Metlife, Inc. · NYSE:MET
Metlife — Q4 2019 Earnings Presentation
24 slides from Metlife's earnings presentation, Feb 5, 2020
Slide 1: 4Q19 Supplemental Slides
Exhibit 99.3 4Q19 Supplemental Slides1 John McCallion Chief Financial Officer 1 These slides highlight information in MetLife, Inc.'s earnings release and quarterly financial supplement.
Slide 2: Table of Contents
Table of Contents Page Net Income (Loss) to Adjusted Earnings..…..........………………................ 3 Notable Items….….…………………………………………….............…….... 4 Adjusted Earnings ex. Total Notable Items by Segment…………................ 6 Variable Investment Income (VII)......................................
Slide 3: Net Income (Loss) to Adjusted Earnings
Net Income (Loss) to Adjusted Earnings ($ in millions) – Post-tax 4Q19 FY19 Net Income (Loss) $536 $5,721 Less: Net Investment Gains (Losses)1 164 311 Net Derivative Gains (Losses)2 (1,157) 496 Investment Hedge Adjustments (99) (371) Actuarial Assumption Review2 — (19) Other1,2 (206) (463) Adjusted
Slide 4: Notable Items
Notable Items Post-tax 4Q19 FY19 $ in Per Share $ in Per Share millions Impact1 millions Impact1 Adjusted Earnings $1,834 $1.98 $5,767 $6.11 Less Notable Items: Tax adjustments 475 0.51 475 0.50 Interest on tax adjustments 64 0.07 64 0.07 Actuarial Assumption Review and ) Other Insurance Adjustments
Slide 5: Notable Items: Tax Adjustments
Notable Items: Tax Adjustments Benefit to Adjusted Highlights ($ in millions) - Post-tax Earnings • U.S. Tax Reform Repatriation Transition Tax Repatriation tax $317 settlement • Executed binding agreement with the IRS in 4Q19 • Wholly-owned U.K. investment subsidiary of MLIC • Recorded tax charge o
Slide 6: Adjusted Earnings ex. Total Notable Items by Segment
Adjusted Earnings ex. Total Notable Items by Segment ($ in millions) – Post-tax % % Change 1 4Q19 4Q18 Change (Constant Rate) Highlights + Underwriting Margins; + Volume Growth; Group Benefits $329 $230 43% + Investment Margins; - Expense Margins Retirement and Income Solutions $321 $356 (10%) - Inv
Slide 7: Variable Investment Income
Variable Investment Income ($ in millions) - Pre-tax $1,161 $334 $326 $327 $174 1Q19 2Q19 3Q19 4Q19 FY19 FY19 target range: $800 million - $1.0 billion pre-tax FY20 target range: $900 million - $1.1 billion pre-tax 7
Slide 8: Steady Progress Toward Achieving Expense Targets; Direct Expense Ratio
Steady Progress Toward Achieving Expense Targets; 4Q19 Impacted by Seasonal Items Direct Expense Ratio1 14.3% -170 bps 13.7% 13.3% 13.3% 12.9% 12.6% 12.3% 12.1% 12.2% 1Q19 2Q19 3Q19 4Q19 2015 2016 2017 2018 2019 1 Direct expense ratio, excluding total notable items related to direct expenses and PRT
Slide 9: Cash & Capital
Cash & Capital • Holding Companies Cash & Liquid Assets1 $4.2B $4.2B $3.5B $3.0B to $4.0B $3.2B $3.0B Cash Buffer 4Q18 1Q19 2Q19 3Q19 4Q19 • Returned ~$4.0 billion of capital to shareholders in 2019 • Average 2018-2019 Free Cash Flow ratio2 of 72%; within 65-75% target • 2019 Combined U.S. Risk Base
Slide 10: Appendix
Appendix Il MetLife
Slide 11: Cautionary Statement on Forward-Looking Statements
Cautionary Statement on Forward- Looking Statements The forward-looking statements in this presentation, such as “FY20 target,” are based on assumptions and expectations that involve risks and uncertainties, including the “Risk Factors” MetLife, Inc. describes in its U.S. Securities and Exchange Com
Slide 12: 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 and Reconciliations) to: Should be read as, respectively: (i) net income (loss); (i) net income (loss) available to MetLife, Inc.’s common shareh
Slide 13: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) 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 appli
Slide 14: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues: • Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to N
Slide 15: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) The following additional information is relevant to an understanding of MetLife’s performance results: • MetLife uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its bu
Slide 16: Reconciliation of Net Income (Loss) to Adjusted Earnings Available to Common Shareholders
Reconciliation of Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders to Adjusted Earnings Available to Common Shareholders 2019 4Q19 4Q18 Earnings Earnings Earnings Per Per Per Weighted Weighted Weighted Average Average Average Common Common Common Share Share Share Diluted1 Diluted1
Slide 17: Reconciliation to Adjusted Earnings, Excluding Total Notable Items
Reconciliation to Adjusted Earnings Available to Common Shareholders, Excluding Total Notable Items 4Q19 Retirement and Group Income Property & Latin MetLife Corporate U.S.1 Benefits1 Solutions1 Casualty1 Asia America EMEA Holdings1 & Other1 (In millions) Adjusted earnings available to common shareh
Slide 18: Expense Detail and Ratios
Expense Detail and Ratios (In millions, except ratio data) 2015 2016 2017 2018 2019 Reconciliation of Capitalization of DAC to Capitalization of DAC, as reported on an adjusted basis Capitalization of DAC $ (3,319) $ (3,152) $ (3,002) $ (3,254) $ (3,358) Less: Divested businesses and lag elimination
Slide 19: Expense Detail and Ratios (Continued)
Expense Detail and Ratios (Continued) (In millions, except ratio data) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 Reconciliation of Capitalization of DAC to Capitalization of DAC, as reported on an adjusted basis Capitalization of DAC $ (812) $ (837) $ (882) $ (827) Less: Divested businesses — — (11) (9) Capit
Slide 20: Premiums, Fees and Other Revenues
Premiums, Fees and Other Revenues (In millions) 2015 2016 2017 2018 2019 Total Company - Premiums, Fees and Other Revenues Premiums, fees and other revenues $ 43,900 $ 44,370 $ 45,843 $ 51,222 $ 49,680 Less: Unearned revenue adjustments 7 30 12 (7) 97 Less: GMIB fees 97 124 125 120 108 Less: Settlem
Slide 21: Premiums, Fees and Other Revenues (Continued)
Premiums, Fees and Other Revenues (Continued) (In millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Total Company - Premiums, Fees and Other Revenues Premiums, fees and other revenues $ 11,264 $ 12,019 $ 12,640 $ 13,757 Less: Unearned revenue adjustments — 20 59 18 Less: GMIB fees 27 28 27 26 Less: Settleme
Slide 22: Condensed Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Condensed Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash Flow of All Holding Companies 2019 2018 (In billions, except ratios) MetLife, Inc. (parent company only) net cash provided by (used in) operating activities $ 4.2 $ 5.5 Adjustments from net cash provi
Slide 23: Condensed Reconciliation to Free Cash Flow (Continued)
Condensed Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash Flow of All Holding Companies (Continued) 1Adjustments include: (i) capital contributions to subsidiaries; (ii) returns of capital from subsidiaries; (iii) repayments on and (issuances of) loans to su
Slide 24: MetLife - Navigating life together
iy MetLife Navigating life together