Metlife, Inc. · NYSE:MET
Metlife — UBS Conference (May 2009)
17 slides from Metlife's conference presentation, May 13, 2009
Slide 1: UBS Conference
UBS Conference William J. Wheeler Executive Vice-President & CFO, MetLife
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events.
Slide 3: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information All references in this presentation to net income (loss), net income (loss) per share, operating earnings and operating earnings per share should be read as net income (loss) available to MetLife, Inc.'s common shareholders, net income (loss) availa
Slide 4: Agenda
Agenda Government Stress Test MetLife's Potential Earnings Power - A "Thought Experiment"
Slide 5: Overview of Stress Test Process
Asset stress test - treated like a bank Process: Two months long Very detailed information Many government agency participants Required to estimate two-year time horizon (2009 - 2010) Expected possible future asset losses Operating income available to absorb such losses Tier 1 capital projections Un
Slide 6: MetLife's Interpretation of Fed's Economic Scenarios
MetLife's Interpretation of Fed's Economic Scenarios Baseline is similar to "normal" postwar recession Adverse is about 50% more severe Exception: residential housing price decline under both scenarios (approximates 1930s) Loss modeling - adverse
Slide 7: MetLife Results vs. Group: Overall Loss Potential
MetLife Results vs. Group Overall loss potential in stress case = $9.6 billion As a percentage of risk weighted assets: Loss as % RWA Rank MetLife 2.9% 1st Median 7.5%
Slide 8: MetLife Results vs. Group: Commercial Real Estate Mortgages
MetLife Results vs. Group Commercial Real Estate mortgages potential loss in stress case = $800 million As a percentage of CRE mortgage portfolio: Loss as % portfolio Rank MetLife 2.1% 1st * Median 10.6% *Among companies that have CRE mortgages.
Slide 9: MetLife Results vs. Group: Tier 1 Capital Ratios
MetLife Results vs. Group Tier 1 capital ratio at 12/31/08 = 9.2% Tier 1 common capital ratio at 12/31/08 = 8.5% Rank of Tier I common equity ratios: Ratio Rank MetLife 8.5% 5th Average 6.7%
Slide 10: MetLife Results vs. Group: S&P Senior Debt Rating
MetLife Results vs. Group S&P Holding Company Senior Debt Rating*: Rating Rating Wells AA PNC A USB AA Regions A BNYM AA- Fifth Third A- BB&T A+ KeyCorp A- JPMC A+ MetLife A- State St. A+ AmEx BBB+ Citi A SunTrust BBB+ BofA A CapOne BBB+ Goldman A GMAC CCC Morgan Stanley A *S&P Senior Debt Rating of
Slide 11: MetLife's Potential Earnings Power: A Thought Experiment
MetLife's Potential Earnings Power A "Thought Experiment"
Slide 12: 1st Quarter Operating Earnings
1st Quarter Operating Earnings* *Operating earnings available to common shareholders - diluted See Appendix to MetLife, Inc.'s 2008 Investor Day presentation and MetLife, Inc.'s Quarterly Financial Supplement for non-GAAP financial information definitions and/or reconciliations. These materials are
Slide 13: Variable Investment Income
Variable Investment Income Definition: Return on alternative assets, RE funds & development JVs ($8.7 billion at 3/31/09), plus securities lending income and pre-payment fees 2009 VII plan is $150 million income per quarter 2008 VII plan was $350 million per quarter 2009 Plan assumes approximately 1
Slide 14: High Cash Balances Held
High Cash Balances Held $30 billion of cash and short-term investments at 3/31/09. Collateral for derivatives was $4 billion. Normal cash balances ~ $10 billion Potential Upside: Invest Excess Cash $10B $16B Incremental Return (6%) 5.5% 5.5% Incremental pre-tax income +$550M +$880M
Slide 15: Expenses
Expenses Pension and post-retirement benefit expense has increased by approximately $300 million in 2009. Operational Excellence is expected to produce at least $400 million of cost reduction by 2010 Potential Upside: Low High Pre-tax Expense Reduction +$200M +$400M
Slide 16: Summary: Normalized Operating EPS Run Rate
Summary "Normalized" Operating EPS run rate $3.32 $3.32 $3.32 $3.32 Low Low High Variable Investment Income $400 $400 $800 High cash balances $550 $550 $880 Expenses $200 $200 $400 Total Pre-Tax $1,150 $1,150 $2,080 After-Tax (35%) $750 $750 $1,350 Incremental EPS Impact* $0.92 $1.65 Potential Earni
Slide 17: MetLife
MetLife