EX-99.1 4 y72524exv99w1.htm EX-99.1: SELECTED FINANCIAL DATED OF 2007 ANNUAL REPORT EX-99.1
 
EXHIBIT 99.1
 
Part II
 
Item 6.   Selected Financial Data
 
The following selected financial data has been derived from the Company’s audited consolidated financial statements which have been updated as described in Item 8.01 of this Current Report on Form 8-K as well as from the Consolidated Financial Statements and Financial Statement Schedules included within Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (the “2007 Annual Report”), as updated by Exhibit 99.3 to this Current Report on Form 8-K. The statement of income data for the years ended December 31, 2007, 2006 and 2005 and the balance sheet data as of December 31, 2007 and 2006 have been derived from the Company’s audited financial statements included as Exhibit 99.3 to this Current Report on Form 8-K. The statement of income data for the years ended December 31, 2004 and 2003 and the balance sheet data as of December 31, 2005, 2004 and 2003 have been derived from the Company’s audited financial statements not included herein. The selected financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as included in the Company’s 2007 Annual Report, portions of which have been updated by Exhibit 99.2 to this Current Report on Form 8-K.
 
                                         
    Years Ended December 31,  
    2007     2006     2005     2004     2003  
    (In millions)  
 
Statement of Income Data (1)
                                       
Revenues (2)(3):
                                       
Premiums
  $ 22,985     $ 22,066     $ 20,990     $ 18,853     $ 17,928  
Universal life and investment-type product policy fees
    5,310       4,779       3,827       2,866       2,495  
Net investment income
    18,086       16,302       14,117       11,675       10,904  
Other revenues
    1,466       1,302       1,221       1,150       1,171  
Net investment gains (losses)
    (561 )     (1,387 )     (110 )     115       (614 )
                                         
Total revenues
    47,286       43,062       40,045       34,659       31,884  
                                         
Expenses (2)(3):
                                       
Policyholder benefits and claims
    23,839       22,942       22,298       19,969       18,701  
Interest credited to policyholder account balances
    5,478       4,916       3,667       2,783       2,851  
Policyholder dividends
    1,726       1,700       1,680       1,665       1,731  
Other expenses
    10,458       9,565       8,281       6,853       6,405  
                                         
Total expenses
    41,501       39,123       35,926       31,270       29,688  
                                         
Income from continuing operations before provision for income tax
    5,785       3,939       4,119       3,389       2,196  
Provision for income tax (2)
    1,668       1,018       1,161       932       529  
                                         
Income from continuing operations
    4,117       2,921       2,958       2,457       1,667  
Income from discontinued operations, net of income tax (2)
    200       3,372       1,756       387       576  
                                         
Income before cumulative effect of a change in accounting, net of income tax
    4,317       6,293       4,714       2,844       2,243  
Cumulative effect of a change in accounting, net of income tax (3)
    —       —       —       (86 )     (26 )
                                         
Net income
    4,317       6,293       4,714       2,758       2,217  
Preferred stock dividends
    137       134       63       —       —  
Charge for conversion of company-obligated mandatorily redeemable securities of a subsidiary trust
    —       —       —       —       21  
                                         
Net income available to common shareholders
  $ 4,180     $ 6,159     $ 4,651     $ 2,758     $ 2,196  
                                         
 


1

 

                                         
    December 31,  
    2007     2006     2005     2004     2003  
    (In millions)  
 
Balance Sheet Data (1)
                                       
Assets:
                                       
General account assets
  $ 398,994     $ 383,746     $ 354,048     $ 270,327     $ 251,721  
Separate account assets
    160,142       144,349       127,855       86,755       75,743  
                                         
Total assets (2)
  $ 559,136     $ 528,095     $ 481,903     $ 357,082     $ 327,464  
                                         
Liabilities:
                                       
Life and health policyholder liabilities (4)
  $ 263,319     $ 253,913     $ 245,623     $ 183,368     $ 169,518  
Property and casualty policyholder liabilities (4)
    3,324       3,453       3,490       3,180       2,943  
Short-term debt
    667       1,449       1,414       1,445       3,642  
Long-term debt
    9,100       8,822       9,088       7,006       5,305  
Collateral financing arrangements
    4,882       —       —       —       —  
Junior subordinated debt securities
    4,075       3,381       2,134       —       —  
Payables for collateral under securities loaned and other transactions
    44,136       45,846       34,515       28,678       27,083  
Other
    34,312       33,084       28,683       23,826       22,081  
Separate account liabilities
    160,142       144,349       127,855       86,755       75,743  
                                         
