-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MZL1OMMgGv2dRfZ5QnWq0HrKpoH4OxD2JKbBauMWZLEugmoQDAW1z2NfQ8peVteW 03+gJSP304qtQN0gZuFnAw== 0000950123-06-009658.txt : 20060731 0000950123-06-009658.hdr.sgml : 20060731 20060731171652 ACCESSION NUMBER: 0000950123-06-009658 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060731 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060731 DATE AS OF CHANGE: 20060731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METLIFE INC CENTRAL INDEX KEY: 0001099219 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 134075851 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15787 FILM NUMBER: 06991909 BUSINESS ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125782211 MAIL ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 8-K 1 y23576e8vk.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) July 31, 2006 MetLife, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-15787 13-4075851 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 200 Park Avenue, New York, New York 10166-0188 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 212-578-2211 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On July 31, 2006, MetLife, Inc., a Delaware Corporation, issued (i) a press release announcing its results for the quarter ended June 30, 2006, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, and (ii) a Quarterly Financial Supplement for the quarter ended June 30, 2006, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The press release and the Quarterly Financial Supplement are furnished and not filed pursuant to Instruction B.2 of Form 8-K. Item 9.01. Financial Statements and Exhibits. (a) Not applicable (b) Not applicable (c) Not applicable (d) 99.1 Press Release of MetLife, Inc., dated July 31, 2006, announcing second quarter 2006 results. 99.2 Quarterly Financial Supplement for the quarter ended June 30, 2006. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. METLIFE, INC. By: /s/ Gwenn L. Carr ------------------------------------------ Name: Gwenn L. Carr Title: Senior Vice-President and Secretary Date: July 31, 2006 EXHIBIT INDEX ------------- Exhibit Number Exhibit - ------- ------- 99.1 Press Release of MetLife, Inc., dated July 31, 2006, announcing second quarter 2006 results. 99.2 Quarterly Financial Supplement for the quarter ended June 30, 2006. EX-99.1 2 y23576exv99w1.txt PRESS RELEASE Exhibit 99.1 Contacts: For Media: John Calagna (212) 578-6252 For Investors: Tracey Dedrick (212) 578-5140 METLIFE ANNOUNCES SECOND QUARTER 2006 RESULTS - REPORTS NET INCOME AVAILABLE TO COMMON SHAREHOLDERS OF $0.80 PER DILUTED COMMON SHARE - - REPORTS OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS OF $1.28 PER DILUTED COMMON SHARE, A 9% INCREASE - NEW YORK, July 31, 2006 - MetLife, Inc. (NYSE: MET) today reported second quarter 2006 net income available to common shareholders of $617 million, or $0.80 per diluted common share, compared with $2.2 billion, or $3.02 per diluted common share, for the second quarter of 2005. During the second quarter of 2005, net income available to common shareholders included a net investment gain of $1.2 billion, net of income taxes, due to the sale of real estate.
For the three months ended June 30, ------------------------------------------------------------ 2006 2005 -------------------------- --------------------------- (in millions, except per diluted common share data) Net income available to common shareholders $617 $2,245 Net income available to common shareholders per diluted common share $0.80 $3.02 Operating earnings available to common shareholders(1) $982 $870 Operating earnings available to common shareholders per diluted common share(1) $1.28 $1.17 Book value per diluted common share $33.30 $35.16 Book value per diluted common share, excluding accumulated other comprehensive income(1) $34.59 $31.02
(1) Operating earnings available to common shareholders, operating earnings available to common shareholders per diluted common share and book value per diluted common share (excluding accumulated other comprehensive income) are not calculated based on generally accepted accounting principles ("GAAP"). Information regarding non-GAAP financial measures in this press release and the reconciliation of them to GAAP measures are provided in the Non-GAAP and Other Financial Disclosures section below, as well as in the tables that accompany this release. 1 SECOND QUARTER HIGHLIGHTS - - Earned total premiums, fees and other revenues of $8 billion, an 11% increase over the prior year period - - Annuity deposits in the United States reached a record $4.2 billion, an increase of 69% over the prior year period - - Achieved record operating earnings available to common shareholders in Institutional Business Operating earnings available to common shareholders for the second quarter of 2006 were $982 million, or $1.28 per diluted common share, compared with $870 million, or $1.17 per diluted common share, for the prior year period. "In the second quarter, MetLife once again demonstrated its ability to achieve strong results. Total premiums, fees and other revenues increased 11% and total annuity deposits increased 69% over the prior year period as our expanded independent distribution group continues to improve our market position," said C. Robert Henrikson, chairman of the board, president and chief executive officer of MetLife, Inc. "Each of our core businesses continues to grow, capitalizing on MetLife's experience and breadth of product offerings." SECOND QUARTER SEGMENT OVERVIEW Reconciliations of segment net income available to common shareholders to segment operating earnings available to common shareholders are provided in the tables that accompany this release. INSTITUTIONAL BUSINESS EARNINGS UP 31% Institutional Business operating earnings available to common shareholders in the second quarter of 2006 were a record $453 million, compared with $346 million in the prior year period. The segment's strong performance during the quarter was due in large part to favorable underwriting results in the group life business, strong performance among the products in the non-medical health & other business as well as favorable investment results in the retirement & savings business. Group life earnings were up 67% over the prior year period due to strong underwriting results and continued favorable persistency. In addition, group life premiums, fees, and other revenues grew slightly over the prior year period. Retirement & savings earnings grew 6% compared with the second quarter of 2005. Favorable investment results and growth in the asset base, due primarily to the Travelers acquisition, were partially offset by a charge of $11 million, net of income taxes, associated with costs related to the sale of certain small market recordkeeping businesses. Retirement & savings net investment income was up 47% due in large part to the Travelers acquisition. 2 Non-medical health & other earnings increased 72% due to favorable results across most product lines and slightly lower expenses. Non-medical health premiums, fees and other revenues were up 9% over the prior year period, reflecting growth across most product lines. INDIVIDUAL BUSINESS EARNINGS UP 22% Individual Business operating earnings available to common shareholders were $353 million in the second quarter of 2006, compared with $290 million in the prior year period. The increase in earnings was primarily driven by the Travelers acquisition. Annuity earnings increased 18% over the prior year period as results benefited from strong growth in the business, including the addition of Travelers. During the quarter, annuity deposits increased 69% over the prior year period to reach a record $4.2 billion, reflecting the successful integration of the distribution channels acquired through the Travelers acquisition and the introduction of new products and riders. As a result, fees for separate account investment-type products within the annuity business increased 85% compared with the prior year period. Earnings in the traditional life business were up 45% due primarily to favorable mortality and a one-time post-retirement benefit liability release. Total first year life premiums and deposits increased 35%, reflecting broader distribution resulting from the Travelers acquisition and a growing agency force. Variable/universal life earnings increased 10% over the prior year period. In addition, MetLife has completed its previously announced review of Travelers underwriting on specific blocks of life policies and has determined that an additional $30 million, net of income taxes, of excess mortality reserves was required for these policies. This resulted in a charge of $21 million, net of income taxes, primarily to variable/universal life earnings. AUTO & HOME EARNINGS REMAIN STRONG Auto & Home operating earnings available to common shareholders remained strong at $99 million in the second quarter of 2006. This compared with a record $101 million in the prior year period, which benefited from unusually low catastrophes. Auto & Home's strong performance in the quarter resulted in an improved non-catastrophe combined ratio of 84.5%, which was due to lower automobile claim frequencies and $21 million, net of income taxes, in favorable claim development related to prior accident years. In addition, earned premiums in the second quarter of 2006 were impacted by higher reinsurance costs. INTERNATIONAL EARNINGS UP 22% International operating earnings available to common shareholders were $62 million in the second quarter of 2006, compared with $51 million in the prior year period. Earnings in the segment benefited from strong performance in Asia Pacific and Latin America. 3 INVESTMENTS During the second quarter of 2006, MetLife's investment results were enhanced by sustained, solid performance in corporate joint ventures. The company took advantage of higher interest rates and wider spreads during the second quarter to enhance the portfolio, which contributed to higher net realized investment losses, net of income taxes, of $524 million. Included in this result were derivative losses, net of income taxes, of $233 million. The company's derivative positions provide MetLife with protection against interest rate and currency movements and the losses related to positions that do not qualify for hedge accounting. Earnings Conference Call MetLife will hold its second quarter 2006 earnings conference call and audio Webcast on Tuesday, August 1, 2006, from 8:00 to 9:00 a.m. (ET). The conference call will be available live via telephone and the Internet. To listen over the telephone, dial (612) 326-1003 (domestic and international callers). To listen to the conference call over the Internet, visit www.metlife.com (through a link on the Investor Relations page). Those who want to listen to the call on the telephone or via the Internet should dial in or go to the Web site at least fifteen minutes prior to the call to register, and/or download and install any necessary audio software. The conference call will be available for replay via telephone and the Internet beginning at 10:30 a.m. (ET) on Tuesday, August 1, 2006, until Tuesday, August 8, 2006, at 11:59 p.m. (ET). To listen to a replay of the conference call over the telephone, dial (320) 365-3844 (domestic and international callers). The access code for the replay is 831132. To access the replay of the conference call over the Internet, visit the above-mentioned Web site. Non-GAAP and Other Financial Disclosures MetLife analyzes its performance using so-called non-GAAP measures, including operating earnings available to common shareholders and operating earnings available to common shareholders per diluted common share. Operating earnings available to common shareholders is defined as GAAP net income, excluding net investment gains and losses, net of income taxes, adjustments related to net investment gains and losses, net of income taxes, and discontinued operations other than discontinued real estate, net of income taxes, less preferred stock dividends which are recorded in Corporate & Other. Scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in operating earnings available to common shareholders. Operating earnings available to common shareholders per diluted common share is calculated by dividing operating earnings available to common shareholders by the number of weighted average diluted common shares outstanding for the period indicated. MetLife believes these measures enhance the understanding and comparability of its performance by excluding net investment gains and losses, net of income taxes, and adjustments related to net investment gains and losses, net of income taxes, both of which can fluctuate significantly from period to period, and discontinued operations other than discontinued real estate, net of income taxes, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings available to common shareholders and operating earnings available to common shareholders per diluted common 4 share should not be viewed as substitutes for GAAP net income available to common shareholders and GAAP net income available to common shareholders per diluted common share, respectively.
For the three months ended June 30, ----------------------------------------------------------- 2006 2005 ---------------------------- --------------------------- (in millions, except per diluted common share data) Net income available to common shareholders $617 $0.80 $2,245 $3.02 Net investment (gains) losses, net of income taxes(1) 524 0.69 (1,439) (1.94) Adjustments related to net investment (gains) losses, net of income taxes(2) (129) (0.17) 63 0.09 Discontinued operations, net of income taxes(3) (30) (0.04) 1 - ------------ ------------ ----------- ----------- Operating earnings available to common shareholders $982 $1.28 $870 $1.17 ============ ============ =========== =========== Book value per diluted common share $33.30 $35.16 Accumulated other comprehensive (income) loss per diluted common share 1.29 (4.14) ------------ ----------- Book value per diluted common share, excluding accumulated other comprehensive income/loss $34.59 $31.02 ============ ===========
(1) Net investment (gains) losses, net of income taxes, includes (gains) losses on sales of real estate and real estate joint ventures related to discontinued operations of $2 million and $(1,227) million for the three months ended June 30, 2006 and 2005, respectively, and excludes (gains) losses of $(44) million and $(8) million for the three months ended June 30, 2006 and 2005, respectively, from scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment. (2) Adjustments related to net investment (gains) losses, net of income taxes, include amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. (3) Discontinued operations, net of income taxes, excludes (gains) losses on sales of real estate and real estate joint ventures related to discontinued operations. This release contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the operations and financial results and the business and the products of the company and its subsidiaries, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on the company. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to, the following: (i) changes in general economic conditions, including the performance of financial markets and interest rates; (ii) heightened competition, including with respect to pricing, entry of new competitors and the 5 development of new products by new and existing competitors; (iii) unanticipated changes in industry trends; (iv) the company's primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (v) deterioration in the experience of the "closed block" established in connection with the reorganization of Metropolitan Life Insurance Company; (vi) catastrophe losses; (vii) adverse results or other consequences from litigation, arbitration or regulatory investigations; (viii) regulatory, accounting or tax changes that may affect the cost of, or demand for, the company's products or services; (ix) downgrades in the company's and its affiliates' claims paying ability, financial strength or credit ratings; (x) changes in rating agency policies or practices; (xi) discrepancies between actual claims experience and assumptions used in setting prices for the company's products and establishing the liabilities for the company's obligations for future policy benefits and claims; (xii) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xiii) the effects of business disruption or economic contraction due to terrorism or other hostilities; (xiv) the company's ability to identify and consummate on successful terms any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; and (xv) other risks and uncertainties described from time to time in the company's filings with the Securities and Exchange Commission, including its S-1 and S-3 registration statements. The company specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. MetLife, Inc. is a leading provider of insurance and other financial services to millions of individual and institutional customers throughout the United States. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowner's insurance and retail banking services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Outside the U.S., the MetLife companies have direct insurance operations in Asia Pacific, Latin America and Europe. For more information, please visit www.metlife.com. For a copy of MetLife's Quarterly Financial Supplement, please visit www.metlife.com. # # # MetLife, Inc. Consolidated Statements of Income Unaudited (in millions)
