses), net of income taxes (1) 32 (9) (4) 9 (10) 34 (1)
Cumulative effect of a change in accounting,
net of income taxes (2) 0 0 0 0 0 (30) 0
Discontinued operations, net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
Net income available to common shareholders 70 38 19 76 45 106 121
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
Net income $70 $38 $19 $76 $45 $106 $121
------------------------------------------------------------- --------------------
-------------------------------------------------------------
NUMBER OF PROFESSIONAL SALES REPRESENTATIVES 1,810 3,222 3,491 3,749 3,913
-------------------------------------------------------------
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs and amounts
allocable to certain participating contracts.
(2)The cumulative effect of a change in accounting, net of income taxes, for the
period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts.
34
(METLIFE LOGO)
REINSURANCE OPERATIONS
STATEMENT OF OPERATING EARNINGS
For the Year-to-Date
For the Three Months Ended Period Ended
------------------------------------------------------------- --------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------------- --------------------
REVENUES
Premiums, net $807 $822 $922 $907 $934 $1,623 $1,841
Investment income, net 136 144 204 161 151 266 312
Other revenues 15 14 16 11 21 27 32
------------------------------------------------------------- --------------------
958 980 1,142 1,079 1,106 1,916 2,185
------------------------------------------------------------- --------------------
EXPENSES
Claims and other policy benefits 651 675 760 750 842 1,310 1,592
Interest credited to policyholder account
balances 52 48 61 55 44 103 99
Policy acquisition costs and other insurance
expenses 133 156 192 148 165 272 313
Other expenses 46 47 44 43 41 91 84
------------------------------------------------------------- --------------------
882 926 1,057 996 1,092 1,776 2,088
------------------------------------------------------------- --------------------
Operating earnings before provision for income
taxes and minority interest 76 54 85 83 14 140 97
Provision for income taxes 13 9 15 13 0 22 13
------------------------------------------------------------- --------------------
Operating earnings available to common
shareholders before minority interest 63 45 70 70 14 118 84
Elimination of minority interest, before tax 40 31 39 43 11 77 54
------------------------------------------------------------- --------------------
CONTRIBUTION TO METLIFE $23 $14 $31 $27 $3(3) $41 $30 (3)
============================================================= ====================
NET INCOME RECONCILIATION
Operating earnings $23 $14 $31 $27 $3 $41 $30
Net investment gains (losses) 32 (17) (2) 28 (7) 53 21
Minority interest - net investment
gains (losses) (8) 2 1 (5) (2) (16) (7)
Net investment gains (losses) tax benefit
(provision) (9) 6 1 (8) 6 (13) (2)
------------------------------------------------------------- --------------------
Net investment gains (losses), net of income
taxes 15 (9) 0 15 (3) 24 12
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0 0 0
Adjustments related to other expenses (13) 14 1 (17) 12 (17) (5)
Adjustments related to tax benefit
(provision) 5 (5) 0 6 (6) 6 0
------------------------------------------------------------- --------------------
Adjustments related to net investment gains
(losses), net of income taxes (1) (8) 9 1 (11) 6 (11) (5)
Cumulative effect of a change in accounting,
net of income taxes (2) 0 0 0 0 0 5 0
Discontinued operations, net of income taxes 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
Net income available to common shareholders 30 14 32 31 6 59 37
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
Net income $30 $14 $32 $31 $6 $59 $37
------------------------------------------------------------- --------------------
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amortization of deferred policy acquisition costs.
(2) The cumulative effect of a change in accounting, net of income taxes, for
the period ended March 31, 2004, is in accordance with AICPA Statement of
Position 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts.
(3) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes an $8 million charge, net of income taxes,
associated with establishment of a liability associated with the
Argentine pension business.
