MetLife, Inc. (NYSE:MET) today announced the following results
for the fourth quarter and full year 2016:
Fourth Quarter Results
On a GAAP basis, MetLife reported a fourth quarter 2016 net loss
of $2.1 billion, compared to net income of $785 million in the
fourth quarter of 2015. On a per share basis, the net loss was
$1.94, compared to net income of $0.70 per share in the prior-year
period.
The net loss includes $3.2 billion, after tax, in net derivative
losses reflecting changes in interest rates, foreign currencies and
equity markets, compared to $231 million, after tax, in net
derivative losses in the fourth quarter of 2015. 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. Approximately 94 percent of the net derivative losses in
the quarter were attributable to asymmetrical and non-economic
accounting. Excluding asymmetrical and non-economic accounting
impacts, fourth quarter 2016 net income was $768 million.
MetLife reported operating earnings* of $1.4 billion, up 3
percent from the fourth quarter of 2015, and 4 percent on a
constant currency basis*. On a per share basis, operating earnings
were $1.28, up 4 percent from the prior-year quarter.
Fourth quarter 2016 operating earnings included the following
notable items:
- changes in deferred policy acquisitions
costs (DAC) associated with the annual fourth quarter approval of
the dividend scale for traditional life insurance policies, and
other insurance adjustments, decreased operating earnings by $58
million, or $0.05 per share, after tax
- expenses related to the company’s
previously announced unit cost initiative, which decreased
operating earnings by $28 million, or $0.03 per share, after
tax
Operating earnings in the U.S. segment increased 19 percent year
over year. Operating earnings in Asia increased 22 percent, and 17
percent on a constant currency basis. Operating earnings in Latin
America decreased 22 percent, and 9 percent on a constant currency
basis. Operating earnings in Europe, the Middle East and Africa
(EMEA) increased 33 percent, and 44 percent on a constant currency
basis. Operating earnings in MetLife Holdings decreased 25 percent.
Operating earnings in Brighthouse Financial decreased 15 percent,
including $35 million related to separation activities which
increased operating earnings in Brighthouse Financial, but was
completely offset in MetLife Holdings.
The fourth quarter variance between operating earnings and net
income reflects an unfavorable impact of $2.9 billion, after tax,
related to asymmetrical and non-economic accounting.
Premiums, fees & other revenues were $12.4 billion, down 1
percent over the fourth quarter of 2015. Operating premiums, fees
& other revenues* were $12.3 billion, down 1 percent on both a
reported and constant currency basis.
Full Year Results
For the full year 2016, MetLife reported net income of $697
million, down 86 percent. On a per share basis, net income was
$0.63, down 86 percent from full year 2015. Net derivative losses
negatively impacted full year net income.
Full year 2016 operating earnings were $5.1 billion, down 7
percent. On a per share basis, 2016 operating earnings were $4.59,
down 6 percent over 2015. Excluding notable items in both years,
operating earnings were down 5 percent. Operating results excluding
notable items varied by segment as shown in the table below.
FULL YEAR 2016 CHANGE IN OPERATING
EARNINGS FROM FULL YEAR 2015
Reported Reported (excluding (excluding all
all notable items, Reported notable items)
constant currency) U.S. (4)% 1% 1% Asia (10)% (2)%
(5)% Latin America (13)% 2% 18% EMEA 14% 24% 33% MetLife Holdings
(44)% (15)% (15)% Corporate & Other (60)% (13)% (13)%
Brighthouse Financial (32)% (17)% (17)%
Total (7)% (5)% (4)% EPS (6)% (3)% (3)% Shares Outstanding
(2)%
“While rising interest rates are good for MetLife’s businesses,
they reduced the carrying value of our derivatives book and
produced a quarterly net loss on a GAAP basis,” said Steven A.
Kandarian, chairman, president and CEO, MetLife, Inc. “For
full-year 2016 excluding notable items, market factors and
underwriting reduced earnings while management actions to control
expenses and generate volume growth were positive. Share
repurchases had a positive impact on earnings per share, and
underlying free cash flow improved significantly as a result of our
value-creation efforts. The prospect of higher interest rates and a
more favorable regulatory environment, together with our new
enterprise strategy, capital management and expense discipline,
position us for value creation for both our customers and
shareholders.”
FOURTH QUARTER & FULL YEAR 2016
SUMMARY
($ in millions, except per share data)
Three months ended Dec.
31 Year ended Dec. 31
2016 2015 Change
2016 2015 Change Premiums, fees & other
revenues $12,351 12,424 (1)% $50,118 $50,035 - Net investment
income 5,037 4,914 3% 19,947 19,281 3% Net investment gains
(losses) (367) 62 171 597 (71)% Net derivative gains (losses)
(4,945) (356)
(6,760) 38 Total revenues
$12,076 $17,044 (29)% $63,476 $69,951 (9)% Total operating
revenues $17,203 $17,111 1% $68,878 $69,470 (1)% Operating
premiums, fees & other revenues $12,250 $12,338 (1)% $49,178
$49,681 (1)%
Net income
$(2,133)
$ 785
$ 697
$ 5,152
(86)%
Net income per share $ (1.94) $ 0.70 $ 0.63 $ 4.57 (86)%
Operating earnings $ 1,415 $ 1,376 3% $ 5,089 $ 5,484 (7)%
Operating earnings per share $ 1.28 $ 1.23 4% $ 4.59 $ 4.86 (6)%
Book value per share $ 59.56 $ 60.00 (1)% Book value per
share, excluding accumulated other comprehensive income (AOCI)
other than foreign currency translation adjustments (FCTA) $ 49.83
$ 51.15 (3)% Book value per share – tangible common stockholders’
equity $ 41.14 $ 42.22 (3)% Return on equity (ROE) (12.1)%
4.7% 1.0% 7.5% ROE, excluding AOCI other than FCTA (15.1)% 5.6%
1.2% 9.1% Tangible ROE (18.1)% 6.8% 1.6% 11.2% Operating ROE,
excluding AOCI other than FCTA 10.0% 9.7% 8.9% 9.7% Operating
tangible ROE 12.2% 11.9%
10.8% 11.9%
*Information regarding the non-GAAP and other financial measures
included in this news release and the reconciliation of the
non-GAAP financial measures to GAAP measures is provided in the
Non-GAAP and Other Financial Disclosures discussion below, as well
as in the tables that accompany this news release and/or the Fourth
Quarter 2016 Financial Supplement (which is available on the
MetLife Investor Relations web page at www.metlife.com).
Book value, excluding AOCI other than FCTA*, was $49.83 per
share, down 3 percent from $51.15 at Dec. 31, 2015.
MetLife’s fourth quarter 2016 operating ROE, excluding AOCI
other than FCTA*, was 10.0 percent for the fourth quarter of 2016,
and the company’s operating tangible ROE* was 12.2 percent.
MetLife’s full year 2016 operating ROE, excluding AOCI other
than FCTA, was 8.9 percent for full year 2016, and the company’s
operating tangible ROE was 10.8 percent.
