10-QPeriod: Q1 FY2018

METLIFE INC Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 8, 2018For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc. reported its first quarter 2018 financial results, showing a significant increase in net income available to common shareholders, primarily driven by favorable changes in net derivative gains and the impact of U.S. Tax Reform. Despite a slight decrease in overall sales compared to the prior year, driven by mixed performance across segments and product lines, the company demonstrated improved profitability. Net investment income declined due to lower investment yields and higher interest credited expenses, but this was partially offset by a larger asset base and favorable underwriting experience. The company's adjusted earnings also saw a notable increase, reflecting the positive impact of tax reform, higher net investment income from a growing asset base, and improved underwriting, although this was tempered by higher interest credited expenses and lower investment yields. MetLife continued its share repurchase program, indicating confidence in its financial position and commitment to returning capital to shareholders.

Financial Highlights

37 data points
Beta

Revenue

$14.80B

Net Income

$1.26B

8.5% Net Margin

EPS (Diluted)

$1.19

Total Assets

$712.58B

Cash & Equivalents

$13.93B

Free Cash Flow

$1.30B

Financial Statements
Beta
Revenue$14.80B
Operating Expenses$3.37B
Operating Income$1.25B
Net Income$1.26B
EPS (Basic)$1.20
EPS (Diluted)$1.19
Shares Outstanding (Basic)1.04B
Shares Outstanding (Diluted)1.04B

Key Highlights

  • 1Net income available to MetLife, Inc.'s common shareholders increased by $380 million to $1,247 million, driven by favorable changes in net derivative gains and the impact of U.S. Tax Reform.
  • 2Adjusted earnings available to common shareholders increased by $102 million (net of tax) to $1,423 million, reflecting the positive impact of U.S. Tax Reform, higher net investment income, favorable underwriting, and lower expenses.
  • 3Total revenues slightly decreased to $14,805 million from $14,964 million in the prior year, with a decline in net investment income partially offset by improved net derivative gains and other revenues.
  • 4The company repurchased $1.0 billion of its common stock in the first quarter of 2018, demonstrating its commitment to returning capital to shareholders.
  • 5Total assets decreased to $712,584 million from $719,892 million at the end of the prior year, primarily due to a decrease in separate account assets.
  • 6The company announced the issuance of $494 million in Series D preferred stock in March 2018 to bolster its capital position.
  • 7The company continues to address material weaknesses identified in internal control over financial reporting related to certain group annuity reserves and assumed variable annuity guarantee reserves, with remediation efforts ongoing.

Frequently Asked Questions

Net income available to MetLife, Inc.'s common shareholders for the first quarter of 2018 was $1,247 million, an increase of $380 million compared to $867 million in the prior year's first quarter.

The U.S. Tax Reform had a positive impact on MetLife's results, contributing an increase of $101 million to adjusted earnings for the first quarter of 2018. It also resulted in a $54 million unfavorable impact on net income due to tax adjustments.

Net investment income decreased to $3,745 million from $4,421 million in the prior year. This was primarily due to lower investment yields on fixed maturity securities, private equities, and derivatives, as well as higher interest credited expenses. However, growth in the asset base, particularly in the U.S., Asia, and Latin America segments, contributed to higher net investment income.

MetLife repurchased $1.0 billion of its common stock in the first quarter of 2018 under its $2.0 billion authorization announced in November 2017. As of March 31, 2018, $720 million remained available under this authorization.