-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KCYoZ3RujF8Ml4EK69zSCfBIRSyymNBl0/JoO7S7rzdWTZRIjaLM2KFZO2SlY2rp Jx6SM5iG2sijHU1UmIbFTA== 0000950123-03-005311.txt : 20030505 0000950123-03-005311.hdr.sgml : 20030505 20030505171304 ACCESSION NUMBER: 0000950123-03-005311 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030505 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METLIFE INC CENTRAL INDEX KEY: 0001099219 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 134075851 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15787 FILM NUMBER: 03682640 BUSINESS ADDRESS: STREET 1: ONE MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10010-3690 BUSINESS PHONE: 2125782211 MAIL ADDRESS: STREET 1: ONE MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10010-3690 8-K 1 y86103e8vk.txt METLIFE INC. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: May 5, 2003 --------------------------------- (Date of earliest event reported) MetLife, Inc. ------------- (Exact name of registrant as specified in its charter) Delaware 1-15787 13-4075851 - ---------------------------- ---------------- ------------------- (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification No.) One Madison Avenue, New York, New York 10010-3690 ------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 578-2211 -------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Item 7. Financial Statements and Exhibits. (a) Not applicable. (b) Not applicable. (c) Exhibits. 99.1 Press Release, dated May 5, 2003. 99.2 Quarterly Financial Supplement for the quarter ended March 31, 2003. Item 9. Regulation FD Disclosure. The following information, including the text of the press release and the Quarterly Financial Supplement attached as exhibits to this Form 8-K, is furnished pursuant to Item 9. Regulation FD Disclosure and Item 12. Disclosure of Results of Operation and Financial Condition. On May 5, 2003, MetLife, Inc., a Delaware corporation, issued (i) a press release, a copy of which is attached hereto as Exhibit 99.1, and (ii) its Quarterly Financial Supplement for the quarter ended March 31, 2003, a copy of which is attached hereto as Exhibit 99.2. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. METLIFE, INC. By: /s/ Gwenn L. Carr ------------------------------------- Name: Gwenn L. Carr Title: Vice-President and Secretary Date: May 5, 2003 EXHIBIT INDEX Exhibit Number Exhibit - ------- ------- 99.1 Press Release, dated May 5, 2003. 99.2 Quarterly Financial Supplement for the quarter ended March 31, 2003. EX-99.1 3 y86103exv99w1.txt PRESS RELEASE Exhibit 99.1 Contacts: For Media: John Calagna (212) 578-6252 For Investors: Kevin Helmintoller (212) 578-5140 METLIFE ANNOUNCES FIRST QUARTER 2003 RESULTS NEW YORK, May 5, 2003 - MetLife, Inc. (NYSE: MET) today reported first quarter 2003 net income of $362 million, or $0.47 per diluted share, compared with $329 million, or $0.44 per diluted share, for the first quarter of 2002. Net income for the first quarter of 2003 includes after-tax net investment losses of $84 million. First quarter 2002 net income includes after-tax net investment losses of $76 million and income of $5 million from the cumulative effect of a change in accounting for goodwill. As a result of the conversion of MetLife Capital Trust I's company-obligated mandatorily redeemable securities into long-term debt, $21 million ($0.03 per diluted share) was charged to additional paid-in capital in the first quarter of 2003 and is included in the calculation of net income per share. See "Corporate Events" within this release for additional information related to MetLife Capital Trust I. MetLife analyzes its performance using a non-GAAP measure called operating earnings. Operating earnings is defined as net income, excluding after-tax net investment gains and losses, and the after-tax impact from the cumulative effect of accounting changes. MetLife believes this measure enhances the understanding and comparability of its performance by excluding the net effect of investment gains and losses, which can fluctuate significantly from period to period, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings for the first quarter of 2003 were $446 million, or $0.62 per diluted share, compared with $400 million, or $0.54 per diluted share, for the prior year period. Total premiums and fees for the first quarter of 2003 were $5.40 billion, up 9% from the prior year period. Total assets under management grew 8% to $307.7 billion at March 31, 2003, compared with $284.9 billion at March 31, 2002, and up 3% from $299.2 billion at December 31, 2002. "We are pleased with our results this quarter, especially considering the difficult environment in which we are operating. At MetLife, we are beginning to see the positive effects of what has now become a very real flight to quality. This trend, coupled with the power of the MetLife brand and the strength of our people, is enhancing the top-line growth across our businesses," said Robert H. Benmosche, chairman of the board and chief executive officer. "Although the equity market performance in the first quarter was disappointing, we are encouraged by the performance thus far in the second quarter," added Mr. Benmosche. "And, the credit environment, although still challenging, has improved significantly from 2002. Our results reflect this improvement, as well as our continued prudent stance on impairments last year, with a 46% reduction in gross investment losses and a 21% reduction in the balance of gross unrealized investment losses versus the fourth quarter of 2002." "The diversification of our businesses and investment portfolio positions us to deliver even stronger results as the economy improves," continued Mr. Benmosche. A reconciliation from net income and net income per share to operating earnings and operating earnings per share follows:
For the three months ended March 31, ----------------------------------- 2003 2002 -------------- -------------- (Dollars in millions, except per share data) Net income $362 $0.47 $329 $0.44 After-tax net investment losses (84) (0.12) (76) (0.10) Impact of conversion of securities -- (0.03) -- -- Cumulative effect of change in accounting -- -- 5 -- ---- ----- ---- ----- Operating earnings $446 $0.62 $400 $0.54 ==== ===== ==== =====
After-tax net investment losses of $84 million in the first quarter of 2003 includes $221 million of pre-tax gross investment gains, offset by $357 million of pre-tax gross investment losses (including $268 million of writedowns and $89 million of losses related to sales of available-for-sale securities) and $34 million of losses on derivatives. After-tax net investment losses of $76 million in the first quarter of 2002 includes $545 million of pre-tax gross investment gains, offset by $621 million of pre-tax gross investment losses (including $338 million of writedowns and $283 million of losses related to sales of available-for-sale securities) and $29 million of losses on derivatives. In 2003, MetLife changed its method of measuring and allocating capital to its operating segments from a risk based capital method to one based on economic capital. While this change impacts the earnings and returns on allocated equity of the company's business segments, it has no impact on MetLife's consolidated results. The company believes that economic capital is a more rigorous model for measuring the risks inherent in its diverse businesses. MetLife did not change its method retrospectively. The impact of this change is quantified in each of the segments below. FIRST QUARTER SEGMENT RESULTS For each of the segments, the company provides below a reconciliation from net income to operating earnings. Reconciliations from net income to operating earnings for the product lines within each segment are provided in the financial tables accompanying this release. The discussions for each segment are based on operating earnings. Institutional Business
For the three months ended March 31, ------------------------------------ 2003 2002 ---- ---- (Dollars in millions) Net income $175 $177 After-tax net investment losses (44) (58) ---- ---- Operating earnings $219 $235 ==== ====
Lower investment spreads and a $14 million after-tax increase in pension and other post-retirement benefit costs were partially offset by improved underwriting results in several product lines and an $5 million after-tax increase in earnings on allocated capital. Institutional Business, which consists of Group Life, Retirement & Savings, and Non-Medical Health & Other product lines, also reports the following highlights (all comparisons are with the quarter ended March 31, 2002, unless otherwise noted): - - Strong top-line growth, with total premiums, fees and other revenues up 12% to $2.44 billion. - - Group Life operating earnings up $10 million to $78 million, due primarily to improved underwriting results. - - Group Life premiums, fees and other revenues up 7% to $1.34 billion. - - Retirement & Savings operating earnings down $32 million to $82 million, primarily as a result of lower investment spreads and reduced underwriting results, compared with more favorable underwriting results in the year-ago period. - - Premiums, fees and other revenues from Retirement & Savings up 30% to $219 million. - - Retirement & Savings general account liabilities up 9% to $36.2 billion, and up 2% versus December 31, 2002. - - Non-Medical Health & Other operating earnings up $6 million to $59 million, due to improved underwriting results and higher earnings from allocated capital. - - Premiums, fees and other revenues for Non-Medical Health & Other up 15% to $880 million due to continuing growth in Group Long-Term Care, Group Disability and Group Dental. - Group Disability premiums, fees and other revenues increased 22% to $241 million. - Group Disability incurred loss ratio was 96.5%, down from 97.2%. Individual Business
For the three months ended March 31, ------------------------------------ 2003 2002 ---- ---- (Dollars in millions) Net income $141 $176 After-tax net investment gains (losses) (19) 2 ---- ---- Operating earnings $160 $174 ==== ====
Individual Business continues to focus on achieving greater efficiencies of scale through expanded distribution, product innovations and expense reductions. After-tax expense savings of approximately $15 million, coupled with improved investment spreads, were more than offset by the continuing effects of lower equity markets on this segment's variable products, an $8 million after-tax increase in pension and other post-retirement benefit costs, and a $6 million after-tax reduction in earnings on allocated capital. Individual Business, which is comprised of Traditional Life, Variable & Universal Life, Annuities and Other product lines, also reports the following highlights (all comparisons are with the quarter ended March 31, 2002, unless otherwise noted): - - Total life insurance and annuity statutory premiums and deposits up 23% to $4.56 billion. - - Traditional Life operating earnings down $22 million to $76 million, due to strong underwriting results in the prior year period, higher pension and other post-retirement benefit costs, and lower earnings on allocated capital. - - Traditional Life insurance first year statutory premiums and deposits up 4% to $53 million. - - Variable & Universal Life operating earnings down $2 million to $23 million resulting from increased pension and other post-retirement benefit costs and lower earnings on allocated capital, partially offset by improved investment spreads and expense savings. - - Variable Life first year statutory premiums and deposits down 19% to $91 million. - - Universal Life first year statutory premiums and deposits up 57% to $55 million. - - Annuities operating earnings up $10 million to $50 million due to higher investment spreads and growth in the overall business partially offset by higher guaranteed minimum death benefit claims and lower earnings on allocated capital. - - Annuity statutory deposits up 53% to $2.61 billion, driven by increases in production by MetLife Investors Group, up 106%; MetLife Financial Services, up 17%; New England Financial, up 28%; and MetLife Resources, up 6%. - - Fixed annuity statutory deposits up 58% to $424 million, and down 9% from the fourth quarter 2002. - - Variable annuity statutory deposits up 52% to $2.19 billion, and up 16% from the fourth quarter 2002. - - Operating earnings from the Other product line remained unchanged at $11 million. Auto & Home
For the three months ended March 31, ----------------------------------- 2003 2002 ---- ---- (Dollars in millions) Net income $27 $21 After-tax net investment losses (3) (9) ---- ---- Operating earnings $30 $30 ==== ====
Auto and Home's earnings continued to benefit from rate increases, as well as expense efficiencies resulting from the completion of the St. Paul personal lines integration. This was partially offset by a $4 million after-tax reduction in earnings on allocated capital. Also, a return to more typical winter weather versus 2002's mild winter was expected, and did suppress earnings growth period over period. Additional highlights include: - - Favorable homeowners claims frequencies, which contributed to a reduction in the Property loss ratio to 50.2%, from 63.2% in the year ago period; - - A $7 million income tax benefit associated with this segment's tax-preferred municipal bond portfolio; - - Higher Auto claims frequencies in the Northeast from winter weather; and - - An Auto loss reserve strengthening related to older accident years of $30 million after-tax. International
For the three months ended March 31, ----------------------------------- 2003 2002 ---- ---- (Dollars in millions) Net income (loss) $28 $(4) After-tax net investment losses -- (23) Cumulative effect of change in accounting -- 5 --- --- Operating earnings $28 $14 === ===
International's first quarter 2003 operating earnings benefited $20 million after-tax from the June 2002 acquisition in Mexico of Aseguradora Hidalgo, S.A. This increase was partially offset by a $6 million after-tax reduction in earnings on allocated capital. Reinsurance
For the three months ended March 31, ----------------------------------- 2003 2002 ---- ---- (Dollars in millions) Net income $20 $24 After-tax net investment gains -- 2 --- --- Operating earnings $20 $22 === ===
Reinsurance operations are conducted primarily through Reinsurance Group of America, Incorporated (NYSE: RGA), of which MetLife beneficially owns approximately 59%. Business growth and favorable mortality in RGA's U.S. operations were offset by a $6 million after-tax reduction in earnings resulting from the aforementioned change in MetLife's capital allocation methodology. Asset Management
For the three months ended March 31, ----------------------------------- 2003 2002 ---- ---- (Dollars in millions) Net income (loss) $6 $(1) After-tax net investment gains (losses) 5 (2) -- -- Operating earnings $1 $1 == ==
A 14% decline in assets under management resulted in lower revenues. A reduction in operating expenses, including staff reductions during 2002, as well as a $2 million after-tax increase in earnings on allocated capital, offset the decline in revenues. Corporate and Other
For the three months ended March 31, ------------------------------------ 2003 2002 ---- ---- (Dollars in millions) Net loss $(35) $(64) After-tax net investment gains (losses) (23) 12 ---- ---- Operating loss $(12) $(76) ==== ====