BUSINESS DISCUSSIONS
All comparisons of the results for the fourth quarter of 2016 in
the business discussions that follow are with the fourth quarter of
2015, unless otherwise noted. Re-segmented results for certain
prior periods were reported by MetLife, Inc. in a Form 8-K
furnished to the U.S. Securities and Exchange Commission (SEC) on
Oct. 20, 2016.
U.S.
Total operating earnings for the U.S. were $516 million, up 19
percent. Operating return on allocated equity was 19.1 percent, and
operating return on allocated tangible equity was 21.0 percent.
Operating premiums, fees & other revenues were $5.8 billion, up
4 percent. Excluding pension risk transfers, operating premiums,
fees & other revenues were up 2 percent.
Group Benefits
Operating earnings for Group Benefits were $174 million, up 14
percent, due to favorable expense margins and volume growth.
Operating premiums, fees & other revenues were $4.0 billion, up
5 percent, driven by growth across all markets. Full year 2016
Group Benefits sales were up 24 percent over the prior year.
Retirement and Income Solutions
Operating earnings for Retirement and Income Solutions were $299
million, up 27 percent, due to higher investment margins and
favorable underwriting. Operating premiums, fees & other
revenues were $895 million, up 5 percent. Excluding pension risk
transfers, operating premiums, fees & other revenues were down
19 percent.
Property & Casualty
Operating earnings for Property & Casualty were $43 million,
down 2 percent, due to less favorable auto results. Operating
premiums, fees & other revenues were $887 million, up 1
percent. Property & Casualty sales overall were down 9
percent.
ASIA
Operating earnings for Asia were $354 million, up 22 percent,
and 17 percent on a constant currency basis. Excluding all notable
items from the prior-year period, operating earnings were up 13
percent, and 8 percent on a constant currency basis. Operating
earnings benefitted from volume growth, favorable markets and a
tax-related item in Japan. Operating return on allocated equity was
12.8 percent, and operating return on allocated tangible equity was
22.1 percent.
Operating premiums, fees & other revenues in Asia were $2.1
billion, up 5 percent, but down 2 percent on a constant currency
basis. Excluding the impact of the 2016 deconsolidation of the
company’s India operations, operating premiums, fees & other
revenues in Asia were up 2 percent on a constant currency basis.
Total sales for the region were essentially unchanged on a constant
currency basis, representing the impact of management’s actions to
improve value in targeted markets. Sales in emerging markets were
up 13 percent.
LATIN AMERICA
Operating earnings for Latin America were $122 million, down 22
percent, and 9 percent on a constant currency basis, due to a
one-time tax benefit in the prior-year quarter and higher expenses
in the fourth quarter of 2016. Excluding all notable items from the
prior-year period, operating earnings were down 5 percent, but up 5
percent on constant currency basis. Operating return on allocated
equity was 15.9 percent, and operating return on allocated tangible
equity was 25.2 percent.
Operating premiums, fees & other revenues were $913 million,
down 2 percent, but up 5 percent on a constant currency basis.
Total sales for the region were essentially unchanged on a constant
currency basis.
EMEA
Operating earnings for EMEA were $72 million, up 33 percent, and
44 percent on a constant currency basis, driven by unit cost
improvement, a claims reserve release in the Gulf, and volume
growth. Operating return on allocated equity was 8.9 percent, and
operating return on allocated tangible equity was 15.6 percent.
Operating premiums, fees & other revenues were $622 million,
essentially unchanged, and up 4 percent on a constant currency
basis, driven by growth in employee benefits and accident &
health. Total sales for the region increased 5 percent on a
constant currency basis.
METLIFE HOLDINGS
Operating earnings for MetLife Holdings were $199 million, down
25 percent, primarily due to unfavorable underwriting and certain
insurance adjustments, including $35 million related to separation
activities which was completely offset in Brighthouse Financial.
These adjustments were partially offset by lower expenses,
including those related to the sale of the MetLife Premier Client
Group in 2016. Operating return on allocated equity was 7.2
percent, and operating return on allocated tangible equity was 7.7
percent. Operating premiums, fees & other revenues were $1.6
billion, down 9 percent, mostly due to the sale of the MetLife
Premier Client Group, which included the company’s affiliated
broker-dealer unit.
CORPORATE & OTHER
Corporate & Other had an operating loss of $178 million,
compared to an operating loss of $210 million in the fourth quarter
of 2015. This loss includes the previously mentioned $28 million in
expenses related to the company's unit cost initiative.
BRIGHTHOUSE FINANCIAL
Brighthouse Financial reported operating earnings of $330
million, down 15 percent, primarily due to life reserve changes and
lower separate account fees. As noted above, operating earnings
included a $35 million benefit related to separation activities
which was completely offset in MetLife Holdings. Operating
premiums, fees & other revenues were $1.3 billion, compared to
$1.6 billion in the fourth quarter of 2015, driven by lower single
premium income annuity sales. Overall Life and Annuity sales were
down 36 percent, but sales of the company’s variable indexed
product, Shield Level SelectorSM, for the fourth quarter of 2016
were $457 million, up 45 percent year over year and 17 percent from
the third quarter of 2016.
INVESTMENTS
Net investment income was $5.0 billion, up 4 percent. Variable
investment income was $301 million ($196 million, after tax and
DAC), as compared to $109 million ($71 million, after tax and DAC)
in the fourth quarter of 2015, driven by strong private equity
performance.
Changes in interest rates, foreign currencies and equity markets
drove derivative net losses of $3.4 billion, after tax and other
adjustments. Derivative net losses in the fourth quarter of 2015
were $375 million, after tax and other adjustments.
Conference Call
MetLife will hold its fourth quarter and full year 2016 earnings
conference call and audio webcast on Thursday, Feb. 2, 2017, from
8-9 a.m. (EST). The conference call will be available live via
telephone and the internet. To listen via telephone, dial
800-288-8975 (U.S.) or 612-288-0337 (outside the U.S.). To listen
to the conference call via the internet, visit www.metlife.com
through a link on the Investor Relations page. Those who want to
listen to the call via telephone or the internet should dial in or
go to the website at least 15 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 a.m. (EST) on Thursday, Feb. 2,
2017, until Thursday, Feb. 9, 2017, at 11:59 p.m. (EST). To listen
to a replay of the conference call via telephone, dial 800-475-6701
(U.S.) or 320-365-3844 (outside the U.S.). The access code for the
replay is 407063. To access the replay of the conference call over
the internet, visit the above-mentioned website.
Supplemental slides related to the company’s derivative losses
and tax rate for the fourth quarter and full year 2016, titled
“4Q16 Supplemental Slides,” are available on the MetLife Investor
Relations website at www.metlife.com in the Conferences &
Presentations section, and in the Form 8-K furnished by MetLife to
the SEC on Feb. 1, 2017.
A brief video of CFO John Hele discussing fourth quarter and
full year 2016 results can be viewed shortly after the conclusion
of MetLife’s fourth quarter and full year 2016 earnings conference
call and audio webcast on Thursday, Feb. 2, at www.metlife.com/earningsvideo.
