10-QPeriod: Q2 FY2018

METLIFE INC Quarterly Report for Q2 Ended Jun 30, 2018

Filed August 7, 2018For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. reported its second quarter results for the period ending June 30, 2018. The company saw a net decrease in net income available to common shareholders, primarily due to unfavorable changes in net investment gains (losses) and results from discontinued operations, partially offset by favorable changes in adjusted earnings and net derivative gains (losses). Adjusted earnings, a non-GAAP measure, showed an increase, driven by higher net investment income from a larger asset base and improved investment yields, along with the favorable impact of U.S. Tax Reform and lower expenses. Total assets stood at $706.3 billion, a slight decrease from the previous year-end. Total revenues for the quarter were $21.2 billion, up from $15.3 billion in the prior year's comparable quarter, driven by increases in premiums and net investment income. The company's strategic decisions, including the sale of Brighthouse Financial, Inc. and ongoing debt management, continue to shape its financial performance. Investors should note the company's proactive management of its investment portfolio and derivatives to mitigate market risks.

Financial Highlights

37 data points
Beta

Revenue

$21.18B

Net Income

$894.00M

4.2% Net Margin

EPS (Diluted)

$0.83

Total Assets

$706.33B

Cash & Equivalents

$16.31B

Free Cash Flow

$5.61B

Financial Statements
Beta
Revenue$21.18B
Operating Expenses$3.48B
Operating Income$2.09B
Net Income$894.00M
EPS (Basic)$0.83
EPS (Diluted)$0.83
Shares Outstanding (Basic)1.02B
Shares Outstanding (Diluted)1.02B

Key Highlights

  • 1Net income available to MetLife, Inc.'s common shareholders was $845 million, a decrease of $20 million compared to the prior year's second quarter.
  • 2Adjusted earnings available to common shareholders increased by $205 million (net of income tax) to $1.3 billion.
  • 3Total revenues increased to $21.2 billion for the three months ended June 30, 2018, compared to $15.3 billion for the same period in 2017.
  • 4Total assets were $706.3 billion as of June 30, 2018, down from $719.9 billion as of December 31, 2017.
  • 5The company repurchased 24.1 million shares of common stock during the quarter for approximately $1.1 billion.
  • 6MetLife repurchased $2.2 billion of its common stock during the six months ended June 30, 2018.
  • 7The company issued 500,000 shares of 5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D and 32,200 shares of 5.625% Non-Cumulative Preferred Stock, Series E.

Frequently Asked Questions

MetLife's net income available to MetLife, Inc.'s common shareholders decreased by $20 million to $845 million for the three months ended June 30, 2018, compared to $865 million for the same period in 2017. This decrease was primarily driven by unfavorable changes in net investment gains (losses) and income (loss) from discontinued operations, partially offset by favorable changes in adjusted earnings and net derivative gains (losses).

U.S. Tax Reform, which reduced the federal corporate income tax rate to 21%, had a favorable impact on MetLife's results. For the second quarter of 2018, the changes from U.S. Tax Reform resulted in an increase in adjusted earnings of $64 million compared to the prior period. For the first six months of 2018, the impact was an increase of $165 million.

MetLife actively managed its capital during the quarter. The company repurchased approximately 24.1 million shares of its common stock for about $1.1 billion under its repurchase program. Additionally, MetLife issued new preferred stock, Series D and Series E, raising significant capital for its operations.

MetLife continues to manage its investment portfolio with a primary objective of optimizing risk-adjusted net investment income and total return while ensuring assets and liabilities are managed on a cash flow and duration basis. The company utilizes derivatives as an integral part of its risk management strategy to hedge against interest rate, foreign currency exchange rate, credit, and equity market risks. While certain hedging strategies are not designated as accounting hedges, leading to potential earnings volatility, MetLife actively evaluates market risk hedging needs to meet its financial objectives.