MetLife 2003 Annual Report Download - page 90

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Three Months Ended
March 31 June 30 September 30 December 31
(Dollars in millions, except per share data)
2002
Total revenues ******************************************************** $7,963 $8,189 $8,111 $8,803
Total expenses ******************************************************* $7,482 $7,669 $7,686 $8,593
Income from continuing operations *************************************** $ 299 $ 364 $ 307 $ 164
Income from discontinued operations, net of income taxes******************* $ 25 $ 23 $ 26 $ 397
Income before cumulative effect of change in accounting ******************** $ 324 $ 387 $ 333 $ 561
Net income ********************************************************** $ 329 $ 387 $ 328 $ 561
Basic earnings per share:
Income from continuing operations available to common shareholders ******* $ 0.42 $ 0.52 $ 0.44 $ 0.23
Income from discontinued operations, net of income taxes***************** $ 0.04 $ 0.03 $ 0.04 $ 0.57
Income before cumulative effect of change in accounting available to common
shareholders ***************************************************** $ 0.46 $ 0.55 $ 0.47 $ 0.80
Net income available to common shareholders*************************** $ 0.46 $ 0.55 $ 0.47 $ 0.80
Diluted earnings per share:
Income from continuing operations available to common shareholders ******* $ 0.40 $ 0.50 $ 0.42 $ 0.23
Income from discontinued operations, net of income taxes***************** $ 0.03 $ 0.03 $ 0.04 $ 0.55
Income before cumulative effect of change in accounting available to common
shareholders ***************************************************** $ 0.44 $ 0.53 $ 0.46 $ 0.78
Net income available to common shareholders*************************** $ 0.44 $ 0.53 $ 0.45 $ 0.78
Unaudited net income for the three months ended June 30, 2003 includes a $64 million after-tax benefit from a reduction of a previously established
liability related to the Company’s race-conscious underwriting settlement, $62 million of after-tax earnings from the merger of the Company’s Mexican
operations and a reduction in policyholder liabilities resulting from the change in reserve methodology and a $31 million after-tax charge related to
previously deferred expenses. Unaudited net income for the three months ended September 30, 2003 includes a $28 million after-tax benefit from a
reduction of a previously established liability related to the Company’s race-conscious underwriting settlement and a $36 million benefit from a revision to
the 2002 income tax estimates.
Unaudited net income for the three months ended March 31, 2002 includes a $48 million after-tax charge to cover costs associated with the
resolution of a federal government investigation of General American’s former Medicare business. Unaudited net income for the three months ended
June 30, 2002 includes a $30 million after-tax reduction of a previously established liability related to the Company’s sales practice class action
settlement in 1999. Unaudited net income for the three months ended December 31, 2002 includes a $169 million after-tax charge to cover costs
associated with the asbestos-related claims, a $20 million after-tax reduction of a previously established liability to the Company’s 2001 business
realignment initiatives and a $17 million after-tax reduction of a previously established disability insurance liability related to the September 11, 2001
tragedies.
18. Business Segment Information
The Company provides insurance and financial services to customers in the United States, Canada, Central America, Europe, South America, South
Africa, Asia and Australia. The Company’s business is divided into six segments: Institutional, Individual, Auto & Home, International, Reinsurance and
Asset Management. These segments are managed separately because they either provide different products and services, require different strategies or
have different technology requirements.
Institutional offers a broad range of group insurance and retirement and savings products and services, including group life insurance, non-medical
health insurance, such as short and long-term disability, long-term care, and dental insurance, and other insurance products and services. Individual
offers a wide variety of individual insurance and investment products, including life insurance, annuities and mutual funds. Auto & Home provides
insurance coverages, including private passenger automobile, homeowners and personal excess liability insurance. International provides life insurance,
accident and health insurance, annuities and retirement and savings products to both individuals and groups, and auto and homeowners coverage to
individuals. Reinsurance provides primarily reinsurance of life and annuity policies in North America and various international markets. Additionally,
reinsurance of critical illness policies is provided in select international markets. Asset Management provides a broad variety of asset management
products and services to individuals and institutions.
Set forth in the tables below is certain financial information with respect to the Company’s operating segments as of and for the years ended
December 31, 2003, 2002 and 2001. The accounting policies of the segments are the same as those of the Company, except for the method of capital
allocation and the accounting for gains and losses from intercompany sales, which are eliminated in consolidation. The Company allocates capital to
each segment based upon an internal capital allocation system that allows the Company to more effectively manage its capital. The Company evaluates
the performance of each operating segment based upon net income excluding certain net investment gains and losses, net of income taxes, and the
impact from the cumulative effect of changes in accounting, net of income taxes. Scheduled periodic settlement payments on derivative instruments not
qualifying for hedge accounting are included in net investment gains(losses). The Company allocates certain non-recurring items (e.g., expenses
associated with the resolution of proceedings alleging race-conscious underwriting practices, sales practices claims and asbestos-related claims) to
Corporate & Other.
MetLife, Inc. F-45