MetLife Announces Fourth Quarter and Full Year 2018 Results

NEW YORK–(BUSINESS WIRE)–MetLife, Inc. (NYSE: MET) today announced its results for the fourth
quarter and full year ended December 31, 2018.

Fourth Quarter Results Summary

  • Net income of $2.0 billion, or $2.04 per share, compared to net income
    of $2.3 billion, or $2.14 per share, in the fourth quarter of 2017.
  • Adjusted earnings* of $1.3 billion, or $1.35 per share, compared to
    adjusted earnings of $678 million, or $0.64 per share in the fourth
    quarter of 2017.
  • Book value of $51.53 per share, down 5 percent from $54.24 per share
    at December 31, 2017.
  • Book value, excluding accumulated other comprehensive income (AOCI)
    other than foreign currency translation adjustments (FCTA)*, of $44.62
    per share, up 4 percent from $42.92 per share at December 31, 2017.
  • Return on equity (ROE) of 16.5 percent.
  • Adjusted ROE, excluding AOCI other than FCTA*, of 12.5 percent.

Full Year Results Summary

  • Net income of $5.0 billion, compared to net income of $3.9 billion for
    the full year 2017. Net income of $4.91 per share, up 36 percent from
    the prior-year.
  • Adjusted earnings* of $5.5 billion, compared to adjusted earnings of
    $4.2 billion for the full year 2017. Adjusted earnings* of $5.39 per
    share, up 37 percent from the prior-year.
  • Return on equity of 9.6 percent.
  • Adjusted ROE, excluding AOCI other than FCTA*, of 12.6 percent.

“While market conditions were challenging in the fourth quarter, our
businesses performed exceptionally well overall in 2018,” said Steven A.
Kandarian, chairman, president and CEO of MetLife, Inc. “MetLife
delivered 37 percent adjusted earnings per share growth, achieved a 12.6
percent adjusted return on equity**, and returned a record $5.7 billion
in cash to shareholders through common stock repurchases and dividends.”

**Refers to adjusted ROE, excluding AOCI other than FCTA*.

Fourth Quarter & Full Year 2018 Summary

             
($ in millions, except per share data)       Three months ended

December 31,

  Year ended

December 31,

2018   2017   Change 2018   2017   Change
Premiums, fees & other revenues $11,116 $11,335 (2)% $51,222 $45,843 12%
Net investment income 3,462 4,454 (22)% 16,166 17,363 (7)%
Net investment gains (losses) 145 106 37% (298) (308) 3%
Net derivative gains (losses) 939   (55)     851   (590)    
Total revenues $15,662 $15,840 (1)% $67,941 $62,308 9%
 
Total adjusted revenues $15,397 $15,403

 

$68,161 $62,744 9%
Adjusted premiums, fees & other revenues $11,022 $11,300 (2)% $50,778 $46,200 10%
Adjusted premiums, fees & other revenues, excluding pension risk
transfer (PRT)
$11,098 $10,703 4% $43,884 $42,895 2%
 
Net income (loss) $2,010 $2,272 (12)% $4,982 $3,907 28%
Net income (loss) per share $2.04 $2.14 (5)% $4.91 $3.62 36%
 
Adjusted earnings $1,336 $678 97% $5,461 $4,235 29%
Adjusted earnings per share $1.35 $0.64 111% $5.39 $3.93 37%
 
Book value per share $51.53 $54.24 (5)% $51.53 $54.24 (5)%
Book value per share, excluding AOCI other than FCTA $44.62 $42.92 4% $44.62 $42.92 4%
 
Expense ratio 20.7% 24.4% 18.9% 21.7%
Direct expense ratio, excluding total notable items related to
direct expenses and PRT
12.5% 14.5% 12.9% 13.3%
Adjusted expense ratio, excluding total notable items related to
other expenses and PRT
20.4% 21.9% 20.6% 21.0%
 
ROE 16.5% 16.3% 9.6% 6.3%
ROE, excluding AOCI other than FCTA 18.9% 20.6% 11.5% 7.7%
Adjusted ROE, excluding AOCI other than FCTA       12.5%   6.1%       12.6%   8.4%    
 

MetLife reported fourth quarter 2018 premiums, fees & other revenues of
$11.1 billion, down 2 percent over the fourth quarter of 2017. Adjusted
premiums, fees & other revenues* were $11.0 billion, down 2 percent, and
1 percent on a constant currency basis* over the prior-year period.

