MetLife Announces Fourth Quarter and Full Year 2018 Results
MetLife, Inc. (NYSE: MET) today announced its results for the fourth quarter and full year ended December 31, 2018.
Fourth Quarter Results Summary
- Net income of $2.0 billion, or $2.04 per share, compared to net income of $2.3 billion, or $2.14
per share, in the fourth quarter of 2017.
- Adjusted earnings* of $1.3 billion, or $1.35 per share, compared to adjusted earnings of $678
million, or $0.64 per share in the fourth quarter of 2017.
- Book value of $51.53 per share, down 5 percent from $54.24 per share at December 31, 2017.
- Book value, excluding accumulated other comprehensive income (AOCI) other than foreign currency
translation adjustments (FCTA)*, of $44.62 per share, up 4 percent from $42.92 per share at December 31, 2017.
- Return on equity (ROE) of 16.5 percent.
- Adjusted ROE, excluding AOCI other than FCTA*, of 12.5 percent.
Full Year Results Summary
- Net income of $5.0 billion, compared to net income of $3.9 billion for the full year 2017. Net income
of $4.91 per share, up 36 percent from the prior-year.
- Adjusted earnings* of $5.5 billion, compared to adjusted earnings of $4.2 billion for the full year
2017. Adjusted earnings* of $5.39 per share, up 37 percent from the prior-year.
- Return on equity of 9.6 percent.
- Adjusted ROE, excluding AOCI other than FCTA*, of 12.6 percent.
"While market conditions were challenging in the fourth quarter, our businesses performed exceptionally well overall in 2018,”
said Steven A. Kandarian, chairman, president and CEO of MetLife, Inc. “MetLife delivered 37 percent adjusted earnings per share
growth, achieved a 12.6 percent adjusted return on equity**, and returned a record $5.7 billion in cash to shareholders through
common stock repurchases and dividends.”
**Refers to adjusted ROE, excluding AOCI other than FCTA*.
Fourth Quarter & Full Year 2018 Summary
|
|
|
|
|
|
|
($ in millions, except per share data) |
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
|
|
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
2017 |
|
Change |
Premiums, fees & other revenues |
|
|
|
$11,116 |
|
$11,335 |
|
(2)% |
|
$51,222 |
|
$45,843 |
|
12% |
Net investment income |
|
|
|
3,462 |
|
4,454 |
|
(22)% |
|
16,166 |
|
17,363 |
|
(7)% |
Net investment gains (losses) |
|
|
|
145 |
|
106 |
|
37% |
|
(298) |
|
(308) |
|
3% |
Net derivative gains (losses) |
|
|
|
939 |
|
(55) |
|
|
|
851 |
|
(590) |
|
|
Total revenues |
|
|
|
$15,662 |
|
$15,840 |
|
(1)% |
|
$67,941 |
|
$62,308 |
|
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted revenues |
|
|
|
$15,397 |
|
$15,403 |
|
|
|
$68,161 |
|
$62,744 |
|
9% |
Adjusted premiums, fees & other revenues |
|
|
|
$11,022 |
|
$11,300 |
|
(2)% |
|
$50,778 |
|
$46,200 |
|
10% |
Adjusted premiums, fees & other revenues, excluding pension risk transfer
(PRT) |
|
|
|
$11,098 |
|
$10,703 |
|
4% |
|
$43,884 |
|
$42,895 |
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
|
$2,010 |
|
$2,272 |
|
(12)% |
|
$4,982 |
|
$3,907 |
|
28% |
Net income (loss) per share |
|
|
|
$2.04 |
|
$2.14 |
|
(5)% |
|
$4.91 |
|
$3.62 |
|
36% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings |
|
|
|
$1,336 |
|
$678 |
|
97% |
|
$5,461 |
|
$4,235 |
|
29% |
Adjusted earnings per share |
|
|
|
$1.35 |
|
$0.64 |
|
111% |
|
$5.39 |
|
$3.93 |
|
37% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
|
|
$51.53 |
|
$54.24 |
|
(5)% |
|
$51.53 |
|
$54.24 |
|
(5)% |
Book value per share, excluding AOCI other than FCTA |
|
|
|
$44.62 |
|
$42.92 |
|
4% |
|
$44.62 |
|
$42.92 |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
20.7% |
|
24.4% |
|
|
|
18.9% |
|
21.7% |
|
|
Direct expense ratio, excluding total notable items related to direct expenses and
PRT |
|
|
|
12.5% |
|
14.5% |
|
|
|
12.9% |
|
13.3% |
|
|
Adjusted expense ratio, excluding total notable items related to other expenses and
PRT |
|
|
|
20.4% |
|
21.9% |
|
|
|
20.6% |
|
21.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROE |
|
|
|
16.5% |
|
16.3% |
|
|
|
9.6% |
|
6.3% |
|
|
ROE, excluding AOCI other than FCTA |
|
|
|
18.9% |
|
20.6% |
|
|
|
11.5% |
|
7.7% |
|
|
Adjusted ROE, excluding AOCI other than FCTA |
|
|
|
12.5% |
|
6.1% |
|
|
|
12.6% |
|
8.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife reported fourth quarter 2018 premiums, fees & other revenues of $11.1 billion, down 2 percent over the
fourth quarter of 2017. Adjusted premiums, fees & other revenues* were $11.0 billion, down 2 percent, and 1 percent on a
constant currency basis* over the prior-year period.
Net investment income was $3.5 billion, down 22 percent. The decline in net investment income was driven by changes in the
estimated fair value of certain securities which do not qualify as separate accounts under GAAP. On an adjusted basis, net
investment income was $4.4 billion, up 7 percent.
Net derivative gains amounted to $939 million, and $742 million after tax during the quarter.
Net income was $2.0 billion, compared to net income of $2.3 billion in the fourth quarter of 2017. On a per share
basis, net income was $2.04, compared to net income of $2.14 in the prior-year period.
MetLife reported adjusted earnings of $1.3 billion, up 97 percent over the fourth quarter of 2017, and 104 percent on
a constant currency basis. On a per share basis, which includes the impact of share repurchases, adjusted earnings were $1.35, up
111 percent from the prior-year period.
For the full year 2018, MetLife reported net income of $5.0 billion, compared to net income of $3.9 billion for the full year
2017.
Full year 2018 adjusted earnings were $5.5 billion, up 29 percent. On a per share basis, 2018 adjusted earnings were $5.39, up
37 percent over 2017.
Supplemental slides for the fourth quarter of 2018, titled "4Q18 Supplemental Slides," are available on the MetLife Investor
Relations website at
www.metlife.com and in the Form 8-K furnished by MetLife to the U.S. Securities and Exchange
Commission in connection with this earnings news release.
Adjusted Earnings by Segment Summary***
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2018
|
|
Year ended
December 31, 2018
|
Segment |
|
|
|
Change from
prior-year
period
|
|
Change from
prior-year
period (on a
constant
currency
basis)
|
|
Change from
prior-year
period
|
|
Change from
prior-year
period (on a
constant
currency
basis)
|
U.S. |
|
|
|
38% |
|
38% |
|
38% |
|
38% |
Asia |
|
|
|
(9)% |
|
(8)% |
|
1% |
|
—% |
Latin America |
|
|
|
10% |
|
19% |
|
1% |
|
3% |
Europe, the Middle East and Africa (EMEA) |
|
|
|
(30)% |
|
(24)% |
|
(7)% |
|
(7)% |
MetLife Holdings |
|
|
|
15% |
|
15% |
|
6% |
|
6% |
***The percentages in this table are on a reported basis, and do not exclude notable items.
Business Discussions
All comparisons of the results for the fourth quarter of 2018 in the business discussions that follow are with the fourth
quarter of 2017, unless otherwise noted. See the fourth quarter of 2018 notable items table that follows the Business Discussions
section of this release for additional information on notable items incurred in the fourth quarter of 2018.
U.S.
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$685 |
|
$498 |
|
38% |
Adjusted premiums, fees & other revenues |
|
|
$5,725 |
|
$6,038 |
|
(5)% |
Adjusted premiums, fees & other revenues, excluding pension risk
transfers |
|
|
$5,801 |
|
$5,441 |
|
7% |
Notable item(s) |
|
|
$0 |
|
$(55) |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for the U.S. were $685 million, up 38 percent, driven by U.S. tax
reform and volume growth.
- Excluding notable items from both periods, adjusted earnings were up 24 percent. Excluding the
impact of U.S. tax reform, and excluding notable items in both periods, adjusted earnings were up 3 percent.
- Adjusted return on allocated equity was 25.2 percent, and adjusted return on allocated
tangible equity was 29.2 percent.
- Adjusted premiums, fees & other revenues were $5.7 billion, down 5 percent, driven by
lower pension risk transfer transactions in Retirement and Income Solutions. Excluding pension risk transfers, adjusted premiums,
fees & other revenues were up 7 percent.
Group Benefits
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$230 |
|
$230 |
|
—% |
Adjusted premiums, fees & other revenues |
|
|
$4,283 |
|
$4,105 |
|
4% |
Notable item(s) |
|
|
$0 |
|
$0 |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for Group Benefits were $230 million, flat compared to the prior-year
period, driven by U.S. tax reform, offset by unfavorable underwriting. Excluding the impact of U.S. tax reform, adjusted earnings
were down 18 percent.
- Adjusted premiums, fees & other revenues were $4.3 billion, up 4 percent.
- Sales for Group Benefits were down 1 percent for the full year 2018 compared to the full year
2017.
Retirement and Income Solutions
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$356 |
|
$173 |
|
106% |
Adjusted premiums, fees & other revenues |
|
|
$523 |
|
$1,026 |
|
(49)% |
Adjusted premiums, fees & other revenues, excluding pension risk
transfers |
|
|
$599 |
|
$429 |
|
40% |
Notable item(s) |
|
|
$0 |
|
$(62) |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for Retirement and Income Solutions were $356 million, up 106 percent,
driven by favorable underwriting, U.S. tax reform and higher investment margin.
