MetLife 2005 Annual Report Download - page 128

Download and view the complete annual report

Please find page 128 of the 2005 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 133

  • 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
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On January 31, 2005, the Company completed the sale of SSRM to a third party for $328 million in cash and stock. As a result of the sale of SSRM,
the Company recognized income from discontinued operations of approximately $157 million, net of income taxes, comprised of a realized gain of
$165 million, net of income taxes, and an operating expense related to a lease abandonment of $8 million, net of income taxes. Under the terms of the
sale agreement, MetLife will have an opportunity to receive, prior to the end of 2006, additional payments aggregating up to approximately 25% of the
base purchase price, based on, among other things, certain revenue retention and growth measures. The purchase price is also subject to reduction
over five years, depending on retention of certain MetLife-related business. Also under the terms of such agreement, MetLife had the opportunity to
receive additional consideration for the retention of certain customers for a specific period in 2005. In the fourth quarter of 2005, upon finalization of the
computation, the Company received a payment of $12 million, net of income taxes, due to the retention of these specific customer accounts. The
Company reclassified the assets, liabilities and operations of SSRM into discontinued operations for all periods presented. Additionally, the sale of SSRM
resulted in the elimination of the Company’s Asset Management segment. The remaining asset management business, which is insignificant, has been
reclassified into Corporate & Other. The Company’s discontinued operations for the year ended December 31, 2005 also includes expenses of
approximately $6 million, net of income taxes, related to the sale of SSRM.
The operations of SSRM include affiliated revenues of $5 million, $59 million and $54 million for the years ended December 31, 2005, 2004 and
2003, respectively, related to asset management services provided by SSRM to the Company that have not been eliminated from discontinued
operations as these transactions continue after the sale of SSRM. The following tables present the amounts related to operations and financial position of
SSRM that have been combined with the discontinued real estate operations in the consolidated income statements:
Years Ended
December 31,
2005 2004 2003
(In millions)
Revenues from discontinued operations*************************************************************** $ 19 $328 $231
Expenses from discontinued operations *************************************************************** 38 296 197
Income from discontinued operations before provision for income taxes ************************************ (19) 32 34
Provision for income taxes ************************************************************************** (5) 13 13
Income (loss) from discontinued operations, net of income taxes **************************************** (14) 19 21
Net investment gains, net of income taxes ************************************************************ 177 — —
Income from discontinued operations, net of income taxes ********************************************* $163 $ 19 $ 21
December 31,
2004
(In millions)
Equity securities********************************************************************************************* $49
Real estate and real estate joint ventures ************************************************************************ 96
Short-term investments *************************************************************************************** 33
Other invested assets **************************************************************************************** 20
Cash and cash equivalents *********************************************************************************** 55
Premiums and other receivables ******************************************************************************* 38
Other assets *********************************************************************************************** 88
Total assets held-for-sale *********************************************************************************** $379
Short-term debt ********************************************************************************************* $19
Current income taxes payable ********************************************************************************* 1
Deferred income taxes payable ******************************************************************************** 1
Other liabilities ********************************************************************************************** 219
Total liabilities held-for-sale ********************************************************************************** $240
20. Fair Value Information
The estimated fair values of financial instruments have been determined by using available market information and the valuation methodologies
described below. Considerable judgment is often required in interpreting market data to develop estimates of fair value. Accordingly, the estimates
presented herein may not necessarily be indicative of amounts that could be realized in a current market exchange. The use of different assumptions or
valuation methodologies may have a material effect on the estimated fair value amounts.
MetLife, Inc.
F-66