MetLife Announces Third Quarter 2019 Results

NEW YORK–(BUSINESS WIRE)–MetLife, Inc. (NYSE: MET) today announced its results for the third quarter ended September 30, 2019.

Third Quarter Results Summary

• Net income of $2.2 billion, or $2.30 per share, compared to net income of $880 million, or $0.88 per share, in the third quarter of 2018.
• Adjusted earnings of $1.2 billion, or $1.27 per share, compared to adjusted earnings of $1.4 billion, or $1.38 per share in the third quarter of 2018.
• Adjusted earnings, excluding total notable items, of $1.4 billion, or $1.54 per share, compared to adjusted earnings, excluding total notable items of $1.5 billion, or $1.53 per share in the third quarter of 2018.
• Book value of $70.71 per share, up 44 percent from $48.94 per share at September 30, 2018.
• Book value, excluding accumulated other comprehensive income (AOCI) other than foreign currency translation adjustments (FCTA), of $48.56 per share, up 13 percent from $42.97 per share at September 30, 2018.
• Return on equity (ROE) of 13.7 percent.
• Adjusted ROE, excluding AOCI other than FCTA, of 10.7 percent.
• Adjusted ROE, excluding total notable items (excludes AOCI other than FCTA), of 12.9 percent.

“MetLife reported solid third quarter adjusted earnings per share, driven by volume growth, variable investment income and the cumulative impact of our capital management,” said Michel Khalaf, president and CEO of MetLife, Inc. “Our performance highlights MetLife’s resilience in the face of market headwinds and the strength of our diverse mix of businesses.”

Third Quarter 2019 Summary

($ in millions, except per share data)		Three months ended September 30,
		2019			2018			Change
Premiums, fees and other revenues		$12,640			$12,064			5%
Net investment income		4,623			4,486			3%
Net investment gains (losses)		161			117			38%
Net derivative gains (losses)		1,254			(378)
Total revenues		$18,678			$16,289			15%
Total adjusted revenues		$16,918			$16,400			3%
Adjusted premiums, fees and other revenues		$12,445			$11,938			4%
Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT)		$11,152			$10,920			2%
Net income (loss)		$2,152			$880			145%
Net income (loss) per share		$2.30			$0.88			161%
Adjusted earnings		$1,190			$1,376			(14)%
Adjusted earnings per share		$1.27			$1.38			(8)%
Adjusted earnings, excluding total notable items		$1,438			$1,532			(6)%
Adjusted earnings, excluding total notable items per share		$1.54			$1.53			1%
Book value per share		$70.71			$48.94			44%
Book value per share, excluding AOCI other than FCTA		$48.56			$42.97			13%
Expense ratio		19.2%			20.5%
Direct expense ratio, excluding total notable items related to direct expenses and PRT		12.2%			13.1%
Adjusted expense ratio, excluding total notable items related to other expenses and PRT		19.9%			20.7%
ROE		13.7%			7.1%
ROE, excluding AOCI other than FCTA		19.4%			8.3%
Adjusted ROE, excluding AOCI other than FCTA		10.7%			12.9%
Adjusted ROE, excluding total notable items (excludes AOCI other than FCTA)		12.9%			14.4%

MetLife reported third quarter 2019 premiums, fees and other revenues of $12.6 billion, up 5 percent over the third quarter of 2018. Adjusted premiums, fees and other revenues were $12.4 billion, up 4 percent, and 4 percent on a constant currency basis over the prior-year period. Excluding pension risk transfers, adjusted premiums, fees and other revenues were $11.2 billion, up 2 percent, and 2 percent on a constant currency basis.

Net investment income was $4.6 billion, up 3 percent. The increase in net investment income was driven by favorable changes in the estimated fair value of certain securities which do not qualify as separate accounts under GAAP. On an adjusted basis, net investment income was $4.5 billion.

Net derivative gains amounted to $1.3 billion, or $991 million after tax during the quarter.

Net income was $2.2 billion, compared to net income of $880 million in the third quarter of 2018. On a per share basis, net income was $2.30, compared to net income of $0.88 in the prior-year period.