- Excluding notable items from both periods, adjusted earnings were up 51 percent. Excluding the
impact of U.S. tax reform, and excluding notable items in both periods, adjusted earnings were up 24 percent.
- Adjusted premiums, fees & other revenues were $523 million, down 49 percent from
the prior-year period, driven by lower pension risk transfer transactions.
- Excluding pension risk transfers, adjusted premiums, fees & other revenues were up 40
percent.
Property & Casualty
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$99 |
|
$95 |
|
4% |
Adjusted premiums, fees & other revenues |
|
|
$919 |
|
$907 |
|
1% |
Notable item(s) |
|
|
$0 |
|
$7 |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for Property & Casualty were $99 million, up 4 percent, driven by U.S.
tax reform, partially offset by unfavorable homeowners underwriting and expenses. Excluding the impact of U.S. tax reform,
adjusted earnings were down 10 percent.
- Adjusted premiums, fees & other revenues were $919 million, up 1 percent.
- Pre-tax catastrophe losses and prior year development totaled $19 million, compared to $16
million in the prior-year period.
- Sales for Property & Casualty were $151 million, up 13 percent.
ASIA
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$281 |
|
$310 |
|
(9)% |
Adjusted earnings (constant currency) |
|
|
$281 |
|
$305 |
|
(8)% |
Adjusted premiums, fees & other revenues |
|
|
$2,095 |
|
$2,088 |
|
—% |
Notable item(s) |
|
|
$0 |
|
$0 |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for Asia were $281 million, down 9 percent, and down 8 percent on a
constant currency basis, as volume growth was more than offset by unfavorable underwriting and weaker capital markets. Excluding
the impact of U.S. tax reform, adjusted earnings were down 13 percent, and down 12 percent on a constant currency basis.
- Adjusted return on allocated equity was 7.9 percent, and adjusted return on allocated
tangible equity was 12.0 percent.
- Adjusted premiums, fees & other revenues were $2.1 billion, up 1 percent on a
constant currency basis.
- Sales for Asia were $628 million, up 5 percent on a constant currency basis. Japan sales
were up 19 percent, primarily driven by foreign currency denominated products. Other Asia sales were down 13 percent, primarily
driven by regulatory changes in Korea.
LATIN AMERICA
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$137 |
|
$125 |
|
10% |
Adjusted earnings (constant currency) |
|
|
$137 |
|
$115 |
|
19% |
Adjusted premiums, fees & other revenues |
|
|
$956 |
|
$988 |
|
(3)% |
Notable item(s) |
|
|
$0 |
|
$0 |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for Latin America were $137 million, up 10 percent, and up
19 percent on a constant currency basis, driven by volume growth, lower expenses and favorable underwriting, partially
offset by the negative impact of U.S. tax reform and lower equity markets impacting Chile encaje. Excluding the impact of U.S.
tax reform, adjusted earnings were up 19 percent, and up 30 percent on a constant currency basis.
- Adjusted return on allocated equity was 17.5 percent, and adjusted return on allocated
tangible equity was 29.1 percent.
- Adjusted premiums, fees & other revenues were $956 million, down 3 percent, and
up 5 percent on a constant currency basis, driven by volume growth across the region, led by Chile and Mexico.
- Sales for Latin America were $222 million, up 6 percent on a constant currency basis, due to
higher group sales.
EMEA
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$55 |
|
$79 |
|
(30)% |
Adjusted earnings (constant currency) |
|
|
$55 |
|
$72 |
|
(24)% |
Adjusted premiums, fees & other revenues |
|
|
$642 |
|
$651 |
|
(1)% |
Notable item(s) |
|
|
$0 |
|
$0 |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for EMEA were $55 million, down 30 percent, and down 24 percent on a
constant currency basis, as volume growth and lower expenses were more than offset by one-time items, unfavorable underwriting,
and the negative impact of U.S. tax reform. Excluding the impact of U.S. tax reform, adjusted earnings were down 24 percent, and
down 15 percent on a constant currency basis.
- Adjusted return on allocated equity was 6.3 percent, and adjusted return on allocated
tangible equity was 10.5 percent.
- Adjusted premiums, fees & other revenues were $642 million, down 1 percent, and up 3
percent on a constant currency basis.
- Sales for EMEA were $200 million, down 7 percent on a constant currency basis due to
lower volumes in the Gulf.
METLIFE HOLDINGS
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$223 |
|
$194 |
|
15% |
Adjusted premiums, fees & other revenues |
|
|
$1,385 |
|
$1,453 |
|
(5)% |
Notable item(s) |
|
|
$0 |
|
$(48) |
|
|
|
|
|
|
|
|
|
|
- Adjusted earnings for MetLife Holdings were $223 million, up 15 percent.
- Excluding notable items from both periods, adjusted earnings were down 8 percent. Excluding
the impact of U.S. tax reform, and excluding notable items in both periods, adjusted earnings were down 21 percent due to the
decline in equity markets, lower interest margins, and unfavorable life underwriting, partially offset by lower expenses.
- Adjusted return on allocated equity was 8.9 percent, and adjusted return on
allocated tangible equity was 10.0 percent.
- Adjusted premiums, fees & other revenues were $1.4 billion, down 5
percent.
CORPORATE & OTHER
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Adjusted earnings |
|
|
$(45) |
|
$(528) |
|
|
Notable item(s) |
|
|
$87 |
|
$(395) |
|
|
|
|
|
|
|
|
|
|
- Corporate & Other had an adjusted loss of $45 million, compared to an adjusted loss
of $528 million in the fourth quarter of 2017. Notable items in the current period include favorable tax items partially
offset by expenses associated with the company's previously announced cost saving initiatives and litigation expenses.
- Excluding notable items from both periods, adjusted loss was essentially flat. Excluding the
impact of U.S. tax reform, and excluding notable items in both periods, adjusted loss was $132 million, compared to an adjusted
loss of $207 million in the prior-year period.
INVESTMENTS
|
|
|
|
|
|
|
|
($ in millions) |
|
|
Three months ended
December 31, 2018
|
|
Three months ended
December 31, 2017
|
|
Change |
Net investment income (as reported on an adjusted basis) |
|
|
$4,375 |
|
$4,103 |
|
7% |
|
|
|
|
|
|
|
|
- As reported on an adjusted basis, net investment income was $4.4 billion, up
7 percent. Variable investment income was $237 million ($187 million, after tax), as compared to $216 million
($140 million, after tax) in the fourth quarter of 2017, driven by higher private equity income.
FOURTH QUARTER 2018 NOTABLE ITEMS
|
|
|
($ in millions) |
|
Adjusted Earnings |
|
Three months ended December 31, 2018 |
Notable Items |
|
U.S. |
|
Asia |
|
Latin
America
|
|
EMEA |
|
MetLife
Holdings
|
|
Corporate
&
Other
|
|
Total |
|
Group
Benefits
|
|
Retirement
and Income
Solutions
|
|
Property &
Casualty
|
|
|
|
|
|
|
Litigation reserves & settlement costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(60) |
|
$(60) |
Expense initiative costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(100) |
|
$(100) |
Tax adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$247 |
|
$247 |
Total notable items |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$87 |
|
$87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Information regarding the non-GAAP and other financial measures included in this news release and the reconciliation of the
non-GAAP financial measures to GAAP measures is provided in the Non-GAAP and Other Financial Disclosures discussions below, as well
as the tables that accompany this news release. Adjusted measures were formerly referred to as operating measures.
About MetLife
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (MetLife), is one of the world's leading financial services
companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional
customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market
positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit
www.metlife.com.
Conference Call
MetLife will hold its fourth quarter and full year 2018 earnings conference call and audio webcast on Thursday, February 7,
2019, from 9-10 a.m. (ET). The conference call will be available live via telephone and the internet. To listen via telephone, dial
800-230-1085 (U.S.) or 612-234-9959 (outside the U.S.). To listen to the conference call via the internet, visit
www.metlife.com through a link on the Investor Relations page. Those who want to listen to the
call via telephone or the internet should dial in or go to the website at least 15 minutes prior to the call to register, and/or
download and install any necessary audio software.
The conference call will be available for replay via telephone and the internet beginning at 11 a.m. (ET) on Thursday, February
7, 2019, until Thursday, February 14, 2019, at 11:59 p.m. (ET). To listen to a replay of the conference call via telephone, dial
800-475-6701 (U.S.) or 320-365-3844 (outside the U.S.). The access code for the replay is 462460. To access the replay of the
conference call over the internet, visit the above-mentioned website.
Non-GAAP and Other Financial Disclosures
Any references in this news release (except in this section and the
tables that accompany this release) to: |
|
should be read as, respectively: |
|
|
|
|
|
(i) |
|
net income (loss); |
|
(i) |
|
net income (loss) available to MetLife, Inc.’s common shareholders; |
(ii) |
|
net income (loss) per share; |
|
(ii) |
|
net income (loss) available to MetLife, Inc.’s common shareholders per diluted common
share; |
(iii) |
|
adjusted earnings; |
|
(iii) |
|
adjusted earnings available to common shareholders; |
(iv) |
|
adjusted earnings per share; |
|
(iv) |
|
adjusted earnings available to common shareholders per diluted common share; |
(v) |
|
book value per share; |
|
(v) |
|
book value per common share; |
(vi) |
|
book value per share, excluding AOCI other than FCTA; |
|
(vi) |
|
book value per common share, excluding AOCI other than FCTA; |
(vii) |
|
book value per share-tangible common stockholders’ equity; |
|
(vii) |
|
book value per common share-tangible common stockholders’ equity; |
(viii) |
|
premiums, fees and other revenues; |
|
(viii) |
|
premiums, fees and other revenues (adjusted); |
(ix) |
|
return on equity; |
|
(ix) |
|
return on MetLife, Inc.’s common stockholders’ equity; |
(x) |
|
return on equity, excluding AOCI other than FCTA; |
|
(x) |
|
return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI, other than
FCTA; |
(xi) |
|
adjusted return on equity, excluding AOCI other than FCTA; |
|
(xi) |
|
adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI other
than FCTA; |
(xii) |
|
tangible return on equity; and |
|
(xii) |
|
return on MetLife, Inc.’s tangible common stockholders' equity; and |
(xiii) |
|
adjusted tangible return on equity. |
|
(xiii) |
|
adjusted return on MetLife, Inc.’s tangible common stockholders’ equity. |
|
|
|
|
|
|
|
In this news release, MetLife presents certain measures of its performance that are not calculated in accordance with accounting
principles generally accepted in the United States of America (GAAP). MetLife believes that these non-GAAP financial measures
enhance the understanding of MetLife’s performance by highlighting the results of operations and the underlying profitability
drivers of the business.