35
(METLIFE LOGO)
REINSURANCE OPERATIONS
PRE-TAX AND PRE-MINORITY INTEREST OPERATING
EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended
------------------------------------------------------------------------
June 30, September 30, December 31, March 31. June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
PRE-TAX AND PRE-MINORITY INTEREST
OPERATING EARNINGS BY REGION
United States $60 $69 $82 $50 $28
Canada 15 16 17 23 17
Asia-Pacific 5 (2) 2 5 14
Other international markets 11 9 4 15 (7)
Corporate (15) (38) (20) (10) (38)
------------------------------------------------------------------------
Total pre-tax and pre-minority interest
operating earnings $76 $54 $85 $83 $14
========================================================================
POLICY BENEFITS AND INTEREST
SENSITIVE CONTRACT LIABILITIES BY REGION
Traditional U.S. $4,385 $4,458 $4,253 $4,285 $4,365
Asset intensive 3,645 3,893 4,085 4,159 4,267
Other 125 58 124 122 126
------------------------------------------------------------------------
Total U.S. 8,155 8,409 8,462 8,566 8,758
------------------------------------------------------------------------
Canada 1,167 1,243 1,375 1,367 1,389
Asia-Pacific 357 456 517 548 611
Other international markets 497 549 610 693 702
------------------------------------------------------------------------
Total International 2,021 2,248 2,502 2,608 2,702
------------------------------------------------------------------------
Total policy benefits and interest sensitive
contract liabilities $10,176 $10,657 $10,964 $11,174 $11,460
------------------------------------------------------------------------
36
(METLIFE LOGO)
CORPORATE, OTHER & ELIMINATIONS
STATEMENT OF OPERATING EARNINGS
For the Year-to-Date
For the Three Months Ended Period Ended
------------------------------------------------------------- --------------------
June 30, September 30, December 31, March 31, June 30, June 30, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005 2004 2005
- -------------------------------------------------------------------------------------------------------------- --------------------
REVENUES
Premiums ($4) ($5) $1 $1 $3 ($5) $4
Universal life and investment-type product
policy fees 0 2 0 0 0 0 0
Investment income, net 163 129 195 150 192 247 342
Other revenues (7) 7 0 3 5 0 8
------------------------------------------------------------- --------------------
152 133 196 154 200 242 354
------------------------------------------------------------- --------------------
EXPENSES
Policyholder benefits and dividends 2 1 3 5 (45) 4 (40)
Interest credited to policyholder account
balances 0 0 0 0 0 0 0
Interest expense 88 94 97 105 110 166 215
Other expenses 76 44 75 76 57 130 133
------------------------------------------------------------- --------------------
166 139 175 186 122 300 308
------------------------------------------------------------- --------------------
Operating earnings before (benefit) provision
for income taxes (14) (6) 21 (32) 78 (58) 46
Benefit for income taxes (111) (34) (7) (41) (1) (138) (42)
------------------------------------------------------------- --------------------
Operating earnings 97 28 28 9 79 80 88
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
OPERATING EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS $97 $28 $28 $9 $79(4) $80 $88 (4)
============================================================= ====================
NET INCOME RECONCILIATION
Operating earnings available to common
shareholders $97 $28 $28 $9 $79 $80 $88
Net investment gains (losses) 83 (17) (86) (113) 1,314 87 1,201
Minority interest - net investment gains
(losses) 0 0 0 0 0 0 0
Net investment gains (losses) tax benefit
(provision) (31) 3 33 43 (468) (33) (425)
------------------------------------------------------------- --------------------
Net investment gains (losses), net of income
taxes 52 (14) (53) (70) 846 54 776
Adjustments related to policyholder
benefits and dividends 0 0 0 0 0 0 0
Adjustments related to other expenses 0 0 0 0 0 0 0
Adjustments related to tax benefit
(provision) 0 1 (1) 0 0 0 0
------------------------------------------------------------- --------------------
Adjustments related to net investment gains
(losses), net of income taxes (1) 0 1 (1) 0 0 0 0
Cumulative effect of a change in accounting,
net of income taxes 0 0 0 0 0 (1) 0
Discontinued operations, net of income taxes 14 5 (4) 151 0 18 151
------------------------------------------------------------- --------------------
Net income available to common shareholders 163 20 (30) 90 925 151 1,015
Preferred stock dividend 0 0 0 0 0 0 0
------------------------------------------------------------- --------------------
Net income $163 $20 ($30) $90 $925 $151 $1,015
------------------------------------------------------------- --------------------
(1) Adjustments related to net investment gains (losses), net of income taxes,
includes amounts allocable to certain participating contracts.