About MetLife
MetLife, Inc. (NYSE: MET), through its subsidiaries and
affiliates (“MetLife”), is one of the largest life insurance
companies in the world. Founded in 1868, MetLife is a global
provider of life insurance, annuities, employee benefits and asset
management. Serving approximately 100 million customers, MetLife
has operations in nearly 50 countries and holds leading market
positions in the United States, Japan, Latin America, Asia, Europe
and the Middle East. For more information, visit
www.metlife.com.
Non-GAAP and Other
Financial Disclosures
Any references in this news release (except in this section and
the tables that accompany this release) to: should be read
as, respectively: (i) net income (loss); (i) net
income (loss) available to MetLife, Inc.’s common shareholders;
(ii) net income (loss) per share; (ii) net income (loss)
available to MetLife, Inc.’s common shareholders per diluted common
share; (iii) operating earnings; (iii) operating earnings
available to common shareholders; (iv) operating earnings
per share; (iv) operating earnings available to common shareholders
per diluted common share; (v) book value per share; (v) book
value per common share; (vi) book value per share, excluding
AOCI other than FCTA; (vi) book value per common share, excluding
AOCI other than FCTA; (vii) book value per share-tangible
common stockholders’ equity; (vii) book value per common
share-tangible common stockholders’ equity; (viii) premiums,
fees and other revenues; (viii) premiums, fees and other revenues
(operating); (ix) return on equity; (ix) return on MetLife,
Inc.’s common stockholders’ equity; (x) return on equity,
excluding AOCI other than FCTA; (x) return on MetLife, Inc.’s
common stockholders’ equity, excluding AOCI, other than FCTA;
(xi) operating return on equity, excluding AOCI other than
FCTA; (xi) operating return on MetLife, Inc.’s common stockholders’
equity, excluding AOCI other than FCTA; (xii) tangible
return on equity; and (xii) return on MetLife, Inc.’s tangible
common stockholders' equity; and (xiii) operating tangible
return on equity. (xiii) operating return on MetLife, Inc.’s
tangible common stockholders’ equity.
In this news release, MetLife presents certain measures of its
performance that are not calculated in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). MetLife believes that these non-GAAP financial measures
enhance the understanding of MetLife’s performance by highlighting
the results of operations and the underlying profitability drivers
of the business. The following non-GAAP financial measures should
not be viewed as substitutes for the most directly comparable
financial measures calculated in accordance with GAAP:
Non-GAAP financial measures:
Comparable GAAP financial
measures:
(i) operating revenues; (i) revenues; (ii)
operating expenses; (ii) expenses; (iii) operating premiums,
fees and other revenues; (iii) premiums, fees and other revenues;
(iv) operating earnings; (iv) income (loss) from continuing
operations, net of income tax; (v) operating earnings
available to common shareholders; (v) net income (loss) available
to MetLife, Inc.’s common shareholders; (vi) operating
earnings available to common shareholders on a constant currency
basis; (vi) net income (loss) available to MetLife, Inc.’s common
shareholders; (vii) operating earnings available to common
shareholders, adjusted for total notable items; (vii) net income
(loss) available to MetLife, Inc.’s common shareholders;
(viii) operating earnings available to common shareholders,
adjusted for total notable items, on a constant currency basis;
(viii) net income (loss) available to MetLife, Inc.’s common
shareholders;
(ix)
net income (loss) available to MetLife,
Inc.’s common shareholders, excluding asymmetrical and non-economic
accounting;
(ix)
net income (loss) available to MetLife,
Inc.’s common shareholders;
(x)
operating earnings available to common
shareholders per diluted common share;
(x)
net income (loss) available to MetLife,
Inc.’s common shareholders per diluted common share;
(xi) operating earnings available to common shareholders,
adjusted for total notable items per diluted common share; (xi) net
income (loss) available to MetLife, Inc.’s common shareholders per
diluted common share; (xii) operating earnings available to
common shareholders, adjusted for total notable items, on a
constant currency basis per diluted common share; (xii) net income
(loss) available to MetLife, Inc.’s common shareholders per diluted
common share; (xiii) operating return on equity; (xiii)
return on equity; (xiv) investment portfolio gains (losses);
(xiv) net investment gains (losses); (xv) derivative gains
(losses); (xv) net derivative gains (losses); (xvi) MetLife,
Inc.’s tangible common stockholders’ equity; (xvi) MetLife, Inc.’s
stockholders’ equity; (xvii) MetLife, Inc.’s tangible common
stockholders’ equity, adjusted for total notable items; (xvii)
MetLife, Inc.’s stockholders’ equity; (xviii) MetLife,
Inc.’s common stockholders’ equity, excluding AOCI other than FCTA;
(xviii) MetLife, Inc.’s stockholders’ equity; (xix) MetLife,
Inc.’s common stockholders’ equity, excluding AOCI other than FCTA,
adjusted for total notable items; and (xix) MetLife, Inc.’s
stockholders’ equity; and (xx) free cash flow of all holding
companies. (xx) MetLife, Inc.’s net cash provided by (used in)
operating activities.
Reconciliations of these non-GAAP measures to the most directly
comparable GAAP measures are included in this earnings news release
and in this period’s quarterly financial supplement, which is
available at www.metlife.com.
MetLife’s definitions of the various non-GAAP and other
financial measures discussed in this news release may differ from
those used by other companies:
Operating earnings and related measures
- operating earnings;
- operating earnings available to common
shareholders;
- operating earnings available to common
shareholders on a constant currency basis;
- operating earnings available to common
shareholders, adjusted for total notable items;
- operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis;
- operating earnings available to common
shareholders per diluted common share;
- operating earnings available to common
shareholders, adjusted for total notable items per diluted common
share; and
- operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis per diluted common share;
These measures are used by management to evaluate performance
and allocate resources. Consistent with GAAP guidance for segment
reporting, operating earnings is also MetLife’s GAAP measure of
segment performance. Operating earnings and other financial
measures based on operating earnings are also the measures 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 and other
financial measures based on operating earnings allow analysis of
our performance relative to our business plan and facilitate
comparisons to industry results.
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 and operating
expenses
These financial measures, along with the related operating
premiums, fees and other revenues, focus on our primary businesses
principally by excluding the impact of market volatility, which
could distort trends, and revenues and costs related to non-core
products and divested businesses and certain entities required to
be consolidated under GAAP. Also, these measures exclude results of
discontinued operations and other businesses that have been or will
be sold or exited by MetLife and are referred to as divested
businesses. In addition, for the year ended Dec. 31, 2016,
operating revenues and operating expenses exclude the financial
impact of converting MetLife’s Japan operations to calendar-year
end reporting without retrospective application of this change to
prior periods and is referred to as lag elimination. Operating
revenues also excludes net investment gains (losses) (NIGL) and net
derivative gains (losses) (NDGL). Operating expenses also excludes
goodwill impairments.
The following additional adjustments are made to revenues, in
the line items indicated, in calculating operating revenues:
- Universal life and investment-type
product policy fees excludes 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
earned income on derivatives and amortization of premium on
derivatives that are hedges of investments or that are used to
replicate certain investments but do not qualify for hedge
accounting treatment, (ii) excludes post-tax operating earnings
adjustments relating to insurance joint ventures accounted for
under the equity method, (iii) excludes certain amounts related to
contractholder-directed unit-linked investments, and (iv) 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 additional adjustments are made to expenses, in
the line items indicated, in calculating operating expenses:
- Policyholder benefits and claims and
policyholder dividends excludes: (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 and other pass through
adjustments, (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 earned income on
derivatives 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 operating expenses excludes costs
related to: (i) noncontrolling interests, (ii) implementation of
new insurance regulatory requirements, and (iii) acquisition,
integration and other costs.