Net investment income was $3.5 billion, down 22 percent. The decline in
net investment income was driven by changes in the estimated fair value
of certain securities which do not qualify as separate accounts under
GAAP. On an adjusted basis, net investment income was $4.4 billion, up 7
percent.

Net derivative gains amounted to $939 million, and $742 million after
tax during the quarter.

Net income was $2.0 billion, compared to net income of $2.3 billion in
the fourth quarter of 2017. On a per share basis, net income was $2.04,
compared to net income of $2.14 in the prior-year period.

MetLife reported adjusted earnings of $1.3 billion, up 97 percent over
the fourth quarter of 2017, and 104 percent on a constant currency
basis. On a per share basis, which includes the impact of share
repurchases, adjusted earnings were $1.35, up 111 percent from the
prior-year period.

For the full year 2018, MetLife reported net income of $5.0 billion,
compared to net income of $3.9 billion for the full year 2017.

Full year 2018 adjusted earnings were $5.5 billion, up 29 percent. On a
per share basis, 2018 adjusted earnings were $5.39, up 37 percent over
2017.

Supplemental slides for the fourth quarter of 2018, titled “4Q18
Supplemental Slides,” are available on the MetLife Investor Relations
website at www.metlife.com
and in the Form 8-K furnished by MetLife to the U.S. Securities and
Exchange Commission in connection with this earnings news release.

Adjusted Earnings by Segment Summary***

             
        Three months ended

December 31, 2018

  Year ended

December 31, 2018

Segment       Change from

prior-year

period

  Change from

prior-year

period (on a

constant

currency

basis)

  Change from

prior-year

period

  Change from

prior-year

period (on a

constant

currency

basis)

U.S.       38%   38%   38%   38%
Asia       (9)%   (8)%   1%   —%
Latin America       10%   19%   1%   3%
Europe, the Middle East and Africa (EMEA)       (30)%   (24)%   (7)%   (7)%
MetLife Holdings       15%   15%   6%   6%

***The percentages in this table are on a reported basis, and do not
exclude notable items.

Business Discussions

All comparisons of the results for the fourth quarter of 2018 in the
business discussions that follow are with the fourth quarter of 2017,
unless otherwise noted. See the fourth quarter of 2018 notable items
table that follows the Business Discussions section of this release for
additional information on notable items incurred in the fourth quarter
of 2018.

U.S.

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $685   $498   38%
Adjusted premiums, fees & other revenues     $5,725   $6,038   (5)%
Adjusted premiums, fees & other revenues, excluding pension risk
transfers
    $5,801   $5,441   7%
Notable item(s)     $0   $(55)    
       
  • Adjusted earnings for the U.S. were $685 million, up
    38 percent, driven by U.S. tax reform and volume growth.
  • Excluding notable items from both periods, adjusted earnings
    were up 24 percent. Excluding the impact of U.S. tax reform, and
    excluding notable items in both periods, adjusted earnings were up 3
    percent.
  • Adjusted return on allocated equity was 25.2 percent, and
    adjusted return on allocated tangible equity was 29.2 percent.
  • Adjusted premiums, fees & other revenues were $5.7 billion,
    down 5 percent, driven by lower pension risk transfer transactions in
    Retirement and Income Solutions. Excluding pension risk transfers,
    adjusted premiums, fees & other revenues were up 7 percent.

Group Benefits

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $230   $230   —%
Adjusted premiums, fees & other revenues     $4,283   $4,105   4%
Notable item(s)     $0   $0    
       
  • Adjusted earnings for Group Benefits were $230 million, flat
    compared to the prior-year period, driven by U.S. tax reform, offset
    by unfavorable underwriting. Excluding the impact of U.S. tax reform,
    adjusted earnings were down 18 percent.
  • Adjusted premiums, fees & other revenues were $4.3 billion,
    up 4 percent.
  • Sales for Group Benefits were down 1 percent for the full year
    2018 compared to the full year 2017.