(2) Operating earnings available to common shareholders 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 available to common shareholders for the three months
ended September 30, 2004 includes a $9 million benefit from a revision of
the estimate of income taxes for 2003.
(4) Operating earnings available to common shareholders for the three months
ended June 30, 2005 includes a $30 million benefit, net of income taxes,
associated with the reduction of a previously established liability for
settlement death benefits related to the Company's sales practices class
action settlement recorded in 1999 and a $18 million benefit, net of
income taxes, associated with the reduction of a previously established
liability related to the Company's demutualization in 2000.
37
(METLIFE LOGO)
================================================================================
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
<Table>
<Caption>
------------------------------------------------------------------------
At or for the Three Months Ended
------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.64% 6.44% 6.46% 6.33% 6.31%
Income (3) $2,291 $2,246 $2,273 $2,278 $2,306
Investment gains (losses) ($3) $61 ($21) ($114) ($89)
Ending Carrying Value (3) $170,192 $176,091 $176,763 $182,653 $185,218
MORTGAGE AND CONSUMER LOANS
Yield (4) 6.83% 7.02% 6.93% 6.55% 6.68%
Income $468 $507 $537 $527 $547
Investment gains (losses) $0 ($8) ($39) ($11) ($8)
Ending Carrying Value $28,118 $29,620 $32,406 $31,977 $33,586
REAL ESTATE AND REAL ESTATE
JOINT VENTURES
Yield (4) 13.37% 10.55% 11.04% 11.11% 12.82%
Income (5) $148 $111 $117 $119 $130
Investment gains (losses) (6) $133 ($5) $13 $18 $1,904
Ending Carrying Value $4,150 $4,263 $4,233 $4,306 $3,803
POLICY LOANS
Yield (4) 6.13% 6.14% 6.23% 6.17% 6.19%
Income $134 $135 $138 $138 $139
Ending Carrying Value $8,766 $8,801 $8,899 $8,953 $8,975
EQUITY SECURITIES AND OTHER LIMITED
PARTNERSHIP INTERESTS (1)
Yield (4) 10.32% 7.42% 18.26% 9.84% 21.01%
Income $101 $75 $199 $118 $276
Investment gains (losses) $87 $96 $25 $95 $12
Ending Carrying Value $4,521 $4,715 $5,095 $5,567 $6,015
CASH AND SHORT-TERM INVESTMENTS (1)
Yield (4) 2.39% 3.16% 3.67% 4.76% 3.66%
Income $30 $43 $50 $64 $93
Investment gains (losses) $0 $0 ($1) ($1) $0
Ending Carrying Value $6,501 $6,043 $6,714 $6,476 $15,778
OTHER INVESTED ASSETS
Yield (4) 4.29% 5.51% 10.55% 9.06% 7.74%
Income (7) $46 $55 $104 $95 $94
Investment gains (losses) (8) ($60) $34 ($191) ($8) $406
Ending Carrying Value $5,108 $4,395 $4,926 $4,960 $6,079
TOTAL INVESTMENTS
Gross investment income yield 6.72% 6.51% 6.88% 6.55% 6.76%
Investment fees and expenses yield (0.13%) (0.13%) (0.14%) (0.12%) (0.15%)
------------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.59% 6.38% 6.74% 6.43% 6.61%
========================================================================
Gross investment income $3,218 $3,172 $3,418 $3,339 $3,585
Investment fees and expenses (61) (65) (72) (59) (78)
------------------------------------------------------------------------
NET INVESTMENT INCOME $3,157 $3,107 $3,346 $3,280 $3,507
========================================================================
Ending Carrying Value $227,356 $233,928 $239,036 $244,892 $259,454
========================================================================
Gross investment gains $411 $351 $309 $373 $2,133
Gross investment losses (126) (201) (175) (322) (231)
Writedowns (77) (44) (79) (51) (42)
------------------------------------------------------------------------
Subtotal 208 106 55 0 1,860
Derivative & other instruments not qualifying for hedge
accounting (51) 72 (269) (21) 365
------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 157 178 (214) (21) 2,225
Minority interest - net investment gains (losses (8) 2 5 (9) (2)
Net investment gains (losses) tax benefit (provision) (47) (62) 71 9 (784)
------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $102 $118 ($138) ($21) $1,439
------------------------------------------------------------------------
</Table>
(1) Included in ending carrying value, income and investment gains (losses)
are $2,241 million, $23 million and $2 million, respectively, related
to the consolidation of separate accounts under AICPA Statement of
Position 03-1 for the three months ended June 30, 2005.