The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial
measures calculated in accordance with GAAP:
Non-GAAP financial measures: |
|
Comparable GAAP financial measures: |
|
|
|
|
|
(i) |
|
adjusted revenues; |
|
(i) |
|
revenues; |
(ii) |
|
adjusted expenses; |
|
(ii) |
|
expenses; |
(iii) |
|
adjusted premiums, fees and other revenues; |
|
(iii) |
|
premiums, fees and other revenues; |
(iv) |
|
adjusted premiums, fees & other revenues, excluding pension risk transfer |
|
(iv) |
|
premiums, fees and other revenues; |
(v) |
|
adjusted earnings; |
|
(v) |
|
income (loss) from continuing operations, net of income tax; |
(vi) |
|
net investment income, as reported on an adjusted basis |
|
(vi) |
|
net investment income |
(vii) |
|
capitalization of deferred policy acquisition costs (DAC), as reported on an adjusted
basis |
|
(vii) |
|
capitalization of DAC |
(viii) |
|
other expenses, as reported on an adjusted basis |
|
(viii) |
|
other expenses |
(ix) |
|
other expenses, as reported on an adjusted basis, on a constant currency basis |
|
(ix) |
|
other expenses |
(x) |
|
adjusted earnings available to common shareholders; |
|
(x) |
|
net income (loss) available to MetLife, Inc.’s common shareholders; |
(xi) |
|
adjusted earnings available to common shareholders on a constant currency basis; |
|
(xi) |
|
net income (loss) available to MetLife, Inc.’s common shareholders; |
(xii) |
|
adjusted earnings available to common shareholders, excluding total notable
items; |
|
(xii) |
|
net income (loss) available to MetLife, Inc.’s common shareholders; |
(xiii) |
|
adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis; |
|
(xiii) |
|
net income (loss) available to MetLife, Inc.’s common shareholders; |
(xiv) |
|
adjusted earnings available to common shareholders per diluted common share; |
|
(xiv) |
|
net income (loss) available to MetLife, Inc.’s common shareholders per diluted common
share; |
(xv) |
|
adjusted earnings available to common shareholders on a constant currency basis per
diluted common share; |
|
(xv) |
|
net income (loss) available to MetLife, Inc.’s common shareholders per diluted common
share; |
(xvi) |
|
adjusted earnings available to common shareholders, excluding total notable items,
per diluted common share; |
|
(xvi) |
|
net income (loss) available to MetLife, Inc.’s common shareholders per diluted common
share; |
(xvii) |
|
adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis per diluted common share; |
|
(xvii) |
|
net income (loss) available to MetLife, Inc.’s common shareholders per diluted common
share; |
(xviii) |
|
adjusted return on equity; |
|
(xviii) |
|
return on equity; |
(xix) |
|
adjusted return on equity, excluding AOCI other than FCTA; |
|
(xix) |
|
return on equity; |
(xx) |
|
adjusted return on equity, excluding net equity of assets and liabilities of disposed
subsidiary (excludes AOCI other than FCTA) |
|
(xx) |
|
return on equity |
(xxi) |
|
adjusted tangible return on equity; |
|
(xxi) |
|
return on equity; |
(xxii) |
|
investment portfolio gains (losses); |
|
(xxii) |
|
net investment gains (losses); |
(xxiii) |
|
derivative gains (losses); |
|
(xxiii) |
|
net derivative gains (losses); |
(xxiv) |
|
MetLife, Inc.’s tangible common stockholders’ equity; |
|
(xxiv) |
|
MetLife, Inc.’s stockholders’ equity; |
(xxv) |
|
MetLife, Inc.’s tangible common stockholders’ equity, excluding total notable
items; |
|
(xxv) |
|
MetLife, Inc.’s stockholders’ equity; |
(xxvi) |
|
MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA; |
|
(xxvi) |
|
MetLife, Inc.’s stockholders’ equity; |
(xxvii) |
|
MetLife, Inc.’s common stockholders’ equity, excluding total notable items (excludes
AOCI other than FCTA); |
|
(xxvii) |
|
MetLife, Inc.’s stockholders’ equity; |
(xxviii) |
|
MetLife, Inc.’s common stockholders’ equity, excluding net equity of assets and
liabilities of disposed subsidiary (excludes AOCI other than FCTA); |
|
(xxviii) |
|
MetLife, Inc.’s stockholders’ equity; |
(xxix) |
|
book value per common share, excluding AOCI other than FCTA |
|
(xxix) |
|
book value per common share |
(xxx) |
|
book value per common share - tangible common stockholders' equity |
|
(xxx) |
|
book value per common share |
(xxxi) |
|
free cash flow of all holding companies; |
|
(xxxi) |
|
MetLife, Inc. (parent company only) net cash provided by (used in) operating
activities; |
(xxxii) |
|
adjusted expense ratio; |
|
(xxxii) |
|
expense ratio; |
(xxxiii) |
|
adjusted expense ratio, excluding total notable items related to other expenses and
PRT; |
|
(xxxiii) |
|
expense ratio; |
(xxxiv) |
|
direct expense ratio; and |
|
(xxxiv) |
|
expense ratio; and |
(xxxv) |
|
direct expense ratio, excluding total notable items related to direct expenses and
PRT. |
|
(xxxv) |
|
expense ratio. |
|
|
|
|
|
|
|
Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in this earnings news
release and in this period’s quarterly financial supplement, which is available at
www.metlife.com.
MetLife’s definitions of the various non-GAAP and other financial measures discussed in this news release may differ from those
used by other companies:
Adjusted earnings and related measures
- adjusted earnings;
- adjusted earnings available to common shareholders;
- adjusted earnings available to common shareholders on a constant currency basis;
- adjusted earnings available to common shareholders, excluding total notable items;
- adjusted earnings available to common shareholders, excluding total notable items, on a constant
currency basis;
- adjusted earnings available to common shareholders per diluted common share;
- adjusted earnings available to common shareholders on a constant currency basis per diluted common
share;
- adjusted earnings available to common shareholders, excluding total notable items per diluted common
share; and
- adjusted earnings available to common shareholders, excluding total notable items, on a constant
currency basis per diluted common share.
These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment
reporting, adjusted earnings is also MetLife’s GAAP measure of segment performance. Adjusted earnings and other financial measures
based on adjusted earnings are also the measures by which MetLife senior management’s and many other employees’ performance is
evaluated for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and other
financial measures based on adjusted earnings allow analysis of MetLife's performance relative to its business plan and facilitate
comparisons to industry results.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as
negative adjusted earnings. Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred stock
dividends.
Adjusted revenues and adjusted expenses
These financial measures, along with the related adjusted premiums, fees and other revenues, focus on our primary businesses
principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core
products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued
operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not meet the discontinued
operations criteria under GAAP and are referred to as divested businesses. Divested businesses also includes the net impact of
transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that
have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations
under GAAP.
Adjusted revenues also excludes net investment gains (losses) (NIGL) and net derivative gains (losses) (NDGL). Adjusted expenses
also excludes goodwill impairments.
The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:
- Universal life and investment-type product policy fees excludes the amortization of unearned revenue
related to NIGL and NDGL (Unearned revenue adjustments) and certain variable annuity guaranteed minimum income benefits (GMIB)
fees (GMIB fees);
- Net investment income: (i) includes earned income on derivatives and amortization of premium on
derivatives that are hedges of investments or that are used to replicate certain investments but do not qualify for hedge
accounting treatment (Investment hedge adjustments), (ii) excludes post-tax adjusted earnings adjustments relating to insurance
joint ventures accounted for under the equity method (Operating joint venture adjustments), (iii) excludes certain amounts
related to contractholder-directed equity securities (Unit-linked contract income), (iv) excludes certain amounts related to
securitization entities that are variable interest entities (VIEs) consolidated under GAAP (Securitization entities income); and
(v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under
the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in
NIGL under GAAP (Certain partnership distributions); and
- Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees
received in association with services provided under transition service agreements (TSA fees).
The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:
- Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder
dividend obligation related to NIGL and NDGL (PDO adjustments), (ii) inflation-indexed benefit adjustments associated with
contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the
total return of a contractually referenced pool of assets and other pass-through adjustments (Inflation and pass-through
adjustments), (iii) benefits and hedging costs related to GMIBs (GMIB costs), and (iv) market value adjustments associated with
surrenders or terminations of contracts (Market value adjustments);
- Interest credited to policyholder account balances includes adjustments for earned income on
derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for
hedge accounting treatment (PAB hedge adjustments) and excludes certain amounts related to net investment income earned on
contractholder-directed equity securities (Unit-linked contract costs);
- Amortization of DAC and value of business acquired (VOBA) excludes amounts related to: (i) NIGL and
NDGL, (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;
- Amortization of negative VOBA excludes amounts related to Market value adjustments;
- Interest expense on debt excludes certain amounts related to securitization entities that are VIEs
consolidated under GAAP (Securitization entities debt expense); and
- Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new
insurance regulatory requirements (Regulatory implementation costs), and (iii) acquisition, integration and other costs. Other
expenses includes TSA fees.
Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at
acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.
The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could
differ from MetLife’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact
related to the timing of certain tax credits, as well as certain tax reforms.