Three months Six months ended June 30, ended June 30, --------------------- --------------------- 2006 2005 2006 2005 -------- -------- -------- -------- Premiums $ 6,428 $ 6,034 $ 12,856 $ 12,000 Universal life and investment-type product policy fees 1,185 813 2,360 1,604 Net investment income 4,204 3,474 8,439 6,684 Other revenues 335 301 663 600 Net investment gains (losses) (743) 333 (1,328) 318 -------- -------- -------- -------- Total revenues 11,409 10,955 22,990 21,206 -------- -------- -------- -------- Policyholder benefits and claims 6,331 6,259 12,736 12,181 Interest credited to policyholder account balances 1,272 820 2,487 1,615 Policyholder dividends 425 416 846 835 Other expenses 2,545 2,005 5,043 3,976 -------- -------- -------- -------- Total expenses 10,573 9,500 21,112 18,607 -------- -------- -------- -------- Income from continuing operations before provision for income taxes 836 1,455 1,878 2,599 Provision for income taxes 217 450 511 799 -------- -------- -------- -------- Income from continuing operations 619 1,005 1,367 1,800 Income from discontinued operations, net of income taxes 31 1,240 30 1,432 -------- -------- -------- -------- Net income 650 2,245 1,397 3,232 Preferred stock dividends 33 -- 66 -- -------- -------- -------- -------- Net income available to common shareholders $ 617 $ 2,245 $ 1,331 $ 3,232 ======== ======== ======== ======== OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS RECONCILIATION Net income available to common shareholders 617 2,245 1,331 3,232 Net investment gains (losses) (817) 2,225 (1,441) 2,204 Minority interest - net investment gains (losses) 4 (2) 2 (11) Net investment gains (losses) tax provision 289 (784) 509 (775) -------- -------- -------- -------- Net investment gains (losses), net of income taxes(1)(2) (524) 1,439 (930) 1,418 Adjustments related to universal life and investment-type product policy fees (9) -- (12) -- Adjustments related to policyholder benefits and dividends 84 (86) 192 (16) Adjustments related to other expenses 126 (9) 168 (24) Adjustments related to tax benefit (provision) (72) 32 (124) 13 -------- -------- -------- -------- Adjustments related to net investment gains (losses), net of income taxes(3) 129 (63) 224 (27) Discontinued operations, net of income taxes(4) 30 (1) 30 149 -------- -------- -------- -------- Operating earnings available to common shareholders $ 982 $ 870 $ 2,007 $ 1,692 ======== ======== ======== ========
(1) Net investment gains (losses), net of income taxes, benefit on sales of real estate and real estate joint ventures related to discontinued operations, of $(2) million and $1,227 million for the three months ended June 30, 2006 and 2005, respectively and $(5) million and $1,239 million for the six months ended June 30, 2006 and 2005, respectively. (2) Net investment gains (losses), net of income taxes, excludes gains (losses) of $44 million and $8 million for the three months ended June 30, 2006 and 2005, respectively, and $69 million and $24 million for the six months ended June 30, 2006 and 2005, respectively, from scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment. (3) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. (4) Discontinued operations, net of income taxes, excludes gains (losses) on sales of real estate and real estate joint ventures related to discontinued operations. MetLife, Inc. Financial Highlights Unaudited (in millions, except per common share data or unless otherwise noted)
At or for the At or for the three months six months ended June 30, ended June 30, ---------------------- ---------------------- 2006 2005 2006 2005 -------- -------- -------- -------- Other Financial Data: Net income available to common shareholders $ 617 $ 2,245 $ 1,331 $ 3,232 Operating earnings available to common shareholders $ 982 $ 870 $ 2,007 $ 1,692 Total assets (billions) $ 500.3 $ 381.5 $ 500.3 $ 381.5 Individual Business Sales Data: Total first year life premiums and deposits $ 288 $ 213 $ 597 $ 420 Variable and Universal life first year premiums and deposits (including COLI/BOLI) $ 238 $ 161 $ 497 $ 321 Total annuity deposits $ 4,229 $ 2,496 $ 8,072 $ 5,036 Earnings Per Common Share Calculation: Weighted average common shares outstanding - diluted 769.9 743.1 769.4 742.3 Operating earnings available to common shareholders per common share - diluted $ 1.28 $ 1.17 $ 2.61 $ 2.28 Net income available to common shareholders per common share - diluted $ 0.80 $ 3.02 $ 1.73 $ 4.35
MetLife, Inc. Balance Sheet Data June 30, 2006 (Unaudited) and December 31, 2005 (Audited) (in millions)
At June 30, At December 31, 2006 2005 ---------- ---------- Balance Sheet Data: General account assets $ 367,523 $ 353,776 Separate account assets 132,782 127,869 ---------- ---------- Total assets $ 500,305 $ 481,645 ========== ========== Policyholder liabilities (including amounts of closed block) $ 264,178 $ 262,371 Short-term debt 2,253 1,414 Long-term debt 10,737 9,888 Junior subordinated debt securities underlying common equity units 2,134 2,134 Shares subject to mandatory redemption 278 278 Other liabilities 60,262 48,590 Separate account liabilities 132,782 127,869 ---------- ---------- Total liabilities 472,624 452,544 ---------- ---------- Preferred stock, at par value 1 1 Common stock, at par value 8 8 Additional paid-in capital 17,372 17,274 Retained earnings 12,196 10,865 Treasury stock (905) (959) Accumulated other comprehensive income (loss) (991) 1,912 ---------- ---------- Total stockholders' equity 27,681 29,101 ---------- ---------- Total liabilities and stockholders' equity $ 500,305 $ 481,645 ========== ==========
MetLife, Inc. Reconciliations of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders Unaudited (in millions)
Three months ended Six months ended June 30, June 30, --------------------------- --------------------------- 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Total Institutional Operations Net income available to common shareholders $ 209 $ 590 $ 422 $ 939 Net investment gains (losses), net of income taxes (283) 268 (502) 270 Adjustments related to net investment gains (losses), net of income taxes 39 (24) 55 (1) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 453 $ 346 $ 869 $ 670 ========== ========== ========== ========== Institutional Operations Group Life Net income available to common shareholders $ 95 $ 82 $ 185 $ 170 Net investment gains (losses), net of income taxes (47) (1) (49) (10) Adjustments related to net investment gains (losses), net of income taxes 3 -- 4 -- ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 139 $ 83 $ 230 $ 180 ========== ========== ========== ========== Retirement & Savings Net income available to common shareholders $ 44 $ 430 $ 130 $ 618 Net investment gains (losses), net of income taxes (187) 231 (355) 243 Adjustments related to net investment gains (losses), net of income taxes 10 (10) 3 1 ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 221 $ 209 $ 482 $ 374 ========== ========== ========== ========== Non-Medical Health & Other Net income available to common shareholders $ 70 $ 78 $ 107 $ 151 Net investment gains (losses), net of income taxes (49) 38 (98) 37 Adjustments related to net investment gains (losses), net of income taxes 26 (14) 48 (2) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 93 $ 54 $ 157 $ 116 ========== ========== ========== ========== Total Individual Operations Net income available to common shareholders $ 208 $ 582 $ 512 $ 949 Net investment gains (losses), net of income taxes (199) 327 (369) 359 Adjustments related to net investment gains (losses), net of income taxes 54 (35) 120 (20) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 353 $ 290 $ 761 $ 610 ========== ========== ========== ========== Individual Operations Traditional Life Net income available to common shareholders $ 68 $ 269 $ 162 $ 440 Net investment gains (losses), net of income taxes (48) 224 (92) 269 Adjustments related to net investment gains (losses), net of income taxes 19 (22) 59 (7) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 97 $ 67 $ 195 $ 178 ========== ========== ========== ========== Variable & Universal Life Net income available to common shareholders $ 13 $ 46 $ 71 $ 87 Net investment gains (losses), net of income taxes (36) 9 (61) 1 Adjustments related to net investment gains (losses), net of income taxes 6 (2) 15 (4) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 43 $ 39 $ 117 $ 90 ========== ========== ========== ========== Annuities Net income available to common shareholders $ 130 $ 258 $ 271 $ 408 Net investment gains (losses), net of income taxes (105) 94 (207) 95 Adjustments related to net investment gains (losses), net of income taxes 29 (11) 46 (9) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 206 $ 175 $ 432 $ 322 ========== ========== ========== ========== Other Net income (loss) available to common shareholders $ (3) $ 9 $ 8 $ 14 Net investment gains (losses), net of income taxes (10) -- (9) (6) ---------- ---------- ---------- ---------- Operating earnings (losses) available to common shareholders $ 7 $ 9 $ 17 $ 20 ========== ========== ========== ========== Total Auto & Home Net income available to common shareholders $ 99 $ 98 $ 190 $ 174 Net investment gains (losses), net of income taxes -- (3) (2) (3) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 99 $ 101 $ 192 $ 177 ========== ========== ========== ========== Auto & Home Auto Net income available to common shareholders $ 68 $ 65 $ 132 $ 108 Net investment gains (losses), net of income taxes -- (2) (1) (2) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 68 $ 67 $ 133 $ 110 ========== ========== ========== ==========
Three months ended Six months ended June 30, June 30, --------------------------- --------------------------- 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Homeowners Net income available to common shareholders $ 32 $ 32 $ 59 $ 63 Net investment gains (losses), net of income taxes -- (1) (1) (1) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 32 $ 33 $ 60 $ 64 ========== ========== ========== ========== Other Net income (loss) available to common shareholders $ (1) $ 1 $ (1) $ 3 ---------- ---------- ---------- ---------- Operating earnings (losses) available to common shareholders $ (1) $ 1 $ (1) $ 3 ========== ========== ========== ========== International Net income available to common shareholders $ 101 $ 45 $ 205 $ 121 Net investment gains (losses), net of income taxes 8 5 22 5 Adjustments related to net investment gains (losses), net of income taxes 31 (10) 46 (1) Discontinued operations, net of income taxes -- (1) -- (2) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 62 $ 51 $ 137 $ 119 ========== ========== ========== ========== Reinsurance Net income available to common shareholders $ 27 $ 7 $ 53 $ 36 Net investment gains (losses), net of income taxes (7) (3) (3) 12 Adjustments related to net investment gains (losses), net of income taxes 5 6 3 (5) ---------- ---------- ---------- ---------- Operating earnings available to common shareholders $ 29 $ 4 $ 53 $ 29 ========== ========== ========== ==========
EX-99.2 3 y23576exv99w2.txt QUARTERLY FINANCIAL SUPPLEMENT METLIFE(R) SECOND QUARTER FINANCIAL SUPPLEMENT JUNE 30, 2006 2 [METLIFE LOGO] (METLIFE(R) LOGO) TABLE OF CONTENTS HIGHLIGHTS CORPORATE OVERVIEW 2 METLIFE, INC. CONSOLIDATED BALANCE SHEETS 3 CONSOLIDATED STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 4 CONSOLIDATING BALANCE SHEET 5 CONSOLIDATING STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 6 SUMMARY OF SEGMENT OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 10 INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 11 PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION 15 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 16 OTHER EXPENSES BY MAJOR CATEGORY 17 SPREADS BY PRODUCT 18 INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 19 PREMIUMS AND DEPOSITS BY PRODUCT 24 ADDITIONAL STATISTICAL INFORMATION 25 FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES 26 INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY 27 SPREADS BY PRODUCT 28 AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 29 WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA 33 INTERNATIONAL OPERATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 34 REINSURANCE OPERATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 35 PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION 36 CORPORATE, OTHER & ELIMINATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS 37 METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS 38 FIXED MATURITIES AND EQUITY SECURITIES GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULES 40 SUMMARY OF REAL ESTATE AND SUMMARY OF MORTGAGES AND CONSUMER LOANS 41 OTHER INFORMATION COMPANY RATINGS 42
NOTE: The Quarterly Financial Supplement ("QFS") includes financial measures, operating earnings, operating earnings available to common shareholders and operating earnings available to common shareholders per diluted common share, that are not based on generally accepted accounting principles ("GAAP"). Operating earnings is defined as GAAP net income excluding net investment gains and losses, net of income taxes, adjustments related to net investment gains and losses, net of income taxes and discontinued operations other than discontinued real estate, net of income taxes. Scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in operating earnings. Operating earnings available to common shareholders is defined as operating earnings less preferred stock dividends, which are recorded in Corporate & Other. Operating earnings available to common shareholders per diluted common share is calculated by dividing operating earnings available to common shareholders by the number of weighted average diluted common shares outstanding for the period indicated. MetLife believes these measures enhance the understanding and comparability of its performance by excluding net investment gains and losses, net of income taxes, and adjustments related to net investment gains and losses, net of income taxes, both of which can fluctuate significantly from period to period and discontinued operations other than discontinued real estate, net of income taxes, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings, operating earnings available to common shareholders and operating earnings available to common shareholders per diluted common share should not be viewed as substitutes for GAAP net income, GAAP net income available to common shareholders and GAAP net income available to common shareholders per diluted common share, respectively. Reconciliations of operating earnings to GAAP net income, operating earnings available to common shareholders to GAAP net income available to common shareholders and operating earnings available to common shareholders per diluted common share to GAAP net income available to common shareholders per diluted common share, the most directly comparable GAAP measures, are included in the QFS and in MetLife's earnings press release dated July 31, 2006, for the quarter ended June 30, 2006, which are available at www.metlife.com. 1 (METLIFE(R) LOGO) CORPORATE OVERVIEW Unaudited (Dollars and shares in millions, except per share data)
