MetLife 2002 Annual Report Download - page 7

(2) Investment gains and losses are presented net of related policyholder amounts. The amounts netted against investment gains and losses are the
following:
For the Years Ended December 31,
2002 2001 2000 1999 1998
(Dollars in millions)
Gross investment (losses) gains *********************************** $(929) $(737) $(444) $(137) $2,629
Less amounts allocable to:
Future policy benefit loss recognition ***************************** ————(272)
Deferred policy acquisition costs ******************************** (5) (25) 95 46 (240)
Participating contracts ***************************************** (7) — (126) 21 (96)
Policyholder dividend obligation ********************************* 157 159 85 — —
Net investment (losses) gains ************************************* $(784) $(603) $(390) $ (70) $2,021
Investment gains and losses have been reduced by (i) additions to future policy benefits resulting from the need to establish additional liabilities due
to the recognition of investment gains, (ii) amortization of deferred policy acquisition costs, to the extent that such amortization results from
investment gains and losses, (iii) adjustments to participating contractholder accounts when amounts equal to such investment gains and losses are
applied to the contractholder’s accounts, and (iv) adjustments to the policyholder dividend obligation resulting from investment gains and losses.
This presentation may not be comparable to presentations made by other insurers.
(3) Includes the following combined financial statement data of Conning Corporation (‘‘Conning’’), which was sold in 2001, the Company’s controlling
interest in Nvest Companies, L.P. and its affiliates (‘‘Nvest’’), which were sold in 2000, MetLife Capital Holdings, Inc., which was sold in 1998, and
the Company’s Canadian operations and U.K. insurance operations, substantially all of which were sold in 1998:
For the Years Ended December 31,
2001 2000 1999 1998
(Dollars in millions)
Total revenues ************************************************************* $32 $605 $655 $1,405
Total expenses************************************************************* $33 $580 $603 $1,275
As a result of these sales, investment gains of $25 million, $663 million, and $520 million were recorded for the years ended December 31, 2001,
2000, and 1998, respectively.
In July 1998, Metropolitan Life sold a substantial portion of its Canadian operations to Clarica Life Insurance Company (‘‘Clarica Life’’). As part of that
sale, a large block of policies in effect with Metropolitan Life in Canada were transferred to Clarica Life, and the holders of the transferred Canadian
policies became policyholders of Clarica Life. Those transferred policyholders were no longer policyholders of Metropolitan Life and, therefore, were
not entitled to compensation under the plan of reorganization. However, as a result of a commitment made in connection with obtaining Canadian
regulatory approval of that sale and in connection with the demutualization, in 2000, Metropolitan Life’s Canadian branch made cash payments to
those who were, or were deemed to be, holders of these transferred Canadian policies. The payments were determined in a manner that is
consistent with the treatment of, and fair and equitable to, eligible policyholders of Metropolitan Life.
(4) Included in total revenues and total expenses for the year ended December 31, 2002 are $421 million and $358 million, respectively, related to
Aseguradora Hidalgo S.A., which was acquired in June 2002. Included in total revenues and total expenses for the year ended December 31, 2000
are $3,739 million and $3,561 million, respectively, related to GenAmerica, which was acquired in January 2000.
(5) Policyholder benefits and claims exclude ($150) million, ($159) million, $41 million, ($21) million, and $368 million for the years ended December 31,
2002, 2001, 2000, 1999, and 1998, respectively, of future policy benefit loss recognition, adjustments to participating contractholder accounts and
changes in the policyholder dividend obligation that have been netted against net investment gains and losses as such amounts are directly related
to such gains and losses. This presentation may not be comparable to presentations made by other insurers.
(6) Other expenses exclude $5 million, $25 million, ($95) million, ($46) million, and $240 million for the years ended December 31, 2002, 2001, 2000,
1999 and 1998, respectively, of amortization of deferred policy acquisition costs that have been netted against net investment gains and losses as
such amounts are directly related to such gains and losses. This presentation may not be comparable to presentations made by other insurers.
(7) Provision for income taxes includes ($145) million, $125 million, and $18 million for surplus tax (credited) accrued by Metropolitan Life for the years
ended December 31, 2000, 1999, and 1998, respectively. Prior to its demutualization, Metropolitan Life was subject to surplus tax imposed on
mutual life insurance companies under Section 809 of the Internal Revenue Code.
(8) Policyholder liabilities include future policy benefits and other policyholder funds. Life and health policyholder liabilities also include policyholder
account balances, policyholder dividends payable and the policyholder dividend obligation.
(9) For additional information regarding these items, see Notes 1 and 17 of Notes to Consolidated Financial Statements.
(10) Return on equity is defined as net income divided by average total equity, excluding accumulated other comprehensive income (loss).
(11) Includes MetLife’s general account and separate account assets managed on behalf of third parties. Includes $21 billion of assets under
management managed by Conning at December 31, 2000, which was sold in 2001. Includes $133 billion and $135 billion of assets under
management managed by Nvest at December 31, 1999 and 1998, respectively, which was sold in 2000.
(12) Based on earnings subsequent to the date of demutualization. For additional information regarding net income per share data, see Note 19 of Notes
to Consolidated Financial Statements.
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