MetLife, Inc. (NYSE: MET) today reported third quarter 2011 net
income of $3.6 billion, or $3.33 per share, and operating earnings1
of $1.2 billion, or $1.11 per share.
“During the third quarter, MetLife generated strong results,
despite continued challenging economic conditions,” said Steven A.
Kandarian, president and chief executive officer of MetLife, Inc.
“We increased operating earnings 23%, generated a record $12.0
billion in premiums, fees and other revenues and had strong top
line growth in both our U.S. and International Businesses compared
with the third quarter of 2010. We also demonstrated that, despite
several unusual items during the third quarter, the core
fundamentals of our diverse, global businesses are strong, and we
remain committed to delivering further value for our customers and
our shareholders.”
1 Information regarding the non-GAAP financial measures included
in this press release and the reconciliation of them to GAAP
measures are provided in the Non-GAAP and Other Financial
Disclosures discussion below, as well as in the tables that
accompany this release and/or the Third Quarter 2011 Quarterly
Financial Supplement.
THIRD QUARTER 2011 SUMMARY
- Operating earnings of $1.2 billion, or
$1.11 per share, reflecting:
- a $117 million ($0.11 per share), after
tax, charge to increase reserves in connection with the company’s
use of the U.S. Social Security Administration’s Death Master File
and similar databases to identify potential life insurance claims
that have not yet been presented to the company; the charge mostly
impacted the Insurance Products segment
- severe storm-related catastrophe losses
in the Auto & Home business that were $50 million ($0.05 per
share), after tax, higher than the company’s quarterly plan
provision of $38 million
- strong variable investment income,
which was above the plan range by $37 million, or $0.03 per share,
after tax and the impact of deferred acquisition costs (“DAC”)
- a net charge of $40 million ($0.04 per
share), after tax, related to the liquidation plan for Executive
Life Insurance Company of New York (“ELNY”) filed by the New York
State Department of Financial Services; the charge was recorded in
Corporate & Other
- U.S. annuity sales of $9.2 billion, up
79% over the third quarter of 2010, driven by strong demand for
variable annuities
- Total International sales more than
doubled on a reported basis over the third quarter of 2010 and were
up 25% compared with combined MetLife and Alico third quarter 2010
results
- Premiums, fees & other revenues of
$12.0 billion, up 41% over the third quarter of 2010, largely due
to the acquisition of Alico as well as growth in U.S. Business
($ in millions, except per share data)
For the three months ended September 30, 2011
2010 Change Premiums,
fees & other revenues $ 11,965 $ 8,506 41 % Total operating
revenues $ 17,017 $ 12,820 33 % Net income $ 3,552 $ 286 –
Net income per share $ 3.33 $ 0.32 – Operating earnings $
1,179 $ 958 23 % Operating earnings per share $ 1.11 $ 1.08 3 %
Book value per share $ 55.13 $ 48.93 13 % Book value per
share excluding AOCI $ 48.69
$ 44.48 9 %
BUSINESS SEGMENT DISCUSSIONS
All comparisons of third quarter 2011 results in the segment
discussions that follow are with the third quarter of 2010, unless
otherwise noted. Reconciliations of segment net income to segment
operating earnings are provided in the tables that accompany this
release and in the Third Quarter 2011 Quarterly Financial
Supplement, which is available on the Investor Relations section of
www.metlife.com.
U.S. BUSINESS
- U.S. Business operating earnings of
$655 million, down 23% primarily due to the previously mentioned
reserve increase and higher catastrophe losses
- Variable annuity sales of $8.6 billion,
up 84%
- Continued improvement in non-medical
health underwriting results, particularly in the dental
business
- Premiums, fees & other revenues of
$7.7 billion, up 9% primarily due to growth in Corporate Benefit
Funding and Retirement Products
Insurance Products
Operating earnings for Insurance Products – which includes group
life, individual life and non-medical health insurance – were $265
million, down 23% largely due to the previously mentioned reserve
adjustment, which impacted group and individual life results.
Partially offsetting this was a 31% increase in non-medical health
earnings, which benefitted from improved investment income and
underwriting results. Premiums, fees & other revenues for
Insurance Products were $4.9 billion, relatively unchanged.
