-----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, Fy6/4IAXsNlHMUguNmoiSDaLePuP+Lt1pcOY2LP3TinzudVD2+xmqql6SRF90Dtx qgGkpiUMfpqr285AZaOpvA== 0000950123-03-009190.txt : 20030811 0000950123-03-009190.hdr.sgml : 20030811 20030811081456 ACCESSION NUMBER: 0000950123-03-009190 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030811 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030811 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: 03833179 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 y88962k2e8vk.txt FORM 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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: August 11, 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 of MetLife, Inc., dated August 11, 2003. 99.2 Quarterly Financial Supplement for the quarter ended June 30, 2003, revised as of August 11, 2003. Item 12. Results of Operations and Financial Condition. 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 12. Results of Operations and Financial Condition. On August 11, 2003, MetLife, Inc., a Delaware Corporation, issued (i) a press release, a copy of which is attached hereto as Exhibit 99.1, and (ii) a revised Quarterly Financial Supplement for the quarter ended June 30, 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 thereunto duly authorized. METLIFE, INC. By: /s/ Gwenn L. Carr ------------------------------------- Name: Gwenn L. Carr Title: Vice-President and Secretary Date: August 11, 2003 EXHIBIT INDEX Exhibit Number Exhibit - ------- ------- 99.1 Press Release, dated August 11, 2003. 99.2 Quarterly Financial Supplement for the quarter ended June 30, 2003, revised as of August 11, 2003. EX-99.1 3 y88962k2exv99w1.txt PRESS RELEASE Contacts: For Media: Holly Sheffer (212) 578-4072 For Investors: John Nadel (212) 578-2085 METLIFE ANNOUNCES CHARGE AT ITS AFFILIATE NEW ENGLAND FINANCIAL NEW YORK, August 11, 2003 - MetLife, Inc. (NYSE: MET) today announced that it is adjusting its previously reported second quarter earnings by $31 million after-tax. This adjustment results from certain improperly deferred expenses at its affiliate, New England Financial, which is part of MetLife's Individual Business segment. The revised, as well as previously reported, second quarter and six months ended June 30, 2003 net income and operating earnings are shown below:
For the three months ended June 30, 2003 ------------------------------------------- As Revised As Previously Reported ----------------- ---------------------- (Dollars in millions, except per share data, unaudited) Net income $580 $0.79 $611 $0.84 After-tax investment losses 40 0.05 40 0.05 ---- ----- ---- ----- Operating earnings $620 $0.84 $651 $0.89 ==== ===== ==== =====
For the six months ended June 30, 2003 ---------------------------------------------- As Revised As Previously Reported ----------------- ---------------------- (Dollars in millions, except per share data, unaudited) Net income $ 942 $1.29 $ 973 $1.33 After-tax investment losses 124 0.17 124 0.17 Impact of conversion of securities -- 0.03 -- 0.03 ------ ----- ------ ----- Operating earnings $1,066 $1.49 $1,097 $1.53 ====== ===== ====== =====
"We are disappointed by the need for this adjustment and by the timing of it, one week after the release of our second quarter results," said Robert H. Benmosche, chairman of the board and chief executive officer. "Excluding this charge, we continue to work towards and expect to achieve our 2003 business plan," he added. Eileen McDonnell, currently senior vice president, Individual Insurance Business Development for MetLife, has been named president of New England Financial, replacing Thom Faria, who has left the company. Ms. McDonnell has had overall responsibility for field recruiting and training, advanced markets, strategic planning, expense management and field compensation for the MetLife, GenAmerica Financial and New England Financial distribution channels. Prior to joining MetLife earlier this year, Ms. McDonnell was senior vice president and head of individual insurance at Guardian Life Insurance Company. In that capacity, she was responsible for retail distribution, product development, marketing and operations. Earlier in her career, Ms. McDonnell spent nearly ten years at AXA Financial. "We recruited Eileen several months ago because she brings a strong track record in leading and developing a highly productive agency sales force," said C. Robert Henrikson, president U.S. Insurance and Financial Services businesses. "Our appointment of Eileen to this important leadership position again underscores our commitment to grow New England Financial and its general agency sales force." The aforementioned $31 million after-tax charge resulted in a reduction to net income and operating earnings in the Traditional Life and Variable & Universal Life product lines within the Individual Business segment. For further details, a revised June 30, 2003 quarterly financial supplement is available on MetLife's Web site at www.metlife.com on the investor relations pages. 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 provide benefits to 37 million employees and family members through their plan sponsors. Outside the U.S., the MetLife companies have insurance operations in 12 countries serving approximately 8 million customers. # # # 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. EX-99.2 4 y88962k2exv99w2.txt QUARTERLY FINANCIAL SUPPLEMENT [METLIFE LOGO] [SNOOPY GRAPHIC] SECOND QUARTER FINANCIAL SUPPLEMENT June 30, 2003 (Revised as of August 11, 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 10 Consolidating Statement of Operating Earnings 11 INSTITUTIONAL OPERATIONS Statements of Operating Earnings - Product Level 15 Premiums, Fees and Other Revenues by Product and Additional Statistical Information 16 Future Policy Benefits and Policyholder Account Balances and Separate Account Liabilities 17 Insurance Expenses Ratio and Other Expenses by Major Category 18 Spreads by Product 19 INDIVIDUAL OPERATIONS Statements of Operating Earnings - Product Level 20 Premiums and Deposits by Product and Manufacturer and Mutual Fund Sales 22 Additional Statistical Information 23 Future Policy Benefits and Policyholder Account Balances and Separate Account Liabilities 24 Insurance Expenses Ratio and Other Expenses by Major Category 25 Spreads by Product 26 AUTO & HOME Statements of Operating Earnings - Product Level 27 Written Premiums by Product and Selected Financial Information and Supplemental Data 28 INTERNATIONAL OPERATIONS Statements of Operating Earnings 29 REINSURANCE OPERATIONS Statements of Operating Earnings, Pre-Tax and Pre-Minority Interest Operating Earnings by Region and Reserves by Region 30 ASSET MANAGEMENT Statements of Operating Earnings, Change in Assets Under Management and Composition of Assets Under Management 31 CORPORATE, OTHER & ELIMINATIONS Statements of Operating Earnings 32 METLIFE, INC. Investment Results by Asset Category and Annualized Yields 33 Fixed Maturities and Equity Securities Gross Unrealized Loss Aging Schedule 35 Summary of Fixed Maturities by Sector and by Quality Distribution, and Summary of Commercial Mortgage Loans by Region and Property Type 36 Summary of Real Estate, Summary of Mortgages and Distribution of Assets Under Management 37 OTHER INFORMATION Company Ratings 38 Capital Allocation based on Risk Based Capital vs. Economic Capital 2002 through 2000 39
NOTE: The Quarterly Financial Supplement ("QFS") includes financial measures, operating earnings and operating earnings per diluted shares, that are 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. Operating earnings per diluted share is calculated by dividing operating earnings as defined above by the number of weighted average diluted shares outstanding for the period indicated. MetLife uses operating earnings and operating earnings per diluted share in analyzing its performance; it believes that these measures enhance 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 and operating earnings per diluted share should not be viewed as substitutes for GAAP net income and GAAP net income per diluted share, respectively. Reconciliations of operating earnings to GAAP net income and operating earnings per diluted share to GAAP net income per diluted share, the most directly comparable GAAP measures, are included in this QFS, in MetLife's earnings press release for the quarter ended June 30, 2003, and in MetLife's press release dated August 11, 2003, all of which are available at www.metlife.com. (METLIFE LOGO) =============================================================================== CORPORATE OVERVIEW Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended --------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, 2003 2003 2002 2002 2002 2002 --------------------------------------------------------------------- Net income (1) $ 580 $ 362 $ 561 $ 328 $ 387 $ 329 Net investment gains (losses) (54) (170) 310 (286) (266) (105) Minority interest - net investment gains (losses) (2) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (2) 0 38 43 16 73 13 Net investment gains (losses) tax benefit (provision) 16 44 (132) 102 72 15 --------------------------------------------------------------------- After-tax net investment gains (losses) (40) (84) 223 (169) (117) (76) Cumulative effect of accounting change for SFAS 142 0 0 0 (5) 0 5 --------------------------------------------------------------------- Operating earnings $ 620(3) $ 446 $ 338(4) $ 502 $ 504(5) $ 400(6) ====================================================================== Net income per share - diluted $0.79 $0.47(7) $0.78 $0.45 $0.53 $0.44 After-tax net investment gains (losses) (0.05) (0.12) 0.31 (0.23) (0.16) (0.10) Cumulative effect of accounting change for SFAS 142 0.00 0.00 0.00 (0.01) 0.00 0.00 Impact of conversion of securities 0.00 (0.03) 0.00 0.00 0.00 0.00 ----------------------------------------------------------------------- Operating earnings per share - diluted $0.84 $0.62 $0.47 $0.69 $0.69 $0.54 ======================================================================= Weighted average common shares outstanding -- diluted 731.3 722.4 720.9 722.7 733.0 739.5 Book value per common share (actual shares outstanding) $27.13 $25.76 $24.83 $24.39 $23.00 $21.64 Book value per common share, excluding other accumulated comprehensive income (actual shares outstanding) $22.78 $22.45 $21.96 $21.37 $20.91 $20.45 Book value per common share - diluted $28.20 $24.97 $24.12 $23.63 $22.00 $20.72 Book value per common share, excluding other accumulated comprehensive income - diluted $23.68 $21.77 $21.33 $20.70 $20.00 $19.58
At or for the Three Months Ended ----------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, 2003 2003 2002 2002 2002 2002 ----------------------------------------------------------------------- Shares outstanding, beginning of period 700.4 700.3 700.3 701.9 707.8 715.5 Treasury stock 59.8 0.1 0.0 (1.6) (5.9) (7.7) ----------------------------------------------------------------------- Shares outstanding, end of period 760.2 700.4 700.3 700.3 701.9 707.8 Weighted average common shares outstanding - basic 731.3 700.3 700.3 701.5 704.7 712.1 Dilutive effect of convertible securities 0.0 22.1 20.6 21.2 28.3 27.1 Dilutive effect of stock options 0.0 0.0 0.0 0.0 0.9 0.3 ----------------------------------------------------------------------- Weighted average common shares outstanding - diluted 731.3 722.4 720.9 722.7 733.9 739.5 ======================================================================= Policyholder Trust Shares 382.4 386.4 390.0 400.6 403.2 409.4 SUPPLEMENTAL DATA Adjusted long-term debt to total capital excluding other accumulated comprehensive income (8) 22.0% 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 June 30, 2003 includes a $64 million after-tax benefit ($0.09 per diluted share) from a reduction of a previously established liability related to the Company's race conscious underwriting settlement and $62 million of after-tax earnings ($0.08 per diluted share) from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge ($0.05 per diluted share) related to previously deferred expenses. (4) 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. (5) 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. (6) 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. (7) 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. (8) Adjusted long-term debt at June 30, 2003, March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, consists of $4,917 million $4,919 million, $3,899 million, $2,911 million, $2,903 million and $2,898 million, of long-term debt, respectively, and $35 million, $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 -------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS (1) INVESTMENTS - ----------- Fixed maturities available-for-sale, at fair value $ 158,822 $ 144,341 $ 140,288 $ 132,906 $ 123,796 $ 118,236 Equity securities, at fair value 1,617 1,474 1,613 2,212 1,932 1,735 Mortgage loans on real estate 25,289 25,046 25,086 23,885 23,733 23,684 Real estate and real estate joint ventures 4,585 4,569 4,725 5,663 5,963 5,862 Policy loans 8,627 8,615 8,580 8,366 8,316 8,310 Other limited partnership interests 2,406 2,299 2,395 1,747 1,785 1,817 Short-term investments 2,640 3,188 1,921 2,658 2,233 2,410 Other invested assets 4,261 3,948 3,727 3,214 3,271 3,512 -------------------------------------------------------------------------- 208,247 193,480 188,335 180,651 171,029 165,566 Cash and cash equivalents 5,714 4,938 2,323 3,647 3,563 4,024 Accrued investment income 2,241 2,179 2,088 2,224 2,215 2,186 Premiums and other receivables 7,512 6,795 6,472 7,400 7,345 7,284 Deferred policy acquisition costs 11,899 11,889 11,727 11,553 11,774 11,436 Goodwill and other