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Net income $2,245 $ 773 $ 709 $ 747 $ 650 Preferred stock dividends 0 31 32 33 33 ------ ------ ------ ------ ------ Net income available to common shareholders 2,245 742 677 714 617 Net investment gains (losses) 2,225 (23) (234) (624) (817) Minority interest - net investment gains (losses) (2) (1) 3 (2) 4 Net investment gains (losses) tax benefit (provision) (784) 9 85 220 289 ------ ------ ------ ------ ------ Net investment gains (losses), net of income taxes (1) (2) 1,439 (15) (146) (406) (524) Adjustments related to universal life and investment-type product policy fees 0 0 0 (3) (9) Adjustments related to policyholder benefits and dividends (86) (55) (9) 108 84 Adjustments related to other expenses (9) 7 30 42 126 Adjustments related to tax benefit (provision) 32 18 (9) (52) (72) ------ ------ ------ ------ ------ Adjustments related to net investment gains (losses), net of income taxes (3) (63) (30) 12 95 129 Discontinued operations, net of income taxes (1) 7 12 0 30 ------ ------ ------ ------ ------ Operating earnings available to common shareholders (4) $ 870(6) $ 780(7) $ 799 $1,025 $ 982 ====== ====== ====== ====== ====== Net income available to common shareholders per common share - diluted $ 3.02 $ 0.97 $ 0.88 $ 0.93 $ 0.80 Net investment gains (losses), net of income taxes 1.94 (0.02) (0.20) (0.53) (0.69) Adjustments related to net investment gains (losses), net of income taxes (0.09) (0.03) 0.02 0.13 0.17 Discontinued operations, net of income taxes 0.00 0.01 0.02 0.00 0.04 ------ ------ ------ ------ ------ Operating earnings available to common shareholders - diluted $ 1.17 $ 1.01 $ 1.04 $ 1.33 $ 1.28 ====== ====== ====== ====== ====== Weighted average common shares outstanding - diluted 743.1 768.7 769.0 768.8 769.9 Book value per common share (actual common shares outstanding) $35.60 $35.29 $35.72 $34.98 $33.77 Book value per common share, excluding accumulated other comprehensive income (actual common shares outstanding) $31.41 $32.81 $33.20 $34.21 $35.08 Book value per common share - diluted (weighted average common shares outstanding) $35.16 $34.75 $35.19 $34.50 $33.30 Book value per common share, excluding accumulated other comprehensive income - diluted (weighted average common shares outstanding) $31.02 $32.32 $32.70 $33.73 $34.59
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Common shares outstanding, beginning of period 733.1 733.9 757.1 757.5 758.2 Treasury stock 0.8 23.2 0.4 0.7 1.0 ----- ----- ----- ----- ----- Common shares outstanding, end of period 733.9 757.1 757.5 758.2 759.2 Weighted average common shares outstanding - basic 736.5 759.8 761.1 762.0 763.1 Dilutive effect of stock options 6.4 8.6 7.7 6.5 6.5 Dilutive effect of LTPCP shares 0.2 0.3 0.2 0.3 0.3 ----- ----- ----- ----- ----- Weighted average common shares outstanding - diluted 743.1 768.7 769.0 768.8 769.9 ===== ===== ===== ===== ===== Policyholder Trust Shares 310.9 307.8 298.8 294.0 285.3 SUPPLEMENTAL DATA Adjusted long-term debt to total capital (5) 29.4% 28.3% 28.6% 28.5% 27.8%
(1) Net investment gains (losses), net of income taxes, excludes scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment of $8 million, $17 million, $23 million, $25 million and $44 million for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006, and June 30, 2006, respectively. For QFS purposes, these settlements are included in net investment income. (2) Net investment gains (losses), net of income taxes, from real estate and real estate joint ventures includes discontinued operations of $1,227 million, $30 million, $100 million, ($3) million and ($2) million, for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006, and June 30, 2006, respectively. (3) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. (4) Presentation of operating earnings available to common shareholders throughout the QFS differs from other public filings with respect to discontinued operations and scheduled settlement payments on derivatives not qualifying for hedge accounting treatment. Presentation of discontinued operations in other public filings is in accordance with the Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Presentation of scheduled settlement payments on derivatives not qualifying for hedge accounting treatment in other public filings is in accordance with SFAS No.133, Accounting for Derivative Instruments and Hedging Activities. (5) Adjusted long-term debt at June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, consists of $8,319 million, $8,297 million, $8,017 million, $8,028 million and $8,112 million of long-term debt, respectively, $2,134 million, $2,134 million, $2,134 million, $2,134 million and $2,134 million of junior subordinated debt securities underlying common equity units, respectively, and $115 million, $272 million, $878 million, $1,084 million and $926 million of adjusted short-term debt, respectively. Non-recourse debt not included in adjusted long-term debt consists of $985 million, $1,195 million, $1,871 million, $1,904 million and $2,625 million at such dates, respectively. Non-core borrowings not included in adjusted short-term debt consist of $1,864 million, $1,031 million, $536 million, $276 million and $1,326 million at such dates, respectively. Total capital is defined as adjusted long-term debt, shares subject to mandatory redemption and stockholders' equity net of accumulated other comprehensive income. (6) Operating earnings available to common shareholders for the three months ended June 30, 2005 includes a $30 million benefit, net of income taxes ($0.04 per diluted common share), associated with the reduction of a previously established liability for settlement death benefits related to the Company's sales practices class action settlement recorded in 1999, an $18 million benefit, net of income taxes ($0.02 per diluted common share), associated with the reduction of a previously established liability related to the Company's demutualization in 2000, and an $8 million charge, net of income taxes ($0.01 per diluted common share), associated with an establishment of a liability associated with the Argentine pension business. (7) Operating earnings available to common shareholders for the three months ended September 30, 2005 includes a $31 million benefit ($0.04 per diluted common share) from a revision of the estimate of income taxes for 2004. 2 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATED BALANCE SHEETS
As of --------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- --------- ASSETS Fixed maturities, at fair value $184,830 $232,041 $230,875 $240,711 $ 237,612 Equity securities, at fair value 2,531 3,058 3,338 3,356 3,202 Mortgage and consumer loans 33,586 36,094 37,190 37,351 38,665 Policy loans 8,975 9,841 9,981 9,987 10,065 Real estate and real estate joint ventures 3,998 4,705 4,665 4,700 4,786 Other limited partnership interests 3,383 4,345 4,276 4,514 4,805 Short-term investments 2,169 4,481 3,306 3,368 4,067 Other invested assets 6,452 7,877 8,078 8,386 9,652 -------- -------- -------- -------- --------- TOTAL INVESTMENTS 245,924 302,442 301,709 312,373 312,854 Cash and cash equivalents 13,601 6,950 4,018 5,144 4,126 Accrued investment income 2,450 3,299 3,036 3,145 3,275 Premiums and other receivables 7,821 14,391 12,186 12,731 13,216 Deferred policy acquisition costs and value of business acquired 14,865 19,211 19,641 20,245 20,814 Assets of subsidiaries held-for-sale 33 0 0 0 0 Current income tax recoverable 0 0 0 0 154 Goodwill 614 4,564 4,797 4,797 4,913 Other assets 6,758 8,017 8,389 8,145 8,171 Separate account assets 89,459 124,044 127,869 132,522 132,782 -------- -------- -------- -------- --------- TOTAL ASSETS $381,525 $482,918 $481,645 $499,102 $ 500,305 ======== ======== ======== ======== ========= LIABILITIES AND EQUITY LIABILITIES Future policy benefits $103,175 $121,591 $123,204 $122,748 $ 123,802 Policyholder account balances 90,080 127,431 128,312 129,860 130,518 Other policyholder funds 7,650 8,521 8,331 8,620 8,721 Policyholder dividends payable 939 978 917 918 961 Policyholder dividend obligation 2,477 1,735 1,607 814 176 Short-term debt 1,979 1,303 1,414 1,360 2,253 Long-term debt 9,389 9,576 9,888 10,782 10,737 Junior subordinated debt securities underlying common equity units 2,134 2,134 2,134 2,134 2,134 Shares subject to mandatory redemption 278 278 278 278 278 Liabilities of subsidiaries held-for-sale 28 0 0 0 0 Current income tax payable 635 97 69 88 0 Deferred income tax payable 3,201 1,456 1,706 1,199 485 Payables for collateral under securities loaned and other transactions 31,632 40,127 34,515 47,059 46,612 Other liabilities 10,298 14,890 12,300 12,153 13,165 Separate account liabilities 89,459 124,044 127,869 132,522 132,782 -------- -------- -------- -------- --------- TOTAL LIABILITIES 353,354 454,161 452,544 470,535 472,624 -------- -------- -------- -------- --------- EQUITY Preferred stock, at par value 1 1 1 1 1 Common stock, at par value 8 8 8 8 8 Additional paid-in capital 16,974 17,273 17,274 17,327 17,372 Retained earnings 9,841 10,582 10,865 11,579 12,196 Treasury stock (1,733) (981) (959) (938) (905) Accumulated other comprehensive income 3,080 1,874 1,912 590 (991) -------- -------- -------- -------- --------- TOTAL STOCKHOLDERS' EQUITY 28,171 28,757 29,101 28,567 27,681 -------- -------- -------- -------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $381,525 $482,918 $481,645 $499,102 $ 500,305 ======== ======== ======== ======== =========
3 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATED STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS
For the Three Months Ended ----------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- REVENUES Premiums $ 6,034 $ 6,514 $ 6,346 $ 6,428 $ 6,428 Universal life and investment-type product policy fees 813 1,112 1,112 1,178 1,194 Investment income, net 3,508 4,112 4,167 4,278 4,277 Other revenues 301 348 323 328 335 ------- ------- ------- ------- ------- 10,656 12,086 11,948 12,212 12,234 ------- ------- ------- ------- ------- EXPENSES Policyholder benefits and dividends 6,589 7,208 6,897 6,934 6,840 Interest credited to policyholder account balances 820 1,156 1,167 1,220 1,269 Interest credited to bank deposits 25 30 37 43 48 Interest expense 125 183 185 198 202 Other expenses 1,844 2,408 2,487 2,297 2,425 ------- ------- ------- ------- ------- 9,403 10,985 10,773 10,692 10,784 ------- ------- ------- ------- ------- Operating earnings before provision (benefit) for income taxes 1,253 1,101 1,175 1,520 1,450 Provision for income taxes 383 290 344 462 435 ------- ------- ------- ------- ------- Operating earnings 870 811 831 1,058 1,015 Preferred stock dividends 0 31 32 33 33 ------- ------- ------- ------- ------- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 870(2) $ 780(3) $ 799 $ 1,025 $ 982 ======= ======= ======= ======= ======= NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 870 $ 780 $ 799 $ 1,025 $ 982 Net investment gains (losses) 2,225 (23) (234) (624) (817) Minority interest - net investment gains (losses) (2) (1) 3 (2) 4 Net investment gains (losses) tax benefit (provision) (784) 9 85 220 289 ------- ------- ------- ------- ------- Net investment gains (losses), net of income taxes 1,439 (15) (146) (406) (524) Adjustments related to universal life and investment-type product policy fees 0 0 0 (3) (9) Adjustments related to policyholder benefits and dividends (86) (55) (9) 108 84 Adjustments related to other expenses (9) 7 30 42 126 Adjustments related to tax benefit (provision) 32 18 (9) (52) (72) ------- ------- ------- ------- ------- Adjustments related to net investment gains (losses), net of income taxes (1) (63) (30) 12 95 129 Discontinued operations, net of income taxes (1) 7 12 0 30 ------- ------- ------- ------- ------- Net income available to common shareholders 2,245 742 677 714 617 Preferred stock dividends 0 31 32 33 33 ------- ------- ------- ------- ------- Net income $ 2,245 $ 773 $ 709 $ 747 $ 650 ======= ======= ======= ======= =======
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. (2) Operating earnings available to common shareholders for the three months ended June 30, 2005 includes a $30 million benefit, net of income taxes, associated with the reduction of a previously established liability for settlement death benefits related to the Company's sales practices class action settlement recorded in 1999, an $18 million benefit, net of income taxes, associated with the reduction of a previously established liability related to the Company's demutualization in 2000, and an $8 million charge, net of income taxes, associated with an establishment of a liability associated with the Argentine pension business. (3) Operating earnings available to common shareholders for the three months ended September 30, 2005 includes a $31 million benefit from a revision of the estimate of income taxes for 2004. 4 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATING BALANCE SHEET AT JUNE 30, 2006
Corporate, Other Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations ------------ ------------- ---------- ----------- ------------- ----------- ---------------- ASSETS Total investments $312,854 $129,696 $122,488 $3,773 $13,906 $12,929 $30,062 Cash and cash equivalents 4,126 (956) 959 (108) (118) 187 4,162 Accrued investment income 3,275 1,116 1,288 60 180 81 550 Premiums and other receivables 13,216 3,606 3,134 902 805 1,243 3,526 Deferred policy acquisition costs and value of business acquired 20,814 1,328 14,307 184 1,960 3,019 16 Current income tax recoverable 154 (114) 27 34 86 (91) 212 Goodwill 4,913 982 2,971 157 295 96 412 Other assets 8,171 1,856 3,364 376 356 80 2,139 Separate account assets 132,782 45,328 85,184 0 2,255 15 0 -------- -------- -------- ------ ------- ------- ------- Total Assets $500,305 $182,842 $233,722 $5,378 $19,725 $17,559 $41,079 ======== ======== ======== ====== ======= ======= ======= LIABILITIES AND EQUITY LIABILITIES Future policy benefits $123,802 $ 48,637 $ 56,192 $3,422 $ 7,251 $ 4,861 $ 3,439 Policyholder account balances 130,518 56,469 58,232 0 5,357 5,807 4,653 Other policyholder funds 8,721 2,750 2,767 39 1,113 1,878 174 Policyholder dividends payable 961 0 961 0 0 0 0 Policyholder dividend obligation 176 0 176 0 0 0 0 Short-term debt 2,253 0 2 0 0 0 2,251 Long-term debt 10,737 1 145 0 53 1,552 8,986 Junior subordinated debt securities underlying common equity units 2,134 0 0 0 0 0 2,134 Shares subject to mandatory redemption 278 0 0 0 0 159 119 Deferred income tax payable 485 (1,705) 1,364 (6) 65 749 18 Payables for collateral under securities loaned and other transactions 46,612 19,732 16,732 111 0 0 10,037 Other liabilities 13,165 3,187 2,953 689 900 1,430 4,006 Separate account liabilities 132,782 45,328 85,184 0 2,255 15 0 -------- -------- -------- ------ ------- ------- ------- Total Liabilities 472,624 174,399 224,708 4,255 16,994 16,451 35,817 EQUITY Preferred stock, at par value 1 0 0 0 0 0 1 Common stock, at par value 8 0 0 0 0 0 8 Allocated equity (1) 29,568 8,935 9,405 1,051 2,623 972 6,582 Treasury stock (905) 0 0 0 0 0 (905) Accumulated other comprehensive income (991) (492) (391) 72 108 136 (424) -------- -------- -------- ------ ------- ------- ------- Total Stockholders' Equity 27,681 8,443 9,014 1,123 2,731 1,108 5,262 -------- -------- -------- ------ ------- ------- ------- Total Liabilities and Stockholders' Equity $500,305 $182,842 $233,722 $5,378 $19,725 $17,559 $41,079 ======== ======== ======== ====== ======= ======= =======
(1) Allocated equity includes additional paid-in capital and retained earnings. 5 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS FOR THE THREE MONTHS ENDED JUNE 30, 2006