Retirement and Income Solutions

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $356   $173   106%
Adjusted premiums, fees & other revenues     $523   $1,026   (49)%
Adjusted premiums, fees & other revenues, excluding pension risk
transfers
    $599   $429   40%
Notable item(s)     $0   $(62)    
       
  • Adjusted earnings for Retirement and Income Solutions were
    $356 million, up 106 percent, driven by favorable underwriting, U.S.
    tax reform and higher investment margin.
  • Excluding notable items from both periods, adjusted earnings
    were up 51 percent. Excluding the impact of U.S. tax reform, and
    excluding notable items in both periods, adjusted earnings were up 24
    percent.
  • Adjusted premiums, fees & other revenues were $523 million,
    down 49 percent from the prior-year period, driven by lower pension
    risk transfer transactions.
  • Excluding pension risk transfers, adjusted premiums, fees & other
    revenues
    were up 40 percent.

Property & Casualty

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $99   $95   4%
Adjusted premiums, fees & other revenues     $919   $907   1%
Notable item(s)     $0   $7    
       
  • Adjusted earnings for Property & Casualty were $99 million,
    up 4 percent, driven by U.S. tax reform, partially offset by
    unfavorable homeowners underwriting and expenses. Excluding the impact
    of U.S. tax reform, adjusted earnings were down 10 percent.
  • Adjusted premiums, fees & other revenues were $919 million,
    up 1 percent.
  • Pre-tax catastrophe losses and prior year development totaled
    $19 million, compared to $16 million in the prior-year period.
  • Sales for Property & Casualty were $151 million, up 13
    percent.

ASIA

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $281   $310   (9)%
Adjusted earnings (constant currency)     $281   $305   (8)%
Adjusted premiums, fees & other revenues     $2,095   $2,088   —%
Notable item(s)     $0   $0    
       
  • Adjusted earnings for Asia were $281 million, down 9 percent,
    and down 8 percent on a constant currency basis, as volume growth was
    more than offset by unfavorable underwriting and weaker capital
    markets. Excluding the impact of U.S. tax reform, adjusted earnings
    were down 13 percent, and down 12 percent on a constant currency basis.
  • Adjusted return on allocated equity was 7.9 percent, and
    adjusted return on allocated tangible equity was 12.0 percent.
  • Adjusted premiums, fees & other revenues were $2.1 billion,
    up 1 percent on a constant currency basis.
  • Sales for Asia were $628 million, up 5 percent on a constant
    currency basis. Japan sales were up 19 percent, primarily driven by
    foreign currency denominated products. Other Asia sales were down 13
    percent, primarily driven by regulatory changes in Korea.

LATIN AMERICA

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $137   $125   10%
Adjusted earnings (constant currency)     $137   $115   19%
Adjusted premiums, fees & other revenues     $956   $988   (3)%
Notable item(s)     $0   $0    
       
  • Adjusted earnings for Latin America were $137 million, up 10
    percent, and up 19 percent on a constant currency basis, driven by
    volume growth, lower expenses and favorable underwriting, partially
    offset by the negative impact of U.S. tax reform and lower equity
    markets impacting Chile encaje. Excluding the impact of U.S. tax
    reform, adjusted earnings were up 19 percent, and up 30 percent on a
    constant currency basis.
  • Adjusted return on allocated equity was 17.5 percent, and
    adjusted return on allocated tangible equity was 29.1 percent.
  • Adjusted premiums, fees & other revenues were $956 million,
    down 3 percent, and up 5 percent on a constant currency basis, driven
    by volume growth across the region, led by Chile and Mexico.
  • Sales for Latin America were $222 million, up 6 percent on a
    constant currency basis, due to higher group sales.

EMEA

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $55   $79   (30)%
Adjusted earnings (constant currency)     $55   $72   (24)%
Adjusted premiums, fees & other revenues     $642   $651   (1)%
Notable item(s)     $0   $0    
       
  • Adjusted earnings for EMEA were $55 million, down 30 percent,
    and down 24 percent on a constant currency basis, as volume growth and
    lower expenses were more than offset by one-time items, unfavorable
    underwriting, and the negative impact of U.S. tax reform. Excluding
    the impact of U.S. tax reform, adjusted earnings were down 24 percent,
    and down 15 percent on a constant currency basis.
  • Adjusted return on allocated equity was 6.3 percent, and
    adjusted return on allocated tangible equity was 10.5 percent.
  • Adjusted premiums, fees & other revenues were $642 million,
    down 1 percent, and up 3 percent on a constant currency basis.
  • Sales for EMEA were $200 million, down 7 percent on a constant
    currency basis due to lower volumes in the Gulf.