intangible assets 652 745 753 792 807 648 Other 6,097 6,276 6,035 5,731 5,267 5,078 Separate account assets 67,460 60,620 59,693 56,049 59,283 62,538 -------------------------------------------------------------------------- $ 309,822 $ 286,922 $ 277,426 $ 268,047 $ 261,283 $ 258,760 ========================================================================== LIABILITIES AND EQUITY (1) LIABILITIES - ----------- Future policy benefits $ 95,360 $ 92,744 $ 91,697 $ 89,734 $ 88,200 $ 86,020 Policyholder account balances 72,207 69,060 66,830 65,011 63,005 60,236 Short-term debt 3,443 2,441 1,161 878 52 546 Long-term debt 5,562 5,481 4,425 3,428 3,436 3,434 Payables under securities loaned transactions 23,028 19,566 17,862 16,251 13,486 13,665 Other 21,862 18,694 17,108 18,356 16,417 15,743 Separate account liabilities 67,460 60,620 59,693 56,049 59,283 62,538 -------------------------------------------------------------------------- 288,922 268,606 258,776 249,707 243,879 242,182 -------------------------------------------------------------------------- Company-obligated mandatorily redeemable capital securities 277 277 1,265 1,263 1,260 1,258 -------------------------------------------------------------------------- EQUITY - ------ Common stock, at par value 8 8 8 8 8 8 Capital in excess of par value 14,956 14,952 14,968 14,967 14,967 14,966 Retained earnings 3,093 3,169 2,807 2,393 2,065 1,678 Treasury stock (740) (2,402) (2,405) (2,405) (2,365) (2,174) Accumulated other comprehensive income 3,306 2,312 2,007 2,114 1,469 842 -------------------------------------------------------------------------- 20,623 18,039 17,385 17,077 16,144 15,320 -------------------------------------------------------------------------- $ 309,822 $ 286,922 $ 277,426 $ 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 ------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES (1) Premiums $ 5,092 $ 4,838 $ 5,228 $ 4,676 $ 4,701 $ 4,481 Universal life and investment-type product policy fees 594 566 581 587 514 457 Investment income, net 2,889 2,899 2,964 2,839 2,861 2,789 Other revenues 355 298 301 320 343 367 ------------------------------------------------------------------------- 8,930 8,601 9,074 8,422 8,419 8,094 ------------------------------------------------------------------------- EXPENSES (1) Policyholder benefits and dividends 5,472 5,456 5,737 5,243 5,370 5,115 Interest credited to policyholder account balances 761 747 773 736 727 714 Interest expense 112 116 98 95 93 94 Other expenses 1,732 1,637 1,987 1,611 1,483 1,560 ------------------------------------------------------------------------- 8,077 7,956 8,595 7,685 7,673 7,483 ------------------------------------------------------------------------- Operating earnings before provision for income taxes 853 645 479 737 746 611 Provision for income taxes 233 199 141 235 242 211 ------------------------------------------------------------------------- OPERATING EARNINGS $ 620(2) $ 446 $ 338(3) $ 502 $ 504(4) $ 400(5) ------------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 620 $ 446 $ 338 $ 502 $ 504 $ 400 Net investment gains (losses) (54) (170) 310 (286) (266) (105) Minority interest - net investment gains (losses) (2) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (6) 0 38 43 16 73 13 Net investment gains (losses) tax benefit (provision) 16 44 (132) 102 72 15 ------------------------------------------------------------------------- After-tax net investment gains (losses) (40) (84) 223 (169) (117) (76) Cumulative effect of accounting change for SFAS 142 0 0 0 (5) 0 5 ------------------------------------------------------------------------- Net income $ 580 $ 362 $ 561 $ 328 $ 387 $ 329 =========================================================================
For the Three Months Ended -------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, 2003 2003 2002 2002 2002 2002 -------------------------------------------------------------------- TOTAL COMPANY HEADCOUNT DOMESTIC Sales Individual (7) 10,380 10,409 10,909 10,968 11,015 10,785 Institutional 809 735 720 731 687 672 Auto & Home 487 479 467 435 443 443 Asset Management 69 72 68 72 95 99 -------------------------------------------------------------------- Total domestic sales 11,745 11,695 12,164 12,206 12,240 11,999 Other Than Sales Individual 2,873 2,920 2,960 2,999 3,038 3,012 Institutional 5,626 5,631 5,488 5,502 5,519 5,569 Auto & Home 3,497 3,526 3,536 3,491 3,510 3,570 Reinsurance 637 630 622 621 606 599 Asset Management 503 516 521 570 630 648 Operations 3,903 3,945 3,886 3,891 3,995 4,107 Technology 3,440 3,488 3,659 3,701 3,685 3,708 Corporate 3,220 3,255 3,289 3,362 3,391 3,400 -------------------------------------------------------------------- Total domestic other than sales 23,699 23,911 23,961 24,137 24,374 24,613 -------------------------------------------------------------------- Total Domestic Headcount 35,444 35,606 36,125 36,343 36,614 36,612 -------------------------------------------------------------------- International Sales Professional sales 1,240 1,146 1,146 732 732 732 Other 7,932 7,894 8,337 8,153 8,289 5,628 Other than sales 2,789 2,761 2,904 2,903 3,069 2,250 -------------------------------------------------------------------- Total International Headcount 11,961 11,801 12,387 11,788 12,090 8,610 -------------------------------------------------------------------- Total Company Headcount 47,405 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 June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement and $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (3) 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. (4) 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. (5) 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. (6) 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) 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 JUNE 30, 2003
Insurance Reinsurance Asset Corporate, Other Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Total investments $ 208,247 $189,176 $ 7,863 $ 163 $ 11,045 Deferred policy acquisition costs 11,899 10,231 1,668 0 0 Goodwill and other intangible assets 652 531 99 18 4 Other 21,564 13,765 1,558 104 6,137 Separate account assets 67,460 67,466 12 0 (18) ---------------------------------------------------------------------------------- $ 309,822 $281,169 $11,200 $ 285 $ 17,168 ================================================================================== LIABILITIES AND EQUITY LIABILITIES - ----------- Future policy benefits $ 95,360 $ 93,600 $ 3,179 $ 0 $ (1,419) Policyholder account balances 72,207 68,741 3,984 0 (518) Debt 9,005 2,800 376 0 5,829 Payables under securities loaned transactions 23,028 18,914 0 0 4,114 Other 21,862 12,896 2,703 56 6,207 Separate account liabilities 67,460 67,466 12 0 (18) ---------------------------------------------------------------------------------- 288,922 264,417 10,254 56 14,195 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) 18,049 14,017 615 226 3,191 Treasury stock (740) 0 0 0 (740) Accumulated other comprehensive income 3,306 2,735 173 3 395 ---------------------------------------------------------------------------------- 20,623 16,752 788 229 2,854 ---------------------------------------------------------------------------------- $ 309,822 $281,169 $11,200 $ 285 $ 17,168 ==================================================================================
(1) Allocated equity includes additional paid-in capital and retained earnings. 5 (METLIFE LOGO) =============================================================================== METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED JUNE 30, 2003
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 5,092 $ 4,509 $ 588 $ 0 $ (5) Universal life and investment-type product policy fees 594 594 0 0 0 Investment income, net 2,889 2,710 121 16 42 Other revenues 355 291 12 37 15 ----------------------------------------------------------------------- 8,930 8,104 721 53 52 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,472 5,006 466 0 0 Interest credited to policyholder account balances 761 716 45 0 0 Other expenses 1,844 1,597 180 44 23 ---------------------------------------------------------------------- 8,077 7,319 691 44 23 ----------------------------------------------------------------------- Operating earnings before provision (benefit) for income taxes 853 785 30 9 29 Provision (benefit) for income taxes 233 230 11 4 (12) ----------------------------------------------------------------------- OPERATING EARNINGS $ 620(1) $ 555(2) $ 19 $ 5 $ 41(3) ----------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 620 $ 555 $ 19 $ 5 $ 41 Net investment gains (losses) (54) (23) 5 0 (36) Minority interest - net investment gains (losses) (2) 0 (2) 0 0 Adjustments to net investment gains (losses) (4) 0 0 0 0 0 Net investment gains (losses) tax benefit (provision) 16 5 0 0 11 ----------------------------------------------------------------------- After-tax net investment gains (losses) (40) (18) 3 0 (25) ----------------------------------------------------------------------- Net income $ 580 $ 537 $ 22 $ 5 $ 16 =======================================================================
(1) Consolidated operating earnings for the three months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement and $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (2) Insurance Operations operating earnings for the three months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in the terms of a significant contract, and a $31 million after-tax charge related to previously deferred expenses. (3) Corporate, Other & Eliminations operating earnings for the three months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement. (4) 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 JUNE 30, 2002
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 4,701 $ 4,233 $ 472 $ 0 $ (4) Universal life and investment-type product policy fees 514 513 0 0 1 Investment income, net 2,861 2,724 102 15 20 Other revenues 343 270 11 50 12 ----------------------------------------------------------------------- 8,419 7,740 585 65 29 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,370 4,983 385 0 2 Interest credited to policyholder account balances 727 696 32 0 (1) Other expenses 1,576 1,316 139 57 64 ----------------------------------------------------------------------- 7,673 6,995 556 57 65 ----------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 746 745 29 8 (36) Provision (benefit) for income taxes 242 261 10 3 (32) ----------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 504(1) $ 484 $ 19 $ 5 $ (4)(1) ----------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings (loss) $ 504 $ 484 $ 19 $ 5 $ (4) Net investment gains (losses) (266) (281) 0 0 15 Minority interest - net investment gains (losses) 4 0 4 0 0 Adjustments to net investment gains (losses) (2) 73 73 0 0 0 Net investment gains (losses) tax benefit (provision) 72 85 (2) 0 (11) ----------------------------------------------------------------------- After-tax net investment gains (losses) (117) (123) 2 0 4 ----------------------------------------------------------------------- Net income (loss) $ 387 $ 361 $ 21 $ 5 $ 0 =======================================================================
(1) Consolidated operating earnings and Corporate, Other & Eliminations 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. (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) =============================================================================== METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 2003
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 9,930 $ 8,799 $1,140 $ 0 $ (9) Universal life and investment-type product policy fees 1,160 1,160 0 0 0 Investment income, net 5,788 5,414 231 32 111 Other revenues 653 536 24 66 27 ----------------------------------------------------------------------- 17,531 15,909 1,395 98 129 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 10,928 10,027 899 0 2 Interest credited to policyholder account balances 1,508 1,420 88 0 0 Other expenses 3,597 3,021 348 87 141 ----------------------------------------------------------------------- 16,033 14,468 1,335 87 143 ----------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 1,498 1,441 60 11 (14) Provision (benefit) for income taxes 432 449 21 5 (43) ----------------------------------------------------------------------- OPERATING EARNINGS $ 1,066(1) $ 992(2) $ 39 $ 6 $ 29(3) ----------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 1,066 $ 992 $ 39 $ 6 $ 29 Net investment gains (losses) (224) (164) 1 8 (69) Minority interest - net investment gains (losses) 2 0 2 0 0 Adjustments to net investment gains (losses) (4) 38 38 0 0 0 Net investment gains (losses) tax benefit (provision) 60 42 0 (3) 21 ----------------------------------------------------------------------- After-tax net investment gains (losses) (124) (84) 3 5 (48) ----------------------------------------------------------------------- Net income $ 942 $ 908 $ 42 $ 11 $ (19) =======================================================================
(1) Consolidated operating earnings for the six months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement and $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (2) Insurance Operations operating earnings for the six months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in the terms of a significant contract, and a $31 million after-tax charge related to previously deferred expenses. (3) Corporate, Other & Eliminations operating earnings for the six months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement. (4) 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) =============================================================================== METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 2002