Retirement Products
Operating earnings for Retirement Products – which includes the
company’s U.S. annuity products – were $104 million, down 56%. The
decrease was largely due to the initial negative impact of
declining equity markets, which reduced earnings by $90 million,
after tax, as well as lower net investment income. Total annuity
sales increased 79% to $9.2 billion due to strong growth in
variable annuities across all distribution channels. In addition,
total annuity net flows were $5.8 billion, higher than the second
quarter of 2011 and the third quarter of 2010. Premiums, fees &
other revenues for Retirement Products were $1.1 billion, up 39%
due to increased sales of immediate annuities and higher fee
income.
Corporate Benefit Funding
Operating earnings for Corporate Benefit Funding – which
includes the U.S. and U.K. pension closeout businesses, structured
settlements and other benefit funding products – were $264 million,
up 45% primarily due to higher net investment income. Premiums,
fees & other revenues for Corporate Benefit Funding were $854
million, up 65% due to higher pension closeout sales (which often
fluctuate significantly from quarter to quarter) and higher
structured settlement sales.
Auto & Home
Operating earnings for Auto & Home were $22 million, down
73% as storm activity, including Hurricane Irene, contributed to
catastrophe losses of $88 million, after tax. Partially offsetting
this was favorable non-catastrophe claim development related to
prior accident years of $19 million ($0.02 per share), after tax,
compared with $3 million, after tax, in the third quarter of 2010.
Excluding catastrophes, Auto & Home’s combined ratio was strong
at 88.0%, compared with 88.2%. Net written premiums for Auto &
Home were $807 million, up 3%.
INTERNATIONAL BUSINESS
- International operating earnings of
$578 million, up from $189 million largely due to the acquisition
of Alico* and reflecting particularly strong performance in the
Latin America and Asia Pacific regions
- Total International sales up 25%
compared with combined MetLife and Alico third quarter 2010
results
- Premiums, fees & other revenues of
$4.0 billion, reflecting growth across all the regions as well as
the positive impact of foreign currency exchange rates
Japan
Operating earnings in Japan were $315 million, up 29% over the
second quarter of 2011 due to higher net investment income, reduced
claims associated with the March earthquake, lower operating
expenses and improved persistency. Sales grew 22% over the second
quarter of 2011 and 28% over the third quarter of 2010. Premiums,
fees & other revenues in Japan were $1.8 billion.
Other International Regions
Operating earnings in the Other International Regions were $263
million, up 39%, while premiums, fees & other revenues grew to
$2.2 billion. The increases were largely due to the Alico
acquisition. In addition, in Latin America, growth in premiums,
fees & other revenues was driven by higher immediate annuity
sales in Chile, as well as premium increases in Mexico and
Argentina. In Asia Pacific, increases in institutional business in
Australia and in accident & health insurance in Korea drove the
growth in premiums, fees & other revenues.
*MetLife acquired Alico on November 1, 2010. Accordingly,
Alico’s financial results prior to that date are not reflected in
MetLife’s historical financial statements.
BANKING, CORPORATE & OTHER
Operating earnings for MetLife Bank were $51 million, down from
$101 million, reflecting higher expenses. Operating revenues rose
4% to $425 million. At September 30, 2011, total assets were $17.7
billion (including deposits of $10.7 billion), up 6% from September
30, 2010. On October 12, MetLife announced that, in addition to its
previously announced decision to explore a sale of MetLife Bank’s
depository business, the company is also exploring a sale of the
Bank’s forward mortgage origination business.
Corporate & Other had an operating loss of $105 million,
compared with an operating loss of $178 million. Results in the
third quarter of 2011 benefited from higher net investment income,
partially offset by the previously mentioned charge related to
ELNY.
INVESTMENTS
- Investment portfolio of $493.2 billion,
up from $383.2 billion at September 30, 2010 largely due to the
acquisition of Alico
- Strong net investment income of $5.1
billion
- Investment portfolio net gain of $14
million, after tax (including impairments of $167 million, after
tax), compared with an investment portfolio net loss of $72
million, after tax
Net investment income was $5.1 billion, up 17% from the third
quarter of 2010 and relatively unchanged from the second quarter of
2011. During the third quarter of 2011, variable investment income
was $400 million ($258 million, after tax and the impact of DAC),
driven by strong performance from private equity funds and
securities lending.