MetLife reported adjusted earnings of $1.2 billion, down 14 percent, and down 13 percent on a constant currency basis. On a per share basis, which includes the impact of share repurchases, adjusted earnings were $1.27, down 8 percent from the prior-year period.

Annual Actuarial Assumption Review

In the third quarter of 2019, MetLife performed the company’s annual global actuarial assumption review. The actuarial assumption review and other insurance adjustments during the quarter reduced net income and adjusted earnings by $179 million and $160 million, respectively.

Information regarding the non-GAAP and other financial measures included in this news release and reconciliation of the non-GAAP financial measures to GAAP measures are in “Non-GAAP and Other Financial Disclosures” below and in the tables that accompany this news release.

Supplemental slides for the third quarter of 2019, titled “3Q19 Supplemental Slides,” are available on the MetLife Investor Relations website at www.metlife.com and in the Form 8-K furnished by MetLife to the U.S. Securities and Exchange Commission in connection with this earnings news release.

Adjusted Earnings by Segment Summary*

	Three months ended September 30, 2019
Segment	Change from prior-year period	Change from prior-year period (on a constant currency basis)
U.S.	(11)%
Asia	31%	33%
Latin America	(9)%	(4)%
Europe, the Middle East and Africa (EMEA)	(4)%	(2)%
MetLife Holdings	(54)%

*The percentages in this table are on a reported and constant currency basis, and do not exclude notable items.

Business Discussions

All comparisons of the results for the third quarter of 2019 in the business discussions that follow are with the third quarter of 2018, unless otherwise noted. See the third quarter of 2019 notable items table that follows the Business Discussions section of this release for additional information on notable items incurred in the third quarter of 2019.

U.S.

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$707	$795	(11)%
Adjusted premiums, fees and other revenues	$7,391	$6,889	7%
Adjusted premiums, fees and other revenues, excluding PRT	$6,098	$5,871	4%
Notable item(s)	$0	$37

• Adjusted earnings for the U.S. were $707 million, down 11 percent.
• Excluding notable items from both periods, adjusted earnings were down 7 percent.
• Adjusted return on allocated equity was 26.4 percent, and adjusted return on allocated tangible equity was 30.0 percent.
• Adjusted premiums, fees and other revenues were $7.4 billion, up 7 percent.
• Excluding pension risk transfers, adjusted premiums, fees and other revenues were $6.1 billion, up 4 percent.

Group Benefits

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$366	$370	(1)%
Adjusted premiums, fees and other revenues	$4,582	$4,317	6%
Notable item(s)	$0	$37

• Adjusted earnings for Group Benefits were $366 million, down 1 percent.
• Excluding notable items from both periods, adjusted earnings were up 10 percent, driven by favorable expense margins and volume growth.
• Adjusted premiums, fees and other revenues were $4.6 billion, up 6 percent, driven by strong growth in voluntary products.
• Sales for Group Benefits were up 10 percent year-to-date compared to the first three quarters of 2018.

Retirement and Income Solutions

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$284	$339	(16)%
Adjusted premiums, fees and other revenues	$1,878	$1,658	13%
Adjusted premiums, fees and other revenues, excluding PRT	$585	$640	(9)%
Notable item(s)	$0	$0

• Adjusted earnings for Retirement and Income Solutions were $284 million, down 16 percent, driven by lower investment margins and less favorable underwriting.
• Adjusted premiums, fees and other revenues were $1.9 billion, up 13 percent, driven by higher pension risk transfer transactions.
• Excluding pension risk transfers, adjusted premiums, fees and other revenues were $585 million, down 9 percent, driven by lower sales of institutional income annuities.

Property & Casualty

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$57	$86	(34)%
Adjusted premiums, fees and other revenues	$931	$914	2%
Notable item(s)	$0	$0

• Adjusted earnings for Property & Casualty were $57 million, down 34 percent, driven by unfavorable underwriting.
• Adjusted premiums, fees and other revenues were $931 million, up 2 percent.
• Pre-tax catastrophe losses and prior year development totaled $64 million, compared to $46 million in the prior-year period.
• Sales for Property & Casualty were $160 million, down 4 percent.