Corporate, Other Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations ------------ ------------- ---------- ----------- ------------- ----------- ---------------- REVENUES Premiums $ 6,428 $2,836 $1,102 $ 726 $ 676 $1,078 $ 10 Universal life and investment-type product policy fees 1,194 201 799 0 194 0 0 Investment income, net 4,277 1,824 1,709 42 238 156 308 Other revenues 335 169 135 8 4 13 6 ------- ------ ------ ----- ------ ------ ----- 12,234 5,030 3,745 776 1,112 1,247 324 ------- ------ ------ ----- ------ ------ ----- EXPENSES Policyholder benefits and dividends 6,840 3,169 1,755 432 600 871 13 Interest credited to policyholder account balances 1,269 617 518 0 86 48 0 Capitalization of deferred policy acquisition costs (890) (62) (415) (119) (145) (149) 0 Amortization of deferred policy acquisition costs 611 43 289 115 78 85 1 Other expenses 2,954 578 1,060 215 413 347 341 ------- ------ ------ ----- ------ ------ ----- 10,784 4,345 3,207 643 1,032 1,202 355 ------- ------ ------ ----- ------ ------ ----- Operating earnings before provision (benefit) for income taxes 1,450 685 538 133 80 45 (31) Provision (benefit) for income taxes 435 232 185 34 18 16 (50) ------- ------ ------ ----- ------ ------ ----- Operating earnings 1,015 453 353 99 62 29 19 Preferred stock dividends 33 0 0 0 0 0 33 ------- ------ ------ ----- ------ ------ ----- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 982 $ 453 $ 353 $ 99 $ 62 $ 29 ($14) ======= ====== ====== ===== ====== ====== ===== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 982 $ 453 $ 353 $ 99 $ 62 $ 29 ($14) Net investment gains (losses) (817) (440) (307) (4) 13 (15) (64) Minority interest - net investment gains (losses) 4 0 0 0 0 4 0 Net investment gains (losses) tax benefit (provision) 289 157 108 4 (5) 4 21 ------- ------ ------ ----- ------ ------ ----- Net investment gains (losses), net of income taxes (524) (283) (199) 0 8 (7) (43) Adjustments related to universal life and investment-type product policy fees (9) 0 (9) 0 0 0 0 Adjustments related to policyholder benefits and dividends 84 61 (26) 0 49 0 0 Adjustments related to other expenses 126 0 118 0 0 8 0 Adjustments related to tax benefit (provision) (72) (22) (29) 0 (18) (3) 0 ------- ------ ------ ----- ------ ------ ----- Adjustments related to net investment gains (losses), net of income taxes (1) 129 39 54 0 31 5 0 Discontinued operations, net of income taxes 30 0 0 0 0 0 30 ------- ------ ------ ----- ------ ------ ----- Net income available to common shareholders 617 209 208 99 101 27 (27) Preferred stock dividends 33 0 0 0 0 0 33 ------- ------ ------ ----- ------ ------ ----- Net income $ 650 $ 209 $ 208 $ 99 $ 101 $ 27 $ 6 ======= ====== ====== ===== ====== ====== =====
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. 6 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS (1) FOR THE THREE MONTHS ENDED JUNE 30, 2005
Auto Corporate, Other Unaudited (Dollars in millions) Consolidated Institutional Individual & Home International Reinsurance & Eliminations ------------ ------------- ---------- ------ ------------- ----------- ---------------- REVENUES Premiums $ 6,034 $2,834 $1,061 $ 738 $ 470 $ 928 $ 3 Universal life and investment-type product policy fees 813 185 501 0 125 2 0 Investment income, net 3,508 1,364 1,571 46 195 137 195 Other revenues 301 163 105 8 (1) 21 5 ------- ------ ------ ----- ----- ------ ------ 10,656 4,546 3,238 792 789 1,088 203 ------- ------ ------ ----- ----- ------ ------ EXPENSES Policyholder benefits and dividends 6,589 3,159 1,732 448 468 828 (46) Interest credited to policyholder account balances 820 326 395 0 55 43 1 Capitalization of deferred policy acquisition costs (858) (68) (279) (119) (138) (254) 0 Amortization of deferred policy acquisition costs 556 39 169 115 56 175 2 Other expenses 2,296 566 786 208 274 293 169 ------- ------ ------ ----- ----- ------ ------ 9,403 4,022 2,803 652 715 1,085 126 ------- ------ ------ ----- ----- ------ ------ Operating earnings before provision (benefit) for income taxes 1,253 524 435 140 74 3 77 Provision (benefit) for income taxes 383 178 145 39 23 (1) (1) ------- ------ ------ ----- ----- ------ ------ Operating earnings 870 346 290 101 51 4 78 Preferred stock dividends 0 0 0 0 0 0 0 ------- ------ ------ ----- ----- ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 870 $ 346 $ 290 $ 101 $ 51 $ 4 $ 78 ======= ====== ====== ===== ===== ====== ====== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 870 $ 346 $ 290 $ 101 $ 51 $ 4 $ 78 Net investment gains (losses) 2,225 415 501 (4) 7 (7) 1,313 Minority interest - net investment gains (losses) (2) 0 0 0 0 (2) 0 Net investment gains (losses) tax benefit (provision) (784) (147) (174) 1 (2) 6 (468) ------- ------ ------ ----- ----- ------ ------ Net investment gains (losses), net of income taxes 1,439 268 327 (3) 5 (3) 845 Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends (86) (37) (33) 0 (16) 0 0 Adjustments related to other expenses (9) 0 (21) 0 0 12 0 Adjustments related to tax benefit (provision) 32 13 19 0 6 (6) 0 ------- ------ ------ ----- ----- ------ ------ Adjustments related to net investment gains (losses), net of income taxes (2) (63) (24) (35) 0 (10) 6 0 Discontinued operations, net of income taxes (1) 0 0 0 (1) 0 0 ------- ------ ------ ----- ----- ------ ------ Net income available to common shareholders 2,245 590 582 98 45 7 923 Preferred stock dividends 0 0 0 0 0 0 0 ------- ------ ------ ----- ----- ------ ------ Net income $ 2,245 $ 590 $ 582 $ 98 $ 45 $ 7 $ 923 ======= ====== ====== ===== ===== ====== ======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. 7 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS FOR THE SIX MONTHS ENDED JUNE 30, 2006
Auto Corporate, Other Unaudited (Dollars in millions) Consolidated Institutional Individual & Home International Reinsurance & Eliminations ------------ ------------- ---------- ------ ------------- ----------- ---------------- REVENUES Premiums $12,856 $ 5,825 $2,184 $1,450 $1,307 $2,071 $ 19 Universal life and investment-type product policy fees 2,372 402 1,592 0 378 0 0 Investment income, net 8,555 3,611 3,450 87 473 330 604 Other revenues 663 339 260 15 8 28 13 ------- ------- ------ ------ ------ ------ ----- 24,446 10,177 7,486 1,552 2,166 2,429 636 ------- ------- ------ ------ ------ ------ ----- EXPENSES Policyholder benefits and dividends 13,774 6,558 3,500 885 1,127 1,684 20 Interest credited to policyholder account balances 2,489 1,211 994 0 173 111 0 Capitalization of deferred policy acquisition costs (1,773) (143) (785) (224) (296) (325) 0 Amortization of deferred policy acquisition costs 1,255 78 591 226 160 199 1 Other expenses 5,731 1,157 2,024 410 809 679 652 ------- ------- ------ ------ ------ ------ ----- 21,476 8,861 6,324 1,297 1,973 2,348 673 ------- ------- ------ ------ ------ ------ ----- Operating earnings before provision (benefit) for income taxes 2,970 1,316 1,162 255 193 81 (37) Provision (benefit) for income taxes 897 447 401 63 56 28 (98) ------- ------- ------ ------ ------ ------ ----- Operating earnings 2,073 869 761 192 137 53 61 Preferred stock dividends 66 0 0 0 0 0 66 ------- ------- ------ ------ ------ ------ ----- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 2,007 $ 869 $ 761 $ 192 $ 137 $ 53 ($5) ======= ======= ====== ====== ====== ====== ===== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 2,007 $ 869 $ 761 $ 192 $ 137 $ 53 ($5) Net investment gains (losses) (1,441) (779) (572) (3) 33 (7) (113) Minority interest - net investment gains (losses) 2 0 0 0 0 2 0 Net investment gains (losses) tax benefit (provision) 509 277 203 1 (11) 2 37 ------- ------- ------ ------ ------ ------ ----- Net investment gains (losses), net of income taxes (930) (502) (369) (2) 22 (3) (76) Adjustments related to universal life and investment-type product policy fees (12) 0 (12) 0 0 0 0 Adjustments related to policyholder benefits and dividends 192 86 35 0 71 0 0 Adjustments related to other expenses 168 0 163 0 0 5 0 Adjustments related to tax benefit (provision) (124) (31) (66) 0 (25) (2) 0 ------- ------- ------ ------ ------ ------ ----- Adjustments related to net investment gains (losses), net of income taxes (1) 224 55 120 0 46 3 0 Discontinued operations, net of income taxes 30 0 0 0 0 0 30 ------- ------- ------ ------ ------ ------ ----- Net income available to common shareholders 1,331 422 512 190 205 53 (51) Preferred stock dividends 66 0 0 0 0 0 66 ------- ------- ------ ------ ------ ------ ----- Net income $ 1,397 $ 422 $ 512 $ 190 $ 205 $ 53 $ 15 ======= ======= ====== ====== ====== ====== =====
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. 8 (METLIFE(R) LOGO) METLIFE, INC. CONSOLIDATING STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS(1) FOR THE SIX MONTHS ENDED JUNE 30, 2005
Corporate, Other Unaudited (Dollars in millions) Consolidated Institutional Individual Auto & Home International Reinsurance & Eliminations ------------ ------------- ---------- ----------- ------------- ----------- -------------- REVENUES Premiums $ 12,000 $ 5,678 $ 2,085 $ 1,466 $ 936 $ 1,831 $ 4 Universal life and investment-type product policy fees 1,604 378 980 0 244 2 0 Investment income, net 6,787 2,612 3,109 89 344 287 346 Other revenues 600 324 217 17 2 32 8 -------- ------- ------- ------- ------- ------- ------- 20,991 8,992 6,391 1,572 1,526 2,152 358 -------- ------- ------- ------- ------- ------- ------- EXPENSES Policyholder benefits and dividends 13,000 6,305 3,367 926 878 1,567 (43) Interest credited to policyholder account balances 1,615 627 787 0 102 99 0 Capitalization of deferred policy acquisition costs (1,625) (132) (533) (222) (263) (475) 0 Amortization of deferred policy acquisition costs 1,084 74 351 226 112 317 4 Other expenses 4,482 1,105 1,504 399 518 603 353 -------- ------- ------- ------- ------- ------- ------- 18,556 7,979 5,476 1,329 1,347 2,111 314 -------- ------- ------- ------- ------- ------- ------- Operating earnings before provision (benefit) for income taxes 2,435 1,013 915 243 179 41 44 Provision (benefit) for income taxes 743 343 305 66 60 12 (43) Operating earnings 1,692 670 610 177 119 29 87 Preferred stock dividends 0 0 0 0 0 0 0 OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 1,692 $ 670 $ 610 $ 177 $ 119 $ 29 $ 87 ======== ======= ======= ======= ======= ======= ======= NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 1,692 $ 670 $ 610 $ 177 $ 119 $ 29 $ 87 Net investment gains (losses) 2,204 420 560 (4) 7 21 1,200 Minority interest - net investment gains (losses) (11) 0 (4) 0 0 (7) 0 Net investment gains (losses) tax benefit (provision) (775) (150) (197) 1 (2) (2) (425) -------- ------- ------- ------- ------- ------- ------- Net investment gains (losses), net of income taxes 1,418 270 359 (3) 5 12 775 Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends (16) (2) (12) 0 (2) 0 0 Adjustments related to other expenses (24) 0 (19) 0 0 (5) 0 Adjustments related to tax benefit (provision) 13 1 11 0 1 0 0 -------- ------- ------- ------- ------- ------- ------- Adjustments related to net investment gains (losses), net of income taxes(2) (27) (1) (20) 0 (1) (5) 0 Discontinued operations, net of income taxes 149 0 0 0 (2) 0 151 -------- ------- ------- ------- ------- ------- ------- Net income available to common shareholders 3,232 939 949 174 121 36 1,013 Preferred stock dividends 0 0 0 0 0 0 0 -------- ------- ------- ------- ------- ------- ------- Net income $ 3,232 $ 939 $ 949 $ 174 $ 121 $ 36 $ 1,013 ======== ======= ======= ======= ======= ======= =======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. 9 (METLIFE(R) LOGO) SUMMARY OF SEGMENT OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS (1)
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- INSTITUTIONAL OPERATIONS $346 $386 $389 $ 416 $453 INDIVIDUAL OPERATIONS 290 330 312 408 353 AUTO & HOME OPERATIONS 101 (26) 81 93 99 INTERNATIONAL OPERATIONS 51 66 48 75 62 REINSURANCE OPERATIONS 4 26 31 24 29 CORPORATE, OTHER & ELIMINATIONS 78 (2) (62) 9 (14) ---- ---- ---- ------ ---- CONSOLIDATED $870(2) $780(3) $799 $1,025 $982 ==== ==== ==== ====== ====
(1) A reconciliation of operating earnings available to common shareholders to net income for each segment appears in this QFS as follows: (i) Institutional Operations, page 11; (ii) Individual Operations, page 19; (iii) Auto & Home Operations, page 29; (iv) International Operations, page 34; (v) Reinsurance Operations, page 35; and Corporate, Other & Eliminations, page 37. A reconciliation of operating earnings available to common shareholders to net income for MetLife, Inc., Consolidated, appears on page 4. (2) Operating earnings available to common shareholders for the three months ended June 30, 2005 includes a $30 million benefit, net of income taxes, associated with the reduction of a previously established liability for settlement death benefits related to the Company's sales practices class action settlement recorded in 1999, an $18 million benefit, net of income taxes, associated with the reduction of a previously established liability related to the Company's demutualization in 2000, and an $8 million charge, net of income taxes, associated with an establishment of a liability associated with the Argentine pension business. (3) Operating earnings available to common shareholders for the three months ended September 30, 2005 includes a $31 million benefit from a revision of the estimate of income taxes for 2004. 10 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - TOTAL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ---------------------------------------------------------- -------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Institutional Operations 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $2,834 $3,066 $2,643 $2,989 $2,836 $5,678 $ 5,825 Universal life and investment-type product policy fees 185 197 197 201 201 378 402 Investment income, net 1,364 1,707 1,732 1,787 1,824 2,612 3,611 Other revenues 163 163 166 170 169 324 339 ------ ------ ------ ------ ------ ------ ------- 4,546 5,133 4,738 5,147 5,030 8,992 10,177 ------ ------ ------ ------ ------ ------ ------- EXPENSES Policyholder benefits and dividends 3,159 3,455 3,025 3,389 3,169 6,305 6,558 Interest credited to policyholder account balances 326 508 530 594 617 627 1,211 Other expenses 537 587 595 533 559 1,047 1,092 ------ ------ ------ ------ ------ ------ ------- 4,022 4,550 4,150 4,516 4,345 7,979 8,861 ------ ------ ------ ------ ------ ------ ------- Operating earnings before provision (benefit) for income taxes 524 583 588 631 685 1,013 1,316 Provision (benefit) for income taxes 178 197 199 215 232 343 447 ------ ------ ------ ------ ------ ------ ------- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 346 $ 386 $ 389 $ 416 $ 453 $ 670 $ 869 ====== ====== ====== ====== ====== ====== ======= NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 346 $ 386 $ 389 $ 416 $ 453 $ 670 $ 869 Net investment gains (losses) 415 (97) (156) (339) (440) 420 (779) Minority interest - net investment gains (losses) 0 0 0 0 0 0 0 Net investment gains (losses) tax benefit (provision) (147) 36 59 120 157 (150) 277 ------ ------ ------ ------ ------ ------ ------- Net investment gains (losses), net of income taxes 268 (61) (97) (219) (283) 270 (502) Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends (37) 28 (18) 25 61 (2) 86 Adjustments related to other expenses 0 0 0 0 0 0 0 Adjustments related to tax benefit (provision) 13 (10) 6 (9) (22) 1 (31) ------ ------ ------ ------ ------ ------ ------- Adjustments related to net investment gains (losses), net of income taxes(1) (24) 18 (12) 16 39 (1) 55 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------- Net income available to common shareholders 590 343 280 213 209 939 422 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------- Net income $ 590 $ 343 $ 280 $ 213 $ 209 $ 939 $ 422 ====== ====== ====== ====== ====== ====== =======
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of deferred policy acquisition costs and amounts allocable to certain participating contracts. 11 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ---------------------------------------------------------- -------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Group Life 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $1,435 $1,485 $1,359 $1,551 $1,474 $2,799 $3,025 Universal life and investment-type product policy fees 180 192 194 195 197 367 392 Investment income, net 281 296 296 303 309 552 612 Other revenues 14 11 10 15 13 27 28 ------ ------ ------ ------ ------ ------ ------ 1,910 1,984 1,859 2,064 1,993 3,745 4,057 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 1,519 1,542 1,398 1,636 1,484 2,963 3,120 Interest credited to policyholder account balances 105 119 125 134 143 204 277 Other expenses 159 168 157 155 157 305 312 ------ ------ ------ ------ ------ ------ ------ 1,783 1,829 1,680 1,925 1,784 3,472 3,709 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 127 155 179 139 209 273 348 Provision (benefit) for income taxes 44 53 61 48 70 93 118 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 83 $ 102 $ 118 $ 91 $ 139 $ 180 $ 230 ====== ====== ====== ====== ====== ====== ====== Net investment gains (losses), net of income taxes (1) 7 (38) (2) (47) (10) (49) Adjustments related to net investment gains (losses), net of income taxes 0 4 1 1 3 0 4 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 82 113 81 90 95 170 185 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 82 $ 113 $ 81 $ 90 $ 95 $ 170 $ 185 ====== ====== ====== ====== ====== ====== ======
