10-QPeriod: Q3 FY2006

METLIFE INC Quarterly Report for Q3 Ended Sep 30, 2006

Filed November 8, 2006For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc. reported a strong performance for the third quarter of 2006, with net income available to common shareholders increasing by 35% year-over-year to $999 million, or $1.29 per diluted share. This growth was primarily driven by a significant increase in net investment gains, largely due to favorable mark-to-market adjustments on derivatives and improved investment income from higher interest rates and an expanded asset base. The company also saw continued business growth across most operating segments, contributing to higher premiums, fees, and other revenues. Despite the positive top-line and investment performance, overall expenses also rose, mainly due to increased interest expenses on debt, higher corporate spending, and investments in information technology and growth initiatives. These higher expenses were partially offset by reduced integration costs from the Travelers acquisition. Discontinued operations showed a net gain, primarily from real estate disposals, though this was lower than the prior year's substantial gains. The company's balance sheet remains robust, with total assets growing to $516.2 billion.

Key Highlights

  • 1Net income available to common shareholders increased 35% to $999 million ($1.29/diluted share) for the three months ended September 30, 2006.
  • 2Net investment gains increased significantly due to favorable mark-to-market on derivatives and higher investment income driven by interest rates and asset base growth.
  • 3Total revenues grew 5% to $12.55 billion, driven by premiums, fees, and higher net investment income.
  • 4Total expenses increased 2% to $11.24 billion, impacted by higher interest expenses and operating costs, partially offset by reduced integration expenses.
  • 5The company ended the quarter with total assets of $516.2 billion and total stockholders' equity of $31.6 billion.
  • 6The acquisition of Travelers continues to be integrated, with Travelers' operations included from July 1, 2005.

Frequently Asked Questions

MetLife reported net income available to common shareholders of $999 million for the three months ended September 30, 2006, compared to $742 million in the same period of 2005.

The increase in net income was primarily driven by a significant rise in net investment gains, largely due to favorable mark-to-market adjustments on derivatives and higher net investment income resulting from increased interest rates and a larger asset base. Continued business growth across most segments also contributed.

The acquisition of Travelers, completed on July 1, 2005, contributed to the overall results for the period. While the acquisition provided scale and expanded the company's presence, integration costs and higher expenses associated with growth initiatives were noted.

As of September 30, 2006, MetLife had total assets of $516.2 billion, total liabilities of $484.6 billion, and total stockholders' equity of $31.6 billion.