Operating earnings also excludes the recognition of certain
contingent assets and liabilities that could not be recognized at
acquisition or adjusted for during the measurement period under
GAAP business combination accounting guidance.
The tax impact of the adjustments mentioned above are calculated
net of the U.S. or foreign statutory tax rate, which could differ
from the Company’s effective tax rate. Additionally, the provision
for income tax (expense) benefit also includes the impact related
to the timing of certain tax credits, as well as certain tax
reforms.
Investment portfolio gains (losses) and derivative gains
(losses)
These are measures of investment and hedging activity.
Investment portfolio gains (losses) principally excludes amounts
that are reported within net investment gains (losses) but do not
relate to the performance of the investment portfolio, such as
gains (losses) on sales and divestitures of businesses or goodwill
impairment. Derivative gains (losses) principally excludes earned
income on derivatives and amortization of premium on derivatives,
where such derivatives are either hedges of investments or are used
to replicate certain investments, and where such derivatives do not
qualify for hedge accounting. This earned income and amortization
of premium is reported within operating earnings and not within
derivative gains (losses).
Return on equity, allocated equity, tangible equity and
related measures
- MetLife, Inc.’s common stockholders’
equity, excluding AOCI other than FCTA: MetLife, Inc.’s common
stockholders’ equity, excluding the net unrealized investment gains
(losses) and defined benefit plans adjustment components of AOCI,
net of income tax.
- MetLife, Inc.’s common stockholders’
equity, excluding AOCI other than FCTA, adjusted for total notable
items.
- Operating return on MetLife, Inc.'s
common stockholders' equity, excluding AOCI other than FCTA:
operating earnings available to common shareholders divided by
MetLife, Inc.'s average common stockholders' equity, excluding AOCI
other than FCTA.
- Operating return on MetLife, Inc.'s
common stockholders' equity: operating earnings available to common
shareholders divided by MetLife, Inc.'s average common
stockholders' equity.
- Return on MetLife, Inc.'s common
stockholders' equity, excluding AOCI other than FCTA: net income
(loss) available to MetLife, Inc.’s common shareholders divided by
MetLife, Inc.'s average common stockholders' equity, excluding AOCI
other than FCTA.
- Return on MetLife, Inc.’s common
stockholders’ equity: net income (loss) available to MetLife,
Inc.’s common shareholders divided by MetLife, Inc.’s average
common stockholders’ equity.
- Allocated equity: portion of MetLife,
Inc.’s common stockholders’ equity that management allocates to
each of its segments and sub-segments based on local capital
requirements and economic capital. Economic capital is an
internally developed risk capital model, the purpose of which is to
measure the risk in the business and to provide a basis upon which
capital is deployed. MetLife management periodically reviews this
model to ensure that it remains consistent with emerging industry
practice standards and the local capital requirements; allocated
equity may be adjusted if warranted by such review. Allocated
equity excludes the impact of AOCI other than FCTA.
- Operating return on allocated equity:
operating earnings available to common shareholders divided by
allocated equity.
- Return on allocated equity: net income
(loss) available to MetLife, Inc.’s common shareholders divided by
allocated equity.
The above measures represent a level of equity consistent with
the view that, in the ordinary course of business, we do not plan
to sell most investments for the sole purpose of realizing gains or
losses. Also refer to the utilization of operating earnings and
other financial measures based on operating earnings mentioned
above.
- MetLife, Inc.’s tangible common
shareholders’ equity or tangible equity: MetLife, Inc.’s common
stockholders’ equity, excluding the net unrealized investment gains
(losses) and defined benefit plans adjustment components of AOCI
reduced by the impact of goodwill, value of distribution agreements
(VODA) and value of customer relationships acquired (VOCRA), all
net of income tax.
- MetLife, Inc.’s tangible common
stockholders’ equity, adjusted for total notable items.
- Operating return on MetLife, Inc.'s
tangible common stockholders' equity: operating earnings available
to common shareholders, excluding amortization of VODA and VOCRA,
net of income tax, divided by MetLife, Inc.'s average tangible
common stockholders' equity.
- Return on MetLife, Inc.’s tangible
common stockholders' equity: net income (loss) available to
MetLife, Inc.’s common shareholders, excluding goodwill impairment
and amortization of VODA and VOCRA, net of income tax, divided by
MetLife, Inc.'s average tangible common stockholders' equity.
- Operating return on allocated tangible
equity: operating earnings available to common shareholders,
excluding amortization of VODA and VOCRA, net of income tax,
divided by allocated tangible equity.
- Return on allocated tangible equity:
net income (loss) available to MetLife, Inc.’s common shareholders,
excluding amortization of VODA and VOCRA, net of income tax,
divided by allocated tangible equity.
The above measures are, when considered in conjunction with
regulatory capital ratios, a measure of capital adequacy.
The following additional information is relevant to an
understanding of MetLife’s performance results:
- Operating expense ratio: calculated by
dividing operating expenses (other expenses, net of capitalization
of DAC) by operating premiums, fees and other revenues.
- Statistical sales information for U.S.
MetLife Holdings and Brighthouse are calculated (i) for life sales
using the LIMRA 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, and (ii) annuity sales consist
of statutory premiums direct and assumed, excluding company
sponsored internal exchanges. Sales statistics do not correspond to
revenues under GAAP, but are used as relevant measures of business
activity.
- Statistical sales information for Latin
America, Asia and EMEA is calculated using 10% of single-premium
deposits (mainly from retirement products such as variable annuity,
fixed annuity and pensions), 20% of single-premium deposits from
credit insurance and 100% of annualized full-year premiums and fees
from recurring-premium policy sales of all products (mainly from
risk and protection products such as individual life, accident
& health and group). Sales statistics do not correspond to
revenues under GAAP, but are used as relevant measures of business
activity.
- All comparisons on a constant currency
basis reflect the impact of changes in foreign currency exchange
rates and are calculated using the average foreign currency
exchange rates for the current period and are applied to each of
the comparable periods.
- Volume growth, as discussed in the
context of business growth, is the period over period percentage
change in operating earnings available to common shareholders
attributable to operating premiums, fees and other revenues and
assets under management levels, applying a model in which certain
margins and factors are held constant. The most significant of
such items are underwriting margins, investment margins, changes in
equity market performance, expense margins and the impact of
changes in foreign currency exchange rates.