ASIA

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$349	$266	31%
Adjusted earnings (constant currency)	$349	$262	33%
Adjusted premiums, fees and other revenues	$2,098	$2,129	(1)%
Notable item(s)	$(19)	$(86)

• Adjusted earnings for Asia were $349 million, up 31 percent, and up 33 percent on a constant currency basis, primarily due to the smaller negative impact in the current period from the annual actuarial assumption review.
• Excluding notable items from both periods, adjusted earnings were up 5 percent, and up 6 percent on constant currency basis, driven by volume growth and favorable variable investment income.
• Adjusted return on allocated equity was 9.8 percent, and adjusted return on allocated tangible equity was 14.9 percent.
• Adjusted premiums, fees and other revenues were $2.1 billion, down 1 percent, and down 3 percent on a constant currency basis.
• Sales for Asia were $659 million, down 7 percent on a constant currency basis. While Japan sales were down 15 percent, sales in Other Asia were up 7 percent, driven by growth in Korea, China and India.

LATIN AMERICA

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$155	$170	(9)%
Adjusted earnings (constant currency)	$155	$162	(4)%
Adjusted premiums, fees and other revenues	$967	$928	4%
Notable item(s)	$10	$28

• Adjusted earnings for Latin America were $155 million, down 9 percent, and down 4 percent on a constant currency basis, primarily due to a smaller positive impact in the current period from the annual actuarial assumption review.
• Excluding notable items from both periods, adjusted earnings were up 2 percent, and up 7 percent on constant currency basis due to higher Chilean encaje returns and volume growth, partially offset by lower investment margins.
• Adjusted return on allocated equity was 20.9 percent, and adjusted return on allocated tangible equity was 34.6 percent.
• Adjusted premiums, fees and other revenues were $967 million, up 4 percent, and up 8 percent on a constant currency basis, primarily driven by growth across the region.
• Sales for Latin America were $225 million, up 12 percent on a constant currency basis, driven by higher sales in Chile, Mexico and Brazil.

EMEA

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$53	$55	(4)%
Adjusted earnings (constant currency)	$53	$54	(2)%
Adjusted premiums, fees and other revenues	$656	$634	3%
Notable item(s)	$(13)	$(23)

• Adjusted earnings for EMEA were $53 million, down 4 percent, and down 2 percent on a constant currency basis, primarily due to less favorable underwriting and higher taxes, partially offset by smaller negative impact from the annual actuarial assumption review.
• Excluding notable items from both periods, adjusted earnings were down 15 percent, and down 13 percent on a constant currency basis, as less favorable underwriting and higher taxes were partially offset by favorable expense margins.
• Adjusted return on allocated equity was 7.6 percent, and adjusted return on allocated tangible equity was 13.8 percent.
• Adjusted premiums, fees and other revenues were $656 million, up 3 percent, and up 6 percent on a constant currency basis.
• Sales for EMEA were $207 million, up 13 percent on a constant currency basis, driven by higher growth across the region.

METLIFE HOLDINGS

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$149	$327	(54)%
Adjusted premiums, fees and other revenues	$1,261	$1,305	(3)%
Notable item(s)	$(138)	$(24)

• Adjusted earnings for MetLife Holdings were $149 million, down 54 percent, primarily due to the impact of the annual actuarial assumption review and other insurance adjustments.
• Excluding notable items from both periods, adjusted earnings were down 18 percent, primarily due to lower investment margins.
• Adjusted return on allocated equity was 6.2 percent, and adjusted return on allocated tangible equity was 7.1 percent.
• Adjusted premiums, fees and other revenues were $1.3 billion, down 3 percent.

CORPORATE & OTHER

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Adjusted earnings	$(223)	$(237)
Notable item(s)	$(88)	$(88)

• Corporate & Other had an adjusted loss of $223 million, compared to an adjusted loss of $237 million in the third quarter of 2018. The notable item in both periods is related to the company’s previously announced cost saving initiative.

