10-QPeriod: Q3 FY2014

METLIFE INC Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 6, 2014For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc.'s Q3 2014 filing (as of September 30, 2014) shows a solid increase in net income attributable to common shareholders, reaching $2.064 billion, up significantly from $942 million in the same period of the prior year. This growth was largely driven by a favorable swing in net derivative gains (losses), which moved from a loss of $546 million to a gain of $478 million, and a substantial increase in income from continuing operations before taxes, climbing to $2.952 billion from $976 million year-over-year. The company's total assets grew to $908.6 billion, reflecting an increase in investments, particularly fixed maturity securities available-for-sale. Key operating segments, including Americas (Retail, Group, Voluntary & Worksite Benefits, Corporate Benefit Funding, Latin America), Asia, and EMEA, all contributed to profitability. However, specific product sales showed mixed performance, with declines in variable annuity and certain Japan-based products due to pricing discipline, while other areas like group benefits and Latin America showed growth. The company continues to manage its investment portfolio strategically amidst a low interest rate environment and is navigating evolving regulatory landscapes globally, including potential designations as a non-bank SIFI.

Financial Statements
Beta
Revenue$18.85B
Operating Expenses$4.22B
Operating Income$4.70B
Net Income$2.09B
EPS (Basic)$1.83
EPS (Diluted)$1.81
Shares Outstanding (Basic)1.13B
Shares Outstanding (Diluted)1.14B

Key Highlights

  • 1Net income available to common shareholders significantly increased to $2.064 billion for the three months ended September 30, 2014, compared to $942 million in the prior year period.
  • 2Total assets grew to $908.6 billion, up from $885.3 billion at the end of 2013, primarily driven by an increase in total investments.
  • 3The company reported a substantial positive swing in net derivative gains (losses), moving from a loss of $546 million in Q3 2013 to a gain of $478 million in Q3 2014.
  • 4Operating earnings available to common shareholders increased to $1.825 billion for the three months ended September 30, 2014, up from $1.495 billion in the prior year period.
  • 5MetLife Inc. repurchased approximately 8.2 million shares of common stock for $443 million during the first nine months of 2014, under its common stock repurchase program.
  • 6The company reported strong performance in its Latin America segment, with operating earnings increasing by $19 million year-over-year for the third quarter.
  • 7MetLife Inc. received regulatory approval to merge three U.S.-based life insurance companies and a former offshore reinsurance subsidiary, expected to occur in Q4 2014.

Frequently Asked Questions

MetLife reported a significant increase in net income available to common shareholders, reaching $2.064 billion for the three months ended September 30, 2014, a substantial improvement from $942 million in the same period of 2013. This was driven by higher operating earnings, improved net investment income, and a favorable swing in net derivative gains (losses).

The company's total investments increased to $507.6 billion at September 30, 2014. Net investment income increased to $5.41 billion for the third quarter of 2014, up from $5.03 billion in the prior year's period. The portfolio remains heavily weighted towards fixed-income securities, with efforts to manage interest rate risk through ALM strategies and derivatives.

The improved profitability was primarily driven by a favorable change in net derivative gains (losses), a significant increase in income from continuing operations before taxes, higher net investment income due to portfolio growth and improved yields, and growth in asset-based fee revenues. These factors were partially offset by mixed sales performance in certain product lines and less favorable mortality and claims experience in some segments.

MetLife is subject to various regulatory developments, including potential designation as a non-bank Systemically Important Financial Institution (non-bank SIFI) by the Financial Stability Oversight Council (FSOC), which could lead to enhanced prudential standards and capital requirements. The company is contesting this preliminary designation. Additionally, evolving insurance regulations globally, including Solvency II in Europe and potential changes in U.S. federal oversight of insurance, could impact capital requirements and business operations.