- Asymmetrical and non-economic
accounting refer to: (i) the portion of net derivative gains
(losses) on embedded derivatives attributable to the inclusion of
MetLife’s credit spreads in the liability valuations, (ii) hedging
activity that generates net derivative gains (losses) and creates
fluctuations in net income because hedge accounting cannot be
achieved and the item being hedged does not a have an offsetting
gain or loss recognized in earnings, (iii) 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 and other pass through
adjustments, and (iv) impact of changes in foreign currency
exchange rates on the re-measurement of foreign denominated
unhedged funding agreements and financing transactions to the U.S.
dollar and the re-measurement of certain liabilities from
non-functional currencies to functional currencies. MetLife
believes that excluding the impact of asymmetrical and non-economic
accounting from total GAAP results enhances investor understanding
of MetLife’s performance by disclosing how these accounting
practices affect reported GAAP results.
- MetLife uses a measure of free cash
flow to facilitate an understanding of its ability to generate cash
for reinvestment into its businesses or use in non-mandatory
capital actions. MetLife defines free cash flow as the sum of cash
available at MetLife’s holding companies from dividends from
operating subsidiaries, expenses and other net flows of the holding
companies (including capital contributions to subsidiaries), and
net contributions from debt to be at or below target leverage
ratios. This measure of free cash flow is prior to capital actions,
such as common stock dividends and repurchases, debt reduction and
mergers and acquisitions. Free cash flow should not be viewed as a
substitute for net cash provided by (used in) operating activities
calculated in accordance with GAAP. The free cash flow ratio is
typically expressed as a percentage of annual operating earnings
available to common shareholders.
Forward-Looking Statements
This news 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, or are tied to future periods, 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.
These factors include: (1) difficult conditions in the global
capital markets; (2) increased volatility and disruption of
the global capital and credit markets, which may affect our ability
to meet liquidity needs and access capital, including through our
credit facilities, 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, including assets supporting risks ceded to
certain of our captive reinsurers or hedging arrangements
associated with those risks; (3) exposure to global financial
and capital market risks, including as a result of the pending
withdrawal of the United Kingdom from the European Union, other
disruption in Europe and possible withdrawal of one or more
countries from the Euro zone; (4) impact on us of
comprehensive financial services regulation reform, including
potential regulation of MetLife, Inc. as a non-bank systemically
important financial institution, or otherwise; (5) numerous
rulemaking initiatives required or permitted by the Dodd-Frank Wall
Street Reform and Consumer Protection Act which may impact how we
conduct our business, including those compelling the liquidation of
certain financial institutions; (6) regulatory, legislative or
tax changes relating to our insurance, international, or other
operations that may affect the cost of, or demand for, our products
or services, or increase the cost or administrative burdens of
providing benefits to employees; (7) adverse results or other
consequences from litigation, arbitration or regulatory
investigations; (8) unanticipated developments that could
delay, prevent or otherwise adversely affect the separation of
Brighthouse Financial; (9) our ability to address difficulties,
unforeseen liabilities, asset impairments, or rating agency actions
arising from (a) business acquisitions and integrating and managing
the growth of such acquired businesses, (b) dispositions of
businesses via sale, initial public offering, spin-off or
otherwise, including failure to achieve projected operational
benefit from such transactions; (c) entry into joint ventures, or
(d) legal entity reorganizations; (10) potential liquidity and
other risks resulting from our participation in a securities
lending program and other transactions, including any separated
business’ incurrence of debt in connection with such a separation;
(11) investment losses and defaults, and changes to investment
valuations; (12) changes in assumptions related to investment
valuations, deferred policy acquisition costs, deferred sales
inducements, value of business acquired or goodwill;
(13) impairments of goodwill and realized losses or market
value impairments to illiquid assets; (14) defaults on our
mortgage loans; (15) the defaults or deteriorating credit of
other financial institutions that could adversely affect us;
(16) economic, political, legal, currency and other risks
relating to our international operations, including with respect to
fluctuations of exchange rates; (17) downgrades in our claims
paying ability, financial strength or credit ratings; (18) a
deterioration in the experience of the closed block established in
connection with the reorganization of Metropolitan Life Insurance
Company; (19) availability and effectiveness of reinsurance,
hedging, or indemnification arrangements, as well as any default or
failure of counterparties to perform; (20) differences between
actual claims experience and underwriting and reserving
assumptions; (21) ineffectiveness of risk management policies
and procedures; (22) catastrophe losses; (23) increasing
cost and limited market capacity for statutory life insurance
reserve financings; (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, and for personnel; (25) 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 any adjustment for
nonperformance risk; (26) legal, regulatory and other
restrictions affecting MetLife, Inc.’s ability to pay dividends and
repurchase common stock; (27) MetLife, Inc.’s and its
subsidiary holding companies’ primary reliance, as holding
companies, on dividends from its subsidiaries to meet its free cash
flow targets and debt payment obligations and the applicable
regulatory restrictions on the ability of the subsidiaries to pay
such dividends; (28) the possibility that MetLife, Inc.’s
Board of Directors may influence the outcome of stockholder votes
through the voting provisions of the MetLife Policyholder Trust;
(29) changes in accounting standards, practices and/or
policies; (30) increased expenses relating to pension and
postretirement benefit plans, as well as health care and other
employee benefits; (31) inability to protect our intellectual
property rights or claims of infringement of the intellectual
property rights of others; (32) difficulties in marketing and
distributing products through our distribution channels;
(33) provisions of laws and our incorporation documents may
delay, deter or prevent takeovers and corporate combinations
involving MetLife; (34) the effects of business disruption or
economic contraction due to disasters such as terrorist attacks,
cyberattacks, other hostilities, or natural catastrophes, including
any related impact on the value of our investment portfolio, our
disaster recovery systems, cyber- or other information security
systems and management continuity planning; (35) any failure to
protect the confidentiality of client information; (36) the
effectiveness of our programs and practices in avoiding giving our
associates incentives to take excessive risks; (37) restrictions,
liabilities, losses or indemnification obligations arising from any
transitional services or tax arrangements related to the separation
of any business, or from the failure of such a separation to
qualify for any intended tax-free treatment; and (38) other
risks and uncertainties described from time to time in MetLife,
Inc.’s filings with the U.S. Securities and Exchange
Commission.
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 U.S. Securities and
Exchange Commission.
MetLife,
Inc. GAAP Consolidated Statements of Operations
(Unaudited) (In millions) For the Three Months Ended
For the Year Ended December 31, December 31, 2016
2015 2016 2015
Revenues Premiums $ 9,652 $ 9,605 $ 39,153 $ 38,545
Universal life and investment-type product policy fees 2,280 2,333
9,206 9,507 Net investment income 5,037 4,914 19,947 19,281 Other
revenues 419 486 1,759 1,983 Net investment gains (losses) (367 )
62 171 597 Net derivative gains (losses) (4,945 )
(356 ) (6,760 ) 38 Total revenues
12,076 17,044 63,476
69,951 .