12 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended -------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Retirement & Savings 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 384 $ 557 $ 234 $ 334 $ 254 $ 880 $ 588 Universal life and investment-type product policy fees 5 5 3 6 4 11 10 Investment income, net 926 1,255 1,273 1,325 1,361 1,772 2,686 Other revenues 59 63 67 62 64 118 126 ------ ------ ------ ------ ------ ------ ------ 1,374 1,880 1,577 1,727 1,683 2,781 3,410 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 751 1,041 743 774 755 1,615 1,529 Interest credited to policyholder account balances 221 389 405 460 474 423 934 Other expenses 87 126 113 98 119 180 217 ------ ------ ------ ------ ------ ------ ------ 1,059 1,556 1,261 1,332 1,348 2,218 2,680 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 315 324 316 395 335 563 730 Provision (benefit) for income taxes 106 108 106 134 114 189 248 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 209 $ 216 $ 210 $ 261 $ 221 $ 374 $ 482 ====== ====== ====== ====== ====== ====== ====== Net investment gains (losses), net of income taxes 231 (45) (61) (168) (187) 243 (355) Adjustments related to net investment gains (losses), net of income taxes (10) 7 (2) (7) 10 1 3 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 430 178 147 86 44 618 130 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 430 $ 178 $ 147 $ 86 $ 44 $ 618 $ 130 ====== ====== ====== ====== ====== ====== ======
13 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended -------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Non-Medical Health & Other 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $1,015 $1,024 $1,050 $1,104 $1,108 $1,999 $2,212 Universal life and investment-type product policy fees 0 0 0 0 0 0 0 Investment income, net 157 156 163 159 154 288 313 Other revenues 90 89 89 93 92 179 185 ------ ------ ------ ------ ------ ------ ------ 1,262 1,269 1,302 1,356 1,354 2,466 2,710 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 889 872 884 979 930 1,727 1,909 Interest credited to policyholder account balances 0 0 0 0 0 0 0 Other expenses 291 293 325 280 283 562 563 ------ ------ ------ ------ ------ ------ ------ 1,180 1,165 1,209 1,259 1,213 2,289 2,472 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 82 104 93 97 141 177 238 Provision (benefit) for income taxes 28 36 32 33 48 61 81 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 54 $ 68 $ 61 $ 64 $ 93 $ 116 $ 157 ====== ====== ====== ====== ====== ====== ====== Net investment gains (losses), net of income taxes 38 (23) 2 (49) (49) 37 (98) Adjustments related to net investment gains (losses), net of income taxes (14) 7 (11) 22 26 (2) 48 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 78 52 52 37 70 151 107 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 78 $ 52 $ 52 $ 37 $ 70 $ 151 $ 107 ====== ====== ====== ====== ====== ====== ======
14 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT AND ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- PREMIUMS, FEES AND OTHER REVENUES BY PRODUCT (1) Group Life $1,629 $1,688 $1,563 $1,761 $1,684 Retirement & Savings 448 625 304 402 322 Non-Medical Health & Other 1,105 1,113 1,139 1,197 1,200 ------ ------ ------ ------ ------ Total Premiums, Fees and Other Revenues $3,182 $3,426 $3,006 $3,360 $3,206 ====== ====== ====== ====== ====== Group Disability (Included in Non-Medical Health & Other) $ 331 $ 325 $ 335 $ 347 $ 342 ADDITIONAL STATISTICAL INFORMATION INCURRED LOSS RATIO (MORTALITY EXPERIENCE): Term Life 94.7% 91.5% 89.3% 94.2% 88.1% INCURRED LOSS RATIO (MORBIDITY EXPERIENCE): Group Disability 83.5% 95.0% 91.1% 90.7% 90.2% NUMBER OF SALES REPRESENTATIVES 778 787 761 745 700
(1) With respect to premiums, fees and other revenues, certain experience rating refunds and changes to premium stabilization reserves are included in premiums and fees. The following table excludes these amounts: Group Life $1,633 $1,699 $1,655 $1,694 $1,669 Retirement & Savings 448 625 304 402 322 Non-Medical Health & Other 1,104 1,116 1,146 1,197 1,207 ------ ------ ------ ------ ------ Total Premiums, Fees and Other Revenues $3,185 $3,440 $3,105 $3,293 $3,198 ------ ------ ------ ------ ------
15 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Group Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $15,354 $15,449 $16,290 $16,400 $16,951 Premiums and deposits 2,921 2,921 2,681 3,372 2,824 Interest on reserves 144 159 166 176 187 Surrenders and withdrawals (1,324) (1,263) (1,180) (1,196) (1,581) Benefits and reserves (1,519) (1,295) (1,397) (1,623) (1,489) Other (127) 319(1) (160) (178) (206) ------- ------- ------- ------- ------- Balance, end of period $15,449 $16,290 $16,400 $16,951 $16,686 ======= ======= ======= ======= =======
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Retirement & Savings 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $49,233 $51,020 $77,933 $78,405 $78,252 Premiums and deposits 2,122 2,751 3,282 3,819 3,028 Interest on reserves 650 933 937 986 1,022 Surrenders and withdrawals (1,786) (2,604) (2,378) (2,851) (2,301) Benefits and reserves (508) (671) (655) (679) (673) Other 1,309 26,504(1) (714) (1,428) 78 ------- ------- ------- ------- ------- Balance, end of period $51,020 $77,933 $78,405 $78,252 $79,406 ======= ======= ======= ======= =======
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Non-Medical Health & Other 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $7,721 $7,968 $8,321 $8,556 $8,849 Premiums and deposits 978 996 1,023 1,066 1,059 Interest on reserves 66 74 76 78 81 Surrenders and withdrawals 23 21 20 20 28 Benefits and reserves (880) (917) (915) (991) (950) Other 60 179(1) 31 120 (53) ------ ------ ------ ------ ------ Balance, end of period $7,968 $8,321 $8,556 $8,849 $9,014 ====== ====== ====== ====== ======
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Group Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $7,976 $8,050 $ 9,931 $10,539 $10,949 Premiums and deposits 120 232 706 189 603 Investment performance 40 219 29 329 (161) Surrenders and withdrawals (86) (108) (121) (101) (86) Policy charges 0 (7) (7) (7) (7) Other 0 1,545(1) 1 0 (4) ------ ------ ------- ------- ------- Balance, end of period $8,050 $9,931 $10,539 $10,949 $11,294 ====== ====== ======= ======= =======
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Retirement & Savings 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $30,654 $32,105 $34,508 $34,374 $33,653 Premiums and deposits 965 1,108 1,204 1,345 1,127 Investment performance 1,890 538 527 550 279 Surrenders and withdrawals (1,351) (2,029) (1,775) (2,592) (1,377) Policy charges (26) (23) (30) (25) (26) Other (27) 2,809(1) (60) 1 1 ------- ------- ------- ------- ------- Balance, end of period $32,105 $34,508 $34,374 $33,653 $33,657 ======= ======= ======= ======= =======
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Non-Medical Health & Other 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $ 243 $276 $298 $ 326 $360 Premiums and deposits 85 81 78 90 91 Investment performance 191 66 (34) 90 (48) Surrenders and withdrawals (23) (21) (19) (20) (28) Policy charges (18) (18) (15) (14) (20) Other (202) (86) 18 (112) 22 ----- ---- ---- ----- ---- Balance, end of period $ 276 $298 $326 $ 360 $377 ===== ==== ==== ===== ====
(1) Includes the beginning balances of Travelers of $771 million, $27,661 million and $347 million for Group Life, Retirement & Savings and Non-Medical Health & Other, respectively, in Future Policy Benefits and Policyholder Account Balances and $1,545 million and $2,428 million for Group Life and Retirement & Savings, respectively, in Separate Account Liabilities. 16 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS OTHER EXPENSES BY MAJOR CATEGORY
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- OTHER EXPENSES BY MAJOR CATEGORY Direct and allocated expenses $396 $417 $431 $361 $413 Pension and other post-retirement benefit costs 18 19 19 21 20 Premium taxes and other taxes, licenses and fees 41 46 53 50 38 ---- ---- ---- ---- ---- Sub-total Insurance Expenses 455 482 503 432 471 Commissions and other expenses 82 105 92 101 88 ---- ---- ---- ---- ---- Total Other Expenses $537 $587 $595 $533 $559 ==== ==== ==== ==== ====
17 (METLIFE(R) LOGO) INSTITUTIONAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Group Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 5.86% 5.89% 5.98% 6.07% 6.11% Average crediting rate 3.78% 3.92% 4.07% 4.40% 4.56% ---- ---- ---- ---- ---- Spread 2.08% 1.97% 1.91% 1.67% 1.55% ==== ==== ==== ==== ====
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Retirement & Savings 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 7.66% 6.57% 6.59% 6.74% 6.83% Average crediting rate 5.51% 4.97% 5.11% 5.31% 5.33% ---- ---- ---- ---- ---- Spread 2.15% 1.60% 1.48% 1.43% 1.50% ==== ==== ==== ==== ====
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Non-Medical Health & Other 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- ANNUALIZED GENERAL ACCOUNT SPREADS BY SEGMENT (%) Investment income yield 9.17% 8.19% 8.25% 7.71% 7.22% Average crediting rate 4.94% 4.93% 4.95% 4.99% 5.00% ---- ---- ---- ---- ---- Spread 4.23% 3.26% 3.30% 2.72% 2.22% ==== ==== ==== ==== ====
18 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - TOTAL (1) UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ------------------------------------------------------ ----------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Individual Operations 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $1,061 $1,136 $1,264 $1,082 $1,102 $2,085 $2,184 Universal life and investment-type product policy fees 501 746 750 793 799 980 1,592 Investment income, net 1,571 1,751 1,711 1,741 1,709 3,109 3,450 Other revenues 105 150 110 125 135 217 260 ------ ------ ------ ------ ------ ------ ------ 3,238 3,783 3,835 3,741 3,745 6,391 7,486 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 1,732 1,769 1,940 1,745 1,755 3,367 3,500 Interest credited to policyholder account balances 395 500 488 476 518 787 994 Capitalization of deferred policy acquisition costs (279) (384) (409) (370) (415) (533) (785) Amortization of deferred policy acquisition costs 169 310 303 302 289 351 591 Other expenses 786 1,094 1,047 964 1,060 1,504 2,024 ------ ------ ------ ------ ------ ------ ------ 2,803 3,289 3,369 3,117 3,207 5,476 6,324 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 435 494 466 624 538 915 1,162 Provision (benefit) for income taxes 145 164 154 216 185 305 401 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 290 $ 330 $ 312 $ 408 $ 353 $ 610 $ 761 ====== ====== ====== ====== ====== ====== ====== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 290 $ 330 $ 312 $ 408 $ 353 $ 610 $ 761 Net investment gains (losses) 501 (6) (180) (265) (307) 560 (572) Minority interest - net investment gains (losses) 0 0 0 0 0 (4) 0 Net investment gains (losses) tax benefit (provision) (174) 0 65 95 108 (197) 203 ------ ------ ------ ------ ------ ------ ------ Net investment gains (losses), net of income taxes 327 (6) (115) (170) (199) 359 (369) Adjustments related to universal life and investment-type product policy fees 0 0 0 (3) (9) 0 (12) Adjustments related to policyholder benefits and dividends (33) (29) 30 61 (26) (12) 35 Adjustments related to other expenses (21) 11 31 45 118 (19) 163 Adjustments related to tax benefit (provision) 19 7 (22) (37) (29) 11 (66) ------ ------ ------ ------ ------ ------ ------ Adjustments related to net investment gains (losses), net of income taxes (2) (35) (11) 39 66 54 (20) 120 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 582 313 236 304 208 949 512 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 582 $ 313 $ 236 $ 304 $ 208 $ 949 $ 512 ====== ====== ====== ====== ====== ====== ======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of unearned revenue and deferred policy acquisition costs, adjustments to the policyholder dividend obligation and amounts allocable to certain participating contracts. 19 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL (1) UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ------------------------------------------------------ ----------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Traditional Life 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 988 $1,016 $1,134 $ 976 $1,011 $1,949 $1,987 Universal life and investment-type product policy fees 0 0 0 0 0 0 0 Investment income, net 832 838 815 821 804 1,674 1,625 Other revenues 0 1 1 0 (1) 2 (1) ------ ------ ------ ------ ------ ------ ------ 1,820 1,855 1,950 1,797 1,814 3,625 3,611 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 1,522 1,467 1,648 1,444 1,463 2,968 2,907 Interest credited to policyholder account balances 0 0 0 0 0 0 0 Capitalization of deferred policy acquisition costs (60) (47) (53) (56) (52) (103) (108) Amortization of deferred policy acquisition costs 48 58 46 53 45 100 98 Other expenses 207 228 222 207 213 390 420 ------ ------ ------ ------ ------ ------ ------ 1,717 1,706 1,863 1,648 1,669 3,355 3,317 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 103 149 87 149 145 270 294 Provision (benefit) for income taxes 36 50 30 51 48 92 99 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 67 $ 99 $ 57 $ 98 $ 97 $ 178 $ 195 ====== ====== ====== ====== ====== ====== ====== Net investment gains (losses), net of income taxes 224 31 15 (44) (48) 269 (92) Adjustments related to net investment gains (losses), net of income taxes (22) (22) 20 40 19 (7) 59 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 269 108 92 94 68 440 162 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 269 $ 108 $ 92 $ 94 $ 68 $ 440 $ 162 ====== ====== ====== ====== ====== ====== ======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. 20 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ---------------------------------------------------------- ------------------ June 30, September 30, December 31, March 31, June 30, June 30, June 30, Variable & Universal Life 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Universal life and investment-type product policy fees 277 384 382 395 384 542 779 Investment income, net 151 196 190 203 197 303 400 Other revenues (3) 0 (1) (3) 0 (3) (3) ---- ----- ----- ----- ----- ----- ------ 425 580 571 595 581 842 1,176 ---- ----- ----- ----- ----- ----- ------ EXPENSES Policyholder benefits and dividends 97 120 120 123 162 190 285 Interest credited to policyholder account balances 117 145 146 142 144 231 286 Capitalization of deferred policy acquisition costs (72) (133) (136) (102) (110) (137) (212) Amortization of deferred policy acquisition costs 64 105 113 110 104 113 214 Other expenses 160 266 275 208 214 308 422 ---- ----- ----- ----- ----- ----- ------ 366 503 518 481 514 705 995 ---- ----- ----- ----- ----- ----- ------ Operating earnings before provision (benefit) for income taxes 59 77 53 114 67 137 181 Provision (benefit) for income taxes 20 26 18 40 24 47 64 ---- ----- ----- ----- ----- ----- ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 39 $ 51 $ 35 $ 74 $ 43 $ 90 $ 117 ==== ===== ===== ===== ===== ===== ====== Net investment gains (losses), net of income taxes 9 (12) (22) (25) (36) 1 (61) Adjustments related to net investment gains (losses), net of income taxes (2) 7 10 9 6 (4) 15 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ---- ----- ----- ----- ----- ----- ------ Net income available to common shareholders 46 46 23 58 13 87 71 Preferred stock dividends 0 0 0 0 0 0 0 ---- ----- ----- ----- ----- ----- ------ Net income $ 46 $ 46 $ 23 $ 58 $ 13 $ 87 $ 71 ==== ===== ===== ===== ===== ===== ======