The current period benefited from higher investment income resulting primarily from joint venture earnings (up $18 million after-tax) and earnings related to allocated capital (up $15 million after-tax) partially offset by lower yields on invested assets. In addition, the year-ago period includes a $48 million after-tax settlement provision for General American Life Insurance Company's former Medicare business. CORPORATE EVENTS Stock Options Expensed First quarter 2003 net income and operating earnings reflect a $3 million after-tax expense from MetLife's adoption of the fair-value recognition method of accounting for employee stock options on a prospective basis. MetLife Capital Trust I On May 15, 2003, the purchase contracts associated with the MetLife Capital Trust I equity security units will be settled. The company expects the settlement rate to be 2.97 shares of MetLife common stock per purchase contract, which will result in the issuance of approximately 59.8 million common shares on that date. The company will receive approximately $1.0 billion in proceeds from this issuance, which is expected to be used for general corporate purposes. The weighted average common shares outstanding on a diluted basis used in the calculation of net income and operating earnings per diluted share for the first quarter of 2003 totaled 722.4 million shares. Included in this amount was 22.1 million shares related to the above-mentioned stock issuance, which is determined using the treasury method. As a result of the settlement of the purchase contracts and the issuance of the common shares, the company expects weighted average common shares outstanding on a diluted basis to total approximately 730 million shares in the quarter ending June 30, 2003 and approximately 760 million shares for periods thereafter, assuming no share repurchases or issuances. Earnings Conference Call MetLife will hold its first quarter 2003 earnings conference call and audio Webcast on Tuesday, May 6, 2003, from 8:00 to 9:00 a.m. (ET). The conference call will be available live via telephone and Internet. To listen over the telephone, dial (612) 326-1003 (domestic and international callers). To listen to the conference call over the Internet, visit www.metlife.com (through a link on the Investor Relations page). Those who want to listen to the call on the telephone or via the Internet should dial in or go to the Web site at least fifteen minutes prior to the call to register, and/or download and install any necessary audio software. The conference call will be available for replay via telephone and Internet beginning at 11:30 a.m. (ET) on Tuesday, May 6, 2003, until Tuesday, May 13, 2003, at 11:59 p.m. (ET). To listen to a replay of the conference call over the telephone, dial (320) 365-3844 (domestic and international callers). The access code for the replay is 680861. To access the replay of the conference call over the Internet, visit the above-mentioned Web site. MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and institutional customers. The MetLife companies serve approximately 12 million individuals in the U.S. and companies and institutions with 37 million employees and members. It also has international insurance operations in 12 countries. # # # This release contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the company's operations and financial results and the business and the products of the company and its subsidiaries, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on the company. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to the following: (i) changes in general economic conditions, including the performance of financial markets and interest rates; (ii) heightened competition, including with respect to pricing, entry of new competitors and the development of new products by new and existing competitors; (iii) unanticipated changes in industry trends; (iv) the company's primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (v) deterioration in the experience of the "closed block" established in connection with the reorganization of Metropolitan Life Insurance Company; (vi) catastrophe losses; (vii) adverse litigation or arbitration results; (viii) regulatory, accounting or tax changes that may affect the cost of, or demand for, the company's products or services; (ix) downgrades in the company's and its affiliates' claims paying ability, financial strength or debt ratings; (x) changes in rating agency policies or practices; (xi) discrepancies between actual claims experience and assumptions used in setting prices for the company's products and establishing the liabilities for the company's obligations for future policy benefits and claims; (xii) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xiii) the effects of business disruption or economic contraction due to terrorism or other hostilities; and (xiv) other risks and uncertainties described from time to time in the company's filings with the Securities and Exchange Commission, including its S-1 and S-3 registration statements. The company specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. For a copy of MetLife's Quarterly Financial Supplement, please visit www.metlife.com. MetLife, Inc. Consolidated Statements of Income Unaudited (Dollar amounts in millions)
Three months ended March 31, ---------------------------- 2003 2002 ---- ---- Premiums $ 4,838 $ 4,481 Universal life and investment-type product policy fees 566 457 Net investment income 2,897 2,762 Other revenues 298 367 Net investment losses (net of amounts allocable from other accounts of ($38) and ($13), respectively (222) (92) ------- ------- Total revenues 8,377 7,975 ------- ------- Policyholder benefits and claims (excludes amounts directly related to net investment losses of ($28) and ($7), respectively) 4,953 4,618 Interest credited to policyholder account balances 747 714 Policyholder dividends 503 497 Other expenses (excludes amounts directly related to net investment losses of ($10) and ($6), respectively) 1,749 1,653 ------- ------- Total expenses 7,952 7,482 ------- ------- Income from continuing operations before provision for income taxes 425 493 Provision for income taxes 121 186 ------- ------- Income from continuing operations 304 307 Income from discontinued operations, net of income taxes 58 17 ------- ------- Income before cumulative effect of change in accounting 362 324 Cumulative effect of change in accounting -- 5 ------- ------- Net income $ 362 $ 329 ======= ======= RECONCILIATION OF NET INCOME TO OPERATING EARNINGS Net income $ 362 $ 329 Net investment losses (1) (170) (105) Minority interest - net investment losses 4 1 Adjustments to net investments losses (2) 38 13 Net investment losses tax benefit 44 15 ------- ------- After-tax net investment losses (84) (76) Cumulative effect of accounting change for SFAS 142 -- 5 ------- ------- Operating earnings $ 446 $ 400 ======= =======
(1) In accordance with the Statement of Financial Accounting Standards No. 144 ("SFAS 144"), a recently issued accounting standard pertaining to long-lived assets, income related to the company's real estate sold and held for sale is classified as discontinued operations. Included in net investment losses for the three months ended March 31, 2003 and 2002 are investment gains of $90 million and zero, respectively. This presentation differs from the presentation required by SFAS 144. (2) Adjustments to investment losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from net investment gains and losses. MetLife, Inc. Financial Highlights Unaudited (Dollar amounts in millions, except per share data or unless otherwise noted)
At or for the three months ended March 31, --------------- 2003 2002 ---- ---- Other Financial Data: Net income $ 362 $ 329 Operating earnings $ 446 $ 400 Total assets under management (billions) $ 308 $ 285 Individual Business Sales Data: Total first year statutory life premiums and deposits $ 212 $ 200 Variable and Universal life first year statutory premiums and deposits $ 159 $ 149 Total annuity statutory deposits $2,611 $1,704 Mutual fund sales $ 797 $ 997 Earnings per Share Calculation: Weighted average common shares outstanding - diluted 722.4 739.5 Operating earnings per share - diluted $ 0.62 $ 0.54 Net income per share - diluted $ 0.47 (3) $ 0.44
(3) Accounting standards require gains or losses resulting from the redemption of a subsidiary's redeemable preferred stock to be recorded in additional paid-in capital. However, such gains or losses are included in the calculation of net income per share. During the first quarter of 2003, net income per share includes a $21 million ($0.03 per diluted share) charge associated with the Company's conversion of company-obligated manditorily redeemable securities issued by MetLife Capital Trust I into long-term debt. MetLife, Inc. Balance Sheet Data Unaudited (Dollar amounts in millions)
March 31, December 31, 2003 2002 ---- ---- Balance Sheet Data: General account assets $ 226,238 $ 217,692 Separate account assets 60,620 59,693 --------- --------- Total assets $ 286,858 $ 277,385 ========= ========= Policyholder liabilities (including amounts of closed block) $ 168,929 $ 165,242 Short-term debt 2,441 1,161 Long-term debt 5,481 4,425 Other liabilities 31,071 28,214 Separate account liabilities 60,620 59,693 --------- --------- Total liabilities 268,542 258,735 --------- --------- Company-obligated mandatorily redeemable capital securities 277 1,265 --------- --------- Common stock, at par value 8 8 Additional paid-in capital 14,952 14,968 Retained earnings 3,169 2,807 Treasury stock (2,402) (2,405) Accumulated other comprehensive income 2,312 2,007 --------- --------- Total stockholders' equity 18,039 17,385 --------- --------- Total liabilities and stockholders' equity $ 286,858 $ 277,385 ========= =========
MetLife, Inc. Operating Earnings Unaudited (Dollar amounts in millions)
Three months ended March 31, ---------------------------------------------- 2003 2002 2002 As Reported As Reported Pro Forma(4) ----------- ----------- ------------ Institutional Operations Group Life $ 78 $ 68 $ 70 Retirement & Savings 82 114 118 Non-Medical Health & Other 59 53 58 ----- ----- ----- Total Institutional Operations 219 235 246 ----- ----- ----- Individual Operations Traditional Life 76 98 92 Variable & Universal Life 23 25 20 Annuities 50 40 35 Other 11 11 12 ----- ----- ----- Total Individual Operations 160 174 159 ----- ----- ----- Auto & Home Auto (4) 15 12 Property 32 11 12 Other 2 4 4 ----- ----- ----- Total Auto & Home 30 30 28 ----- ----- ----- International Operations 28 14 8 Reinsurance 20 22 16 Asset Management 1 1 3 Corporate, Other & Eliminations (12) (76) (60) ----- ----- ----- Total Operating Earnings $ 446 $ 400 $400 ===== ===== =====
(4) The amounts shown as pro forma for the three months ended March 31, 2002 reflect operating earnings that would have been reported had the Company allocated capital based on economic capital rather than on the basis of risk-based capital. MetLife, Inc. Reconciliations of Net Income to Operating Earnings - Product Level Unaudited (Dollar amounts in millions)
Three months ended March 31, ---------------------------- 2003 2002 ---- ---- Institutional Operations Group Life Net income $ 65 $ 46 After-tax net investment losses (13) (22) ---- ----- Operating earnings $ 78 $ 68 ==== ===== Retirement & Savings Net income $ 57 $ 70 After-tax net investment losses (25) (44) ---- ----- Operating earnings $ 82 $ 114 ==== ===== Non-Medical Health & Other Net income $ 53 $ 61 After-tax net investment gains (losses) (6) 8 ---- ----- Operating earnings $ 59 $ 53 ==== ===== Individual Operations Traditional Life Net income $ 82 $ 125 After-tax net investment gains 6 27 ---- ----- Operating earnings $ 76 $ 98 ==== ===== Variable & Universal Life Net income $ 18 $ 27 After-tax net investment gains (losses) (5) 2 ---- ----- Operating earnings $ 23 $ 25 ==== ===== Annuities Net income $ 35 $ 9 After-tax net investment losses (15) (31) ---- ----- Operating earnings $ 50 $ 40 ==== ===== Other Net income $ 6 $ 15 After-tax net investment gains (losses) (5) 4 ---- ----- Operating earnings $ 11 $ 11 ==== ===== Auto & Home Auto Net income $ (6) $ 8 After-tax net investment gains (losses) (2) (7) ---- ----- Operating earnings $ (4) $ 15 ==== ===== Property Net income $ 31 $ 9 After-tax net investment gains (losses) (1) (2) ---- ----- Operating earnings $ 32 $ 11 ==== ===== Other Net income $ 2 $ 4 After-tax net investment gains (losses) -- -- ---- ----- Operating earnings $ 2 $ 4 ==== =====
EX-99.2 4 y86103exv99w2.txt QUARTERLY FINANCIAL SUPPLEMENT [METLIFE LOGO] [SNOOPY GRAPHIC] FIRST QUARTER FINANCIAL SUPPLEMENT March 31, 2003 1 [METLIFE LOGO] TABLE OF CONTENTS HIGHLIGHTS CORPORATE OVERVIEW 2 METLIFE, INC. CONSOLIDATED BALANCE SHEETS 3 CONSOLIDATED STATEMENTS OF OPERATING EARNINGS AND TOTAL COMPANY HEADCOUNT 4 CONSOLIDATING BALANCE SHEET 5 CONSOLIDATING STATEMENT OF OPERATING EARNINGS 6 INSURANCE OPERATIONS CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 8 CONSOLIDATING STATEMENT OF OPERATING EARNINGS 9 INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL 11 PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION 12 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 13 INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY 14 SPREADS BY PRODUCT 15 INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL 16 PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES 18 ADDITIONAL STATISTICAL INFORMATION 19 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 20 INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY 21 SPREADS BY PRODUCT 22 AUTO & HOME STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL 23 WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA 24 INTERNATIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS 25 REINSURANCE OPERATIONS STATEMENTS OF OPERATING EARNINGS, PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION 26 ASSET MANAGEMENT STATEMENTS OF OPERATING EARNINGS, CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT 27 CORPORATE, OTHER & ELIMINATIONS STATEMENTS OF OPERATING EARNINGS 28 METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS 29 FIXED MATURITIES AND EQUITY SECURITIES GROSS UNREALIZED LOSS AGING SCHEDULE 31 SUMMARY OF FIXED MATURITIES BY SECTOR AND BY QUALITY DISTRIBUTION, AND SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE 32 SUMMARY OF REAL ESTATE, SUMMARY OF MORTGAGES AND DISTRIBUTION OF ASSETS UNDER MANAGEMENT 33 OTHER INFORMATION COMPANY RATINGS 34 CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL VS. ECONOMIC CAPITAL 2002 THROUGH 2000 35
NOTE: THE QUARTERLY FINANCIAL SUPPLEMENT ("QFS") INCLUDES A FINANCIAL MEASURE, OPERATING EARNINGS, THAT IS NOT BASED ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). OPERATING EARNINGS IS DEFINED AS GAAP NET INCOME EXCLUDING AFTER-TAX NET INVESTMENT GAINS AND LOSSES, AND THE IMPACT FROM THE CUMULATIVE EFFECT OF ACCOUNTING CHANGES. METLIFE USES OPERATING EARNINGS IN ANALYZING ITS PERFORMANCE; IT BELIEVES THAT THIS MEASURE ENHANCES THE UNDERSTANDING AND COMPARABILITY OF ITS PERFORMANCE BY EXCLUDING THE EFFECT OF INVESTMENT GAINS AND LOSSES WHICH CAN FLUCTUATE SIGNIFICANTLY FROM PERIOD TO PERIOD, THEREBY HIGHLIGHTING THE RESULTS OF OPERATIONS AND THE UNDERLYING PROFITABILITY DRIVERS OF THE BUSINESS. A RECONCILIATION OF OPERATING EARNINGS TO NET INCOME, THE MOST DIRECTLY COMPARABLE GAAP MEASURE, IS INCLUDED THROUGHOUT THE QFS. [METLIFE LOGO] CORPORATE OVERVIEW Unaudited (Dollars in millions, except per share data)