Total liabilities (2)
    523,957       494,297       452,802       334,258       306,315  
                                         
Stockholders’ Equity
                                       
Preferred stock, at par value
    1       1       1       —       —  
Common stock, at par value
    8       8       8       8       8  
Additional paid-in capital
    17,098       17,454       17,274       15,037       14,991  
Retained earnings (5)
    19,884       16,574       10,865       6,608       4,193  
Treasury stock, at cost
    (2,890 )     (1,357 )     (959 )     (1,785 )     (835 )
Accumulated other comprehensive income (6)
    1,078       1,118       1,912       2,956       2,792  
                                         
Total stockholders’ equity
    35,179       33,798       29,101       22,824       21,149  
                                         
Total liabilities and stockholders’ equity
  $ 559,136     $ 528,095     $ 481,903     $ 357,082     $ 327,464  
                                         
 

2

 

                                         
    Years Ended December 31,  
    2007     2006     2005     2004     2003  
    (In millions, expect per share data)  
 
Other Data (1)
                                       
Net income available to common shareholders
  $ 4,180     $ 6,159     $ 4,651     $ 2,758     $ 2,196  
Return on common equity (7)
    13.0 %     21.9 %     18.5 %     12.5 %     11.4 %
Return on common equity, excluding accumulated other comprehensive income
    13.2 %     22.6 %     20.4 %     14.4 %     13.0 %
EPS Data (1)
                                       
Income from Continuing Operations Available to Common Shareholders Per Common Share
                                       
Basic
  $ 5.35     $ 3.66     $ 3.87     $ 3.27     $ 2.23  
Diluted
  $ 5.22     $ 3.62     $ 3.83     $ 3.25     $ 2.20  
Income (Loss) from Discontinued Operations Per Common Share
                                       
Basic
  $ 0.27     $ 4.43     $ 2.34     $ 0.52     $ 0.78  
Diluted
  $ 0.26     $ 4.38     $ 2.32     $ 0.50     $ 0.77  
Cumulative Effect of a Change in Accounting Per Common Share (3)
                                       
Basic
  $ —     $ —     $ —     $ (0.11 )   $ (0.04 )
Diluted
  $ —     $ —     $ —     $ (0.11 )   $ (0.04 )
Net Income Available to Common Shareholders Per Common Share
                                       
Basic
  $ 5.62     $ 8.09     $ 6.21     $ 3.67     $ 2.97  
Diluted
  $ 5.48     $ 7.99     $ 6.16     $ 3.65     $ 2.94  
Dividends Declared Per Common Share
  $ 0.74     $ 0.59     $ 0.52     $ 0.46     $ 0.23  
 
 
(1) On July 1, 2005, the Company acquired Travelers. The 2005 selected financial data includes total revenues and total expenses of $966 million and $577 million, respectively, from the date of the acquisition.
 
(2) Discontinued Operations:
 
Real Estate
 
In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”), income related to real estate sold or classified as held-for-sale for transactions initiated on or after January 1, 2002 is presented as discontinued operations. The following information presents the components of income from discontinued real estate operations:
 
                                         
    Years Ended December 31,
    2007   2006   2005   2004   2003
    (In millions)
 
Investment income
  $ 61     $ 267     $ 431     $ 686     $ 756  
Investment expense
    (32 )     (175 )     (269 )     (411 )     (444 )
Net investment gains (losses)
    13       4,795       2,125       146       420  
                                         
Total revenues
    42       4,887       2,287       421       732  
Interest expense
    —       —       —       13       4  
Provision for income tax
    18       1,725       814       143       265  
                                         
Income from discontinued operations, net of income tax
  $ 24     $ 3,162     $ 1,473     $ 265     $ 463  
                                         

3

 

Operations
 
In September 2007, September 2005 and January 2005, the Company sold its MetLife Insurance Limited (“MetLife Australia”) annuities and pension businesses, P.T. Sejahtera (“MetLife Indonesia”) and SSRM Holdings, Inc. (“SSRM”), respectively. In accordance with SFAS 144, the assets, liabilities and operations of MetLife Indonesia, SSRM and MetLife Australia have been reclassified into discontinued operations for all years presented. The following tables present these discontinued operations:
 