Corporate, Insurance Reinsurance Asset Other & Unaudited (Dollars in millions) Consolidated Operations Operations Management Eliminations - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 9,182 $ 8,243 $ 947 $ 0 $ (8) Universal life and investment-type product policy fees 971 971 0 0 0 Investment income, net 5,650 5,360 201 29 60 Other revenues 710 580 19 90 21 ----------------------------------------------------------------------- 16,513 15,154 1,167 119 73 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 10,485 9,699 785 0 1 Interest credited to policyholder account balances 1,441 1,375 66 0 0 Other expenses 3,230 2,636 253 109 232 ----------------------------------------------------------------------- 15,156 13,710 1,104 109 233 ----------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 1,357 1,444 63 10 (160) Provision (benefit) for income taxes 453 507 22 4 (80) ----------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 904 (1) $ 937 $ 41 $ 6 $ (80)(1) ----------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - ---------------------------------------- Operating earnings (loss) $ 904 $ 937 $ 41 $ 6 $ (80) Net investment gains (losses) (371) (409) 2 (4) 40 Minority interest - net investment gains (losses) 5 0 5 0 0 Adjustments to net investment gains (losses) (2) 86 86 0 0 0 Net investment gains (losses) tax benefit (provision) 87 112 (3) 2 (24) ----------------------------------------------------------------------- After-tax net investment gains (losses) (193) (211) 4 (2) 16 Cumulative effect of accounting change for SFAS 142 5 5 0 0 0 ----------------------------------------------------------------------- Net income (loss) $ 716 $ 731 $ 45 $ 4 $ (64) =======================================================================
(1) Consolidated operating earnings and Corporate, Other & Eliminations operating loss for the six months ended June 30, 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, as well as a $30 million after-tax reduction of a previously established liability related to the Company's sales practice class action settlement in 1999. (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. 9 (METLIFE LOGO) =============================================================================== INSURANCE OPERATIONS CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended ----------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 4,509 $ 4,290 $ 4,635 $ 4,222 $ 4,233 $ 4,010 Universal life and investment-type product policy fees 594 566 581 587 513 458 Investment income, net 2,710 2,704 2,802 2,752 2,724 2,636 Other revenues 291 245 225 262 270 310 ----------------------------------------------------------------------- 8,104 7,805 8,243 7,823 7,740 7,414 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,006 5,021 5,287 4,900 4,983 4,716 Interest credited to policyholder account balances 716 704 724 705 696 679 Capitalization of deferred policy acquisition costs (502) (476) (480) (473) (434) (417) Amortization of deferred policy acquisition costs 415 344 379 393 308 284 Other expenses 1,684 1,556 1,543 1,462 1,442 1,453 ----------------------------------------------------------------------- 7,319 7,149 7,453 6,987 6,995 6,715 ----------------------------------------------------------------------- Operating earnings before provision for income taxes 785 656 790 836 745 699 Provision for income taxes 230 219 268 288 261 246 ----------------------------------------------------------------------- OPERATING EARNINGS $ 555(1) $ 437 $ 522(2) $ 548 $ 484 $ 453 ----------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 555 $ 437 $ 522 $ 548 $ 484 $ 453 Net investment gains (losses) (23) (141) 209 (246) (281) (128) Adjustments to net investment gains (losses) (3) 0 38 39 16 73 13 Net investment gains (losses) tax benefit (provision) 5 37 (98) 85 85 27 ----------------------------------------------------------------------- After-tax net investment gains (losses) (18) (66) 150 (145) (123) (88) Cumulative effect of accounting change for SFAS 142 0 0 0 (5) 0 5 ----------------------------------------------------------------------- Net income $ 537 $ 371 $ 672 $ 398 $ 361 $ 370 =======================================================================
(1) Operating earnings for the six months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (2) 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. (3) 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) ================================================================================ INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED JUNE 30, 2003 Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 4,509 $ 2,343 $ 1,055 $ 721 $ 390 Universal life and investment-type product policy fees 594 145 378 0 71 Investment income, net 2,710 1,009 1,529 41 131 Other revenues 291 152 109 4 26 ------------------------------------------------------------------------ 8,104 3,649 3,071 766 618 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 5,006 2,560 1,625 527 294 Interest credited to policyholder account balances 716 228 452 0 36 Capitalization of deferred policy acquisition costs (502) (53) (280) (110) (59) Amortization of deferred policy acquisition costs 415 24 207 107 77 Other expenses 1,684 485 833 189 177 ------------------------------------------------------------------------ 7,319 3,244 2,837 713 525 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 785 405 234 53 93 Provision for income taxes 230 145 83 11 (9) ------------------------------------------------------------------------ OPERATING EARNINGS $ 555(1) $ 260 $ 151(2) $ 42 $ 102(3) ------------------------------------------------------------------------ NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 555 $ 260 $ 151 $ 42 $ 102 Net investment losses (23) (9) (11) (2) (1) Adjustments to net investment gains (losses) (4) 0 0 0 0 0 Net investment losses tax benefit (provision) 5 3 4 1 (3) ------------------------------------------------------------------------ After-tax net investment losses (18) (6) (7) (1) (4) ------------------------------------------------------------------------ Net income $ 537 $ 254 $ 144 $ 41 $ 98 ========================================================================
(1) Insurance Operations operating earnings for the three months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (2) Individual Operations operating earnings for the three months ended June 30, 2003 includes a $31 million after-tax charge related to previously deferred expenses. (3) International Operations operating earnings for the three months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology. (4) 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. 11 (METLIFE LOGO) ================================================================================ INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED JUNE 30, 2002
Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 4,233 $ 2,162 $ 1,095 $ 702 $ 274 Universal life and investment-type product policy fees 513 168 338 0 7 Investment income, net 2,724 1,003 1,580 46 95 Other revenues 270 156 102 9 3 ---------------------------------------------------------------------- 7,740 3,489 3,115 757 379 ---------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 4,983 2,475 1,723 517 268 Interest credited to policyholder account balances 696 232 453 0 11 Capitalization of deferred policy acquisition costs (434) (38) (258) (98) (40) Amortization of deferred policy acquisition costs 308 12 177 97 22 Other expenses 1,442 420 714 194 114 ---------------------------------------------------------------------- 6,995 3,101 2,809 710 375 ---------------------------------------------------------------------- Operating earnings before provision for income taxes 745 388 306 47 4 Provision for income taxes 261 138 110 11 2 ---------------------------------------------------------------------- OPERATING EARNINGS $ 484 $ 250 $ 196 $ 36 $ 2 ---------------------------------------------------------------------- NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 484 $ 250 $ 196 $ 36 $ 2 Net investment gains (losses) (281) (109) (162) (18) 8 Adjustments to net investment gains (losses) (1) 73 0 73 0 0 Net investment gains (losses) tax benefit (provision) 85 49 33 6 (3) ---------------------------------------------------------------------- After-tax net investment gains (losses) (123) (60) (56) (12) 5 ---------------------------------------------------------------------- Net income $ 361 $ 190 $ 140 $ 24 $ 7 ======================================================================
(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. 12 (METLIFE LOGO) ================================================================================ INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 2003
Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 8,799 $ 4,485 $ 2,096 $ 1,433 $ 785 Universal life and investment-type product policy fees 1,160 300 738 0 122 Investment income, net 5,414 1,988 3,092 80 254 Other revenues 536 294 195 13 34 ------------------------------------------------------------------------ 15,909 7,067 6,121 1,526 1,195 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 10,027 4,978 3,317 1,061 671 Interest credited to policyholder account balances 1,420 452 895 0 73 Capitalization of deferred policy acquisition costs (978) (91) (540) (222) (125) Amortization of deferred policy acquisition costs 759 44 382 222 111 Other expenses 3,240 939 1,586 385 330 ------------------------------------------------------------------------ 14,468 6,322 5,540 1,446 1,060 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 1,441 745 481 80 135 Provision for income taxes 449 266 170 8 5 ------------------------------------------------------------------------ OPERATING EARNINGS $ 992(1) $ 479 $ 311(2) $ 72 $ 130(3) ------------------------------------------------------------------------ NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 992 $ 479 $ 311 $ 72 $ 130 Net investment losses (164) (79) (78) (6) (1) Adjustments to net investment gains (losses) (4) 38 0 38 0 0 Net investment losses tax benefit (provision) 42 29 14 2 (3) ------------------------------------------------------------------------ After-tax net investment losses (84) (50) (26) (4) (4) ------------------------------------------------------------------------ Net income $ 908 $ 429 $ 285 $ 68 $ 126 ========================================================================
(1) Insurance Operations operating earnings for the six months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology, and a $31 million after-tax charge related to previously deferred expenses. (2) Individual Operations operating earnings for the six months ended June 30, 2003 includes a $31 million after-tax charge related to previously deferred expenses. (3) International Operations operating earnings for the six months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology. (4) 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. 13 (METLIFE LOGO) ================================================================================ INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 2002
Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations - ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 8,243 $ 4,022 $ 2,178 $ 1,394 $ 649 Universal life and investment-type product policy fees 971 320 637 0 14 Investment income, net 5,360 1,988 3,111 91 170 Other revenues 580 328 230 16 6 ------------------------------------------------------------------------ 15,154 6,658 6,156 1,501 839 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 9,699 4,666 3,415 1,012 606 Interest credited to policyholder account balances 1,375 460 895 0 20 Capitalization of deferred policy acquisition costs (851) (73) (502) (196) (80) Amortization of deferred policy acquisition costs 592 28 314 201 49 Other expenses 2,895 824 1,455 396 220 ------------------------------------------------------------------------ 13,710 5,905 5,577 1,413 815 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 1,444 753 579 88 24 Provision for income taxes 507 268 209 22 8 ------------------------------------------------------------------------ OPERATING EARNINGS $ 937 $ 485 $ 370 $ 66 $ 16 ------------------------------------------------------------------------ NET INCOME RECONCILIATION - ---------------------------------------- Operating earnings $ 937 $ 485 $ 370 $ 66 $ 16 Net investment losses (409) (191) (172) (32) (14) Adjustments to net investment gains (losses) (1) 86 0 86 0 0 Net investment losses tax benefit (provision) 112 73 32 11 (4) ------------------------------------------------------------------------ After-tax net investment losses (211) (118) (54) (21) (18) Cumulative effect of accounting change for SFAS 142 5 0 0 0 5 ------------------------------------------------------------------------ Net income $ 731 $ 367 $ 316 $ 45 $ 3 ========================================================================