For the Three Months Ended ---------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, 2003 2002 2002 2002 2002 ---------------------------------------------------------------------- Net income (1) $ 362 $ 561 $ 328 $ 387 $ 329 Net investment gains (losses) (170) 310 (286) (266) (105) Minority interest - net investment gains (losses) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (2) 38 43 16 73 13 Net investment gains (losses) tax benefit (provision) 44 (132) 102 72 15 ---------------------------------------------------------------------- After-tax net investment gains (losses) (84) 223 (169) (117) (76) Cumulative effect of accounting change for SFAS 142 0 0 (5) 0 5 ---------------------------------------------------------------------- Operating earnings $ 446 $ 338 (3) $ 502 $ 504 (4) $ 400(5) ====================================================================== Net income per share - diluted $ 0.47 (6) $ 0.78 $ 0.45 $ 0.53 $ 0.44 Operating earnings per share - diluted $ 0.62 $ 0.47 $ 0.69 $ 0.69 $ 0.54 Weighted average common shares outstanding - diluted 722.4 720.9 722.7 733.9 739.5 Book value per common share - diluted $24.97 $24.12 $23.63 $22.00 $20.72 Book value per common share, excluding other accumulated comprehensive income - diluted $21.77 $21.33 $20.70 $20.00 $19.58
At or for the Three Months Ended ---------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, 2003 2002 2002 2002 2002 ---------------------------------------------------------------------- Shares outstanding, beginning of period 700.3 700.3 701.9 707.8 715.5 Treasury stock 0.1 0.0 (1.6) (5.9) (7.7) ---------------------------------------------------------------------- Shares outstanding, end of period 700.4 700.3 700.3 701.9 707.8 Weighted average common shares outstanding- basic 700.3 700.3 701.5 704.7 712.1 Dilutive effect of convertible securities 22.1 20.6 21.2 28.3 27.1 Dilutive effect of stock options 0.0 0.0 0.0 0.9 0.3 ---------------------------------------------------------------------- Weighted average common shares outstanding - diluted 722.4 720.9 722.7 733.9 739.5 ====================================================================== Policyholder Trust Shares 386.4 390.0 400.6 403.2 409.4 SUPPLEMENTAL DATA Adjusted long-term debt to total capital excluding other accumulated comprehensive income (7) 23.7% 19.2% 15.4% 15.4% 15.5%
(1) Presentation of net income throughout the QFS differs from other public filings with respect to discontinued operations. Presentation of discontinued operations in other public filings is in accordance with the Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets. (2) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. (3) Operating earnings for the three months ended December 31, 2002 includes a $169 million after-tax ($0.23 per diluted share) charge to cover costs associated with personal injury liabilities caused by exposure to asbestos or asbestos-containing products, a $20 million after-tax ($0.03 per diluted share) reduction of a previously established liability related to the Company's business realignment initiatives, and a $17 million after-tax ($0.02 per diluted share) reduction of a previously established disability insurance liability related to the September 11, 2001 tragedies. (4) Operating earnings for the three months ended June 30, 2002 includes a $30 million after-tax ($0.04 per diluted share) reduction of a previously established liability related to the Company's sales practice class action settlement in 1999. (5) Operating earnings for the three months ended March 31, 2002 includes a $48 million after-tax ($0.07 per diluted share) charge to cover costs associated with the resolution of a federal government investigation of General American Life Insurance Company's former Medicare business. (6) Accounting standards require gains or losses resulting from the redemption of a subsidiary's redeemable preferred stock be excluded from the income statement. Rather, such gains or losses are recorded in capital in excess of par value on the balance sheet. However, such gains or losses are included in the calculation of net income per share. During the first quarter of 2003, net income per share includes a $21 million after-tax ($0.03 per diluted share) charge associated with the Company's redemption of MetLife Capital Trust's mandatorily redeemable capital securities. (7) Adjusted long-term debt at March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, consists of $4,919 million, $3,899 million, $2,911 million, $2,903 million and $2,898 million, of long-term debt, respectively, and $49 million, $47 million, $52 million, $0 million and $0 million, of short-term debt, respectively. Total capital is defined as equity less accumulated other comprehensive income plus adjusted long-term debt and company obligated mandatorily redeemable capital securities. 2 [METLIFE LOGO] METLIFE, INC. CONSOLIDATED BALANCE SHEETS
As of ------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------- ASSETS (1) INVESTMENTS - ----------- Fixed maturities available-for-sale, at fair value $144,610 $140,553 $133,163 $124,067 $118,477 Equity securities, at fair value 1,205 1,348 1,955 1,661 1,494 Mortgage loans on real estate 25,046 25,086 23,885 23,733 23,684 Real estate and real estate joint ventures 4,569 4,725 5,663 5,963 5,862 Policy loans 8,615 8,580 8,366 8,316 8,310 Other limited partnership interests 2,299 2,395 1,747 1,785 1,817 Short-term investments 3,188 1,921 2,658 2,233 2,410 Other invested assets 3,948 3,727 3,214 3,271 3,512 ------------------------------------------------------------------------------ 193,480 188,335 180,651 171,029 165,566 Cash and cash equivalents 4,938 2,323 3,647 3,563 4,024 Accrued investment income 2,179 2,088 2,224 2,215 2,186 Premiums and other receivables 7,968 7,669 8,278 8,223 8,162 Deferred policy acquisition costs 11,889 11,727 11,553 11,774 11,436 Goodwill and other intangible assets 745 753 792 807 648 Other 5,039 4,797 4,853 4,389 4,200 Separate account assets 60,620 59,693 56,049 59,283 62,538 ------------------------------------------------------------------------------ $286,858 $277,385 $268,047 $261,283 $258,760 ============================================================================== LIABILITIES AND EQUITY (1) LIABILITIES - ----------- Future policy benefits $ 92,744 $ 91,697 $ 89,734 $ 88,200 $ 86,020 Policyholder account balances 69,060 66,830 65,011 63,005 60,236 Short-term debt 2,441 1,161 878 52 546 Long-term debt 5,481 4,425 3,428 3,436 3,434 Payables under securities loaned transactions 19,566 17,862 16,251 13,486 13,665 Other 18,630 17,067 18,356 16,417 15,743 Separate account liabilities 60,620 59,693 56,049 59,283 62,538 ------------------------------------------------------------------------------ 268,542 258,735 249,707 243,879 242,182 ------------------------------------------------------------------------------ Company-obligated mandatorily redeemable capital securities 277 1,265 1,263 1,260 1,258 ------------------------------------------------------------------------------ EQUITY - ------ Common stock, at par value 8 8 8 8 8 Capital in excess of par value 14,952 14,968 14,967 14,967 14,966 Retained earnings 3,169 2,807 2,393 2,065 1,678 Treasury stock (2,402) (2,405) (2,405) (2,365) (2,174) Accumulated other comprehensive income 2,312 2,007 2,114 1,469 842 ------------------------------------------------------------------------------ 18,039 17,385 17,077 16,144 15,320 ------------------------------------------------------------------------------ $286,858 $277,385 $268,047 $261,283 $258,760 ==============================================================================
(1) Certain amounts in prior periods presented throughout the quarterly financial supplement have been reclassified to conform with current period presentation. 3 [METLIFE LOGO] METLIFE, INC. CONSOLIDATED STATEMENTS OF OPERATING EARNINGS AND TOTAL COMPANY HEADCOUNT
For the Three Months Ended ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- REVENUES (1) Premiums $4,838 $5,228 $4,676 $4,701 $4,481 Universal life and investment-type product policy fees 566 581 587 514 457 Investment income, net 2,899 2,964 2,839 2,861 2,789 Other revenues 298 301 320 389 367 ------------------------------------------------------------------------- 8,601 9,074 8,422 8,465 8,094 ------------------------------------------------------------------------- EXPENSES (1) Policyholder benefits and dividends 5,456 5,737 5,243 5,370 5,115 Interest credited to policyholder account balances 747 773 736 727 714 Interest expense 116 98 95 93 94 Other expenses 1,637 1,987 1,611 1,529 1,560 ------------------------------------------------------------------------- 7,956 8,595 7,685 7,719 7,483 ------------------------------------------------------------------------- Operating earnings before provision for income taxes 645 479 737 746 611 Provision for income taxes 199 141 235 242 211 ------------------------------------------------------------------------- OPERATING EARNINGS $ 446 $ 338 (2) $ 502 $ 504 (3) $ 400 (4) ------------------------------------------------------------------------- NET INCOME RECONCILIATION - ------------------------- Operating earnings $ 446 $ 338 $ 502 $ 504 $ 400 Net investment gains (losses) (170) 310 (286) (266) (105) Minority interest - net investment gains (losses) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (5) 38 43 16 73 13 Net investment gains (losses) tax benefit (provision) 44 (132) 102 72 15 ------------------------------------------------------------------------- After-tax net investment gains (losses) (84) 223 (169) (117) (76) Cumulative effect of accounting change for SFAS 142 0 0 (5) 0 5 ------------------------------------------------------------------------- Net income $ 362 $ 561 $ 328 $ 387 $ 329 =========================================================================
As of -------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, 2003 2002 2002 2002 2002 -------------------------------------------------------------------------- TOTAL COMPANY HEADCOUNT DOMESTIC SALES Individual (6) 10,409 10,909 10,968 11,015 10,785 Institutional 735 720 731 687 672 Auto & Home 492 480 450 458 456 Asset Management 72 68 72 95 99 -------------------------------------------------------------------------- Total domestic sales 11,708 12,177 12,221 12,255 12,012 OTHER THAN SALES Individual 2,927 2,968 3,007 3,047 3,021 Institutional 5,631 5,488 5,502 5,519 5,569 Auto & Home 3,513 3,523 3,476 3,495 3,557 Reinsurance 630 622 621 606 599 Asset Management 516 521 570 630 648 Operations 3,920 3,849 3,856 3,962 4,081 Technology 3,506 3,688 3,728 3,709 3,725 Corporate 3,255 3,289 3,362 3,391 3,400 -------------------------------------------------------------------------- Total domestic other than sales 23,898 23,948 24,122 24,359 24,600 -------------------------------------------------------------------------- TOTAL DOMESTIC HEADCOUNT 35,606 36,125 36,343 36,614 36,612 -------------------------------------------------------------------------- INTERNATIONAL Sales Professional sales 1,146 1,146 732 732 732 Other 7,894 8,337 8,153 8,289 5,628 Other than sales 2,761 2,904 2,903 3,069 2,250 -------------------------------------------------------------------------- TOTAL INTERNATIONAL HEADCOUNT 11,801 12,387 11,788 12,090 8,610 -------------------------------------------------------------------------- TOTAL COMPANY HEADCOUNT 47,407 48,512 48,131 48,704 45,222 ==========================================================================
(1) Certain amounts in prior periods presented throughout the quarterly financial supplement have been reclassified to conform with current period presentation. (2) Operating earnings for the three months ended December 31, 2002 includes a $169 million after-tax charge to cover costs associated with personal injury liabilities caused by exposure to asbestos or asbestos-containing products, a $20 million after-tax reduction of a previously established liability related to the Company's business realignment initiatives, and a $17 million after-tax reduction of a previously established disability insurance liability related to the September 11, 2001 tragedies. (3) Operating earnings for the three months ended June 30, 2002 includes a $30 million after-tax reduction of a previously established liability related to the Company's sales practice class action settlement in 1999. (4) Operating earnings for the three months ended March 31, 2002 includes a $48 million after-tax charge to cover costs associated with the resolution of a federal government investigation of General American Life Insurance Company's former Medicare business. (5) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. (6) Individual sales headcount has been restated for all prior periods based on the December 2002 increase in minimum annual production requirements for General American agents. 4 [METLIFE LOGO] METLIFE, INC. CONSOLIDATING BALANCE SHEET AT MARCH 31, 2003
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Total investments $193,480 $176,637 $ 7,429 $ 156 $ 9,258 Deferred policy acquisition costs 11,889 10,311 1,577 0 1 Goodwill and other intangible assets 745 623 99 18 5 Other 20,124 15,170 1,389 112 3,453 Separate account assets 60,620 60,626 11 0 (17) ----------------------------------------------------------------------------------- $286,858 $263,367 $10,505 $ 286 $12,700 =================================================================================== LIABILITIES AND EQUITY LIABILITIES - ----------- Future policy benefits $ 92,744 $ 91,170 $ 2,987 $ 0 ($ 1,413) Policyholder account balances 69,060 65,668 3,896 0 (504) Debt 7,922 1,068 344 0 6,510 Payables under securities loaned transactions 19,566 16,318 0 0 3,248 Other 18,630 12,516 2,409 58 3,647 Separate account liabilities 60,620 60,626 11 0 (17) ----------------------------------------------------------------------------------- 268,542 247,366 9,647 58 11,471 Company-obligated mandatorily redeemable capital securities 277 0 158 0 119 ----------------------------------------------------------------------------------- EQUITY - ------ Common stock, at par value 8 0 0 0 8 Allocated equity (1) 18,121 14,017 615 226 3,263 Treasury stock (2,402) 0 0 0 (2,402) Accumulated other comprehensive income 2,312 1,984 85 2 241 ----------------------------------------------------------------------------------- 18,039 16,001 700 228 1,110 ----------------------------------------------------------------------------------- $286,858 $263,367 $10,505 $ 286 $12,700 ===================================================================================
(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 MARCH 31, 2003
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,838 $4,290 $ 552 $ 0 ($ 4) Universal life and investment-type product policy fees 566 566 0 0 0 Investment income, net 2,899 2,704 110 16 69 Other revenues 298 245 12 29 12 -------------------------------------------------------------------- 8,601 7,805 674 45 77 -------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,456 5,021 433 0 2 Interest credited to policyholder account balances 747 704 43 0 0 Other expenses 1,753 1,424 168 43 118 -------------------------------------------------------------------- 7,956 7,149 644 43 120 -------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 645 656 30 2 (43) Provision (benefit) for income taxes 199 219 10 1 (31) -------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 446 $ 437 $ 20 $ 1 ($12) -------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings (loss) $ 446 $ 437 $ 20 $ 1 ($12) Net investment gains (losses) (170) (141) (4) 8 (33) Minority interest - net investment gains (losses) 4 0 4 0 0 Adjustments to net investment gains (losses) (1) 38 38 0 0 0 Net investment gains (losses) tax benefit (provision) 44 37 0 (3) 10 -------------------------------------------------------------------- After-tax net investment gains (losses) (84) (66) 0 5 (23) -------------------------------------------------------------------- Net income (loss) $ 362 $ 371 $ 20 $ 6 ($35) ====================================================================