For the quarter, MetLife reported a $14 million, after tax,
investment portfolio net gain. Separately, the impact of MetLife’s
credit spreads contributed $1.3 billion, after tax, to total
derivative net gains of $2.7 billion, after tax. Lower interest
rates also contributed to the total derivative net gains for the
quarter. In the third quarter of 2010, MetLife reported $190
million, after tax, in derivative net losses. MetLife uses
derivatives in connection with its broader portfolio management
strategy to hedge a number of risks, including changes in interest
rates and fluctuations in foreign currencies. Movement in interest
rates, foreign currencies and MetLife’s credit spreads – which
impact the valuation of certain insurance liabilities – can
generate derivative gains or losses. Derivative gains or losses
related to MetLife’s credit spreads do not have an economic impact
on the company.
Conference Call
MetLife will hold its third quarter 2011 earnings conference
call on Friday, October 28, 2011, at 8:00 a.m. (ET). Following the
discussion of the company’s third quarter 2011 results, MetLife
will host a separate discussion at 9:05 a.m. (ET) to address market
concerns about a potential long-term low interest rate environment
in the U.S. Presentation materials for the interest rate discussion
will be available at www.metlife.com (through a link on the
Investor Relations page).
The entire conference call will be available live via telephone.
To listen, dial (612) 326-1011 (domestic and international
callers). Please note that there will be no audio Webcast of the
earnings discussion or the interest rate discussion, and
participants must dial the above-mentioned number to listen to the
call. To view the interest rate presentation materials, visit
https://metlife.webex.com/metlife/onstage/g.php?d=639282138&t=a.
The event password for the presentation is mlirq3.
The entire conference call will be available for replay via
telephone beginning at 12:00 p.m. (ET) on Friday, October 28, 2011,
until Friday, November 4, 2011 at 11:59 p.m. (ET). To listen to a
replay of the earnings conference call, dial (320) 365-3844
(domestic and international callers), access code 169216. To listen
to a replay of the interest rate-related conference call, dial
(320) 365-3844 (domestic and international callers), access code
222037.
Non-GAAP and Other Financial
Disclosures
All references in this press release (except in this section) to
net income (loss), net income (loss) per share, operating earnings,
operating earnings per share and book value per share should be
read as net income (loss) available to MetLife, Inc.’s common
shareholders, net income (loss) available to MetLife, Inc.’s common
shareholders per diluted common share, operating earnings available
to common shareholders, operating earnings available to common
shareholders per diluted common share and book value per common
share, respectively.
Operating earnings is the measure of segment profit or loss that
MetLife uses to evaluate segment performance and allocate resources
and, consistent with accounting principles generally accepted in
the United States of America (“GAAP”) accounting guidance for
segment reporting, it is MetLife’s measure of segment performance.
Operating earnings is also a measure by which MetLife senior
management’s and many other employees’ performance is evaluated for
the purposes of determining their compensation under applicable
compensation plans.
Operating earnings is defined as operating revenues less
operating expenses, both net of income tax. Operating earnings
available to common shareholders is defined as operating earnings
less preferred stock dividends.
Operating revenues exclude net investment gains (losses)
(“NIGL”) and net derivative gains (losses) (“NDGL”). The following
additional adjustments are made to GAAP revenues, in the line items
indicated, in calculating operating revenues:
- Universal life and investment-type
product policy fees exclude the amortization of unearned revenue
related to NIGL and NDGL and certain variable annuity guaranteed
minimum income benefits (“GMIB”) fees (“GMIB Fees”);
- Net investment income: (i) includes
amounts for scheduled periodic settlement payments and amortization
of premium on derivatives that are hedges of investments but do not
qualify for hedge accounting treatment, (ii) includes income from
discontinued real estate operations, (iii) excludes post-tax
operating earnings adjustments relating to insurance joint ventures
accounted for under the equity method, (iv) excludes certain
amounts related to contractholder-directed unit-linked investments,
and (v) excludes certain amounts related to securitization entities
that are variable interest entities (“VIEs”) consolidated under
GAAP; and
- Other revenues are adjusted for
settlements of foreign currency earnings hedges.