Investment portfolio gains (losses) and derivative gains (losses)
These are measures of investment and hedging activity. Investment portfolio gains (losses) principally excludes amounts that are
reported within net investment gains (losses) but do not relate to the performance of the investment portfolio, such as gains
(losses) on sales and divestitures of businesses, goodwill impairment or changes in estimated fair value. Derivative gains (losses)
principally excludes earned income on derivatives and amortization of premium on derivatives, where such derivatives are either
hedges of investments or are used to replicate certain investments, and where such derivatives do not qualify for hedge accounting.
This earned income and amortization of premium is reported within adjusted earnings and not within derivative gains (losses).
Return on equity, allocated equity, tangible equity and related measures
- MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA: MetLife, Inc.’s common
stockholders’ equity, excluding the net unrealized investment gains (losses) and defined benefit plans adjustment components of
AOCI, net of income tax.
- MetLife, Inc.’s common stockholders’ equity, excluding total notable items (excludes AOCI other than
FCTA): MetLife, Inc.’s common stockholders’ equity, excluding the net unrealized investment gains (losses), defined benefit plans
adjustment components of AOCI and total notable items, net of income tax.
- Return on MetLife, Inc.’s common stockholders’ equity: net income (loss) available to MetLife, Inc.’s
common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
- Return on MetLife, Inc.'s common stockholders' equity, excluding AOCI other than FCTA: net income
(loss) available to MetLife, Inc.’s common shareholders divided by MetLife, Inc.'s average common stockholders' equity, excluding
AOCI other than FCTA.
- Adjusted return on MetLife, Inc.'s common stockholders' equity: adjusted earnings available to common
shareholders divided by MetLife, Inc.'s average common stockholders' equity.
- Adjusted return on MetLife, Inc.'s common stockholders' equity, excluding AOCI other than FCTA:
adjusted earnings available to common shareholders divided by MetLife, Inc.'s average common stockholders' equity, excluding AOCI
other than FCTA.
- Adjusted return on MetLife, Inc.'s common stockholders' equity, excluding net equity of assets and
liabilities of disposed subsidiary (excludes AOCI other than FCTA): adjusted earnings available to common shareholders divided by
MetLife, Inc.'s average common stockholders' equity, excluding net equity of assets and liabilities of disposed subsidiary
(excludes AOCI other than FCTA).
- Allocated equity: portion of MetLife, Inc.’s common stockholders’ equity that management allocates to
each of its segments and sub-segments based on local capital requirements and economic capital. Economic capital is an internally
developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which
capital is deployed. MetLife management periodically reviews this model to ensure that it remains consistent with emerging
industry practice standards and the local capital requirements; allocated equity may be adjusted if warranted by such review.
Allocated equity excludes the impact of AOCI other than FCTA.
- Return on allocated equity: net income (loss) available to MetLife, Inc.’s common shareholders
divided by allocated equity.
- Adjusted return on allocated equity: adjusted earnings available to common shareholders divided by
allocated equity.
The above measures represent a level of equity consistent with the view that, in the ordinary course of business, MetLife does
not plan to sell most investments for the sole purpose of realizing gains or losses. Also refer to the utilization of adjusted
earnings and other financial measures based on adjusted earnings mentioned above.
- MetLife, Inc.’s tangible common stockholders’ equity or tangible equity: MetLife, Inc.’s common
stockholders’ equity, excluding AOCI other than FCTA, reduced by the impact of goodwill, value of distribution agreements (VODA)
and value of customer relationships acquired (VOCRA), all net of income tax.
- MetLife, Inc.’s tangible common stockholders’ equity, adjusted for total notable items: MetLife,
Inc.’s common stockholders’ equity, excluding AOCI other than FCTA, reduced by the impact of goodwill, value of distribution
agreements (VODA), value of customer relationships acquired (VOCRA) and total notable items, all net of income tax.
- Return on MetLife, Inc.’s tangible common stockholders' equity: net income (loss) available to
MetLife, Inc.’s common shareholders, excluding amortization of VODA and VOCRA, net of income tax, divided by MetLife, Inc.'s
average tangible common stockholders' equity.
- Adjusted return on MetLife, Inc.'s tangible common stockholders' equity: adjusted earnings available
to common shareholders, excluding amortization of VODA and VOCRA, net of income tax, divided by MetLife, Inc.'s average tangible
common stockholders' equity.
- Return on allocated tangible equity: net income (loss) available to MetLife, Inc.’s common
shareholders, excluding amortization of VODA and VOCRA, net of income tax, divided by allocated tangible equity.
- Adjusted return on allocated tangible equity: adjusted earnings available to common shareholders,
excluding amortization of VODA and VOCRA, net of income tax, divided by allocated tangible equity.
The above measures are, when considered in conjunction with regulatory capital ratios, a measure of capital adequacy.
Expense ratio, direct expense ratio, adjusted expense ratio and related measures
- Expense ratio: other expenses, net of capitalization of DAC, divided by premiums, fees and other
revenues.
- Direct expense ratio: direct expenses, on an adjusted basis, divided by adjusted premiums, fees and
other revenues.
- Direct expense ratio, excluding total notable items related to direct expenses and PRT: direct
expenses, on an adjusted basis, excluding total notable items related to direct expenses, divided by adjusted premiums, fees and
other revenues, excluding PRT.
- Adjusted expense ratio: other expenses, net of capitalization of DAC, both on an adjusted basis,
divided by adjusted premiums, fees and other revenues.
- Adjusted expense ratio, excluding total notable items related to other expenses and PRT: other
expenses, net of capitalization of DAC, both on an adjusted basis, excluding total notable items related to other expenses,
divided by adjusted premiums, fees and other revenues, excluding PRT.
Statistical sales information:
- U.S.:
- Group Benefits: calculated using 10% of single premium deposits and 100% of annualized full-year
premiums and fees from recurring premium policy sales of all products.
- Retirement and Income Solutions: calculated using 10% of single premium deposits and 100% of
annualized full-year premiums and fees only from recurring premium policy sales of specialized benefit resources and
corporate-owned life insurance.
- Property & Casualty: calculated based on first year direct written premium, net of
cancellation and endorsement activity.
- Latin America, Asia and EMEA: calculated using 10% of single-premium deposits (mainly from retirement
products such as variable annuity, fixed annuity and pensions), 20% of single-premium deposits from credit insurance and 100% of
annualized full-year premiums and fees from recurring-premium policy sales of all products (mainly from risk and protection
products such as individual life, accident & health and group).
Sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity.
The following additional information is relevant to an understanding of MetLife’s performance results:
- All comparisons on a constant currency basis reflect the impact of changes in foreign currency
exchange rates and are calculated using the average foreign currency exchange rates for the current period and are applied to
each of the comparable periods. As a result, amounts will be updated each period to reflect the average foreign currency exchange
rates.
- Volume growth, as discussed in the context of business growth, is the period over period percentage
change in adjusted earnings available to common shareholders attributable to adjusted premiums, fees and other revenues and
assets under management levels, applying a model in which certain margins and factors are held constant. The most
significant of such items are underwriting margins, investment margins, changes in equity market performance, expense margins and
the impact of changes in foreign currency exchange rates.
- Asymmetrical and non-economic accounting refers to: (i) the portion of net derivative gains (losses)
on embedded derivatives attributable to the inclusion of MetLife’s credit spreads in the liability valuations, (ii) hedging
activity that generates net derivative gains (losses) and creates fluctuations in net income because hedge accounting cannot be
achieved and the item being hedged does not a have an offsetting gain or loss recognized in earnings, (iii) inflation-indexed
benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic
crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through
adjustments, and (iv) impact of changes in foreign currency exchange rates on the re-measurement of foreign denominated unhedged
funding agreements and financing transactions to the U.S. dollar and the re-measurement of certain liabilities from
non-functional currencies to functional currencies. MetLife believes that excluding the impact of asymmetrical and non-economic
accounting from total GAAP results enhances investor understanding of MetLife’s performance by disclosing how these accounting
practices affect reported GAAP results.
- MetLife uses a measure of free cash flow to facilitate an understanding of its ability to generate
cash for reinvestment into its businesses or use in non-mandatory capital actions. MetLife defines free cash flow as the sum of
cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other net flows of the
holding companies (including capital contributions to subsidiaries), and net contributions from debt to be at or below target
leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock dividends and repurchases, debt
reduction and mergers and acquisitions. Free cash flow should not be viewed as a substitute for net cash provided by (used in)
operating activities calculated in accordance with GAAP. The free cash flow ratio is typically expressed as a percentage of
annual adjusted earnings available to common shareholders.
- Notable items represent a positive (negative) impact to adjusted earnings available to common
shareholders. Notable items reflect the unexpected impact of events that affect MetLife’s results, but that were unknown and that
MetLife could not anticipate when it devised its Business Plan. Notable items also include certain items regardless of the extent
anticipated in the Business Plan, to help investors have a better understanding of MetLife's results and to evaluate and forecast
those results.
Forward-Looking Statements
This news release may contain or incorporate by reference information that includes or is based upon forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or
forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or
current facts. They use words and terms such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” "will,"
and other words and terms of similar meaning, or are tied to future periods, in connection with a discussion of future performance.
In particular, these include statements relating to future actions, prospective services or products, future performance or results
of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings,
trends in operations and financial results.
