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MetLife Announces Third Quarter 2012 Results

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.
Consolidated Statements of Operating Earnings Available to Common Shareholders
(Unaudited) (1)
         
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
(In millions) (In millions)
OPERATING REVENUES
Premiums $ 9,080 $ 9,319 $ 27,326 $ 27,121
Universal life and investment-type product policy fees 2,048 1,906 6,056 5,646
Net investment income 5,048 4,961 15,297 14,746
Other revenues   435     418     1,313     1,232  
Total operating revenues   16,611     16,604     49,992     48,745  
 
OPERATING EXPENSES
Policyholder benefits and claims and policyholder dividends 8,995 9,604 27,066 27,315
Interest credited to policyholder account balances 1,589 1,534 4,653 4,521
Capitalization of DAC (1,301 ) (1,524 ) (3,976 ) (4,151 )
Amortization of DAC and VOBA 1,051 1,162 3,231 3,295
Amortization of negative VOBA (155 ) (150 ) (456 ) (476 )
Interest expense on debt 286 327 898 978
Other expenses   4,120     4,332     12,414     12,363  
Total operating expenses   14,585     15,285     43,830     43,845  
 
Operating earnings before provision for income tax 2,026 1,319 6,162 4,900
Provision for income tax expense (benefit)   579     324     1,758     1,376  
Operating earnings 1,447 995 4,404 3,524
Preferred stock dividends   30     30     91     91  
OPERATING EARNINGS AVAILABLE TO COMMON SHAREHOLDERS $ 1,417   $ 965   $ 4,313   $ 3,433  
 
 
Reconciliation to Net Income (Loss) and Financial Statement Line Item Adjustments from GAAP
Operating earnings $ 1,447 $ 995 $ 4,404 $ 3,524
Adjustments from operating earnings to income (loss) from continuing operations:
Net investment gains (losses) 22 (55 ) (152 ) (309 )
Net derivative gains (losses) (718 ) 4,196 (604 ) 4,233
Premiums 16 23 60 69
Universal life and investment-type product policy fees 83 92 250 210
Net investment income 469 (709 ) 1,139 (88 )
Other revenues 20 302 132 646
Policyholder benefits and claims and policyholder dividends (303 ) 202 (942 ) (191 )
Interest credited to policyholder account balances (513 ) 796 (1,028 ) 417
Capitalization of DAC 1 3 5 7
Amortization of DAC and VOBA 43 (556 ) 30 (616 )
Amortization of negative VOBA 15 20 50 60
Interest expense on debt (40 ) (98 ) (128 ) (282 )
Other expenses (263 ) (420 ) (1,187 ) (1,147 )
Goodwill impairment (1,868 ) - (1,868 ) -
Provision for income tax (expense) benefit   632     (1,349 )   1,048     (1,105 )
Income (loss) from continuing operations, net of income tax (957 ) 3,442 1,209 5,428
Income (loss) from discontinued operations, net of income tax   -     8     17     (1 )
Net income (loss) (957 ) 3,450 1,226 5,427
Less: Net income (loss) attributable to noncontrolling interest   (3 )   (6 )   29     (6 )
Net income (loss) attributable to MetLife, Inc. (954 ) 3,456 1,197 5,433
Less: Preferred stock dividends 30 30 91 91
Less: Preferred stock redemption premium   -     -     -     146  
Net income (loss) available to MetLife, Inc.'s common shareholders $ (984 ) $ 3,426   $ 1,106   $ 5,196  
 
MetLife, Inc.
(Unaudited) (1)
                     
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012

2011

2012

2011

Earnings Per Weighted Average Common Shares

Diluted (2), (3)

Earnings Per Weighted Average Common Shares

Diluted (2)

Earnings Per Weighted Average Common Shares

Diluted (2)

Earnings Per Weighted Average Common Shares

Diluted

(In millions, except per share data) (In millions, except per share data)
Reconciliation to Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders
Operating earnings available to common shareholders $ 1,417 $ 1.32 $ 965 $ 0.91 $ 4,313 $ 4.03 $ 3,433 $ 3.21
 
