EX-99.2 3 y96811exv99w2.txt QUARTERLY FINANCIAL SUPPLEMENT . . . (METLIFE LOGO) -------------------------------------------------------------------------------- TABLE OF CONTENTS HIGHLIGHTS CORPORATE OVERVIEW 2 METLIFE, INC. CONSOLIDATED BALANCE SHEETS 3 CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 4 TOTAL COMPANY HEADCOUNT 5 CONSOLIDATING BALANCE SHEET 6 CONSOLIDATING STATEMENT OF OPERATING EARNINGS 7 INSURANCE OPERATIONS CONSOLIDATED STATEMENTS OF OPERATING EARNINGS 9 CONSOLIDATING STATEMENT OF OPERATING EARNINGS 10 SUMMARY OF SEGMENT OPERATING EARNINGS 12 INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS 13 PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION 17 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 18 EXPENSES BY MAJOR CATEGORY 19 SPREADS BY PRODUCT 20 INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS 21 PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES 26 ADDITIONAL STATISTICAL INFORMATION 27 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 28 INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY 29 SPREADS BY PRODUCT 30 AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS 31 WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA 35 INTERNATIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS 36 REINSURANCE OPERATIONS STATEMENTS OF OPERATING EARNINGS 37 PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION 38 ASSET MANAGEMENT OPERATIONS STATEMENTS OF OPERATING EARNINGS CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT 39 40 CORPORATE, OTHER & ELIMINATIONS STATEMENTS OF OPERATING EARNINGS 41 METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS 42 FIXED MATURITIES AND EQUITY SECURITIES GROSS UNREALIZED LOSSES AGING SCHEDULE 44 SUMMARY OF FIXED MATURITIES BY SECTOR AND BY QUALITY DISTRIBUTION, AND SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE 45 SUMMARY OF REAL ESTATE, SUMMARY OF MORTGAGES AND DISTRIBUTION OF ASSETS UNDER MANAGEMENT 46 OTHER INFORMATION COMPANY RATINGS 47
NOTE: THE QUARTERLY FINANCIAL SUPPLEMENT ("QFS") INCLUDES FINANCIAL MEASURES, OPERATING EARNINGS AND OPERATING EARNINGS PER DILUTED SHARE, THAT ARE NOT BASED ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). OPERATING EARNINGS IS DEFINED AS GAAP NET INCOME EXCLUDING CERTAIN NET INVESTMENT-RELATED GAINS AND LOSSES, NET OF INCOME TAXES, AND THE IMPACT FROM THE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING, NET OF INCOME TAXES. SCHEDULED SETTLEMENT PAYMENTS ON DERIVATIVE INSTRUMENTS NOT QUALIFYING FOR HEDGE ACCOUNTING TREATMENT ARE INCLUDED IN OPERATING EARNINGS. OPERATING EARNINGS PER DILUTED SHARE IS CALCULATED BY DIVIDING OPERATING EARNINGS AS DEFINED ABOVE BY THE NUMBER OF WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING FOR THE PERIOD INDICATED. METLIFE 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 CERTAIN INVESTMENT-RELATED GAINS AND LOSSES, WHICH CAN FLUCTUATE SIGNIFICANTLY FROM PERIOD TO PERIOD, AND THE IMPACT OF THE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING, NET OF INCOME TAXES, THEREBY HIGHLIGHTING THE RESULTS FROM OPERATIONS AND THE UNDERLYING PROFITABILITY DRIVERS OF THE BUSINESS. OPERATING EARNINGS AND OPERATING EARNINGS PER DILUTED SHARE SHOULD NOT BE VIEWED AS SUBSTITUTES FOR GAAP NET INCOME AND GAAP NET INCOME PER DILUTED SHARE, RESPECTIVELY. RECONCILIATIONS OF OPERATING EARNINGS TO GAAP NET INCOME AND OPERATING EARNINGS PER DILUTED SHARE TO GAAP NET INCOME PER DILUTED SHARE, THE MOST DIRECTLY COMPARABLE GAAP MEASURES, ARE INCLUDED IN THE QFS AND IN METLIFE'S EARNINGS PRESS RELEASE, DATED MAY 3, 2004, FOR THE QUARTER ENDED MARCH 31, 2004, 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 ------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, 2004 2003 2003 2003 2003 ------------------------------------------------------------------ Net income (1) $523 $701 $574 $580 $362 Net investment-related gains (losses) (2) (3) 105 139 (151) (54) (170) Minority interest - net investment-related gains (losses) (8) (9) (2) (2) 4 Adjustments to net investment-related gains (losses) (4) 32 138 39 0 38 Net investment-related gains (losses) tax benefit (provision) (44) (106) 72 16 44 ------------------------------------------------------------------ Net investment-related gains (losses), net of income taxes 85 162 (42) (40) (84) Cumulative effect of a change in accounting, net of income taxes (5) (158) (26) 0 0 0 ------------------------------------------------------------------ Operating earnings $596 $565 $616 (7) $620 (8) $446 ================================================================== Net income per share - diluted $0.69 $0.92 $0.75 $0.79 $0.47 (9) Net investment-related gains (losses) 0.11 0.21 (0.06) (0.05) (0.12) Cumulative effect of a change in accounting, net of income taxes (0.20) (0.03) 0.00 0.00 0.00 Impact of conversion of securities 0.00 0.00 0.00 0.00 (0.03) ------------------------------------------------------------------ Operating earnings per share - diluted $0.78 $0.74 $0.81 $0.84 $0.62 ================================================================== Weighted average common shares outstanding - diluted 760.3 761.3 760.9 731.3 722.4 Book value per common share (actual shares outstanding) $29.48 $27.93 $27.50 $27.13 $25.76 Book value per common share, excluding accumulated other comprehensive income (actual shares outstanding) $24.93 $24.24 $23.54 $22.78 $22.45 Book value per common share - diluted $29.29 $27.78 $27.47 $28.20 $24.97 Book value per common share, excluding accumulated other comprehensive income - diluted $24.76 $24.11 $23.52 $23.68 $21.77 ------------------------------------------------------------------
At or for the Three Months Ended ------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, 2004 2003 2003 2003 2003 ------------------------------------------------------------------ Shares outstanding, beginning of period 757.2 760.2 760.2 700.4 700.3 Treasury stock (1.8) (3.0) 0.0 59.8 0.1 ------------------------------------------------------------------ Shares outstanding, end of period 755.4 757.2 760.2 760.2 700.4 Weighted average common shares outstanding - basic 756.5 759.0 760.1 731.3 700.3 Dilutive effect of convertible securities 0.0 0.0 0.0 0.0 22.1 Dilutive effect of stock options 3.1 1.6 0.0 0.0 0.0 Dilutive effect of deferred stock compensation 0.7 0.7 0.8 0.0 0.0 ------------------------------------------------------------------ Weighted average common shares outstanding - diluted 760.3 761.3 760.9 731.3 722.4 ================================================================== Policyholder Trust Shares 347.2 362.5 372.7 382.4 386.4 SUPPLEMENTAL DATA Adjusted long-term debt to total capital excluding accumulated other comprehensive income (6) 20.5% 21.3% 21.4% 22.0% 23.7% ------------------------------------------------------------------
(1) Presentation of net income throughout the QFS differs from other public filings with respect to discontinued operations and scheduled settlement payments on derivatives not qualifying for hedge accounting treatment. Presentation of discontinued operations in other public filings is in accordance with the Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Presentation of scheduled settlement payments on derivatives not qualifying for hedge accounting treatment in other public filings is in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). (2) Net investment-related gains and losses, net of income taxes, excludes scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment of $9 million, $18 million, $22 million, $8 million and $5 million for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003 and March 31, 2003, respectively. (3) Net investment-related gains and losses, net of income taxes, from real estate and real estate joint ventures include discontinued operations of $13 million, $205 million, $4 million, $0 million, and $57 million for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. (4) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (5) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. For the period ended December 31, 2003, the cumulative effect of a change in accounting, net of income taxes, is in accordance with FASB Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. (6) Adjusted long-term debt at March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003 consists of $4,907 million, $4,909 million, $4,912 million, $4,917 million and $4,919 million of long-term debt, respectively, and $36 million, $142 million, $36 million, $35 million, and $49 million of short-term debt, respectively. Total capital is defined as equity less accumulated other comprehensive income plus adjusted long-term and company obligated mandatorily redeemable capital securities. (7) Operating earnings for the three months ended September 30, 2003 includes a $28 million after-tax benefit ($0.04 per diluted share) from a reduction of a previously established liability related to the Company's race-conscious underwriting settlement and a $36 million benefit ($0.05 per diluted share) from a revision of the estimate of income taxes for 2002. (8) 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, $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. (9) 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 I's mandatorily redeemable capital securities. 2 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. CONSOLIDATED BALANCE SHEETS
As of ------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------------------------ ASSETS (1) Fixed maturities available-for-sale, at fair value $174,100 $167,752 $159,940 $158,822 $144,341 Equity securities, at fair value 1,756 1,598 1,659 1,617 1,474 Mortgage loans on real estate 26,562 26,249 25,535 25,289 25,046 Real estate and real estate joint ventures 4,699 4,680 5,255 4,491 4,475 Policy loans 8,758 8,749 8,668 8,627 8,615 Other limited partnership interests 2,549 2,600 2,559 2,500 2,393 Short-term investments 1,998 1,826 2,718 2,640 3,188 Other invested assets 5,094 4,645 4,617 4,261 3,948 ------------------------------------------------------------------------- Investments 225,516 218,099 210,951 208,247 193,480 Cash and cash equivalents 3,146 3,733 5,372 5,714 4,938 Accrued investment income 2,337 2,186 2,265 2,241 2,179 Premiums and other receivables 7,554 7,047 7,107 7,486 6,768 Deferred policy acquisition costs 13,020 12,943 12,367 11,899 11,889 Goodwill and other intangible assets 638 643 654 652 745 Other 6,666 6,434 6,269 6,123 6,303 Separate account assets 78,336 75,756 69,998 67,460 60,620 ------------------------------------------------------------------------- $337,213 $326,841 $314,983 $309,822 $286,922 ========================================================================= LIABILITIES AND EQUITY (1) LIABILITIES Future policy benefits $99,262 $96,278 $95,095 $95,360 $92,744 Policyholder account balances 77,981 75,901 74,857 72,207 69,060 Short-term debt 3,068 3,642 2,935 3,443 2,441 Long-term debt 5,707 5,703 5,703 5,562 5,481 Shares subject to mandatory redemption 277 277 277 0 0 Payables under securities loaned transactions 28,045 27,083 24,666 23,028 19,566 Other 22,264 21,052 20,547 21,862 18,694 Separate account liabilities 78,336 75,756 69,998 67,460 60,620 ------------------------------------------------------------------------- 314,940 305,692 294,078 288,922 268,606 ------------------------------------------------------------------------- Company-obligated mandatorily redeemable capital securities 0 0 0 277 277 ------------------------------------------------------------------------- EQUITY Common stock, at par value 8 8 8 8 8 Capital in excess of par value 15,001 14,991 14,960 14,956 14,952 Retained earnings 4,716 4,193 3,667 3,093 3,169 Treasury stock (896) (835) (739) (740) (2,402) Accumulated other comprehensive income 3,444 2,792 3,009 3,306 2,312 ------------------------------------------------------------------------- 22,273 21,149 20,905 20,623 18,039 ------------------------------------------------------------------------- $337,213 $326,841 $314,983 $309,822 $286,922 =========================================================================
(1)Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. 3 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended For the Year-to-Date Period Ended ------------------------------------------------------- ------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 --------------------------------------------------------------------------------------------- ------------------------------------ REVENUES (1) Premiums $5,353 $5,679 $5,079 $5,083 $4,832 $20,673 $14,994 $9,915 Universal life and investment-type product policy fees 690 698 623 603 572 2,496 1,798 1,175 Investment income, net 3,006 3,070 2,914 2,889 2,899 11,772 8,702 5,788 Other revenues 353 354 335 355 298 1,342 988 653 ------------------------------------------------------- ------------------------------------ 9,402 9,801 8,951 8,930 8,601 36,283 26,482 17,531 ------------------------------------------------------- ------------------------------------ EXPENSES (1) Policyholder benefits and dividends 5,933 6,244 5,651 5,472 5,456 22,823 16,579 10,928 Interest credited to policyholder account balances 743 760 767 761 747 3,035 2,275 1,508 Interest expense 99 109 104 112 116 441 332 228 Other expenses 1,757 1,897 1,585 1,732 1,637 6,851 4,954 3,369 ------------------------------------------------------- ------------------------------------ 8,532 9,010 8,107 8,077 7,956 33,150 24,140 16,033 ------------------------------------------------------- ------------------------------------ Operating earnings before provision for income taxes 870 791 844 853 645 3,133 2,342 1,498 Provision for income taxes 274 226 228 233 199 886 660 432 ------------------------------------------------------- ------------------------------------ OPERATING EARNINGS $596 $565 $616 (4) $620 (5) $446 $2,247 $1,682 (4) $1,066 (5) ======================================================= ==================================== NET INCOME RECONCILIATION Operating earnings $596 $565 $616 $620 $446 $2,247 $1,682 $1,066 Net investment-related gains (losses) 105 139 (151) (54) (170) (236) (375) (224) Minority interest - net investment-related gains (losses) (8) (9) (2) (2) 4 (9) 0 2 Adjustments to net investment- related gains (losses) (2) 32 138 39 0 38 215 77 38 Net investment-related gains (losses) tax benefit (provision) (44) (106) 72 16 44 26 132 60 ------------------------------------------------------- ------------------------------------ Net investment-related gains (losses), net of income taxes 85 162 (42) (40) (84) (4) (166) (124) Cumulative effect of a change in accounting, net of income taxes (3) (158) (26) 0 0 0 (26) 0 0 ------------------------------------------------------- ------------------------------------ Net income $523 $701 $574 $580 $362 $2,217 $1,516 $942 ======================================================= ====================================
(1) Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. (2) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (3) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. For the period ended December 31, 2003, the cumulative effect of a change in accounting, net of income taxes, is in accordance with FASB Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. (4) Operating earnings for the period ended September 30, 2003 includes a $28 million after-tax benefit from a reduction of a previously established liability related to the Company's race-conscious underwriting settlement. (5) Operating earnings for the period 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, $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. 4 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. TOTAL COMPANY HEADCOUNT