(1) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 6 [METLIFE LOGO] METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2002
Corporate, Insurance Reinsurance Asset Other Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations - ------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $4,481 $4,010 $475 $ 0 ($ 4) Universal life and investment-type product policy fees 457 458 0 0 (1) Investment income, net 2,789 2,636 99 14 40 Other revenues 367 310 8 40 9 ------------------------------------------------------------------ 8,094 7,414 582 54 44 ------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 5,115 4,716 400 0 (1) Interest credited to policyholder account balances 714 679 34 0 1 Other expenses 1,654 1,320 114 52 168 ------------------------------------------------------------------ 7,483 6,715 548 52 168 ------------------------------------------------------------------ Operating earnings (loss) before provision (benefit) for income taxes 611 699 34 2 (124) Provision (benefit) for income taxes 211 246 12 1 (48) ------------------------------------------------------------------ OPERATING EARNINGS (LOSS) $ 400 (1) $ 453 $ 22 $ 1 ($76) (1) ------------------------------------------------------------------ NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings (loss) $ 400 $ 453 $ 22 $ 1 ($76) Net investment gains (losses) (105) (127) 2 (4) 24 Minority interest - net investment gains (losses) 1 0 1 0 0 Adjustments to net investment gains (losses) (2) 13 13 0 0 0 Net investment gains (losses) tax benefit (provision) 15 26 (1) 2 (12) ------------------------------------------------------------------ After-tax net investment gains (losses) (76) (88) 2 (2) 12 Cumulative effect of accounting change for SFAS 142 5 5 0 0 0 ------------------------------------------------------------------ Net income (loss) $ 329 $ 370 $ 24 ($ 1) ($64) ==================================================================
(1) Consolidated operating earnings and Corporate, Other & Eliminations operating loss for the three months ended March 31, 2002 includes a $48 million after-tax charge to cover costs associated with the resolution of a federal government investigation of General American Life Insurance Company's former Medicare business. (2) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 7 [METLIFE LOGO] INSURANCE OPERATIONS CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended -------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,290 $4,635 $4,222 $4,233 $4,010 Universal life and investment-type product policy fees 566 581 587 513 458 Investment income, net 2,704 2,802 2,752 2,724 2,636 Other revenues 245 225 262 270 310 -------------------------------------------------------------------- 7,805 8,243 7,823 7,740 7,414 -------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,021 5,287 4,900 4,983 4,716 Interest credited to policyholder account balances 704 724 705 696 679 Capitalization of deferred policy acquisition costs (476) (480) (473) (434) (417) Amortization of deferred policy acquisition costs 344 379 393 308 284 Other expenses 1,556 1,543 1,462 1,442 1,453 -------------------------------------------------------------------- 7,149 7,453 6,987 6,995 6,715 -------------------------------------------------------------------- Operating earnings before provision for income taxes 656 790 836 745 699 Provision for income taxes 219 268 288 261 246 -------------------------------------------------------------------- OPERATING EARNINGS $ 437 $ 522(1) $ 548 $ 484 $ 453 -------------------------------------------------------------------- NET INCOME RECONCILIATION - ------------------------- Operating earnings $ 437 $ 522 $ 548 $ 484 $ 453 Net investment gains (losses) (141) 209 (246) (282) (127) Adjustments to net investment gains (losses) (2) 38 39 16 73 13 Net investment gains (losses) tax benefit (provision) 37 (98) 85 86 26 -------------------------------------------------------------------- After-tax net investment gains (losses) (66) 150 (145) (123) (88) Cumulative effect of accounting change for SFAS 142 0 0 (5) 0 5 -------------------------------------------------------------------- Net income $ 371 $ 672 $ 398 $ 361 $ 370 ====================================================================
(1) Operating earnings for the three months ended December 31, 2002 includes a $20 million after-tax reduction of a previously established liability related to the Company's business realignment initiatives and a $17 million after-tax reduction of a previously established disability insurance liability related to the September 11, 2001 tragedies. (2) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 8 [METLIFE LOGO] INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2003
------------------------------------------------------------------- Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 4,290 $ 2,142 $ 1,041 $ 712 $ 395 Universal life and investment-type product policy fees 566 155 360 0 51 Investment income, net 2,704 979 1,563 39 123 Other revenues 245 142 86 9 8 --------------------------------------------------------------- 7,805 3,418 3,050 760 577 --------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,021 2,418 1,692 534 377 Interest credited to policyholder account balances 704 224 443 0 37 Capitalization of deferred policy acquisition costs (476) (38) (260) (112) (66) Amortization of deferred policy acquisition costs 344 20 175 115 34 Other expenses 1,556 454 753 196 153 --------------------------------------------------------------- 7,149 3,078 2,803 733 535 --------------------------------------------------------------- Operating earnings before provision for income taxes 656 340 247 27 42 Provision for income taxes 219 121 87 (3) 14 --------------------------------------------------------------- OPERATING EARNINGS $ 437 $ 219 $ 160 $ 30 $ 28 --------------------------------------------------------------- NET INCOME RECONCILIATION ------------------------- Operating earnings $ 437 $ 219 $ 160 $ 30 $ 28 Net investment gains (losses) (141) (70) (67) (4) 0 Adjustments to net investment gains (losses) (1) 38 0 38 0 0 Net investment gains (losses) tax benefit (provision) 37 26 10 1 0 --------------------------------------------------------------- After-tax net investment gains (losses) (66) (44) (19) (3) 0 --------------------------------------------------------------- Net income $ 371 $ 175 $ 141 $ 27 $ 28 ===============================================================
(1) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 9 [METLIFE LOGO] INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2002
------------------------------------------------------------------------ Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 4,010 $ 1,860 $ 1,083 $ 692 $ 375 Universal life and investment-type product policy fees 458 152 299 0 7 Investment income, net 2,636 985 1,531 45 75 Other revenues 310 172 128 7 3 ------------------------------------------------------------------------ 7,414 3,169 3,041 744 460 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 4,716 2,191 1,692 495 338 Interest credited to policyholder account balances 679 228 442 0 9 Capitalization of deferred policy acquisition costs (417) (35) (244) (98) (40) Amortization of deferred policy acquisition costs 284 16 137 104 27 Other expenses 1,453 404 741 202 106 ------------------------------------------------------------------------ 6,715 2,804 2,768 703 440 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 699 365 273 41 20 Provision for income taxes 246 130 99 11 6 ------------------------------------------------------------------------ OPERATING EARNINGS $ 453 $ 235 $ 174 $ 30 $ 14 ------------------------------------------------------------------------ NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings $ 453 $ 235 $ 174 $ 30 $ 14 Net investment gains (losses) (127) (81) (10) (14) (22) Adjustments to net investment gains (losses) (1) 13 0 13 0 0 Net investment gains (losses) tax benefit (provision) 26 23 (1) 5 (1) ------------------------------------------------------------------------ After-tax net investment gains (losses) (88) (58) 2 (9) (23) Cumulative effect of accounting change for SFAS 142 5 0 0 0 5 ------------------------------------------------------------------------ Net income (loss) $ 370 $ 177 $ 176 $ 21 $ (4) ========================================================================
(1) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 10 [METLIFE LOGO] INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended -------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 1,169 $ 1,175 $ 1,145 $ 1,095 $ 1,084 Universal life and investment-type product policy fees 155 147 148 168 152 Investment income, net 242 246 245 241 242 Other revenues 16 7 13 10 14 ------------------------------------------------------------------------- 1,582 1,575 1,551 1,514 1,492 ------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 1,234 1,208 1,201 1,171 1,178 Interest credited to policyholder account balances 106 110 107 106 102 Other expenses 121 128 111 121 105 ------------------------------------------------------------------------- 1,461 1,446 1,419 1,398 1,385 ------------------------------------------------------------------------- Operating earnings before provision for income taxes 121 129 132 116 107 Provision for income taxes 43 47 48 42 39 ------------------------------------------------------------------------- OPERATING EARNINGS $ 78 $ 82 $ 84 $ 74 $ 68 ========================================================================= After-tax net investment losses ($ 13) ($ 15) ($ 52) ($ 50) ($ 22)
For the Three Months Ended ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 174 $ 257 $ 200 $ 388 $ 98 Universal life and investment-type product policy fees 0 0 0 0 0 Investment income, net 642 674 641 673 655 Other revenues 45 46 55 62 70 ------------------------------------------------------------------------- 861 977 896 1,123 823 ------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 531 627 547 723 443 Interest credited to policyholder account balances 118 126 129 126 126 Other expenses 86 41 63 68 81 ------------------------------------------------------------------------- 735 794 739 917 650 ------------------------------------------------------------------------- Operating earnings before provision for income taxes 126 183 157 206 173 Provision for income taxes 44 63 54 71 59 ------------------------------------------------------------------------- OPERATING EARNINGS $ 82 $ 120(1) $ 103 $ 135 $ 114 ========================================================================= After-tax net investment gains (losses) ($ 25) $ 52 ($ 69) $ 10 ($ 44)
For the Three Months Ended ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 799 $ 750 $ 705 $ 679 $ 678 Universal life and investment-type product policy fees 0 0 0 0 0 Investment income, net 95 85 84 89 88 Other revenues 81 74 86 84 88 ------------------------------------------------------------------------ 975 909 875 852 854 ------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 653 593 612 581 570 Interest credited to policyholder account balances 0 0 0 0 0 Other expenses 229 220 189 205 199 ------------------------------------------------------------------------- 882 813 801 786 769 ------------------------------------------------------------------------- Operating earnings before provision for income taxes 93 96 74 66 85 Provision for income taxes 34 36 27 25 32 ------------------------------------------------------------------------- OPERATING EARNINGS $ 59 $ 60(1) $ 47 $ 41 $ 53 ========================================================================= After-tax net investment gains (losses) ($ 6) ($ 12) ($ 8) ($ 20) $ 8
(1) Operating earnings for the three months ended December 31, 2002 includes a $20 million after-tax benefit in Retirement & Savings for the reduction of a previously established liability associated with the 2001 business realignment initiatives, as well as a $17 million after-tax benefit in Non-Medical Health & Other for the reduction of a previously established disability insurance liability associated with the September 11, 2001 tragedies. 11 [METLIFE LOGO] INSTITUTIONAL OPERATIONS PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ---------------------------------------------------------------------------------------------------------------------------------- PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT Group Life $ 1,340 $ 1,329 $ 1,306 $ 1,273 $ 1,250 Retirement & Savings 219 303 255 450 168 Non-Medical Health & Other 880 824 791 763 766 --------------------------------------------------------------------- Total Premiums, Fees and Other Revenues $ 2,439 $ 2,456 $ 2,352 $ 2,486 $ 2,184 ===================================================================== Group Disability (Included in Non-Medical Health & Other) $ 241 $ 236 $ 210 $ 212 $ 198 ADDITIONAL STATISTICAL INFORMATION INCURRED LOSS RATIO (MORTALITY EXPERIENCE): Term Life 93.2% 92.4% 93.3% 94.4% 94.5% INCURRED LOSS RATIO (MORBIDITY EXPERIENCE): Group Disability (1) 96.5% 97.7% 97.5% 99.5% 97.2%
(1) Group Disability incurred loss ratio excludes the impact associated with the fourth quarter 2002 reduction of a previously established disability insurance liability related to the September 11, 2001 tragedies. Including the impact of the reduction in the liability, the incurred loss ratio was 88.7%. 12 [METLIFE LOGO] INSTITUTIONAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES - --------------------------------------------------------
For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $13,756 $13,269 $13,004 $12,800 $12,475 Premiums and deposits 2,877 2,673 2,251 2,536 2,018 Interest on reserves 136 139 137 135 134 Surrenders and withdrawals (1,426) (909) (760) (978) (456) Benefit payments (1,223) (950) (1,198) (1,165) (1,175) Other (127) (466) (165) (324) (196) ------------------------------------------------------------------------------------------- Balance, end of period $13,993 $13,756 $13,269 $13,004 $12,800 =========================================================================================== For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $35,548 $35,553 $34,618 $33,313 $33,502 Premiums and deposits 1,060 1,387 1,907 2,281 1,465 Interest on reserves 518 525 526 522 523 Surrenders and withdrawals (602) (1,943) (1,598) (996) (1,331) Benefit payments (465) (540) (486) (439) (422) Other 147 566 586 (63) (424) ------------------------------------------------------------------------------------------- Balance, end of period $36,206 $35,548 $35,553 $34,618 $33,313 =========================================================================================== For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 4,396 $ 4,349 $ 4,286 $ 4,227 $ 4,169 Premiums and deposits 736 699 662 645 638 Interest on reserves 55 58 57 56 56 Surrenders and withdrawals 12 18 22 9 18 Benefit payments (609) (558) (589) (562) (553) Other (107) (170) (89) (89) (101) ------------------------------------------------------------------------------------------- Balance, end of period $ 4,483 $ 4,396 $ 4,349 $ 4,286 $ 4,227 ===========================================================================================
SEPARATE ACCOUNT LIABILITIES - ----------------------------