(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. 14 (METLIFE LOGO) ================================================================================ INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Group Life 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 1,184 $ 1,169 $ 1,175 $ 1,145 $ 1,095 $ 1,084 Universal life and investment-type product policy fees 145 155 147 148 168 152 Investment income, net 248 242 246 245 241 242 Other revenues 13 16 7 13 10 14 ---------------------------------------------------------------------------------------- 1,590 1,582 1,575 1,551 1,514 1,492 ---------------------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 1,229 1,234 1,208 1,201 1,171 1,178 Interest credited to policyholder account balances 104 106 110 107 106 102 Other expenses 133 121 128 111 121 105 ---------------------------------------------------------------------------------------- 1,466 1,461 1,446 1,419 1,398 1,385 ---------------------------------------------------------------------------------------- Operating earnings before provision for income taxes 124 121 129 132 116 107 Provision for income taxes 45 43 47 48 42 39 ---------------------------------------------------------------------------------------- OPERATING EARNINGS $ 79 $ 78 $ 82 $ 84 $ 74 $ 68 ======================================================================================== After-tax net investment losses $ (8) $ (13) $ (15) $ (52) $ (50) $ (22)
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 351 $ 174 $ 257 $ 200 $ 388 $ 98 Universal life and investment-type product policy fees 0 0 0 0 0 0 Investment income, net 674 642 674 641 673 655 Other revenues 52 45 46 55 62 70 ---------------------------------------------------------------------------------------- 1,077 861 977 896 1,123 823 ---------------------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 681 531 627 547 723 443 Interest credited to policyholder account balances 124 118 126 129 126 126 Other expenses 87 86 41 63 68 81 ---------------------------------------------------------------------------------------- 892 735 794 739 917 650 ---------------------------------------------------------------------------------------- Operating earnings before provision for income taxes 185 126 183 157 206 173 Provision for income taxes 65 44 63 54 71 59 ---------------------------------------------------------------------------------------- OPERATING EARNINGS $ 120 $ 82 $ 120(1) $ 103 $ 135 $ 114 ======================================================================================== After-tax net investment gains (losses) $ 2 $ (25) $ 52 $ (69) $ 10 $ (44)
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 808 $ 799 $ 750 $ 705 $ 679 $ 678 Universal life and investment-type product policy fees 0 0 0 0 0 0 Investment income, net 87 95 85 84 89 88 Other revenues 87 81 74 86 84 88 ---------------------------------------------------------------------------------------- 982 975 909 875 852 854 ---------------------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 650 653 593 612 581 570 Interest credited to policyholder account balances 0 0 0 0 0 0 Other expenses 236 229 220 189 205 199 ---------------------------------------------------------------------------------------- 886 882 813 801 786 769 ---------------------------------------------------------------------------------------- Operating earnings before provision for income taxes 96 93 96 74 66 85 Provision for income taxes 35 34 36 27 25 32 ---------------------------------------------------------------------------------------- OPERATING EARNINGS $ 61 $ 59 $ 60(1) $ 47 $ 41 $ 53 ======================================================================================== After-tax net investment gains (losses) $ 0 $ (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. 15 (METLIFE LOGO) ================================================================================ INSTITUTIONAL OPERATIONS PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended ----------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT Group Life $1,342 $1,340 $1,329 $1,306 $1,273 $1,250 Retirement & Savings 403 219 303 255 450 168 Non-Medical Health & Other 895 880 824 791 763 766 ----------------------------------------------------------------------- Total Premiums, Fees and Other Revenues $2,640 $2,439 $2,456 $2,352 $2,486 $2,184 ======================================================================= Group Disability (Included in Non-Medical Health & Other) $ 238 $ 241 $ 236 $ 210 $ 212 $ 198 ADDITIONAL STATISTICAL INFORMATION INCURRED LOSS RATIO (MORTALITY EXPERIENCE): Term Life 92.0% 93.2% 92.4% 93.3% 94.4% 94.5% INCURRED LOSS RATIO (MORBIDITY EXPERIENCE): Group Disability (1) 95.1% 96.5% 97.7% 97.5% 99.5% 97.2%
(1) In the third quarter of 2001, the Company established a group disability insurance liability as a result of the September 11th tragedies. The group disability incurred loss ratio for all periods reflects the release of such liabilities against incurred claims stemming from the events of September 11th. The fourth quarter 2002 incurred loss ratio excludes the impact of a $17 million after-tax reduction of such liability not stemming from claims activity. Including the impact of this reduction in the liability, the fourth quarter 2002 incurred loss ratio was 88.7%. 16 (METLIFE LOGO) ================================================================================ INSTITUTIONAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES - --------------------------------------------------------
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Group Life 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 13,993 $ 13,756 $ 13,269 $ 13,004 $ 12,800 $ 12,475 Premiums and deposits 2,676 2,877 2,673 2,251 2,536 2,018 Interest on reserves 134 136 139 137 135 134 Surrenders and withdrawals (1,103) (1,426) (909) (760) (978) (456) Benefit payments (1,197) (1,223) (950) (1,198) (1,165) (1,175) Other (314) (127) (466) (165) (324) (196) ------------------------------------------------------------------------------------ Balance, end of period $ 14,189 $ 13,993 $ 13,756 $ 13,269 $ 13,004 $ 12,800 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 36,206 $ 35,548 $ 35,553 $ 34,618 $ 33,313 $ 33,502 Premiums and deposits 3,040 1,060 1,387 1,907 2,281 1,465 Interest on reserves 526 518 525 526 522 523 Surrenders and withdrawals (1,113) (602) (1,943) (1,598) (996) (1,331) Benefit payments (521) (465) (540) (486) (439) (422) Other 973 147 566 586 (63) (424) ------------------------------------------------------------------------------------ Balance, end of period $ 39,111 $ 36,206 $ 35,548 $ 35,553 $ 34,618 $ 33,313 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 4,483 $ 4,396 $ 4,349 $ 4,286 $ 4,227 $ 4,169 Premiums and deposits 728 736 699 662 645 638 Interest on reserves 55 55 58 57 56 56 Surrenders and withdrawals 24 12 18 22 9 18 Benefit payments (591) (609) (558) (589) (562) (553) Other (147) (107) (170) (89) (89) (101) ------------------------------------------------------------------------------------ Balance, end of period $ 4,552 $ 4,483 $ 4,396 $ 4,349 $ 4,286 $ 4,227 ====================================================================================
SEPARATE ACCOUNT LIABILITIES - ----------------------------
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Group Life 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 6,376 $ 6,011 $ 5,529 $ 5,770 $ 5,860 $ 5,551 Premiums and deposits 169 299 1,033 248 363 785 Investment performance 582 175 270 (291) (278) 105 Surrenders and withdrawals (174) (109) (821) (198) (175) (581) ------------------------------------------------------------------------------------ Balance, end of period $ 6,953 $ 6,376 $ 6,011 $ 5,529 $ 5,770 $ 5,860 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 25,105 $ 24,775 $ 23,593 $ 23,050 $ 23,804 $ 24,667 Premiums and deposits 1,008 752 1,087 996 547 760 Investment performance 1,481 393 884 316 (232) 38 Surrenders and withdrawals (1,050) (793) (772) (753) (1,047) (1,639) Policy charges (18) (22) (17) (16) (22) (22) ------------------------------------------------------------------------------------ Balance, end of period $ 26,526 $ 25,105 $ 24,775 $ 23,593 $ 23,050 $ 23,804 ====================================================================================
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 1,241 $ 1,150 $ 1,086 $ 1,042 $ 1,015 $ 962 Premiums and deposits 80 63 51 43 35 39 Investment performance 58 47 38 26 11 39 Surrenders and withdrawals (23) (12) (18) (22) (9) (18) Policy charges (8) (7) (7) (3) (10) (7) ------------------------------------------------------------------------------------ Balance, end of period $ 1,348 $ 1,241 $ 1,150 $ 1,086 $ 1,042 $ 1,015 ====================================================================================
17 (METLIFE LOGO) ================================================================================ INSTITUTIONAL OPERATIONS INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended -------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE EXPENSES TO PREMIUMS, FEES AND OTHER REVENUES RATIO Insurance Expenses $ 401 $ 382 $ 371 $ 322 $ 355 $ 347 ================================================================================ Premiums, Fees and Other Revenues $ 2,640 $ 2,439 $ 2,456 $ 2,352 $ 2,486 $ 2,184 ================================================================================ RATIO 15.2% 15.7% 15.1% 13.7% 14.3% 15.9% OTHER EXPENSES BY MAJOR CATEGORY Direct and allocated expenses $ 327 $ 320 $ 333 $ 275 $ 296 $ 300 Pension and other post-retirement benefit costs 35 26 3 12 12 12 Premium taxes and other taxes, licenses and fees 39 36 35 35 47 35 -------------------------------------------------------------------------------- Subtotal Insurance Expenses $ 401 $ 382 $ 371 $ 322 $ 355 $ 347 Commissions and other expenses 55 54 48 41 39 38 4th quarter 2001 charges 0 0 (30) 0 0 0 -------------------------------------------------------------------------------- Total Other Expenses $ 456 $ 436 $ 389 $ 363 $ 394 $ 385 ================================================================================
18 (METLIFE LOGO) ================================================================================ INSTITUTIONAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Group Life 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 5.57% 5.62% 5.98% 6.07% 6.05% 6.21% Average crediting rate 3.72% 3.87% 4.08% 4.16% 4.16% 4.33% ---------------------------------------------------------------------------------------- Spread 1.85% 1.75% 1.90% 1.91% 1.89% 1.88% ========================================================================================
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 7.37% 7.22% 7.63% 7.33% 7.79% 7.80% Average crediting rate 5.92% 6.05% 6.12% 6.11% 6.21% 6.36% ---------------------------------------------------------------------------------------- Spread 1.45% 1.17% 1.51% 1.22% 1.58% 1.44% ========================================================================================
For the Three Months Ended ---------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 6.60% 7.27% 7.41% 7.54% 7.81% 8.00% Average crediting rate 5.49% 5.52% 5.86% 5.89% 5.87% 6.05% ---------------------------------------------------------------------------------------- Spread 1.11% 1.75% 1.55% 1.65% 1.94% 1.95% ========================================================================================
19 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended -------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Traditional Life 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 1,025 $ 1,010 $ 1,197 $ 1,064 $ 1,049 $ 1,040 Universal life and investment-type product policy fees 0 0 0 0 0 0 Investment income, net 846 869 877 900 891 873 Other revenues 10 0 (3) 4 4 6 -------------------------------------------------------------------------- 1,881 1,879 2,071 1,968 1,944 1,919 -------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 1,512 1,529 1,710 1,569 1,576 1,539 Interest credited to policyholder account balances 0 0 0 0 0 0 Capitalization of deferred policy acquisition costs (43) (47) (52) (42) (51) (49) Amortization of deferred policy acquisition costs 62 58 47 66 62 65 Other expenses 233 221 223 175 205 210 -------------------------------------------------------------------------- 1,764 1,761 1,928 1,768 1,792 1,765 -------------------------------------------------------------------------- Operating earnings before provision for income taxes 117 118 143 200 152 154 Provision for income taxes 42 42 51 73 55 56 -------------------------------------------------------------------------- OPERATING EARNINGS $ 75(1) $ 76 $ 92 $ 127 $ 97 $ 98 ========================================================================== After-tax net investment gains (losses) $ (13) $ 6 $ 178 $ 39 $ 27 $ 27
For the Three Months Ended --------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Universal life and investment-type product policy fees 262 255 265 267 230 196 Investment income, net 144 142 149 149 148 139 Other revenues (1) (2) 0 1 0 4 --------------------------------------------------------------------- 405 395 414 417 378 339 --------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 57 87 66 51 60 71 Interest credited to policyholder account balances 117 117 119 120 115 115 Capitalization of deferred policy acquisition costs (86) (81) (95) (106) (102) (100) Amortization of deferred policy acquisition costs 102 59 85 95 54 22 Other expenses 205 177 202 197 195 192 --------------------------------------------------------------------- 395 359 377 357 322 300 --------------------------------------------------------------------- Operating earnings before provision for income taxes 10 36 37 60 56 39 Provision for income taxes 4 13 14 20 20 14 --------------------------------------------------------------------- OPERATING EARNINGS $ 6(1) $ 23 $ 23 $ 40 $ 36 $ 25 ===================================================================== After-tax net investment gains (losses) $ 7 $ (5) $ (22) $ (1) $ (3) $ 2