As of ----------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, 2004 2003 2003 2003 2003 ----------------------------------------------------------------------- TOTAL COMPANY HEADCOUNT (1) DOMESTIC SALES Individual 10,990 11,191 11,585 11,949 12,030 Institutional 791 795 802 809 735 Auto & Home 88 79 77 78 83 Asset Management 66 69 68 69 72 ----------------------------------------------------------------------- Total domestic sales 11,935 12,134 12,532 12,905 12,920 OTHER THAN SALES Individual 2,404 2,434 2,511 2,534 2,581 Institutional 5,869 5,774 5,679 5,762 5,768 Auto & Home 3,380 3,388 3,437 3,431 3,459 Reinsurance 682 656 642 637 630 Asset Management 870 960 989 996 992 Operations 3,796 3,837 3,833 3,794 3,836 Technology 3,551 3,448 3,434 3,459 3,506 Corporate 3,685 3,587 3,602 3,561 3,599 ----------------------------------------------------------------------- Total domestic other than sales 24,237 24,084 24,127 24,174 24,371 ----------------------------------------------------------------------- TOTAL DOMESTIC HEADCOUNT 36,172 36,218 36,659 37,079 37,291 ----------------------------------------------------------------------- INTERNATIONAL SALES Professional sales 1,602 1,602 1,240 1,240 1,146 Other 9,707 8,808 8,048 7,932 7,894 Other than sales 2,784 2,857 2,840 2,807 2,777 ----------------------------------------------------------------------- TOTAL INTERNATIONAL HEADCOUNT 14,093 13,267 12,128 11,979 11,817 ----------------------------------------------------------------------- TOTAL COMPANY HEADCOUNT 50,265 49,485 48,787 49,058 49,108 =======================================================================
(1) Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. 5 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. CONSOLIDATING BALANCE SHEET AT MARCH 31, 2004
Insurance Reinsurance Asset Corporate, Other Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations -------------------------------------------------------------------------------------------------------------------------------- ASSETS Total investments $225,516 $199,799 $ 9,506 $121 $16,090 Deferred policy acquisition costs 13,020 10,778 2,241 0 1 Goodwill and other intangible assets 638 517 99 18 4 Other 19,703 15,036 1,702 101 2,864 Separate account assets 78,336 78,337 13 0 (14) ------------------------------------------------------------------------------ $337,213 $304,467 $13,561 $240 $18,945 ============================================================================== LIABILITIES AND EQUITY LIABILITIES ----------- Future policy benefits $99,262 $96,712 $3,963 $0 ($1,413) Policyholder account balances 77,981 73,943 4,593 0 (555) Debt 8,775 1,716 404 0 6,655 Shares subject to mandatory redemption 277 0 158 0 119 Payables under securities loaned transactions 28,045 22,090 0 0 5,955 Other 22,264 13,638 3,556 42 5,028 Separate account liabilities 78,336 78,337 13 0 (14) ------------------------------------------------------------------------------ 314,940 286,436 12,687 42 15,775 EQUITY ------ Common stock, at par value 8 0 0 0 8 Allocated equity (1) 19,717 15,203 703 192 3,619 Treasury stock (896) 0 0 0 (896) Accumulated other comprehensive income 3,444 2,828 171 6 439 ------------------------------------------------------------------------------ 22,273 18,031 874 198 3,170 ------------------------------------------------------------------------------ $337,213 $304,467 $13,561 $240 $18,945 ==============================================================================
(1) Allocated equity includes additional paid-in capital and retained earnings. 6 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2004
Insurance Reinsurance Asset Corporate, Other Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $5,353 $4,538 $816 $0 ($1) Universal life and investment-type product policy fees 690 690 0 0 0 Investment income, net 3,006 2,791 130 18 67 Other revenues 353 294 12 40 7 --------------------------------------------------------------------------- 9,402 8,313 958 58 73 --------------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,933 5,272 659 0 2 Interest credited to policyholder account balances 743 692 51 0 0 Capitalization of deferred policy acquisition costs (765) (534) (231) 0 0 Amortization of deferred policy acquisition costs 460 332 128 0 0 Other expenses 2,161 1,672 324 49 116 --------------------------------------------------------------------------- 8,532 7,434 931 49 118 --------------------------------------------------------------------------- Operating earnings before provision (benefit) for income taxes 870 879 27 9 (45) Provision (benefit) for income taxes 274 288 9 4 (27) --------------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $596 $591 $18 $5 ($18) =========================================================================== NET INCOME RECONCILIATION --------------------------------- Operating earnings (loss) $596 $591 $18 $5 ($18) Net investment-related gains (losses) 105 84 17 0 4 Minority interest - net investment-related gains (losses) (8) 0 (8) 0 0 Adjustments to net investment-related gains (losses) (1) 32 32 0 0 0 Net investment-related gains (losses) tax benefit (provision) (44) (39) (3) 0 (2) --------------------------------------------------------------------------- Net investment-related gains (losses), net of income taxes 85 77 6 0 2 Cumulative effect of a change in accounting, net of income taxes (2) (158) (160) 3 0 (1) --------------------------------------------------------------------------- Net income (loss) $523 $508 $27 $5 ($17) ===========================================================================
(1) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (2) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 7 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2003
Insurance Reinsurance Asset Corporate, Other Unaudited (Dollars in millions) Consolidated Operations Operations Management & Eliminations ----------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,832 $4,284 $552 $0 ($4) Universal life and investment-type product policy fees 572 572 0 0 0 Investment income, net 2,899 2,704 110 16 69 Other revenues 298 245 12 29 12 -------------------------------------------------------------------- 8,601 7,805 674 45 77 -------------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 5,456 5,021 433 0 2 Interest credited to policyholder account balances 747 704 43 0 0 Capitalization of deferred policy acquisition costs (627) (476) (151) 0 0 Amortization of deferred policy acquisition costs 428 344 84 0 0 Other expenses 1,952 1,556 235 43 118 -------------------------------------------------------------------- 7,956 7,149 644 43 120 -------------------------------------------------------------------- Operating earnings before provision (benefit) for income taxes 645 656 30 2 (43) Provision (benefit) for income taxes 199 219 10 1 (31) -------------------------------------------------------------------- OPERATING EARNINGS (LOSS) $446 $437 $20 $1 ($12) ==================================================================== NET INCOME RECONCILIATION ---------------------------------------- Operating earnings (loss) $446 $437 $20 $1 ($12) Net investment-related gains (losses) (170) (141) (4) 8 (33) Minority interest - net investment-related gains (losses) 4 0 4 0 0 Adjustments to net investment-related gains (losses) (1) 38 38 0 0 0 Net investment-related gains (losses) tax benefit (provision) 44 37 0 (3) 10 -------------------------------------------------------------------- Net investment-related gains (losses), net of income taxes (84) (66) 0 5 (23) Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0 -------------------------------------------------------------------- Net income (loss) $362 $371 $20 $6 ($35) ====================================================================
(1) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. 8 (METLIFE LOGO) -------------------------------------------------------------------------------- INSURANCE OPERATIONS CONSOLIDATED STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended For the Year-to-Date Period Ended ----------------------------------------------------------- -------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------- -------------------------------------- REVENUES Premiums $4,538 $4,735 $4,504 $4,500 $4,284 $18,023 $13,288 $8,784 Universal life and investment-type product policy fees 690 698 623 603 572 2,496 1,798 1,175 Investment income, net 2,791 2,856 2,711 2,710 2,704 10,981 8,125 5,414 Other revenues 294 305 270 291 245 1,111 806 536 ----------------------------------------------------------- -------------------------------------- 8,313 8,594 8,108 8,104 7,805 32,611 24,017 15,909 ----------------------------------------------------------- -------------------------------------- EXPENSES Policyholder benefits and dividends 5,272 5,456 5,179 5,006 5,021 20,662 15,206 10,027 Interest credited to policyholder account balances 692 711 720 716 704 2,851 2,140 1,420 Capitalization of deferred policy acquisition costs (534) (531) (517) (502) (476) (2,026) (1,495) (978) Amortization of deferred policy acquisition costs 332 349 339 415 344 1,447 1,098 759 Other expenses 1,672 1,813 1,605 1,684 1,556 6,658 4,845 3,240 ----------------------------------------------------------- -------------------------------------- 7,434 7,798 7,326 7,319 7,149 29,592 21,794 14,468 ----------------------------------------------------------- -------------------------------------- Operating earnings before provision for income taxes 879 796 782 785 656 3,019 2,223 1,441 Provision for income taxes 288 259 268 230 219 976 717 449 ----------------------------------------------------------- -------------------------------------- OPERATING EARNINGS $591 $537 $514 $555(1) $437 $2,043 $1,506 $992(1) =========================================================== ====================================== NET INCOME RECONCILIATION ------------------------- Operating earnings $591 $537 $514 $555 $437 $2,043 $1,506 $992 Net investment-related gains (losses) 84 (305) (126) (23) (141) (595) (290) (164) Minority interest - net investment -related gains (losses) 0 0 0 0 0 0 0 0 Adjustments to net investment-related gains (losses) (2) 32 186 39 0 38 263 77 38 Net investment-related gains (losses) tax benefit (provision) (39) 39 49 5 37 130 91 42 ----------------------------------------------------------- -------------------------------------- Net investment-related gains (losses), net of income taxes 77 (80) (38) (18) (66) (202) (122) (84) Cumulative effect of a change in accounting, net of income taxes (3) (160) (26) 0 0 0 (26) 0 0 ----------------------------------------------------------- -------------------------------------- Net income $508 $431 $476 $537 $371 $1,815 $1,384 $908 =========================================================== ======================================
(1) Operating earnings for the period 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) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (3) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. For the period ended December 31, 2003, the cumulative effect of a change in accounting, net of income taxes, is in accordance with FASB Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. 9 (METLIFE LOGO) -------------------------------------------------------------------------------- INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2004
Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations ----------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,538 $2,411 $978 $737 $412 Universal life and investment-type product policy fees 690 185 422 0 83 Investment income, net 2,791 1,101 1,521 46 123 Other revenues 294 164 117 9 4 ------------------------------------------------------------------------ 8,313 3,861 3,038 792 622 ------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 5,272 2,699 1,649 536 388 Interest credited to policyholder account balances 692 232 423 0 37 Capitalization of deferred policy acquisition costs (534) (62) (293) (108) (71) Amortization of deferred policy acquisition costs 332 25 162 114 31 Other expenses 1,672 488 820 192 172 ------------------------------------------------------------------------ 7,434 3,382 2,761 734 557 ------------------------------------------------------------------------ Operating earnings before provision for income taxes 879 479 277 58 65 Provision for income taxes 288 162 93 12 21 ------------------------------------------------------------------------ OPERATING EARNINGS $591 $317 $184 $46 $44 ======================================================================== NET INCOME RECONCILIATION ------------------------- Operating earnings $591 $317 $184 $46 $44 Net investment-related gains (losses) 84 83 (28) 0 29 Minority interest - net investment- related gains (losses) 0 0 0 0 0 Adjustments to net investment- related gains (losses) (1) 32 0 32 0 0 Net investment-related gains (losses) tax benefit (provision) (39) (30) (2) 0 (7) ------------------------------------------------------------------------ Net investment-related gains (losses), net of income taxes 77 53 2 0 22 Cumulative effect of a change in accounting, net of income taxes (2) (160) (60) (70) 0 (30) ------------------------------------------------------------------------ Net income $508 $310 $116 $46 $36 ========================================================================
(1) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (2) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 10 [METLIFE LOGO] -------------------------------------------------------------------------------- INSURANCE OPERATIONS CONSOLIDATING STATEMENT OF OPERATING EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2003
Insurance Institutional Individual Auto & International Unaudited (Dollars in millions) Operations Operations Operations Home Operations --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,284 $2,136 $1,041 $712 $395 Universal life and investment-type product policy fees 572 161 360 0 51 Investment income, net 2,704 979 1,563 39 123 Other revenues 245 142 86 9 8 ------------------------------------------------------------ 7,805 3,418 3,050 760 577 ------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 5,021 2,418 1,692 534 377 Interest credited to policyholder account balances 704 224 443 0 37 Capitalization of deferred policy acquisition costs (476) (38) (260) (112) (66) Amortization of deferred policy acquisition costs 344 20 175 115 34 Other expenses 1,556 454 753 196 153 ------------------------------------------------------------ 7,149 3,078 2,803 733 535 ------------------------------------------------------------ Operating earnings before provision (benefit) for income taxes 656 340 247 27 42 Provision (benefit) for income taxes 219 121 87 (3) 14 ------------------------------------------------------------ OPERATING EARNINGS $437 $219 $160 $30 $28 ============================================================ NET INCOME RECONCILIATION ------------------------- Operating earnings $437 $219 $160 $30 $28 Net investment-related losses (141) (70) (67) (4) 0 Adjustments to net investment-related gains (losses)(1) 38 0 38 0 0 Net investment-related gains (losses) tax benefit (provision) 37 26 10 1 0 ------------------------------------------------------------ Net investment-related gains (losses), net of income taxes (66) (44) (19) (3) 0 Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0 ------------------------------------------------------------ Net income $371 $175 $141 $27 $28 ============================================================
