MetLife 2010 Annual Report Download - page 8

(2) At December 31, 2010, general account assets, long-term debt and other liabilities include amounts relating to variable interest entities of
$11,080 million, $6,902 million and $93 million, respectively.
(3) Policyholder liabilities and other policy-related balances include future policy benefits, policyholder account balances, other policy-
related balances, policyholder dividends payable and the policyholder dividend obligation.
(4) Return on MetLife, Inc.’s common equity is defined as net income (loss) available to MetLife, Inc.’s common shareholders divided by
MetLife, Inc.’s average common stockholders’ equity.
(5) For the year ended December 31, 2009, shares related to the assumed exercise or issuance of stock-based awards have been excluded
from the calculation of diluted earnings per common share as these assumed shares are anti-dilutive.
Business
With a more than 140-year history, we have grown to become a leading global provider of insurance, annuities and employee benefit
programs, serving 90 million customers in over 60 countries. Through our subsidiaries and affiliates, MetLife holds leading market positions in
theUnitedStates(“U.S.”),Japan,LatinAmerica,AsiaPacific,EuropeandtheMiddleEast.Overthepastseveralyears,wehavegrownour
core businesses, as well as successfully executed on our growth strategy. This has included completing a number of transactions that have
resulted in the acquisition and, in some cases, divestiture of certain businesses while also further strengthening our balance sheet to position
MetLife for continued growth.
On November 1, 2010 (the “Acquisition Date”), MetLife, Inc. completed the acquisition of American Life Insurance Company (“American
Life”), from ALICO Holdings LLC (“ALICO Holdings”), a subsidiary of American International Group, Inc. (“AIG”), and Delaware American Life
Insurance Company (“DelAm,”) from AIG, (American Life, together with DelAm, collectively, “ALICO”) (the “Acquisition”) for a total purchase
price of $16.4 billion. The business acquired in the Acquisition provides consumers and businesses with products and services, life
insurance, accident and health insurance, retirement and wealth management solutions. This transaction delivers on our global growth
strategies, adding significant scale and reach to MetLife’s international footprint, furthering our diversification in geographic mix and product
offerings, as well as increasing our distribution strength. See Note 2 of the Notes to the Consolidated Financial Statements.
MetLife is organized into five segments: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home
(collectively, “U.S. Business”) and International. The assets and liabilities of ALICO as of November 30, 2010 and the operating results
of ALICO from the Acquisition Date through November 30, 2010 are included in the International segment. In addition, the Company reports
certain of its results of operations in Banking, Corporate & Other, which includes MetLife Bank, National Association (“MetLife Bank”) and
other business activities. For reporting periods beginning in 2011, our non-U.S. Business results will be presented within two separate
segments: Japan and Other International Regions. MetLife’s management continues to evaluate the Company’s segment performance and
allocated resources and may adjust such measurements in the future to better reflect segment profitability.
U.S. Business provides a variety of insurance and financial services products — including life, dental, disability, auto and homeowner
insurance, guaranteed interest and stable value products, and annuities — through both proprietary and independent retail distribution
channels, as well as at the workplace. This business serves over 60,000 group customers, including over 90 of the top one hundred
FORTUNE 500»companies, and provides protection and retirement solutions to millions of individuals.
International operates in Japan and 64 countries within Latin America, Asia Pacific, Europe and the Middle East. MetLife is the largest life
insurer in Mexico and also holds leading market positions in Japan, Poland, Chile and South Korea. This business provides life insurance,
accident and health insurance, credit insurance, annuities, endowment and retirement & savings products to both individuals and groups.
International is the fastest-growing of MetLife’s businesses, and we believe it will be one of the largest future growth areas.
Within the U.S., we also provide a variety of mortgage and deposit products through MetLife Bank. Results of our banking operation are
reported in Banking, Corporate & Other.
U.S. Business markets our products and services through various distribution groups. Our life insurance and retirement products targeted
to individuals are sold via sales forces, comprised of MetLife employees, in addition to third-party organizations. Our group life, non-medical
health and corporate benefit funding products are sold via sales forces primarily comprised of MetLife employees. Personal lines property and
casualty insurance products are directly marketed to employees at their employer’s worksite. Auto & Home products are also marketed and
sold to individuals by independent agents and property and casualty specialists through a direct response channel and the individual
distribution sales group. MetLife sales employees work with all distribution groups to better reach and service customers, brokers,
consultants and other intermediaries.
International markets its products and services through a multi-distribution strategy which varies by geographic region. The various
distribution channels include: agency, bancassurance, direct marketing (“DM”), brokerage and e-commerce. In developing countries, agency
covers the needs of the emerging middle class with primarily traditional products (e.g., endowment and accident and health). In more
developed and mature markets, agents, while continuing to serve their existing customers to keep pace with their developing financial needs,
also target upper middle class and high net worth customer bases with a more sophisticated product set including more investment-sensitive
products, such as universal life, mutual fund and single premium deposits. In the bancassurance channel, International leverages partner-
ships that span all regions. In addition, DM has extensive and far reaching capabilities in all regions. The DM operations deploy both broadcast
marketing approaches (e.g. direct response TV, web-based lead generation) and traditional DM techniques such as telemarketing. Japan
represents the largest DM market.
Operating revenues derived from any customer did not exceed 10% of consolidated operating revenues in any of the last three years.
Financial information, including revenues, expenses, operating earnings,andtotalassetsbysegment,isprovidedinNote22oftheNotesto
the Consolidated Financial Statements. Operating revenues and operating earnings are performance measures that are not based on
accounting principles generally accepted in the United States of America (“GAAP”). See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” for definitions of such measures.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated
in 1999 (the “Holding Company”), its subsidiaries and affiliates. Following this summary is a discussion addressing the consolidated results of
operations and financial condition of the Company for the periods indicated. This discussion should be read in conjunction with “Note
5MetLife, Inc.