(1) Traditional Life and Variable & Universal Life operating earnings for the three months ended June 30, 2003 includes a $2 million and $29 million after-tax charge related to previously deferred expenses, respectively. 20 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended ----------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Annuities 2003 2003 2002 2002 2002 2002 - ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 23 $ 24 $ 44 $ 37 $ 28 $ 20 Universal life and investment-type product policy fees 95 82 78 82 79 81 Investment income, net 479 487 510 496 478 457 Other revenues 7 1 7 2 5 7 ----------------------------------------------------------------------- 604 594 639 617 590 565 ----------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 46 64 104 76 60 48 Interest credited to policyholder account balances 307 296 312 290 309 297 Capitalization of deferred policy acquisition costs (149) (131) (124) (113) (103) (93) Amortization of deferred policy acquisition costs 41 55 46 80 58 47 Other expenses 274 234 228 216 188 204 ----------------------------------------------------------------------- 519 518 566 549 512 503 ----------------------------------------------------------------------- Operating earnings before provision for income taxes 85 76 73 68 78 62 Provision for income taxes 29 26 26 24 28 22 ----------------------------------------------------------------------- OPERATING EARNINGS $ 56 $ 50 $ 47 $ 44 $ 50 $ 40 ======================================================================= After-tax net investment losses $ (1) $ (15) $ (20) $ (46) $ (67) $ (31)
For the Three Months Ended --------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Other 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 7 $ 7 $ 8 $ (21) $ 18 $ 23 Universal life and investment-type product policy fees 21 23 25 26 29 22 Investment income, net 60 65 61 60 63 62 Other revenues 93 87 89 88 93 111 --------------------------------------------------------------------- 181 182 183 153 203 218 --------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 10 12 14 (15) 27 34 Interest credited to policyholder account balances 28 30 30 27 29 30 Capitalization of deferred policy acquisition costs (2) (1) (2) (1) (2) (2) Amortization of deferred policy acquisition costs 2 3 5 6 3 3 Other expenses 121 121 116 110 126 135 --------------------------------------------------------------------- 159 165 163 127 183 200 --------------------------------------------------------------------- Operating earnings before provision for income taxes 22 17 20 26 20 18 Provision for income taxes 8 6 8 11 7 7 --------------------------------------------------------------------- OPERATING EARNINGS $ 14 $ 11 $ 12 $ 15 $ 13 $ 11 ===================================================================== After-tax net investment gains (losses) $ 0 $ (5) $ (10) $ (8) $(13) $ 4
21 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES
For the Three Months Ended --------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ PREMIUMS AND DEPOSITS BY PRODUCT (1) TOTAL (2) Traditional Life 1st Year (3) $ 49 $ 53 $ 60 $ 46 $ 57 $ 51 Renewal 1,053 1,000 1,291 1,069 1,075 1,002 Variable & Universal Life Variable 1st Year excluding Single Premium COLI/BOLI (3) 59 91 108 97 115 112 Universal 1st Year excluding Single Premium COLI/BOLI (3) 71 55 66 63 49 35 Single Premium COLI/BOLI 3 13 1 50 0 2 Renewal 393 455 429 387 390 415 Annuities (3) 2,933 2,611 2,352 1,988 1,849 1,704 Other 301 281 276 316 374 371 --------------------------------------------------------------------- Total Premiums and Deposits $4,862 $4,559 $4,583 $4,016 $3,909 $3,692 ===================================================================== PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS Variable & Universal Life $ 273 $ 301 $ 304 $ 294 $ 300 $ 298 Annuities 1,229 940 1,056 703 818 654 Other 191 167 195 215 275 251 --------------------------------------------------------------------- Total Separate Accounts $1,693 $1,408 $1,555 $1,212 $1,393 $1,203 ===================================================================== FIRST YEAR LIFE PREMIUMS AND DEPOSITS BY MANUFACTURER (4) MetLife Financial Services $ 65 $ 69 $ 79 $ 66 $ 85 $ 81 New England Financial 32 35 47 44 54 58 General American 76 99 105 139 81 61 MetLife Investors Group 7 8 3 2 1 0 Other 2 1 1 5 0 0 --------------------------------------------------------------------- Total First Year Life Premiums and Deposits $ 182 $ 212 $ 235 $ 256 $ 221 $ 200 ===================================================================== ANNUITY DEPOSITS BY TYPE Fixed Annuity Deposits $ 340 $ 424 $ 464 $ 452 $ 283 $ 268 Variable Annuity Deposits 2,593 2,187 1,888 1,536 1,566 1,436 --------------------------------------------------------------------- Total Annuity Deposits $2,933 $2,611 $2,352 $1,988 $1,849 $1,704 ===================================================================== ANNUITY DEPOSITS BY MANUFACTURER MetLife Financial Services $ 805 $ 737 $ 709 $ 621 $ 687 $ 630 New England Financial 239 218 211 185 206 170 MetLife Resources 183 176 202 164 201 166 General American 11 10 9 10 12 11 MetLife Investors Group (5) 1,636 1,416 1,175 962 687 689 Other 59 54 46 46 56 38 --------------------------------------------------------------------- Total Annuity Deposits $2,933 $2,611 $2,352 $1,988 $1,849 $1,704 ===================================================================== MUTUAL FUND SALES Proprietary $ 48 $ 38 $ 48 $ 60 $ 113 $ 107 Third Party 817 759 713 706 852 890 --------------------------------------------------------------------- Total Mutual Fund Sales $ 865 $ 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 5% of MetLife Financial Services ("MLFS") manufactured life insurance premiums and deposits sold by other-than MLFS agents during the three months ended June 30, 2003 (2% sold by General American; 3% sold New England Financial). Approximately 18% of New England Financial manufactured life insurance premiums and deposits sold by other-than New England Financial agents during the three months ended June 30, 2003 (17% sold by MLFS; 1% sold by General American). Approximately 52% of General American manufactured life insurance premiums and deposits sold by other than General American agents during the three months ended June 30, 2003 (35% sold by MLFS; 17% sold by New England Financial). (5) Approximately $50 million, $52 million, $62 million, $55 million, $52 million and $40 million distributed by General American entities in the three months ended June 30, 2003, March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. 22 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended ------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Unaudited 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS, EXCLUDING TRANSFERS FROM GENERAL ACCOUNT: Variable & Universal Life 52.0% 49.1% 50.4% 49.1% 54.1% 52.2% Annuities 41.9% 36.0% 44.9% 35.4% 44.2% 38.4% Other 63.3% 59.5% 70.6% 68.1% 73.4% 67.6% MORTALITY AS A PERCENTAGE OF EXPECTED 99.4%(1) 87.2% 87.4% 81.4% 77.3% 89.8% LAPSES/SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (2) Traditional Life 6.0% 5.8% 6.0% 6.1% 6.4% 6.5% Variable & Universal Life 7.2% 6.8% 6.6% 6.4% 6.0% 6.3% Variable Annuities 8.1% 8.3% 8.0% 8.3% 7.9% 7.8% Fixed Annuities 8.1% 8.8% 8.8% 9.7% 9.3% 9.4% NUMBER OF AGENTS MetLife Financial Services 5,728 5,798 5,846 6,063 6,139 6,171 New England Financial 3,004 2,916 3,234 3,053 2,965 2,856 General American (3) 522 557 616 607 633 482 MetLife Investors Group Wholesalers 84 78 69 66 68 65 MetLife Resources/Security First Group 379 362 375 376 391 397 Nathan & Lewis 663 698 769 803 819 814 ------------------------------------------------------------------------ Total Agents 10,380 10,409 10,909 10,968 11,015 10,785 ========================================================================
(1) Includes a $45 million pre-tax death benefit that was 100% reinsured. Excluding this item, the mortality ratio was 88.4%. (2) Lapses/Surrenders rates are calculated for the most recent 12 months of experience. (3) 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. 23 (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 --------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Traditional Life 2003 2003 2002 2002 2002 2002 -------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 47,572 $ 47,397 $ 46,888 $ 46,520 $ 46,205 $ 45,828 Premiums and deposits (1) 1,043 1,026 1,208 1,067 1,078 1,079 Interest on reserves 479 476 475 466 462 460 Surrenders and withdrawals (402) (395) (398) (392) (385) (478) Benefit payments (492) (484) (415) (430) (414) (452) Other (365) (448) (361) (343) (426) (232) --------------------------------------------------------------------------------- Balance, end of period $ 47,835 $ 47,572 $ 47,397 $ 46,888 $ 46,520 $ 46,205 =================================================================================
For the Three Months Ended ------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2003 2002 2002 2002 2002 --------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 9,140 $ 8,993 $ 8,878 $ 8,682 $ 8,630 $ 8,694 Premiums and deposits (1) (2) 247 287 274 277 226 265 Interest on reserves 120 118 119 120 118 117 Surrenders and withdrawals (122) (113) (108) (97) (124) (123) Net transfers from (to) separate account 65 66 29 157 8 (3) Policy charges (184) (198) (193) (239) (150) (149) Benefit payments (24) (25) (22) (20) (20) (20) Other (21) 12 16 (2) (6) (151) ------------------------------------------------------------------------- Balance, end of period $ 9,221 $ 9,140 $ 8,993 $ 8,878 $ 8,682 $ 8,630 =========================================================================
For the Three Months Ended --------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Annuities 2003 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 29,917 $ 28,935 $ 27,813 $ 26,695 $ 26,180 $ 25,365 Premiums and deposits (1) (2) 1,836 1,766 1,438 1,170 1,199 1,138 Interest on reserves 357 359 368 358 334 336 Surrenders and withdrawals (665) (667) (474) (563) (589) (551) Net transfers from (to) separate account (517) (171) (212) 51 (172) (219) Policy charges (3) (1) (4) (9) 1 (1) Benefit payments (143) (168) (8) 95 (269) (251) Other (10) (136) 14 16 11 363 --------------------------------------------------------------------------- Balance, end of period $ 30,772 $ 29,917 $ 28,935 $ 27,813 $ 26,695 $ 26,180 ===========================================================================
SEPARATE ACCOUNT LIABILITIES - ----------------------------
For the Three Months Ended --------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2003 2003 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 5,482 $ 5,489 $ 5,088 $ 5,462 $ 6,062 $ 5,914 Premiums and deposits (1) 273 301 316 294 300 298 Investment performance 603 (105) 264 (559) (595) (38) Surrenders and withdrawals (72) (71) (73) (62) (62) (51) Net transfers from (to) fixed account (65) (66) (29) (157) (8) 3 Policy charges (72) (66) (77) (55) (70) (64) Other 0 0 0 165 (165) 0 --------------------------------------------------------------------------- Balance, end of period $ 6,149 $ 5,482 $ 5,489 $ 5,088 $ 5,462 $ 6,062 ===========================================================================
For the Three Months Ended ---------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Annuities 2003 2003 2002 2002 2002 2002 ------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $ 18,464 $ 18,270 $ 16,651 $ 19,279 $ 20,987 $ 20,577 Premiums and deposits (1) 1,229 940 1,060 704 817 654 Investment performance 2,500 (435) 1,011 (2,757) (2,131) 2 Surrenders and withdrawals (508) (423) (588) (467) (499) (405) Net transfers from (to) fixed account 517 171 212 (51) 172 219 Policy charges (69) (59) (76) (57) (67) (60) ---------------------------------------------------------------------------- Balance, end of period $ 22,133 $ 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. 24 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS INSURANCE EXPENSES RATIO AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended ----------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE EXPENSES (NET OF CAPITALIZATION OF DAC) TO PREMIUMS AND DEPOSITS RATIO Insurance Expenses $ 758 $ 682 $ 698 $ 634 $ 643 $ 653 DAC Capitalization (1) (304) (285) (298) (290) (282) (267) ----------------------------------------------------------------------------- Net $ 454 $ 397 $ 400 $ 344 $ 361 $ 386 ============================================================================= Premiums and Deposits (2) $ 4,862 $ 4,559 $ 4,583 $ 4,018 $ 3,908 $ 3,700 ============================================================================= RATIO 9.3% 8.7% 8.7% 8.6% 9.2% 10.4% OTHER EXPENSES BY MAJOR CATEGORY Commissions $ 214 $ 195 $ 213 $ 195 $ 185 $ 177 Other deferrable expenses 107 113 102 113 111 104 Direct and allocated expenses, not deferred 371 310 340 279 296 321 Pension and other post-retirement benefit costs 40 36 21 28 28 23 Premium taxes and other taxes, licenses and fees 26 28 22 19 23 28 ----------------------------------------------------------------------------- Subtotal Insurance Expenses $ 758 $ 682 $ 698 $ 634 $ 643 $ 653 Broker-dealer and other expenses 118 110 113 100 117 132 Reinsurance allowances (43) (39) (42) (36) (46) (44) ----------------------------------------------------------------------------- Total Other Expenses $ 833 $ 753 $ 769 $ 698 $ 714 $ 741 =============================================================================
(1) Excludes $24 million, $25 million, $24 million, $28 million, $24 million and $23 million of DAC capitalization related to reinsurance allowances for the three months ended June 30, 2003, March 31, 2003, December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002, respectively. (2) Statutory premiums and deposits direct and assumed; also includes company-sponsored internal exchanges. 25 (METLIFE LOGO) ================================================================================ INDIVIDUAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ----------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, VARIABLE & UNIVERSAL LIFE 2003 2003 2002 2002 2002 2002 - ---------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 7.31% 7.39% 7.23% 7.41% 7.47% 7.29% Average crediting rate 5.57% 5.64% 5.75% 5.77% 5.85% 5.80% ----------------------------------------------------------------------------------- Spread 1.74% 1.75% 1.48% 1.64% 1.62% 1.49% ==================================================================================-