The following adjustments are made to GAAP expenses, in the line
items indicated, in calculating operating expenses:
- Policyholder benefits and claims and
policyholder dividends exclude: (i) changes in the policyholder
dividend obligation related to NIGL and NDGL, (ii)
inflation-indexed benefit adjustments associated with contracts
backed by inflation-indexed investments and amounts associated with
periodic crediting rate adjustments based on the total return of a
contractually referenced pool of assets, (iii) benefits and hedging
costs related to GMIBs (“GMIB Costs”), and (iv) market value
adjustments associated with surrenders or terminations of contracts
(“Market Value Adjustments”);
- Interest credited to policyholder
account balances includes adjustments for scheduled periodic
settlement payments and amortization of premium on derivatives that
are hedges of policyholder account balances but do not qualify for
hedge accounting treatment and excludes amounts related to net
investment income earned on contractholder-directed unit-linked
investments;
- Amortization of DAC and value of
business acquired (“VOBA”) excludes amounts related to: (i) NIGL
and NDGL, (ii) GMIB Fees and GMIB Costs and (iii) Market Value
Adjustments;
- Amortization of negative VOBA excludes
amounts related to Market Value Adjustments;
- Interest expense on debt excludes
certain amounts related to securitization entities that are VIEs
consolidated under GAAP; and
- Other expenses exclude costs related
to: (i) noncontrolling interests, (ii) implementation of new
insurance regulatory requirements, and (iii) business
combinations.
MetLife believes the presentation of operating earnings and
operating earnings available to common shareholders as MetLife
measures it for management purposes enhances the understanding of
the company’s performance by highlighting the results from
operations and the underlying profitability drivers of the
business. Operating revenues, operating expenses, operating
earnings, operating earnings available to common shareholders,
operating earnings available to common shareholders per diluted
common share, book value per common share, excluding accumulated
other comprehensive income (loss) (“AOCI”) and book value per
diluted common share, excluding AOCI should not be viewed as
substitutes for the following financial measures calculated in
accordance with GAAP: GAAP revenues, GAAP expenses, GAAP income
(loss) from continuing operations, net of income tax, GAAP net
income (loss) available to MetLife, Inc.’s common shareholders,
GAAP net income (loss) available to MetLife, Inc.’s common
shareholders per diluted common share, book value per common share
and book value per diluted common share, respectively.
Reconciliations of these measures to the most directly comparable
GAAP measures are included in the Third Quarter 2011 Quarterly
Financial Supplement and in the tables that accompany this earnings
press release.
Statistical sales information for life insurance is calculated
by MetLife using the LIMRA International, Inc. definition of sales
for core direct sales, excluding company sponsored internal
exchanges, corporate-owned life insurance, bank-owned life
insurance, and private placement variable universal life insurance.
Individual annuities sales consists of statutory premiums direct
and assumed, excluding company sponsored internal exchanges.
About MetLife
MetLife, Inc. is a leading global provider of insurance,
annuities and employee benefit programs, serving 90 million
customers in over 50 countries. Through its subsidiaries and
affiliates, MetLife holds leading market positions in the United
States, Japan, Latin America, Asia Pacific, Europe and the Middle
East. For more information, visit www.metlife.com.
This press release may contain or incorporate by reference
information that includes or is based upon forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements give expectations or
forecasts of future events. These statements can be identified by
the fact that they do not relate strictly to historical or current
facts. They use words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe” and other words and terms of
similar meaning in connection with a discussion of future operating
or financial performance. In particular, these include statements
relating to future actions, prospective services or products,
future performance or results of current and anticipated services
or products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, trends in operations and financial
results.
Any or all forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. Many such factors will be
important in determining the actual future results of MetLife,
Inc., its subsidiaries and affiliates. These statements are based
on current expectations and the current economic environment. They
involve a number of risks and uncertainties that are difficult to
predict. These statements are not guarantees of future performance.
