EX-99.1 2 y26307exv99w1.txt PRESS RELEASE Contacts: For Media: John Calagna (212) 578-6252 For Investors: Tracey Dedrick (212) 578-5140 METLIFE ANNOUNCES THIRD QUARTER 2006 RESULTS - REPORTS NET INCOME AVAILABLE TO COMMON SHAREHOLDERS OF $1.29 PER DILUTED COMMON SHARE, A 33% INCREASE - - REPORTS OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS OF $1.24 PER DILUTED COMMON SHARE, A 23% INCREASE - NEW YORK, October 30, 2006 - MetLife, Inc. (NYSE: MET) today reported third quarter 2006 net income available to common shareholders of $999 million, or $1.29 per diluted common share, compared with $742 million, or $0.97 per diluted common share, for the third quarter of 2005.
For the three months ended September 30, -------------------------- 2006 2005 ------ ------ (in millions, except per diluted common share data) Net income available to common shareholders $ 999 $ 742 Net income available to common shareholders per diluted common share $ 1.29 $ 0.97 Operating earnings available to common shareholders(1) $ 958 $ 780 Operating earnings available to common shareholders per diluted common share(1) $ 1.24 $ 1.01 Book value per diluted common share $38.22 $34.75 Book value per diluted common share, excluding accumulated other comprehensive income(1) $35.78 $32.32
(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 HIGHLIGHTS - Earned record total premiums, fees and other revenues of $8.1 billion - Reached $516.2 billion in total assets - Announced the sale of Peter Cooper Village and Stuyvesant Town Operating earnings available to common shareholders for the third quarter of 2006 were $958 million, or $1.24 per diluted common share, compared with $780 million, or $1.01 per diluted common share, for the prior year period. "MetLife continued to benefit from our diverse businesses in the third quarter with strong underlying fundamentals in all segments and record quarterly results in Auto & Home," said C. Robert Henrikson, chairman of the board, president and chief executive officer of MetLife, Inc. "We are pleased to continue providing value to our shareholders with the recently announced 13% increase in the annual common stock dividend. In addition, we plan to resume our share repurchase program and remain focused on continuing our strong momentum to achieve our objectives for 2006." THIRD 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 REMAIN STRONG Institutional Business operating earnings available to common shareholders in the third quarter of 2006 remained strong at $390 million, compared with $386 million in the prior year period. During the quarter, solid growth in non-medical health & other earnings was partially offset by the impact of lower interest spreads in the retirement & savings business. Non-medical health & other earnings increased 29% due to growth in the business and favorable underwriting results across the major product lines. Non-medical health & other premiums, fees and other revenues were up 9% over the prior year period, reflecting growth across all product lines, especially in dental and disability. Retirement & savings earnings, while benefiting from certain lower expenses, were down 7% compared with the third quarter of 2005, primarily due to the impact of lower interest spreads, driven by the inverted yield curve, and lower variable net investment income. During the quarter, the general and separate account assets for retirement & savings reached a combined record of $114.6 billion. Group life earnings of $101 million were relatively flat compared with the prior year period. Underlying growth in the business, lower expenses and favorable underwriting results were offset by the impact of lower interest spreads. 2 INDIVIDUAL BUSINESS EARNINGS UP 11% Individual Business operating earnings available to common shareholders were $367 million in the third quarter of 2006, compared with $330 million in the prior year period. This increase was due, in part, to growth in the business and favorable underwriting results, partially offset by lower variable net investment income. Total life earnings increased 11% over the prior year period as the business benefited from good mortality and a $12 million benefit from a specific reserve reduction. A strong increase in variable & universal life earnings was partially offset by a decline in traditional life results, which was primarily driven by lower variable net investment income and higher expenses. Total life first year premiums and deposits, as expected, were down compared to the prior year period due to a decline in sales in the independent channel. Annuity earnings increased 11% over the prior year period as results benefited from growth in the business. While variable net investment income decreased from unusually high levels in the prior year period, annuity spreads remained strong. During the quarter, total annuity deposits were $3.5 billion and fees for separate account investment-type products within the annuity business increased 15% compared with the prior year period. AUTO & HOME EARNINGS REACH NEW