METLIFE HOLDINGS

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $223   $194   15%
Adjusted premiums, fees & other revenues     $1,385   $1,453   (5)%
Notable item(s)     $0   $(48)    
       
  • Adjusted earnings for MetLife Holdings were
    $223 million, up 15 percent.
  • Excluding notable items from both periods, adjusted earnings
    were down 8 percent. Excluding the impact of U.S. tax reform, and
    excluding notable items in both periods, adjusted earnings were down
    21 percent due to the decline in equity markets, lower interest
    margins, and unfavorable life underwriting, partially offset by lower
    expenses.
  • Adjusted return on allocated equity was 8.9 percent, and
    adjusted return on allocated tangible equity was 10.0 percent.
  • Adjusted premiums, fees & other revenues were
    $1.4 billion, down 5 percent.

CORPORATE & OTHER

       
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Adjusted earnings     $(45)   $(528)    
Notable item(s)     $87   $(395)    
 
  • Corporate & Other had an adjusted loss of $45 million,
    compared to an adjusted loss of $528 million in the fourth quarter of
    2017. Notable items in the current period include favorable tax items
    partially offset by expenses associated with the company’s previously
    announced cost saving initiatives and litigation expenses.
  • Excluding notable items from both periods, adjusted loss was
    essentially flat. Excluding the impact of U.S. tax reform, and
    excluding notable items in both periods, adjusted loss was $132
    million, compared to an adjusted loss of $207 million in the
    prior-year period.

INVESTMENTS

               
($ in millions)    

Three months ended
December 31, 2018

 

Three months ended
December 31, 2017

  Change
Net investment income (as reported on an adjusted basis)     $4,375   $4,103   7%
       
  • As reported on an adjusted basis, net investment income was
    $4.4 billion, up 7 percent. Variable investment income was
    $237 million ($187 million, after tax), as compared to $216 million
    ($140 million, after tax) in the fourth quarter of 2017, driven by
    higher private equity income.

FOURTH QUARTER 2018 NOTABLE ITEMS

     
($ in millions)   Adjusted Earnings
  Three months ended December 31, 2018
Notable Items   U.S.   Asia   Latin

America

  EMEA   MetLife

Holdings

  Corporate

&

Other

  Total
 

Group
Benefits

 

Retirement
and Income
Solutions

  Property &

Casualty

           
Litigation reserves & settlement costs                               $(60)   $(60)
Expense initiative costs                               $(100)   $(100)
Tax adjustments                               $247   $247
Total notable items   $0   $0   $0   $0   $0   $0   $0   $87   $87
     

*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 discussions below, as well as the tables
that accompany this news release. Adjusted measures were formerly
referred to as operating measures.

About MetLife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates
(MetLife), is one of the world’s leading financial services companies,
providing insurance, annuities, employee benefits and asset management
to help its individual and institutional customers navigate their
changing world. Founded in 1868, MetLife has operations in more than 40
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.

Conference Call

MetLife will hold its fourth quarter and full year 2018 earnings
conference call and audio webcast on Thursday, February 7, 2019, from
9-10 a.m. (ET). The conference call will be available live via telephone
and the internet. To listen via telephone, dial 800-230-1085 (U.S.) or
612-234-9959 (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 11 a.m. (ET) on Thursday, February 7, 2019, until
Thursday, February 14, 2019, at 11:59 p.m. (ET). 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
462460. To access the replay of the conference call over the internet,
visit the above-mentioned website.