Adjustments from operating earnings available to common shareholders to net income (loss) available
to MetLife, Inc.'s common shareholders:
Add: Net investment gains (losses) 22 0.02 (55) (0.05) (152) (0.14) (309) (0.29)
Add: Net derivative gains (losses) (718) (0.67) 4,196 3.94 (604) (0.57) 4,233 3.96
Add: Goodwill impairment (1,868) (1.74) - - (1,868) (1.75) - -
Add: Other adjustments to continuing operations (472) (0.44) (345) (0.33) (1,619) (1.51) (915) (0.86)
Add: Provision for income tax (expense) benefit 632 0.59 (1,349) (1.28) 1,048 0.98 (1,105) (1.03)
Add: Income (loss) from discontinued operations, net of income tax - - 8 0.01 17 0.02 (1) -
Less: Net income (loss) attributable to noncontrolling interests (3) - (6) (0.01) 29 0.03 (6) (0.01)
Less: Preferred stock redemption premium - - - - - - 146 0.14
Net income (loss) available to MetLife, Inc.'s common shareholders $ (984) $ (0.92) $ 3,426 $ 3.21 $ 1,106 $ 1.03 $ 5,196 $ 4.86
 
Weighted average common shares outstanding - diluted

1071.0

1066.2 1070.0 1068.7
    For the Three Months Ended   For the Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
(In millions) (In millions)
Reconciliation to GAAP Premiums, Fees and Other Revenues
Total operating premiums, fees and other revenues $ 11,563 $ 11,643 $ 34,695 $ 33,999
Add: Adjustments to premiums, fees and other revenues   119     417     442     925  
Total premiums, fees and other revenues $ 11,682   $ 12,060   $ 35,137   $ 34,924  
 
 
Reconciliation to GAAP Revenues and GAAP Expenses
 
Total operating revenues $ 16,611 $ 16,604 $ 49,992 $ 48,745
Add: Net investment gains (losses) 22 (55 ) (152 ) (309 )
Add: Net derivative gains (losses) (718 ) 4,196 (604 ) 4,233
Add: Adjustments related to net investment gains (losses) and net derivative gains (losses) (4 ) 16 10 14
Add: Other adjustments to revenues   592     (308 )   1,571     823  
Total revenues $ 16,503   $ 20,453   $ 50,817   $ 53,506  
 
Total operating expenses $ 14,585 $ 15,285 $ 43,830 $ 43,845
Add: Adjustments related to net investment gains (losses) and net derivative gains (losses) 14 426 79 510
Add: Goodwill impairment 1,868 - 1,868 -
Add: Other adjustments to expenses   1,046     (373 )   3,121     1,242  
Total expenses $ 17,513   $ 15,338   $ 48,898   $ 45,597  
 
 
September 30,
Reconciliation to Book Value Per Common Share (4) 2012 2011
 
Book Value Per Common Share Calculation :
Book value per common share, excluding accumulated other comprehensive
income (loss) - (actual common shares outstanding) $ 47.70 $ 46.50
Add: Accumulated other comprehensive income (loss) per common share   10.65     6.65  
Book value per common share - (actual common shares outstanding) $ 58.35   $ 53.15  
 
Common shares outstanding, end of period (In millions) 1,062.6 1057.6
MetLife, Inc.
Reconciliations to Net Income (Loss) Available to Common Shareholders
(Unaudited)
         
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
(In millions) (In millions)
Total The Americas Operations:
Operating earnings available to common shareholders $ 1,230 $ 780 $ 3,516 $ 2,819
Add: Net investment gains (losses) 31 108 198 202
Add: Net derivative gains (losses) (65 ) 2,910 629 3,086
Add: Goodwill impairment (1,692 ) - (1,692 ) -
Add: Other adjustments to continuing operations (246 ) (287 ) (871 ) (692 )
Add: Provision for income tax (expense) benefit 328 (978 ) 229 (954 )
Add: Income (loss) from discontinued operations, net of income tax - 16 17 66
Less: Net income (loss) attributable to noncontrolling interest   -     3     1     3  
Net income (loss) available to MetLife, Inc.'s common shareholders $ (414 ) $ 2,546   $ 2,025   $ 4,524  
 