(2) The fixed maturities yield is annualized and is based on quarterly
average amortized cost.
(3) Fixed maturities includes $197 million and $2 million in ending
carrying value and income, respectively, relating to trading securities
for the three months ended June 30, 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 $53 million, $33 million, $30 million, $39 million and $12
million related to discontinued operations for the three months ended
June 30, 2004, September 30, 2004, December 31, 2004, March 31, 2005
and June 30, 2005, respectively.
(6) Included in investment gains (losses) from real estate and real estate
joint ventures is $132 million, ($15) million, $10 million, $18 million
and $1,905 million related to discontinued operations for the three
months ended June 30, 2004, September 30, 2004, December 31, 2004,
March 31, 2005 and June 30, 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
$22 million, $12 million, $3 million, $24 million and $13 million for
the three months ended June 30, 2004, September 30, 2004, December 31,
2004, March 31, 2005 and June 30, 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.
38
(METLIFE LOGO)
================================================================================
METLIFE, INC.
INVESTMENT RESULTS
BY ASSET CATEGORY AND
ANNUALIZED YIELDS
<Table>
<Caption>
------------------------------------------------------------------------
At or for the Year-to-Date
------------------------------------------------------------------------
June 30, September 30, December 31, March 31, June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITIES (1)
Yield (2) 6.64% 6.58% 6.55% 6.33% 6.34%
Income $4,523 $6,769 $9,042 $2,278 $4,584
Investment gains (losses) $31 $92 $71 ($114) ($203)
Ending Carrying Value $170,192 $176,091 $176,763 $182,653 $185,218
MORTGAGE AND CONSUMER LOANS
Yield (3) 6.80% 6.87% 6.86% 6.55% 6.58%
Income $917 $1,424 $1,961 $527 $1,074
Investment gains (losses) $0 ($8) ($47) ($11) ($19)
Ending Carrying Value $28,118 $29,620 $32,406 $31,977 $33,586
REAL ESTATE AND REAL ESTATE
JOINT VENTURES
Yield (3) 12.72% 11.92% 11.69% 11.11% 12.08%
Income (4) $287 $398 $515 $119 $249
Investment gains (losses) (5) $154 $149 $162 $18 $1,922
Ending Carrying Value $4,150 $4,263 $4,233 $4,306 $3,803
POLICY LOANS
Yield (3) 6.12% 6.13% 6.15% 6.17% 6.18%
Income $268 $403 $541 $138 $277
Ending Carrying Value $8,766 $8,801 $8,899 $8,953 $8,975
EQUITY SECURITIES AND OTHER LIMITED
PARTNERSHIP INTERESTS (1)
Yield (3) 6.74% 6.96% 9.96% 9.84% 15.69%
Income $130 $205 $404 $118 $394
Investment gains (losses) $87 $183 $208 $95 $107
Ending Carrying Value $4,521 $4,715 $5,095 $5,567 $6,015
CASH AND SHORT-TERM INVESTMENTS (1)
Yield (3) 2.47% 2.77% 3.01% 4.76% 3.64%
Income $60 $103 $153 $64 $157
Investment gains (losses) $0 $0 ($1) ($1) ($1)
Ending Carrying Value $6,501 $6,043 $6,714 $6,476 $15,778
OTHER INVESTED ASSETS
Yield (3) 4.68% 5.03% 6.30% 9.06% 8.14%
Income (6) $97 $152 $256 $95 $189
Investment gains (losses) (7) $8 $42 ($149) ($8) $398
Ending Carrying Value $5,108 $4,395 $4,926 $4,960 $6,079
TOTAL INVESTMENTS
Gross investment income yield 6.64% 6.60% 6.67% 6.55% 6.64%
Investment fees and expenses yield (0.13%) (0.13%) (0.14%) (0.12%) (0.13%)
------------------------------------------------------------------------
NET INVESTMENT INCOME YIELD 6.51% 6.47% 6.53% 6.43% 6.51%
========================================================================
Gross investment income $6,282 $9,454 $12,872 $3,339 $6,924
Investment fees and expenses (125) (190) (262) (59) (137)
------------------------------------------------------------------------
NET INVESTMENT INCOME $6,157 $9,264 $12,610 $3,280 $6,787
========================================================================
Ending Carrying Value $227,356 $233,928 $239,036 $244,892 $259,454
========================================================================
Gross investment gains $654 $1,005 $1,314 $373 $2,506
Gross investment losses (211) (412) (587) (322) (553)
Writedowns (89) (133) (212) (51) (93)