For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 6,011 $ 5,529 $ 5,770 $ 5,860 $ 5,551 Premiums and deposits 299 1,033 248 363 785 Investment performance 175 270 (291) (278) 105 Surrenders and withdrawals (109) (821) (198) (175) (581) ------------------------------------------------------------------------------------------- Balance, end of period $ 6,376 $ 6,011 $ 5,529 $ 5,770 $ 5,860 =========================================================================================== For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $24,775 $23,593 $23,050 $23,804 $24,667 Premiums and deposits 752 1,087 996 547 760 Investment performance 393 884 316 (232) 38 Surrenders and withdrawals (793) (772) (753) (1,047) (1,639) Policy charges (22) (17) (16) (22) (22) ------------------------------------------------------------------------------------------- Balance, end of period $25,105 $24,775 $23,593 $23,050 $23,804 =========================================================================================== For the Three Months Ended ------------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 1,150 $ 1,086 $ 1,042 $ 1,015 $ 962 Premiums and deposits 63 51 43 35 39 Investment performance 47 38 26 11 39 Surrenders and withdrawals (12) (18) (22) (9) (18) Policy charges (7) (7) (3) (10) (7) ------------------------------------------------------------------------------------------- Balance, end of period $ 1,241 $ 1,150 $ 1,086 $ 1,042 $ 1,015 ===========================================================================================
13 [METLIFE LOGO] INSTITUTIONAL OPERATIONS INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended -------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE EXPENSES TO PREMIUMS, FEES AND OTHER REVENUES RATIO Insurance Expenses $ 382 $ 371 $ 322 $ 355 $ 347 ================================================================================ Premiums, Fees and Other Revenues $2,439 $2,456 $2,352 $2,486 $2,184 ================================================================================ RATIO 15.7% 15.1% 13.7% 14.3% 15.9% OTHER EXPENSES BY MAJOR CATEGORY Direct and allocated expenses $ 346 $ 336 $ 287 $ 308 $ 312 Premium taxes and other taxes, licenses and fees 36 35 35 47 35 -------------------------------------------------------------------------------- Subtotal Insurance Expenses $ 382 $ 371 $ 322 $ 355 $ 347 Commissions and other expenses 54 48 41 39 38 4th quarter 2001 charges 0 (30) 0 0 0 -------------------------------------------------------------------------------- Total Other Expenses $ 436 $ 389 $ 363 $ 394 $ 385 ================================================================================
14 [METLIFE LOGO] INSTITUTIONAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ---------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2003 2002 2002 2002 2002 ------------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 5.62% 5.98% 6.07% 6.05% 6.21% Average crediting rate 3.87% 4.08% 4.16% 4.16% 4.33% ---------------------------------------------------------------------------------------- Spread 1.75% 1.90% 1.91% 1.89% 1.88% ========================================================================================
For the Three Months Ended ---------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2002 2002 2002 2002 ------------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 7.22% 7.63% 7.33% 7.79% 7.80% Average crediting rate 6.05% 6.12% 6.11% 6.21% 6.36% ---------------------------------------------------------------------------------------- Spread 1.17% 1.51% 1.22% 1.58% 1.44% ========================================================================================
For the Three Months Ended ---------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2002 2002 2002 2002 ------------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 7.27% 7.41% 7.54% 7.81% 8.00% Average crediting rate 5.52% 5.86% 5.89% 5.87% 6.05% ---------------------------------------------------------------------------------------- Spread 1.75% 1.55% 1.65% 1.94% 1.95% ========================================================================================
15 [METLIFE LOGO] INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Traditional Life 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $1,010 $1,197 $1,064 $1,049 $1,040 Universal life and investment-type product policy fees 0 0 0 0 0 Investment income, net 869 877 900 891 873 Other revenues 0 (3) 4 4 6 ----------------------------------------------------------------------- 1,879 2,071 1,968 1,944 1,919 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 1,529 1,710 1,569 1,576 1,539 Interest credited to policyholder account balances 0 0 0 0 0 Capitalization of deferred policy acquisition costs (47) (52) (42) (51) (49) Amortization of deferred policy acquisition costs 58 47 66 62 65 Other expenses 221 223 175 205 210 ------------------------------------------------------------------------ 1,761 1,928 1,768 1,792 1,765 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 118 143 200 152 154 Provision for income taxes 42 51 73 55 56 ------------------------------------------------------------------------ OPERATING EARNINGS $ 76 $ 92 $ 127 $ 97 $ 98 ======================================================================== After-tax net investment gains $ 6 $ 178 $ 39 $ 27 $ 27
For the Three Months Ended ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 0 $ 0 $ 0 $ 0 $ 0 Universal life and investment-type product policy fees 255 265 267 230 196 Investment income, net 142 149 149 148 139 Other revenues (2) 0 1 0 4 ------------------------------------------------------------------------ 395 414 417 378 339 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 87 66 51 60 71 Interest credited to policyholder account balances 117 119 120 115 115 Capitalization of deferred policy acquisition costs (81) (95) (106) (102) (100) Amortization of deferred policy acquisition costs 59 85 95 54 22 Other expenses 177 202 197 195 192 ------------------------------------------------------------------------ 359 377 357 322 300 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 36 37 60 56 39 Provision for income taxes 13 14 20 20 14 ------------------------------------------------------------------------ OPERATING EARNINGS $ 23 $ 23 $ 40 $ 36 $ 25 ========================================================================= After-tax net investment gains (losses) ($ 5) ($ 22) ($ 1) ($ 3) $ 2
16 [METLIFE LOGO] INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended ----------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Annuities 2003 2002 2002 2002 2002 ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 24 $ 44 $37 $ 28 $ 20 Universal life and investment-type product policy fees 82 78 82 79 81 Investment income, net 487 510 496 478 457 Other revenues 1 7 2 5 7 ---------------------------------------------------------------------- 594 639 617 590 565 ---------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 64 104 76 60 48 Interest credited to policyholder account balances 296 312 290 309 297 Capitalization of deferred policy acquisition costs (131) (124) (113) (103) (93) Amortization of deferred policy acquisition costs 55 46 80 58 47 Other expenses 234 228 216 188 204 ---------------------------------------------------------------------- 518 566 549 512 503 ---------------------------------------------------------------------- Operating earnings before provision for income taxes 76 73 68 78 62 Provision for income taxes 26 26 24 28 22 ---------------------------------------------------------------------- OPERATING EARNINGS $ 50 $ 47 $ 44 $ 50 $ 40 ====================================================================== After-tax net investment losses ($ 15) ($ 20) ($ 46) ($ 67) ($ 31)
For the Three Months Ended -------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Other 2003 2002 2002 2002 2002 ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 7 $ 8 ( $21) $ 18 $ 23 Universal life and investment-type product policy fees 23 25 26 29 22 Investment income, net 65 61 60 63 62 Other revenues 87 89 88 93 111 --------------------------------------------------------------------- 182 183 153 203 218 --------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 12 14 (15) 27 34 Interest credited to policyholder account balances 30 30 27 29 30 Capitalization of deferred policy acquisition costs (1) (2) (1) (2) (2) Amortization of deferred policy acquisition costs 3 5 6 3 3 Other expenses 121 116 110 126 135 --------------------------------------------------------------------- 165 163 127 183 200 --------------------------------------------------------------------- Operating earnings before provision for income taxes 17 20 26 20 18 Provision for income taxes 6 8 11 7 7 --------------------------------------------------------------------- OPERATING EARNINGS $ 11 $ 12 $ 15 $ 13 $ 11 ===================================================================== After-tax net investment gains (losses) ($ 5) ($ 10) ($ 8) ($ 13) $ 4
17 [METLIFE LOGO] INDIVIDUAL OPERATIONS PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES
For the Three Months Ended ------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 ---------------------------------------------------------------------------------------------------------------------------------- PREMIUMS AND DEPOSITS BY PRODUCT (1) TOTAL (2) Traditional Life 1st Year (3) $ 53 $ 60 $ 46 $ 57 $ 51 Renewal 1,000 1,291 1,069 1,075 1,002 Variable & Universal Life Variable 1st Year excluding Single Premium COLI/BOLI (3) 91 108 97 115 112 Universal 1st Year excluding Single Premium COLI/BOLI (3) 55 66 63 49 35 Single Premium COLI/BOLI 13 1 50 0 2 Renewal 455 429 387 390 415 Annuities (3) 2,611 2,352 1,988 1,849 1,704 Other 281 276 316 374 371 ----------------------------------------------------------------- Total Premiums and Deposits $4,559 $4,583 $4,016 $3,909 $3,692 ================================================================= PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS Variable & Universal Life $ 301 $ 304 $ 294 $ 300 $ 298 Annuities 940 1,056 703 818 654 Other 167 195 215 275 251 ----------------------------------------------------------------- Total Separate Accounts $1,408 $1,555 $1,212 $1,393 $1,203 ================================================================= FIRST YEAR LIFE PREMIUMS AND DEPOSITS BY MANUFACTURER (4) MetLife Financial Services $ 69 $ 79 $ 66 $ 85 $ 81 New England Financial 35 47 44 54 58 General American 99 105 139 81 61 MetLife Investors Group 8 3 2 1 0 Other 1 1 5 0 0 ----------------------------------------------------------------- Total First Year Life Premiums and Deposits $ 212 $ 235 $ 256 $ 221 $ 200 ================================================================= ANNUITY DEPOSITS BY TYPE Fixed Annuity Deposits $ 424 $ 464 $ 452 $ 283 $ 268 Variable Annuity Deposits 2,187 1,888 1,536 1,566 1,436 ----------------------------------------------------------------- Total Annuity Deposits $2,611 $2,352 $1,988 $1,849 $1,704 ================================================================= ANNUITY DEPOSITS BY MANUFACTURER MetLife Financial Services $ 737 $ 709 $ 621 $ 687 $ 630 New England Financial 218 211 185 206 170 MetLife Resources 176 202 164 201 166 General American 10 9 10 12 11 MetLife Investors Group (5) 1,416 1,175 962 687 689 Other 54 46 46 56 38 ----------------------------------------------------------------- Total Annuity Deposits $2,611 $2,352 $1,988 $1,849 $1,704 ================================================================= MUTUAL FUND SALES Proprietary $ 38 $ 48 $ 60 $ 113 $ 107 Third Party 759 713 706 852 890 ----------------------------------------------------------------- Total Mutual Fund Sales $ 797 $ 761 $ 766 $ 965 $ 997 =================================================================
(1) Statutory premiums direct and assumed. (2) Includes premiums and deposits to separate accounts. (3) Excludes company-sponsored internal exchanges. (4) Approximately 9% of MetLife Financial Services ("MLFS") manufactured life insurance premiums and deposits sold by other than MLFS agents during the three months March 31, 2003 (5% sold by MetLife Investors Group; 3% sold by General American; 1% sold by New England Financial). Approximately 5% of New England Financial manufactured life insurance premiums and deposits sold by other than New England Financial agents during the three months ended March 31, 2003 (3% sold by MLFS; 2% sold by General American). Approximately 41% of General American manufactured life insurance premiums and deposits sold by other than General American agents during the three months ended March 31, 2003 (24% sold by MLFS; 17% sold by New England Financial. (5) Approximately $52 million, $62 million, $55 million, $52 million and $40 million distributed by General American entities in the three months ended March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. 18 [METLIFE LOGO] INDIVIDUAL OPERATIONS ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended ---------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited 2003 2002 2002 2002 2002 --------------------------------------------------------------------------------------------------------------------------------- PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS, EXCLUDING TRANSFERS FROM GENERAL ACCOUNT: Variable & Universal Life 49.1% 50.4% 49.1% 54.1% 52.2% Annuities 36.0% 44.9% 35.4% 44.2% 38.4% Other 59.5% 70.6% 68.1% 73.4% 67.6% MORTALITY AS A PERCENTAGE OF EXPECTED 87.2% 87.4% 81.4% 77.3% 89.8% LAPSES / SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (1) Traditional Life 5.8% 6.0% 6.1% 6.4% 6.5% Variable & Universal Life 6.8% 6.6% 6.4% 6.0% 6.3% Variable Annuities 8.3% 8.0% 8.3% 7.9% 7.8% Fixed Annuities 8.8% 8.8% 9.7% 9.3% 9.4% NUMBER OF AGENTS MetLife Financial Services 5,798 5,846 6,063 6,139 6,171 New England Financial 2,916 3,234 3,053 2,965 2,856 General American (2) 557 616 607 633 482 MetLife Investors Group Wholesalers 78 69 66 68 65 MetLife Resources / Security First Group 362 375 376 391 397 Nathan & Lewis 698 769 803 819 814 --------------------------------------------------------------- Total Agents 10,409 10,909 10,968 11,015 10,785 ===============================================================
(1) Lapses/Surrenders rates are calculated for the most recent 12 months of experience. (2) Based on the December 2002 increase in minimum annual production to $12,500 in first-year commissions. Prior periods have been restated to conform with this change in annual minimum production requirements. 19 [METLIFE LOGO] INDIVIDUAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES - --------------------------------------------------------
For the Three Months Ended ----------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Traditional Life 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $47,397 $46,888 $46,520 $46,205 $45,828 Premiums and deposits (1) 1,026 1,208 1,067 1,078 1,079 Interest on reserves 476 475 466 462 460 Surrenders and withdrawals (395) (398) (392) (385) (478) Benefit payments (484) (415) (430) (414) (452) Other (448) (361) (343) (426) (232) ------------------------------------------------------------------------------------ Balance, end of period $47,572 $47,397 $46,888 $46,520 $46,205 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $8,993 $8,878 $8,682 $8,630 $8,694 Premiums and deposits (1) (2) 287 274 277 226 265 Interest on reserves 118 119 120 118 117 Surrenders and withdrawals (113) (108) (97) (124) (123) Net transfers from (to) separate account 66 29 157 8 (3) Policy charges (198) (193) (239) (150) (149) Benefit payments (25) (22) (20) (20) (20) Other 12 16 (2) (6) (151) ------------------------------------------------------------------------------------ Balance, end of period $9,140 $8,993 $8,878 $8,682 $8,630 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Annuities 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $28,935 $27,813 $26,695 $26,180 $25,365 Premiums and deposits (1) (2) 1,766 1,438 1,170 1,199 1,138 Interest on reserves 359 368 358 334 336 Surrenders and withdrawals (667) (474) (563) (589) (551) Net transfers from (to) separate account (171) (212) 51 (172) (219) Policy charges (1) (4) (9) 1 (1) Benefit payments (168) (8) 95 (269) (251) Other (136) 14 16 11 363 ------------------------------------------------------------------------------------ Balance, end of period $29,917 $28,935 $27,813 $26,695 $26,180 ====================================================================================