Many factors will be important in determining the results of MetLife, Inc., its subsidiaries and affiliates. Forward-looking
statements are based on our assumptions and current expectations, which may be inaccurate, and on the current economic environment,
which may change. These statements are not guarantees of future performance. They involve a number of risks and uncertainties that
are difficult to predict. Results could differ materially from those expressed or implied in the forward-looking statements. Risks,
uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in
MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission. These factors include: (1) adverse effects which may
arise in connection with the material weaknesses in our internal control over financial reporting or our failure to promptly
remediate them; (2) difficult conditions in the global capital markets; (3) increased volatility and disruption of the global
capital and credit markets, which may affect our ability to meet liquidity needs and access capital, including through our credit
facilities, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge
collateral or make payments related to declines in value of specified assets, including assets supporting risks ceded to certain of
our captive reinsurers or hedging arrangements associated with those risks; (4) exposure to global financial and capital
market risks, including as a result of the United Kingdom’s notice of withdrawal from the European Union or other disruption in
global political, security or economic conditions; (5) impact on us of comprehensive financial services regulation reform;
(6) numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act
which may impact how we conduct our business, including those compelling the liquidation of certain financial institutions;
(7) regulatory, legislative or tax changes relating to our insurance, international, or other operations that may affect the
cost of, or demand for, our products or services, or increase the cost or administrative burdens of providing benefits to
employees; (8) adverse results or other consequences from litigation, arbitration or regulatory investigations; (9) potential
liquidity and other risks resulting from our participation in a securities lending program and other transactions;
(10) investment losses and defaults, and changes to investment valuations; (11) changes in assumptions related to
investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill;
(12) impairments of goodwill and realized losses or market value impairments to illiquid assets; (13) defaults on our
mortgage loans; (14) the defaults or deteriorating credit of other financial institutions that could adversely affect us;
(15) economic, political, legal, currency and other risks relating to our international operations, including with respect to
fluctuations of exchange rates; (16) downgrades in our claims paying ability, financial strength or credit ratings;
(17) a deterioration in the experience of the closed block established in connection with the reorganization of Metropolitan
Life Insurance Company; (18) availability and effectiveness of reinsurance, hedging or indemnification arrangements, as well
as any default or failure of counterparties to perform; (19) differences between actual claims experience and underwriting and
reserving assumptions; (20) ineffectiveness of risk management policies and procedures; (21) catastrophe losses;
(22) increasing cost and limited market capacity for statutory life insurance reserve financings; (23) heightened
competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new
products by new and existing competitors, and for personnel; (24) exposure to losses related to variable annuity guarantee
benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates,
unanticipated policyholder behavior, mortality or longevity, and any adjustment for nonperformance risk; (25) our ability to
address difficulties, unforeseen liabilities, asset impairments, or rating agency actions arising from (a) business acquisitions
and integrating and managing the growth of such acquired businesses, (b) dispositions of businesses via sale, initial public
offering, spin-off or otherwise, including failure to achieve projected operational benefits from such transactions and any
restrictions, liabilities, losses or indemnification obligations arising from any transitional services or tax arrangements related
to the separation of any business, or from the failure of such a separation to qualify for any intended tax-free treatment, (c)
entry into joint ventures, or (d) legal entity reorganizations; (26) unanticipated or adverse developments that could adversely
affect our achieving expected operational or other benefits from the separation of Brighthouse Financial, Inc. and its subsidiaries
(“Brighthouse”); (27) liabilities, losses or indemnification obligations arising from our transitional services, investment
management or tax arrangements or other agreements with Brighthouse; (28) failure of the separation of Brighthouse to qualify for
intended tax-free treatment; (29) legal, regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends
and repurchase common stock; (30) MetLife, Inc.’s and its subsidiary holding companies’ primary reliance, as holding
companies, on dividends from subsidiaries to meet free cash flow targets and debt payment obligations and the applicable regulatory
restrictions on the ability of the subsidiaries to pay such dividends; (31) the possibility that MetLife, Inc.’s Board of
Directors may influence the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust;
(32) changes in accounting standards, practices and/or policies; (33) increased expenses relating to pension and
postretirement benefit plans, as well as health care and other employee benefits; (34) inability to protect our intellectual
property rights or claims of infringement of the intellectual property rights of others; (35) difficulties in marketing and
distributing products through our distribution channels; (36) provisions of laws and our incorporation documents that may
delay, deter or prevent takeovers and corporate combinations involving MetLife; (37) the effects of business disruption or
economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities, or natural catastrophes,
including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or other information
security systems and management continuity planning; (38) any failure to protect the confidentiality of client information;
(39) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks;
(40) the impact of technological changes on our businesses; and (41) other risks and uncertainties described from time to time
in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission.
MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc.
later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on
related subjects in reports to the U.S. Securities and Exchange Commission.
|
MetLife, Inc. |
GAAP Consolidated Statements of Operations |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
|
|
|
Premiums |
|
|
|
$ |
9,267 |
|
|
$ |
9,571 |
|
|
$ |
43,840 |
|
|
$ |
38,992 |
|
Universal life and investment-type product policy fees |
|
|
|
1,397 |
|
|
1,358 |
|
|
5,502 |
|
|
5,510 |
|
Net investment income |
|
|
|
3,462 |
|
|
4,454 |
|
|
16,166 |
|
|
17,363 |
|
Other revenues |
|
|
|
452 |
|
|
406 |
|
|
1,880 |
|
|
1,341 |
|
Net investment gains (losses) |
|
|
|
145 |
|
|
106 |
|
|
(298 |
) |
|
(308 |
) |
Net derivative gains (losses) |
|
|
|
939 |
|
|
(55 |
) |
|
851 |
|
|
(590 |
) |
Total revenues |
|
|
|
15,662 |
|
|
15,840 |
|
|
67,941 |
|
|
62,308 |
|
|
|
|
|
|
|
|
|
. |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
Policyholder benefits and claims |
|
|
|
8,992 |
|
|
9,295 |
|
|
42,656 |
|
|
38,313 |
|
Interest credited to policyholder account balances |
|
|
|
486 |
|
|
1,526 |
|
|
4,013 |
|
|
5,607 |
|
Policyholder dividends |
|
|
|
318 |
|
|
306 |
|
|
1,251 |
|
|
1,231 |
|
Capitalization of DAC |
|
|
|
(814 |
) |
|
(784 |
) |
|
(3,254 |
) |
|
(3,002 |
) |
Amortization of DAC and VOBA |
|
|
|
843 |
|
|
736 |
|
|
2,975 |
|
|
2,681 |
|
Amortization of negative VOBA |
|
|
|
(11 |
) |
|
(27 |
) |
|
(56 |
) |
|
(140 |
) |
Interest expense on debt |
|
|
|
260 |
|
|
278 |
|
|
1,122 |
|
|
1,129 |
|
Other expenses |
|
|
|
3,117 |
|
|
3,549 |
|
|
12,927 |
|
|
12,953 |
|
Total expenses |
|
|
|
13,191 |
|
|
14,879 |
|
|
61,634 |
|
|
58,772 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before provision for income tax |
|
|
|
2,471 |
|
|
961 |
|
|
6,307 |
|
|
3,536 |
|
Provision for income tax expense (benefit) |
|
|
|
409 |
|
|
(1,354 |
) |
|
1,179 |
|
|
(1,470 |
) |
Income (loss) from continuing operations, net of income tax |
|
|
|
2,062 |
|
|
2,315 |
|
|
5,128 |
|
|
5,006 |
|
Income (loss) from discontinued operations, net of income tax |
|
|
|
— |
|
|
— |
|
|
— |
|
|
(986 |
) |
Net income (loss) |
|
|
|
2,062 |
|
|
2,315 |
|
|
5,128 |
|
|