Retail (5):
Operating earnings available to common shareholders $ 492 $ 214 $ 1,369 $ 891
Add: Net investment gains (losses) 53 48 178 134
Add: Net derivative gains (losses) 191 1,474 637 1,759
Add: Goodwill impairment (1,692 ) - (1,692 ) -
Add: Other adjustments to continuing operations (254 ) (108 ) (622 ) (317 )
Add: Provision for income tax (expense) benefit 224 (494 ) 153 (550 )
Add: Income (loss) from discontinued operations, net of income tax - 8 10 37
Less: Net income (loss) attributable to noncontrolling interest   -     1     -     1  
Net income (loss) available to MetLife, Inc.'s common shareholders $ (986 ) $ 1,141   $ 33   $ 1,953  
 
Group, Voluntary & Worksite Benefits (5):
Operating earnings available to common shareholders $ 283 $ 153 $ 793 $ 651
Add: Net investment gains (losses) 5 (15 ) 11 (16 )
Add: Net derivative gains (losses) (81 ) 1,034 99 1,089
Add: Other adjustments to continuing operations (33 ) (34 ) (107 ) (101 )
Add: Provision for income tax (expense) benefit 38 (343 ) (1 ) (340 )
Add: Income (loss) from discontinued operations, net of income tax - 2 - 2
Less: Net income (loss) attributable to noncontrolling interest   -     -     -     -  
Net income (loss) available to MetLife, Inc.'s common shareholders $ 212   $ 797   $ 795   $ 1,285  
 
Corporate Benefit Funding:
Operating earnings available to common shareholders $ 303 $ 272 $ 919 $ 886
Add: Net investment gains (losses) (25 ) 83 21 85
Add: Net derivative gains (losses) (194 ) 447 (149 ) 280
Add: Other adjustments to continuing operations (3 ) (2 ) 11 53
Add: Provision for income tax (expense) benefit 78 (185 ) 41 (147 )
Add: Income (loss) from discontinued operations, net of income tax - 6 7 27
Less: Net income (loss) attributable to noncontrolling interest   -     2     -     2  
Net income (loss) available to MetLife, Inc.'s common shareholders $ 159   $ 619   $ 850   $ 1,182  
 
Latin America:
Operating earnings available to common shareholders $ 152 $ 141 $ 435 $ 391
Add: Net investment gains (losses) (2 ) (8 ) (12 ) (1 )
Add: Net derivative gains (losses) 19 (45 ) 42 (42 )
Add: Other adjustments to continuing operations 44 (143 ) (153 ) (327 )
Add: Provision for income tax (expense) benefit (12 ) 44 36 83
Add: Income (loss) from discontinued operations, net of income tax - - - -
Less: Net income (loss) attributable to noncontrolling interest   -     -     1     -  
Net income (loss) available to MetLife, Inc.'s common shareholders $ 201   $ (11 ) $ 347   $ 104  
 
Asia (6):
Operating earnings available to common shareholders $ 259 $ 222 $ 839 $ 621
Add: Net investment gains (losses) (47 ) (34 ) (168 ) (196 )
Add: Net derivative gains (losses) (31 ) 168 (11 ) 229
Add: Other adjustments to continuing operations (15 ) (26 ) (11 ) 2
Add: Provision for income tax (expense) benefit 27 (55 ) 59 (14 )
Add: Income (loss) from discontinued operations, net of income tax - (11 ) - (71 )
Less: Net income (loss) attributable to noncontrolling interest   8     1     25     1  
Net income (loss) available to MetLife, Inc.'s common shareholders $ 185   $ 263   $ 683   $ 570  
 
EMEA (6):
Operating earnings available to common shareholders $ 62 $ 65 $ 212 $ 204
Add: Net investment gains (losses) 73 (220 ) 37 (304 )
Add: Net derivative gains (losses) 13 22 56 29
Add: Other adjustments to continuing operations (12 ) (25 ) (22 ) (71 )
Add: Provision for income tax (expense) benefit (32 ) 84 (18 ) 107
Add: Income (loss) from discontinued operations, net of income tax - - - -
Less: Net income (loss) attributable to noncontrolling interest   (5 )   (11 )   6     (6 )
Net income (loss) available to MetLife, Inc.'s common shareholders $ 109   $ (63 ) $ 259   $ (29 )
 