------------------------------------------------------------------------
Subtotal 354 460 515 0 1,860
Derivative & other instruments not qualifying for hedge
accounting (74) (2) (271) (21) 344
------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES) 280 458 244 (21) 2,204
Minority interest -- net investment gains (losses) (16) (14) (9) (9) (11)
Net investment gains (losses) tax benefit (provision) (86) (148) (77) 9 (775)
------------------------------------------------------------------------
NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $178 $296 $158 ($21) $1,418
------------------------------------------------------------------------
</Table>
(1) Included in ending carrying value, income and investment-related gains
(losses) is $2,241 million, $44 million and $14 million, respectively,
related to the consolidation of separate accounts under AICPA Statement
of Position 03-1 for year-to-date June 30, 2005.
(2) The 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
$102 million, $135 million, $165 million, $39 million and $51 million
related to discontinued operations for year-to-date June 30, 2004,
September 30, 2004, December 31, 2004, March 31, 2005 and June 30,
2005, respectively.
(5) Included in investment gains (losses) from real estate and real estate
joint ventures is $152 million, $136 million, $146 million, $18 million
and $1,923 million related to discontinued operations for year-to-date
June 30, 2004, September 30, 2004, December 31, 2004, March 31, 2005
and June 30, 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
$36 million, $48 million, $51 million, $24 million and $37 million for
the year-to-date June 30, 2004, September 30, 2004, December 31, 2004,
March 31, 2005 and June 30, 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.
39
(METLIFE LOGO)
METLIFE, INC.
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
FIXED MATURITIES (1) (2)
At June 30, 2004 At September 30, 2004 At December 31, 2004 At March 31, 2005
-------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------------------------------
Less than 20% $1,735 96.6% $530 90.8% $463 92.4% $1,185 99.1%
20% or more for less than six months 47 2.6% 44 7.5% 17 3.4% 5 0.4%
20% or more for six months or greater 15 0.8% 10 1.7% 21 4.2% 6 0.5%
-------------------------------------------------------------------------------------------
Total Gross Unrealized Losses $1,797 100.0% $584 100.0% $501 100.0% $1,196 100.0%
Total Gross Unrealized Gains $7,087 $9,703 $10,268 $8,485
======= ======= ======= ========
At June 30, 2005
------------------------
Unaudited (Dollars in millions) Amount % of Total
- ---------------------------------------------------------------
Less than 20% $416 95.4%
20% or more for less than six months 13 3.0%
20% or more for six months or greater 7 1.6%
------------------------
Total Gross Unrealized Losses $436 100.0%
Total Gross Unrealized Gains $11,250
=========
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE
EQUITY SECURITIES (1)
At June 30, 2004 At September 30, 2004 At December 31, 2004 At March 31, 2005
-------------------------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total
-----------------------------------------------------------------------------------------------------------------------------------
Less than 20% $13 44.8% $10 40.0% $7 87.5% $44 78.6%
20% or more for less than six months 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%
-------------------------------------------------------------------------------------------
Total Gross Unrealized Losses $29 100.0% $25 100.0% $8 100.0% $56 100.0%
Total Gross Unrealized Gains $336 $305 $283 $169
==== ====== ===== ======
At June 30, 2005
-----------------------
Unaudited (Dollars in millions) Amount % of Total
- ----------------------------------------------------------------
Less than 20% $25 61.5%
20% or more for less than six months 15 38.5%
20% or more for six months or greater 0 0.0%
-----------------------
Total Gross Unrealized Losses $40 100.0%
Total Gross Unrealized Gains $206
=======
(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.