4,020 |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
|
(5 |
) |
|
(2 |
) |
|
5 |
|
|
10 |
|
Net income (loss) attributable to MetLife, Inc. |
|
|
|
2,067 |
|
|
2,317 |
|
|
5,123 |
|
|
4,010 |
|
Less: Preferred stock dividends |
|
|
|
57 |
|
|
45 |
|
|
141 |
|
|
103 |
|
Net income (loss) available to MetLife, Inc.'s common shareholders |
|
|
|
$ |
2,010 |
|
|
$ |
2,272 |
|
|
$ |
4,982 |
|
|
$ |
3,907 |
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
(Unaudited) |
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation to Adjusted Earnings Available to Common
Shareholders |
|
|
|
|
|
Earnings Per
Weighted Average
Common Share Diluted (1) |
|
|
|
Earnings Per
Weighted Average
Common Share Diluted (1) |
|
|
|
Earnings Per
Weighted Average
Common Share Diluted (1) |
|
|
|
Earnings Per
Weighted Average
Common Share Diluted (1) |
Net income (loss) available to MetLife, Inc.'s common shareholders |
|
|
|
$ |
2,010 |
|
|
$ |
2.04 |
|
|
$ |
2,272 |
|
|
$ |
2.14 |
|
|
$ |
4,982 |
|
|
$ |
4.91 |
|
|
$ |
3,907 |
|
|
$ |
3.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments from net income (loss) available to common shareholders to adjusted
earnings available to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net investment gains (losses) |
|
|
|
145 |
|
|
0.15 |
|
|
106 |
|
|
0.10 |
|
|
(298 |
) |
|
(0.29 |
) |
|
(308 |
) |
|
(0.29 |
) |
Net derivative gains (losses) |
|
|
|
939 |
|
|
0.95 |
|
|
(55 |
) |
|
(0.05 |
) |
|
851 |
|
|
0.84 |
|
|
(590 |
) |
|
(0.55 |
) |
Premiums |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(347 |
) |
|
(0.32 |
) |
Universal life and investment-type product policy fees |
|
|
|
19 |
|
|
0.02 |
|
|
29 |
|
|
0.03 |
|
|
120 |
|
|
0.12 |
|
|
103 |
|
|
0.10 |
|
Net investment income |
|
|
|
(913 |
) |
|
(0.92 |
) |
|
351 |
|
|
0.33 |
|
|
(1,217 |
) |
|
(1.21 |
) |
|
819 |
|
|
0.75 |
|
Other revenues |
|
|
|
75 |
|
|
0.08 |
|
|
6 |
|
|
0.01 |
|
|
324 |
|
|
0.31 |
|
|
(113 |
) |
|
(0.10 |
) |
Policyholder benefits and claims and policyholder dividends |
|
|
|
78 |
|
|
0.08 |
|
|
2 |
|
|
— |
|
|
(174 |
) |
|
(0.17 |
) |
|
(204 |
) |
|
(0.19 |
) |
Interest credited to policyholder account balances |
|
|
|
731 |
|
|
0.73 |
|
|
(420 |
) |
|
(0.40 |
) |
|
680 |
|
|
0.67 |
|
|
(1,294 |
) |
|
(1.21 |
) |
Capitalization of DAC |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
(34 |
) |
|
(0.03 |
) |
Amortization of DAC and VOBA |
|
|
|
(112 |
) |
|
(0.11 |
) |
|
7 |
|
|
0.01 |
|
|
(215 |
) |
|
(0.21 |
) |
|
(33 |
) |
|
(0.03 |
) |
Amortization of negative VOBA |
|
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
|
— |
|
|
9 |
|
|
0.01 |
|
Interest expense on debt |
|
|
|
(18 |
) |
|
(0.02 |
) |
|
— |
|
|
— |
|
|
(63 |
) |
|
(0.06 |
) |
|
16 |
|
|
0.01 |
|
Other expenses |
|
|
|
(62 |
) |
|
(0.06 |
) |
|
(272 |
) |
|
(0.26 |
) |
|
(398 |
) |
|
(0.40 |
) |
|
(544 |
) |
|
(0.50 |
) |
Goodwill impairment |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Provision for income tax (expense) benefit |
|
|
|
(213 |
) |
|
(0.22 |
) |
|
1,837 |
|
|
1.73 |
|
|
(86 |
) |
|
(0.08 |
) |
|
3,188 |
|
|
2.96 |
|
Income (loss) from discontinued operations, net of income tax |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(986 |
) |
|
(0.91 |
) |
Add: Net income (loss) attributable to noncontrolling interests |
|
|
|
(5 |
) |
|
(0.01 |
) |
|
(2 |
) |
|
— |
|
|
5 |
|
|
— |
|
|
10 |
|
|
0.01 |
|
Adjusted earnings available to common shareholders |
|
|
|
1,336 |
|
|
1.35 |
|
|
678 |
|
|
0.64 |
|
|
5,461 |
|
|
5.39 |
|
|
4,235 |
|
|
3.93 |
|
Less: Total notable items (2) |
|
|
|
87 |
|
|
0.09 |
|
|
(498 |
) |
|
(0.47 |
) |
|
(103 |
) |
|
(0.10 |
) |
|
(622 |
) |
|
(0.58 |
) |
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
|
|
$ |
1,249 |
|
|
$ |
1.26 |
|
|
$ |
1,176 |
|
|
$ |
1.11 |
|
|
$ |
5,564 |
|
|
$ |
5.49 |
|
|
$ |
4,857 |
|
|
$ |
4.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis |
|
|
|
$ |
1,336 |
|
|
$ |
1.35 |
|
|
$ |
656 |
|
|
$ |
0.62 |
|
|
$ |
5,461 |
|
|
$ |
5.39 |
|
|
$ |
4,230 |
|
|
$ |
3.92 |
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2) |
|
|
|
$ |
1,249 |
|
|
$ |
1.26 |
|
|
$ |
1,154 |
|
|
$ |
1.09 |
|
|
$ |
5,564 |
|
|
$ |
5.49 |
|
|
$ |
4,852 |
|
|
$ |
4.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - diluted |
|
|
|
|
|
987.6 |
|
|
|
|
1,062.1 |
|
|
|
|
1,013.9 |
|
|
|
|
1,078.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Premiums, Fees and Other Revenues |
|
|
|
|
|
|
|
|
|
|
Premiums, fees and other revenues |
|
|
|
$ |
11,116 |
|
|
$ |
11,335 |
|
|
$ |
51,222 |
|
|
$ |
45,843 |
|
Less: Unearned revenue adjustments |
|
|
|
(8 |
) |
|
(2 |
) |
|
(7 |
) |
|
12 |
|
GMIB fees |
|
|
|
27 |
|
|
31 |
|
|
120 |
|
|
125 |
|
Settlement of foreign currency earnings hedges |
|
|
|
5 |
|
|
6 |
|
|
19 |
|
|
22 |
|
TSA fees |
|
|
|
70 |
|
|
— |
|
|
305 |
|
|
— |
|
Divested businesses |
|
|
|
— |
|
|
— |
|
|
7 |
|
|
(516 |
) |
Adjusted premiums, fees and other revenues |
|
|
|
$ |
11,022 |
|
|
$ |
11,300 |
|
|
$ |
50,778 |
|
|
$ |
46,200 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income |
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
$ |
3,462 |
|
|
$ |
4,454 |
|
|
$ |
16,166 |
|
|
$ |
17,363 |
|
Less: Investment hedge adjustments |
|
|
|
(121 |
) |
|
(85 |
) |
|
(475 |
) |
|
(435 |
) |
Operating joint venture adjustments |
|
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
Unit-linked contract income |
|
|
|
(765 |
) |
|
436 |
|
|
(683 |
) |
|
1,300 |
|
Securitization entities income |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Certain partnership distributions |
|
|
|
(27 |
) |
|
— |
|
|
(61 |
) |
|
— |
|
Divested businesses |
|
|
|
— |
|
|
— |
|
|
1 |
|
|
(46 |
) |
Net investment income, as reported on an adjusted basis |
|
|
|
$ |
4,375 |
|
|
$ |
4,103 |
|
|
$ |
17,383 |
|
|
$ |
16,544 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and Expenses |
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
$ |
15,662 |
|
|
$ |
15,840 |
|
|
$ |
67,941 |
|
|
$ |
62,308 |
|
Less: Net investment gains (losses) |
|
|
|
145 |
|
|
106 |
|
|
(298 |
) |
|
(308 |
) |
Less: Net derivative gains (losses) |
|
|
|
939 |
|
|
(55 |
) |
|
851 |
|
|
(590 |
) |
Less: Adjustments related to net investment gains (losses) and net derivative gains
(losses) |
|
|
|
(8 |
) |
|
(2 |
) |
|
(7 |
) |
|
12 |
|
Less: Other adjustments to revenues: |
|
|
|
|
|
|
|
|
|
|
GMIB fees |
|
|
|
27 |
|
|
31 |
|
|
120 |
|
|
125 |
|
Investment hedge adjustments |
|
|
|
(121 |
) |
|
(85 |
) |
|
(475 |
) |
|
(435 |
) |
Operating joint venture adjustments |
|
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
Unit-linked contract income |
|
|
|
(765 |
) |
|
436 |
|
|
(683 |
) |
|
1,300 |
|
Securitization entities income |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Settlement of foreign currency earnings hedges |
|
|
|
5 |
|
|
6 |
|
|
19 |
|
|
22 |
|
Certain partnership distributions |
|
|
|
(27 |
) |
|
— |
|
|
(61 |
) |
|
— |
|
TSA fees |
|
|
|
70 |
|
|
— |
|
|
305 |
|
|
— |
|
Divested businesses |
|
|
|
— |
|
|
— |
|
|
8 |
|
|
(562 |
) |
Total adjusted revenues |
|
|
|
$ |
15,397 |
|
|
$ |
15,403 |
|
|
$ |
68,161 |
|
|
$ |
62,744 |
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
|
$ |
13,191 |
|
|
$ |
14,879 |
|
|
$ |
61,634 |
|
|
$ |
58,772 |
|
Less: Adjustments related to net investment (gains) losses and net derivative (gains)
losses |
|
|
|
44 |
|
|
(28 |
) |
|
109 |
|
|
(60 |
) |
Less: Goodwill impairment |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Less: Other adjustments to expenses: |
|
|
|
|
|
|
|
|
|
|
Inflation and pass-through adjustments |
|
|
|
1 |
|
|
(77 |
) |
|
29 |
|
|
(31 |
) |
GMIB costs and amortization of DAC and VOBA related to GMIB fees and GMIB costs |
|
|
|
(10 |
) |
|
93 |
|
|
252 |
|
|
352 |
|
Market value adjustments and amortization of DAC, VOBA and negative VOBA related to
market value adjustments |
|
|
|
(1 |
) |
|
2 |
|
|
(2 |
) |
|
13 |
|
PAB hedge adjustments |
|
|
|
(1 |
) |
|
— |
|
|
(4 |
) |
|
(3 |
) |
Unit-linked contract costs |
|
|
|
(730 |
) |
|
420 |
|
|
(676 |
) |
|
1,264 |
|
Securitization entities debt expense |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Noncontrolling interest |
|
|
|
5 |
|
|
5 |
|
|
(10 |
) |
|
(12 |
) |
Regulatory implementation costs |
|
|
|
5 |
|
|
— |
|
|
11 |
|
|
— |
|
Acquisition, integration and other costs |
|
|
|
(14 |
) |
|
23 |
|
|
24 |
|
|
65 |
|
TSA fees |
|
|
|
70 |
|
|
— |
|
|
305 |
|
|
— |
|
Divested businesses |
|
|
|
14 |
|
|
244 |
|
|
130 |
|
|
496 |
|
Total adjusted expenses |
|
|
|
$ |
13,808 |
|
|
$ |
14,197 |
|
|
$ |
61,466 |
|
|
$ |
56,688 |
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
(Unaudited) |
(In millions, except per share and ratio data) |
|
|
|
|
December 31, |
Book Value (3) |
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
Book value per common share |
|
|
|
$ |
51.53 |
|
|
$ |
54.24 |
|
Less: Net unrealized investment gains (losses), net of income tax |
|
|
|
9.03 |
|
|
13.09 |
|
Defined benefit plans adjustment, net of income tax |
|
|
|
(2.12 |
) |
|
(1.77 |
) |