RECORD Auto & Home operating earnings available to common shareholders were a record $107 million in the third quarter of 2006, compared with an operating loss of $26 million in the prior year period. Auto & Home's strong performance in the quarter was due in part to significantly lower catastrophes compared with the prior year period. In addition, the non-catastrophe combined ratio improved to 81.2%, reflecting $27 million, net of income taxes, in favorable claim development related to prior accident years and good claim frequencies in both the auto and homeowners businesses. INTERNATIONAL EARNINGS UP 9% International operating earnings available to common shareholders were $72 million in the third quarter of 2006, compared with $66 million in the prior year period. Earnings in the segment benefited from solid performance in Asia Pacific and Latin America. In Japan, MSI MetLife continued its strong performance with sales of $1.5 billion, up 12% over the prior year period on a yen basis. INVESTMENTS MetLife's investment portfolio continued to deliver strong results as the net investment income yield increased to 6.32% in the third quarter of 2006, compared with 6.17% in the prior year period. Variable net investment income, while on plan, was lower than the prior year period. On October 17, 2006, MetLife announced the sale of its Peter Cooper Village and Stuyvesant Town properties for $5.4 billion. The sale is expected to result in a gain of approximately $3 billion, net of income taxes. It is anticipated that the sale will close in the fourth quarter of 2006, subject to customary closing conditions. 3 CORPORATE EVENTS Share Repurchase ---------------- MetLife announced today that it intends to resume its share repurchase program in the fourth quarter of 2006. The company currently has $716 million remaining on its existing share repurchase authorization. Earnings Conference Call ------------------------ MetLife will hold its third quarter 2006 earnings conference call and audio Webcast on Tuesday, October 31, 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. 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 11:30 a.m. (ET) on Tuesday, October 31, 2006, until Tuesday, November 7, 2006, at 11:59 p.m. (ET). To listen to a replay of the conference call over the telephone, dial (320) 365-3844. The access code for the replay is 843183. 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 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. 4
For the three months ended September 30, --------------------------------- 2006 2005 --------------- --------------- (in millions, except per diluted common share data) Net income available to common shareholders $ 999 $ 1.29 $ 742 $ 0.97 Net investment (gains) losses, net of income taxes(1) (162) (0.21) 15 0.02 Adjustments related to net investment (gains) losses, net of income taxes(2) 121 0.16 30 0.03 Discontinued operations, net of income taxes(3) -- -- (7) (0.01) ------ ------ ------ ------ Operating earnings available to common shareholders $ 958 $ 1.24 $ 780 $ 1.01 ====== ====== ====== ====== Book value per diluted common share $38.22 $34.75 Accumulated other comprehensive (income) loss per diluted common share (2.44) (2.43) ------ ------ Book value per diluted common share, excluding accumulated other comprehensive income/loss $35.78 $32.32 ====== ======
(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 $(63) million and $(30) million for the three months ended September 30, 2006 and 2005, respectively, and excludes (gains) losses of $(61) million and $(17) million for the three months ended September 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 from discontinued operations related to real estate and real estate joint ventures. 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 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 5 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 financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its domestic and international subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement & savings products and services to corporations and other institutions. For more information, please visit www.metlife.com. For a copy of MetLife's Quarterly Financial Supplement, please visit www.metlife.com. # # # 6 MetLife, Inc. Consolidated Statements of Income Unaudited (In millions)
