01—Abstract
Summary
Summary of the 10-K/A filed November 22, 2010. Cited figures are marked; the original filing is the authoritative source.
This filing is a Form 10-K/A (Amendment) from MetLife, Inc. (MET), filed November 22, 2010, that amends only Part I, Item 1 (Business) and Part II, Item 7 (MD&A) of the original 10-K for fiscal year 2009 (originally filed February 26, 2010).
The sole purpose of the amendment is to delete disclosures and references to the company's credit ratings, on the view that they may not constitute issuer disclosure-related ratings information. The amendment is stated as of December 31, 2009 and does not reflect subsequent events. Financial statements, risk factors, and other items are not included, so this document does not restate results and should not be used on its own for investment decisions.
Investors should refer to the original 10-K for complete financial data. For context from the amended sections, MetLife reported a 2009 loss from continuing operations of $2.3 billiona (versus income of $3.5 billion in 2008), driven mainly by a $7.8 billion pre-tax net investment loss, largely from freestanding derivatives hedging variable annuity guarantees. Operating earnings available to common shareholders fell 12% to $2.4 billion.
The company describes itself as operating with a $328 billionb general account portfolio and about 70 million customers across the U.S., Latin America, Asia Pacific, and EMEI. Management expects roughly 6% top-line growth and earnings recovery in 2010, while noting that the 2009 results were affected by market volatility and that the company was in discussions to acquire AIG's American Life Insurance Company.
The key takeaway for investors is that this amendment changes disclosure language around ratings rather than the company's financial condition. Its main significance is as a documented change in what MetLife discloses about its credit and financial strength ratings, a topic that matters for funding costs and collateral requirements.
02—Key points
Key Highlights
- Form 10-K/A amends only Item 1 (Business) and Item 7 (MD&A) of the FY2009 Original 10-K filed February 26, 2010; financial statements are not included.
- The amendment removes references to MetLife's credit ratings, which the company states may not constitute issuer disclosure-related ratings information.
- FY2009 loss from continuing operations was $2.3 billion versus income of $3.5 billion in 2008, mainly due to a $7.8 billion pre-tax net investment loss.
- Operating earnings available to common shareholders declined 12% to $2.4 billion in 2009 from $2.7 billion in 2008.
- The company reports a $328 billion general account portfolio, with fixed maturity securities of $227.6 billion at estimated fair value at year-end 2009.
- Management guides to approximately 6% top-line growth in 2010 and expects a meaningful earnings recovery, with lower volatility in guarantee-related liabilities.
- Information is stated as of December 31, 2009 and does not reflect subsequent events after the original filing, so it may be outdated for current investment decisions.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-K/AFY2009filed November 22, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $40.66B$50.98B | −20.3% |
| Operating Expenses | $10.52B$11.95B | −11.9% |
| Operating Income | -$2.60B$3.38B | −176.8% |
| Interest Expense | $1.04B$1.05B | −0.7% |
| Net Income | -$2.25B$3.21B | −170.0% |
| EPS (Basic) | $-2.89$4.19 | −169.0% |
| EPS (Diluted) | $-2.89$4.14 | −169.8% |
| Shares Outstanding (Basic) | 818.46M735.18M | +11.3% |
| Shares Outstanding (Diluted) | 818.46M744.79M | +9.9% |
05—Questions
Frequently Asked Questions
Why was this 10-K/A filed?
The amendment deletes disclosures and references to MetLife's credit ratings, because the company believes these may not constitute issuer disclosure-related ratings information. It modifies only Items 1 and 7 and leaves the rest of the original 10-K unchanged.
Does this amendment change MetLife's reported financial results?
No. The amendment changes only narrative disclosure about credit ratings in Business and MD&A. The financial statements and other items are not included and are unaffected, so reported 2009 results are the same as in the original filing.
What drove MetLife's 2009 net loss?
The loss from continuing operations of $2.3 billion was driven mainly by a $5.2 billion unfavorable swing in net investment gains and losses, primarily from losses on freestanding derivatives partly offset by gains on embedded derivatives tied to variable annuity guarantees, along with lower net investment income from declining yields.
What does MetLife expect for 2010?
Management expects approximately 6% top-line growth in 2010, driven by higher separate account fees, pension closeout sales, International growth, and modest growth in Insurance Products. It also expects higher investment returns, reduced volatility in guarantee-related liabilities, and lower pension-related expenses, though it cautions that outcomes are difficult to predict.
Where can investors find complete financial information?
The complete financial statements, risk factors, and other items are in the Original Form 10-K for the year ended December 31, 2009, filed February 26, 2010. Investors should consult that filing for full financial data.
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