Book value per common share, excluding AOCI other than FCTA |
|
|
|
44.62 |
|
|
42.92 |
|
Less: Goodwill, net of income tax |
|
|
|
9.52 |
|
|
8.93 |
|
VODA and VOCRA, net of income tax |
|
|
|
0.33 |
|
|
0.36 |
|
Book value per common share - tangible common stockholders' equity |
|
|
|
$ |
34.77 |
|
|
$ |
33.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding, end of period |
|
|
|
958.6 |
|
|
1,043.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
December 31, |
Expense Detail and Ratios |
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
Reconciliation of Capitalization of DAC to Capitalization of DAC, as reported on
an adjusted basis. |
|
|
|
|
|
|
Capitalization of DAC |
|
|
|
$ |
(814 |
) |
|
$ |
(784 |
) |
Less: Divested businesses |
|
|
|
— |
|
|
— |
|
Capitalization of DAC, as reported on an adjusted basis |
|
|
|
$ |
(814 |
) |
|
$ |
(784 |
) |
|
|
|
|
|
|
|
Reconciliation of Other Expenses to Other Expenses, as reported on an adjusted
basis |
|
|
|
|
|
|
Other expenses |
|
|
|
$ |
3,117 |
|
|
$ |
3,549 |
|
Less: Noncontrolling interest |
|
|
|
5 |
|
|
5 |
|
Less: Regulatory implementation costs |
|
|
|
5 |
|
|
— |
|
Less: Acquisition, integration and other costs |
|
|
|
(14 |
) |
|
23 |
|
Less: TSA fees |
|
|
|
70 |
|
|
— |
|
Less: Divested businesses |
|
|
|
(4 |
) |
|
244 |
|
Other expenses, as reported on an adjusted basis |
|
|
|
$ |
3,055 |
|
|
$ |
3,277 |
|
|
|
|
|
|
|
|
Other detail and ratios |
|
|
|
|
|
|
Other expenses |
|
|
|
$ |
3,117 |
|
|
$ |
3,549 |
|
Capitalization of DAC |
|
|
|
(814 |
) |
|
(784 |
) |
Other expenses, net of capitalization of DAC |
|
|
|
$ |
2,303 |
|
|
$ |
2,765 |
|
|
|
|
|
|
|
|
Premiums, fees and other revenues |
|
|
|
$ |
11,116 |
|
|
$ |
11,335 |
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
20.7 |
% |
|
24.4 |
% |
|
|
|
|
|
|
|
Direct expenses |
|
|
|
$ |
1,369 |
|
|
$ |
1,697 |
|
Less: Total notable items related to direct expenses |
|
|
|
(19 |
) |
|
149 |
|
Direct expenses, excluding total notable items related to direct
expenses |
|
|
|
$ |
1,388 |
|
|
$ |
1,548 |
|
|
|
|
|
|
|
|
Other expenses, as reported on an adjusted basis |
|
|
|
$ |
3,055 |
|
|
$ |
3,277 |
|
Capitalization of DAC, as reported on an adjusted basis |
|
|
|
(814 |
) |
|
(784 |
) |
Other expenses, net of capitalization of DAC, as reported on an adjusted basis |
|
|
|
2,241 |
|
|
2,493 |
|
Less: Total notable items related to other expenses, as reported on an
adjusted basis |
|
|
|
(19 |
) |
|
149 |
|
Other expenses, net of capitalization of DAC, excluding total notable items
related to other expenses, as reported on an adjusted basis |
|
|
|
$ |
2,260 |
|
|
$ |
2,344 |
|
|
|
|
|
|
|
|
Adjusted premiums, fees and other revenues |
|
|
|
$ |
11,022 |
|
|
$ |
11,300 |
|
Less: Pension risk transfer (PRT) |
|
|
|
(76 |
) |
|
597 |
|
Adjusted premiums, fees and other revenues, excluding PRT |
|
|
|
$ |
11,098 |
|
|
$ |
10,703 |
|
|
|
|
|
|
|
|
Direct expense ratio |
|
|
|
12.4 |
% |
|
15.0 |
% |
Direct expense ratio, excluding total notable items related to direct expenses and
PRT |
|
|
|
12.5 |
% |
|
14.5 |
% |
Adjusted expense ratio |
|
|
|
20.3 |
% |
|
22.1 |
% |
Adjusted expense ratio, excluding total notable items related to other expenses and
PRT |
|
|
|
20.4 |
% |
|
21.9 |
% |
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
(Unaudited) |
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
|
|
December 31, (4) |
|
December 31, |
Return on Equity |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Return on MetLife, Inc.'s: |
|
|
|
|
|
|
|
|
|
|
Common stockholders' equity |
|
|
|
16.5 |
% |
|
16.3 |
% |
|
9.6 |
% |
|
6.3 |
% |
Common stockholders' equity, excluding AOCI other than FCTA |
|
|
|
18.9 |
% |
|
20.6 |
% |
|
11.5 |
% |
|
7.7 |
% |
Tangible common stockholders' equity |
|
|
|
24.4 |
% |
|
26.4 |
% |
|
14.8 |
% |
|
9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted return on MetLife, Inc.'s: |
|
|
|
|
|
|
|
|
|
|
Common stockholders' equity |
|
|
|
10.9 |
% |
|
4.9 |
% |
|
10.6 |
% |
|
6.8 |
% |
Common stockholders' equity, excluding AOCI other than FCTA |
|
|
|
12.5 |
% |
|
6.1 |
% |
|
12.6 |
% |
|
8.4 |
% |
Common stockholders' equity, excluding total notable items (excludes AOCI other than
FCTA) (2) |
|
|
|
11.7 |
% |
|
10.6 |
% |
|
12.8 |
% |
|
9.6 |
% |
Common stockholders' equity, excluding net equity of assets and liabilities of
disposed subsidiary (excludes AOCI other than FCTA) |
|
|
|
12.5 |
% |
|
6.1 |
% |
|
12.6 |
% |
|
10.3 |
% |
Tangible common stockholders' equity |
|
|
|
16.2 |
% |
|
8.0 |
% |
|
16.3 |
% |
|
10.4 |
% |
Tangible common stockholders' equity, excluding total notable items (2) |
|
|
|
15.1 |
% |
|
13.6 |
% |
|
16.5 |
% |
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
Return on Allocated Equity: |
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
|
25.8 |
% |
|
21.5 |
% |
|
|
|
|
Asia |
|
|
|
21.7 |
% |
|
11.8 |
% |
|
|
|
|
Latin America |
|
|
|
4.7 |
% |
|
8.0 |
% |
|
|
|
|
EMEA |
|
|
|
9.2 |
% |
|
11.3 |
% |
|
|
|
|
MetLife Holdings |
|
|
|
16.1 |
% |
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Allocated Tangible Equity: |
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
|
29.9 |
% |
|
25.0 |
% |
|
|
|
|
Asia |
|
|
|
32.9 |
% |
|
18.8 |
% |
|
|
|
|
Latin America |
|
|
|
7.9 |
% |
|
13.8 |
% |
|
|
|
|
EMEA |
|
|
|
15.1 |
% |
|
18.4 |
% |
|
|
|
|
MetLife Holdings |
|
|
|
18.0 |
% |
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Allocated Equity: |
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
|
25.2 |
% |
|
19.5 |
% |
|
|
|
|
Asia |
|
|
|
7.9 |
% |
|
9.9 |
% |
|
|
|
|
Latin America |
|
|
|
17.5 |
% |
|
17.0 |
% |
|
|
|
|
EMEA |
|
|
|
6.3 |
% |
|
9.8 |
% |
|
|
|
|
MetLife Holdings |
|
|
|
8.9 |
% |
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Allocated Tangible Equity: |
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
|
29.2 |
% |
|
22.7 |
% |
|
|
|
|
Asia |
|
|
|
12.0 |
% |
|
15.8 |
% |
|
|
|
|
Latin America |
|
|
|
29.1 |
% |
|
29.3 |
% |
|
|
|
|
EMEA |
|
|
|
10.5 |
% |
|
16.1 |
% |
|
|
|
|
MetLife Holdings |
|
|
|
10.0 |
% |
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Reconciliation of Net Cash Provided by Operating Activities
of MetLife, Inc. |
to Free Cash Flow of All Holding Companies |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
|
|
|
|
2018 |
|
2017 |
|
|
|
|
(In billions, except ratios) |
MetLife, Inc. (parent company only) net cash provided by operating activities |
|
|
|
$ |
5.5 |
|
|
$ |
6.5 |
|
Adjustments from net cash provided by operating activities to free cash flow: |
|
|
|
|
|
|
Add: Incremental debt to be at or below target leverage ratios |
|
|
|
— |
|
|
— |
|
Add: Adjustments from net cash provided by operating activities to free cash
flow (5) |
|
|
|
(1.1 |
) |
|
(0.3 |
) |
MetLife, Inc. (parent company only) free cash flow |
|
|
|
4.4 |
|
|
6.2 |
|
Other MetLife, Inc. holding companies free cash flow (6) |
|
|
|
(1.0 |
) |
|
(0.5 |
) |
Free cash flow of all holding companies |
|
|
|
$ |
3.4 |
|
|
$ |
5.7 |
|
|
|
|
|
|
|
|
Ratio of net cash provided by operating activities to consolidated net income
(loss) available to MetLife, Inc.'s common shareholders: |
|
|
|
|
|
|
MetLife, Inc. (parent company only) net cash provided by operating activities |
|
|
|
$ |
5.5 |
|
|
$ |
6.5 |
|
Consolidated net income (loss) available to MetLife, Inc.'s common shareholders
(7) |
|
|
|
$ |
5.0 |
|
|
$ |
3.9 |
|
Ratio of net cash provided by operating activities (parent company only) to
consolidated net income (loss) available to MetLife, Inc.'s common shareholders (7) (8) |
|
|
|
110 |
% |
|
165 |
% |
|
|
|
|
|
|
|
Ratio of free cash flow to adjusted earnings available to common
shareholders: |
|
|
|
|
|
|
Free cash flow of all holding companies (9) |
|
|
|
$ |
3.4 |
|
|
$ |
5.7 |
|
Consolidated adjusted earnings available to common shareholders (9) |
|
|
|
$ |
5.5 |
|
|
$ |
4.2 |
|
Ratio of free cash flow of all holding companies to consolidated adjusted earnings
available to common shareholders (9) |
|
|
|
62 |
% |
|
134 |
% |
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
Adjusted Earnings Available to Common Shareholders |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
U.S.: |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
685 |
|
|
$ |
498 |
|
|
$ |
2,804 |
|
|
$ |
2,027 |
|
|
Less: Total notable items (2) |
|
— |
|
|
(55 |
) |
|
37 |
|
|
(88 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
685 |
|
|
$ |
553 |
|
|
$ |
2,767 |
|
|
$ |
2,115 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
685 |
|
|
$ |
498 |
|
|
$ |
2,804 |
|
|
$ |
2,027 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
685 |
|
|
$ |
553 |
|
|
$ |
2,767 |
|
|
$ |
2,115 |
|
Group Benefits: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
230 |
|
|
$ |
230 |
|
|
$ |
1,079 |
|
|
$ |
868 |
|
|
Less: Total notable items (2) |
|
— |
|
|
— |
|
|
37 |
|
|
3 |
|
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
230 |
|
|
$ |
230 |
|
|
$ |
1,042 |
|
|
$ |
865 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
