MetLife 2000 Annual Report Download - page 62

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
settlement lump sum contracts accounted for as a financing transaction. Reinsurance and ceded commissions payables, included in other liabilities,
were $225 million and $148 million at December 31, 2000 and 1999, respectively.
The following provides an analysis of the activity in the liability for benefits relating to property and casualty and group accident and non-medical
health policies and contracts:
Years ended December 31,
2000 1999 1998
(Dollars in millions)
Balance at January 1 ********************************************************************** $ 3,789 $ 3,320 $ 3,655
Reinsurance recoverables **************************************************************** (415) (382) (378)
Net balance at January 1 ****************************************************************** 3,374 2,938 3,277
Acquisition of business ******************************************************************** 35 204 —
Incurred related to:
Current year *************************************************************************** 3,773 3,129 2,726
Prior years ***************************************************************************** (111) (16) (245)
3,662 3,113 2,481
Paid related to:
Current year *************************************************************************** (2,243) (2,012) (1,967)
Prior years ***************************************************************************** (1,023) (869) (853)
(3,266) (2,881) (2,820)
Net balance at December 31 *************************************************************** 3,805 3,374 2,938
Add: reinsurance recoverables ************************************************************ 214 415 382
Balance at December 31 ****************************************************************** $ 4,019 $ 3,789 $ 3,320
14. Other Expenses
Other expenses were comprised of the following:
Years ended December 31,
2000 1999 1998
(Dollars in millions)
Compensation**************************************************************************** $ 2,712 $ 2,590 $ 2,478
Commissions **************************************************************************** 1,768 937 902
Interest and debt issue costs *************************************************************** 424 405 379
Amortization of policy acquisition costs (excludes amortization of $(95), $(46) and $240, respectively,
related to investment (losses) gains)******************************************************** 1,478 930 641
Capitalization of policy acquisition costs ****************************************************** (1,863) (1,160) (1,025)
Rent, net of sublease income *************************************************************** 296 239 155
Minority interest*************************************************************************** 115 55 67
Restructuring charge ********************************************************************** ——81
Other *********************************************************************************** 3,297 2,759 4,341
Total other expenses ************************************************************** $ 8,227 $ 6,755 $ 8,019
During 1998, the Company recorded charges of $81 million to restructure headquarters operations and consolidate certain agencies and other
operations. These costs were paid during 1999.
15. Stockholders’ Equity
Preferred Stock
On September 29, 1999, the Holding Company adopted a stockholder rights plan (the ‘‘rights plan’’) under which each outstanding share of
common stock issued between April 4, 2000 and the distribution date (as defined in the rights plan) will be coupled with a stockholder right. Each right
will entitle the holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock. Each one one-hundredth of a share of
Series A Junior Participating Preferred Stock will have economic and voting terms equivalent to one share of common stock. Until it is exercised, the right
itself will not entitle the holder thereof to any rights as a stockholder, including the right to receive dividends or to vote at stockholder meetings.
Stockholder rights are not exercisable until the distribution date, and will expire at the close of business on April 4, 2010, unless earlier redeemed or
exchanged by the Holding Company. The rights plan is designed to protect stockholders in the event of unsolicited offers to acquire the Holding
Company and other coercive takeover tactics.
Common Stock
On the date of demutualization, the Holding Company conducted an initial public offering of 202,000,000 shares of its common stock and
concurrent private placements of an aggregate of 60,000,000 shares of its common stock at an initial public offering price of $14.25 per share. The
shares of common stock issued in the offerings were in addition to 494,466,664 shares of common stock of the Holding Company distributed to the
Metropolitan Life Policyholder Trust for the benefit of policyholders of Metropolitan Life in connection with the demutualization. On April 10, 2000, the
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