SEPARATE ACCOUNT LIABILITIES - ----------------------------
For the Three Months Ended ------------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $5,489 $5,088 $5,462 $6,062 $5,914 Premiums and deposits (1) 301 316 294 300 298 Investment performance (105) 264 (559) (595) (38) Surrenders and withdrawals (71) (73) (62) (62) (51) Net transfers from (to) fixed account (66) (29) (157) (8) 3 Policy charges (66) (77) (55) (70) (64) Other 0 0 165 (165) 0 ------------------------------------------------------------------------------------ Balance, end of period $5,482 $5,489 $5,088 $5,462 $6,062 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Annuities 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $18,270 $16,651 $19,279 $20,987 $20,577 Premiums and deposits (1) 940 1,060 704 817 654 Investment performance (435) 1,011 (2,757) (2,131) 2 Surrenders and withdrawals (423) (588) (467) (499) (405) Net transfers from (to) fixed account 171 212 (51) 172 219 Policy charges (59) (76) (57) (67) (60) ------------------------------------------------------------------------------------ Balance, end of period $18,464 $18,270 $16,651 $19,279 $20,987 ====================================================================================
(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. 20 [METLIFE LOGO] INDIVIDUAL OPERATIONS INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- INSURANCE EXPENSES (NET OF CAPITALIZATION OF DAC) TO PREMIUMS AND DEPOSITS RATIO Insurance Expenses $ 682 $ 698 $ 634 $ 643 $ 653 DAC Capitalization (1) (285) (298) (290) (282) (267) ----------------------------------------------------------------------------- Net $ 397 $ 400 $ 344 $ 361 $ 386 ============================================================================= Premiums and Deposits (2) $4,559 $4,583 $4,018 $3,908 $3,700 ============================================================================= RATIO 8.7% 8.7% 8.6% 9.2% 10.4% OTHER EXPENSES BY MAJOR CATEGORY Commissions $ 195 $ 213 $ 195 $ 185 $ 177 Other deferrable expenses 113 102 113 111 104 Direct and allocated expenses, not deferred 346 361 307 324 344 Premium taxes and other taxes, licenses and fees 28 22 19 23 28 ----------------------------------------------------------------------------- Subtotal Insurance Expenses $ 682 $ 698 $ 634 $ 643 $ 653 Broker-dealer and other expenses 110 113 100 117 132 Reinsurance allowances (39) (42) (36) (46) (44) ----------------------------------------------------------------------------- Total Other Expenses $ 753 $ 769 $ 698 $ 714 $ 741 =============================================================================
(1) Excludes $25 million, $24 million, $28 million, $24 million and $23 million of DAC capitalization related to reinsurance allowances for the three months ended March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (2) Statutory premiums direct and assumed; also includes company-sponsored internal exchanges. 21 [METLIFE LOGO] INDIVIDUAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, VARIABLE & UNIVERSAL LIFE 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 7.39% 7.23% 7.41% 7.47% 7.29% Average crediting rate 5.64% 5.75% 5.77% 5.85% 5.80% ------------------------------------------------------------------------------------- Spread 1.75% 1.48% 1.64% 1.62% 1.49% =====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, ANNUITIES 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 6.64% 7.20% 7.09% 7.14% 7.02% Average crediting rate 4.47% 4.91% 4.81% 5.00% 5.09% ------------------------------------------------------------------------------------- Spread 2.17% 2.29% 2.28% 2.14% 1.93% =====================================================================================
22 [METLIFE LOGO] AUTO & HOME STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Auto 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Earned premiums $530 $535 $533 $525 $519 Investment income, net 27 31 32 34 33 Other revenues 6 6 9 6 4 --------------------------------------------------------------------- 563 572 574 565 556 --------------------------------------------------------------------- EXPENSES Losses 366 360 308 343 325 Loss adjustment expense 75 55 61 64 64 Other expenses 143 130 150 138 147 --------------------------------------------------------------------- 584 545 519 545 536 --------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes (21) 27 55 20 20 Provision (benefit) for income taxes (17) 6 14 3 5 --------------------------------------------------------------------- OPERATING EARNINGS (LOSS) ($ 4) $ 21 $ 41 $ 17 $ 15 ===================================================================== After-tax net investment losses ($ 2) ($ 3) ($ 4) ($ 8) ($ 7)
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Property 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Earned premiums $167 $175 $165 $164 $160 Investment income, net 10 10 11 10 11 Other revenues 1 2 1 1 1 --------------------------------------------------------------------- 178 187 177 175 172 --------------------------------------------------------------------- EXPENSES Losses 76 78 106 95 93 Loss adjustment expense 8 12 13 8 9 Other expenses 48 52 51 50 55 --------------------------------------------------------------------- 132 142 170 153 157 --------------------------------------------------------------------- Operating earnings before provision for income taxes 46 45 7 22 15 Provision for income taxes 14 15 1 7 4 -------------------------------------------------------------------- OPERATING EARNINGS $ 32 $ 30 $ 6 $ 15 $ 11 ===================================================================== After-tax net investment losses ($ 1) ($ 1) ($ 1) ($ 3) ($ 2)
For the Three Months Ended -------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Other 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Earned premiums $ 15 $ 13 $ 13 $ 13 $ 13 Investment income, net 2 1 1 2 1 Other revenues 2 (9) 1 2 2 -------------------------------------------------------------------- 19 5 15 17 16 -------------------------------------------------------------------- EXPENSES Losses 10 5 9 6 4 Loss adjustment expense (1) 0 0 1 0 Other expenses 8 5 4 5 6 -------------------------------------------------------------------- 17 10 13 12 10 -------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 2 (5) 2 5 6 Provision (benefit) for income taxes 0 (2) 1 1 2 -------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 2 ($ 3) $ 1 $ 4 $ 4 ==================================================================== After-tax net investment losses $ 0 $ 0 $ 0 ($ 1) $ 0
23 [METLIFE LOGO] AUTO & HOME WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA
For the Three Months Ended -------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ WRITTEN PREMIUMS BY PRODUCT Preferred/Standard Automobile $ 505 $ 498 $ 526 $ 512 $ 489 Non-Standard Automobile 24 25 23 29 29 Property 149 176 189 179 138 Other 20 9 11 15 18 -------------------------------------------------------------------------------- Total $ 698 $ 708 $ 749 $ 735 $ 674 ================================================================================ SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA TOTAL AUTO & HOME Loss and loss adjustment expense ratio 75.0% 70.6% 69.9% 73.7% 71.5% Other expense ratio 28.0% 25.8% 28.9% 27.4% 30.1% -------------------------------------------------------------------------------- Total combined ratio 103.0% 96.4% 98.8% 101.1% 101.6% Effect of catastrophe losses 1.8% 2.3% 0.8% 2.8% 2.0% -------------------------------------------------------------------------------- Combined ratio excluding catastrophes 101.2% 94.1% 98.0% 98.3% 99.6% ================================================================================ AUTO Loss and loss adjustment expense ratio 83.3% 77.6% 69.2% 77.5% 75.0% Other expense ratio 27.2% 24.3% 28.2% 26.2% 28.4% -------------------------------------------------------------------------------- Total combined ratio 110.5% 101.9% 97.4% 103.7% 103.4% Effect of catastrophe losses 0.2% 0.4% 0.1% 0.8% 0.0% -------------------------------------------------------------------------------- Combined ratio excluding catastrophes 110.3% 101.5% 97.3% 102.9% 103.4% ================================================================================ PROPERTY Loss and loss adjustment expense ratio 50.2% 51.4% 72.0% 63.6% 63.2% Other expense ratio 28.5% 29.8% 30.9% 30.8% 34.2% -------------------------------------------------------------------------------- Total combined ratio 78.7% 81.2% 102.9% 94.4% 97.4% Effect of catastrophe losses 6.9% 8.2% 3.3% 9.4% 8.7% -------------------------------------------------------------------------------- Combined ratio excluding catastrophes 71.8% 73.0% 99.6% 85.0% 88.7% ================================================================================ OTHER Loss and loss adjustment expense ratio 57.7% 39.8% 71.9% 47.4% 33.9% Other expense ratio 52.0% 37.3% 31.6% 35.3% 49.2% -------------------------------------------------------------------------------- Total combined ratio 109.7% 77.1% 103.5% 82.7% 83.1% Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0% -------------------------------------------------------------------------------- Combined ratio excluding catastrophes 109.7% 77.1% 103.5% 82.7% 83.1% ================================================================================ PRE-TAX CATASTROPHE LOSSES Auto $ 1 $ 2 $ 1 $ 4 $ 0 Property 12 14 5 15 14 Other 0 0 0 0 0 -------------------------------------------------------------------------------- Total $ 13 $ 16 $ 6 $ 19 $ 14 ================================================================================ -------------------------------------------------------------------------------- Catastrophe points on combined ratios 1.8 2.3 0.8 2.8 2.0 --------------------------------------------------------------------------------
24 [METLIFE LOGO] INTERNATIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended ------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $395 $481 $381 $274 $375 Universal life and investment-type product policy fees 51 66 64 7 7 Investment income, net 123 158 133 95 75 Other revenues 8 6 2 3 3 ------------------------------------------------------------------- 577 711 580 379 460 ------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 377 455 362 268 338 Interest credited to policyholder account balances 37 27 32 11 9 Capitalization of deferred policy acquisition costs (66) (51) (60) (40) (40) Amortization of deferred policy acquisition costs 34 55 24 22 27 Other expenses 153 183 167 114 106 ------------------------------------------------------------------- 535 669 525 375 440 ------------------------------------------------------------------- Operating earnings before provision for income taxes 42 42 55 4 20 Provision for income taxes 14 4 15 2 6 ------------------------------------------------------------------- OPERATING EARNINGS $ 28 $ 38 $ 40 $ 2 $ 14 ------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings $ 28 $ 38 $ 40 $ 2 $ 14 Net investment gains (losses) 0 (1) 6 8 (22) Net investment gains (losses) tax benefit (provision) 0 4 (1) (3) (1) ------------------------------------------------------------------- After-tax net investment gains (losses) 0 3 5 5 (23) Cumulative effect of accounting change for SFAS 142 0 0 (5) 0 5 ------------------------------------------------------------------- Net income (loss) $ 28 $ 41 $ 40 $ 7 ($ 4) ===================================================================
25 [METLIFE LOGO] REINSURANCE OPERATIONS STATEMENTS OF OPERATING EARNINGS, PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION
At or for the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums, net $ 552 $ 597 $ 461 $ 472 $ 475 Investment income, net 110 125 95 102 99 Other revenues 12 8 16 11 8 --------------------------------------------------------------------- 674 730 572 585 582 --------------------------------------------------------------------- EXPENSES Claims and other policy benefits 433 448 343 385 400 Interest credited to policyholder account balances 43 49 31 32 34 Policy acquisition costs and other insurance expenses 108 153 102 82 68 Other expenses 36 40 39 36 27 --------------------------------------------------------------------- 620 690 515 535 529 --------------------------------------------------------------------- Operating earnings before provision for income taxes and minority interest 54 40 57 50 53 Provision for income taxes 10 5 13 10 12 --------------------------------------------------------------------- Operating earnings before minority interest 44 35 44 40 41 --------------------------------------------------------------------- Elimination of minority interest, before tax 24 20 21 21 19 --------------------------------------------------------------------- CONTRIBUTION TO METLIFE $ 20 $ 15 $ 23 $ 19 $ 22 --------------------------------------------------------------------- NET INCOME RECONCILIATION - ------------------------- Operating earnings $ 20 $ 15 $ 23 $ 19 $ 22 Net investment gains (losses) (4) (8) 5 (1) 2 Minority interest - net investment gains (losses) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (1) 0 4 0 0 0 Net investment gains (losses) tax benefit (provision) 0 1 (2) (1) (1) --------------------------------------------------------------------- After-tax net investment gains (losses) 0 (1) 2 2 2 --------------------------------------------------------------------- Net income $ 20 $ 14 $ 25 $ 21 $ 24 ===================================================================== PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION United States $ 45 $ 39 $ 59 $ 42 $ 45 Canada 11 12 9 10 9 Latin America 0 1 (1) 0 1 Asia-Pacific 2 1 1 3 2 Other international markets 2 (1) 3 0 1 Corporate (6) (12) (14) (5) (5) --------------------------------------------------------------------- Total pre-tax and pre-minority interest operating earnings $ 54 $ 40 $ 57 $ 50 $ 53 ===================================================================== POLICY BENEFITS AND INTEREST SENSITIVE CONTRACT LIABILITIES BY REGION Traditional U.S. $3,653 $3,382 $3,097 $3,085 $2,865 Asset intensive 2,718 2,477 1,608 1,569 1,718 Other 112 55 57 57 57 --------------------------------------------------------------------- Total U.S. 6,483 5,914 4,762 4,711 4,640 --------------------------------------------------------------------- Canada 972 837 862 882 752 Latin America 0 69 61 80 83 Asia-Pacific 302 197 164 163 166 Other international markets 271 220 188 156 99 --------------------------------------------------------------------- Total International 1,545 1,323 1,275 1,281 1,100 --------------------------------------------------------------------- Total policy benefits and interest sensitive contract liabilities $8,028 $7,237 $6,037 $5,992 $5,740 =====================================================================
(1) Adjustments to net investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 26 [METLIFE LOGO] ASSET MANAGEMENT STATEMENTS OF OPERATING EARNINGS, CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT
For the Three Months Ended ---------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Investment and advisory service fees Mutual funds $ 16 $ 17 $ 19 $ 24 $ 21 MetLife and affiliates separately managed accounts 9 9 10 10 10 Third party client separate accounts 10 17 15 17 11 Other revenues 10 9 10 14 12 ---------------------------------------------------------------------- 45 52 54 65 54 ---------------------------------------------------------------------- EXPENSES Employee compensation and benefits 26 27 31 31 29 Promoting and servicing 7 7 8 11 11 General and administrative 10 15 14 15 12 ---------------------------------------------------------------------- 43 49 53 57 52 ---------------------------------------------------------------------- Operating earnings before provision for income taxes 2 3 1 8 2 Provision for income taxes 1 2 0 3 1 ---------------------------------------------------------------------- OPERATING EARNINGS $ 1 $ 1 $ 1 $ 5 $ 1 ---------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings $ 1 $ 1 $ 1 $ 5 $ 1 Net investment gains (losses) 8 1 (2) 1 (4) Net investment gains (losses) tax benefit (provision) (3) 0 1 (1) 2 ---------------------------------------------------------------------- After-tax net investment gains (losses) 5 1 (1) 0 (2) ---------------------------------------------------------------------- Net income (loss) $ 6 $ 2 $ 0 $ 5 ($ 1) ======================================================================
At or for the Three Months Ended ---------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ CHANGE IN ASSETS Beginning assets $44,577 $45,100 $48,850 $50,898 $51,278 Contributions 1,004 1,851 1,417 1,825 1,594 Redemptions (2,063) (3,303) (3,241) (2,521) (1,661) Market appreciation (depreciation) 34 929 (1,926) (1,352) (313) ---------------------------------------------------------------------- Ending Carrying Value $43,552 $44,577 $45,100 $48,850 $50,898 ====================================================================== ASSETS UNDER MANAGEMENT STATE STREET RESEARCH MetLife Separate Account $17,160 $18,463 $18,653 $18,035 $18,187 MetLife Retail Funds 5,618 4,353 4,200 5,255 6,617 Third Party Individual and Retail Funds 6,966 7,724 8,448 10,434 10,970 Third Party Institutional 13,808 14,037 13,799 15,126 15,124 ---------------------------------------------------------------------- Total State Street Research $43,552 $44,577 $45,100 $48,850 $50,898 ======================================================================
27 [METLIFE LOGO] CORPORATE, OTHER & ELIMINATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums ($ 4) ($ 4) ($ 7) ($ 4) ($ 4) Universal life and investment-type product policy fees 0 0 0 1 (1) Investment income, net 69 24 (25) 20 40 Other revenues 12 29 5 58 9 --------------------------------------------------------------------- 77 49 (27) 75 44 --------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 2 2 0 2 (1) Interest credited to policyholder account balances 0 0 0 (1) 1 Interest expense 94 77 76 74 78 Other expenses 24 304 33 36 90 --------------------------------------------------------------------- 120 383 109 111 168 --------------------------------------------------------------------- Operating loss before benefit for income taxes (43) (334) (136) (36) (124) Benefit for income taxes (31) (134) (66) (32) (48) --------------------------------------------------------------------- OPERATING LOSS ($ 12) ($200)(1) ($ 70) ($ 4)(2) ($ 76)(3) --------------------------------------------------------------------- NET LOSS RECONCILIATION - ----------------------- Operating loss ($ 12) ($200) ($ 70) ($ 4) ($ 76) Net investment gains (losses) (33) 108 (43) 16 24 Net investment gains (losses) tax benefit (provision) 10 (35) 18 (12) (12) --------------------------------------------------------------------- After-tax net investment gains (losses) (23) 73 (25) 4 12 --------------------------------------------------------------------- Net loss ($ 35) ($127) ($ 95) $ 0 ($ 64) =====================================================================
(1) Operating loss for the three months ended December 31, 2002 includes a $169 million after-tax charge to cover costs associated with personal injury liabilities caused by exposure to asbestos or asbestos-containing products. (2) Operating loss for the three months ended June 30, 2002 includes a $30 million after-tax reduction of a previously established liability related to the Company's sales practice class action settlement in 1999. (3) Operating loss for the three months ended March 31, 2002 includes a $48 million after-tax charge to cover costs associated with the resolution of a federal government investigation of General American Life Insurance Company's former Medicare business. 28 [METLIFE LOGO] METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Three Months Ended ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES (1) Yield (2) 7.01% 7.38% 7.45% 7.50% 7.56% Income $ 2,048 $ 2,095 $ 2,038 $ 2,002 $ 1,957 Investment losses ($ 149) ($ 219) ($ 323) ($ 210) ($ 165) Ending Carrying Value $144,610 $140,553 $133,163 $124,067 $118,477 MORTGAGE LOANS Yield (2) 7.51% 8.03% 7.68% 7.97% 7.81% Income $ 470 $ 492 $ 457 $ 472 $ 462 Investment gains (losses) ($ 14) $ 0 $ 0 ($ 3) ($ 19) Ending Carrying Value $ 25,046 $ 25,086 $ 23,885 $ 23,733 $ 23,684 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (2) 10.94% 11.79% 10.99% 11.80% 10.36% Income (3) $ 127 $ 153 $ 160 $ 174 $ 150 Investment gains (losses) (4) $ 92 $ 602 ($ 10) ($ 14) ($ 2) Ending Carrying Value $ 4,569 $ 4,725 $ 5,663 $ 5,963 $ 5,862 POLICY LOANS Yield (2) 6.47% 6.42% 6.66% 6.56% 6.35% Income $ 139 $ 136 $ 139 $ 137 $ 131 Ending Carrying Value $ 8,615 $ 8,580 $ 8,366 $ 8,316 $ 8,310 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS Yield (2) 5.53% 1.89% 1.56% 5.14% 0.87% Income $ 50 $ 18 $ 13 $ 43 $ 9 Investment gains (losses) ($ 71) ($ 24) $ 4 $ 81 $ 161 Ending Carrying Value $ 3,504 $ 3,743 $ 3,702 $ 3,446 $ 3,311 CASH AND SHORT-TERM INVESTMENTS Yield (2) 4.57% 5.35% 3.68% 2.85% 4.92% Income $ 64 $ 62 $ 49 $ 38 $ 83 Investment gains (losses) ($ 4) ($ 1) $ 0 ($ 1) $ 2 Ending Carrying Value $ 8,126 $ 4,244 $ 6,305 $ 5,796 $ 6,434 OTHER INVESTED ASSETS Yield (2) 6.52% 8.36% 5.44% 6.53% 5.49% Income $ 63 $ 72 $ 44 $ 56 $ 46 Investment gains (losses) $ 14 ($ 5) $ 59 ($ 46) ($ 69) Ending Carrying Value $ 3,948 $ 3,727 $ 3,214 $ 3,271 $ 3,512 TOTAL INVESTMENTS Gross investment income yield 7.04% 7.41% 7.28% 7.46% 7.31% Investment fees and expenses yield (0.15%) (0.16%) (0.15%) (0.16%) (0.13%) ------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.89% 7.25% 7.13% 7.30% 7.18% ========================================================================= Gross investment income $ 2,961 $ 3,028 $ 2,900 $ 2,922 $ 2,838 Investment fees and expenses (62) (64) (61) (61) (49) ------------------------------------------------------------------------- NET INVESTMENT INCOME $ 2,899 $ 2,964 $ 2,839 $ 2,861 $ 2,789 ========================================================================= Ending Carrying Value $198,418 $190,658 $184,298 $174,592 $169,590 ========================================================================= Gross investment gains $ 221 $ 1,040 $ 412 $ 438 $ 545 Gross investment losses (89) (348) (164) (314) (283) Writedowns (268) (339) (555) (269) (338) ------------------------------------------------------------------------- Subtotal (136) 353 (307) (145) (76) Derivatives not qualifying for hedge accounting (34) (43) 21 (121) (29) ------------------------------------------------------------------------- NET INVESTMENT GAINS (LOSSES) (170) 310 (286) (266) (105) Adjustments to net investment gains (losses) (5) 38 43 16 73 13 Minority interest - net investment gains (losses) 4 2 (1) 4 1 Net investment gains (losses) tax benefit (provision) 44 (132) 102 72 15 ------------------------------------------------------------------------- AFTER-TAX NET INVESTMENT GAINS (LOSSES) ($ 84) $ 223 ($ 169) ($ 117) ($ 76) =========================================================================
(1) Yields are based on quarterly average amortized cost for fixed maturities. (2) Yields are annualized and based on quarterly average carrying values. (3) Included in income from real estate and real estate joint ventures is $2 million, $22 million, $29 million, $33 million and $27 million related to discontinued operations for the three months ended March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (4) Included in investment gains (losses) from real estate and real estate joint ventures is $90 million, $591 million, ($1) million, ($8) million and $0 million related to discontinued operations for the three months ended March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (5) Adjustments to investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 29 [METLIFE LOGO] METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Year-to-date ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES (1) Yield (2) 7.01% 7.46% 7.51% 7.54% 7.56% Income $ 2,048 $ 8,092 $ 5,997 $ 3,959 $ 1,957 Investment losses ($ 149) ($ 917) ($ 698) ($ 375) ($ 165) Ending Carrying Value $144,610 $140,553 $133,163 $124,067 $118,477 MORTGAGE LOANS Yield (2) 7.51% 7.84% 7.82% 7.89% 7.81% Income $ 470 $ 1,883 $ 1,391 $ 934 $ 462 Investment losses ($ 14) ($ 22) ($ 22) ($ 22) ($ 19) Ending Carrying Value $ 25,046 $ 25,086 $ 23,885 $ 23,733 $ 23,684 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (2) 10.94% 11.41% 11.13% 11.09% 10.36% Income (3) $ 127 $ 637 $ 484 $ 324 $ 150 Investment gains (losses) (4) $ 92 $ 576 ($ 26) ($ 16) ($ 2) Ending Carrying Value $ 4,569 $ 4,725 $ 5,663 $ 5,963 $ 5,862 POLICY LOANS Yield (2) 6.47% 6.49% 6.52% 6.46% 6.35% Income $ 139 $ 543 $ 407 $ 268 $ 131 Ending Carrying Value $ 8,615 $ 8,580 $ 8,366 $ 8,316 $ 8,310 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS Yield (2) 5.53% 2.21% 2.31% 2.72% 0.87% Income $ 50 $ 83 $ 65 $ 52 $ 9 Investment gains (losses) ($ 71) $ 222 $ 246 $ 242 $ 161 Ending Carrying Value $ 3,504 $ 3,743 $ 3,702 $ 3,446 $ 3,311 CASH AND SHORT-TERM INVESTMENTS Yield (2) 4.57% 4.17% 3.75% 3.92% 4.92% Income $ 64 $ 232 $ 170 $ 121 $ 83 Investment gains (losses) ($ 4) $ 0 $ 1 $ 1 $ 2 Ending Carrying Value $ 8,126 $ 4,244 $ 6,305 $ 5,796 $ 6,434 OTHER INVESTED ASSETS Yield (2) 6.52% 6.42% 5.87% 6.08% 5.49% Income $ 63 $ 218 $ 146 $ 102 $ 46 Investment gains (losses) $ 14 ($ 61) ($ 56) ($ 115) ($ 69) Ending Carrying Value $ 3,948 $ 3,727 $ 3,214 $ 3,271 $ 3,512 TOTAL INVESTMENTS Gross investment income yield 7.04% 7.35% 7.33% 7.38% 7.31% Investment fees and expenses yield (0.15%) (0.15%) (0.15%) (0.14%) (0.13%) ------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.89% 7.20% 7.18% 7.24% 7.18% ========================================================================= Gross investment income $ 2,961 $ 11,688 $ 8,660 $ 5,760 $ 2,838 Investment fees and expenses (62) (235) (171) (110) (49) ------------------------------------------------------------------------- NET INVESTMENT INCOME $ 2,899 $ 11,453 $ 8,489 $ 5,650 $ 2,789 ========================================================================= Ending Carrying Value $198,418 $190,658 $184,298 $174,592 $169,590 ========================================================================= Gross investment gains $ 221 $ 2,435 $ 1,395 $ 983 $ 545 Gross investment losses (89) (1,109) (761) (597) (283) Writedowns (268) (1,501) (1,162) (607) (338) ------------------------------------------------------------------------- Subtotal (136) (175) (528) (221) (76) Derivatives not qualifying for hedge accounting (34) (172) (129) (150) (29) ------------------------------------------------------------------------- NET INVESTMENT GAINS (LOSSES) (170) (347) (657) (371) (105) Adjustments to net investment gains (losses) (5) 38 145 102 86 13 Minority interest - net investment gains (losses) 4 6 4 5 1 Net investment gains (losses) tax benefit (provision) 44 57 189 87 15 ------------------------------------------------------------------------- AFTER-TAX NET INVESTMENT GAINS (LOSSES) ($ 84) ($ 139) ($ 362) ($ 193) ($ 76) =========================================================================
(1) Yields are based on quarterly average amortized cost for fixed maturities. (2) Yields are annualized and based on year-to-date average carrying values. (3) Included in income from real estate and real estate joint ventures is $2 million, $111 million, $89 million, $60 million and $27 million related to discontinued operations for the year-to-date March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (4) Included in investment gains (losses) from real estate and real estate joint ventures is $90 million, $582 million, ($9) million, ($8) million and $0 million related to discontinued operations for the year-to-date March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (5) Adjustments to investment gains and losses include amortization of deferred policy acquisition costs, charges and credits to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment gains and losses. 30 [METLIFE LOGO] METLIFE, INC. GROSS UNREALIZED LOSSES AGING SCHEDULE FIXED MATURITIES
At March 31, 2003 At December 31, 2002 --------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total - ------------------------------------------------------------------------------------------------ Less than 20% $ 773 61.0% $ 925 54.7% 20% or more for less than six months 216 17.0% 531 31.4% 20% or more for six months or greater 279 22.0% 234 13.9% -------------------------------------------------- Total Gross Unrealized Losses $1,268 100.0% $1,690 100.0% ==================================================
METLIFE, INC. GROSS UNREALIZED LOSSES AGING SCHEDULE EQUITY SECURITIES
At March 31, 2003 At December 31, 2002 ---------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total - ------------------------------------------------------------------------------------------------ Less than 20% $ 33 26.6% $ 25 30.1% 20% or more for less than six months 91 73.4% 58 69.9% 20% or more for six months or greater 0 0.0% 0 0.0% ---------------------------------------------------- Total Gross Unrealized Losses $ 124 100.0% $ 83 100.0% ====================================================
The Company's review of its fixed maturities 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. 31 [METLIFE LOGO] METLIFE, INC. SUMMARY OF FIXED MATURITIES BY SECTOR
Unaudited At March 31, 2003 At December 31, 2002 At September 30, 2002 At June 30, 2002 At March 31, 2002 (Dollars in ---------------------------------------------------------------------------------------------------------- millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total ----------------------------------------------------------------------------------------------------------------------------------- US treasuries/ agencies $ 12,489 8.6% $ 15,934 11.3% $ 10,986 8.3% $ 9,741 7.9% $ 9,415 8.0% State & political subdivisions 2,683 1.8% 2,742 2.0% 2,627 2.0% 2,412 2.0% 2,308 2.0% Corporate bonds 52,167 36.1% 49,257 35.0% 47,693 35.8% 46,039 37.1% 44,431 37.5% Foreign government securities 8,374 5.8% 7,596 5.4% 7,383 5.5% 7,199 5.8% 4,666 3.9% Foreign corporates 19,542 13.5% 19,229 13.7% 18,746 14.1% 18,227 14.7% 18,372 15.5% Mortgage-backed securities 37,769 26.1% 34,883 24.8% 33,822 25.4% 28,967 23.3% 28,401 24.0% Asset-backed securities 10,224 7.1% 9,503 6.8% 9,738 7.3% 8,714 7.0% 8,461 7.1% Other fixed income assets 667 0.5% 697 0.5% 1,481 1.1% 2,025 1.6% 1,673 1.4% ------------------------------------------------------------------------------------------------------------ Total 143,915 99.5% 139,841 99.5% 132,476 99.5% 123,324 99.4% 117,727 99.4% Redeemable preferred stock 695 0.5% 712 0.5% 687 0.5% 743 0.6% 750 0.6% ------------------------------------------------------------------------------------------------------------ Total Fixed Maturities $144,610 100.0% $140,553 100.0% $133,163 100.0% $124,067 100.0% $118,477 100.0% ============================================================================================================
