MetLife 2002 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2002 MetLife annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 94

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Information regarding the policyholder dividend obligation is as follows:
For the Period
April 7, 2000
Years Ended through
December 31, December 31,
2002 2001 2000
(Dollars in millions)
Balance at beginning of period ****************************************************** $ 708 $ 385 $ —
Impact on net income before amounts allocable to policyholder dividend obligation ********** 157 159 85
Net investment losses ************************************************************* (157) (159) (85)
Change in unrealized investment and derivative gains *********************************** 1,174 323 385
Balance at end of period *********************************************************** $1,882 $ 708 $385
Closed block revenues and expenses were as follows:
For the Period
April 7, 2000
Years Ended through
December 31, December 31,
2002 2001 2000
(Dollars in millions)
REVENUES
Premiums *************************************************************************** $3,551 $3,658 $2,900
Net investment income and other revenues *********************************************** 2,568 2,555 1,789
Net investment gains (losses) (net of amounts allocable to the policyholder dividend obligation of
($157), ($159) and ($85), respectively) ************************************************* 168 (20) (150)
Total revenues *************************************************************** 6,287 6,193 4,539
EXPENSES
Policyholder benefits and claims ******************************************************** 3,770 3,862 2,874
Policyholder dividends ***************************************************************** 1,573 1,544 1,132
Change in policyholder dividend obligation (excludes amounts directly related to net investment
losses of ($157), ($159) and ($85), respectively)***************************************** 157 159 85
Other expenses ********************************************************************** 310 352 265
Total expenses *************************************************************** 5,810 5,917 4,356
Revenues net of expenses before income taxes ******************************************* 477 276 183
Income taxes ************************************************************************ 173 97 67
Revenues net of expenses and income taxes ********************************************* $ 304 $ 179 $ 116
The change in maximum future earnings of the closed block was as follows:
For the Period
April 7, 2000
Years Ended through
December 31, December 31,
2002 2001 2000
(Dollars in millions)
Balance at the end of period *********************************************************** $5,114 $5,333 $5,512
Less:
Reallocation of assets *************************************************************** 85 — —
Balance at beginning of period******************************************************** 5,333 5,512 5,628
Change during period ***************************************************************** $ (304) $ (179) $ (116)
During the year ended December 31, 2002, the allocation of assets to the closed block was revised to appropriately classify assets in accordance
with the plan of demutualization. The reallocation of assets had no impact on consolidated assets or liabilities.
Metropolitan Life charges the closed block with federal income taxes, state and local premium taxes, and other additive state or local taxes, as well
as investment management expenses relating to the closed block as provided in the plan of demutualization. Metropolitan Life also charges the closed
block for expenses of maintaining the policies included in the closed block.
Many of the derivative instrument strategies used by the Company are also used for the closed block. The table below provides a summary of the
notional amount and fair value of derivatives by hedge accounting classification at:
December 31, 2002 December 31, 2001
Fair Value Fair Value
Notional Notional
Amount Assets Liabilities Amount Assets Liabilities
(Dollars in millions)
By Type of Hedge
Fair value ********************************************* $ — $— $— $ — $— $—
Cash flow********************************************* 128 2 11 171 22 —
Non-qualifying ***************************************** 258 32 2 112 13 5
Total ***************************************** $386 $34 $13 $283 $35 $ 5
MetLife, Inc. F-29