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, ANNUITIES 2003 2003 2002 2002 2002 2002 - ----------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 6.31% 6.64% 7.20% 7.09% 7.14% 7.02% Average crediting rate 4.36% 4.47% 4.91% 4.81% 5.00% 5.09% ------------------------------------------------------------------------------------ Spread 1.95% 2.17% 2.29% 2.28% 2.14% 1.93% ====================================================================================
26 (METLIFE LOGO) ================================================================================ AUTO & HOME STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended --------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Auto 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Earned premiums $ 535 $ 530 $ 535 $ 533 $ 525 $ 519 Investment income, net 29 27 31 32 34 33 Other revenues 7 6 6 9 6 4 --------------------------------------------------------------------------------- 571 563 572 574 565 556 --------------------------------------------------------------------------------- EXPENSES Losses 347 366 360 308 343 325 Loss adjustment expense 68 75 55 61 64 64 Other expenses 131 143 130 150 138 147 --------------------------------------------------------------------------------- 546 584 545 519 545 536 --------------------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 25 (21) 27 55 20 20 Provision (benefit) for income taxes 4 (17) 6 14 3 5 --------------------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 21 $ (4) $ 21 $ 41 $ 17 $ 15 ================================================================================= After-tax net investment losses $ 0 $ (2) $ (3) $ (4) $ (8) $ (7)
For the Three Months Ended --------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Property 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Earned premiums $ 173 $ 167 $ 175 $ 165 $ 164 $ 160 Investment income, net 10 10 10 11 10 11 Other revenues 2 1 2 1 1 1 --------------------------------------------------------------------------------- 185 178 187 177 175 172 --------------------------------------------------------------------------------- EXPENSES Losses 96 76 78 106 95 93 Loss adjustment expense 13 8 12 13 8 9 Other expenses 50 48 52 51 50 55 --------------------------------------------------------------------------------- 159 132 142 170 153 157 --------------------------------------------------------------------------------- Operating earnings before provision for income taxes 26 46 45 7 22 15 Provision for income taxes 6 14 15 1 7 4 --------------------------------------------------------------------------------- OPERATING EARNINGS $ 20 $ 32 $ 30 $ 6 $ 15 $ 11 ================================================================================= After-tax net investment losses $ (1) $ (1) $ (1) $ (1) $ (3) $ (2)
For the Three Months Ended --------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Other 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Earned premiums $ 13 $ 15 $ 13 $ 13 $ 13 $ 13 Investment income, net 2 2 1 1 2 1 Other revenues (5) 2 (9) 1 2 2 --------------------------------------------------------------------------------- 10 19 5 15 17 16 --------------------------------------------------------------------------------- EXPENSES Losses 3 10 5 9 6 4 Loss adjustment expense 0 (1) 0 0 1 0 Other expenses 5 8 5 4 5 6 --------------------------------------------------------------------------------- 8 17 10 13 12 10 --------------------------------------------------------------------------------- Operating earnings (loss) before provision (benefit) for income taxes 2 2 (5) 2 5 6 Provision (benefit) for income taxes 1 0 (2) 1 1 2 --------------------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $ 1 $ 2 $ (3) $ 1 $ 4 $ 4 ================================================================================= After-tax net investment losses $ 0 $ 0 $ 0 $ 0 $ (1) $ 0
27 (METLIFE LOGO) ================================================================================ AUTO & HOME WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA
For the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- WRITTEN PREMIUMS BY PRODUCT Preferred/Standard Automobile $ 524 $ 505 $ 498 $ 526 $ 512 $ 489 Non-Standard Automobile 23 24 25 23 29 29 Property 192 149 176 189 179 138 Other 12 20 9 11 15 18 ------------------------------------------------------------------------------------ Total $ 751 $ 698 $ 708 $ 749 $ 735 $ 674 ==================================================================================== SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA TOTAL AUTO & HOME Loss and loss adjustment expense ratio 73.2% 75.0% 70.6% 69.9% 73.7% 71.5% Other expense ratio 25.6% 28.0% 25.8% 28.9% 27.4% 30.1% ------------------------------------------------------------------------------------ Total combined ratio 98.8% 103.0% 96.4% 98.8% 101.1% 101.6% Effect of catastrophe losses 3.2% 1.8% 2.3% 0.8% 2.8% 2.0% ------------------------------------------------------------------------------------ Combined ratio excluding catastrophes 95.6% 101.2% 94.1% 98.0% 98.3% 99.6% ==================================================================================== AUTO Loss and loss adjustment expense ratio 77.5% 83.3% 77.6% 69.2% 77.5% 75.0% Other expense ratio 24.2% 27.2% 24.3% 28.2% 26.2% 28.4% ------------------------------------------------------------------------------------ Total combined ratio 101.7% 110.5% 101.9% 97.4% 103.7% 103.4% Effect of catastrophe losses 1.2% 0.2% 0.4% 0.1% 0.8% 0.0% ------------------------------------------------------------------------------------ Combined ratio excluding catastrophes 100.5% 110.3% 101.5% 97.3% 102.9% 103.4% ==================================================================================== PROPERTY Loss and loss adjustment expense ratio 63.4% 50.2% 51.4% 72.0% 63.6% 63.2% Other expense ratio 29.2% 28.5% 29.8% 30.9% 30.8% 34.2% ------------------------------------------------------------------------------------ Total combined ratio 92.6% 78.7% 81.2% 102.9% 94.4% 97.4% Effect of catastrophe losses 9.7% 6.9% 8.2% 3.3% 9.4% 8.7% ------------------------------------------------------------------------------------ Combined ratio excluding catastrophes 82.9% 71.8% 73.0% 99.6% 85.0% 88.7% ==================================================================================== OTHER Loss and loss adjustment expense ratio 24.1% 57.7% 39.8% 71.9% 47.4% 33.9% Other expense ratio 38.8% 52.0% 37.3% 31.6% 35.3% 49.2% ------------------------------------------------------------------------------------ Total combined ratio 62.9% 109.7% 77.1% 103.5% 82.7% 83.1% Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% ------------------------------------------------------------------------------------ Combined ratio excluding catastrophes 62.9% 109.7% 77.1% 103.5% 82.7% 83.1% ==================================================================================== PRE-TAX CATASTROPHE LOSSES Auto $ 7 $ 1 $ 2 $ 1 $ 4 $ 0 Property 17 12 14 5 15 14 Other 0 0 0 0 0 0 ------------------------------------------------------------------------------------ Total $ 24 $ 13 $ 16 $ 6 $ 19 $ 14 ==================================================================================== ------------------------------------------------------------------------------------ Catastrophe points on combined ratios 3.2 1.8 2.3 0.8 2.8 2.0 ------------------------------------------------------------------------------------
28 (METLIFE LOGO) ================================================================================ INTERNATIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended ------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $ 390 $ 395 $ 481 $ 381 $ 274 $ 375 Universal life and investment-type product policy fees 71 51 66 64 7 7 Investment income, net 131 123 158 133 95 75 Other revenues 26 8 6 2 3 3 ------------------------------------------------------------------------------------- 618 577 711 580 379 460 ------------------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 294 377 455 362 268 338 Interest credited to policyholder account balances 36 37 27 32 11 9 Capitalization of deferred policy acquisition costs (59) (66) (51) (60) (40) (40) Amortization of deferred policy acquisition costs 77 34 55 24 22 27 Other expenses 177 153 183 167 114 106 ------------------------------------------------------------------------------------- 525 535 669 525 375 440 ------------------------------------------------------------------------------------- Operating earnings before provision (benefit) for income taxes 93 42 42 55 4 20 Provision (benefit) for income taxes (9) 14 4 15 2 6 ------------------------------------------------------------------------------------- OPERATING EARNINGS $ 102(1) $ 28 $ 38 $ 40 $ 2 $ 14 ------------------------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings $ 102 $ 28 $ 38 $ 40 $ 2 $ 14 Net investment gains (losses) (1) 0 (1) 6 8 (22) Net investment gains (losses) tax benefit (provision) (3) 0 4 (1) (3) (1) ------------------------------------------------------------------------------------- After-tax net investment gains (losses) (4) 0 3 5 5 (23) Cumulative effect of accounting change for SFAS 142 0 0 0 (5) 0 5 ------------------------------------------------------------------------------------- Net income (loss) $ 98 $ 28 $ 41 $ 40 $ 7 $ (4) =====================================================================================
(1) Operating earnings for the three months ended June 30, 2003 includes $62 million of after-tax earnings from the merger of the Company's Mexican operations and a reduction in policyholder liabilities resulting from a change in reserve methodology. 29 (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 ------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums, net $ 588 $ 552 $ 597 $ 461 $ 472 $ 475 Investment income, net 121 110 125 95 102 99 Other revenues 12 12 8 16 11 8 ------------------------------------------------------------------------------- 721 674 730 572 585 582 ------------------------------------------------------------------------------- EXPENSES Claims and other policy benefits 466 433 448 343 385 400 Interest credited to policyholder account balances 45 43 49 31 32 34 Policy acquisition costs and other insurance expenses 116 108 153 102 82 68 Other expenses 38 36 40 39 36 27 ------------------------------------------------------------------------------- 665 620 690 515 535 529 ------------------------------------------------------------------------------- Operating earnings before provision for income taxes and minority interest 56 54 40 57 50 53 Provision for income taxes 11 10 5 13 10 12 ------------------------------------------------------------------------------- Operating earnings before minority interest 45 44 35 44 40 41 Elimination of minority interest, before tax 26 24 20 21 21 19 ------------------------------------------------------------------------------- CONTRIBUTION TO METLIFE $ 19 $ 20 $ 15 $ 23 $ 19 $ 22 ------------------------------------------------------------------------------- NET INCOME RECONCILIATION - ------------------------- Operating earnings $ 19 $ 20 $ 15 $ 23 $ 19 $ 22 Net investment gains (losses) 5 (4) (8) 4 0 2 Minority interest - net investment gains (losses) (2) 4 2 (1) 4 1 Adjustments to net investment gains (losses) (1) 0 0 4 0 0 0 Net investment gains (losses) tax benefit (provision) 0 0 1 (1) (2) (1) ------------------------------------------------------------------------------- After-tax net investment gains (losses) 3 0 (1) 2 2 2 ------------------------------------------------------------------------------- Net income $ 22 $ 20 $ 14 $ 25 $ 21 $ 24 =============================================================================== PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION United States $ 49 $ 45 $ 39 $ 59 $ 42 $ 45 Canada 12 11 12 9 10 9 Latin America 0 0 1 (1) 0 1 Asia-Pacific 4 2 1 1 3 2 Other international markets 3 2 (1) 3 0 1 Corporate (12) (6) (12) (14) (5) (5) ------------------------------------------------------------------------------- Total pre-tax and pre-minority interest operating earnings $ 56 $ 54 $ 40 $ 57 $ 50 $ 53 =============================================================================== POLICY BENEFITS AND INTEREST SENSITIVE CONTRACT LIABILITIES BY REGION Traditional U.S. $ 3,721 $ 3,653 $ 3,532 $ 3,209 $ 3,138 $ 2,916 Asset intensive 2,918 2,718 2,477 1,608 1,569 1,718 Other 110 112 55 57 57 57 ------------------------------------------------------------------------------- Total U.S. 6,749 6,483 6,064 4,874 4,764 4,691 ------------------------------------------------------------------------------- Canada 1,049 972 837 862 882 752 Latin America 0 0 69 61 80 83 Asia-Pacific 344 302 197 164 163 166 Other international markets 316 271 220 188 156 99 ------------------------------------------------------------------------------- Total International 1,709 1,545 1,323 1,275 1,281 1,100 ------------------------------------------------------------------------------- Total policy benefits and interest sensitive contract liabilities $ 8,458 $ 8,028 $ 7,387 $ 6,149 $ 6,045 $ 5,791 ===============================================================================