METLIFE, INC. SUMMARY OF FIXED MATURITIES BY QUALITY DISTRIBUTION
At March 31, 2003 At December 31, 2002 At September 30, 2002 At June 30, 2002 At March 31, 2002 Unaudited ----------------------------------------------------------------------------------------------------- (Dollars % of % of % of % of % of in millions) Amount Total Amount Total Amount Total Amount Total Amount Total - --------------------------------------------------------------------------------------------------------------------------------- RATING AGENCY NAIC EQUIVALENT RATING (1) DESIGNATION 1 Aaa/Aa/A $100,489 69.5% $ 97,495 69.4% $90,651 68.2% $82,235 66.3% $77,569 65.5% 2 Baa 31,264 21.6% 31,060 22.1% 31,290 23.5% 30,480 24.6% 30,314 25.6% 3 Ba 7,581 5.2% 7,304 5.2% 6,324 4.7% 6,435 5.2% 5,546 4.7% 4 B 3,441 2.4% 3,227 2.3% 3,096 2.3% 3,275 2.6% 3,409 2.9% 5 Caa and lower 626 0.4% 339 0.2% 840 0.6% 671 0.5% 625 0.5% 6 In or near default 514 0.4% 416 0.3% 275 0.2% 228 0.2% 264 0.2% --------------------------------------------------------------------------------------------------- Total 143,915 99.5% 139,841 99.5% 132,476 99.5% 123,324 99.4% 117,727 99.4% Redeemable preferred stock 695 0.5% 712 0.5% 687 0.5% 743 0.6% 750 0.6% --------------------------------------------------------------------------------------------------- Total Fixed Maturities $144,610 100.0% $140,553 100.0% $133,163 100.0% $124,067 100.0% $118,477 100.0% ===================================================================================================
(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
Unaudited At March 31, 2003 At December 31, 2002 At September 30, 2002 At June 30, 2002 At March 31, 2002 (Dollars ------------------------------------------------------------------------------------------------------------ in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total - ----------------------------------------------------------------------------------------------------------------------------------- South Atlantic $5,167 26.3% $5,076 26.0% $4,832 26.3% $4,806 26.4% $4,736 26.2% Pacific 4,198 21.4% 4,180 21.4% 3,860 21.0% 3,715 20.5% 3,642 20.1% Middle Atlantic 3,416 17.4% 3,441 17.6% 3,315 18.1% 3,310 18.2% 3,309 18.3% East North Central 2,260 11.5% 2,147 11.0% 1,962 10.7% 1,956 10.8% 1,959 10.8% New England 1,168 6.0% 1,323 6.8% 1,270 6.9% 1,246 6.9% 1,286 7.1% West South Central 1,149 5.9% 1,097 5.6% 975 5.3% 982 5.4% 993 5.5% Mountain 858 4.4% 833 4.2% 763 4.2% 766 4.2% 795 4.4% West North Central 598 3.0% 645 3.3% 647 3.5% 653 3.6% 666 3.7% International 631 3.2% 632 3.2% 546 3.0% 540 3.0% 519 2.9% East South Central 178 0.9% 178 0.9% 178 1.0% 179 1.0% 180 1.0% ------------------------------------------------------------------------------------------------------------ Total $19,623 100.0% $19,552 100.0% $18,348 100.0% $18,153 100.0% $18,085 100.0% ============================================================================================================ Office $ 9,301 47.5% $ 9,340 47.8% $ 8,431 45.9% $ 8,311 45.8% $ 8,165 45.1% Retail 4,321 22.0% 4,320 22.1% 4,332 23.6% 4,349 24.0% 4,383 24.2% Apartments 2,867 14.6% 2,793 14.3% 2,602 14.2% 2,582 14.2% 2,584 14.3% Industrial 1,893 9.6% 1,910 9.7% 1,933 10.5% 1,876 10.3% 1,912 10.6% Hotel 996 5.1% 942 4.8% 818 4.5% 822 4.5% 828 4.6% Other 245 1.2% 247 1.3% 232 1.3% 213 1.2% 213 1.2% ------------------------------------------------------------------------------------------------------------ Total $19,623 100.0% $19,552 100.0% $18,348 100.0% $18,153 100.0% $18,085 100.0% ============================================================================================================
32 [METLIFE LOGO] METLIFE, INC. SUMMARY OF REAL ESTATE
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - -------------------------------------------------------------------------------------------------------------- Wholly owned $4,199 $4,338 $5,302 $5,615 $5,520 Joint ventures 365 377 316 297 291 ------------------------------------------------------------------------ Subtotal 4,564 4,715 5,618 5,912 5,811 Foreclosed 5 10 45 51 51 ------------------------------------------------------------------------ Total Real Estate (1) $4,569 $4,725 $5,663 $5,963 $5,862 ========================================================================
(1) Includes real estate held-for-sale and held-for-investment. METLIFE, INC. SUMMARY OF MORTGAGES
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in millions) 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------- COMMERCIAL $19,623 $19,552 $18,348 $18,153 $18,085 AGRICULTURAL 5,052 5,146 5,155 5,174 5,196 RESIDENTIAL 371 388 382 406 403 ---------------------------------------------------------------------------- TOTAL $25,046 $25,086 $23,885 $23,733 $23,684 ============================================================================
METLIFE, INC. DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in billions) 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- METLIFE $226.3 $217.7 $212.0 $202.0 $196.3 METLIFE SEPARATE ACCOUNT 60.6 59.7 56.0 59.3 62.5 STATE STREET THIRD PARTY 20.8 21.8 22.2 25.6 26.1 ---------------------------------------------------------------------------- TOTAL ASSETS UNDER MANAGEMENT $307.7 $299.2 $290.2 $286.9 $284.9 ============================================================================
33 [METLIFE LOGO] COMPANY RATINGS AS OF MAY 5, 2003 (1)
Moody's Standard & A.M. Best Fitch Investors Service Poor's Company Ratings ----------------- ------ ------- ------- FINANCIAL STRENGTH RATINGS - -------------------------- Metropolitan Life Insurance Company Aa2 AA A+ AA General American Life Insurance Company Aa2 AA A+ AA MetLife Investors Insurance Company Aa2 AA A+ AA MetLife Investors Insurance Company of California NR AA A+ NR MetLife Investors USA Insurance Company Aa3 AA A+ AA New England Life Insurance Company Aa2 AA A+ AA First MetLife Investors Insurance Co. NR AA A+ NR Metropolitan Insurance and Annuity Company Aa3 AA A NR Metropolitan Tower Life Insurance Company NR NR A+ NR RGA Reinsurance Company A1 AA- A+ NR Paragon Life Insurance Company NR AA A+ AA Security Equity Life Insurance Company NR AA A+ AA Texas Life Insurance Company NR NR A NR Metropolitan Property and Casualty Insurance Company Aa3 AA- A NR Metropolitan Casualty Insurance Company NR AA- A NR Metropolitan Direct Property and Casualty Insurance Co. NR AA- A NR Metropolitan General Insurance Company NR AA- A NR Metropolitan Group Property & Casualty Insurance Co. NR AA- A NR Metropolitan Lloyds Insurance Company of Texas NR AA- A NR Metropolitan Life Insurance Company (Short-term rating) P-1 A-1+ NR NR CREDIT RATINGS - -------------- MetLife, Inc. Senior Unsecured A2 A a+ A Commercial Paper P-1 A-1 AMB-1+ F1 Metropolitan Life Insurance Company Surplus Notes A1 A+ a+ A+ General American Life Insurance Company Surplus Notes A1 A+ NR NR GenAmerica Capital I Preferred Stock A3 BBB+ NR A- Reinsurance Group of America, Incorporated Senior Unsecured Baa1 A- a A- New England Life Insurance Company Surplus Notes NR NR a+ NR MetLife Funding, Inc. Commercial Paper P-1 A-1+ AMB-1+ F1+ MetLife Capital Trust I Preferred Stock NR BBB+ NR NR
(1) NR indicates no rating provided. 34 [METLIFE LOGO] METLIFE, INC. 2002 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, 2002(1) September 30, 2002 June 30, 2002 (2) March 31, 2002 (3) --------------------------------------------------------------------------------------- Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC - ---------------------------------------------------------------------------------------------------------------------------- Institutional Operations Group Life $ 82 $ 85 $ 84 $ 86 $ 74 $ 76 $ 68 $ 70 Retirement & Savings 120 121 103 106 135 137 114 118 Non-Medical Health & Other 60 65 47 52 41 46 53 58 ------------------------------------------------------------------------------------- Total Institutional Operations 262 271 234 244 250 259 235 246 ------------------------------------------------------------------------------------- Individual Operations Traditional Life 92 86 127 121 97 91 98 92 Variable & Universal Life 23 19 40 35 36 32 25 20 Annuities 47 42 44 39 50 45 40 35 Other 12 13 15 16 13 14 11 12 ------------------------------------------------------------------------------------- Total Individual Operations 174 160 226 211 196 182 174 159 ------------------------------------------------------------------------------------- Auto & Home Auto 21 17 41 37 17 14 15 12 Property 30 31 6 6 15 15 11 12 Other (3) (3) 1 2 4 4 4 4 ------------------------------------------------------------------------------------- Total Auto & Home 48 45 48 45 36 33 30 28 ------------------------------------------------------------------------------------- International Operations 38 32 40 34 2 (4) 14 8 Reinsurance 15 9 23 17 19 13 22 16 Asset Management 1 3 1 3 5 7 1 3 Corporate, Other & Eliminations (200) (182) (70) (52) (4) 14 (76) (60) ------------------------------------------------------------------------------------- Total Operating Earnings $ 338 $ 338 $ 502 $ 502 $ 504 $ 504 $ 400 $ 400 =====================================================================================
(1) Fourth quarter 2002 includes a $169 million after-tax charge to cover costs associated with personal injury liabilities caused by exposure to asbestos or asbestos-containing products (Corporate, Other & Eliminations), a $20 million after-tax reduction of a previously established liability related to the Company's business realignment initiatives (Retirement & Savings), and a $17 million after-tax reduction of a previously established disability insurance liability related to the September 11, 2001 tragedies (Non-Medical Health & Other). (2) Second quarter 2002 includes a $30 million after-tax reduction of a previously established reserve related to the Company's sales practice class action settlement in 1999. This reserve reduction impacted the Corporate, Other & Eliminations segment. (3) First quarter 2002 includes a $48 million after-tax charge to cover costs associated with the resolution of a federal government investigation of General American Life Insurance Company's former Medicare business. This charge impacted the Corporate, Other & Eliminations segment. 35 [METLIFE LOGO] METLIFE, INC. 2001 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, 2001(1) September 30, 2001(2) June 30, 2001 March 31, 2001 -------------------------------------------------------------------------------------------- Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC - ------------------------------------------------------------------------------------------------------------------------------- Institutional Operations Group Life $ 75 $ 80 ($ 16) ($ 10) $ 76 $ 80 $ 63 $ 68 Retirement & Savings (155) (154) 87 89 88 89 94 95 Non-Medical Health & Other 33 38 (44) (38) 40 45 38 43 ------------------------------------------------------------------------------------------- Total Institutional Operations (47) (36) 27 41 204 214 195 206 ------------------------------------------------------------------------------------------- Individual Operations Traditional Life 61 52 73 64 99 90 98 89 Variable & Universal Life 23 20 23 21 32 29 33 30 Annuities 40 37 57 54 47 44 36 33 Other (72) (71) 11 12 8 9 16 17 ------------------------------------------------------------------------------------------- Total Individual Operations 52 38 164 151 186 172 183 169 ------------------------------------------------------------------------------------------- Auto & Home Auto 24 23 25 23 39 35 (7) (11) Property 15 14 (5) (5) (25) (26) (16) (14) Other 4 4 2 2 (3) (1) (1) 0 ------------------------------------------------------------------------------------------- Total Auto & Home 43 41 22 20 11 8 (24) (25) ------------------------------------------------------------------------------------------- International Operations (8) (11) 11 9 11 9 18 16 Reinsurance (1) (7) 16 10 16 10 15 9 Asset Management 2 5 2 5 1 4 6 9 Corporate, Other & Eliminations (165) (154) (15) (9) (10) 2 (9) 0 ------------------------------------------------------------------------------------------- Total Operating Earnings (Loss) ($124) ($124) $227 $227 $419 $419 $384 $384 ===========================================================================================
(1) Fourth quarter 2001 includes business realignment costs, costs associated with the establishment of a policyholder liability for New England Financial and costs associated with the anticipated resolution of race-conscious underwriting claims. By segment, the after-tax costs were as follows: Group Life $1 million; Retirement & Savings $264 million; Non-Medical Health & Other $2 million; Traditional Life $24 million; Variable & Universal Life $12 million; Annuities $22 million; Individual Business - Other $77 million; Auto $1 million; Property $1 million; and Corporate, Other & Eliminations $159 million. (2) Third quarter 2001 includes costs associated with September 11 tragedies. By segment, the after-tax costs were as follows: Group Life $99 million; Non-Medical Health & Other $83 million; Traditional Life $8 million; Variable & Universal Life $7 million; Auto $1 million; Property $3 million; and Reinsurance $7 million. 36 [METLIFE LOGO] METLIFE, INC. 2000 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, 2000 September 30, 2000 June 30, 2000 March 31, 2000 ------------------------------------------------------------------------------------------ Unaudited (Dollars in millions) RBC EC RBC EC RBC EC RBC EC - ---------------------------------------------------------------------------------------------------------------------------------- Institutional Operations Group Life $ 48 $ 55 $ 63 $ 69 $ 61 $ 67 $ 62 $ 68 Retirement & Savings 71 80 58 67 47 56 45 54 Non-Medical Health & Other 44 51 38 45 40 47 33 40 ------------------------------------------------------------------------------------------ Total Institutional Operations 163 186 159 181 148 170 140 162 ------------------------------------------------------------------------------------------ Individual Operations Traditional Life 155 132 105 83 98 76 101 79 Variable & Universal Life 21 16 35 31 23 19 32 28 Annuities 25 18 48 42 69 62 60 53 Other (3) (4) 6 6 4 5 3 3 ------------------------------------------------------------------------------------------ Total Individual Operations 198 162 194 162 194 162 196 163 ------------------------------------------------------------------------------------------ Auto & Home Auto 7 8 22 20 10 8 8 7 Property 24 24 (17) (16) (22) (22) (7) (6) Other 6 6 5 6 (1) 0 7 7 ------------------------------------------------------------------------------------------ Total Auto & Home 37 38 10 10 (13) (14) 8 8 ------------------------------------------------------------------------------------------ International Operations 3 0 5 2 7 4 11 8 Reinsurance 25 20 16 11 9 4 22 17 Asset Management 3 6 9 12 10 13 11 14 Corporate, Other & Eliminations (25) (8) (9) 6 19 35 (9) 7 ------------------------------------------------------------------------------------------ Total Operating Earnings $404 $404 $384 $384 $374 $374 $379 $379 ==========================================================================================
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