40
(METLIFE LOGO)
METLIFE, INC.
SUMMARY OF FIXED MATURITIES AVAILABLE FOR SALE
BY SECTOR AND QUALITY DISTRIBUTION
At June 30, 2004 At September 30, 2004 At December 31, 2004
--------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ----------------------------------------------------------------------------------------------------------------------
U.S. corporate securities $60,619 35.6% $63,130 35.8% $ 61,720 34.9%
Residential mortgage-backed securities 30,698 18.0% 30,978 17.6% 32,230 18.2%
Foreign corporate securities 24,732 14.5% 27,076 15.4% 27,838 15.7%
US treasury/agency securities 16,664 9.8% 16,561 9.4% 17,826 10.1%
Commercial mortgage-backed securities 12,019 7.1% 12,016 6.8% 12,501 7.1%
Asset-backed securities 12,444 7.3% 12,912 7.3% 10,876 6.1%
Foreign government securities 8,019 4.7% 8,380 4.8% 8,585 4.9%
State and political subdivision securities 3,675 2.2% 3,853 2.2% 3,899 2.2%
Other fixed maturity securities 780 0.5% 644 0.4% 985 0.6%
--------------------------------------------------------------------------
Total bonds 169,650 99.7% 175,550 99.7% 176,460 99.8%
Redeemable preferred stock 542 0.3% 541 0.3% 303 0.2%
--------------------------------------------------------------------------
Total fixed maturities $170,192 100.0% $176,091 100.0% $176,763 100.0%
==========================================================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $113,607 66.8% $117,658 66.8% $118,779 67.2%
2 Baa 43,829 25.8% 45,728 25.9% 45,311 25.6%
3 Ba 7,334 4.3% 7,514 4.3% 7,500 4.2%
4 B 4,086 2.4% 4,089 2.3% 4,414 2.5%
5 Caa and lower 583 0.3% 443 0.3% 366 0.2%
6 In or near default 211 0.1% 118 0.1% 90 0.1%
--------------------------------------------------------------------------
Total bonds 169,650 99.7% 175,550 99.7% 176,460 99.8%
Redeemable preferred stock 542 0.3% 541 0.3% 303 0.2%
--------------------------------------------------------------------------
Total Fixed Maturities $170,192 100.0% $176,091 100.0% $176,763 100.0%
==========================================================================
At March 31, 2005 At June 30, 2005
------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------
U.S. corporate securities $60,417 33.1% $61,614 33.3%
Residential mortgage-backed securities 34,650 19.0% 34,795 18.8%
Foreign corporate securities 27,766 15.2% 28,557 15.4%
US treasury/agency securities 21,770 11.9% 21,051 11.4%
Commercial mortgage-backed securities 13,372 7.3% 13,836 7.5%
Asset-backed securities 10,826 5.9% 10,373 5.6%
Foreign government securities 8,932 4.9% 10,144 5.5%
State and political subdivision securities 3,934 2.2% 3,780 2.0%
Other fixed maturity securities 703 0.4% 716 0.4%
----------------------------------------------------------
Total bonds 182,370 99.9% 184,866 99.9%
Redeemable preferred stock 149 0.1% 155 0.1%
----------------------------------------------------------
Total fixed maturities $182,519 100.0% $185,021 100.0%
==========================================================
NAIC RATING AGENCY
RATING (1) EQUIVALENT DESIGNATION
1 Aaa / Aa / A $125,899 69.0% $127,913 69.1%
2 Baa 44,054 24.1% 44,202 23.9%
3 Ba 7,392 4.1% 7,476 4.0%
4 B 4,649 2.5% 4,910 2.7%
5 Caa and lower 325 0.2% 335 0.2%
6 In or near default 51 0.0% 30 0.0%
----------------------------------------------------------
Total 182,370 99.9% 184,866 99.9%
Redeemable preferred stock 149 0.1% 155 0.1%
----------------------------------------------------------
Total Fixed Maturities $182,519 100.0% $185,021 100.0%