(1) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. 11 (METLIFE LOGO) -------------------------------------------------------------------------------- SUMMARY OF SEGMENT OPERATING EARNINGS(1) Unaudited (Dollars in millions)
For the Three Months Ended For the Year-to-Date Period Ended ---------------------------------------------------------- ---------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, 2004 2003 2003 2003 2003 2003 2003 2003 ------------------------------------------------------------------------------------------ ---------------------------------------- INSTITUTIONAL OPERATIONS $317 $277 $264 $260 $219 $1,020 $743 $479 INDIVIDUAL OPERATIONS 184 173 171 151 160 655 482 311 AUTO & HOME OPERATIONS 46 53 42 42 30 167 114 72 INTERNATIONAL OPERATIONS 44 34 37 102 28 201 167 130 REINSURANCE OPERATIONS 18 20 18 19 20 77 57 39 ASSET MANAGEMENT OPERATIONS 5 6 4 5 1 16 10 6 CORPORATE, OTHER & ELIMINATIONS (18) 2 80 41 (12) 111 109 29 -------------------------------------------------------- ---------------------------------------- CONSOLIDATED $596 $565 $616(2) $620(3) $446 $2,247 $1,682(2) $1,066(3) ======================================================== ========================================
(1) A reconciliation of operating earnings to net income for each segment appears in this QFS as follows: (i) Institutional, page 13; (ii) Individual, page 21; (iii) Auto & Home, page 31; (iv) International, page 36; (v) Reinsurance, page 37; and (vi) Asset Management, page 39, and for Corporate, Other and Eliminations, on page 41. A reconciliation of operating earnings to net income for MetLife, Inc., Consolidated, appears on page 4. (2) Operating earnings for the period ended September 30, 2003 includes a $28 million after-tax benefit from a reduction of a previously established liability related to the Company's race-conscious underwriting settlement and a $36 million benefit from a revision of the estimate of income taxes for 2002. (3) Operating earnings for the period 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, $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. 12 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - TOTAL Unaudited (Dollars in millions)
For the Three Months Ended ----------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Institutional Operations 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $2,411 $2,363 $2,260 $2,334 $2,136 Universal life and investment-type product policy fees 185 153 167 154 161 Investment income, net 1,101 1,103 1,003 1,009 979 Other revenues 164 154 144 152 142 -------------------------------------------------------- 3,861 3,773 3,574 3,649 3,418 -------------------------------------------------------- EXPENSES Policyholder benefits and dividends 2,699 2,629 2,523 2,560 2,418 Interest credited to policyholder account balances 232 229 234 228 224 Other expenses 451 485 407 456 436 -------------------------------------------------------- 3,382 3,343 3,164 3,244 3,078 -------------------------------------------------------- Operating earnings before provision for income taxes 479 430 410 405 340 Provision for income taxes 162 153 146 145 121 -------------------------------------------------------- OPERATING EARNINGS $317 $277 $264 $260 $219 ======================================================== NET INCOME RECONCILIATION ------------------------- Operating earnings $317 $277 $264 $260 $219 Net investment-related gains (losses) 83 (164) (59) (9) (70) Adjustments to net investment-related gains (losses) (1) 0 89 0 0 0 Net investment-related gains (losses) tax benefit (provision) (30) 16 23 3 26 -------------------------------------------------------- Net investment-related gains (losses), net of income taxes 53 (59) (36) (6) (44) Cumulative effect of a change in accounting, net of income taxes (2) (60) (26) 0 0 0 -------------------------------------------------------- Net income $310 $192 $228 $254 $175 ======================================================== For the Year-to-Date Period Ended -------------------------------------- December 31, September 30, June 30, Institutional Operations 2003 2003 2003 ---------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $9,093 $6,730 $4,470 Universal life and investment-type product policy fees 635 482 315 Investment income, net 4,094 2,991 1,988 Other revenues 592 438 294 -------------------------------------- 14,414 10,641 7,067 -------------------------------------- EXPENSES Policyholder benefits and dividends 10,130 7,501 4,978 Interest credited to policyholder account balances 915 686 452 Other expenses 1,784 1,299 892 -------------------------------------- 12,829 9,486 6,322 -------------------------------------- Operating earnings before provision for income taxes 1,585 1,155 745 Provision for income taxes 565 412 266 -------------------------------------- OPERATING EARNINGS $1,020 $743 $479 ====================================== NET INCOME RECONCILIATION ------------------------- Operating earnings $1,020 $743 $479 Net investment-related gains (losses) (302) (138) (79) Adjustments to net investment-related gains (losses) (1) 89 0 0 Net investment-related gains (losses) tax benefit (provision) 68 52 29 -------------------------------------- Net investment-related gains (losses), net of income taxes (145) (86) (50) Cumulative effect of a change in accounting, net of income taxes (2) (26) 0 0 -------------------------------------- Net income $849 $657 $429 ======================================
(1) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (2) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. For the period ended December 31, 2003, the cumulative effect of a change in accounting, net of income taxes, is in accordance with FASB Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. 13 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL Unaudited (Dollars in millions)
For the Three Months Ended ------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $1,268 $1,223 $1,167 $1,175 $1,163 Universal life and investment-type product policy fees 185 153 167 154 161 Investment income, net 259 271 262 248 242 Other revenues 19 18 17 13 16 ----------------------------------------------------------------- 1,731 1,665 1,613 1,590 1,582 ----------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 1,392 1,272 1,237 1,229 1,234 Interest credited to policyholder account balances 100 100 113 104 106 Other expenses 123 138 116 133 121 ----------------------------------------------------------------- 1,615 1,510 1,466 1,466 1,461 ----------------------------------------------------------------- Operating earnings before provision for income taxes 116 155 147 124 121 Provision for income taxes 39 56 53 45 43 ----------------------------------------------------------------- OPERATING EARNINGS $77 $99 $94 $79 $78 ----------------------------------------------------------------- Net investment-related gains (losses), net of income taxes 17 (53) 3 (8) (13) Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0 ----------------------------------------------------------------- Net income $94 $46 $97 $71 $65 =================================================================
For the Year-to-Date Period Ended -------------------------------------------- December 31, September 30, June 30, Group Life 2003 2003 2003 --------------------------------------------------------------------------------------------------------------- REVENUES Premiums $4,728 $3,505 $2,338 Universal life and investment-type product policy fees 635 482 315 Investment income, net 1,023 752 490 Other revenues 64 46 29 ------------------------------------------- 6,450 4,785 3,172 ------------------------------------------- EXPENSES Policyholder benefits and dividends 4,972 3,700 2,463 Interest credited to policyholder account balances 423 323 210 Other expenses 508 370 254 ------------------------------------------- 5,903 4,393 2,927 ------------------------------------------- Operating earnings before provision for income taxes 547 392 245 Provision for income taxes 197 141 88 ------------------------------------------- OPERATING EARNINGS $350 $251 $157 ------------------------------------------- Net investment-related gains (losses), net of income taxes (71) (18) (21) Cumulative effect of a change in accounting, net of income taxes 0 0 0 ------------------------------------------- Net income $279 $233 $136 ===========================================
14 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL Unaudited (Dollars in millions)
For the Three Months Ended ------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2004 2003 2003 2003 2003 -------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $265 $305 $289 $351 $174 Universal life and investment-type product policy fees 0 0 0 0 0 Investment income, net 735 732 653 674 642 Other revenues 57 58 48 52 45 ---------------------------------------------------------- 1,057 1,095 990 1,077 861 ---------------------------------------------------------- EXPENSES Policyholder benefits and dividends 589 682 641 681 531 Interest credited to policyholder account balances 132 129 121 124 118 Other expenses 69 90 68 87 86 ---------------------------------------------------------- 790 901 830 892 735 ---------------------------------------------------------- Operating earnings before provision for income taxes 267 194 160 185 126 Provision for income taxes 89 69 56 65 44 ---------------------------------------------------------- OPERATING EARNINGS $178 $125 $104 $120 $82 ---------------------------------------------------------- Net investment-related gains (losses), net of income taxes 32 0 (48) 2 (25) Cumulative effect of a change in accounting, net of income taxes (1) (40) (26) 0 0 0 ---------------------------------------------------------- Net income $170 $99 $56 $122 $57 ========================================================== For the Year-to-Date Period Ended ----------------------------------------------- December 31, September 30, June 30, Retirement & Savings 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------ REVENUES Premiums $1,119 $814 $525 Universal life and investment-type product policy fees 0 0 0 Investment income, net 2,701 1,969 1,316 Other revenues 203 145 97 ----------------------------------------------- 4,023 2,928 1,938 ----------------------------------------------- EXPENSES Policyholder benefits and dividends 2,535 1,853 1,212 Interest credited to policyholder account balances 492 363 242 Other expenses 331 241 173 ----------------------------------------------- 3,358 2,457 1,627 ----------------------------------------------- Operating earnings before provision for income taxes 665 471 311 Provision for income taxes 234 165 109 ----------------------------------------------- OPERATING EARNINGS $431 $306 $202 ----------------------------------------------- Net investment-related gains (losses), net of income taxes (71) (71) (23) Cumulative effect of a change in accounting, net of income taxes(1) (26) 0 0 ----------------------------------------------- Net income $334 $235 $179 ===============================================
(1) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. For the period ended December 31, 2003, the cumulative effect of a change in accounting, net of income taxes, is in accordance with FASB Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. 15 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL Unaudited (Dollars in millions)
For the Three Months Ended ------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2004 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $878 $835 $804 $808 $799 Universal life and investment-type product policy fees 0 0 0 0 0 Investment income, net 107 100 88 87 95 Other revenues 88 78 79 87 81 -------------------------------------------------------- 1,073 1,013 971 982 975 -------------------------------------------------------- EXPENSES Policyholder benefits and dividends 718 675 645 650 653 Interest credited to policyholder account balances 0 0 0 0 0 Other expenses 259 257 223 236 229 -------------------------------------------------------- 977 932 868 886 882 -------------------------------------------------------- Operating earnings before provision for income taxes 96 81 103 96 93 Provision for income taxes 34 28 37 35 34 -------------------------------------------------------- OPERATING EARNINGS $62 $53 $66 $61 $59 -------------------------------------------------------- Net investment-related gains (losses), net of income taxes 4 (6) 9 0 (6) Cumulative effect of a change in accounting, net of income taxes (1) (20) 0 0 0 0 -------------------------------------------------------- Net income $46 $47 $75 $61 $53 ======================================================== For the Year-to-Date Period Ended -------------------------------------------------- December 31, September 30, June 30, Non-Medical Health & Other 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $3,246 $2,411 $1,607 Universal life and investment-type product policy fees 0 0 0 Investment income, net 370 270 182 Other revenues 325 247 168 -------------------------------------------------- 3,941 2,928 1,957 -------------------------------------------------- EXPENSES Policyholder benefits and dividends 2,623 1,948 1,303 Interest credited to policyholder account balances 0 0 0 Other expenses 945 688 465 -------------------------------------------------- 3,568 2,636 1,768 -------------------------------------------------- Operating earnings before provision for income taxes 373 292 189 Provision for income taxes 134 106 69 -------------------------------------------------- OPERATING EARNINGS $239 $186 $120 -------------------------------------------------- Net investment-related gains (losses), net of income taxes (3) 3 (6) Cumulative effect of a change in accounting, net of income taxes (1) 0 0 0 -------------------------------------------------- Net income $236 $189 $114 ==================================================
(1) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 16 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended -------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------------------------- PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT Group Life $1,472 $1,394 $1,351 $1,342 $1,340 Retirement & Savings 322 363 337 403 219 Non-Medical Health & Other 966 913 883 895 880 -------------------------------------------------------------------- Total Premiums, Fees and Other Revenues $2,760 $2,670 $2,571 $2,640 $2,439 ==================================================================== Group Disability (Included in Non-Medical Health & Other) $246 $237 $227 $238 $241 ADDITIONAL STATISTICAL INFORMATION INCURRED LOSS RATIO (MORTALITY EXPERIENCE): Term Life 95.7% 91.4% 91.3% 92.0% 93.2% INCURRED LOSS RATIO (MORBIDITY EXPERIENCE): Group Disability 93.3% 102.7% 99.8% 95.1% 96.5%