21 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ------------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Annuities 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 73 $ 118 $ 101 $ 98 $ 85 $ 136 $ 183 Universal life and investment-type product policy fees 198 318 334 356 367 383 723 Investment income, net 551 681 665 677 667 1,062 1,344 Other revenues 13 26 29 29 36 24 65 ----- ------ ------ ------ ------ ------ ------ 835 1,143 1,129 1,160 1,155 1,605 2,315 ----- ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 113 178 152 173 125 209 298 Interest credited to policyholder account balances 260 338 322 314 351 521 665 Capitalization of deferred policy acquisition costs (147) (204) (220) (212) (253) (292) (465) Amortization of deferred policy acquisition costs 57 147 144 139 140 138 279 Other expenses 292 427 422 400 477 551 877 ----- ------ ------ ------ ------ ------ ------ 575 886 820 814 840 1,127 1,654 ----- ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 260 257 309 346 315 478 661 Provision (benefit) for income taxes 85 84 100 120 109 156 229 ----- ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 175 $ 173 $ 209 $ 226 $ 206 $ 322 $ 432 ===== ====== ====== ====== ====== ====== ====== Net investment gains (losses), net of income taxes 94 (29) (99) (102) (105) 95 (207) Adjustments related to net investment gains (losses), net of income taxes (11) 4 9 17 29 (9) 46 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ----- ------ ------ ------ ------ ------ ------ Net income available to common shareholders 258 148 119 141 130 408 271 Preferred stock dividends 0 0 0 0 0 0 0 ----- ------ ------ ------ ------ ------ ------ Net income $ 258 $ 148 $ 119 $ 141 $ 130 $ 408 $ 271 ===== ====== ====== ====== ====== ====== ======
22 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended ------------------------------------------------------ ----------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Other 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 0 $ 2 $ 29 $ 8 $ 6 $ 0 $ 14 Universal life and investment-type product policy fees 26 44 34 42 48 55 90 Investment income, net 37 36 41 40 41 70 81 Other revenues 95 123 81 99 100 194 199 ---- ---- ---- ---- ---- ---- ---- 158 205 185 189 195 319 384 ---- ---- ---- ---- ---- ---- ---- EXPENSES Policyholder benefits and dividends 0 4 20 5 5 0 10 Interest credited to policyholder account balances 18 17 20 20 23 35 43 Capitalization of deferred policy acquisition costs 0 0 0 0 0 (1) 0 Amortization of deferred policy acquisition costs 0 0 0 0 0 0 0 Other expenses 127 173 128 149 156 255 305 ---- ---- ---- ---- ---- ---- ---- 145 194 168 174 184 289 358 ---- ---- ---- ---- ---- ---- ---- Operating earnings before provision (benefit) for income taxes 13 11 17 15 11 30 26 Provision (benefit) for income taxes 4 4 6 5 4 10 9 ---- ---- ---- ---- ---- ---- ---- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 9 $ 7 $ 11 $ 10 $ 7 $ 20 $ 17 ==== ==== ==== ==== ==== ==== ==== Net investment gains (losses), net of income taxes 0 4 (9) 1 (10) (6) (9) Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ---- ---- Net income available to common shareholders 9 11 2 11 (3) 14 8 Preferred stock dividends 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ---- ---- Net income $ 9 $ 11 $ 2 $ 11 ($3) $ 14 $ 8 ==== ==== ==== ==== ==== ==== ====
23 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS PREMIUMS AND DEPOSITS BY PRODUCT
For the Three Months Ended ---------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- PREMIUMS AND DEPOSITS BY PRODUCT (1) TOTAL (2) Life First Year Premiums and Deposits Traditional Life $ 52 $ 52 $ 54 $ 50 $ 50 Variable Life 1st Year excluding Single Premium COLI/BOLI 41 56 63 50 55 Universal Life 1st Year excluding Single Premium COLI/BOLI 110 245 228 203 177 Single Premium COLI/BOLI 10 4 15 6 6 ------ ------ ------ ------ ------ Total Life First Year Premiums & Deposits (3) 213 357 360 309 288 Life Renewal Premiums and Deposits Traditional Life 1,020 1,033 1,227 959 1,049 Variable & Universal Life 416 532 551 600 515 Annuities (4) 2,496 3,624 3,570 3,843 4,229 ------ ------ ------ ------ ------ Total Premiums and Deposits $4,145 $5,546 $5,708 $5,711 $6,081 ====== ====== ====== ====== ====== PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS Variable & Universal Life $ 246 $ 297 $ 307 $ 283 $ 276 Annuities 1,503 2,306 2,479 2,532 2,928 ------ ------ ------ ------ ------ Total Separate Accounts $1,749 $2,603 $2,786 $2,815 $3,204 ====== ====== ====== ====== ====== ANNUITY DEPOSITS BY TYPE Fixed Annuity Deposits $ 356 $ 496 $ 464 $ 520 $ 430 Variable Annuity Deposits 2,140 3,128 3,106 3,323 3,799 ------ ------ ------ ------ ------ Total Annuity Deposits $2,496 $3,624 $3,570 $3,843 $4,229 ====== ====== ====== ====== ======
(1) Statutory premiums direct and assumed. (2) Includes premiums and deposits to separate accounts and excludes Company sponsored internal exchanges. (3) Of the $288 million of First Year Life Premiums and Deposits received during the three months ended June 30, 2006, approximately 44% were distributed through MetLife agents, 15% through New England Financial agents, 38% through MetLife's Independent Distribution channel and 3% through other distribution channels. (4) Of the $4,229 million of Annuity Deposits received during the three months ended June 30, 2006, approximately 22% were distributed through MetLife agents, 6% through New England Financial agents, 61% through MetLife's Independent Distribution channel and 11% through MetLife Resources representatives. 24 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS ADDITIONAL STATISTICAL INFORMATION
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- PERCENTAGE OF PREMIUMS AND DEPOSITS TO SEPARATE ACCOUNTS, EXCLUDING TRANSFERS FROM GENERAL ACCOUNT: Variable & Universal Life 41.4% 33.4% 33.6% 31.3% 33.8% Annuities 60.2% 63.6% 69.4% 65.9% 69.2% MORTALITY AS A PERCENTAGE OF EXPECTED 84.7% 86.4% 84.9% 94.0% 85.1% LAPSES / SURRENDERS (GENERAL AND SEPARATE ACCOUNT) (1) Traditional Life 6.1% 6.1% 6.0% 6.0% 5.9% Variable & Universal Life 6.3% 6.2% 6.1% 6.3% 6.0% Variable Annuities 7.7% 8.4% 8.9% 9.5% 10.0% Fixed Annuities 5.8% 6.4% 8.0% 8.7% 9.6% NUMBER OF SALES REPRESENTATIVES MetLife Distribution 5,773 5,774 5,804 5,954 6,002 New England Financial 2,255 2,228 2,006 2,068 2,071 Independent Distribution Wholesalers 124 279 229 220 217 MetLife Resources 428 857 794 751 739 Walnut Street and Tower Square Securities 1,263 1,869 1,676 1,632 1,564 P&C Specialists 617 672 682 658 657 ------ ------ ------ ------ ------ Total Agents 10,460 11,679 11,191 11,283 11,250 ====== ====== ====== ====== ======
(1) Lapses/Surrenders rates are calculated for the most recent 12 months of experience. 25 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES AND SEPARATE ACCOUNT LIABILITIES UNAUDITED (DOLLARS IN MILLIONS) FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES
For the Three Months Ended ------------------------------------------------------------------ June 30, September 30, December 31, March 31, June 30, Traditional Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $49,371 $49,582 $50,562 $50,944 $50,977 Premiums and deposits (1) 1,066 1,101 1,239 1,061 1,093 Interest on reserves 503 514 518 511 520 Surrenders and withdrawals (437) (443) (470) (504) (433) Benefit payments (492) (498) (459) (572) (498) Other (429) 306(2) (446) (463) (482) ------- ------- ------- ------- ------- Balance, end of period $49,582 $50,562 $50,944 $50,977 $51,177 ======= ======= ======= ======= =======
For the Three Months Ended -------------------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Variable & Universal Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $10,087 $10,154 $14,315 $14,852 $15,042 Premiums and deposits (1) (3) 320 548 567 572 482 Interest on reserves 117 151 148 142 145 Surrenders and withdrawals (160) (178) (185) (168) (171) Net transfers from (to) separate account 55 52 45 49 48 Policy charges (231) (350) (351) (363) (364) Benefit payments (30) (36) (34) (48) (44) Other (4) 3,974(2) 347 6 130 ------- ------- ------- ------- ------- Balance, end of period $10,154 $14,315 $14,852 $15,042 $15,268 ======= ======= ======= ======= =======
For the Three Months Ended -------------------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Annuities 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $32,304 $32,421 $46,136 $45,732 $45,293 Premiums and deposits (1) (3) 1,101 1,410 1,298 1,398 1,456 Interest on reserves 309 401 398 395 448 Surrenders and withdrawals (679) (1,014) (1,178) (1,231) (1,552) Net transfers from (to) separate account (346) (544) (625) (621) (521) Policy charges (3) (2) (2) (2) (2) Benefit payments (273) (309) (297) (326) (349) Other 8 13,773 2 (52) 2 ------- ------- ------- ------- ------- Balance, end of period $32,421 $46,136 $45,732 $45,293 $44,775 ======= ======= ======= ======= =======
SEPARATE ACCOUNT LIABILITIES
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Variable & Universal Life 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $ 7,747 $7,900 $9,164 $9,307 $9,769 Premiums and deposits (1) 247 297 307 283 276 Investment performance 135 318 155 492 (134) Surrenders and withdrawals (109) (137) (177) (158) (160) Net transfers from (to) fixed account (55) (52) (45) (51) (48) Policy charges (65) (89) (96) (80) (110) Other 0 927(2) (1) (24) 0 ------- ------ ------ ------ ------ Balance, end of period $ 7,900 $9,164 $9,307 $9,769 $9,593 ======= ====== ====== ====== ======
For the Three Months Ended -------------------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Annuities 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Balance, beginning of period $38,051 $39,771 $69,146 $71,764 $75,861 Premiums and deposits (1) 1,503 2,306 2,479 2,532 2,928 Investment performance 806 2,701 1,507 3,255 (1,483) Surrenders and withdrawals (796) (1,723) (1,724) (2,026) (1,947) Net transfers from (to) fixed account 346 544 625 621 521 Policy charges (139) (266) (269) (280) (292) Other 0 25,813(2) 0 (5) (1) ------- ------- ------- ------- ------- Balance, end of period $39,771 $69,146 $71,764 $75,861 $75,587 ======= ======= ======= ======= =======
(1) Includes Company-sponsored internal exchanges. (2) Includes the beginning balances of Travelers of $764 million, $3,952 million and $13,755 million for Traditional Life, Variable & Universal Life and Annuities, respectively, in Future Policy Benefits and Policyholder Account Balances and $928 million and $25,813 million for Variable & Universal Life and Annuities, respectively, in Separate Account Liabilities. (3) Includes premiums and deposits directed to General Account investment option of a variable life and variable annuity product. 26 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS INSURANCE EXPENSES AND OTHER EXPENSES BY MAJOR CATEGORY (1)
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- INSURANCE EXPENSES (NET OF CAPITALIZATION OF DAC) Insurance Expenses $ 674 $ 936 $ 941 $ 830 $ 914 DAC Capitalization (2) (292) (401) (426) (384) (429) ----- ------ ------ ----- ------ Net $ 382 $ 535 $ 515 $ 446 $ 485 ===== ====== ====== ===== ====== OTHER EXPENSES BY MAJOR CATEGORY Commissions $ 206 $ 329 $ 347 $ 315 $ 350 Other deferrable expenses 113 126 140 120 146 Direct and allocated expenses, not deferred 317 422 410 334 386 Pension and other post-retirement benefit costs 29 29 30 34 3 Premium taxes and other taxes, licenses and fees 9 30 14 27 29 ----- ------ ------ ----- ------ Subtotal Insurance Expenses 674 936 941 830 914 Broker-dealer and other expenses 132 177 132 155 159 Reinsurance allowances (20) (19) (26) (21) (13) ----- ------ ------ ----- ------ Total Other Expenses $ 786 $1,094 $1,047 $ 964 $1,060 ===== ====== ====== ===== ======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) Excludes $13 million, $17 million, $17 million, $14 million and $14 million of DAC capitalization related to reinsurance allowances for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. 27 (METLIFE(R) LOGO) INDIVIDUAL OPERATIONS SPREADS BY PRODUCT UNAUDITED
For the Three Months Ended --------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, VARIABLE & UNIVERSAL LIFE 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 6.85% 6.91% 6.63% 6.69% 6.41% Average crediting rate 4.92% 4.65% 4.67% 4.56% 4.54% ---- ---- ---- ---- ---- Spread 1.93% 2.26% 1.96% 2.13% 1.87% ==== ==== ==== ==== ====
For the Three Months Ended --------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, ANNUITIES 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- ANNUALIZED GENERAL ACCOUNT SPREADS BY PRODUCT (%) Investment income yield 6.62% 6.41% 6.32% 6.28% 6.28% Average crediting rate 3.44% 3.64% 3.64% 3.65% 3.66% ---- ---- ---- ---- ---- Spread 3.18% 2.77% 2.68% 2.63% 2.62% ==== ==== ==== ==== ====
28 (METLIFE(R) LOGO) AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - TOTAL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended -------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Auto & Home Operations 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Earned premiums $738 $ 716 $729 $724 $726 $1,466 $1,450 Investment income, net 46 46 46 45 42 89 87 Other revenues 8 8 8 7 8 17 15 ---- ---- ---- ---- ---- ------ ------ 792 770 783 776 776 1,572 1,552 ---- ---- ---- ---- ---- ------ ------ EXPENSES Losses and loss adjustment expense 448 615 454 451 432 925 883 Other expenses 204 209 218 203 211 404 414 ---- ---- ---- ---- ---- ------ ------ 652 824 672 654 643 1,329 1,297 ---- ---- ---- ---- ---- ------ ------ Operating earnings before provision (benefit) for income taxes 140 (54) 111 122 133 243 255 Provision (benefit) for income taxes 39 (28) 30 29 34 66 63 ---- ---- ---- ---- ---- ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $101 ($26) $ 81 $ 93 $ 99 $ 177 $ 192 ==== ==== ==== ==== ==== ====== ====== NET INCOME RECONCILIATION Operating earnings available to common shareholders $101 ($26) $ 81 $ 93 $ 99 $ 177 $ 192 Net investment gains (losses) (4) (5) (3) 1 (4) (4) (3) Minority interest - net investment gains (losses) 0 0 0 0 0 0 0 Net investment gains (losses) tax benefit (provision) 1 2 1 (3) 4 1 1 ---- ---- ---- ---- ---- ------ ------ Net investment gains (losses), net of income taxes (3) (3) (2) (2) 0 (3) (2) Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends 0 0 0 0 0 0 0 Adjustments related to other expenses 0 0 0 0 0 0 0 Adjustments related to tax benefit (provision) 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ------ ------ Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ------ ------ Net income available to common shareholders 98 (29) 79 91 99 174 190 Preferred stock dividends 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ------ ------ Net income $ 98 ($29) $ 79 $ 91 $ 99 $ 174 $ 190 ==== ==== ==== ==== ==== ====== ======
29 (METLIFE(R) LOGO) AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the Year-to-Date For the Three Months Ended Period Ended -------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Auto 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Earned premiums $533 $534 $525 $517 $516 $1,064 $ 1,033 Investment income, net 35 34 37 34 32 67 66 Other revenues 6 6 5 6 7 12 13 ---- ---- ---- ---- ---- ------ ------- 574 574 567 557 555 1,143 1,112 ---- ---- ---- ---- ---- ------ ------- EXPENSES Losses and loss adjustment expense 342 339 355 334 321 720 655 Other expenses 141 143 150 137 145 278 282 ---- ---- ---- ---- ---- ------ ------- 483 482 505 471 466 998 937 ---- ---- ---- ---- ---- ------ ------- Operating earnings before provision (benefit) for income taxes 91 92 62 86 89 145 175 Provision (benefit) for income taxes 24 27 13 21 21 35 42 ---- ---- ---- ---- ---- ------ ------- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 67 $ 65 $ 49 $ 65 $ 68 $ 110 $ 133 ==== ==== ==== ==== ==== ====== ======= Net investment gains (losses), net of income taxes (2) (2) (2) (1) 0 (2) (1) Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ------ ------- Net income available to common shareholders 65 63 47 64 68 108 132 Preferred stock dividends 0 0 0 0 0 0 0 ---- ---- ---- ---- ---- ------ ------- Net income $ 65 $ 63 $ 47 $ 64 $ 68 $ 108 $ 132 ==== ==== ==== ==== ==== ====== =======