Expenses Policyholder benefits and claims
9,997 9,772 40,804 38,714 Interest credited to policyholder account
balances 1,636 1,670 6,282 5,610 Policyholder dividends 305 363
1,256 1,388 Goodwill impairment — — 260 — Capitalization of DAC
(830 ) (987 ) (3,589 ) (3,837 ) Amortization of DAC and VOBA 508
883 2,641 3,936 Amortization of negative VOBA (48 ) (79 ) (269 )
(361 ) Interest expense on debt 291 300 1,201 1,208 Other expenses
3,782 3,987 15,085
15,823 Total expenses 15,641 15,909
63,671 62,481 Income
(loss) from continuing operations before provision for income tax
(3,565 ) 1,135 (195 ) 7,470 Provision for income tax expense
(benefit) (1,479 ) 293 (999 )
2,148 Income (loss) from continuing operations, net of
income tax (2,086 ) 842 804 5,322 Income (loss) from discontinued
operations, net of income tax — —
— — Net income (loss) (2,086 ) 842 804
5,322 Less: Net income (loss) attributable to noncontrolling
interests 2 8 4 12
Net income (loss) attributable to MetLife, Inc. (2,088 ) 834
800 5,310 Less: Preferred stock dividends 45 49 103 116 Preferred
stock repurchase premium — — —
42 Net income (loss) available to MetLife,
Inc.'s common shareholders $ (2,133 ) $ 785 $ 697 $
5,152 See footnotes on last page.
MetLife, Inc. (Unaudited) (In millions,
except per share data) For the Three Months Ended For the
Year Ended December 31, December 31,
2016
2015 2016 2015 Earnings Per
Weighted Average
Common Shares Diluted (1), (2)
Earnings Per
Weighted Average
Common Shares Diluted (1)
Earnings Per
Weighted Average
Common Shares Diluted (1)
Earnings Per
Weighted Average
Common Shares Diluted (1)
Reconciliation to Operating Earnings Available to Common
Shareholders
Net income (loss) available to
MetLife, Inc.'s common shareholders $ (2,133 ) $ (1.94 ) $ 785 $
0.70 $ 697 $ 0.63 $ 5,152 $ 4.57 Adjustments from net income
(loss) available to common shareholders to operating earnings
available to common shareholders: Less: Net investment gains
(losses) (3) (367 ) (0.33 ) 62 0.06 171 0.15 597 0.53 Net
derivative gains (losses) (3) (4,945 ) (4.46 ) (356 ) (0.32 )
(6,760 ) (6.10 ) 38 0.03 Premiums — — (1 ) — 426 0.38 (3 ) —
Universal life and investment-type product policy fees 103 0.09 96
0.09 506 0.46 394 0.35 Net investment income 84 0.08 141 0.13 247
0.22 (508 ) (0.45 ) Other revenues (2 ) — (9 ) (0.01 ) 8 0.01 (37 )
(0.03 ) Policyholder benefits and claims and policyholder benefits
(3) (182 ) (0.16 ) (300 ) (0.27 ) (1,090 ) (0.98 ) (537 ) (0.47 )
Interest credited to policyholder account balances (317 ) (0.30 )
(340 ) (0.31 ) (1,033 ) (0.93 ) (276 ) (0.24 ) Capitalization of
DAC — — — — 105 0.09 — — Amortization of DAC and VOBA (3) 418 0.38
(6 ) (0.01 ) 1,463 1.32 (134 ) (0.12 ) Amortization of negative
VOBA 4 — 8 0.01 47 0.04 35 0.03 Interest expense on debt 1 — 2 — (3
) — (8 ) (0.01 ) Other operating expenses (129 ) (0.12 ) 11 0.01
(596 ) (0.54 ) (17 ) (0.02 ) Goodwill impairment — — — — (260 )
(0.23 ) — — Provision for income tax (expense) benefit (3) 1,786
1.60 109 0.10 2,381 2.15 178 0.16 Add: Net income (loss)
attributable to noncontrolling interests 2 — 8 0.01 4 — 12 0.01
Preferred stock repurchase premium — —
— — — —
42 0.04 Operating earnings available to
common shareholders 1,415 1.28 1,376 1.23 5,089 4.59 5,484 4.86
Less: Total notable items (86 ) (0.08 ) (115 )
(0.10 ) (974 ) (0.88 ) (898 )
(0.80 ) Operating earnings available to common shareholders,
adjusted for total notable items $ 1,501 $ 1.35 $
1,491 $ 1.33 $ 6,063 $ 5.47 $ 6,382
$ 5.66 Operating earnings available to common
shareholders on a constant currency basis $ 1,415 $ 1.28 $ 1,362 $
1.21 $ 5,089 $ 4.59 $ 5,432 $ 4.81 Operating earnings available to
common shareholders, adjusted for total notable items, on a
constant currency basis $ 1,501 $ 1.35 $ 1,487 $ 1.33 $ 6,063 $
5.47 $ 6,337 $ 5.62 Weighted average common shares
outstanding - diluted 1,108.8 1,121.4 1,108.9 1,128.3
For the Three Months Ended December 31,
Asymmetrical and
Non-Economic Accounting 2016 2015
Net income (loss) available to MetLife, Inc.'s common shareholders
$ (2,133 ) $ 785 Less: asymmetrical and non-economic accounting
(2,901 ) (288 ) Net income (loss) available to
MetLife, Inc.'s common shareholders, excluding asymmetrical and
non-economic accounting $ 768 $ 1,073 See
footnotes on last page.
MetLife, Inc. (Unaudited) (In millions)
For the Three Months Ended For the Year Ended December 31,
December 31, 2016 2015 2016
2015
Premiums, Fees and Other Revenues
Total premiums, fees and other revenues $ 12,351 $ 12,424 $ 50,118
$ 50,035 Less: Unearned revenue adjustments — (3 ) 28 5 GMIB fees
103 97 411 382 Settlement of foreign currency earnings hedges (2 )
(9 ) 4 (37 ) Divested businesses and Lag elimination (4) —
1 497 4 Total
operating premiums, fees and other revenues $ 12,250 $
12,338 $ 49,178 $ 49,681
Revenues
and Expenses Total revenues $ 12,076 $ 17,044 $ 63,476 $ 69,951
Less: Net investment (gains) losses (367 ) 62 171 597 Less: Net
derivative (gains) losses (4,945 ) (356 ) (6,760 ) 38 Less:
Adjustments related to net investment gains (losses) and net
derivative gains (losses) — (3 ) 28 5 Less: Other adjustments to
revenues: GMIB fees 103 97 411 382 Investment hedge adjustments
(243 ) (202 ) (878 ) (776 ) Operating joint venture adjustments 1 2
6 (4 ) Unit-linked contract income 327 343 950 264 Securitization
entities income (1 ) (2 ) 3 8 Settlement of foreign currency
earnings hedges (2 ) (9 ) 4 (37 ) Divested businesses and Lag
elimination (4) — 1 663
4 Total operating revenues $ 17,203 $ 17,111
$ 68,878 $ 69,470 Total expenses $
15,641 $ 15,909 $ 63,671 $ 62,481 Less: Adjustments related to net
investment (gains) losses and net derivative (gains) losses (338 )
(27 ) (1,628 ) 15 Less: Goodwill impairment — — 260 — Less: Other
adjustments to expenses: Inflation and pass through adjustments
(198 ) (6 ) (82 ) (5 ) GMIB costs and amortization of DAC and VOBA
related to GMIB fees and GMIB costs 291 319 911 524 Market value
adjustments and amortization of DAC, VOBA and negative VOBA related
to market value adjustments 6 11 24 101 PAB hedge adjustments (1 )
2 — 7 Unit-linked contract costs 318 338 932 269 Securitization
entities debt expense (1 ) (2 ) 3 8 Noncontrolling interest (4 )
(12 ) (6 ) (13 ) Regulatory implementation costs 1 — 1 2
Acquisition, integration and other costs 31 7 64 28 Divested
businesses and Lag elimination (4) 100 (5 )
888 1 Total operating expenses $ 15,436
$ 15,284 $ 62,304 $ 61,544 See
footnotes on last page.