==========================================================
(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 June 30, 2004 At September 30, 2004 At December 31, 2004
-------------------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total
- ---------------------------------------------------------------------------------------------------------------------
Pacific $5,327 24.2% $5,608 24.3% $6,075 24.3%
South Atlantic 5,247 23.8% 5,502 23.6% 5,696 22.8%
Middle Atlantic 3,513 16.0% 3,704 15.9% 4,057 16.2%
East North Central 2,294 10.4% 2,443 10.5% 2,550 10.2%
West South Central 1,470 6.7% 1,775 7.6% 2,024 8.1%
New England 1,302 5.9% 1,285 5.5% 1,412 5.6%
International 1,064 4.8% 1,219 5.2% 1,364 5.5%
Mountain 785 3.6% 741 3.2% 778 3.1%
West North Central 625 2.8% 615 2.6% 667 2.7%
East South Central 278 1.3% 276 1.2% 268 1.1%
Other 100 0.5% 99 0.4% 99 0.4%
--------------------------------------------------------------------------
Total $22,005 100.0% $23,267 100.0% $24,990 100.0%
==========================================================================
Office 10,301 46.8% $10,826 46.6% $11,500 46.0%
Retail 5,221 23.7% 5,288 22.7% 5,698 22.8%
Apartments 3,001 13.6% 3,095 13.3% 3,264 13.1%
Industrial 1,951 8.9% 2,034 8.7% 2,499 10.0%
Hotel 1,098 5.0% 1,227 5.3% 1,245 5.0%
Other 433 2.0% 797 3.4% 784 3.1%
--------------------------------------------------------------------------
Total $22,005 100.0% $23,267 100.0% $24,990 100.0%
==========================================================================
At March 31, 2005 At June 30, 2005
------------------------------------------------------------
Unaudited (Dollars in millions) Amount % of Total Amount % of Total
- -----------------------------------------------------------------------------------------------------------
Pacific $5,888 23.9% $6,224 23.8%
South Atlantic 5,613 22.8% 6,005 23.0%
Middle Atlantic 3,898 15.8% 4,007 15.4%
East North Central 2,565 10.4% 2,868 11.0%
West South Central 2,139 8.7% 2,140 8.2%
New England 1,409 5.7% 1,438 5.5%
International 1,343 5.5% 1,395 5.3%
Mountain 780 3.2% 868 3.3%
West North Central 631 2.5% 698 2.7%
East South Central 267 1.1% 360 1.4%
Other 98 0.4% 97 0.4%
-----------------------------------------------------------
Total $24,631 100.0% $26,100 100.0%
===========================================================
Office $10,798 43.8% $11,776 45.0%
Retail 5,754 23.4% 6,073 23.3%
Apartments 3,330 13.5% 3,416 13.1%
Industrial 2,749 11.2% 2,813 10.8%
Hotel 1,212 4.9% 1,295 5.0%
Other 788 3.2% 727 2.8%
-----------------------------------------------------------
Total $24,631 100.0% $26,100 100.0%
===========================================================
41
(METLIFE LOGO)
METLIFE, INC.
SUMMARY OF REAL ESTATE
At June 30, At September 30, At December 31, At March 31, At June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ----------------------------------------------------------------------------------------------------------------------
Wholly owned $3,823 $3,911 $3,843 $3,768 $3,277
Joint ventures 325 350 386 534 523
--------------------------------------------------------------------------
Subtotal 4,148 4,261 4,229 4,302 3,800
Foreclosed 2 2 4 4 3
--------------------------------------------------------------------------
Total Real Estate (1) $4,150 $4,263 $4,233 $4,306 $3,803
===========================================================---------------
(1) Includes real estate held-for-sale and held-for-investment.
