10-QPeriod: Q3 FY2020

METLIFE INC Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 9, 2020For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc.'s third-quarter 2020 results show a mixed financial performance, impacted by macroeconomic conditions and the ongoing COVID-19 pandemic. While adjusted earnings available to common shareholders saw a favorable year-over-year increase, driven by expense management and higher net investment income from a larger asset base, reported net income available to common shareholders declined significantly. This decrease was primarily due to a substantial unfavorable swing in net derivative gains (losses), a common occurrence in periods of market volatility. The company continues to navigate a low-interest-rate environment, which pressures investment yields and crediting rates. Despite these challenges, MetLife has demonstrated proactive capital management by raising capital through preferred stock and senior debt issuances, and maintaining a strong liquidity position. The pending acquisition of Versant Health in vision care is expected to close by year-end 2020, signaling continued strategic investment in growth areas.

Financial Highlights

35 data points
Beta

Revenue

$16.02B

Net Income

$709.00M

4.4% Net Margin

EPS (Diluted)

$0.69

Total Assets

$780.49B

Cash & Equivalents

$24.41B

Free Cash Flow

$3.79B

Financial Statements
Beta
Revenue$16.02B
Operating Expenses$3.47B
Net Income$709.00M
EPS (Basic)$0.70
EPS (Diluted)$0.69
Shares Outstanding (Basic)908.70M
Shares Outstanding (Diluted)913.70M

Key Highlights

  • 1Adjusted earnings available to common shareholders increased $388 million year-over-year for the three months ended September 30, 2020, driven by expense management and a larger asset base.
  • 2Reported net income available to common shareholders decreased significantly by $1.5 billion for the three months ended September 30, 2020, primarily due to an unfavorable change in net derivative gains (losses).
  • 3The company raised $3.0 billion in capital during the first nine months of 2020 through preferred stock and senior debt issuances.
  • 4MetLife maintained a strong liquidity position with $7.8 billion in cash and liquid assets at the holding companies as of September 30, 2020.
  • 5The company is on track to close the acquisition of Versant Health, a managed vision care company, in the fourth quarter of 2020 for approximately $1.675 billion.
  • 6Total assets grew to $780.5 billion at September 30, 2020, up from $740.5 billion at December 31, 2019.
  • 7MetLife's investment portfolio remained heavily weighted towards fixed income securities (80% of the portfolio), with a significant portion in U.S. and foreign corporate securities.

Frequently Asked Questions

MetLife's net income available to common shareholders decreased by $1.5 billion to $633 million for the three months ended September 30, 2020, compared to $2.15 billion for the same period in 2019. This decline was primarily driven by an unfavorable change in net derivative gains (losses).

MetLife maintained a strong liquidity position with $7.8 billion in cash and liquid assets at its holding companies as of September 30, 2020. The company proactively raised $3.0 billion in capital during the first nine months of 2020 through preferred stock and senior debt issuances. Management actively monitors capital levels and targets, and the company believes it has sufficient liquidity to meet its obligations and withstand reasonably possible stress scenarios.

The COVID-19 pandemic has impacted MetLife's business operations, investment portfolio, and financial results by causing volatility in financial markets, including equity, credit, and real estate markets. This has led to lower investment yields, changes in policyholder behavior, and increased claims in certain product lines. The company has implemented risk management and business continuity plans and provided accommodations to customers to mitigate these impacts.

MetLife announced in September 2020 that it has entered into a definitive agreement to acquire Versant Health, Inc., a managed vision care company, for approximately $1.675 billion in an all-cash transaction. The acquisition is expected to close in the fourth quarter of 2020, subject to customary closing conditions, including regulatory approvals.