(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. 30 (METLIFE LOGO) ================================================================================ ASSET MANAGEMENT STATEMENTS OF OPERATING EARNINGS, CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT
For the Three Months Ended --------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - -------------------------------------------------------------------------------------------------------------------------------- REVENUES Investment and advisory service fees Mutual funds $ 17 $ 16 $ 17 $ 19 $ 24 $ 21 MetLife and affiliates separately managed accounts 9 9 9 10 10 10 Third party client separate accounts 16 10 17 15 17 11 Other revenues 11 10 9 10 14 12 --------------------------------------------------------------------------------- 53 45 52 54 65 54 --------------------------------------------------------------------------------- EXPENSES Employee compensation and benefits 24 26 27 31 31 29 Promoting and servicing 7 7 7 8 11 11 General and administrative 13 10 15 14 15 12 --------------------------------------------------------------------------------- 44 43 49 53 57 52 --------------------------------------------------------------------------------- Operating earnings before provision for income taxes 9 2 3 1 8 2 Provision for income taxes 4 1 2 0 3 1 --------------------------------------------------------------------------------- OPERATING EARNINGS $ 5 $ 1 $ 1 $ 1 $ 5 $ 1 --------------------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings $ 5 $ 1 $ 1 $ 1 $ 5 $ 1 Net investment gains (losses) 0 8 1 (1) 0 (4) Net investment gains (losses) tax benefit (provision) 0 (3) 0 0 0 2 --------------------------------------------------------------------------------- After-tax net investment gains (losses) 0 5 1 (1) 0 (2) --------------------------------------------------------------------------------- Net income (loss) $ 5 $ 6 $ 2 $ 0 $ 5 $ (1) =================================================================================
At or for the Three Months Ended ------------------------------------------------------------------------------------ June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - --------------------------------------------------------------------------------------------------------------------------------- CHANGE IN ASSETS Beginning assets $ 43,552 $ 44,577 $ 45,100 $ 48,850 $ 50,898 $ 51,278 Contributions 1,564 1,004 1,851 1,417 1,825 1,594 Redemptions (2,040) (2,063) (3,303) (3,241) (2,521) (1,661) Market appreciation (depreciation) 3,054 34 929 (1,926) (1,352) (313) ------------------------------------------------------------------------------------ Ending Carrying Value $ 46,130 $ 43,552 $ 44,577 $ 45,100 $ 48,850 $ 50,898 ==================================================================================== ASSETS UNDER MANAGEMENT STATE STREET RESEARCH MetLife Separate Account $ 17,499 $ 17,160 $ 18,463 $ 18,653 $ 18,035 $ 18,187 MetLife Retail Funds 6,759 5,618 4,353 4,200 5,255 6,617 Third Party Individual and Retail Funds 7,854 6,966 7,724 8,448 10,434 10,970 Third Party Institutional 14,018 13,808 14,037 13,799 15,126 15,124 ------------------------------------------------------------------------------------ Total State Street Research $ 46,130 $ 43,552 $ 44,577 $ 45,100 $ 48,850 $ 50,898 ====================================================================================
31 (METLIFE LOGO) ================================================================================ CORPORATE, OTHER & ELIMINATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended ------------------------------------------------------------------------------------- June 30, March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $(5) $(4) $(4) $(7) $(4) $(4) Universal life and investment-type product policy fees 0 0 0 0 1 (1) Investment income, net 42 69 24 (25) 20 40 Other revenues 15 12 29 5 12 9 ------------------------------------------------------------------------------------- 52 77 49 (27) 29 44 ------------------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 0 2 2 0 2 (1) Interest credited to policyholder account balances 0 0 0 0 (1) 1 Interest expense 88 94 77 76 74 78 Other expenses (65) 24 304 33 (10) 90 ------------------------------------------------------------------------------------- 23 120 383 109 65 168 ------------------------------------------------------------------------------------- Operating earnings (loss) before benefit for income taxes 29 (43) (334) (136) (36) (124) Benefit for income taxes (12) (31) (134) (66) (32) (48) ------------------------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $41 (1) $(12) $(200) (2) $(70) $(4) (3) $(76) (4) ------------------------------------------------------------------------------------- NET INCOME (LOSS) RECONCILIATION - -------------------------------- Operating earnings (loss) $41 $(12) $(200) $(70) $(4) $(76) Net investment gains (losses) (36) (33) 108 (43) 15 25 Net investment gains (losses) tax benefit (provision) 11 10 (35) 18 (11) (13) ------------------------------------------------------------------------------------- After-tax net investment gains (losses) (25) (23) 73 (25) 4 12 ------------------------------------------------------------------------------------- Net income (loss) $16 $(35) $(127) $(95) $0 $(64) =====================================================================================
(1) Operating earnings for the three months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established liability related to the Company's race conscious underwriting settlement. (2) 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. (3) 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. (4) 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. 32 (METLIFE LOGO) ================================================================================ METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Three Months Ended ---------------------------------------------------------------------------------------------------- Unaudited (Dollars June 30, March 31, December 31, September 30, June 30, March 31, in millions) 2003 2003 2002 2002 2002 2002 - -------------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES Yield (1) 6.87% 7.01% 7.39% 7.45% 7.51% 7.56% Income $ 2,073 $ 2,044 $ 2,092 $ 2,032 $ 1,998 $ 1,954 Investment losses $ (43) $ (149) $ (219) $ (323) $ (210) $ (165) Ending Carrying Value $158,822 $144,341 $140,288 $132,906 $123,796 $118,236 MORTGAGE LOANS Yield (2) 7.50% 7.51% 8.03% 7.68% 7.97% 7.81% Income $ 472 $ 470 $ 492 $ 457 $ 472 $ 462 Investment losses $ (8) $ (14) $ 0 $ 0 $ (3) $ (19) Ending Carrying Value $ 25,289 $ 25,046 $ 25,086 $ 23,885 $ 23,733 $ 23,684 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (2) 10.97% 10.94% 11.79% 10.99% 11.80% 10.36% Income (3) $ 125 $ 127 $ 153 $ 160 $ 174 $ 150 Investment gains (losses) (4) $ (6) $ 92 $ 602 $ (10) $ (14) $ (2) Ending Carrying Value $ 4,585 $ 4,569 $ 4,725 $ 5,663 $ 5,963 $ 5,862 POLICY LOANS Yield (2) 6.46% 6.47% 6.42% 6.66% 6.56% 6.35% Income $ 139 $ 139 $ 136 $ 139 $ 137 $ 131 Ending Carrying Value $ 8,627 $ 8,615 $ 8,580 $ 8,366 $ 8,316 $ 8,310 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS Yield (2) 3.32% 5.61% 2.07% 2.05% 5.22% 1.16% Income $ 32 $ 54 $ 21 $ 19 $ 47 $ 12 Investment gains (losses) $ 1 $ (71) $ (24) $ 4 $ 81 $ 161 Ending Carrying Value $ 4,023 $ 3,773 $ 4,008 $ 3,959 $ 3,717 $ 3,552 CASH AND SHORT-TERM INVESTMENTS Yield (2) 2.23% 4.57% 5.35% 3.68% 2.85% 4.92% Income $ 42 $ 64 $ 62 $ 49 $ 38 $ 83 Investment gains (losses) $ 0 $ (4) $ (1) $ 0 $ (1) $ 2 Ending Carrying Value $ 8,354 $ 8,126 $ 4,244 $ 6,305 $ 5,796 $ 6,434 OTHER INVESTED ASSETS Yield (2) 6.71% 6.52% 8.36% 5.44% 6.53% 5.49% Income $ 69 $ 63 $ 72 $ 44 $ 56 $ 46 Investment gains (losses) $ 2 $ 14 $ (5) $ 59 $ (46) $ (69) Ending Carrying Value $ 4,261 $ 3,948 $ 3,727 $ 3,214 $ 3,271 $ 3,512 TOTAL INVESTMENTS Gross investment income yield 6.76% 7.04% 7.41% 7.28% 7.46% 7.31% Investment fees and expenses yield (0.14)% (0.15)% (0.16)% (0.15)% (0.16)% (0.13)% ---------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.62% 6.89% 7.25% 7.13% 7.30% 7.18% ==================================================================================================== Gross investment income $ 2,952 $ 2,961 $ 3,028 $2,900 $ 2,922 $ 2,838 Investment fees and expenses (63) (62) (64) (61) (61) (49) ---------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME $ 2,889 $ 2,899 $ 2,964 $ 2,839 $ 2,861 $ 2,789 ==================================================================================================== Ending Carrying Value $213,961 $198,418 $190,658 $184,298 $174,592 $169,590 ==================================================================================================== Gross investment gains $ 137 $ 221 $ 1,040 $ 412 $ 438 $ 545 Gross investment losses (85) (89) (348) (164) (314) (283) Writedowns (103) (268) (339) (555) (269) (338) ---------------------------------------------------------------------------------------------------- Subtotal (51) (136) 353 (307) (145) (76) Derivatives not qualifying for hedge accounting (3) (34) (43) 21 (121) (29) ---------------------------------------------------------------------------------------------------- NET INVESTMENT GAINS (LOSSES) (54) (170) 310 (286) (266) (105) Adjustments to net investment gains (losses) (5) 0 38 43 16 73 13 Minority interest - net investment gains (losses) (2) 4 2 (1) 4 1 Net investment gains (losses) tax benefit (provision) 16 44 (132) 102 72 15 ---------------------------------------------------------------------------------------------------- AFTER-TAX NET INVESTMENT GAINS (LOSSES) $ (40) $ (84) $ 223 $ (169) $ (117) $ (76) ====================================================================================================
(1) The fixed maturity yield is annualized and is based on quarterly average amortized cost. (2) Yields are annualized and based on quarterly average carrying values. (3) Included in income from real estate and real estate joint ventures is $(3) million, $2 million, $22 million, $29 million, $33 million and $27 million related to discontinued operations for the three months ended June 30, 2003, 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 $1 million, $90 million, $591 million, $(1) million, $(8) million and $0 million related to discontinued operations for the three months ended June 30, 2003, 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. 33 (METLIFE LOGO) ================================================================================ METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Year-to-date ---------------------------------------------------------------------------------------------------- Unaudited (Dollars June 30, March 31, December 31, September 30, June 30, March 31, in millions) 2003 2003 2002 2002 2002 2002 - ---------------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES Yield (1) 6.91% 7.01% 7.46% 7.51% 7.54% 7.56% Income $ 4,117 $ 2,044 $ 8,076 $ 5,984 $ 3,952 $ 1,954 Investment losses $ (192) $ (149) $ (917) $ (698) $ (375) $ (165) Ending Carrying Value $158,822 $144,341 $140,288 $132,906 $123,796 $118,236 MORTGAGE LOANS Yield (2) 7.50% 7.51% 7.84% 7.82% 7.89% 7.81% Income $ 942 $ 470 $ 1,883 $ 1,391 $ 934 $ 462 Investment losses $ (22) $ (14) $ (22) $ (22) $ (22) $ (19) Ending Carrying Value $ 25,289 $ 25,046 $ 25,086 $ 23,885 $ 23,733 $ 23,684 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (2) 10.92% 10.94% 11.41% 11.13% 11.09% 10.36% Income (3) $ 252 $ 127 $ 637 $ 484 $ 324 $150 Investment gains (losses) (4) $ 86 $ 92 $ 576 $ (26) $ (16) $ (2) Ending Carrying Value $ 4,585 $ 4,569 $ 4,725 $ 5,663 $ 5,963 $ 5,862 POLICY LOANS Yield (2) 6.47% 6.47% 6.49% 6.52% 6.46% 6.35% Income $ 278 $ 139 $ 543 $ 407 $ 268 $ 131 Ending Carrying Value $ 8,627 $ 8,615 $ 8,580 $ 8,366 $ 8,316 $ 8,310 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS Yield (2) 4.40% 5.61% 2.47% 2.60% 2.92% 0.87% Income $ 86 $ 54 $ 99 $ 78 $ 59 $ 12 Investment gains (losses) $ (70) $ (71) $ 222 $ 246 $ 242 $ 161 Ending Carrying Value $ 4,023 $ 3,773 $ 4,008 $ 3,959 $ 3,717 $ 3, 552 CASH AND SHORT-TERM INVESTMENTS Yield (2) 3.40% 4.57% 4.17% 3.75% 3.92% 4.92% Income $ 106 $ 64 $ 232 $ 170 $ 121 $ 83 Investment gains (losses) $ (4) $ (4) $ 0 $ 1 $ 1 $ 2 Ending Carrying Value $ 8,354 $ 8,126 $ 4,244 $ 6,305 $ 5,796 $ 6,434 OTHER INVESTED ASSETS Yield (2) 6.61% 6.52% 6.42% 5.87% 6.08% 5.49% Income $ 132 $ 63 $ 218 $ 146 $ 102 $ 46 Investment gains (losses) $ 16 $ 14 $ (61) $ (56) $ (115) $ (69) Ending Carrying Value $ 4,261 $ 3,948 $ 3,727 $ 3,214 $ 3,271 $ 3,512 TOTAL INVESTMENTS Gross investment income yield 6.89% 7.04% 7.35% 7.33% 7.38% 7.31% Investment fees and expenses yield (0.15)% (0.15)% (0.15)% (0.15)% (0.14)% (0.13)% ---------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.74% 6.89% 7.20% 7.18% 7.24% 7.18% ==================================================================================================== Gross investment income $ 5,913 $ 2,961 $ 11,688 $ 8,660 $ 5,760 $ 2,838 Investment fees and expenses (125) (62) (235) (171) (110) (49) ---------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME $ 5,788 $ 2,899 $ 11,453 $ 8,489 $ 5,650 $ 2,789 ==================================================================================================== Ending Carrying Value $213,961 $198,418 $190,658 $184,298 $174,592 $169,590 ==================================================================================================== Gross investment gains $ 358 $ 221 $ 2,435 $ 1,395 $ 983 $ 545 Gross investment losses (174) (89) (1,109) (761) (597) (283) Writedowns (371) (268) (1,501) (1,162) (607) (338) ---------------------------------------------------------------------------------------------------- Subtotal (187) (136) (175) (528) (221) (76) Derivatives not qualifying for hedge accounting (37) (34) (172) (129) (150) (29) ---------------------------------------------------------------------------------------------------- NET INVESTMENT LOSSES (224) (170) (347) (657) (371) (105) Adjustments to net investment gains (losses) (5) 38 38 145 102 86 13 Minority interest - net investment gains (losses) 2 4 6 4 5 1 Net investment gains (losses) tax benefit (provision) 60 44 57 189 87 15 ---------------------------------------------------------------------------------------------------- AFTER-TAX NET INVESTMENT LOSSES $(124) $ (84) $ (139) $ (362) $ (193) $ (76) ====================================================================================================
