MetLife 2008 Annual Report Download - page 223

fourth quarter of 2007 for additional transaction costs. The Company reclassified the assets and liabilities of the annuities and pension
businesses within MetLife Australia, which is reported in the International segment, to assets and liabilities of subsidiaries held-for-sale and
the operations of the business to discontinued operations for all periods presented. Included within the assets to be sold were certain fixed
maturity securities in a loss position for which the Company recognized a net investment loss on a consolidated basis of $59 million, net of
income tax, for the year ended December 31, 2007, because the Company no longer had the intent to hold such securities.
The following table presents the amounts related to the operations of MetLife Australia’s annuities and pension businesses:
2007 2006
Years Ended
December 31,
(In millions)
Revenues ............................................................... $71 $132
Expenses ............................................................... 58 89
Incomebeforeprovisionforincometax ............................................ 13 43
Provisionforincometax...................................................... 4 15
Netinvestmentgain(loss),netofincometax ........................................ (4) —
Incomefromdiscontinuedoperations,netofincometax................................. $ 5 $ 28
On January 31, 2005, the Company completed the sale of SSRM Holdings, Inc. to a third party for $328 million in cash and stock. The
Company reported the operations of SSRM in discontinued operations. Under the terms of the sale agreement, MetLife had an opportunity
to receive additional payments based on, among other things, certain revenue retention and growth measures. The purchase price was
also subject to reduction over five years, depending on retention of certain MetLife-related business. In the second quarter of 2008, the
Company paid $3 million, net of income tax, of which $2 million was accrued in the fourth quarter of 2007, related to the termination 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. Upon finalization of the computation, the Company received a payment
of $30 million, net of income tax, in the second quarter of 2006 due to the retention of these specific customer accounts. In the first quarter
of 2007, the Company received a payment of $16 million, net of income tax, as a result of the revenue retention and growth measure
provision in the sales agreement. In the fourth quarter of 2006, the Company eliminated $4 million of a liability that was previously recorded
with respect to the indemnities provided in connection with the sale of SSRM, resulting in a benefit to the Company of $2 million, net of
income tax. The Company believes that future payments relating to these indemnities are not probable.
The following table presents the amounts related to operations of SSRM that have been reflected as discontinued operations in the
consolidated statements of income:
2008 2007 2006
Years Ended
December 31,
(In millions)
Revenues ........................................................ $— $— $—
Expenses ........................................................ — — —
Incomefromdiscontinuedoperationsbeforeprovisionforincometax.................. — — —
Provisionforincometax ............................................... — — —
Netinvestmentgain(loss),netofincometax.................................. (1) 14 32
Incomefromdiscontinuedoperations,netofincometax .......................... $(1) $14 $32
24. Fair Value
Fair Value of Financial Instruments
As described in Note 1, the Company prospectively adopted the provisions of SFAS 157 effective January 1, 2008. As a result, the
methodologies used to determine the estimated fair value for certain financial instruments at December 31, 2008 may have been modified
from those utilized at December 31, 2007, which, while being deemed appropriate under existing accounting guidance, may not have
produced an exit value as defined in SFAS 157. Accordingly, the estimated fair value of financial instruments, and the description of the
methodologies used to derive those estimated fair values, are presented separately at December 31, 2007 and December 31, 2008.
Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions
or valuation methodologies may have a material effect on the estimated fair value amounts.
F-100 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)