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) adjusted earnings; (iii) adjusted earnings available to common shareholders;
(iv) adjusted earnings per share; (iv) adjusted 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 (adjusted);
(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) adjusted return on equity, excluding AOCI other than FCTA; (xi) adjusted 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) adjusted tangible return on equity. (xiii) adjusted 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)   adjusted revenues; (i) revenues;
(ii) adjusted expenses; (ii) expenses;
(iii) adjusted premiums, fees and other revenues; (iii) premiums, fees and other revenues;
(iv) adjusted premiums, fees & other revenues, excluding pension risk
transfer
(iv) premiums, fees and other revenues;
(v) adjusted earnings; (v) income (loss) from continuing operations, net of income tax;
(vi) net investment income, as reported on an adjusted basis (vi) net investment income
(vii) capitalization of deferred policy acquisition costs (DAC), as
reported on an adjusted basis
(vii) capitalization of DAC
(viii) other expenses, as reported on an adjusted basis (viii) other expenses
(ix) other expenses, as reported on an adjusted basis, on a constant
currency basis
(ix) other expenses
(x) adjusted earnings available to common shareholders; (x) net income (loss) available to MetLife, Inc.’s common shareholders;
(xi) adjusted earnings available to common shareholders on a constant
currency basis;
(xi) net income (loss) available to MetLife, Inc.’s common shareholders;
(xii) adjusted earnings available to common shareholders, excluding total
notable items;
(xii) net income (loss) available to MetLife, Inc.’s common shareholders;
(xiii) adjusted earnings available to common shareholders, excluding total
notable items, on a constant currency basis;
(xiii) net income (loss) available to MetLife, Inc.’s common shareholders;
(xiv) adjusted earnings available to common shareholders per diluted
common share;
(xiv) net income (loss) available to MetLife, Inc.’s common shareholders
per diluted common share;
(xv) adjusted earnings available to common shareholders on a constant
currency basis per diluted common share;
(xv) net income (loss) available to MetLife, Inc.’s common shareholders
per diluted common share;
(xvi) adjusted earnings available to common shareholders, excluding total
notable items, per diluted common share;
(xvi) net income (loss) available to MetLife, Inc.’s common shareholders
per diluted common share;
(xvii) adjusted earnings available to common shareholders, excluding total
notable items, on a constant currency basis per diluted common share;
(xvii) net income (loss) available to MetLife, Inc.’s common shareholders
per diluted common share;
(xviii) adjusted return on equity; (xviii) return on equity;
(xix) adjusted return on equity, excluding AOCI other than FCTA; (xix) return on equity;
(xx) adjusted return on equity, excluding net equity of assets and
liabilities of disposed subsidiary (excludes AOCI other than FCTA)
(xx) return on equity
(xxi) adjusted tangible return on equity; (xxi) return on equity;
(xxii) investment portfolio gains (losses); (xxii) net investment gains (losses);
(xxiii) derivative gains (losses); (xxiii) net derivative gains (losses);
(xxiv) MetLife, Inc.’s tangible common stockholders’ equity; (xxiv) MetLife, Inc.’s stockholders’ equity;
(xxv) MetLife, Inc.’s tangible common stockholders’ equity, excluding
total notable items;
(xxv) MetLife, Inc.’s stockholders’ equity;
(xxvi) MetLife, Inc.’s common stockholders’ equity, excluding AOCI other
than FCTA;
(xxvi) MetLife, Inc.’s stockholders’ equity;
(xxvii) MetLife, Inc.’s common stockholders’ equity, excluding total notable
items (excludes AOCI other than FCTA);
(xxvii) MetLife, Inc.’s stockholders’ equity;
(xxviii) MetLife, Inc.’s common stockholders’ equity, excluding net equity of
assets and liabilities of disposed subsidiary (excludes AOCI other
than FCTA);
(xxviii) MetLife, Inc.’s stockholders’ equity;
(xxix) book value per common share, excluding AOCI other than FCTA (xxix) book value per common share
(xxx) book value per common share – tangible common stockholders’ equity (xxx) book value per common share
(xxxi) free cash flow of all holding companies; (xxxi) MetLife, Inc. (parent company only) net cash provided by (used in)
operating activities;
(xxxii) adjusted expense ratio; (xxxii) expense ratio;
(xxxiii) adjusted expense ratio, excluding total notable items related to
other expenses and PRT;
(xxxiii) expense ratio;
(xxxiv) direct expense ratio; and (xxxiv) expense ratio; and
(xxxv) direct expense ratio, excluding total notable items related to
direct expenses and PRT.
(xxxv) expense ratio.
 

Contacts

For Media: Ashia Razzaq
MetLife
(212) 578-1538

For Investors: John Hall
MetLife
(212) 578-7888

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