MetLife, Inc. (Unaudited)
December 31,
Book Value (5) 2016
2015 Book value per common share $ 59.56 $ 60.00
Less: Net unrealized investment gains (losses), net of income tax
11.53 10.72 Defined benefit plans adjustment, net of income tax
(1.80 ) (1.87 ) Book value per common share,
excluding AOCI other than FCTA 49.83 51.15 Less: Goodwill, net of
income tax 8.32 8.48 VODA and VOCRA, net of income tax 0.37
0.45 Book value per common share - tangible
common stockholders' equity $ 41.14 $ 42.22
Common shares outstanding, end of period (In millions) 1,095.5
1,098.0 For the Three Months Ended For the Year Ended
December 31, (6) December 31,
Return on Equity (7)
2016 2015 2016 2015 Return on MetLife, Inc.'s:
Common stockholders' equity (12.1 )% 4.7 % 1.0 % 7.5 % Common
stockholders' equity, excluding AOCI other than FCTA (15.1 )% 5.6 %
1.2 % 9.1 % Tangible common stockholders' equity (18.1 )% 6.8 % 1.6
% 11.2 % Operating return on MetLife, Inc.'s: Common
stockholders' equity 8.0 % 8.2 % 7.1 % 8.0 % Common stockholders'
equity, excluding AOCI other than FCTA 10.0 % 9.7 % 8.9 % 9.7 %
Common stockholders' equity, excluding AOCI other than FCTA,
adjusted for total notable items 10.3 % 10.4 % 10.3 % 11.3 %
Tangible common stockholders' equity 12.2 % 11.9 % 10.8 % 11.9 %
Tangible common stockholders' equity, adjusted for total notable
items 12.4 % 12.7 % 12.5 % 13.8 % Return on Allocated
Equity: U.S. 6.2 % 12.0 % Asia (21.7 )% 8.1 % Latin America 32.7 %
12.9 % EMEA 3.2 % 8.8 % MetLife Holdings (14.4 )% 1.6 %
Return on Allocated Tangible Equity: U.S. 6.8 % 13.2 % Asia (37.2
)% 14.0 % Latin America 51.9 % 21.7 % EMEA 6.0 % 16.3 % MetLife
Holdings (14.9 )% 1.9 % Operating Return on Allocated
Equity: U.S. 19.1 % 15.6 % Asia 12.8 % 10.1 % Latin America 15.9 %
18.3 % EMEA 8.9 % 6.5 % MetLife Holdings 7.2 % 9.3 %
Operating Return on Allocated Tangible Equity: U.S. 21.0 % 17.2 %
Asia 22.1 % 17.4 % Latin America 25.2 % 30.7 % EMEA 15.6 % 12.2 %
MetLife Holdings 7.7 % 9.9 % See footnotes on last page.
MetLife, Inc.
Condensed Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow Free Cash Flow of All Holding
Companies (Unaudited) For the Year Ended December
31, 2016 2015 (In billions, except
ratios) MetLife, Inc. (parent company only) net cash
provided by operating activities $ 3.7 $ 1.6 Adjustments from net
cash provided by operating activities to free cash flow: Add:
Incremental debt to be at or below target leverage ratios - 1.8
Add: Remaining adjustments from net cash provided by operating
activities to free cash flow (8) (2.3 ) 0.1
MetLife, Inc. (parent company only) free cash flow 1.4 3.5 Other
MetLife, Inc. holding companies free cash flow (9) 1.0
0.5
Free cash flow of all holding
companies $ 2.4 $ 4.0
Ratio of net cash
provided by operating activities to consolidated net income (loss)
available to MetLife, Inc.'s common shareholders: MetLife, Inc.
(parent company only) net cash provided by operating activities $
3.7 $ 1.6 Consolidated net income (loss) available to MetLife,
Inc.'s common shareholders (10) $ 0.7 $ 5.2 Ratio of net cash
provided by operating activities (parent company only) to
consolidated net income (loss) available to MetLife, Inc.'s common
shareholders (10), (11) 538 % 31 %
Ratio of free cash
flow to operating earnings available to common shareholders:
Free cash flow of all holding companies (12) $ 2.4 $ 4.0
Consolidated operating earnings available to common shareholders
(13) $ 5.1 $ 5.5 Ratio of free cash flow of all holding companies
to consolidated operating earnings available to common shareholders
(13) 48 % 73 % See footnotes on last page.
MetLife,
Inc. Operating Earnings Available to Common Shareholders
(Unaudited) (In millions) For the Three Months Ended
For the Year Ended December 31, December 31, 2016
2015 2016 2015
U.S.:
Operating earnings available to common shareholders $ 516 $ 432 $
1,917 $ 2,004 Less: Total notable items — (17
) (101 ) 3 Operating earnings available to
common shareholders, adjusted for total notable items $ 516
$ 449 $ 2,018 $ 2,001 Operating
earnings available to common shareholders on a constant currency
basis (14) $ 516 $ 432 $ 1,917 $ 2,004 Operating earnings available
to common shareholders, adjusted for total notable items, on a
constant currency basis (14) $ 516 $ 449 $ 2,018 $ 2,001
Group Benefits:
Operating earnings available to common shareholders $ 174 $ 153 $
687 $ 634 Less: Total notable items — (6 )
9 1 Operating earnings available to
common shareholders, adjusted for total notable items $ 174
$ 159 $ 678 $ 633 Operating earnings
available to common shareholders on a constant currency basis (14)
$ 174 $ 153 $ 687 $ 634 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis (14) $ 174 $ 159 $ 678 $ 633
Retirement and Income Solutions:
Operating earnings available to common shareholders $ 299 $ 235 $
1,109 $ 1,147 Less: Total notable items — 1
(59 ) 11 Operating earnings available
to common shareholders, adjusted for total notable items $ 299
$ 234 $ 1,168 $ 1,136 Operating
earnings available to common shareholders on a constant currency
basis (14) $ 299 $ 235 $ 1,109 $ 1,147 Operating earnings available
to common shareholders, adjusted for total notable items, on a
constant currency basis (14) $ 299 $ 234 $ 1,168 $ 1,136
Property & Casualty:
Operating earnings available to common shareholders $ 43 $ 44 $ 121
$ 223 Less: Total notable items — (12 )
(51 ) (9 ) Operating earnings available to common
shareholders, adjusted for total notable items $ 43 $ 56
$ 172 $ 232 Operating earnings
available to common shareholders on a constant currency basis (14)
$ 43 $ 44 $ 121 $ 223 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis (14) $ 43 $ 56 $ 172 $ 232
Asia:
Operating earnings available to common shareholders $ 354 $ 290 $
1,242 $ 1,380 Less: Total notable items — (24
) (79 ) 36 Operating earnings available to
common shareholders, adjusted for total notable items $ 354
$ 314 $ 1,321 $ 1,344 Operating
earnings available to common shareholders on a constant currency
basis $ 354 $ 303 $ 1,242 $ 1,426 Operating earnings available to
common shareholders, adjusted for total notable items, on a
constant currency basis $ 354 $ 327 $ 1,321 $ 1,390
Latin America:
Operating earnings available to common shareholders $ 122 $ 157 $
543 $ 625 Less: Total notable items — 28
(8 ) 86 Operating earnings available to
common shareholders, adjusted for total notable items $ 122
$ 129 $ 551 $ 539 Operating earnings
available to common shareholders on a constant currency basis $ 122
$ 134 $ 543 $ 544 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis $ 122 $ 116 $ 551 $ 465
EMEA:
Operating earnings available to common shareholders $ 72 $ 54 $ 273