INVESTMENTS

($ in millions)	Three months ended September 30, 2019	Three months ended September 30, 2018	Change
Net investment income (as reported on an adjusted basis)	$4,473	$4,462	—%

• As reported on an adjusted basis, net investment income was $4.5 billion, flat compared to the prior-year period. Variable investment income was $326 million, compared to $280 million in the third quarter of 2018, driven by higher private equity and hedge fund income.

THIRD QUARTER 2019 NOTABLE ITEMS

($ in millions)	Adjusted Earnings
	Three months ended September 30, 2019
Notable Items	U.S.			Asia	Latin America	EMEA	MetLife Holdings	Corporate & Other	Total
	Group Benefits	Retirement and Income Solutions	Property & Casualty
Actuarial assumption review and other insurance adjustments				$(19)	$10	$(13)	$(138)		$(160)
Expense initiative costs								$(88)	$(88)
Total notable items	$0	$0	$0	$(19)	$10	$(13)	$(138)	$(88)	$(248)

About MetLife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (MetLife), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.

Conference Call

MetLife will hold its third quarter 2019 earnings conference call and audio webcast on Thursday, October 31, 2019, from 9-10 a.m. (ET). The conference call will be available live via telephone and the internet. To listen via telephone, dial 800-230-1085 (U.S.) or 612-288-0340 (outside the U.S.). To listen to the conference call via the internet, visit www.metlife.com through a link on the Investor Relations page. Those who want to listen to the call via telephone or the internet should dial in or go to the website at least 15 minutes prior to the call to register, and/or download and install any necessary audio software.

The conference call will be available for replay via telephone and the internet beginning at 11 a.m. (ET) on Thursday, October 31, 2019, until Thursday, November 7, 2019, at 11:59 p.m. (ET). To listen to a replay of the conference call via telephone, dial 800-475-6701 (U.S.) or 320-365-3844 (outside the U.S.). The access code for the replay is 462463. To access the replay of the conference call over the internet, visit the above-mentioned website.

Non-GAAP and Other Financial Disclosures

Any references in this news release (except in this section and the tables that accompany this release) to:			should be read as, respectively:
(i)	net income (loss);		(i)	net income (loss) available to MetLife, Inc.’s common shareholders;
(ii)	net income (loss) per share;		(ii)	net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(iii)	adjusted earnings;		(iii)	adjusted earnings available to common shareholders;
(iv)	adjusted earnings per share;		(iv)	adjusted earnings available to common shareholders per diluted common share;
(v)	book value per share;		(v)	book value per common share;
(vi)	book value per share, excluding AOCI other than FCTA;		(vi)	book value per common share, excluding AOCI other than FCTA;
(vii)	book value per share-tangible common stockholders’ equity;		(vii)	book value per common share-tangible common stockholders’ equity;
(viii)	premiums, fees and other revenues;		(viii)	premiums, fees and other revenues (adjusted);
(ix)	return on equity;		(ix)	return on MetLife, Inc.’s common stockholders’ equity;
(x)	return on equity, excluding AOCI other than FCTA;		(x)	return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI, other than FCTA;
(xi)	adjusted return on equity, excluding AOCI other than FCTA;		(xi)	adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA;
(xii)	tangible return on equity; and		(xii)	return on MetLife, Inc.’s tangible common stockholders’ equity; and
(xiii)	adjusted tangible return on equity.		(xiii)	adjusted return on MetLife, Inc.’s tangible common stockholders’ equity.

In this news release, MetLife presents certain measures of its performance on a consolidated and segment basis that are not calculated in accordance with accounting principles generally accepted in the United States of America (GAAP). MetLife believes that these non-GAAP financial measures enhance the understanding of MetLife’s performance by highlighting the results of operations and the underlying profitability drivers of the business. Segment-specific financial measures are calculated using only the portion of consolidated results attributable to that specific segment.