                                         
    Years Ended December 31,  
    2007     2006     2005     2004     2003  
    (In millions)  
 
Revenues
  $ 71     $ 100     $ 74     $ 333     $ 235  
Expenses
    58       89       89       310       206  
                                         
Income before provision for income tax
    13       11       (15 )     23       29  
Provision for income tax
    4       3       (2 )     13       13  
                                         
Income (loss) from discontinued operations, net of income tax
    9       8       (13 )     10       16  
                                         
Net investment gains, net of income tax
    10       52       182       —       —  
                                         
Income from discontinued operations, net of income tax
  $ 19     $ 60     $ 169     $ 10     $ 16  
                                         
 
                                 
    December 31,  
    2006     2005     2004     2003  
    (In millions)  
 
General account assets
  $ 1,563     $ 1,621     $ 410     $ 210  
                                 
Total assets
  $ 1,563     $ 1,621     $ 410     $ 210  
                                 
Life and health policyholder liabilities(4)
  $ 1,595     $ 1,622     $ 24     $ 17  
Short-term debt
    —       —       19       —  
Other
    —       —       225       73  
                                 
Total liabilities
  $ 1,595     $ 1,622     $ 268     $ 90  
                                 
 
On September 12, 2008, the Company completed a tax-free split-off of its majority-owned subsidiary, Reinsurance Group of America, Incorporated (‘‘RGA”), as described in Item 8.01 of this Current Report on Form 8-K, as well as in the Consolidated Financial Statements and Financial Statement Schedules included within Item 8 of Part II of the 2007 Annual Report, as updated by Exhibit 99.3 of this Current Report on Form 8-K. In accordance with SFAS 144, the assets, liabilities and operations of RGA have been reclassified into discontinued operations for all years presented. The following tables present these discontinued operations:
 
                                         
    Years Ended December 31,  
    2007     2006     2005     2004     2003  
    (In millions)  
 
Revenues
  $ 5,895     $ 5,195     $ 4,567     $ 3,984     $ 3,163  
Expenses
    5,477       4,971       4,417       3,876       3,077  
                                         
Income before provision for income tax
    418       224       150       108       86  
Provision for income tax
    146       79       50       35       29  
                                         
Income from discontinued operations, net of income tax
    272       145       100       73       57  
                                         
Net investment (losses) gains, net of income tax
    (115 )     5       14       39       40  
                                         
Income from discontinued operations, net of income tax
  $ 157     $ 150     $ 114     $ 112     $ 97  
                                         
 


4

 

                                         
    December 31,  
    2007     2006     2005     2004     2003  
    (In millions)  
 
General account assets
  $ 22,020     $ 19,435     $ 16,617     $ 14,552     $ 12,622  
                                         
Total assets
  $ 22,037     $ 19,451     $ 16,631     $ 14,566     $ 12,635  
                                         
Life and health policyholder liabilities(4)
    15,113       13,332       11,751       10,464       8,983  
Long-term debt
    528       307       401       406       399  
Other
    4,317       3,929       2,729       2,084       1,798  
                                         
Total liabilities
  $ 19,958     $ 17,568     $ 14,881     $ 12,954     $ 11,180  
                                         
 
(3) The cumulative effect of a change in accounting, net of income tax, of $86 million for the year ended December 31, 2004, resulted from the adoption of Statement of Position (“SOP”) 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. The cumulative effect of a change in accounting, net of income tax, of $26 million for the year ended December 31, 2003, resulted from the adoption of SFAS No. 133 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) Policyholder liabilities include future policy benefits, other policyholder funds and bank deposits. The life and health policyholder liabilities also include policyholder account balances, policyholder dividends payable and the policyholder dividend obligation.
 
(5) The cumulative effect of changes in accounting, net of income tax, of $329 million, which decreased retained earnings at January 1, 2007, resulted from $292 million related to the adoption of SOP 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, and $37 million related to the adoption of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109.
 
(6) The cumulative effect of a change in accounting, net of income tax, of $744 million resulted from the adoption of SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, and decreased accumulated other comprehensive income at December 31, 2006.
 
(7) Return on common equity is defined as net income available to common shareholders divided by average common stockholders’ equity.

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