Corporate & Other (1):
Operating earnings available to common shareholders $ (134 ) $ (102 ) $ (254 ) $ (211 )
Add: Net investment gains (losses) (35 ) 91 (219 ) (11 )
Add: Net derivative gains (losses) (635 ) 1,096 (1,278 ) 889
Add: Goodwill impairment (176 ) - (176 ) -
Add: Other adjustments to continuing operations (199 ) (7 ) (715 ) (154 )
Add: Provision for income tax (expense) benefit 309 (400 ) 778 (244 )
Add: Income (loss) from discontinued operations, net of income tax - 3 - 4
Less: Net income (loss) attributable to noncontrolling interest (6 ) 1 (3 ) (4 )
Less: Preferred stock redemption premium   -     -     -     146  
Net income (loss) available to MetLife, Inc.'s common shareholders $ (864 ) $ 680   $ (1,861 ) $ 131  
MetLife, Inc.
GAAP Interim Condensed Consolidated Statements of Operations
(Unaudited)
         
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
(In millions)
Revenues
Premiums $ 9,096 $ 9,342 $ 27,386 $ 27,190
Universal life and investment-type product policy fees 2,131 1,998 6,306 5,856
Net investment income 5,517 4,252 16,436 14,658
Other revenues 455 720 1,445 1,878
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities (57 ) (95 ) (310 ) (525 )
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income (loss) 10 (189 ) 39 (5 )
Other net investment gains (losses)   69     229     119     221  
Total net investment gains (losses) 22 (55 ) (152 ) (309 )
Net derivative gains (losses)   (718 )   4,196     (604 )   4,233  
Total revenues   16,503     20,453     50,817     53,506  
 
Expenses
Policyholder benefits and claims 8,943 9,018 26,958 26,376
Interest credited to policyholder account balances 2,102 738 5,681 4,104
Policyholder dividends 355 384 1,050 1,130
Goodwill impairment 1,868 - 1,868 -
Other expenses   4,245     5,198     13,341     13,987  
Total expenses   17,513     15,338     48,898     45,597  
 
Income (loss) from continuing operations before provision for income tax (1,010 ) 5,115 1,919 7,909
Provision for income tax expense (benefit)   (53 )   1,673     710     2,481  
Income (loss) from continuing operations, net of income tax (957 ) 3,442 1,209 5,428
Income (loss) from discontinued operations, net of income tax   -     8     17     (1 )
Net income (loss) (957 ) 3,450 1,226 5,427
Less: Net income (loss) attributable to noncontrolling interests   (3 )   (6 )   29     (6 )
Net income (loss) attributable to MetLife, Inc. (954 ) 3,456 1,197 5,433
Less: Preferred stock dividends 30 30 91 91
Preferred stock redemption premium   -     -     -     146  
Net income (loss) available to MetLife, Inc.'s common shareholders $ (984 ) $ 3,426   $ 1,106   $ 5,196  
(1)   Certain amounts in the prior periods have been revised to conform with current period presentation. In the third quarter of 2012, MetLife, Inc. began reporting additional MetLife Bank operations as Divested businesses.
 
(2) For the three and nine months ended September 30, 2012 and the three months ended September 30, 2011, all shares related to the assumed issuance of shares in settlement of the applicable purchase contracts of the common equity units have been excluded from the weighted average common shares outstanding - diluted, as these assumed shares would be anti-dilutive to operating earnings available to common shareholders per common share - diluted and net income available to MetLife, Inc.’s common shareholders per common share - diluted.
 
(3) For the three months ended September 30, 2012, 6.0 million shares related to the assumed exercise or issuance of stock-based awards should be excluded from the weighted average common shares outstanding - diluted, as to include these assumed shares would be anti-dilutive to net income (loss) available to MetLife, Inc.'s common shareholders per common share - diluted. These shares were included in the calculation of operating earnings available to common shareholders per common share - diluted.
 
(4) Book value per common share and book value per common share, excluding accumulated other comprehensive income (loss) exclude $2,043 million of equity related to preferred stock.
 
(5) Certain amounts in prior periods have been revised to conform with current period presentation. In the third quarter of 2012, MetLife, Inc. further realigned certain products among its existing segments to better conform to the way it manages and assesses its business, and began reporting certain individual disability income and property & casualty products in the Retail segment, which were previously reported in the Group, Voluntary & Worksite Benefits segment.
 
(6) Certain amounts in prior periods have been revised to conform with current period presentation. In the third quarter of 2012, MetLife, Inc. further realigned certain businesses among its existing segments to better conform to the way it manages and assesses its business, and began reporting the results of South Asia and India in the Asia segment, which were previously reported in the EMEA segment.




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