MetLife, Inc. (NYSE:MET) today reported the following results for the third quarter of 2013:
MetLife reported operating earnings* of $1.5 billion, up 6% over the third quarter of 2012. On a per share basis, operating earnings were $1.34, up 2% over the prior year quarter. Growth on a per share basis was dampened by the increase in the common share count resulting from the conversion of equity units issued in 2010 to fund the Alico acquisition. Operating earnings in the Americas grew 7%. Operating earnings in Asia decreased 1% on a reported basis, but increased 7% on a constant currency basis. Operating earnings in Europe, the Middle East and Africa (EMEA) increased 37% on a reported basis and 28% on a constant currency basis.
Third quarter 2013 operating earnings included the following items:
- strengthening of group total and permanent disability claim reserves in Australia, net of reinsurance, which reduced operating earnings by $57 million or $0.05 per share
- results of the annual actuarial assumption review, which increased operating earnings by $28 million or $0.03 per share
- favorable catastrophe experience and prior year loss reserve development, which increased operating earnings by $21 million relative to plan, or $0.02 per share
MetLife reported third quarter 2013 net income of $942 million, or $0.84 per share, including $355 million, after tax, in net derivative losses. Increases in interest rates, changes in foreign currencies and the impact of MetLife’s own credit during the quarter contributed to the net derivative losses. MetLife uses derivatives as part of its broader asset-liability management strategy to hedge certain risks, such as movements in interest rates and foreign currencies. This hedging activity often generates derivative gains or losses and creates fluctuations in net income because the risk being hedged may not have the same GAAP accounting treatment. Net income also reflects a total after tax charge of $69 million related to the annual actuarial assumption review.