MetLife 2001 Annual Report Download - page 72

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
13. Business Realignment Initiatives
During the fourth quarter of 2001, the Company implemented several business realignment initiatives, which resulted from a strategic review of
operations and an ongoing commitment to reduce expenses. The impact of these actions on a segment basis are as follows:
For the year ended
December 31, 2001
Net of
income
Amount tax
(Dollars in millions)
Institutional********************************************************************************************* $399 $267
Individual ********************************************************************************************** 97 61
Auto & Home ****************************************************************************************** 32
Total ****************************************************************************************** $499 $330
The charges, net of income tax, reduced earnings per share for the year ended December 31, 2001 by $0.43, on a diluted basis.
Institutional. The charges to this segment include costs associated with exiting a business, including the write-off of goodwill, severance,
severance-related expenses, and facility consolidation costs. These expenses are the result of the discontinuance of certain 401(k) recordkeeping
services and externally-managed guaranteed index separate accounts. These initiatives will result in the elimination of approximately 450 positions. These
actions resulted in charges to policyholder benefits and claims and other expenses of $215 million and $184 million, respectively.
Individual. The charges to this segment include facility consolidation costs, severance and severance-related expenses, which predominately stem
from the elimination of approximately 560 non-sales positions and 190 operations and technology positions supporting this segment. The costs were
recorded in other expenses.
Auto & Home. The charges to this segment include severance and severance-related costs associated with the elimination of approximately 200
positions. The costs were recorded in other expenses.
Although many of the underlying business initiatives were completed in 2001, a portion of the activity will continue into 2002. The liability as of
December 31, 2001 was $295 million.
14. Income Taxes
The provision for income taxes was as follows:
Years ended December 31,
2001 2000 1999
(Dollars in millions)
Current:
Federal************************************************************************************ $ (44) $(153) $608
State and local ***************************************************************************** (4) 34 24
Foreign************************************************************************************ 15 5 4
(33) (114) 636
Deferred:
Federal************************************************************************************ 286 563 (78)
State and local ***************************************************************************** 12 8 2
Foreign************************************************************************************ 1 6 (2)
299 577 (78)
Provision for income taxes********************************************************************** $266 $ 463 $558
Reconciliations of the income tax provision at the U.S. statutory rate to the provision for income taxes as reported were as follows:
Years ended December 31,
2001 2000 1999
(Dollars in millions)
Tax provision at U.S. statutory rate*************************************************************** $259 $ 496 $411
Tax effect of:
Tax exempt investment income**************************************************************** (82) (52) (39)
Surplus tax ******************************************************************************** — (145) 125
State and local income taxes ***************************************************************** 93018
Prior year taxes***************************************************************************** 38 (37) (31)
Demutualization costs *********************************************************************** —2156
Payment to former Canadian policyholders ****************************************************** — 114 —
Sales of businesses************************************************************************* 531—
Other, net ********************************************************************************* 37 5 18
Provision for income taxes********************************************************************** $266 $ 463 $558
MetLife, Inc. F-33