17 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period $14,678 $14,453 $14,189 $13,993 $13,756 Premiums and deposits 2,705 2,935 2,728 2,676 2,877 Interest on reserves 130 132 141 134 136 Surrenders and withdrawals (1,144) (1,344) (1,078) (1,103) (1,426) Benefit payments (1,387) (1,203) (1,238) (1,197) (1,223) Other (340) (295) (289) (314) (127) ----------------------------------------------------------------------------- Balance, end of period $14,642 $14,678 $14,453 $14,189 $13,993 =============================================================================
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period $40,298 $40,191 $39,111 $36,206 $35,548 Premiums and deposits 2,424 1,763 3,156 3,040 1,060 Interest on reserves 542 537 526 526 518 Surrenders and withdrawals (1,222) (1,330) (1,396) (1,113) (602) Benefit payments (468) (468) (471) (521) (465) Other (1) 1,060 (395) (735) 973 147 ----------------------------------------------------------------------------- Balance, end of period $42,634 $40,298 $40,191 $39,111 $36,206 =============================================================================
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period $4,708 $4,621 $4,552 $4,483 $4,396 Premiums and deposits 795 762 727 728 736 Interest on reserves 57 56 56 55 55 Surrenders and withdrawals 24 16 17 24 12 Benefit payments (693) (615) (591) (591) (609) Other (1) 1,112 (132) (140) (147) (107) ----------------------------------------------------------------------------- Balance, end of period $6,003 $4,708 $4,621 $4,552 $4,483 =============================================================================
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period $7,045 $6,951 $6,953 $6,376 $6,011 Premiums and deposits 160 85 298 169 299 Investment performance 645 113 23 582 175 Surrenders and withdrawals (92) (104) (323) (174) (109) Policy charges 0 0 0 0 0 Other (4) 0 0 0 0 ----------------------------------------------------------------------------- Balance, end of period $7,754 $7,045 $6,951 $6,953 $6,376 =============================================================================
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period $27,081 $26,570 $26,526 $25,105 $24,775 Premiums and deposits 1,369 1,103 726 1,008 752 Investment performance 802 661 206 1,481 393 Surrenders and withdrawals (1,262) (1,235) (874) (1,050) (793) Policy charges (21) (18) (14) (18) (22) Other (1) (593) 0 0 0 0 ----------------------------------------------------------------------------- Balance, end of period $27,376 $27,081 $26,570 $26,526 $25,105 =============================================================================
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------- Balance, beginning of period 1,505 $1,462 $1,348 $1,241 $1,150 Premiums and deposits 84 73 76 80 63 Investment performance 16 15 63 58 47 Surrenders and withdrawals (24) (16) (17) (23) (12) Policy charges (15) (29) (8) (8) (7) Other (1) (1,427) 0 0 0 0 ----------------------------------------------------------------------------- Balance, end of period $139 $1,505 $1,462 $1,348 $1,241 =============================================================================
(1) For the period ended March 31, 2004, the balances include liabilities recorded in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 18 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS EXPENSES BY MAJOR CATEGORY
For the Three Months Ended ----------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- EXPENSES BY MAJOR CATEGORY Direct and allocated expenses $352 $370 $303 $327 $320 Pension and other post-retirement benefit costs 18 31 23 35 26 Premium taxes and other taxes, licenses and fees 35 28 30 39 36 ----------------------------------------------------------------- Subtotal Insurance Expenses $405 $429 $356 $401 $382 Commissions and other expenses 46 56 51 55 54 ----------------------------------------------------------------- Total Expenses $451 $485 $407 $456 $436 =================================================================
19 (METLIFE LOGO) -------------------------------------------------------------------------------- INSTITUTIONAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Group Life 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 5.66% 6.11% 5.83% 5.57% 5.62% Average crediting rate 3.49% 3.56% 3.85% 3.72% 3.87% --------------------------------------------------------------------- Spread 2.17% 2.55% 1.98% 1.85% 1.75% =====================================================================
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Retirement & Savings 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 7.11% 7.35% 6.82% 7.37% 7.22% Average crediting rate 5.47% 5.58% 5.62% 5.92% 6.05% --------------------------------------------------------------------- Spread 1.64% 1.77% 1.20% 1.45% 1.17% =====================================================================
For the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Non-Medical Health & Other 2004 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 6.96% 7.48% 6.49% 6.60% 7.27% Average crediting rate 5.35% 5.38% 5.43% 5.49% 5.52% --------------------------------------------------------------------- Spread 1.61% 2.10% 1.06% 1.11% 1.75% =====================================================================
20 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - TOTAL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ----------------------------------------------------------- ---------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Individual Operations 2004 2003 2003 2003 2003 2003 2003 2003 --------------------------------------------------------------------------------------- ---------------------------------------- REVENUES Premiums $978 $1,184 $1,064 $1,055 $1,041 $4,344 $3,160 $2,096 Universal life and investment-type product policy fees 422 465 386 378 360 1,589 1,124 738 Investment income, net 1,521 1,585 1,550 1,529 1,563 6,227 4,642 3,092 Other revenues 117 116 96 109 86 407 291 195 ----------------------------------------------------------- ---------------------------------------- 3,038 3,350 3,096 3,071 3,050 12,567 9,217 6,121 ----------------------------------------------------------- ---------------------------------------- EXPENSES Policyholder benefits and dividends 1,649 1,863 1,703 1,625 1,692 6,883 5,020 3,317 Interest credited to policyholder account balances 423 446 452 452 443 1,793 1,347 895 Capitalization of deferred policy acquisition costs (293) (279) (280) (280) (260) (1,099) (820) (540) Amortization of deferred policy acquisition costs 162 174 162 207 175 718 544 382 Other expenses 820 880 795 833 753 3,261 2,381 1,586 ----------------------------------------------------------- ---------------------------------------- 2,761 3,084 2,832 2,837 2,803 11,556 8,472 5,640 ----------------------------------------------------------- ---------------------------------------- Operating earnings before provision for income taxes 277 266 264 234 247 1,011 745 481 Provision for income taxes 93 93 93 83 87 356 263 170 ----------------------------------------------------------- ---------------------------------------- OPERATING EARNINGS $184 $173 $171 $151(1) $160 $655 $482 $311(1) =========================================================== ======================================== NET INCOME RECONCILIATION ------------------------- Operating earnings $184 $173 $171 $151 $160 $655 $482 $311 Net investment-related gains (losses) (28) (130) (77) (11) (67) (285) (155) (78) Adjustments to net investment-related gains (losses) (2) 32 100 39 0 38 177 77 38 Net investment-related gains (losses) tax benefit (provision) (2) 19 21 4 10 54 35 14 ----------------------------------------------------------- ---------------------------------------- Net investment-related gains (losses), net of income taxes 2 (11) (17) (7) (19) (54) (43) (26) Cumulative effect of a change in accounting, net of income taxes (3) (70) 0 0 0 0 0 0 0 ----------------------------------------------------------- ---------------------------------------- Net income $116 $162 $154 $144 $141 $601 $439 $285 =========================================================== ========================================
(1) Operating earnings for the period ended June 30, 2003 include a $31 million after-tax charge related to previously deferred expenses. (2) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (3) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 21 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ----------------------------------------------------------- ---------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Traditional Life 2004 2003 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------- ---------------------------------------- REVENUES Premiums $959 $1,159 $1,037 $1,025 $1,010 $4,231 $3,072 $2,035 Universal life and investment-type product policy fees 0 0 0 0 0 0 0 0 Investment income, net 843 873 847 846 869 3,435 2,562 1,715 Other revenues 1 6 0 10 0 16 10 10 ----------------------------------------------------------- ---------------------------------------- 1,803 2,038 1,884 1,881 1,879 7,682 5,644 3,760 ----------------------------------------------------------- ---------------------------------------- EXPENSES Policyholder benefits and dividends 1,480 1,684 1,564 1,512 1,529 6,289 4,605 3,041 Interest credited to policyholder account balances 0 0 0 0 0 0 0 0 Capitalization of deferred policy acquisition costs (41) (42) (39) (43) (47) (171) (129) (90) Amortization of deferred policy acquisition costs 56 54 56 62 58 230 176 120 Other expenses 211 236 200 233 221 890 654 454 ----------------------------------------------------------------------------------------------------- 1,706 1,932 1,781 1,764 1,761 7,238 5,306 3,525 ----------------------------------------------------------------------------------------------------- Operating earnings before provision for income taxes 97 106 103 117 118 444 338 235 Provision for income taxes 33 38 37 42 42 159 121 84 ----------------------------------------------------------- ---------------------------------------- OPERATING EARNINGS $64 $68 $66 $75(1) $76 $285 $217 151(1) ----------------------------------------------------------- ---------------------------------------- Net investment- related gains (losses), net of income taxes 7 14 5 (13) 6 12 (2) (7) Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0 0 0 0 ----------------------------------------------------------- ---------------------------------------- Net income $71 $82 $71 $62 $82 $297 $215 $144 =========================================================== ========================================
(1) Operating earnings for the period ended June 30, 2003 includes a $2 million after-tax charge related to previously deferred expenses. 22 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ------------------------------------------------------------ ---------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Variable & Universal Life 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------------------------------------- --------------------------------------- REVENUES Premiums $0 $0 $0 $0 $0 $0 $0 $0 Universal life and investment-type product policy fees 242 301 256 262 255 1,074 773 517 Investment income, net 140 143 145 144 142 574 431 286 Other revenues 4 4 (1) (1) (2) 0 (4) (3) ------------------------------------------------------------ --------------------------------------- 386 448 400 405 395 1,648 1,200 800 ------------------------------------------------------------ --------------------------------------- EXPENSES Policyholder benefits and dividends 92 126 69 57 87 339 213 144 Interest credited to policyholder account balances 113 118 122 117 117 474 356 234 Capitalization of deferred policy acquisition costs (70) (88) (82) (86) (81) (337) (249) (167) Amortization of deferred policy acquisition costs 44 64 47 102 59 272 208 161 Other expenses 175 205 196 205 177 783 578 382 ------------------------------------------------------------ --------------------------------------- 354 425 352 395 359 1,531 1,106 754 ------------------------------------------------------------ --------------------------------------- Operating earnings before provision for income taxes 32 23 48 10 36 117 94 46 Provision for income taxes 11 8 18 4 13 43 35 17 ------------------------------------------------------------ --------------------------------------- OPERATING EARNINGS $21 $15 $30 $6(1) $23 $74 $59 $29(1) ------------------------------------------------------------ --------------------------------------- Net investment- related gains (losses), 2 (4) (8) 7 (5) (10) (6) 2 net of income taxes Cumulative effect of a change in accounting, net of income taxes (2) (81) 0 0 0 0 0 0 0 ------------------------------------------------------------ --------------------------------------- Net income (loss) ($58) $11 $22 $13 $18 $64 $53 $31 ============================================================ =======================================
(1) Operating earnings for the period ended June 30, 2003 includes a $29 million after-tax charge related to previously deferred expenses. (2) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 23 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended --------------------------------------------------------------- -------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Annuities 2004 2003 2003 2003 2003 2003 2003 2003 -------------------------------------------------------------------------------------------- -------------------------------------- REVENUES Premiums $18 $20 $19 $23 $24 $86 $66 $47 Universal life and investment-type product policy fees 151 137 106 95 82 420 283 177 Investment income, net 475 503 489 479 487 1,958 1,455 966 Other revenues 7 7 3 7 1 18 11 8 --------------------------------------------------------------- -------------------------------------- 651 667 617 604 594 2,482 1,815 1,198 --------------------------------------------------------------- -------------------------------------- EXPENSES Policyholder benefits and dividends 68 53 55 46 64 218 165 110 Interest credited to policyholder account balances 280 299 303 307 296 1,205 906 603 Capitalization of deferred policy acquisition costs (181) (148) (158) (149) (131) (586) (438) (280) Amortization of deferred policy acquisition costs 59 53 55 41 55 204 151 96 Other expenses 299 281 261 274 234 1,050 769 508 --------------------------------------------------------------- -------------------------------------- 525 538 516 519 518 2,091 1,553 1,037 --------------------------------------------------------------- -------------------------------------- Operating earnings before provision for income taxes 126 129 101 85 76 391 262 161 Provision for income taxes 41 44 34 29 26 133 89 55 --------------------------------------------------------------- -------------------------------------- OPERATING EARNINGS $85 $85 $67 $56 $50 $258 $173 $106 --------------------------------------------------------------- -------------------------------------- Net investment-related gains (losses), net 2 (24) (14) (1) (15) (54) (30) (16) of income taxes Cumulative effect of a change in accounting, net of income taxes (1) 11 0 0 0 0 0 0 0 --------------------------------------------------------------- -------------------------------------- Net income $98 $61 $53 $55 $35 $204 $143 $90 =============================================================== ======================================
