MetLife 2001 Annual Report Download - page 74

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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,
2001 2000 1999
(Dollars in millions)
Balance at January 1 ******************************************************************** $ 4,185 $ 3,789 $ 3,320
Reinsurance recoverables ************************************************************** (413) (415) (382)
Net balance at January 1 **************************************************************** 3,772 3,374 2,938
Acquisition of business ****************************************************************** — 2 204
Incurred related to:
Current year ************************************************************************* 4,213 3,766 3,129
Prior years *************************************************************************** (34) (111) (16)
4,179 3,655 3,113
Paid related to:
Current year ************************************************************************* (2,567) (2,237) (2,012)
Prior years *************************************************************************** (1,239) (1,022) (869)
(3,806) (3,259) (2,881)
Net Balance at December 31 ************************************************************* 4,145 3,772 3,374
Add: Reinsurance recoverables ********************************************************* 423 413 415
Balance at December 31 **************************************************************** $ 4,568 $ 4,185 $ 3,789
16. Other Expenses
Other expenses were comprised of the following:
Years ended December 31,
2001 2000 1999
(Dollars in millions)
Compensation************************************************************************** $ 2,459 $ 2,712 $ 2,590
Commissions ************************************************************************** 1,651 1,696 872
Interest and debt issue costs ************************************************************* 332 436 405
Amortization of policy acquisition costs (excludes amortization of $25, $(95), and $(46), respectively,
related to realized investment losses)***************************************************** 1,413 1,478 930
Capitalization of policy acquisition costs **************************************************** (2,039) (1,863) (1,160)
Rent, net of sublease income ************************************************************* 282 230 172
Minority interest************************************************************************* 57 115 55
Other ********************************************************************************* 3,410 3,220 2,598
Total other expenses **************************************************************** $ 7,565 $ 8,024 $ 6,462
17. 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
MetLife Policyholder Trust for the benefit of policyholders of Metropolitan Life in connection with the demutualization. On April 10, 2000, the Holding
Company issued 30,300,000 additional shares of common stock as a result of the exercise of over-allotment options granted to underwriters in the initial
public offering.
On March 28, 2001, the Holding Company’s Board of Directors authorized a $1 billion common stock repurchase program. This program began
after the completion of an earlier $1 billion repurchase program that was announced on June 27, 2000. Under these authorizations, the Holding
Company may purchase common stock from the MetLife Policyholder Trust, in the open market and in privately negotiated transactions. On August 7,
2001, the Company purchased 10 million shares of its common stock as part of the sale of 25 million shares of MetLife common stock by Santusa
MetLife, Inc. F-35