The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:

Non-GAAP financial measures:			Comparable GAAP financial measures:
(i)	total adjusted revenues;		(i)	total revenues;
(ii)	total adjusted expenses;		(ii)	total expenses;
(iii)	adjusted premiums, fees and other revenues;		(iii)	premiums, fees and other revenues;
(iv)	adjusted premiums, fees and other revenues, excluding PRT;		(iv)	premiums, fees and other revenues;
(v)	adjusted earnings;		(v)	income (loss) from continuing operations, net of income tax;
(vi)	net investment income, as reported on an adjusted basis;		(vi)	net investment income;
(vii)	capitalization of deferred policy acquisition costs (DAC), as reported on an adjusted basis;		(vii)	capitalization of DAC;
(viii)	adjusted earnings available to common shareholders;		(viii)	net income (loss) available to MetLife, Inc.’s common shareholders;
(ix)	adjusted earnings available to common shareholders, excluding total notable items;		(ix)	net income (loss) available to MetLife, Inc.’s common shareholders;
(x)	adjusted earnings available to common shareholders per diluted common share;		(x)	net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xi)	adjusted earnings available to common shareholders, excluding total notable items, per diluted common share;		(xi)	net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xii)	adjusted return on equity;		(xii)	return on equity;
(xiii)	adjusted return on equity, excluding AOCI other than FCTA;		(xiii)	return on equity;
(xiv)	adjusted tangible return on equity;		(xiv)	return on equity;
(xv)	investment portfolio gains (losses);		(xv)	net investment gains (losses);
(xvi)	derivative gains (losses);		(xvi)	net derivative gains (losses);
(xvii)	total MetLife, Inc.’s tangible common stockholders’ equity;		(xvii)	total MetLife, Inc.’s stockholders’ equity;
(xviii)	total MetLife, Inc.’s tangible common stockholders’ equity, excluding total notable items;		(xviii)	total MetLife, Inc.’s stockholders’ equity;
(xix)	total MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA;		(xix)	total MetLife, Inc.’s stockholders’ equity;
(xx)	total MetLife, Inc.’s common stockholders’ equity, excluding total notable items (excludes AOCI other than FCTA);		(xx)	total MetLife, Inc.’s stockholders’ equity;
(xxi)	book value per common share, excluding AOCI other than FCTA;		(xxi)	book value per common share;
(xxii)	book value per common share – tangible common stockholders’ equity;		(xxii)	book value per common share;
(xxiii)	free cash flow of all holding companies;		(xxiii)	MetLife, Inc. (parent company only) net cash provided by (used in) operating activities;
(xxiv)	other expenses, as reported on an adjusted basis;		(xxiv)	other expenses;
(xxv)	other expenses, net of capitalization of DAC, as reported on an adjusted basis;		(xxv)	other expenses, net of capitalization of DAC;
(xxvi)	Other expenses, net of capitalization of DAC, excluding total notable items related to other expenses, as reported on an adjusted basis;		(xxvi)	other expenses, net of capitalization of DAC;
(xxvii)	adjusted expense ratio;		(xxvii)	expense ratio;
(xxviii)	adjusted expense ratio, excluding total notable items related to other expenses and PRT;		(xxviii)	expense ratio;
(xxix)	direct expenses;		(xxix)	other expenses;
(xxx)	direct expenses, excluding total notable items related to direct expenses;		(xxx)	other expenses;
(xxxi)	direct expense ratio; and		(xxxi)	expense ratio; and
(xxxii)	direct expense ratio, excluding total notable items related to direct expenses and PRT.		(xxxii)	expense ratio.

Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency exchange rates and are calculated using the average foreign currency exchange rates for the most recent period and applied to the comparable prior period.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this earnings news release and in this period’s quarterly financial supplement, which is available at www.metlife.com.

MetLife’s definitions of non-GAAP and other financial measures discussed in this news release may differ from those used by other companies:

Adjusted earnings and related measures

• adjusted earnings;
• adjusted earnings available to common shareholders;
• adjusted earnings available to common shareholders on a constant currency basis;
• adjusted earnings available to common shareholders, excluding total notable items;
• adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis;
• adjusted earnings available to common shareholders per diluted common share;
• adjusted earnings available to common shareholders on a constant currency basis per diluted common share;
• adjusted earnings available to common shareholders, excluding total notable items per diluted common share; and
• adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis per diluted common share.

These measures are used by management to evaluate performance and allocate resources.

Contacts

For Media:

Ashia Razzaq

MetLife

(212) 578-1538

For Investors:

John Hall

MetLife

(212) 578-7888

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