(1) The fixed maturity yield is annualized and is based on quarterly average amortized cost. (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 $(1) million, $2 million, $111 million, $89 million, $60 million and $27 million related to discontinued operations for the year-to-date June 30, 2003, 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 $91 million, $90 million, $582 million, $(9) million, $(8) million and $0 million related to discontinued operations for the year-to-date June 30, 2003, 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. 34 (METLIFE LOGO) ================================================================================ METLIFE, INC. GROSS UNREALIZED LOSSES AGING SCHEDULE FIXED MATURITIES
At June 30, 2003 At December 31, 2002 --------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total - ---------------------------------------------------------------------------------------------------- Less than 20% $612 76.8% $ 925 54.7% 20% or more for less than six months 74 9.3% 531 31.4% 20% or more for six months or greater 111 13.9% 234 13.9% --------------------------------------------------------- Total Gross Unrealized Losses $797 100.0% $1,690 100.0% =========================================================
METLIFE, INC. GROSS UNREALIZED LOSSES AGING SCHEDULE EQUITY SECURITIES
At June 30, 2003 At December 31, 2002 --------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total - ---------------------------------------------------------------------------------------------------- Less than 20% $8 88.9% $25 30.1% 20% or more for less than six months 1 11.1% 58 69.9% 20% or more for six months or greater 0 0.0% 0 0.0% --------------------------------------------------------- Total Gross Unrealized Losses $9 100.0% $83 100.0% =========================================================
The Company's review of its fixed maturities and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below amortized cost by less than 20%; (ii) securities where the estimated fair value had declined and remained below amortized cost by 20% or more for less than six months; and (iii) securities where the estimated value had declined and remained below amortized cost by 20% or more for six months or greater. 35 (METLIFE LOGO) ================================================================================ METLIFE, INC. SUMMARY OF FIXED MATURITIES BY SECTOR
At June 30, 2003 At March 31, 2003 At December 31, 2002 ---------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - ----------------------------------------------------------------------------------------------------------------------------- US treasuries/agencies $13,992 8.8% $12,489 8.7% $15,934 11.4% State & political subdivisions 3,022 1.9% 2,683 1.8% 2,742 1.9% Corporate bonds 56,548 35.6% 52,167 36.1% 49,257 35.1% Foreign government securities 8,938 5.6% 8,374 5.8% 7,596 5.4% Foreign corporates 22,030 13.9% 19,542 13.5% 19,229 13.7% Mortgage-backed securities 41,815 26.3% 37,769 26.2% 34,883 24.9% Asset-backed securities 11,222 7.1% 10,224 7.1% 9,503 6.8% Other fixed income assets 771 0.5% 655 0.5% 697 0.5% ---------------------------------------------------------------------------------------- Total 158,338 99.7% 143,903 99.7% 139,841 99.7% Redeemable preferred stock 484 0.3% 438 0.3% 447 0.3% ---------------------------------------------------------------------------------------- Total Fixed Maturities $158,822 100.0% $144,341 100.0% $140,288 100.0% ========================================================================================
At September 30, 2002 At June 30, 2002 At March 31, 2002 ---------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - ----------------------------------------------------------------------------------------------------------------------------- US treasuries/agencies $10,986 8.3% $9,741 7.9% $9,415 8.1% State & political subdivisions 2,627 2.0% 2,412 2.0% 2,308 1.9% Corporate bonds 47,693 35.9% 46,039 37.2% 44,431 37.6% Foreign government securities 7,383 5.6% 7,199 5.8% 4,666 3.9% Foreign corporates 18,746 14.1% 18,227 14.7% 18,372 15.5% Mortgage-backed securities 33,822 25.4% 28,967 23.4% 28,401 24.0% Asset-backed securities 9,738 7.3% 8,714 7.0% 8,461 7.2% Other fixed income assets 1,481 1.1% 2,025 1.6% 1,673 1.4% ---------------------------------------------------------------------------------------- Total 132,476 99.7% 123,324 99.6% 117,727 99.6% Redeemable preferred stock 430 0.3% 472 0.4% 509 0.4% ---------------------------------------------------------------------------------------- Total Fixed Maturities $132,906 100.0% $123,796 100.0% $118,236 100.0% ========================================================================================
METLIFE, INC. SUMMARY OF FIXED MATURITIES BY QUALITY DISTRIBUTION
At June 30, 2003 At March 31, 2003 At December 31, 2002 ---------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - -------------------------------------------------------------------------------------------------------------------------------- NAIC RATING AGENCY RATING (1) EQUIVALENT DESIGNATION 1 Aaa / Aa / A $110,806 69.8% $100,477 69.6% $97,495 69.5% 2 Baa 34,944 22.0% 31,264 21.7% 31,060 22.1% 3 Ba 7,807 4.9% 7,581 5.3% 7,304 5.2% 4 B 3,645 2.3% 3,441 2.4% 3,227 2.3% 5 Caa and lower 629 0.4% 626 0.4% 339 0.3% 6 In or near default 507 0.3% 514 0.3% 416 0.3% ---------------------------------------------------------------------------------------- Total 158,338 99.7% 143,903 99.7% 139,841 99.7% Redeemable preferred stock 484 0.3% 438 0.3% 447 0.3% ---------------------------------------------------------------------------------------- Total Fixed Maturities $158,822 100.0% $144,341 100.0% $140,288 100.0% ========================================================================================
At September 30, 2002 At June 30, 2002 At March 31, 2002 ---------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - -------------------------------------------------------------------------------------------------------------------------------- NAIC RATING AGENCY RATING (1) EQUIVALENT DESIGNATION 1 Aaa / Aa / A $90,651 68.3% $82,235 66.4% $77,569 65.6% 2 Baa 31,290 23.5% 30,480 24.6% 30,314 25.7% 3 Ba 6,324 4.8% 6,435 5.2% 5,546 4.7% 4 B 3,096 2.3% 3,275 2.7% 3,409 2.9% 5 Caa and lower 840 0.6% 671 0.5% 625 0.5% 6 In or near default 275 0.2% 228 0.2% 264 0.2% ---------------------------------------------------------------------------------------- Total 132,476 99.7% 123,324 99.6% 117,727 99.6% Redeemable preferred stock 430 0.3% 472 0.4% 509 0.4% ---------------------------------------------------------------------------------------- Total Fixed Maturities $132,906 100.0% $123,796 100.0% $118,236 100.0% ========================================================================================
(1) Amounts presented are based on rating agency designations. Comparisons between NAIC ratings and rating agency designations are published by the NAIC. METLIFE, INC. SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE
At June 30, 2003 At March 31, 2003 At December 31, 2002 --------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - ----------------------------------------------------------------------------------------------------------------------------- South Atlantic $5,139 25.9% $5,167 26.3% $5,076 26.0% Pacific 4,130 20.8% 4,198 21.4% 4,180 21.4% Middle Atlantic 3,543 17.9% 3,416 17.4% 3,441 17.6% East North Central 2,331 11.8% 2,260 11.5% 2,147 11.0% New England 1,181 6.0% 1,168 6.0% 1,323 6.8% West South Central 1,256 6.3% 1,149 5.9% 1,097 5.6% Mountain 845 4.3% 858 4.4% 833 4.2% West North Central 580 2.9% 598 3.0% 645 3.3% International 631 3.2% 631 3.2% 632 3.2% East South Central 187 0.9% 178 0.9% 178 0.9% --------------------------------------------------------------------------------------- Total $19,823 100.0% $19,623 100.0% $19,552 100.0% ======================================================================================= Office $9,414 47.4% $9,301 47.5% $9,340 47.8% Retail 4,471 22.6% 4,321 22.0% 4,320 22.1% Apartments 2,805 14.2% 2,867 14.6% 2,793 14.3% Industrial 1,922 9.7% 1,893 9.6% 1,910 9.7% Hotel 955 4.8% 996 5.1% 942 4.8% Other 256 1.3% 245 1.2% 247 1.3% --------------------------------------------------------------------------------------- Total $19,823 100.0% $19,623 100.0% $19,552 100.0% =======================================================================================
At September 30, 2002 At June 30, 2002 At March 31, 2002 --------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total - ----------------------------------------------------------------------------------------------------------------------------- South Atlantic $4,832 26.3% $4,806 26.4% $4,736 26.2% Pacific 3,860 21.0% 3,715 20.5% 3,642 20.1% Middle Atlantic 3,315 18.1% 3,310 18.2% 3,309 18.3% East North Central 1,962 10.7% 1,956 10.8% 1,959 10.8% New England 1,270 6.9% 1,246 6.9% 1,286 7.1% West South Central 975 5.3% 982 5.4% 993 5.5% Mountain 763 4.2% 766 4.2% 795 4.4% West North Central 647 3.5% 653 3.6% 666 3.7% International 546 3.0% 540 3.0% 519 2.9% East South Central 178 1.0% 179 1.0% 180 1.0% --------------------------------------------------------------------------------------- Total $18,348 100.0% $18,153 100.0% $18,085 100.0% ======================================================================================= Office $8,431 45.9% $8,311 45.8% $8,165 45.1% Retail 4,332 23.6% 4,349 24.0% 4,383 24.2% Apartments 2,602 14.2% 2,582 14.2% 2,584 14.3% Industrial 1,933 10.5% 1,876 10.3% 1,912 10.6% Hotel 818 4.5% 822 4.5% 828 4.6% Other 232 1.3% 213 1.2% 213 1.2% --------------------------------------------------------------------------------------- Total $18,348 100.0% $18,153 100.0% $18,085 100.0% =======================================================================================
36 (METLIFE LOGO) ================================================================================ METLIFE, INC. SUMMARY OF REAL ESTATE
Unaudited At June 30, At March 31, At December 31, At September 30, At June 30, At March 31, (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------- Wholly owned $4,184 $4,199 $4,338 $5,302 $5,615 $5,520 Joint ventures 397 365 377 316 297 291 --------------------------------------------------------------------------------------------------- Subtotal 4,581 4,564 4,715 5,618 5,912 5,811 Foreclosed 4 5 10 45 51 51 --------------------------------------------------------------------------------------------------- Total Real Estate (1) $4,585 $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
Unaudited At June 30, At March 31, At December 31, At September 30, At June 30, At March 31, (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL $19,823 $19,623 $19,552 $18,348 $18,153 $18,085 AGRICULTURAL 5,090 5,052 5,146 5,155 5,174 5,196 RESIDENTIAL 376 371 388 382 406 403 --------------------------------------------------------------------------------------------------- TOTAL $25,289 $25,046 $25,086 $23,885 $23,733 $23,684 ===================================================================================================
METLIFE, INC. DISTRIBUTION OF ASSETS UNDER MANAGEMENT
Unaudited At June 30, At March 31, At December 31, At September 30, At June 30, At March 31, (Dollars in millions) 2003 2003 2002 2002 2002 2002 - ------------------------------------------------------------------------------------------------------------------------------- METLIFE $ 242.4 $ 226.3 $ 217.7 $ 212.0 $ 202.0 $ 196.3 METLIFE SEPARATE ACCOUNT 67.5 60.6 59.7 56.0 59.3 62.5 STATE STREET THIRD PARTY 21.9 20.8 21.8 22.2 25.6 26.1 --------------------------------------------------------------------------------------------------- TOTAL ASSETS UNDER MANAGEMENT $ 331.8 $ 307.7 $ 299.2 $ 290.2 $ 286.9 $ 284.9 ===================================================================================================
37 (METLIFE LOGO) ================================================================================ COMPANY RATINGS AS OF AUGUST 4, 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- MetLife Funding, Inc. Commercial Paper P-1 A-1+ AMB-1+ F1+
(1) NR indicates no rating provided. 38 (METLIFE LOGO) ================================================================================ METLIFE, INC. 2002 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, September 30, June 30, March 31, 2002 (1) 2002 2002 (2) 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. 39 (METLIFE LOGO) ================================================================================ METLIFE, INC. 2001 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, September 30, June 30, March 31, 2001 (1) 2001 (2) 2001 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. 40 (METLIFE LOGO) ================================================================================ METLIFE, INC. 2000 OPERATING EARNINGS (LOSS) CAPITAL ALLOCATION BASED ON RISK BASED CAPITAL ("RBC") VS. ECONOMIC CAPITAL ("EC")
December 31, September 30, June 30, March 31, 2000 2000 2000 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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