Metlife, Inc. · NYSE:MET
Metlife — Q4 2017 Earnings Presentation
20 slides from Metlife's earnings presentation, Feb 13, 2018
Slide 1: 4Q17 Supplemental Slides
4Q17 Supplemental Slides John C. R. Hele Chief Financial Officer Exhibit 99.3
Slide 2: Table of Contents
2 Table of Contents Page Net Income (Loss) Reconciliation…………………..……………… 3 Notable Items….….………………………………………………….. 4 Adjusted Earnings Ex. Total Notable Items by Segment………… 5 U.S. Group Annuities………………………………………………… 6 Long Term Care………………………………………………………. 10 Benefits from U.S. Tax Reform……………………………………
Slide 3: Net Income (Loss) Reconciliation
3 Net Income (Loss) Reconciliation 4Q17 QTD Net Income (Loss)* $2,091 Less: Net Investment Gains (Losses) 69 Net Derivative Gains (Losses) (92) Investment Hedge Adjustments (55) Tax Reform 1,504 Other (13) Adjusted Earnings* $678 (In millions) – Post-tax * Available to common shareholders. See Expla
Slide 4: Notable Items
4 Notable Items (In millions) – Post-tax * Available to common shareholders. 1 Includes a portion of the group annuity reserve charge of $62 million or $0.06 per share. See Explanatory Note on Non-GAAP Financial Information for non-GAAP financial information, definitions and/or reconciliations. 4Q17
Slide 5: Adjusted Earnings Ex. Total Notable Items by Segment
5 Adjusted Earnings Ex. Total Notable Items by Segment (In millions) – Post-tax * Available to common shareholders. See Explanatory Note on Non-GAAP Financial Information for non-GAAP financial information, definitions and/or reconciliations. 4Q17 QTD 4Q16 QTD % Change % Change (Constant Rate) Group
Slide 6: U.S. RIS Group Annuities - Background
MetLife has been in the group annuity business for a long time Reserve correction goes back ~25 years Total group annuitants of ~600K Reserve releases for ~13.5K “unresponsive and missing” Total group annuity reserves of roughly $40 billion U.S. RIS Group Annuities - Background
Slide 7: Total Group Annuity Reserve Charge
Total Group Annuity Reserve Charge 1 Taxed at a 35% U.S. tax rate. Impacts to be reflected in both net income and adjusted earnings. (In millions) – Post-tax Pre-Tax Post-Tax1 Total Charge $510 $331 4Q17 in-quarter activity -13 -8 4Q17 change in estimate -95 -62 Total Error $402 $261 1Q17-3Q17 corre
Slide 8: Group Annuities – Deficiency Assessment
Group Annuities – Deficiency Assessment Management has identified a Material Weakness related to the group annuity reserves Administrative practices not sufficient to allow for reserves to be released Lack of timely escalation throughout the Company
Slide 9: Initial Steps to Remediate Material Weakness
Initial Steps to Remediate Material Weakness Administrative practices not sufficient to allow for reserves to be released Correct practices of releasing reserves to ensure improvements are made Improve communication to annuitants regarding benefits Establish more frequent attempts to contact annuita
Slide 10: Long Term Care (LTC)
Announced LTC exit in 2010 Generates annual premium of ~$750 million Achieved +7% average rate increase in 2017 Statutory reserves are $2.5 billion higher than GAAP reserves GAAP and Statutory reserve assumptions are tested annually No future rate increases assumed in reserve calculations Long Term
Slide 11: Benefits from U.S. Tax Reform
One Time 4Q17 Tax Benefit Decrease in 2018 Effective Tax Rate Lower U.S. Cash Taxes $1.2B net tax benefit $1,376M benefit from re-measurement of deferred tax liabilities (“DTL”) at 21% tax rate $170M charge due to one-time deemed repatriation tax 23%-25% 18%-20% PRIOR GUIDANCE CURRENT GUIDANCE Benef
Slide 12: Updated 2018 Guidance
Corporate & Other adjusted loss of $700-$900 million after-tax in 2018 excluding expense initiative costs Change from prior guidance due to lower tax rate More than offsetting tax benefits in business segments Maintaining average 2018-2019 FCF target of 65-75% Lower end of range expected Impact of t
Slide 13: Appendix
Appendix Wil MetLife
Slide 14: Revisions to Prior Period Net Income
Revisions to Prior Period Net Income (In millions) – Post-tax 2017 2017 2016 2016 2015 2015 2014 and Prior1 2014 and Prior1 1Q $ (6 ) $ (7 ) 2Q (6 ) (5 ) 3Q (8 ) (4 ) 4Q — (5 ) Group Annuity Reserve Charge $ (20 ) $ (21 ) $ (20 ) $ (200 ) Other Revisions — (49 ) 31 18 Total Prior Period Revisions $
Slide 15: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information Any references in this presentation (except in this Explanatory Note on Non-GAAP Financial Information) to: should be read as, respectively: (i) net income (loss); (i) net income (loss) available to MetLife, Inc.’s common shareholders; (ii) adjusted
Slide 16: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) Adjusted earnings and related measures adjusted earnings available to common shareholders; adjusted earnings available to common shareholders on a constant currency basis; adjusted earnings available to common shareholders, excluding tot
Slide 17: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses: Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obli
Slide 18: Reconciliation of net income (loss) available to common shareholders to adjusted earnings
Reconciliation of net income (loss) available to common shareholders to adjusted earnings available to common shareholders
Slide 19: Reconciliation to Adjusted Earnings Excluding Notable Items
Reconciliation to Adjusted Earnings Available to Common Shareholders Excluding Notable Items
Slide 20: MetLife
iy MetLife Navigating life together