METLIFE, INC.
SUMMARY OF MORTGAGES AND CONSUMER LOANS
At June 30, At September 30, At December 31, At March 31, At June 30,
Unaudited (Dollars in millions) 2004 2004 2004 2005 2005
- ----------------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGES $22,005 $23,267 $24,990 $24,631 $26,100
AGRICULTURAL MORTGAGES 5,377 5,593 5,907 5,929 6,040
CONSUMER LOANS 736 760 1,509 1,417 1,446
--------------------------------------------------------------------------
TOTAL $28,118 $29,620 $32,406 $31,977 $33,586
===========================================================---------------
METLIFE, INC.
DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At June 30, At September 30, At December 31, At March 31, At June 30,
Unaudited (Dollars in billions) 2004 2004 2004 2005 2005
- -----------------------------------------------------------------------------------------------------------------------
METLIFE $258.3 $265.0 $270.0 $276.9 $291.9
METLIFE SEPARATE ACCOUNT 79.7 81.2 86.8 85.8 89.5
---------------------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT $338.0 $346.2 $356.8 $362.7 $381.4
---------------------------------------------------------------------------
42
(METLIFE LOGO)
COMPANY RATINGS AS OF JULY 25, 2005 (1)
Moody's Standard & A.M. Best Fitch
Investors Service Poor's Company Ratings
------------------ ------------ ------------ -------
FINANCIAL STRENGTH RATINGS
First MetLife Investors Insurance Co. NR AA * A+ NR
General American Life Insurance Company Aa2 * AA * A+ AA
MetLife Investors Insurance Company Aa2 * AA * A+ AA
MetLife Investors Insurance Company of California NR AA * A+ NR
MetLife Investors USA Insurance Company Aa3 * AA * A+ AA
Metropolitan 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 Life Insurance Company Aa2 * AA * A+ AA
Metropolitan Life Insurance Company (Short-term rating) P-1 * A-1+ NR NR
Metropolitan Lloyds Insurance Company of Texas NR NR A NR
Metropolitan Property and Casualty Insurance Company Aa3 * NR A NR
Metropolitan Tower Life Insurance Company Aa3 * NR A+ NR
New England Life Insurance Company Aa2 * AA * A+ AA
Paragon Life Insurance Company NR AA * A+ AA
Texas Life Insurance Company NR NR A NR
RGA Reinsurance Company A1 AA- * A+ AA-
CREDIT RATINGS
GenAmerica Capital I
Preferred Stock A3 * BBB+ * NR A-
General American Life Insurance Company
Surplus Notes A1 * A+ * a+ * NR
MetLife, Inc.
Senior Unsecured A2 * A * a * A
Commercial Paper P-1 * A-1 AMB-1 * F1
Subordinated Debt (p) A3 * NR a- * NR
Preferred Stock Baa1 * BBB+ * bbb+ * A-
Perpetual Preferred Stock Baa1 * BBB * bbb+ * A-
MetLife Capital Trust II
Preferred Stock A3 * BBB+ * a- * A-
MetLife Capital Trust III
Preferred Stock A3 * BBB+ * a- * A-
MetLife Funding, Inc.
Commercial Paper P-1 A-1+ AMB-1+ * F1+
Metropolitan Life Global Funding I
Senior Secured Aa2 * AA aa * NR
Metropolitan Life Insurance Company
Surplus Notes A1 * A+ * a+ * A+
Reinsurance Group of America, Incorporated
Senior Unsecured Baa1 A- * a- A-
RGA Capital Trust I
Preferred Stock Baa2 BBB * bbb+ BBB+
* Moody's, Standard & Poor's and A.M. Best's outlook for these ratings is
negative.
(1) For entities owned as of June 30, 2005.
(P) Preliminary
(NR) Not Rated
43