$ 240 Less: Total notable items — —
(16 ) 6 Operating earnings available to common
shareholders, adjusted for total notable items $ 72 $ 54
$ 289 $ 234 Operating earnings
available to common shareholders on a constant currency basis $ 72
$ 50 $ 273 $ 223 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis $ 72 $ 50 $ 289 $ 217
MetLife Holdings:
Operating earnings available to common shareholders $ 199 $ 265 $
699 $ 1,242 Less: Total notable items (91 ) (33 )
(433 ) (85 ) Operating earnings available to common
shareholders, adjusted for total notable items $ 290 $ 298
$ 1,132 $ 1,327 Operating earnings
available to common shareholders on a constant currency basis (14)
$ 199 $ 265 $ 699 $ 1,242 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis (14) $ 290 $ 298 $ 1,132 $ 1,327
Corporate & Other:
Operating earnings available to common shareholders $ (178 ) $ (210
) $ (607 ) $ (1,520 ) Less: Total notable items (28 )
(23 ) (37 ) (864 ) Operating earnings available to
common shareholders, adjusted for total notable items $ (150 ) $
(187 ) $ (570 ) $ (656 ) Operating earnings available to
common shareholders on a constant currency basis (14) $ (178 ) $
(210 ) $ (607 ) $ (1,520 ) Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis (14) $ (150 ) $ (187 ) $ (570 ) $ (656 )
Brighthouse Financial (6):
Operating earnings available to common shareholders $ 330 $ 388 $
1,022 $ 1,513 Less: Total notable items 33 (46
) (300 ) (80 ) Operating earnings available to common
shareholders, adjusted for total notable items $ 297 $ 434
$ 1,322 $ 1,593 Operating earnings
available to common shareholders on a constant currency basis (14)
$ 330 $ 388 $ 1,022 $ 1,513 Operating earnings available to common
shareholders, adjusted for total notable items, on a constant
currency basis (14) $ 297 $ 434 $ 1,322 $ 1,593 See
footnotes on last page.
MetLife, Inc.
(Unaudited) (1) Operating earnings
available to common shareholders is calculated on a standalone
basis and may not equal the sum of operating earnings available to
common shareholders, adjusted for total notable items and total
notable items. (2) For the three months ended December 31,
2016, 8.6 million shares related to the assumed exercise or
issuance of stock-based awards have been 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 common shareholders per common share - diluted. These
shares were included in the calculation of operating earnings
available to common shareholders per common share - diluted.
(3) The impacts of asymmetrical and non-economic accounting on
operating earnings for the three months ended December 31, 2016 are
as follows: i) Net investment gains (losses) - ($115) million; ii)
Net derivative gains (losses) - ($4,647) million; iii) Inflation
and pass through adjustments - $198 million; iv) Amortization of
DAC and VOBA - $107 million; and v) Provision for income tax
(expense) benefit - $1,560 million. (4) For the year ended
December 31, 2016, Divested businesses and Lag elimination includes
adjustments related to the financial impact of converting MetLife's
Japan operations to calendar year end reporting without
retrospective application of this change to prior periods.
(5) Book values exclude $2,066 million of equity related to
preferred stock at both December 31, 2016 and 2015. (6)
Annualized using quarter-to-date results. (7) Brighthouse
Financial segment results are not indicative of Brighthouse
Financial, Inc. and related companies on a combined basis,
therefore return on equity calculations for the Brighthouse
Financial segment are not presented. (8) Remaining
adjustments include: (i) capital contributions to subsidiaries;
(ii) returns of capital from subsidiaries; (iii) repayments on and
(issuances of) loans to subsidiaries, net; and (iv) investment
portfolio and derivatives changes and other, net. (9)
Components include: (i) dividends and returns of capital from
subsidiaries; (ii) capital contributions from MetLife, Inc.; (iii)
capital contributions to subsidiaries; (iv) repayments on and
(issuances of) loans to subsidiaries, net; (v) other expenses; and
(vi) investment portfolio changes and other, net. (10)
Consolidated net income (loss) available to MetLife, Inc.'s common
shareholders for 2016 includes Separation-related costs of $0.07
billion, net of income tax. Excluding this amount from the
denominator of the ratio, this ratio, as adjusted, would be 487%.
Consolidated net income (loss) available to MetLife, Inc.'s common
shareholders for 2015 includes a non-cash charge of $0.8 billion,
net of income tax, related to an uncertain tax position. Excluding
this charge from the denominator of the ratio, this ratio, as
adjusted, would be 27%. (11) Including the free cash flow of
other MetLife, Inc. holding companies of $1.0 billion and $0.5
billion for the years ended December 31, 2016 and 2015,
respectively, in the numerator of the ratio, this ratio, as
adjusted, would be 688% and 40%, respectively. Including the free
cash flow of other MetLife, Inc. holding companies in the numerator
of the ratio and excluding the Separation-related costs and
uncertain tax position non-cash charge from the denominator of the
ratio, this ratio, as adjusted, would be 623% and 35%, for the
years ended December 31, 2016 and 2015, respectively. (12)
In 2016, we incurred $2.3 billion of Separation-related items which
reduced free cash flow. Excluding these Separation-related items,
adjusted free cash flow would be $4.7 billion for the year ended
December 31, 2016. (13) Consolidated operating earnings
available to common shareholders for 2016 includes notable items of
$1.0 billion, net of income tax, and Separation-related costs of
$0.02 billion, net of income tax. Excluding the $2.3 billion of
Separation-related items, which reduced free cash flow, from the
numerator of the ratio, and excluding the notable items and
Separation-related costs impacting consolidated operating earnings
available to common shareholders from the denominator of the ratio,
the adjusted free cash flow ratio would be 77%. Consolidated
operating earnings available to common shareholders for 2015
includes a non-cash charge of $0.8 billion, net of income tax,
related to an uncertain tax position. Excluding this charge from
the denominator of the ratio, the adjusted free cash flow ratio
would be 63%. (14) Amounts on a reported basis, as constant
currency impact is not significant.
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version on businesswire.com: http://www.businesswire.com/news/home/20170201006315/en/
MetLifeMedia:John Calagna, 212-578-6252orInvestors:John Hall,
212-578-7888
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