Actual results could differ materially from those expressed or
implied in the forward-looking statements. Risks, uncertainties,
and other factors that might cause such differences include the
risks, uncertainties and other factors identified in MetLife,
Inc.’s filings with the U.S. Securities and Exchange Commission
(the “SEC”). These factors include: (1) difficult conditions in the
global capital markets; (2) the delay by Congress in raising the
statutory debt limit of the U.S., as well as rating agency
downgrades of U.S. Treasury securities; (3) increased volatility
and disruption of the capital and credit markets, which may affect
our ability to seek financing or access our credit facilities; (4)
uncertainty about the effectiveness of the U.S. government’s
programs to stabilize the financial system, the imposition of fees
relating thereto, or the promulgation of additional regulations;
(5) impact of comprehensive financial services regulation reform on
us; (6) exposure to financial and capital market risk; (7) changes
in general economic conditions, including the performance of
financial markets and interest rates, which may affect our ability
to raise capital, generate fee income and market-related revenue
and finance statutory reserve requirements and may require us to
pledge collateral or make payments related to declines in value of
specified assets; (8) potential liquidity and other risks resulting
from our participation in a securities lending program and other
transactions; (9) investment losses and defaults, and changes to
investment valuations; (10) impairments of goodwill and realized
losses or market value impairments to illiquid assets; (11)
defaults on our mortgage loans; (12) the impairment of other
financial institutions that could adversely affect our investments
or business; (13) our ability to address unforeseen liabilities,
asset impairments, loss of key contractual relationships, or rating
actions arising from acquisitions or dispositions, including our
acquisition of American Life Insurance Company and Delaware
American Life Insurance Company (collectively, “ALICO”) and to
successfully integrate and manage the growth of acquired businesses
with minimal disruption; (14) uncertainty with respect to the
outcome of the closing agreement entered into with the United
States Internal Revenue Service in connection with the acquisition
of ALICO; (15) uncertainty with respect to any incremental tax
benefits resulting from the elections made for ALICO and certain of
its subsidiaries under Section 338 of the U.S. Internal Revenue
Code of 1986, as amended; (16) the dilutive impact on our
stockholders resulting from the issuance of equity securities in
connection with the acquisition of ALICO or otherwise; (17)
economic, political, currency and other risks relating to our
international operations, including with respect to fluctuations of
exchange rates; (18) our primary reliance, as a holding company, on
dividends from our subsidiaries to meet debt payment obligations
and the applicable regulatory restrictions on the ability of the
subsidiaries to pay such dividends; (19) downgrades in our claims
paying ability, financial strength or credit ratings; (20)
ineffectiveness of risk management policies and procedures; (21)
availability and effectiveness of reinsurance or indemnification
arrangements, as well as default or failure of counterparties to
perform; (22) discrepancies between actual claims experience and
assumptions used in setting prices for our products and
establishing the liabilities for our obligations for future policy
benefits and claims; (23) catastrophe losses; (24) heightened
competition, including with respect to pricing, entry of new
competitors, consolidation of distributors, the development of new
products by new and existing competitors, distribution of amounts
available under U.S. government programs, and for personnel; (25)
unanticipated changes in industry trends; (26) changes in
accounting standards, practices and/or policies; (27) changes in
assumptions related to deferred policy acquisition costs, deferred
sales inducements, value of business acquired or goodwill; (28)
increased expenses relating to pension and postretirement benefit
plans, as well as health care and other employee benefits; (29)
exposure to losses related to variable annuity guarantee benefits,
including from significant and sustained downturns or extreme
volatility in equity markets, reduced interest rates, unanticipated
policyholder behavior, mortality or longevity, and the adjustment
for nonperformance risk; (30) deterioration in the experience of
the “closed block” established in connection with the
reorganization of Metropolitan Life Insurance Company; (31) adverse
results or other consequences from litigation, arbitration or
regulatory investigations; (32) inability to protect our
intellectual property rights or claims of infringement of the
intellectual property rights of others, (33) discrepancies between
actual experience and assumptions used in establishing liabilities
related to other contingencies or obligations; (34) regulatory,
legislative or tax changes relating to our insurance, banking,
international, or other operations that may affect the cost of, or
demand for, our products or services, impair our ability to attract
and retain talented and experienced management and other employees,
or increase the cost or administrative burdens of providing
benefits to employees; (35) the effects of business disruption or
economic contraction due to terrorism, other hostilities, or
natural catastrophes, including any related impact on our disaster
recovery systems and management continuity planning which could
impair our ability to conduct business effectively; (36) the
effectiveness of our programs and practices in avoiding giving our
associates incentives to take excessive risks; and (37) other risks
and uncertainties described from time to time in MetLife, Inc.’s
filings with the SEC.