(1) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 24 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended -------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Other 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums $1 $5 $8 $7 $7 Universal life and investment-type product policy fees 29 27 24 21 23 Investment income, net 63 66 69 60 65 Other revenues 105 99 94 93 87 -------------------------------------------------------------- 198 197 195 181 182 -------------------------------------------------------------- EXPENSES Policyholder benefits and dividends 9 0 15 10 12 Interest credited to policyholder account balances 30 29 27 28 30 Capitalization of deferred policy acquisition costs (1) (1) (1) (2) (1) Amortization of deferred policy acquisition costs 3 3 4 2 3 Other expenses 135 158 138 121 121 -------------------------------------------------------------- 176 189 183 159 165 -------------------------------------------------------------- Operating earnings before provision for income taxes 22 8 12 22 17 Provision for income taxes 8 3 4 8 6 -------------------------------------------------------------- OPERATING EARNINGS $14 $5 $8 $14 $11 -------------------------------------------------------------- Net investment-related gains (losses), net of income taxes (9) 3 0 0 (5) Cumulative effect of a change in accounting, net of income taxes 0 0 0 0 0 -------------------------------------------------------------- Net income $5 $8 $8 $14 $6 ==============================================================
For the Year-to-Date Period Ended ---------------------------------------- December 31, September 30, June 30, Other 2003 2003 2003 -------------------------------------------------------------------------------------------------------------- REVENUES Premiums $27 $22 $14 Universal life and investment-type product policy fees 95 68 44 Investment income, net 260 194 125 Other revenues 373 274 180 ---------------------------------------- 755 558 363 ---------------------------------------- EXPENSES Policyholder benefits and dividends 37 37 22 Interest credited to policyholder account balances 114 85 58 Capitalization of deferred policy acquisition costs (5) (4) (3) Amortization of deferred policy acquisition costs 12 9 5 Other expenses 538 380 242 ---------------------------------------- 696 507 324 ---------------------------------------- Operating earnings before provision for income taxes 59 51 39 Provision for income taxes 21 18 14 ---------------------------------------- OPERATING EARNINGS $38 $33 $25 ---------------------------------------- Net investment-related gains (losses), net of income taxes (2) (5) (5) Cumulative effect of a change in accounting, net of income taxes 0 0 0 ---------------------------------------- Net income $36 $28 $20 ========================================
25 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS PREMIUMS AND DEPOSITS BY PRODUCT AND MANUFACTURER AND MUTUAL FUND SALES
For the Three Months Ended ------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------- PREMIUMS AND DEPOSITS BY PRODUCT (1) TOTAL (2) Traditional Life 1st Year (3) $45 $53 $50 $49 $53 Renewal 965 1,228 1,052 1,053 1,000 Variable & Universal Life Variable 1st Year excluding Single Premium COLI/BOLI (3) 51 53 86 59 91 Universal 1st Year excluding Single Premium COLI/BOLI (3) 99 91 82 71 55 Single Premium COLI/BOLI 5 27 18 3 13 Renewal 474 431 392 393 455 Annuities (3) 3,436 2,844 2,843 2,933 2,611 Other 258 335 287 301 281 ------------------------------------------------------------------------------ Total Premiums and Deposits $5,333 $5,062 $4,810 $4,862 $4,559 ============================================================================== PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS Variable & Universal Life $284 $275 $294 $273 $301 Annuities 2,120 1,782 1,437 1,229 940 Other 160 258 171 191 167 ------------------------------------------------------------------------------ Total Separate Accounts $2,564 $2,315 $1,902 $1,693 $1,408 ============================================================================== FIRST YEAR LIFE PREMIUMS AND DEPOSITS BY MANUFACTURER (4) MetLife $79 $81 $74 $70 $73 New England Financial 28 35 26 29 32 General American 87 102 128 76 99 MetLife Investors Group 6 6 8 7 8 ------------------------------------------------------------------------------ Total First Year Life Premiums and Deposits $200 $224 $236 $182 $212 ============================================================================== ANNUITY DEPOSITS BY TYPE Fixed Annuity Deposits $506 $257 $320 $340 $424 Variable Annuity Deposits 2,930 2,587 2,523 2,593 2,187 ------------------------------------------------------------------------------ Total Annuity Deposits $3,436 $2,844 $2,843 $2,933 $2,611 ============================================================================== ANNUITY DEPOSITS BY MANUFACTURER (5) MetLife $1,030 $870 $950 $1,053 $974 New England Financial 252 249 235 233 211 General American 10 13 9 11 10 MetLife Investors Group 2,144 1,712 1,649 1,636 1,416 ------------------------------------------------------------------------------ Total Annuity Deposits $3,436 $2,844 $2,843 $2,933 $2,611 ============================================================================== MUTUAL FUND SALES Proprietary $65 $59 $47 $48 $38 Third Party 1,012 1,196 725 817 759 ------------------------------------------------------------------------------ Total Mutual Fund Sales $1,077 $1,255 $772 $865 $797 ==============================================================================
(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 manufactured life insurance premiums and deposits were sold by other-than MetLife Financial Services agents during the three months ended March 31, 2004 (2% sold by General American; 2% sold by New England Financial; and 1% sold by MetLife Resources). Approximately 6% of New England Financial manufactured life insurance premiums and deposits were sold by other-than New England Financial agents during the three months ended March 31, 2004 (5% sold by MetLife Financial Services, and 1% sold by General American). Approximately 60% of General American manufactured life insurance premiums and deposits were sold by other-than General American agents during the three months ended March 31, 2004 (46% sold by MetLife Financial Services; and 14% sold by New England Financial). Approximately 3% of MetLife Investors Group manufactured life insurance premiums and deposits were sold by other-than MetLife Investors Group Wholesalers during the three months ended March 31, 2004 (3% sold by MetLife Financial Services). (5) Approximately 23% of MetLife manufactured annuity deposits were sold by other-than MetLife Financial Services agents during the three months ended March 31, 2004 (23% sold by MetLife Resources). Approximately 7% of MetLife Investors Group manufactured annuity deposits were sold by other-than MetLife Investors Group Wholesalers during the three months ended March 31, 2004 (5% sold by Walnut Street Securities, and 2% sold by MetLife Resources). 26 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS ADDITIONAL STATISTICAL INFORMATION
At or for the Three Months Ended --------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS, EXCLUDING TRANSFERS FROM GENERAL ACCOUNT: Variable & Universal Life 45.0% 45.6% 50.8% 52.0% 49.1% Annuities 61.7% 62.6% 50.6% 41.9% 36.0% Other 62.1% 77.3% 59.5% 63.3% 59.5% MORTALITY AS A PERCENTAGE OF EXPECTED 85.4% 84.2% 80.3% 99.4%(1) 87.2% LAPSES / SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (2) Traditional Life 6.3% 6.1% 6.0% 6.0% 5.8% Variable & Universal Life 7.0% 7.0% 7.2% 7.2% 6.8% Variable Annuities (3) 7.8% 8.2% 8.7% 9.0% 9.2% Fixed Annuities (3) 7.4% 6.6% 6.7% 6.4% 6.7% NUMBER OF SALES REPRESENTATIVES MetLife Financial Services 5,594 5,531 5,587 5,728 5,798 New England Financial 2,531 2,845 2,992 3,004 2,916 General American (4) 448 429 471 522 557 Independent Distribution Wholesalers 91 86 86 84 78 MetLife Resources 397 401 384 379 362 Walnut Street Securities (5) 1,468 1,462 1,649 1,823 1,923 P&C Specialists 461 437 416 409 396 --------------------------------------------------------------------- Total Agents 10,990 11,191 11,585 11,949 12,030 =====================================================================
(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) Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. (4) Based on minimum annual production of $25,000 in life insurance sales. (5) At March 31, 2004, the number of Walnut Street Securities representatives includes 163 brokers who are also reported as General American sales representatives above. 27 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES --------------------------------------------------------
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Traditional Life 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $48,503 $48,140 $47,835 $47,572 $47,397 Premiums and deposits (1) 1,038 1,246 975 1,043 1,026 Interest on reserves 489 486 483 479 476 Surrenders and withdrawals (477) (478) (407) (402) (395) Benefit payments (486) (420) (456) (492) (484) Other (454) (471) (290) (365) (448) ------------------------------------------------------------------------ Balance, end of period $48,613 $48,503 $48,140 $47,835 $47,572 ========================================================================
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $9,475 $9,327 $9,221 $9,140 $8,993 Premiums and deposits (1)(2) 346 318 272 247 287 Interest on reserves 119 122 121 120 118 Surrenders and withdrawals (233) (137) (117) (122) (113) Net transfers from (to) separate account 75 83 54 65 66 Policy charges (199) (199) (195) (184) (198) Benefit payments (34) (22) (22) (24) (25) Other (3) 354 (17) (7) (21) 12 ------------------------------------------------------------------------ Balance, end of period $9,903 $9,475 $9,327 $9,221 $9,140 ========================================================================
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Annuities 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $31,350 $31,258 $30,772 $29,917 $28,935 Premiums and deposits (1)(2) 1,426 1,126 1,492 1,836 1,766 Interest on reserves 298 343 361 357 359 Surrenders and withdrawals (797) (647) (678) (665) (667) Net transfers from (to) separate account (610) (653) (562) (517) (171) Policy charges (6) 2 0 (3) (1) Benefit payments (128) (70) (129) (143) (168) Other (3) (42) (9) 2 (10) (136) ------------------------------------------------------------------------ Balance, end of period $31,491 $31,350 $31,258 $30,772 $29,917 ========================================================================
SEPARATE ACCOUNT LIABILITIES ----------------------------
For the Three Months Ended ----------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Variable & Universal Life 2004 2003 2003 2003 2003 -------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $6,835 $6,424 $6,149 $5,482 $5,489 Premiums and deposits (1) 284 275 294 273 301 Investment performance 191 376 177 603 (105) Surrenders and withdrawals (177) (87) (74) (72) (71) Net transfers from (to) fixed account (75) (83) (54) (65) (66) Policy charges (69) (70) (68) (72) (66) Other (3) 0 0 0 0 0 ----------------------------------------------------------------------- Balance, end of period $6,989 $6,835 $6,424 $6,149 $5,482 =======================================================================
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Annuities 2004 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of period $28,667 $24,310 $22,133 $18,464 $18,270 Premiums and deposits (1) 2,120 1,782 1,438 1,229 940 Investment performance 834 2,520 734 2,500 (435) Surrenders and withdrawals (617) (508) (475) (508) (423) Net transfers from (to) fixed account 610 653 562 517 171 Policy charges (105) (90) (82) (69) (59) Other (3) (4) 0 0 0 0 ------------------------------------------------------------------------ Balance, end of period $31,505 $28,667 $24,310 $22,133 $18,464 ========================================================================
(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. (3) For the period ended March 31, 2004, the balances include liabilities recorded in accordance with AICPA Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 28 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended For the Year Ended ----------------------------------------------------------- -------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 -------------------------------------------------------------------------------------------- -------------------------------------- INSURANCE EXPENSES (NET OF CAPITALIZATION OF DAC) Insurance Expenses $757 $775 $709 $758 $682 $2,924 $2,149 $1,440 DAC Capitalization (1) (324) (336) (309) (304) (285) (1,234) (898) (589) ----------------------------------------------------------- -------------------------------------- Net $433 $439 $400 $454 $397 $1,690 $1,251 $851 =========================================================== ====================================== OTHER EXPENSES BY MAJOR CATEGORY Commissions $252 $244 $220 $214 $195 $873 $629 $409 Other deferrable expenses 92 108 101 107 113 429 321 220 Direct and allocated expenses, not deferred 353 347 322 371 310 1,350 1,003 681 Pension and other post- retirement benefit costs 31 50 41 40 36 167 117 76 Premium taxes and other taxes, licenses and fees 29 26 25 26 28 105 79 54 ----------------------------------------------------------- -------------------------------------- Subtotal Insurance Expenses $757 $775 $709 $758 $682 $2,924 $2,149 $1,440 Broker-dealer and other expenses 116 150 124 118 110 502 352 228 Reinsurance allowances (53) (45) (38) (43) (39) (165) (120) (82) ----------------------------------------------------------- -------------------------------------- Total Other Expenses $820 $880 $795 $833 $753 $3,261 $2,381 $1,586 =========================================================== ======================================
(1) Excludes $31 million, $57 million, $29 million, $24 million, and $25 million, of DAC capitalization related to reinsurance allowances for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. 29 (METLIFE LOGO) -------------------------------------------------------------------------------- INDIVIDUAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, VARIABLE & UNIVERSAL LIFE 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 6.98% 7.23% 7.25% 7.31% 7.39% Average crediting rate 5.26% 5.50% 5.63% 5.57% 5.64% ----------------------------------------------------------------------------- Spread 1.72% 1.73% 1.62% 1.74% 1.75% =============================================================================
For the Three Months Ended ----------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, ANNUITIES 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 5.85% 6.50% 6.50% 6.31% 6.64% Average crediting rate 3.90% 4.16% 4.28% 4.36% 4.47% ----------------------------------------------------------------------------- Spread 1.95% 2.34% 2.22% 1.95% 2.17% =============================================================================