30 (METLIFE(R) LOGO) AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the For the Three Months Ended Year-to-Date Period Ended ------------------------------------------------------ ------------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Homeowners 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Earned premiums $193 $ 170 $192 $194 $198 $377 $392 Investment income, net 10 12 8 11 9 20 20 Other revenues 2 1 2 1 1 3 2 ---- ----- ---- ---- ---- ---- ---- 205 183 202 206 208 400 414 ---- ----- ---- ---- ---- ---- ---- EXPENSES Losses and loss adjustment expense 99 260 94 110 102 192 212 Other expenses 58 61 64 59 61 114 120 ---- ----- ---- ---- ---- ---- ---- 157 321 158 169 163 306 332 ---- ----- ---- ---- ---- ---- ---- Operating earnings before provision (benefit) for income taxes 48 (138) 44 37 45 94 82 Provision (benefit) for income taxes 15 (52) 15 9 13 30 22 ---- ----- ---- ---- ---- ---- ---- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 33 ($86) $ 29 $ 28 $ 32 $ 64 $ 60 ==== ===== ==== ==== ==== ==== ==== Net investment gains (losses), net of income taxes (1) 0 (1) (1) 0 (1) (1) Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ---- ----- ---- ---- ---- ---- ---- Net income available to common shareholders 32 (86) 28 27 32 63 59 Preferred stock dividends 0 0 0 0 0 0 0 ---- ----- ---- ---- ---- ---- ---- Net income $ 32 ($86) $ 28 $ 27 $ 32 $ 63 $ 59 ==== ===== ==== ==== ==== ==== ====
31 (METLIFE(R) LOGO) AUTO & HOME OPERATIONS STATEMENTS OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS - PRODUCT LEVEL UNAUDITED (DOLLARS IN MILLIONS)
For the For the Three Months Ended Year-to-Date Period Ended ------------------------------------------------------ ------------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Other 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Earned premiums $12 $ 12 $12 $13 $ 12 $25 $ 25 Investment income, net 1 0 1 0 1 2 1 Other revenues 0 1 1 0 0 2 0 --- ---- --- --- ---- --- ---- 13 13 14 13 13 29 26 --- ---- --- --- ---- --- ---- EXPENSES Losses and loss adjustment expense 7 16 5 7 9 13 16 Other expenses 5 5 4 7 5 12 12 --- ---- --- --- ---- --- ---- 12 21 9 14 14 25 28 --- ---- --- --- ---- --- ---- Operating earnings before provision (benefit) for income taxes 1 (8) 5 (1) (1) 4 (2) Provision (benefit) for income taxes 0 (3) 2 (1) 0 1 (1) --- ---- --- --- ---- --- ---- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 1 ($5) $ 3 $ 0 ($1) $ 3 ($1) === ==== === === ==== === ==== Net investment gains (losses), net of income taxes 0 (1) 1 0 0 0 0 Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 --- ---- --- --- ---- --- ---- Net income available to common shareholders 1 (6) 4 0 (1) 3 (1) Preferred stock dividends 0 0 0 0 0 0 0 --- ---- --- --- ---- --- ---- Net income $ 1 ($6) $ 4 $ 0 ($1) $ 3 ($1) === ==== === === ==== === ====
32 (METLIFE(R) LOGO) AUTO & HOME OPERATIONS WRITTEN PREMIUMS BY PRODUCT AND SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- WRITTEN PREMIUMS BY PRODUCT Preferred/Standard Automobile $ 519 $ 528 $ 492 $ 498 $ 507 Non-Standard Automobile 15 14 12 12 11 Homeowners 212 200 191 169 213 Other 12 11 9 17 13 ----- ------ ----- ------ ------ Total $ 758 $ 753 $ 704 $ 696 $ 744 ===== ====== ===== ====== ====== SELECTED FINANCIAL INFORMATION AND SUPPLEMENTAL DATA TOTAL AUTO & HOME Loss and loss adjustment expense ratio 60.4% 85.8% 62.3% 62.4% 59.3% Other expense ratio 27.2% 28.5% 29.2% 27.2% 28.6% ----- ------ ----- ------ ------ Total combined ratio (1) 87.6% 114.3% 91.5% 89.6% 87.9% Effect of catastrophe losses (2) 1.2% 27.5% 8.5% 3.0% 3.4% ----- ------ ----- ------ ------ Combined ratio excluding catastrophes 86.4% 86.8% 83.0% 86.6% 84.5% ===== ====== ===== ====== ====== AUTO Loss and loss adjustment expense ratio 63.6% 63.3% 67.6% 64.7% 62.2% Other expense ratio 26.0% 26.0% 27.8% 25.7% 27.1% ----- ------ ----- ------ ------ Total combined ratio (1) 89.6% 89.3% 95.4% 90.4% 89.3% Effect of catastrophe losses (2) 0.1% 2.7% 3.4% 0.8% 1.3% ----- ------ ----- ------ ------ Combined ratio excluding catastrophes 89.5% 86.6% 92.0% 89.6% 88.0% ===== ====== ===== ====== ====== HOMEOWNERS Loss and loss adjustment expense ratio 51.4% 153.1% 48.9% 57.1% 51.5% Other expense ratio 29.8% 35.4% 32.9% 29.3% 31.2% ----- ------ ----- ------ ------ Total combined ratio (1) 81.2% 188.5% 81.8% 86.4% 82.7% Effect of catastrophe losses (2) 4.4% 106.3% 20.9% 8.9% 8.6% ----- ------ ----- ------ ------ Combined ratio excluding catastrophes 76.8% 82.2% 60.9% 77.5% 74.1% ===== ====== ===== ====== ====== OTHER Loss and loss adjustment expense ratio 60.7% 127.0% 41.7% 53.2% 64.1% Other expense ratio 38.7% 39.4% 33.3% 52.3% 46.1% ----- ------ ----- ------ ------ Total combined ratio (1) 99.4% 166.4% 75.0% 105.5% 110.2% Effect of catastrophe losses 0.0% 0.0% 12.5% 0.0% 0.0% ----- ------ ----- ------ ------ Combined ratio excluding catastrophes 99.4% 166.4% 62.5% 105.5% 110.2% ===== ====== ===== ====== ====== PRE-TAX CATASTROPHE LOSSES Auto $ 1 $ 13 $ 17 $ 4 $ 7 Homeowners 9 156 34 17 17 Other 0 0 2 0 0 ----- ------ ----- ------ ------ Total $ 10 $ 169 $ 53 $ 21 $ 24 ===== ====== ===== ====== ====== CATASTROPHE POINTS ON COMBINED RATIOS 1.2 27.5 8.5 3.0 3.4 NUMBER OF SALES REPRESENTATIVES 89 85 100 98 93 ----- ------ ----- ------ ------
(1) The combined ratio reflects payment fees as a credit to Other expenses for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, which resulted in a 0.7, 0.7, 0.7, 0.7 and 0.6 of a percentage point decrease in the combined ratio for the periods ended, respectively. The decreases for Auto, Homeowners and Other were 0.7, 0.4 and 0.8 of a percentage point, respectively, for June 30, 2005, 0.8, 0.5, 0.8 of a percentage point, respectively, for September 30, 2005, 0.8, 0.4 and 0.8 of a percentage point, respectively, for December 31, 2005, 0.8, 0.4 and 0.4 of a percentage point, respectively, for March 31, 2006 and 0.7, 0.4 and 0.5 of a percentage point, respectively, for June 30, 2006. (2) Includes the effect of both catastrophe losses and $32 million in reinstatement reinsurance premiums within Auto ($2 million) and Homeowners ($30 million) for third quarter of 2005 and $11 million in the fourth quarter of 2005 for reinstatement reinsurance premiums within Auto ($1 million) and Homeowners ($10 million). 33 (METLIFE(R) LOGO) INTERNATIONAL OPERATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS
For the Year-to- For the Three Months Ended Date Period Ended -------------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 470 $ 614 $ 636 $ 631 $ 676 $ 936 $1,307 Universal life and investment-type product policy fees 125 170 165 184 194 244 378 Investment income, net 195 238 262 235 238 344 473 Other revenues (1) 9 9 4 4 2 8 ------ ------ ------ ------ ------ ------ ------ 789 1,031 1,072 1,054 1,112 1,526 2,166 ------ ------ ------ ------ ------ ------ ------ EXPENSES Policyholder benefits and dividends 468 578 600 527 600 878 1,127 Interest credited to policyholder account balances 55 84 92 87 86 102 173 Capitalization of deferred policy acquisition costs (138) (137) (141) (151) (145) (263) (296) Amortization of deferred policy acquisition costs 56 68 43 82 78 112 160 Other expenses 274 359 441 396 413 518 809 ------ ------ ------ ------ ------ ------ ------ 715 952 1,035 941 1,032 1,347 1,973 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes 74 79 37 113 80 179 193 Provision (benefit) for income taxes 23 13 (11) 38 18 60 56 ------ ------ ------ ------ ------ ------ ------ OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 51 $ 66 $ 48 $ 75 $ 62 $ 119 $ 137 ====== ====== ====== ====== ====== ====== ====== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 51 $ 66 $ 48 $ 75 $ 62 $ 119 $ 137 Net investment gains (losses) 7 5 (7) 20 13 7 33 Minority interest - net investment gains (losses) 0 0 0 0 0 0 0 Net investment gains (losses) tax benefit (provision) (2) (2) 3 (6) (5) (2) (11) ------ ------ ------ ------ ------ ------ ------ Net investment gains (losses), net of income taxes 5 3 (4) 14 8 5 22 Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends (16) (54) (21) 22 49 (2) 71 Adjustments related to other expenses 0 0 0 0 0 0 0 Adjustments related to tax benefit (provision) 6 19 7 (7) (18) 1 (25) ------ ------ ------ ------ ------ ------ ------ Adjustments related to net investment gains (losses), net of income taxes (1) (10) (35) (14) 15 31 (1) 46 Discontinued operations, net of income taxes (1) 7 0 0 0 (2) 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 45 41 30 104 101 121 205 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 45 $ 41 $ 30 $ 104 $ 101 $ 121 $ 205 ====== ====== ====== ====== ====== ====== ====== NUMBER OF PROFESSIONAL SALES REPRESENTATIVES (2) 3,913 3,861 3,783 3,782 3,982 ------ ------ ------ ------ ------
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of deferred policy acquisition costs and amounts allocable to certain participating contracts. (2) Certain prior period amounts have been reclassified to conform with current period presentation. 34 (METLIFE(R) LOGO) REINSURANCE OPERATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS
For the Year-to-Date For the Three Months Ended Period Ended ---------------------------------------------------------- ------------------- June 30, September 30, December 31, March 31, June 30, June 30, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 930 $ 974 $1,062 $ 993 $1,078 $1,833 $2,071 Investment income, net 137 158 161 174 156 287 330 Other revenues 21 13 13 15 13 32 28 ------ ------ ------ ------ ------ ------ ------ 1,088 1,145 1,236 1,182 1,247 2,152 2,429 ------ ------ ------ ------ ------ ------ ------ EXPENSES Claims and other policy benefits 828 779 860 813 871 1,567 1,684 Interest credited to policyholder account balances 43 64 57 63 48 99 111 Policy acquisition costs and other insurance expenses 156 162 159 158 174 300 332 Other expenses 47 48 57 63 60 91 123 ------ ------ ------ ------ ------ ------ ------ 1,074 1,053 1,133 1,097 1,153 2,057 2,250 ------ ------ ------ ------ ------ ------ ------ Operating earnings before provision (benefit) for income taxes and minority interest 14 92 103 85 94 95 179 Provision (benefit) for income taxes (1) 16 17 12 16 12 28 ------ ------ ------ ------ ------ ------ ------ Operating earnings available to common shareholders before minority interest 15 76 86 73 78 83 151 Elimination of minority interest, before tax 11 50 55 49 49 54 98 ------ ------ ------ ------ ------ ------ ------ CONTRIBUTION TO METLIFE $ 4(2) $ 26 $ 31 $ 24 $ 29 $ 29 $ 53 ====== ====== ====== ====== ====== ====== ====== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 4 $ 26 $ 31 $ 24 $ 29 $ 29 $ 53 Net investment gains (losses) (7) 7 (6) 8 (15) 21 (7) Minority interest - net investment gains (losses) (2) (1) 3 (2) 4 (7) 2 Net investment gains (losses) tax benefit (provision) 6 (2) 1 (2) 4 (2) 2 ------ ------ ------ ------ ------ ------ ------ Net investment gains (losses), net of income taxes (3) 4 (2) 4 (7) 12 (3) Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends 0 0 0 0 0 0 0 Adjustments related to other expenses 12 (4) (1) (3) 8 (5) 5 Adjustments related to tax benefit (provision) (6) 2 0 1 (3) 0 (2) ------ ------ ------ ------ ------ ------ ------ Adjustments related to net investment gains (losses), net of income taxes (1) 6 (2) (1) (2) 5 (5) 3 Discontinued operations, net of income taxes 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income available to common shareholders 7 28 28 26 27 36 53 Preferred stock dividends 0 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ ------ Net income $ 7 $ 28 $ 28 $ 26 $ 27 $ 36 $ 53 ====== ====== ====== ====== ====== ====== ======
(1) Adjustments related to net investment gains (losses), net of income taxes, includes amortization of deferred policy acquisition costs. (2) Operating earnings available to common shareholders for the three months ended June 30, 2005 includes an $8 million charge, net of income taxes, associated with an establishment of a liability associated with the Argentine pension business. 35 (METLIFE(R) LOGO) REINSURANCE OPERATIONS PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION AND RESERVES BY REGION
For the Three Months Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- PRE-TAX AND PRE-MINORITY INTEREST OPERATING EARNINGS BY REGION (1) United States $ 28 $ 78 $ 80 $ 66 $ 66 Canada 17 21 20 7 9 Asia-Pacific 14 4 18 7 8 Other international markets (7) 15 12 15 17 Corporate (38) (26) (27) (10) (6) ------- ------- ------- ------- ------- Total pre-tax and pre-minority interest operating earnings $ 14 $ 92 $ 103 $ 85 $ 94 ======= ======= ======= ======= ======= POLICY BENEFITS AND INTEREST SENSITIVE CONTRACT LIABILITIES BY REGION Traditional U.S. $ 3,865 $ 3,966 $ 4,030 $ 4,157 $ 4,239 Asset intensive 4,267 4,497 4,657 4,773 4,911 Other 126 90 100 77 90 ------- ------- ------- ------- ------- Total U.S. 8,258 8,553 8,787 9,007 9,240 ------- ------- ------- ------- ------- Canada 1,389 1,507 1,596 1,622 1,780 Asia-Pacific 611 629 688 708 752 Other international markets 702 677 680 719 774 ------- ------- ------- ------- ------- Total International 2,702 2,813 2,964 3,049 3,306 ------- ------- ------- ------- ------- Total policy benefits and interest sensitive contract liabilities $10,960 $11,366 $11,751 $12,056 $12,546 ======= ======= ======= ======= =======
(1) Effective for the three months ended March 31, 2006, Reinsurance Group of America Incorporated ("RGA") changed its method of allocating capital to its regional markets from a method based on regulatory capital requirements to one based upon underlying economic capital levels. This approach is based upon a more detailed, internally developed risk capital model that its management believes better captures the unique risks inherent in each regional business. The primary effect of the change relates to the amount of net investment income and capital charges that are allocated to each region. This change does not affect RGA's consolidated financial results. 36 (METLIFE(R) LOGO) CORPORATE, OTHER & ELIMINATIONS STATEMENT OF OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS (1)
For the Year-to- For the Three Months Ended Date Period Ended --------------------------------------------------------- ------------------ June 30, September 30, December 31, March 31, June 30, June 30, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 2005 2006 -------- ------------- ------------ --------- -------- -------- -------- REVENUES Premiums $ 3 $ 6 $ 12 $ 9 $ 10 $ 4 $ 19 Universal life and investment-type product policy fees 0 1 0 0 0 0 0 Investment income, net 195 212 255 296 308 346 604 Other revenues 5 5 17 7 6 8 13 ------ ---- ----- ----- ----- ------ ----- 203 224 284 312 324 358 636 ------ ---- ----- ----- ----- ------ ----- EXPENSES Policyholder benefits and dividends (46) 12 16 7 13 (43) 20 Interest credited to policyholder account balances 1 0 0 0 0 0 0 Interest credited to bank deposits 25 30 37 43 48 42 91 Interest expense 110 166 171 175 183 214 358 Other expenses 36 59 135 93 111 101 204 ------ ---- ----- ----- ----- ------ ----- 126 267 359 318 355 314 673 ------ ---- ----- ----- ----- ------ ----- Operating earnings before provision (benefit) for income taxes 77 (43) (75) (6) (31) 44 (37) Provision (benefit) for income taxes (1) (72) (45) (48) (50) (43) (98) ------ ---- ----- ----- ----- ------ ----- Operating earnings 78 29 (30) 42 19 87 61 Preferred stock dividends 0 31 32 33 33 0 66 ------ ---- ----- ----- ----- ------ ----- OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 78(2) ($2)(3) ($62) $ 9 ($14) $ 87 ($5) ====== ==== ===== ===== ===== ====== ===== NET INCOME RECONCILIATION Operating earnings available to common shareholders $ 78 ($2) ($62) $ 9 ($14) $ 87 ($5) Net investment gains (losses) 1,313 73 118 (49) (64) 1,200 (113) Minority interest - net investment gains (losses) 0 0 0 0 0 0 0 Net investment gains (losses) tax benefit (provision) (468) (25) (44) 16 21 (425) 37 ------ ---- ----- ----- ----- ------ ----- Net investment gains (losses), net of income taxes 845 48 74 (33) (43) 775 (76) Adjustments related to universal life and investment-type product policy fees 0 0 0 0 0 0 0 Adjustments related to policyholder benefits and dividends 0 0 0 0 0 0 0 Adjustments related to other expenses 0 0 0 0 0 0 0 Adjustments related to tax benefit (provision) 0 0 0 0 0 0 0 ------ ---- ----- ----- ----- ------ ----- Adjustments related to net investment gains (losses), net of income taxes 0 0 0 0 0 0 0 Discontinued operations, net of income taxes 0 0 12 0 30 151 30 ------ ---- ----- ----- ----- ------ ----- Net income available to common shareholders 923 46 24 (24) (27) 1,013 (51) Preferred stock dividends 0 31 32 33 33 0 66 ------ ---- ----- ----- ----- ------ ----- Net income $ 923 $ 77 $ 56 $ 9 $ 6 $1,013 $ 15 ====== ==== ===== ===== ===== ====== =====