MetLife, Inc. does not undertake any obligation to publicly
correct or update any forward-looking statement if MetLife, Inc.
later becomes aware that such statement is not likely to be
achieved. Please consult any further disclosures MetLife, Inc.
makes on related subjects in reports to the SEC.
MetLife,
Inc. Interim Condensed Consolidated Statements of Operations
(Unaudited) For the Three Months Ended For the
Nine Months Ended September 30, September 30, 2011 2010 2011 2010
(In millions)
Revenues Premiums $ 9,342 $ 6,484 $ 27,190 $
19,856 Universal life and investment-type product policy fees 1,998
1,452 5,856 4,339 Net investment income 4,257 4,364 14,669 12,745
Other revenues 720 624 1,878 1,681 Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities (95 )
(143 ) (525 ) (538 ) Other-than-temporary impairments on fixed
maturity securities transferred to other comprehensive income
(loss) (189 ) 24 (5 ) 181 Other net investment gains (losses)
229 (223 ) 221 33
Total net investment gains (losses) (55 ) (342 ) (309 ) (324 ) Net
derivative gains (losses) 4,196 (244 )
4,233 1,278 Total revenues 20,458
12,338 53,517 39,575
Expenses Policyholder benefits and claims
9,017 7,309 26,367 21,703 Interest credited to policyholder account
balances 738 1,264 4,104 3,454 Policyholder dividends 384 391 1,130
1,156 Other expenses 5,013 2,989
13,410 9,330 Total expenses 15,152
11,953 45,011 35,643
Income (loss) from continuing operations before
provision for income tax 5,306 385 8,506 3,932 Provision for income
tax expense (benefit) 1,734 68
2,681 1,251 Income (loss) from continuing
operations, net of income tax 3,572 317 5,825 2,681 Income (loss)
from discontinued operations, net of income tax 4
3 (6 ) 20 Net income (loss)
3,576 320 5,819 2,701 Less: Net income (loss) attributable to
noncontrolling interests (6 ) 4 (6 )
(7 ) Net income (loss) attributable to MetLife, Inc. 3,582
316 5,825 2,708 Less: Preferred stock dividends 30 30 91 91
Preferred stock redemption premium - -
146 - Net income (loss) available to
MetLife, Inc.'s common shareholders $ 3,552 $ 286 $
5,588 $ 2,617
Reconciliation to
Operating Earnings Available to Common Shareholders Net income
(loss) available to MetLife, Inc.'s common shareholders $ 3,552 $
286 $ 5,588 $ 2,617
Adjustments from net income (loss)
available to MetLife, Inc.'s common shareholders to operating
earnings available to common shareholders:
Less: Net investment gains (losses) (55 ) (342 ) (309 ) (324 )
Less: Net derivative gains (losses) 4,196 (244 ) 4,233 1,278 Less:
Other adjustments to continuing operations (478 ) (437 ) (1,064 )
(1,017 ) Less: Provision for income tax (expense) benefit (1,300 )
352 (1,052 ) (83 ) Less: Income (loss) from discontinued
operations, net of income tax 4 3 (6 ) 20 Add: Net income (loss)
attributable to noncontrolling interests (6 ) 4 (6 ) (7 ) Add:
Preferred stock redemption premium - -
146 - Operating earnings available to
common shareholders $ 1,179 $ 958 $ 3,926 $
2,736
Reconciliation of GAAP revenues to operating
revenues and GAAP expenses to operating expenses Total
revenues $ 20,458 $ 12,338 $ 53,517 $ 39,575 Less: Net investment
gains (losses) (55 ) (342 ) (309 ) (324 ) Less: Net derivative
gains (losses) 4,196 (244 ) 4,233 1,278 Less: Adjustments related
to net investment gains (losses) and net derivative gains (losses)
16 - 14 6 Less: Other adjustments to revenues (716 )
104 (147 ) 194 Total operating revenues
$ 17,017 $ 12,820 $ 49,726 $ 38,421
Total expenses $ 15,152 $ 11,953 $ 45,011 $ 35,643 Less:
Adjustments related to net investment gains (losses) and net
derivative gains (losses) 471 37 565 263 Less: Other adjustments to
expenses (693 ) 504 366
954 Total operating expenses $ 15,374 $ 11,412
$ 44,080 $ 34,426 For the Three Months
Ended For the Nine Months Ended September 30, September 30, 2011
2010 2011 2010 Diluted Earnings Per Common Share
Calculation: Net income (loss) available to MetLife, Inc.'s common
shareholders per common share - diluted $ 3.33 $ 0.32 $ 5.23 $ 3.09
Less: Net investment gains (losses) (0.05 ) (0.39 ) (0.29 ) (0.38 )
Less: Net derivative gains (losses) 3.94 (0.28 ) 3.96 1.51 Less:
Other adjustments to continuing operations (0.46 ) (0.49 ) (0.99 )
(1.20 ) Less: Provision for income tax (expense) benefit (1.22 )
0.40 (0.98 ) (0.10 ) Less: Income (loss) from discontinued
operations, net of income tax - - (0.01 ) 0.02 Add: Net income
(loss) attributable to noncontrolling interest (0.01 ) - (0.01 )
(0.01 ) Add: Preferred stock redemption premium -
- 0.14 - Operating
earnings available to common shareholders per common share -
diluted $ 1.11 $ 1.08 $ 3.67 $ 3.23
Weighted average common shares outstanding - diluted 1,066.2
883.1 1,068.7 847.3 September 30, 2011 2010
Book Value Per Common Share Calculation : Book value per common
share - (actual common shares outstanding) $ 55.13 $ 48.93 Less:
Accumulated other comprehensive income (loss) per common share
6.44 4.45
Book value per common share, excluding
accumulated other comprehensive income (loss) - (actual common
shares outstanding)
$ 48.69 $ 44.48 Common shares outstanding, end
of period 1,057.6 906.9
MetLife, Inc. Reconciliations of Net
Income (Loss) Available to Common Shareholders to Operating
Earnings Available to Common Shareholders (Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30, 2011 2010 2011 2010 (In millions) (In
millions) Total U.S. Business Operations: Net income (loss)
available to MetLife, Inc.'s common shareholders $ 2,527 $ 764 $
4,415 $ 3,084 Less: Net investment gains (losses) 118 125 203 282
Less: Net derivative gains (losses) 2,953 5 3,127 1,208 Less: Other
adjustments to continuing operations (207 ) (263 ) (429 ) (522 )
Less: Provision for income tax (expense) benefit (1,002 ) 47 (1,016
) (347 ) Less: Income (loss) from discontinued operations, net of
income tax 13 4 62 14 Add: Net income (loss) attributable to
noncontrolling interest 3 - 3
1 Operating earnings available to common
shareholders $ 655 $ 846 $ 2,471 $ 2,450
Insurance Products: Net income (loss) available to
MetLife, Inc.'s common shareholders $ 1,258 $ 401 $ 2,098 $ 1,405
Less: Net investment gains (losses) 15 69 55 78 Less: Net
derivative gains (losses) 1,597 86 1,689 711 Less: Other
adjustments to continuing operations (97 ) (70 ) (208 ) (187 )
Less: Provision for income tax (expense) benefit (530 ) (29 ) (538
) (211 ) Less: Income (loss) from discontinued operations, net of
income tax 8 - 36
2 Operating earnings available to common shareholders $ 265
$ 345 $ 1,064 $ 1,012 Retirement
Products: Net income (loss) available to MetLife, Inc.'s common
shareholders $ 667 $ 185 $ 1,173 $ 782 Less: Net investment gains
(losses) 21 5 72 96 Less: Net derivative gains (losses) 956 116
1,220 627 Less: Other adjustments to continuing operations (110 )
(203 ) (281 ) (404 ) Less: Provision for income tax (expense)
benefit (303 ) 28 (354 ) (113 ) Less: Income (loss) from
discontinued operations, net of income tax - 1 - 1 Add: Net income
(loss) attributable to noncontrolling interest 1