30 (METLIFE LOGO) -------------------------------------------------------------------------------- AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS - TOTAL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ------------------------------------------------------------- ------------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Auto & Home Operations 2004 2003 2003 2003 2003 2003 2003 2003 ------------------------------------------------------------------------------------------- ------------------------------------- REVENUES Earned premiums $737 $740 $735 $721 $712 $2,908 $2,168 $1,433 Investment income, net 46 39 39 41 39 158 119 80 Other revenues 9 9 10 4 9 32 23 13 ------------------------------------------------------------- ------------------------------------- 792 788 784 766 760 3,098 2,310 1,526 ------------------------------------------------------------- ------------------------------------- EXPENSES Losses 446 447 465 446 452 1,810 1,363 898 Loss adjustment expense 90 89 78 81 82 330 241 163 Other expenses 198 184 187 186 199 756 572 385 ------------------------------------------------------------- ------------------------------------- 734 720 730 713 733 2,896 2,176 1,446 ------------------------------------------------------------- ------------------------------------- Operating earnings before provision (benefit) for income taxes 58 68 54 53 27 202 134 80 Provision (benefit) for income taxes 12 15 12 11 (3) 35 20 8 ------------------------------------------------------------- ------------------------------------- OPERATING EARNINGS $46 $53 $42 $42 $30 $167 $114 $72 ============================================================= ===================================== NET INCOME RECONCILIATION Operating earnings $46 $53 $42 $42 $30 $167 $114 $72 Net investment-related gains (losses) 0 (11) 2 (2) (4) (15) (4) (6) Net investment-related gains (losses) tax benefit (provision) 0 4 (1) 1 1 5 1 2 ------------------------------------------------------------- ------------------------------------- Net investment-related gains (losses), net of income taxes 0 (7) 1 (1) (3) (10) (3) (4) ------------------------------------------------------------- ------------------------------------- Net income $46 $46 $43 $41 $27 $157 $111 $68 ============================================================= =====================================
31 (METLIFE LOGO) -------------------------------------------------------------------------------- AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended --------------------------------------------------------- ------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Auto 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------- ------------------------------------ REVENUES Earned premiums $542 $545 $545 $535 $530 $2,155 $1,610 $1,065 Investment income, net 36 26 27 29 27 109 83 56 Other revenues 6 5 7 7 6 25 20 13 --------------------------------------------------------- ------------------------------------ 584 576 579 571 563 2,289 1,713 1,134 --------------------------------------------------------- ------------------------------------ EXPENSES Losses 351 357 359 347 366 $1,429 $1,072 $713 Loss adjustment expense 72 76 61 68 75 280 204 143 Other expenses 139 126 131 131 143 531 405 274 --------------------------------------------------------- ------------------------------------ 562 559 551 546 584 2,240 1,681 1,130 --------------------------------------------------------- ------------------------------------ Operating earnings (loss) before provision (benefit) for income taxes 22 17 28 25 (21) $49 $32 $4 Provision (benefit) for income taxes 0 (2) 5 4 (17) (10) (8) (13) --------------------------------------------------------- ------------------------------------ OPERATING EARNINGS (LOSS) $22 $19 $23 $21 ($4) $59 $40 $17 --------------------------------------------------------- ------------------------------------ Net investment-related gains (losses), net of income taxes 0 (5) 0 0 (2) (7) (2) (2) --------------------------------------------------------- ------------------------------------ Net income (loss) $22 $14 $23 $21 ($6) $52 $38 $15 ========================================================= ====================================
32 (METLIFE LOGO) -------------------------------------------------------------------------------- AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ---------------------------------------------------------- ------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Homeowners 2004 2003 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------------------------------------- ------------------------------------ REVENUES Earned premiums $182 $183 $177 $173 $167 $700 $517 $340 Investment income, net 9 11 12 10 10 43 32 20 Other revenues 1 2 1 2 1 6 4 3 ---------------------------------------------------------- ------------------------------------ 192 196 190 185 178 749 553 363 ---------------------------------------------------------- ------------------------------------ EXPENSES Losses 89 82 95 96 76 $349 $267 $172 Loss adjustment expense 18 12 16 13 8 49 37 21 Other expenses 52 52 52 50 48 202 150 98 ---------------------------------------------------------- ------------------------------------ 159 146 163 159 132 600 454 291 ---------------------------------------------------------- ------------------------------------ Operating earnings before provision for income taxes 33 50 27 26 46 $149 $99 $72 Provision for income taxes 11 16 8 6 14 44 28 20 ---------------------------------------------------------- ------------------------------------ OPERATING EARNINGS $22 $34 $19 $20 $32 $105 $71 $52 ---------------------------------------------------------- ------------------------------------ Net investment-related gains (losses), net of income taxes $0 ($2) $1 ($1) ($1) ($3) ($1) ($2) ---------------------------------------------------------- ------------------------------------ Net income $22 $32 $20 $19 $31 $102 $70 $50 ========================================================== ====================================
33 (METLIFE LOGO) -------------------------------------------------------------------------------- AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ---------------------------------------------------------- ------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Other 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------- ------------------------------------ REVENUES Earned premiums $13 $12 $13 $13 $15 $53 $41 $28 Investment income, net 1 2 0 2 2 6 4 4 Other revenues 2 2 2 (5) 2 1 (1) (3) ---------------------------------------------------------- ------------------------------------ 16 16 15 10 19 60 44 29 ---------------------------------------------------------- ------------------------------------ EXPENSES Losses 6 8 11 3 10 $32 $24 $13 Loss adjustment expense 0 1 1 0 (1) 1 0 (1) Other expenses 7 6 4 5 8 23 17 13 ---------------------------------------------------------- ------------------------------------ 13 15 16 8 17 56 41 25 ---------------------------------------------------------- ------------------------------------ Operating earnings (loss) before provision (benefit) for income taxes 3 1 (1) 2 2 $4 $3 $4 Provision (benefit) for income taxes 1 1 (1) 1 0 1 0 1 ---------------------------------------------------------- ------------------------------------ OPERATING EARNINGS (LOSS) $2 $0 $0 $1 $2 $3 $3 $3 ---------------------------------------------------------- ------------------------------------ Net investment-related gains (losses), net of income taxes 0 0 0 0 $0 0 0 0 ---------------------------------------------------------- ------------------------------------ Net income (loss) $2 $0 $0 $1 $2 $3 $3 $3 ========================================================== ====================================
34 (METLIFE LOGO) -------------------------------------------------------------------------------- AUTO & HOME OPERATIONS WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA
For the Three Months Ended ------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------ WRITTEN PREMIUMS BY PRODUCT Preferred/Standard Automobile $517 $514 $538 $524 $505 Non-Standard Automobile 21 21 23 23 24 Homeowners 155 183 204 192 149 Other 20 9 11 12 20 ------------------------------------------------------------------------ Total $713 $727 $776 $751 $698 ======================================================================== SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA TOTAL AUTO & HOME Loss and loss adjustment expense ratio 72.7% 72.2% 73.8% 73.2% 75.0% Other expense ratio 26.1% 25.1% 25.5% 25.6% 28.0% ------------------------------------------------------------------------ Total combined ratio(1) 98.8% 97.3% 99.3% 98.8% 103.0% Effect of catastrophe losses 2.3% 1.9% 3.4% 3.2% 1.8% ------------------------------------------------------------------------ Combined ratio excluding catastrophes 96.5% 95.4% 95.9% 95.6% 101.2% ======================================================================== AUTO Loss and loss adjustment expense ratio 78.1% 79.3% 77.0% 77.5% 83.3% Other expense ratio 24.8% 23.5% 24.1% 24.2% 27.2% ------------------------------------------------------------------------ Total combined ratio (1) 102.9% 102.8% 101.1% 101.7% 110.5% Effect of catastrophe losses 0.1% 0.5% 0.2% 1.2% 0.2% ------------------------------------------------------------------------ Combined ratio excluding catastrophes 102.8% 102.3% 100.9% 100.5% 110.3% ======================================================================== HOMEOWNERS Loss and loss adjustment expense ratio 58.7% 51.4% 62.3% 63.4% 50.2% Other expense ratio 28.2% 28.7% 29.3% 29.2% 28.5% ------------------------------------------------------------------------ Total combined ratio (1) 86.9% 80.1% 91.6% 92.6% 78.7% Effect of catastrophe losses 9.0% 6.3% 13.4% 9.7% 6.9% ------------------------------------------------------------------------ Combined ratio excluding catastrophes 77.9% 73.8% 78.2% 82.9% 71.8% ======================================================================== OTHER Loss and loss adjustment expense ratio 44.6% 68.4% 99.5% 24.1% 57.7% Other expense ratio 50.7% 42.7% 34.2% 38.8% 52.0% ------------------------------------------------------------------------ Total combined ratio (1) 95.3% 111.1% 133.7% 62.9% 109.7% Effect of catastrophe losses 0.0% 0.0% 0.0% 0.0% 0.0% ------------------------------------------------------------------------ Combined ratio excluding catastrophes 95.3% 111.1% 133.7% 62.9% 109.7% ======================================================================== PRE-TAX CATASTROPHE LOSSES Auto $0 $3 $1 $7 $1 Homeowners 16 12 24 17 12 Other 0 0 0 0 0 ------------------------------------------------------------------------ Total $16 $15 $25 $24 $13 ======================================================================== Catastrophe points on combined ratios 2.3 1.9 3.4 3.2 1.8
(1) In the first quarter of 2004 the Combined Ratio reflects payment fees as a credit to Other Expenses. This change resulted in a 0.8 of a percentage point decrease in the combined ratio in the first quarter of 2004. The decreases for Auto, Homeowners & Other were 0.9, 0.5 and 0.4 of a percentage point, respectively. 35 (METLIFE LOGO) -------------------------------------------------------------------------------- INTERNATIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended For the Year-to-Date Period Ended ---------------------------------------------------------- ------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------- ------------------------------------ REVENUES Premiums $412 $448 $445 $390 $395 $1,678 $1,230 $785 Universal life and investment-type product policy fees 83 80 70 71 51 272 192 122 Investment income, net 123 129 119 131 123 502 373 254 Other revenues 4 26 20 26 8 80 54 34 ---------------------------------------------------------- ------------------------------------ 622 683 654 618 577 2,532 1,849 1,195 ---------------------------------------------------------- ------------------------------------ EXPENSES Policyholder benefits and dividends 388 428 410 294 377 1,509 1,081 671 Interest credited to policyholder account balances 37 36 34 36 37 143 107 73 Capitalization of deferred policy acquisition costs (71) (90) (72) (59) (66) (287) (197) (125) Amortization of deferred policy acquisition costs 31 73 41 77 34 225 152 111 Other expenses 172 204 187 177 153 721 517 330 ---------------------------------------------------------- ------------------------------------ 557 651 600 525 535 2,311 1,660 1,060 ---------------------------------------------------------- ------------------------------------ Operating earnings before provision (benefit) for income taxes 65 32 54 93 42 221 189 135 Provision (benefit) for income taxes 21 (2) 17 (9) 14 20 22 5 ------------------------------------------------ --------- ------------------------------------ OPERATING EARNINGS $44 $34 $37 $102(1) $28 $201 $167 $130(1) ========================================================== ==================================== NET INCOME (LOSS) RECONCILIATION Operating earnings $44 $34 $37 $102 $28 $201 $167 $130 Net investment-related gains (losses) 29 0 8 (1) 0 7 7 (1) Minority interest - net investment-related gains (losses) 0 0 0 0 0 0 0 0 Adjustments to net investment-related gains (losses) (2) 0 (3) 0 0 0 (3) 0 0 Net investment-related gains (losses) tax benefit (provision) (7) 0 6 (3) 0 3 3 (3) ---------------------------------------------------------- ------------------------------------ Net investment-related gains (losses), net of income taxes 22 (3) 14 (4) 0 7 10 (4) Cumulative effect of a change in accounting, net of income taxes (3) (30) 0 0 0 0 0 0 0 ---------------------------------------------------------- ------------------------------------ Net income $36 $31 $51 $98 $28 $208 $177 $126 ========================================================== ====================================
(1) Operating earnings for the period 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. (2) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (3) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statements of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 36 (METLIFE LOGO) -------------------------------------------------------------------------------- REINSURANCE OPERATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended For the Year-to-Date Period Ended --------------------------------------------------------- ----------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums, net $816 $949 $579 $588 $552 $2,668 $1,719 $1,140 Investment income, net 130 120 122 121 110 473 353 231 Other revenues 12 14 11 12 12 49 35 24 --------------------------------------------------------- ----------------------------------- 958 1,083 712 721 674 3,190 2,107 1,395 --------------------------------------------------------- ----------------------------------- EXPENSES Claims and other policy benefits 659 788 470 466 433 2,157 1,369 899 Interest credited to policyholder account balances 51 49 47 45 43 184 135 88 Policy acquisition costs and other insurance expenses 139 130 112 116 108 466 336 224 Other expenses 45 54 33 38 36 161 107 74 --------------------------------------------------------- ----------------------------------- 894 1,021 662 665 620 2,968 1,947 1,285 --------------------------------------------------------- ----------------------------------- Operating earnings before provision for income taxes and minority interest 64 62 50 56 54 222 160 110 Provision for income taxes 9 11 9 11 10 41 30 21 --------------------------------------------------------- ----------------------------------- Operating earnings before minority interest 55 51 41 45 44 181 130 89 Elimination of minority interest, before tax 37 31 23 26 24 104 73 50 --------------------------------------------------------- ----------------------------------- CONTRIBUTION TO METLIFE $18 $20 $18 $19 $20 $77 $57 $39 ========================================================= =================================== NET INCOME RECONCILIATION Operating earnings $18 $20 $18 $19 $20 $77 $57 $39 Net investment-related gains (losses) 17 25 5 5 (4) 31 6 1 Minority interest - net investment-related gains (losses) (8) (9) (2) (2) 4 (9) 0 2 Adjustments to net investment-related gains (losses) 0 0 0 0 0 0 0 0 Net investment-related gains (losses) tax benefit (provision) (3) (5) (2) 0 0 (7) (2) 0 --------------------------------------------------------- ----------------------------------- Net investment-related gains (losses), net of income taxes 6 11 1 3 0 15 4 3 Cumulative effect of a change in accounting, net of income taxes (1) 3 0 0 0 0 0 0 0 --------------------------------------------------------- ----------------------------------- Net income $27 $31 $19 $22 $20 $92 $61 $42 ========================================================= ===================================