Three months ended Nine months ended September 30, September 30, ------------------ ----------------- 2006 2005 2006 2005 ------- ------- ------- ------- Premiums $ 6,577 $ 6,514 $19,433 $18,514 Universal life and investment-type product policy fees 1,188 1,112 3,548 2,716 Net investment income 4,193 4,064 12,594 10,713 Other revenues 339 348 1,002 948 Net investment gains (losses) 254 (50) (1,074) 268 ------- ------- ------- ------- Total revenues 12,551 11,988 35,503 33,159 ------- ------- ------- ------- Policyholder benefits and claims 6,712 6,837 19,448 19,018 Interest credited to policyholder account balances 1,352 1,149 3,839 2,764 Policyholder dividends 422 426 1,268 1,261 Other expenses 2,751 2,615 7,794 6,591 ------- ------- ------- ------- Total expenses 11,237 11,027 32,349 29,634 ------- ------- ------- ------- Income from continuing operations before provision for income taxes 1,314 961 3,154 3,525 Provision for income taxes 357 238 855 1,025 ------- ------- ------- ------- Income from continuing operations 957 723 2,299 2,500 Income from discontinued operations, net of income taxes 76 50 131 1,505 ------- ------- ------- ------- Net income 1,033 773 2,430 4,005 Preferred stock dividends 34 31 100 31 ------- ------- ------- ------- Net income available to common shareholders $ 999 $ 742 $ 2,330 $ 3,974 ======= ======= ======= ======= OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS RECONCILIATION ------------------------------------------------------------------ Net income available to common shareholders $ 999 $ 742 $ 2,330 $ 3,974 Net investment gains (losses) 254 (23) (1,187) 2,181 Minority interest - net investment gains (losses) -- (1) 2 (12) Net investment gains (losses) tax provision (92) 9 417 (766) ------- ------- ------- ------- Net investment gains (losses), net of income taxes (1)(2) 162 (15) (768) 1,403 Adjustments related to universal life and investment-type product policy fees 3 -- (9) -- Adjustments related to policyholder benefits and dividends (204) (55) (12) (71) Adjustments related to other expenses 14 7 182 (17) Adjustments related to tax benefit (provision) 66 18 (58) 31 ------- ------- ------- ------- Adjustments related to net investment gains (losses), net of income taxes (3) (121) (30) 103 (57) Discontinued operations, net of income taxes (4) -- 7 30 156 ------- ------- ------- ------- Operating earnings available to common shareholders $ 958 $ 780 $ 2,965 $ 2,472 ======= ======= ======= =======
(1) Net investment gains (losses), net of income taxes, from real estate and real estate joint ventures includes discontinued operations of $63 million and $30 million for the three months ended September 30, 2006 and 2005, respectively, and $58 million and $1,269 million for the nine months ended September 30, 2006 and 2005, respectively. (2) Net investment gains (losses), net of income taxes, excludes scheduled periodic settlement payments on derivative instruments not qualifying for hedge accounting treatment of $61 million and $17 million for the three months ended September 30, 2006 and 2005, respectively, and $130 million and $41 million for the nine months ended September 30, 2006 and 2005, 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) Discontinued operations, net of income taxes, excludes gains (losses) from discontinued operations related to real estate and real estate joint ventures. MetLife, Inc. Financial Highlights Unaudited (In millions, except per common share data or unless otherwise noted)
At or for the At or for three months the nine months ended September 30, ended September 30, ------------------- ------------------- 2006 2005 2006 2005 ------ ------ ------- ------ Other Financial Data: Net income available to common shareholders $ 999 $ 742 $ 2,330 $3,974 Operating earnings available to common shareholders $ 958 $ 780 $ 2,965 $2,472 Total assets (billions) $516.2 $482.9 $ 516.2 $482.9 Individual Business Sales Data: Total first year life premiums and deposits $ 244 $ 357 $ 841 $ 777 Variable and Universal life first year premiums and deposits (including COLI/BOLI) $ 198 $ 305 $ 695 $ 626 Total annuity deposits $3,531 $3,624 $11,603 $8,660 Earnings Per Common Share Calculation: Weighted average common shares outstanding - diluted 773.7 768.7 769.9 753.1 Operating earnings available to common shareholders per common share - diluted $ 1.24 $ 1.01 $ 3.85 $ 3.28 Net income available to common shareholders per common share - diluted $ 1.29 $ 0.97 $ 3.03 $ 5.28
MetLife, Inc. Balance Sheet Data September 30, 2006 (Unaudited) and December 31, 2005 (Audited) (In millions)
At September At December 30, 2006 31, 2005 ------------ ----------- Balance Sheet Data: General account assets $378,912 $353,776 Separate account assets 137,274 127,869 -------- -------- Total assets $516,186 $481,645 ======== ======== Policyholder liabilities (including amounts in closed block) $268,693 $262,371 Short-term debt 1,706 1,414 Long-term debt 10,711 9,888 Junior subordinated debt securities underlying common equity units 2,134 2,134 Shares subject to mandatory redemption 278 278 Other liabilities 63,780 48,590 Separate account liabilities 137,274 127,869 -------- -------- Total liabilities 484,576 452,544 -------- -------- Preferred stock, at par value 1 1 Common stock, at par value 8 8 Additional paid-in capital 17,397 17,274 Retained earnings 13,195 10,865 Treasury stock (878) (959) Accumulated other comprehensive income (loss) 1,887 1,912 -------- -------- Total stockholders' equity 31,610 29,101 -------- -------- Total liabilities and stockholders' equity $516,186 $481,645 ======== ========
MetLife, Inc. Reconciliations of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders Unaudited (In millions)
