MetLife 2011 Annual Report Download - page 235
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MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
In addition, in 2011, management modified its definition of operating earnings to exclude impacts related to certain variable annuity guarantees and
Market Value Adjustments to better conform to the way it manages and assesses its business. Accordingly, such results are no longer reported in
operating earnings. Consequently, prior years’ results for Retirement Products and total consolidated operating earnings have been increased by
$64 million, net of $34 million of income tax, and $90 million, net of $49 million of income tax, for the years ended December 31, 2010 and 2009,
respectively.
Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other for the years
ended December 31, 2011, 2010 and 2009 and at December 31, 2011 and 2010. The accounting policies of the segments are the same as those of
the Company, except for operating earnings adjustments as defined above, the method of capital allocation and the accounting for gains (losses) from
intercompany sales, which are eliminated in consolidation.
Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis
upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company’s
business.
Effective January 1, 2011, the Company updated its economic capital model to align segment allocated equity with emerging standards and
consistent risk principles. Such changes to the Company’s economic capital model are applied prospectively. Segment net investment income is also
credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net
investment income, operating earnings or income (loss) from continuing operations, net of income tax.
MetLife, Inc. 231