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) Operating earnings available to common shareholders for the three months ended June 30, 2005 includes a $30 million benefit, net of income taxes, associated with the reduction of a previously established liability for settlement death benefits related to the Company's sales practices class action settlement recorded in 1999 and an $18 million benefit, net of income taxes, associated with the reduction of a previously established liability related to the Company's demutualization in 2000. (3) Operating earnings available to common shareholders for the three months ended September 30, 2005 includes a $31 million benefit from a revision of the estimate of income taxes for 2004. 37 (METLIFE(R) LOGO) METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or For the Three Months Ended --------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- FIXED MATURITIES (1) Yield (2) 6.34% 6.03% 6.17% 6.14% 6.10% Income (3) $ 2,310 $ 2,858 $ 2,954 $ 2,996 $ 2,986 Investment gains (losses) ($89) ($98) ($567) ($412) ($381) Ending Carrying Value (3) $184,830 $232,041 $230,875 $240,711 $237,612 MORTGAGE AND CONSUMER LOANS Yield (4) 6.89% 6.96% 6.85% 6.68% 6.41% Income $ 535 $ 593 $ 591 $ 585 $ 574 Investment gains (losses) ($8) $ 13 $ 23 $ 4 $ 3 Ending Carrying Value $ 33,586 $ 36,094 $ 37,190 $ 37,351 $ 38,665 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (4) 12.41% 10.72% 8.59% 12.50% 11.37% Income (5) $ 130 $ 118 $ 100 $ 146 $ 135 Investment gains (losses) (6) $ 1,904 $ 51 $ 166 $ 17 $ 54 Ending Carrying Value $ 3,998 $ 4,705 $ 4,665 $ 4,700 $ 4,786 POLICY LOANS Yield (4) 6.19% 6.15% 5.80% 5.84% 5.89% Income $ 139 $ 152 $ 143 $ 146 $ 147 Ending Carrying Value $ 8,975 $ 9,841 $ 9,981 $ 9,987 $ 10,065 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS (1) Yield (4) 21.40% 9.69% 13.15% 12.86% 14.83% Income $ 277 $ 170 $ 232 $ 235 $ 278 Investment gains (losses) $ 12 $ 20 $ 32 $ 27 $ 25 Ending Carrying Value $ 5,914 $ 7,403 $ 7,614 $ 7,870 $ 8,007 CASH AND SHORT-TERM INVESTMENTS Yield (4) 3.57% 3.45% 4.22% 4.63% 4.70% Income $ 91 $ 122 $ 85 $ 80 $ 85 Investment gains (losses) $ 0 $ 0 ($1) ($1) ($1) Ending Carrying Value $ 15,770 $ 11,431 $ 7,324 $ 8,512 $ 8,193 OTHER INVESTED ASSETS Yield (4) 7.83% 10.00% 9.65% 8.92% 7.94% Income (7) $ 102 $ 186 $ 178 $ 171 $ 168 Investment gains (losses) (7) $ 406 ($9) $ 113 ($259) ($517) Ending Carrying Value $ 6,452 $ 7,877 $ 8,078 $ 8,386 $ 9,652 TOTAL INVESTMENTS Gross investment income yield 6.81% 6.30% 6.51% 6.54% 6.49% Investment fees and expenses yield (0.15%) (0.13%) (0.17%) (0.12%) (0.14%) -------- -------- -------- -------- -------- NET INVESTMENT INCOME YIELD 6.66% 6.17% 6.34% 6.42% 6.35% ======== ======== ======== ======== ======== Gross investment income $ 3,584 $ 4,199 $ 4,283 $ 4,359 $ 4,373 Investment fees and expenses (76) (87) (116) (81) (96) -------- -------- -------- -------- -------- NET INVESTMENT INCOME $ 3,508 $ 4,112 $ 4,167 $ 4,278 $ 4,277 ======== ======== ======== ======== ======== Ending Carrying Value $259,525 $309,392 $305,727 $317,517 $316,980 ======== ======== ======== ======== ======== Gross investment gains $ 2,133 $ 342 $ 492 $ 237 $ 247 Gross investment losses (231) (304) (721) (587) (661) Writedowns (42) (14) (9) (22) (45) -------- -------- -------- -------- -------- Subtotal 1,860 24 (238) (372) (459) Derivative & other instruments not qualifying for hedge accounting 365 (47) 4 (252) (358) -------- -------- -------- -------- -------- NET INVESTMENT GAINS (LOSSES) 2,225 (23) (234) (624) (817) Minority interest - net investment gains (losses) (2) (1) 3 (2) 4 Net investment gains (losses) tax benefit (provision) (784) 9 85 220 289 -------- -------- -------- -------- -------- NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $ 1,439 ($15) ($146) ($406) ($524) ======== ======== ======== ======== ========
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) The fixed maturities yield is annualized and is based on quarterly average amortized cost. (3) Fixed maturities includes $197 million, $805 million, $825 million, $883 million and $519 million in ending carrying value and $2 million, $14 million, ($3) million, $19 million and ($3) million of investment income (loss) related to trading securities at or for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (4) Yields are annualized and based on quarterly average carrying values. (5) Included in income from real estate and real estate joint ventures is $21 million, $4 million, $9 million, $4 million, and $5 million related to discontinued operations for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (6) Included in investment gains (losses) from real estate and real estate joint ventures is $1,905 million, $46 million, $156 million, ($5) million, and ($3) million related to discontinued operations for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (7) Included in income from other invested assets are scheduled settlement payments on derivative instruments that do not qualify for hedge accounting under Statement of Financial Accounting Standards No. 133 of $13 million, $26 million, $36 million, $39 million and $68 million for the three months ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. These amounts are excluded from net investment gains (losses). Additionally, excluded from net investment gains (losses) is ($7) million, ($6) million, ($4) million and $3 million for the three months ended September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively, related to settlement payments on derivatives used to hedge interest rate and currency risk on policyholder account balances that do not qualify for hedge accounting. 38 (METLIFE(R) LOGO) METLIFE, INC. INVESTMENT RESULTS BY ASSET CATEGORY AND ANNUALIZED YIELDS
At or For the Year-to-Date Ended -------------------------------------------------------------- June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- FIXED MATURITIES (1) Yield (2) 6.34% 5.94% 6.00% 6.14% 6.12% Income (3) $4,588 $7,446 $10,400 $2,996 $5,982 Investment gains (losses) ($203) ($301) ($868) ($412) ($793) Ending Carrying Value (3) $184,830 $232,041 $230,875 $240,711 $237,612 MORTGAGE AND CONSUMER LOANS Yield (4) 6.79% 6.79% 6.81% 6.68% 6.55% Income $1,052 $1,645 $2,236 $585 $1,159 Investment gains (losses) ($19) ($6) $17 $4 $7 Ending Carrying Value $33,586 $36,094 $37,190 $37,351 $38,665 REAL ESTATE AND REAL ESTATE JOINT VENTURES Yield (4) 11.82% 11.31% 10.59% 12.50% 11.93% Income (5) $249 $367 $467 $146 $281 Investment gains (losses) (6) $1,922 $1,973 $2,139 $17 $71 Ending Carrying Value $3,998 $4,705 $4,665 $4,700 $4,786 POLICY LOANS Yield (4) 6.18% 6.08% 6.00% 5.84% 5.86% Income $277 $429 $572 $146 $293 Ending Carrying Value $8,975 $9,841 $9,981 $9,987 $10,065 EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS (1) Yield (4) 15.92% 12.70% 12.83% 12.86% 13.86% Income $396 $566 $798 $235 $513 Investment gains (losses) $107 $127 $159 $27 $52 Ending Carrying Value $5,914 $7,403 $7,614 $7,870 $8,007 CASH AND SHORT-TERM INVESTMENTS Yield (4) 3.59% 3.52% 3.66% 4.63% 4.67% Income $155 $277 $362 $80 $165 Investment gains (losses) ($1) ($1) ($2) ($1) ($2) Ending Carrying Value $15,770 $11,431 $7,324 $8,512 $8,193 OTHER INVESTED ASSETS Yield (4) 8.22% 8.67% 8.96% 8.92% 8.41% Income (7) $206 $392 $570 $171 $339 Investment gains (losses) (7) $398 $389 $502 ($259) ($776) Ending Carrying Value $6,452 $7,877 $8,078 $8,386 $9,652 TOTAL INVESTMENTS Gross investment income yield 6.69% 6.29% 6.35% 6.54% 6.51% Investment fees and expenses yield (0.13%) (0.13%) (0.14%) (0.12%) (0.13%) -------- ------------- ------------ --------- -------- NET INVESTMENT INCOME YIELD 6.56% 6.16% 6.21% 6.42% 6.38% ======== ============= ============ ========= ======== Gross investment income $6,923 $11,122 $15,405 $4,359 $8,732 Investment fees and expenses (136) (223) (339) (81) (177) -------- ------------- ------------ --------- -------- NET INVESTMENT INCOME $6,787 $10,899 $15,066 $4,278 $8,555 ======== ============= ============ ========= ======== Ending Carrying Value $259,525 $309,392 $305,727 $317,517 $316,980 ======== ============= ============ ========= ======== Gross investment gains $2,506 $2,848 $3,340 $237 $484 Gross investment losses (553) (857) (1,578) (587) (1,248) Writedowns (93) (107) (116) (22) (67) -------- ------------- ------------ --------- -------- Subtotal 1,860 1,884 1,646 (372) (831) Derivative & other instruments not qualifying for hedge accounting 344 297 301 (252) (610) -------- ------------- ------------ --------- -------- NET INVESTMENT GAINS (LOSSES) 2,204 2,181 1,947 (624) (1,441) Minority interest - net investment gains (losses) (11) (12) (9) (2) 2 Net investment gains (losses) tax benefit (provision) (775) (766) (681) 220 509 -------- ------------- ------------ --------- -------- NET INVESTMENT GAINS (LOSSES), NET OF INCOME TAXES $1,418 $1,403 $1,257 ($406) ($930) ======== ============= ============ ========= =======
(1) Certain prior period amounts have been reclassified to conform with current period presentation. (2) The fixed maturities yield is annualized and is based on quarterly average amortized cost. (3) Fixed maturities includes $197 million, $805 million, $825 million, $883 million and $519 million in ending carrying value and $3 million, $17 million, $14 million, $19 million and $16 million of investment income related to trading securities at or for year-to-date ended June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (4) Yields are annualized and based on quarterly average carrying values. (5) Included in income from real estate and real estate joint ventures is $66 million, $70 million, $78 million, $4 million and $9 million related to discontinued operations for year-to-date June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (6) Included in investment gains (losses) from real estate and real estate joint ventures is $1,923 million, $1,969 million, $2,125 million, ($5) million, and ($8) million related to discontinued operations for year-to-date June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. (7) Included in income from other invested assets are scheduled settlement payments on derivative instruments that do not qualify for hedge accounting under Statement of Financial Accounting Standards No. 133 of $37 million, $63 million, $99 million, $39 million and $107 million for the year-to-date June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively. These amounts are excluded from net investment gains (losses). Additionally, excluded from net investment gains (losses) is ($7) million, ($13) million, ($4) million and ($1) million for the year-to-date September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006, respectively, related to settlement payments on derivatives used to hedge interest rate and currency risk on policyholder account balances that do not qualify for hedge accounting. 39 (METLIFE(R) LOGO) METLIFE, INC. GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE FIXED MATURITIES (1)
At September At December 31, At March 31, At June 30, At June 30, 2005 30, 2005 2005 2006 2006 ---------------- --------------- --------------- --------------- --------------- % of % of % of % of % of Unaudited (Dollars in millions) Amount Total Amount Total Amount Total Amount Total Amount Total ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ Less than 20% $ 416 95.4% $1,758 95.9% $2,159 97.9% $4,379 98.7% $6,400 96.3% 20% or more for less than six months 13 3.0% 69 3.8% 39 1.8% 47 1.1% 232 3.5% 20% or more for six months or greater 7 1.6% 6 0.3% 7 0.3% 9 0.2% 10 0.2% ------- ----- ------ ----- ------ ----- ------ ----- ------ ----- Total Gross Unrealized Losses $ 436 100.0% $1,833 100.0% $2,205 100.0% $4,435 100.0% $6,642 100.0% ------- ----- ------ ----- ------ ----- ------ ----- ------ ----- Total Gross Unrealized Gains $11,250 $8,814 $8,329 $6,123 $4,994 ======= ====== ====== ====== ======
GROSS UNREALIZED GAINS AND LOSSES AGING SCHEDULE EQUITY SECURITIES (1)
At September At December 31, At March 31, At June 30, At June 30, 2005 30, 2005 2005 2006 2006 ---------------- --------------- --------------- --------------- --------------- % of % of % of % of % of Unaudited (Dollars in millions) Amount Total Amount Total Amount Total Amount Total Amount Total ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ Less than 20% $ 25 62.5% $ 29 70.7% $ 29 70.7% $ 30 75.0% $ 51 69.9% 20% or more for less than six months 15 37.5% 12 29.3% 12 29.3% 10 25.0% 22 30.1% 20% or more for six months or greater 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% ------- ----- ------ ----- ------ ----- ------ ----- ------ ----- Total Gross Unrealized Losses $ 40 100.0% $ 41 100.0% $ 41 100.0% $ 40 100.0% $ 73 100.0% ------- ----- ------ ----- ------ ----- ------ ----- ------ ----- Total Gross Unrealized Gains $206 $256 $295 $384 $338 ======= ====== ====== ====== ======
(1) The Company's review of its fixed maturities and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below amortized cost by less than 20%; (ii) securities where the estimated value had declined and remained below amortized cost by 20% or more for less than six months; and (iii) securities where the estimated value had declined and remained below amortized cost by 20% or more for six months or greater. 40 (METLIFE(R) LOGO) METLIFE, INC. SUMMARY OF REAL ESTATE
June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- Wholly owned $3,277 $3,919 $3,735 $3,902 $3,854 Joint ventures 718 783 926 794 923 ------ ------ ------ ------ ------ Subtotal 3,995 4,702 4,661 4,696 4,777 Foreclosed 3 3 4 4 9 ------ ------ ------ ------ ------ Total Real Estate (1) $3,998 $4,705 $4,665 $4,700 $4,786 ====== ====== ====== ====== ======
SUMMARY OF MORTGAGES AND CONSUMER LOANS
June 30, September 30, December 31, March 31, June 30, Unaudited (Dollars in millions) 2005 2005 2005 2006 2006 -------- ------------- ------------ --------- -------- COMMERCIAL MORTGAGES $26,100 $27,250 $28,022 $28,278 $29,533 AGRICULTURAL MORTGAGES 6,040 7,474 7,700 7,689 7,817 CONSUMER LOANS 1,446 1,370 1,468 1,384 1,315 ------- ------- ------- ------- ------- TOTAL $33,586 $36,094 $37,190 $37,351 $38,665 ======= ======= ======= ======= =======
(1) Includes real estate held-for-sale and held-for-investment. 41 (METLIFE(R) LOGO) COMPANY RATINGS AS OF JULY 28, 2006
Moody's Standard & A.M. Best Fitch Investors Service Poor's Company Ratings ----------------- ---------- --------- ------- FINANCIAL STRENGTH RATINGS First MetLife Investors Insurance Co. NR AA* A+ NR General American Life Insurance Company Aa2 AA* A+ AA MetLife Insurance Company of Connecticut Aa2 AA* A+ AA MetLife Insurance Company of Connecticut (Short-term rating) P-1 NR NR NR MetLife Investors Insurance Company Aa2 AA* A+ AA MetLife Investors Insurance Company of California NR AA* A+ NR MetLife Investors USA Insurance Company Aa3 AA* A+ AA MetLife Life and Annuity Company of Connecticut Aa2 AA* A+ AA Metropolitan Casualty Insurance Company NR NR A NR Metropolitan Direct Property and Casualty Insurance Co. NR NR A NR Metropolitan General Insurance Company NR NR A NR Metropolitan Group Property & Casualty Insurance Co. NR NR A NR Metropolitan Life Insurance Company Aa2 AA* A+ AA Metropolitan Life Insurance Company (Short-term rating) P-1 A-1+ NR NR Metropolitan Lloyds Insurance Company of Texas NR NR A NR Metropolitan Property and Casualty Insurance Company Aa3 NR A NR Metropolitan Tower Life Insurance Company Aa3 NR A+ NR New England Life Insurance Company Aa2 AA* A+ AA Texas Life Insurance Company NR NR A NR RGA Reinsurance Company A1 AA-* A+* AA- CREDIT RATINGS GenAmerica Capital I Preferred Stock A3 BBB+* NR A- General American Life Insurance Company Surplus Notes A1 A+* a+* NR MetLife, Inc. Senior Unsecured Debt A2 A* a* A Commercial Paper P-1 A-1 AMB-1* F1 Subordinated Debt A3(P) NR a-* NR Preferred Stock Baa1 BBB+* bbb+* A- Non-Cumulative Perpetual Preferred Stock Baa1 BBB* bbb+* A- MetLife Capital Trust II Trust Preferred Stock A3 BBB+* a-* A- MetLife Capital Trust III Trust Preferred Stock A3 BBB+* a-* A- MetLife Funding, Inc. Commercial Paper P-1 A-1+ AMB-1+* F1+ Metropolitan Life Global Funding I Senior Secured Debt Aa2 AA aa* NR Metropolitan Life Insurance Company Surplus Notes A1 A+* a+* A+ Reinsurance Group of America, Incorporated Senior Unsecured Debt Baa1 A-* a-* A- Junior Subordinated Debt Baa3 BBB-* bbb* BBB+ RGA Capital Trust I Preferred Stock Baa2 BBB* bbb+* BBB+ RGA Capital Trust II Preferred Stock Baa2 BBB* bbb+* BBB+
* Standard & Poor's and A.M. Best's outlook for these ratings is negative. (P) Preliminary NR Not Rated 42 -----END PRIVACY-ENHANCED MESSAGE-----