230 |
|
|
$ |
230 |
|
|
$ |
1,079 |
|
|
$ |
868 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
230 |
|
|
$ |
230 |
|
|
$ |
1,042 |
|
|
$ |
865 |
|
Retirement & Income Solutions: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
356 |
|
|
$ |
173 |
|
|
$ |
1,381 |
|
|
$ |
956 |
|
|
Less: Total notable items (2) |
|
— |
|
|
(62 |
) |
|
— |
|
|
(45 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
356 |
|
|
$ |
235 |
|
|
$ |
1,381 |
|
|
$ |
1,001 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
356 |
|
|
$ |
173 |
|
|
$ |
1,381 |
|
|
$ |
956 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
356 |
|
|
$ |
235 |
|
|
$ |
1,381 |
|
|
$ |
1,001 |
|
Property & Casualty: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
99 |
|
|
$ |
95 |
|
|
$ |
344 |
|
|
$ |
203 |
|
|
Less: Total notable items (2) |
|
— |
|
|
7 |
|
|
— |
|
|
(46 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
99 |
|
|
$ |
88 |
|
|
$ |
344 |
|
|
$ |
249 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
99 |
|
|
$ |
95 |
|
|
$ |
344 |
|
|
$ |
203 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
99 |
|
|
$ |
88 |
|
|
$ |
344 |
|
|
$ |
249 |
|
Asia: |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
281 |
|
|
$ |
310 |
|
|
$ |
1,237 |
|
|
$ |
1,229 |
|
|
Less: Total notable items (2) |
|
— |
|
|
— |
|
|
(86 |
) |
|
5 |
|
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
281 |
|
|
$ |
310 |
|
|
$ |
1,323 |
|
|
$ |
1,224 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis |
|
$ |
281 |
|
|
$ |
305 |
|
|
$ |
1,237 |
|
|
$ |
1,235 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2) |
|
$ |
281 |
|
|
$ |
305 |
|
|
$ |
1,323 |
|
|
$ |
1,230 |
|
Latin America: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
137 |
|
|
$ |
125 |
|
|
$ |
592 |
|
|
$ |
585 |
|
|
Less: Total notable items (2) |
|
— |
|
|
— |
|
|
28 |
|
|
14 |
|
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
137 |
|
|
$ |
125 |
|
|
$ |
564 |
|
|
$ |
571 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis |
|
$ |
137 |
|
|
$ |
115 |
|
|
$ |
592 |
|
|
$ |
573 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2) |
|
$ |
137 |
|
|
$ |
115 |
|
|
$ |
564 |
|
|
$ |
559 |
|
EMEA: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
55 |
|
|
$ |
79 |
|
|
$ |
277 |
|
|
$ |
297 |
|
|
Less: Total notable items (2) |
|
— |
|
|
— |
|
|
(23 |
) |
|
(8 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
55 |
|
|
$ |
79 |
|
|
$ |
300 |
|
|
$ |
305 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis |
|
$ |
55 |
|
|
$ |
72 |
|
|
$ |
277 |
|
|
$ |
298 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2) |
|
$ |
55 |
|
|
$ |
72 |
|
|
$ |
300 |
|
|
$ |
306 |
|
MetLife Holdings: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
223 |
|
|
$ |
194 |
|
|
$ |
1,255 |
|
|
$ |
1,182 |
|
|
Less: Total notable items (2) |
|
— |
|
|
(48 |
) |
|
38 |
|
|
111 |
|
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
223 |
|
|
$ |
242 |
|
|
$ |
1,217 |
|
|
$ |
1,071 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
223 |
|
|
$ |
194 |
|
|
$ |
1,255 |
|
|
$ |
1,182 |
|
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
223 |
|
|
$ |
242 |
|
|
$ |
1,217 |
|
|
$ |
1,071 |
|
Corporate & Other: |
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders |
|
$ |
(45 |
) |
|
$ |
(528 |
) |
|
$ |
(704 |
) |
|
$ |
(1,085 |
) |
|
Less: Total notable items (2) |
|
87 |
|
|
(395 |
) |
|
(97 |
) |
|
(656 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable
items (2) |
|
$ |
(132 |
) |
|
$ |
(133 |
) |
|
$ |
(607 |
) |
|
$ |
(429 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common shareholders on a constant currency basis
(10) |
|
$ |
(45 |
) |
|
$ |
(528 |
) |
|
$ |
(704 |
) |
|
$ |
(1,085 |
) |
|
Adjusted earnings available to common shareholders, excluding total notable items, on
a constant currency basis (2), (10) |
|
$ |
(132 |
) |
|
$ |
(133 |
) |
|
$ |
(607 |
) |
|
$ |
(429 |
) |
|
|
|
|
|
|
|
|
|
|
See footnotes on last page. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MetLife, Inc. |
(Unaudited) |
|
|
|
(1) |
|
Adjusted earnings available to common shareholders is calculated on a standalone
basis and may not equal the sum of (i) adjusted earnings available to common shareholders, excluding total notable items and
(ii) total notable items. |
|
|
|
(2) |
|
Notable items reflect the unexpected impact of events that affect MetLife’s results,
but that were unknown and that MetLife could not anticipate when it devised its Business Plan. Notable items also include
certain items regardless of the extent anticipated in the Business Plan to help investors have a better understanding of
MetLife's results and to evaluate and forecast those results. Notable items can affect MetLife’s results either positively or
negatively. |
|
|
|
(3) |
|
Book values exclude $3,340 million and $2,066 million of equity related to preferred
stock at December 31, 2018 and 2017, respectively. |
|
|
|
(4) |
|
Annualized using quarter-to-date results. |
|
|
|
(5) |
|
Adjustments include: (i) capital contributions to subsidiaries; (ii) returns of
capital from subsidiaries; (iii) repayments on and (issuances of) loans to subsidiaries, net; and (iv) investment portfolio and
derivatives changes and other, net. |
|
|
|
(6) |
|
Components include: (i) dividends and returns of capital from subsidiaries; (ii)
capital contributions from MetLife, Inc.; (iii) capital contributions to subsidiaries; (iv) repayments on and (issuances of)
loans to subsidiaries, net; (v) other expenses; (vi) dividends and returns of capital to MetLife, Inc. and (vii) investment
portfolio changes and other, net. |
|
|
|
(7) |
|
Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for
2018 includes costs related to the separation of Brighthouse Financial, Inc. (Brighthouse) and its subsidiaries (Separation) of
$0.08 billion, net of income tax. Excluding this amount from the denominator of the ratio, this ratio, as adjusted, would be
109%. Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for 2017 includes Separation-related
costs of $0.3 billion, net of income tax. Excluding this amount from the denominator of the ratio, this ratio, as adjusted,
would be 153%. |
|
|
|
(8) |
|
Including the free cash flow of other MetLife, Inc. holding companies of ($1.0)
billion and ($0.5) billion for the years ended December 31, 2018 and 2017, respectively, in the numerator of the ratio, this
ratio, as adjusted, would be 90% and 153%, respectively. Including the free cash flow of other MetLife, Inc. holding companies
in the numerator of the ratio and excluding the Separation-related costs from the denominator of the ratio, this ratio, as
adjusted, would be 88% and 141% for the years ended December 31, 2018 and 2017, respectively. |
|
|
|
(9) |
|
In 2018, $0.3 billion of Separation-related items (comprised of certain
Separation-related inflows primarily related to reinsurance benefit from Brighthouse) were included, which increased MetLife,
Inc. holding companies’ liquid assets, as well as MetLife, Inc.'s free cash flow. Excluding these Separation-related items,
adjusted free cash flow would be $3.1 billion for the year ended December 31, 2018. Consolidated adjusted earnings available to
common shareholders for 2018 was negatively impacted by notable items, primarily related to expense initiative costs of $0.3
billion, net of income tax, partially offset by tax adjustments of $0.2 billion, net of income tax. Excluding the
Separation-related items, which increased free cash flow, from the numerator of the ratio and excluding such notable items and
Separation-related costs negatively impacting consolidated adjusted earnings available to common shareholders from the
denominator of the ratio, the adjusted free cash flow ratio for 2018 would be 56%.
In 2017, $2.1 billion of Separation-related items (comprised of certain Separation-related inflows primarily related to
dividends from Brighthouse, net of outflows) were included, which increased MetLife, Inc. holding companies’ liquid assets, as
well as MetLife, Inc.'s free cash flow. Excluding these Separation-related items, adjusted free cash flow would be $3.6 billion
for the year ended December 31, 2017. Consolidated adjusted earnings available to common shareholders for 2017 was negatively
impacted by notable items, primarily related to tax adjustments, of $0.6 billion, net of income tax. Excluding the
Separation-related items, which increased free cash flow, from the numerator of the ratio and excluding such notable items and
Separation-related costs negatively impacting consolidated adjusted earnings available to common shareholders from the
denominator of the ratio, the adjusted free cash flow ratio for 2017 would be 75%. |
|
|
|
(10) |
|
Amounts on a reported basis, as constant currency impact is not significant. |
For Media: Ashia Razzaq
MetLife
(212) 578-1538
For Investors: John Hall
MetLife
(212) 578-7888
View source version on businesswire.com: https://www.businesswire.com/news/home/20190206005627/en/