(1) The cumulative effect of a change in accounting, net of income taxes, for the period ended March 31, 2004, is in accordance with AICPA Statements of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. 37 (METLIFE LOGO) -------------------------------------------------------------------------------- REINSURANCE OPERATIONS PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended ---------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ---------------------------------------------------------------------- PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION United States $52 $52 $38 $49 $45 Canada 16 14 13 12 11 Latin America 0 0 0 0 0 Asia-Pacific 6 7 7 4 2 Other international markets 3 8 3 3 2 Corporate (13) (19) (11) (12) (6) ---------------------------------------------------------------------- Total pre-tax and pre-minority interest operating earnings $64 $62 $50 $56 $54 ====================================================================== POLICY BENEFITS AND INTEREST SENSITIVE CONTRACT LIABILITIES BY REGION Traditional U.S. $4,636 $4,386 $3,743 $3,721 $3,653 Asset intensive 3,343 3,201 3,029 2,918 2,718 Other 120 112 113 110 112 ---------------------------------------------------------------------- Total U.S. 8,099 7,699 6,885 6,749 6,483 ---------------------------------------------------------------------- Canada 1,151 1,270 1,049 1,049 972 Latin America 0 0 0 0 0 Asia-Pacific 420 409 376 344 302 Other international markets 499 405 368 316 271 ---------------------------------------------------------------------- Total International 2,070 2,084 1,793 1,709 1,545 ---------------------------------------------------------------------- Total policy benefits and interest sensitive contract liabilities $10,169 $9,783 $8,678 $8,458 $8,028 ======================================================================
38 (METLIFE LOGO) -------------------------------------------------------------------------------- ASSET MANAGEMENT OPERATIONS STATEMENTS OF OPERATING EARNINGS UNAUDITED (DOLLARS IN MILLIONS)
For the Three Months Ended For the Year-to-Date Period Ended ------------------------------------------------------- ----------------------------------- March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Asset Management Operations 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------- ----------------------------------- REVENUES Investment and advisory service fees Mutual funds $22 $20 $20 $17 $16 $73 $53 $33 MetLife and affiliates separately managed accounts 9 9 9 9 9 36 27 18 Third party client separate accounts 13 16 13 16 10 55 39 26 Other revenues 14 13 11 11 10 45 32 21 ------------------------------------------------------- ----------------------------------- 58 58 53 53 45 209 151 98 ------------------------------------------------------- ----------------------------------- EXPENSES(1) Employee compensation and benefits 21 22 21 20 22 85 63 42 Promoting and servicing 8 11 6 7 7 31 20 14 General and administrative 20 15 20 17 14 66 51 31 ------------------------------------------------------- ----------------------------------- 49 48 47 44 43 182 134 87 ------------------------------------------------------- ----------------------------------- Operating earnings before provision for income taxes 9 10 6 9 2 27 17 11 Provision for income taxes 4 4 2 4 1 11 7 5 ------------------------------------------------------- ----------------------------------- OPERATING EARNINGS $5 $6 $4 $5 $1 $16 $10 $6 ======================================================= =================================== NET INCOME (LOSS) RECONCILIATION -------------------------------- Operating earnings $5 $6 $4 $5 $1 $16 $10 $6 Net investment-related gains (losses) 0 (1) 2 0 8 9 10 8 Net investment-related gains (losses) tax benefit (provision) 0 0 0 0 (3) (3) (3) (3) ------------------------------------------------------- ----------------------------------- Net investment-related gains (losses), net of income taxes 0 (1) 2 0 5 6 7 5 ------------------------------------------------------- ----------------------------------- Net income (loss) $5 $5 $6 $5 $6 $22 $17 $11 ======================================================= ===================================
(1) Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. 39 (METLIFE LOGO) -------------------------------------------------------------------------------- ASSET MANAGEMENT OPERATIONS CHANGE IN ASSETS UNDER MANAGEMENT AND COMPOSITION OF ASSETS UNDER MANAGEMENT
At or for the Three Months Ended --------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------------------------------------------- CHANGE IN ASSETS Beginning assets $47,518 $45,711 $46,130 $43,552 $44,577 Contributions 3,183 1,983 1,190 1,564 1,004 Redemptions (1,798) (2,215) (2,039) (2,040) (2,063) Market appreciation 1,540 2,039 430 3,054 34 --------------------------------------------------------------------------------- Ending Carrying Value $50,443 $47,518 $45,711 $46,130 $43,552 ================================================================================= ASSETS UNDER MANAGEMENT STATE STREET RESEARCH MetLife Separate Account $17,307 $16,762 $17,244 $17,499 $17,160 MetLife Retail Funds 7,394 7,362 6,894 6,759 5,618 Third Party Individual and Retail Funds 9,819 9,255 8,140 7,854 6,966 Third Party Institutional 15,923 14,139 13,433 14,018 13,808 --------------------------------------------------------------------------------- Total State Street Research $50,443 $47,518 $45,711 $46,130 $43,552 =================================================================================
40 (METLIFE LOGO) -------------------------------------------------------------------------------- CORPORATE, OTHER & ELIMINATIONS STATEMENTS OF OPERATING EARNINGS
For the Three Months Ended For the Year-to-Date Period Ended ------------------------------------------------------------------------------------------------ March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums ($1) ($5) ($4) ($5) ($4) ($18) ($13) ($9) Universal life and investment-type product policy fees 0 0 0 0 0 0 0 0 Investment income, net 67 77 64 42 69 252 175 111 Other revenues 7 (6) 18 15 12 39 45 27 ------------------------------------------------------------------------------------------------ 73 66 78 52 77 273 207 129 ------------------------------------------------------------------------------------------------ EXPENSES Policyholder benefits and dividends 2 0 2 0 2 4 4 2 Interest credited to policyholder account balances 0 0 0 0 0 0 0 0 Interest expense 78 91 77 88 94 350 259 182 Other expenses 38 21 (30) (65) 24 (50) (71) (41) ------------------------------------------------------------------------------------------------ 118 112 49 23 120 304 192 143 ------------------------------------------------------------------------------------------------ Operating earnings before (benefit) provision for income taxes (45) (46) 29 29 (43) (31) 15 (14) Benefit for income taxes (27) (48) (51) (12) (31) (142) (94) (43) ------------------------------------------------------------------------------------------------ OPERATING EARNINGS (LOSS) ($18) $2 $80(1) $41(2) ($12) $111 $109(1) $29(2) ================================================================================================ NET INCOME (LOSS) RECONCILIATION -------------------------------- Operating earnings (loss) ($18) $2 $80 $41 ($12) $111 $109 $29 Net investment-related gains (losses) 4 420 (32) (36) (33) 319 (101) (69) Adjustments to net investment-related gains (losses)(3) 0 (48) 0 0 0 (48) 0 0 Net investment-related gains (losses) tax benefit (provision) (2) (140) 25 11 10 (94) 46 21 ------------------------------------------------------------------------------------------------ Net investment-related gains (losses), net of income taxes 2 232 (7) (25) (23) 177 (55) (48) ------------------------------------------------------------------------------------------------ Cumulative effect of a change in accounting, net of income taxes (1) 0 0 0 0 0 0 0 ------------------------------------------------------------------------------------------------ Net income (loss) ($17) $234 $73 $16 ($35) $288 $54 ($19) ================================================================================================
(1) Operating earnings for the period ended September 30, 2003 includes a $28 million after-tax benefit from a reduction of a previously established liability related to the Company's race-conscious underwriting settlement and a $36 million benefit from a revision of the estimate of income taxes for 2002. (2) Operating earnings for the period 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. (3) Adjustments to net investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. 41 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Three Months Ended ---------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES (7) Yield (1) 6.62% 6.92% 6.83% 6.87% 7.01% Income $2,232 $2,245 $2,140 $2,073 $2,044 Investment-related gains (losses) $34 ($183) ($23) ($43) ($149) Ending Carrying Value $174,100 $167,752 $159,940 $158,822 $144,341 MORTGAGE LOANS Yield (2) 6.81% 7.61% 7.37% 7.50% 7.51% Income $449 $493 $468 $472 $470 Investment-related gains (losses) $0 $2 ($36) ($8) ($14) Ending Carrying Value $26,562 $26,249 $25,535 $25,289 $25,046 REAL ESTATE AND REAL ESTATE JOINT VENTURES (8) Yield (2) 11.85% 11.06% 10.14% 11.20% 11.16% Income (3) $139 $137 $124 $125 $127 Investment-related gains (losses) (4) $21 $344 $10 ($6) $92 Ending Carrying Value $4,699 $4,680 $5,255 $4,491 $4,475 POLICY LOANS Yield (2) 6.12% 6.15% 6.54% 6.46% 6.47% Income $134 $135 $141 $139 $139 Ending Carrying Value $8,758 $8,749 $8,668 $8,627 $8,615 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS (7) (8) Yield (2) 3.03% 3.80% (1.26%) 3.62% 6.11% Income $29 $36 ($11) $32 $54 Investment-related gains (losses) $0 $33 ($6) $1 ($71) Ending Carrying Value $4,305 $4,198 $4,218 $4,117 $3,867 CASH AND SHORT-TERM INVESTMENTS (7) Yield (2) 2.67% 1.67% 1.95% 2.23% 4.57% Income $30 $24 $35 $42 $64 Investment-related gains (losses) $0 $5 $0 $0 ($4) Ending Carrying Value $5,144 $5,559 $8,090 $8,354 $8,126 OTHER INVESTED ASSETS (5) (8) Yield (2) 5.60% 7.78% 9.32% 8.47% 8.45% Income $57 $74 $84 $69 $63 Investment-related gains (losses) $82 $76 ($57) $2 $14 Ending Carrying Value $5,094 $4,645 $4,617 $4,261 $3,948 TOTAL INVESTMENTS (8) Gross investment income yield 6.57% 6.88% 6.66% 6.82% 7.10% Investment fees and expenses yield (0.14%) (0.16%) (0.15%) (0.14%) (0.15%) ---------------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.43% 6.72% 6.51% 6.68% 6.95% ================================================================================== Gross investment income $3,070 $3,144 $2,981 $2,952 $2,961 Investment fees and expenses (64) (74) (67) (63) (62) ---------------------------------------------------------------------------------- NET INVESTMENT INCOME $3,006 $3,070 $2,914 $2,889 $2,899 ================================================================================== Ending Carrying Value $228,662 $221,832 $216,323 $213,961 $198,418 ================================================================================== Gross investment gains $246 $564 $153 $137 $221 Gross investment losses (105) (280) (106) (85) (89) Writedowns (12) (73) (89) (103) (268) ---------------------------------------------------------------------------------- Subtotal 129 211 (42) (51) (136) Derivative instruments not qualifying for hedge accounting (24) (72) (109) (3) (34) ---------------------------------------------------------------------------------- NET INVESTMENT-RELATED GAINS (LOSSES) 105 139 (151) (54) (170) Adjustments to net investment-related gains (losses) (6) 32 138 39 0 38 Minority interest - net investment-related gains (losses) (8) (9) (2) (2) 4 Net investment-related gains (losses) tax benefit (provision) (44) (106) 72 16 44 ---------------------------------------------------------------------------------- NET INVESTMENT-RELATED GAINS (LOSSES), NET OF INCOME TAXES $85 $162 ($42) ($40) ($84) ==================================================================================
(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 $16 million, $22 million, $22 million, $10 million, and $17 million related to discontinued operations for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. (4) Included in investment-related gains (losses) from real estate and real estate joint ventures is $21 million, $323 million, $7 million, $0 million, and $90 million related to discontinued operations for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. (5) Included in investment income from other invested assets are scheduled settlement payments on derivative instruments that do not qualify for hedge accounting under SFAS 133 of $14 million, $29 million, $35 million, $12 million, and $8 million for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. These amounts are excluded from net investment-related gains (losses) in other invested assets. (6) Adjustments to investment-related gains and losses include amortization of deferred policy acquisition costs and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (7) Included in ending assets, investment income and investment-related gains (losses) is $2,361 million, $20 million and $1 million, respectively, related to the consolidation of separate accounts under SOP 03-1 for the three months ended March 31, 2004. (8) Certain amounts in prior periods presented have been reclassified/restated to conform with current period presentation. 