- 1 - Operating earnings
available to common shareholders $ 104 $ 238 $ 517
$ 575 Corporate Benefit Funding: Net income
(loss) available to MetLife, Inc.'s common shareholders $ 587 $ 102
$ 1,134 $ 678 Less: Net investment gains (losses) 86 54 86 111
Less: Net derivative gains (losses) 407 (193 ) 228 (123 ) Less:
Other adjustments to continuing operations - 10 60 69 Less:
Provision for income tax (expense) benefit (173 ) 46 (131 ) (26 )
Less: Income (loss) from discontinued operations, net of income tax
5 3 26 11
Add: Net income (loss) attributable to
noncontrolling interest
2 - 2 1
Operating earnings available to common shareholders $ 264 $
182 $ 867 $ 637 Auto & Home: Net
income (loss) available to MetLife, Inc.'s common shareholders $ 15
$ 76 $ 10 $ 219 Less: Net investment gains (losses) (4 ) (3 ) (10 )
(3 ) Less: Net derivative gains (losses) (7 ) (4 ) (10 ) (7 ) Less:
Provision for income tax (expense) benefit 4 2
7 3 Operating earnings available
to common shareholders $ 22 $ 81 $ 23 $ 226
Total International Operations: Net income (loss)
available to MetLife, Inc.'s common shareholders $ 1,070 $ (137 ) $
1,719 $ 56 Less: Net investment gains (losses) (261 ) (239 ) (500 )
(268 ) Less: Net derivative gains (losses) 1,273 (109 ) 1,215 157
Less: Other adjustments to continuing operations (199 ) (145 ) (413
) (413 ) Less: Provision for income tax (expense) benefit (320 )
169 (169 ) 87 Less: Income (loss) from discontinued operations, net
of income tax (11 ) 2 (71 ) 9 Add: Net income (loss) attributable
to noncontrolling interest (10 ) 4 (5 )
(6 ) Operating earnings available to common shareholders $
578 $ 189 $ 1,652 $ 478 Japan:
Net income (loss) available to MetLife, Inc.'s common shareholders
$ 339 $ - $ 931 $ - Less: Net investment gains (losses) (21 ) -
(115 ) - Less: Net derivative gains (losses) 101 - 228 - Less:
Other adjustments to continuing operations (42 ) - 15 - Less:
Provision for income tax (expense) benefit (12 ) - (44 ) - Add: Net
income (loss) attributable to noncontrolling interest 2
- 3 - Operating
earnings available to common shareholders $ 315 $ - $
850 $ - Other International Regions: Net
income (loss) available to MetLife, Inc.'s common shareholders $
731 $ (137 ) $ 788 $ 56 Less: Net investment gains (losses) (240 )
(239 ) (385 ) (268 ) Less: Net derivative gains (losses) 1,172 (109
) 987 157 Less: Other adjustments to continuing operations (157 )
(145 ) (428 ) (413 ) Less: Provision for income tax (expense)
benefit (308 ) 169 (125 ) 87 Less: Income (loss) from discontinued
operations, net of income tax (11 ) 2 (71 ) 9 Add: Net income
(loss) attributable to noncontrolling interest (12 )
4 (8 ) (6 ) Operating earnings available to
common shareholders $ 263 $ 189 $ 802 $ 478
Banking, Corporate & Other: Net income (loss)
available to MetLife, Inc.'s common shareholders $ (45 ) $ (341 ) $
(546 ) $ (523 ) Less: Net investment gains (losses) 88 (228 ) (12 )
(338 ) Less: Net derivative gains (losses) (30 ) (140 ) (109 ) (87
) Less: Other adjustments to continuing operations (72 ) (29 ) (222
) (82 ) Less: Provision for income tax (expense) benefit 22 136 133
177 Less: Income (loss) from discontinued operations, net of income
tax 2 (3 ) 3 (3 ) Add: Net income (loss) attributable to
noncontrolling interest 1 - (4 ) (2 ) Add: Preferred stock
redemption premium - - 146
- Operating earnings available to common
shareholders $ (54 ) $ (77 ) $ (197 ) $ (192 )
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