MetLife 2003 Annual Report Download - page 67

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Net Unrealized Investment Gains
The components of net unrealized investment gains, included in accumulated other comprehensive income, were as follows:
Years Ended December 31,
2003 2002 2001
(Dollars in millions)
Fixed maturities***************************************************************************** $ 9,204 $ 7,360 $ 3,097
Equity securities **************************************************************************** 376 57 617
Derivatives ********************************************************************************* (427) (24) 71
Other invested assets *********************************************************************** (33) 16 59
Total ********************************************************************************** 9,120 7,409 3,844
Amounts allocated from:
Future policy benefit loss recognition ********************************************************* (1,482) (1,269) (30)
Deferred policy acquisition costs ************************************************************ (674) (559) (21)
Participating contracts ********************************************************************* (183) (153) (127)
Policyholder dividend obligation ************************************************************* (2,130) (1,882) (708)
Deferred income taxes*********************************************************************** (1,679) (1,264) (1,079)
Total ********************************************************************************** (6,148) (5,127) (1,965)
Net unrealized investment gains ******************************************************* $ 2,972 $ 2,282 $ 1,879
The changes in net unrealized investment gains were as follows:
Years Ended December 31,
2003 2002 2001
(Dollars in millions)
Balance at January 1 ************************************************************************* $2,282 $ 1,879 $1,175
Unrealized investment gains (losses) during the year *********************************************** 1,711 3,565 1,365
Unrealized investment gains (losses) relating to:
Future policy benefit gains (losses) recognition ************************************************** (213) (1,239) 254
Deferred policy acquisition costs ************************************************************* (115) (538) (140)
Participating contracts ********************************************************************** (30) (26) 6
Policyholder dividend obligation ************************************************************** (248) (1,174) (323)
Deferred income taxes************************************************************************ (415) (185) (458)
Balance at December 31 ********************************************************************* $2,972 $ 2,282 $1,879
Net change in unrealized investment gains ******************************************************* $ 690 $ 403 $ 704
Structured Investment Transactions
The Company securitizes high yield debt securities, investment grade bonds and structured finance securities. The Company has sponsored four
securitizations with a total of approximately $1,431 million in financial assets as of December 31, 2003. The Company’s beneficial interests in these SPEs
as of December 31, 2003 and 2002 and the related investment income for the years ended December 31, 2003, 2002 and 2001 were insignificant.
The Company also invests in structured notes and similar type instruments, which generally provide equity-based returns on debt securities. The
carrying value of such investments was approximately $880 million and $870 million at December 31, 2003 and 2002, respectively. The related income
recognized was $78 million, $1 million and $44 million for the years ended December 31, 2003, 2002 and 2001, respectively.
Variable Interest Entities
As discussed in Note 1, the Company has adopted the provisions of FIN 46 and FIN 46(r). At December 31, 2003, FIN 46(r) did not require the
Company to consolidate any additional VIEs that were not previously consolidated.
MetLife, Inc.
F-22