42 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or for the Year-to-date -------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ---------------------------------------------------------------------------------------------------------------------------- FIXED MATURITIES (7) Yield (1) 6.62% 6.89% 6.89% 6.91% 7.01% Income $2,232 $8,502 $6,257 $4,117 $2,044 Investment-related gains (losses) $34 ($398) ($215) ($192) ($149) Ending Carrying Value $174,100 $167,752 $159,940 $158,822 $144,341 MORTGAGE LOANS Yield (2) 6.81% 7.48% 7.45% 7.50% 7.51% Income $449 $1,903 $1,410 $942 $470 Investment-related gains (losses) $0 ($56) ($58) ($22) ($14) Ending Carrying Value $26,562 $26,249 $25,535 $25,289 $25,046 REAL ESTATE AND REAL ESTATE JOINT VENTURES (8) Yield (2) 11.85% 10.90% 10.63% 11.14% 11.16% Income (3) $139 $513 $376 $252 $127 Investment-related gains (losses) (4) $21 $440 $96 $86 $92 Ending Carrying Value $4,699 $4,680 $5,255 $4,491 $4,475 POLICY LOANS Yield (2) 6.12% 6.40% 6.49% 6.47% 6.47% Income $134 $554 $419 $278 $139 Ending Carrying Value $8,758 $8,749 $8,668 $8,627 $8,615 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS (7)(8) Yield (2) 3.03% 3.02% 2.73% 4.80% 6.11% Income $29 $111 $75 $86 $54 Investment-related gains (losses) $0 ($43) ($76) ($70) ($71) Ending Carrying Value $4,305 $4,198 $4,218 $4,117 $3,867 CASH AND SHORT-TERM INVESTMENTS (7) Yield (2) 2.67% 2.73% 2.93% 3.40% 4.57% Income $30 $165 $141 $106 $64 Investment-related gains (losses) $0 $1 ($4) ($4) ($4) Ending Carrying Value $5,144 $5,559 $8,090 $8,354 $8,126 OTHER INVESTED ASSETS (5)(8) Yield (2) 5.60% 8.53% 8.75% 8.43% 8.45% Income $57 $290 $216 $132 $63 Investment-related gains (losses) $82 $35 ($41) $16 $14 Ending Carrying Value $5,094 $4,645 $4,617 $4,261 $3,948 TOTAL INVESTMENTS (8) Gross investment income yield 6.57% 6.86% 6.85% 6.94% 7.10% Investment fees and expenses yield (0.14%) (0.15%) (0.15%) (0.15%) (0.15%) -------------------------------------------------------------------------- NET INVESTMENT INCOME YIELD 6.43% 6.71% 6.70% 6.79% 6.95% ========================================================================== Gross investment income $3,070 $12,038 $8,894 $5,913 $2,961 Investment fees and expenses (64) (266) (192) (125) (62) -------------------------------------------------------------------------- NET INVESTMENT INCOME $3,006 $11,772 $8,702 $5,788 $2,899 ========================================================================== Ending Carrying Value $228,662 $221,832 $216,323 $213,961 $198,418 ========================================================================== Gross investment gains $246 $1,075 $511 $358 $221 Gross investment losses (105) (560) (280) (174) (89) Writedowns (12) (533) (460) (371) (268) -------------------------------------------------------------------------- Subtotal 129 (18) (229) (187) (136) Derivative instruments not qualifying for hedge accounting (24) (218) (146) (37) (34) -------------------------------------------------------------------------- NET INVESTMENT-RELATED GAINS (LOSSES) 105 (236) (375) (224) (170) Adjustments to net investment-related gains (losses)(6) 32 215 77 38 38 Minority interest - net investment-related gains (losses) (8) (9) 0 2 4 Net investment-related gains (losses) tax benefit (provision) (44) 26 132 60 44 -------------------------------------------------------------------------- NET INVESTMENT-RELATED GAINS (LOSSES), NET OF INCOME TAXES $85 ($4) ($166) ($124) ($84) ==========================================================================
(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 $16 million, $71 million, $49 million, $27 million, and $17 million related to discontinued operations for the year-to-date March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. (4) Included in investment-related gains (losses) from real estate and real estate joint ventures is $21 million, $420 million, $97 million, $90 million, and $90 million related to discontinued operations for the year-to-date March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. (5) Included in investment income from other invested assets are scheduled settlement payments on derivative instruments that do not qualify for hedge accounting under SFAS 133 of $14 million, $84 million, $55 million, $20 million, and $8 million for the year-to-date March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003, and March 31, 2003, respectively. These amounts are excluded from net investment-related gains (losses) in other invested assets. (6) Adjustments to investment-related gains and losses include amortization of deferred policy acquisition costs, charges and credit to participating contracts, and adjustments to the policyholder dividend obligation resulting from investment-related gains and losses. (7) Included in ending assets, investment income and investment-related gains (losses) is $2,361 million, $20 million and $1 million, respectively, related to the consolidation of separate accounts under SOP 03-1 for year-to-date March 31, 2004. (8) Certain amounts in prior periods presented have been reclassified/restated to conform with current period presentation. 43 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. GROSS UNREALIZED LOSSES AGING SCHEDULE FIXED MATURITIES
At March 31, 2004 At December 31, 2003 At September 30, 2003 ----------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total -------------------------------------------------------------------------------------------------------------------------------- Less than 20% $364 86.3% $677 91.1% $826 83.4% 20% or more for less than six months 52 12.3% 22 3.0% 82 8.3% 20% or more for six months or greater 6 1.4% 44 5.9% 82 8.3% ----------------------------------------------------------------------------------- Total Gross Unrealized Losses $422 100.0% $743 100.0% $990 100.0% ===================================================================================
At June 30, 2003 At March 31, 2003 --------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total ------------------------------------------------------------------------------------------------------ Less than 20% $612 76.8% $767 60.8% 20% or more for less than six months 74 9.3% 216 17.1% 20% or more for six months or greater 111 13.9% 279 22.1% --------------------------------------------------------- Total Gross Unrealized Losses $797 100.0% $1,262 100.0% =========================================================
GROSS UNREALIZED LOSSES AGING SCHEDULE EQUITY SECURITIES
At March 31, 2004 At December 31, 2003 At September 30, 2003 ----------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total -------------------------------------------------------------------------------------------------------------------------------- Less than 20% $5 45.5% $6 100.0% $5 100.0% 20% or more for less than six months 6 54.5% 0 0.0% 0 0.0% 20% or more for six months or greater 0 0.0% 0 0.0% 0 0.0% ----------------------------------------------------------------------------------- Total Gross Unrealized Losses $11 100.0% $6 100.0% $5 100.0% ===================================================================================
At June 30, 2003 At March 31, 2003 --------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total ------------------------------------------------------------------------------------------------------ Less than 20% $8 88.9% $39 30.0% 20% or more for less than six months 1 11.1% 91 70.0% 20% or more for six months or greater 0 0.0% 0 0.0% --------------------------------------------------------- Total Gross Unrealized Losses $9 100.0% $130 100.0% =========================================================
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. 44 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. SUMMARY OF FIXED MATURITIES BY SECTOR AND QUALITY DISTRIBUTION
At March 31, 2004 At December 31, 2003 At September 30, 2003 At June 30, 2003 At March 31, 2003 Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total ------------------------------------------------------------------------------------------------------------------------------------ US treasuries/agencies $17,065 9.8% $15,945 9.5% $14,730 9.2% $13,992 8.8% $12,489 8.7% State & political subdivisions 3,580 2.0% 3,349 2.0% 3,276 2.0% 3,022 1.9% 2,683 1.8% Corporate bonds 63,215 36.3% 60,391 36.0% 57,746 36.1% 56,548 35.6% 52,167 36.1% Foreign government securities 8,444 4.8% 8,764 5.2% 9,027 5.7% 8,938 5.6% 8,374 5.8% Foreign corporates 24,654 14.2% 23,842 14.2% 21,787 13.6% 22,030 13.9% 19,542 13.5% Mortgage-backed securities 31,825 18.3% 31,454 18.8% 31,831 19.9% 33,166 20.9% 30,260 21.0% Commercial mortgage-backed securities 11,955 6.9% 11,031 6.6% 9,318 5.8% 8,649 5.4% 7,509 5.2% Asset-backed securities 12,327 7.1% 11,863 7.1% 11,033 6.9% 11,222 7.1% 10,224 7.1% Other fixed income assets 491 0.3% 576 0.3% 687 0.5% 771 0.5% 655 0.5% ---------------------------------------------------------------------------------------------------- Total 173,556 99.7% 167,215 99.7% 159,435 99.7% 158,338 99.7% 143,903 99.7% Redeemable preferred stock 544 0.3% 537 0.3% 505 0.3% 484 0.3% 438 0.3% ---------------------------------------------------------------------------------------------------- Total Fixed Maturities $174,100 100.0% $167,752 100.0% $159,940 100.0% $158,822 100.0% $144,341 100.0% ==================================================================================================== NAIC RATING AGENCY RATING (1)(2) EQUIVALENT DESIGNATION 1 Aaa / Aa / A $116,165 66.7% $112,333 67.0% $107,284 67.1% $107,243 67.5% $97,087 67.3% 2 Baa 44,842 25.8% 42,057 25.0% 39,066 24.4% 38,263 24.1% 34,326 23.8% 3 Ba 7,731 4.4% 8,011 4.8% 7,913 5.0% 7,727 4.9% 7,624 5.3% 4 B 3,929 2.3% 3,814 2.3% 3,962 2.5% 3,854 2.4% 3,658 2.5% 5 Caa and lower 700 0.4% 629 0.4% 545 0.3% 724 0.5% 627 0.4% 6 In or near default 189 0.1% 371 0.2% 665 0.4% 527 0.3% 581 0.4% ---------------------------------------------------------------------------------------------------- Total 173,556 99.7% 167,215 99.7% 159,435 99.7% 158,338 99.7% 143,903 99.7% Redeemable preferred stock 544 0.3% 537 0.3% 505 0.3% 484 0.3% 438 0.3% ---------------------------------------------------------------------------------------------------- Total Fixed Maturities $174,100 100.0% $167,752 100.0% $159,940 100.0% $158,822 100.0% $144,341 100.0% ====================================================================================================
(1) Amounts presented are based on rating agency designations. Comparisons between NAIC ratings and rating agency designations are published by the NAIC. (2) Certain amounts in prior periods presented throughout the QFS have been reclassified to conform with current period presentation. METLIFE, INC. SUMMARY OF COMMERCIAL MORTGAGE LOANS BY REGION AND PROPERTY TYPE
At March 31, 2004 At December 31, 2003 At September 30, 2003 At June 30, 2003 At March 31, 2003 ----------------------------------------------------------------------------------------------------- Unaudited (Dollars in millions) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total ------------------------------------------------------------------------------------------------------------------------------------ South Atlantic $4,929 23.8% $4,978 24.5% $5,027 25.2% $5,139 25.9% $5,167 26.3% Pacific 5,172 25.1% 5,005 24.7% 4,587 23.0% 4,130 20.8% 4,198 21.4% Middle Atlantic 3,450 16.6% 3,455 17.0% 3,522 17.6% 3,543 17.9% 3,416 17.4% East North Central 1,894 9.1% 1,821 9.0% 1,808 9.1% 2,331 11.8% 2,260 11.5% New England 1,295 6.2% 1,278 6.3% 1,269 6.4% 1,181 6.0% 1,168 6.0% West South Central 1,415 6.8% 1,370 6.8% 1,352 6.8% 1,256 6.3% 1,149 5.9% Mountain 763 3.7% 740 3.6% 798 4.0% 845 4.3% 858 4.4% West North Central 606 2.9% 619 3.0% 582 2.9% 580 2.9% 598 3.0% International 943 4.5% 836 4.1% 811 4.1% 631 3.2% 631 3.2% East South Central 265 1.3% 198 1.0% 189 0.9% 187 0.9% 178 0.9% ----------------------------------------------------------------------------------------------------- Total $20,732 100.0% $20,300 100.0% $19,945 100.0% $19,823 100.0% $19,623 100.0% ===================================================================================================== Office $9,570 46.1% $9,170 45.2% $8,919 44.7% $9,414 47.4% $9,301 47.5% Retail 4,961 23.9% 5,006 24.7% 4,825 24.2% 4,471 22.6% 4,321 22.0% Apartments 2,916 14.1% 2,832 13.9% 2,932 14.7% 2,805 14.2% 2,867 14.6% Industrial 1,852 8.9% 1,911 9.4% 1,940 9.7% 1,922 9.7% 1,893 9.6% Hotel 1,027 5.0% 1,032 5.1% 1,038 5.2% 955 4.8% 996 5.1% Other 406 2.0% 349 1.7% 291 1.5% 256 1.3% 245 1.2% ----------------------------------------------------------------------------------------------------- Total $20,732 100.0% $20,300 100.0% $19,945 100.0% $19,823 100.0% $19,623 100.0% =====================================================================================================
45 (METLIFE LOGO) -------------------------------------------------------------------------------- METLIFE, INC. SUMMARY OF REAL ESTATE
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------ Wholly owned $4,409 $4,362 $4,927 $4,184 $4,199 Joint ventures (1) 287 315 322 303 271 ------------------------------------------------------------------------------- Subtotal 4,696 4,677 5,249 4,487 4,470 Foreclosed 3 3 6 4 5 ------------------------------------------------------------------------------- Total Real Estate (2) $4,699 $4,680 $5,255 $4,491 $4,475 ===============================================================================
(1) Certain amounts in prior periods presented have been reclassified/restated to conform with current period presentation. (2) Includes real estate held-for-sale and held-for-investment. METLIFE, INC. SUMMARY OF MORTGAGES
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in millions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------ COMMERCIAL $20,732 $20,300 $19,945 $19,823 $19,623 AGRICULTURAL 5,226 5,327 5,131 5,090 5,052 RESIDENTIAL 604 622 459 376 371 ------------------------------------------------------------------------------- TOTAL $26,562 $26,249 $25,535 $25,289 $25,046 ===============================================================================
METLIFE, INC. DISTRIBUTION OF ASSETS UNDER MANAGEMENT
At March 31, At December 31, At September 30, At June 30, At March 31, Unaudited (Dollars in billions) 2004 2003 2003 2003 2003 ------------------------------------------------------------------------------------------------------------------ METLIFE $258.9 $251.0 $245.0 $242.3 $226.3 METLIFE SEPARATE ACCOUNT 78.3 75.8 70.0 67.5 60.6 STATE STREET THIRD PARTY 25.7 23.4 21.6 21.9 20.8 ------------------------------------------------------------------------------- TOTAL ASSETS UNDER MANAGEMENT $362.9 $350.2 $336.6 $331.7 $307.7 ===============================================================================
46 (METLIFE LOGO) -------------------------------------------------------------------------------- COMPANY RATINGS AS OF APRIL 20TH, 2004 (1)
Moody's Standard & A.M. Best Fitch Investors Service Poor's Company Ratings ----------------- ------ ------- ------- FINANCIAL STRENGTH RATINGS -------------------------- Metropolitan Life Insurance Company Aa2 AA A+ AA Metropolitan Life Insurance Company (Short-term rating) P-1 A-1+ NR NR First MetLife Investors Insurance Co. NR AA A+ NR General American Life Insurance Company Aa2 AA A+ AA MetLife Investors Insurance Company Aa2 AA A+ AA MetLife Investors Insurance Company of California NR AA A+ NR MetLife Investors USA Insurance Company Aa3 AA A+ AA Metropolitan Insurance and Annuity Company Aa3 NR A NR New England Life Insurance Company Aa2 AA A+ AA Paragon Life Insurance Company NR AA A+ AA Texas Life Insurance Company NR NR A NR RGA Reinsurance Company A1 AA- A+ AA- Metropolitan Property and Casualty Insurance Company Aa3 NR A NR Metropolitan Casualty Insurance Company NR NR A NR Metropolitan Direct Property and Casualty Insurance Co. NR NR A NR Metropolitan General Insurance Company NR NR A NR Metropolitan Group Property & Casualty Insurance Co. NR NR A NR Metropolitan Lloyds Insurance Company of Texas NR NR A NR CREDIT RATINGS MetLife, Inc. Senior Unsecured A2 A a A Commercial Paper P-1 A-1 AMB-1+ F1 Metropolitan Life Insurance Company Surplus Notes A1 A+ a+ A+ MetLife Funding, Inc. Commercial Paper P-1 A-1+ AMB-1+ F1+ General American Life Insurance Company Surplus Notes A1 A+ a+ NR GenAmerica Capital I Preferred Stock A3 BBB+ NR A- Reinsurance Group of America, Incorporated Senior Unsecured Baa1 A- a- A- RGA Capital Trust I Preferred Stock Baa2 BBB bbb+ BBB+
(1) NR indicates not rated. 47