Three months Nine months ended ended September 30, September 30, ------------- --------------- 2006 2005 2006 2005 ---- ---- ------ ------ Total Institutional Operations Net income available to common shareholders $486 $343 $ 908 $1,282 Net investment gains (losses), net of income taxes 150 (61) (352) 209 Adjustments related to net investment gains (losses), net of income taxes (54) 18 1 17 ---- ---- ------ ------ Operating earnings available to common shareholders $390 $386 $1,259 $1,056 ==== ==== ====== ====== Institutional Operations Group Life Net income available to common shareholders $ 91 $113 $ 276 $ 283 Net investment gains (losses), net of income taxes (10) 7 (59) (3) Adjustments related to net investment gains (losses), net of income taxes -- 4 4 4 ---- ---- ------ ------ Operating earnings available to common shareholders $101 $102 $ 331 $ 282 ==== ==== ====== ====== Retirement & Savings Net income available to common shareholders $290 $178 $ 420 $ 796 Net investment gains (losses), net of income taxes 105 (45) (250) 198 Adjustments related to net investment gains (losses), net of income taxes (16) 7 (13) 8 ---- ---- ------ ------ Operating earnings available to common shareholders $201 $216 $ 683 $ 590 ==== ==== ====== ====== Non-Medical Health & Other Net income available to common shareholders $105 $ 52 $ 212 $ 203 Net investment gains (losses), net of income taxes 55 (23) (43) 14 Adjustments related to net investment gains (losses), net of income taxes (38) 7 10 5 ---- ---- ------ ------ Operating earnings available to common shareholders $ 88 $ 68 $ 245 $ 184 ==== ==== ====== ====== Total Individual Operations Net income available to common shareholders $401 $313 $ 913 $1,262 Net investment gains (losses), net of income taxes 53 (6) (316) 353 Adjustments related to net investment gains (losses), net of income taxes (19) (11) 101 (31) ---- ---- ------ ------ Operating earnings available to common shareholders $367 $330 $1,128 $ 940 ==== ==== ====== ====== Individual Operations Traditional Life Net income available to common shareholders $ 55 $108 $ 217 $ 548 Net investment gains (losses), net of income taxes (14) 31 (106) 300 Adjustments related to net investment gains (losses), net of income taxes (4) (22) 55 (29) ---- ---- ------ ------ Operating earnings available to common shareholders $ 73 $ 99 $ 268 $ 277 ==== ==== ====== ====== Variable & Universal Life Net income available to common shareholders $105 $ 46 $ 176 $ 133 Net investment gains (losses), net of income taxes 14 (12) (47) (11) Adjustments related to net investment gains (losses), net of income taxes (3) 7 12 3 ---- ---- ------ ------ Operating earnings available to common shareholders $ 94 $ 51 $ 211 $ 141 ==== ==== ====== ====== Annuities Net income available to common shareholders $236 $148 $ 507 $ 556 Net investment gains (losses), net of income taxes 56 (29) (151) 66 Adjustments related to net investment gains (losses), net of income taxes (12) 4 34 (5) ---- ---- ------ ------ Operating earnings available to common shareholders $192 $173 $ 624 $ 495 ==== ==== ====== ====== Other Net income (loss) available to common shareholders $ 5 $ 11 $ 13 $ 25 Net investment gains (losses), net of income taxes (3) 4 (12) (2) ---- ---- ------ ------ Operating earnings (losses) available to common shareholders $ 8 $ 7 $ 25 $ 27 ==== ==== ====== ====== Total Auto & Home Net income available to common shareholders $106 $(29) $ 296 $ 145 Net investment gains (losses), net of income taxes (1) (3) (3) (6) ---- ---- ------ ------ Operating earnings available to common shareholders $107 $(26) $ 299 $ 151 ==== ==== ====== ====== Auto & Home Auto Net income available to common shareholders $ 87 $ 63 $ 219 $ 171 Net investment gains (losses), net of income taxes (1) (2) (2) (4) ---- ---- ------ ------ Operating earnings available to common shareholders $ 88 $ 65 $ 221 $ 175 ==== ==== ====== ====== Homeowners & Other Net income available to common shareholders $ 19 $(92) $ 77 $ (26) Net investment gains (losses), net of income taxes -- (1) (1) (2) ---- ---- ------ ------ Operating earnings available to common shareholders $ 19 $(91) $ 78 $ (24) ==== ==== ====== ======
Three months Nine months ended ended September 30, September 30, ------------- --------------- 2006 2005 2006 2005 ---- ---- ------ ------ International Net income available to common shareholders $ 11 $ 41 $ 216 $ 162 Net investment gains (losses), net of income taxes (13) 3 9 8 Adjustments related to net investment gains (losses), net of income taxes (48) (35) (2) (36) Discontinued operations, net of income taxes -- 7 -- 5 ---- ---- ------ ------ Operating earnings available to common shareholders $ 72 $ 66 $ 209 $ 185 ==== ==== ====== ====== Reinsurance Net income available to common shareholders $ 30 $ 28 $ 83 $ 64 Net investment gains (losses), net of income taxes 1 4 (2) 16 Adjustments related to net investment gains (losses), net of income taxes -- (2) 3 (7) ---- ---- ------ ------ Operating earnings available to common shareholders $ 29 $ 26 $ 82 $ 55 ==== ==== ====== ======