2. Explanatory Note on Non-GAAP Financial Information
The historical and forward-looking financial information presented at Investor Day and contained in these presentations include
performance measures which are based on methodologies other than Generally Accepted Accounting Principles (“GAAP”). MetLife
analyzes its performance using so-called non-GAAP measures, including operating earnings, operating earnings available to common
shareholders, operating earnings available to common shareholders per diluted common share and operating return on common equity.
MetLife believes these measures enhance the understanding and comparability of its performance by excluding net investment gains
and losses, net of income tax, and adjustments related to net investment gains and losses, net of income tax, both of which can
fluctuate significantly from period to period, and discontinued operations other than discontinued real estate, net of income tax, thereby
highlighting the results from operations and the underlying profitability drivers of the business.
Operating earnings is defined as GAAP net income, excluding net investment gains and losses, net of income tax, adjustments related
to net investment gains and losses, net of income tax, and discontinued operations other than discontinued real estate, net of income
tax. Scheduled periodic settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in
operating earnings available to common shareholders.
Operating earnings available to common shareholders is defined as operating earnings less preferred stock dividends. All references in
these slides and in the presentations made at Investor Day to “operating earnings” for 2005 and future years should be read as
references to “operating earnings available to common shareholders.”
Operating earnings available to common shareholders per diluted common share is calculated by dividing operating earnings available
to common shareholders by the number of weighted average diluted common shares outstanding for the period indicated. All
references in these slides and in the presentations made at Investor Day to “operating earnings per share” for 2005 and future years
should be read as references to “operating earnings available to common shareholders per diluted common share.”
Operating return on common equity is calculated by dividing operating earnings available to common shareholders by average common
equity for the period indicated, excluding accumulated other comprehensive income.
2
3. Explanatory Note on Non-GAAP Financial Information (Continued)
For the historical periods presented, reconciliations of the non-GAAP measures used in the presentations made at Investor Day to
the most directly comparable GAAP measures are included in this Appendix and are on the Investor Relations portion of MetLife,
Inc.’s website (www.metlife.com). Additional information about MetLife’s historical financial results is available in the Company’s
Quarterly Financial Supplements for the corresponding periods which may be accessed through the Company’s website. The non-
GAAP measures used in the presentations made at Investor Day should not be viewed as substitutes for the most directly
comparable GAAP measures.
In the presentations made at Investor Day, MetLife provides guidance on its future earnings, earnings per diluted common share and
return on equity on an operating and non-GAAP basis. A reconciliation of the non-GAAP measures to the most directly comparable
GAAP measures is not accessible on a forward-looking basis because MetLife believes it is not possible to provide other than a
range of net investment gains and losses, which can fluctuate significantly within or without the range and from period to period and
may have a significant impact on GAAP net income.
3
4. Table of Contents
Definitions ……………………………….……….………………………………………5
Reconciliation
Reconciliation of Net Income Available to Common Shareholders …..….…….…8
Reconciliation of Book Value per Common Share ….…………………………….12
Reconciliation of Premiums, Fees & Other Revenues .…………………………..13
Reconciliation of Operating Expenses and Expense Ratio ……………………...14
Reconciliation of Return on Common Equity…………………….………………...15
2007 Reconciliation of Return on Common Equity ……………..………………...16
Institutional Metrics ..…………….…………………………………………………...17
Individual Metrics ……………….………………………………………………..……24
International Metrics….………….……………………………………………………29
Auto & Home Metrics ……..…………….…………………………………………….32
4
6. Definitions
Sales (Total Company):
Variable annuity sales are on a VARDS basis.
Sales (Institutional):
Sales include annualized revenue at issue and initial deposit.
Sales (Individual):
Variable annuity sales are on a VARDS basis.
Fixed annuity and life sales are on a LIMRA basis.
Sales (International):
Sales include annualized full year premiums and fees from risk and protection products such as life
insurance, credit insurance, AD&D, etc., and include joint ventures in Japan and China.
Premium Equivalents:
The estimated premium amount for administrative services only accounts if they had been fully insured
plans.
6
8. Reconciliation of Net Income Available to Common Shareholders to
Operating Earnings Available to Common Shareholders -Total Company
2003 2004 2005 2006 2007
($ Millions)
Total Company
Net income available to common shareholders $ 2,196 $ 2,758 $ 4,651 $ 6,159 $ 4,180
Cumulative effect of a change in accounting 26 86 - - -
Investment (gains) losses 164 (143) (1,247) (2,000) 554
Adjustments related to investment (gains) losses (140) (34) 36 (74) 24
Discontinued operations (113) (123) (283) (210) (175)
Operating earnings available to common shareholders 2,133 2,544 3,157 3,875 4,583
IRS tax audit settlement - (105) - - -
Premium tax liability - (31) - - -
MetLife Foundation contribution - 32 - - -
Race conscious underwriting (92) - - - -
Merger of Mexican operations (40) - - - -
Change in reserve methodology (22) - - - -
New England Financial charge 31 - - - -
Operating earnings available to common shareholders, as presented $ 2,010 $ 2,440 $ 3,157 $ 3,875 $ 4,583
8
9. Reconciliation of Net Income Available to Common Shareholders per Share to
Operating Earnings Available to Common Shareholders per Share - Total Company
YTD
2003 2004 2005 2006 2007 3Q08
Total Company
Net income available to common shareholders per diluted
common share $ 2.94 $ 3.65 $ 6.16 $ 7.99 $ 5.48 $ 2.92
Cumulative effect of a change in accounting 0.04 0.11 - - - -
Investment (gains) losses 0.22 (0.19) (1.65) (2.60) 0.73 0.34
Adjustments related to investment (gains) losses (0.19) (0.05) 0.05 (0.10) 0.03 (0.19)
Discontinued operations (0.15) (0.16) (0.37) (0.27) (0.23) 0.49
Operating earnings available to common shareholders per
diluted common share 2.86 3.36 4.19 5.02 6.01 3.56
IRS tax audit settlement - (0.14) - - - -
Premium tax liability - (0.04) - - - -
MetLife Foundation contribution - 0.04 - - - -
Race conscious underwriting (0.13) - - - - -
Merger of Mexican operations (0.05) - - - - -
Change in reserve methodology (0.03) - - - - -
New England Financial charge 0.04 - - - - -
Operating earnings available to common shareholders per
diluted common share, as presented $ 2.69 $ 3.22 $ 4.19 $ 5.02 $ 6.01 $ 3.56
9
10. Reconciliation of Net Income Available to Common Shareholders to
Operating Earnings Available to Common Shareholders
($ Millions) 2003 2004 2005 2006 2007
Total Institutional
Net income available to common shareholders $ 886 $ 1,267 $ 1,562 $ 1,167 $ 1,449
Cumulative effect of a change in accounting 26 60 - - -
Investment (gains) losses and related adjustments 139 (78) (117) 533 518
Operating earnings available to common shareholders 1,051 1,249 1,445 1,700 1,967
Premium tax liability - (31) - - -
Operating earnings available to common shareholders, as presented $ 1,051 $ 1,218 $ 1,445 $ 1,700 $ 1,967
2003 2004 2005 2006 2007
Group Life
Net income available to common shareholders $ 282 $ 373 $ 364 $ 345 $ 355
Investment (gains) losses and related adjustments 68 25 36 81 108
Operating earnings available to common shareholders 350 398 400 426 463
Premium tax liability - (31) - - -
Operating earnings available to common shareholders, as presented $ 350 $ 367 $ 400 $ 426 $ 463
10
11. Reconciliation of Net Income Available to Common Shareholders to
Operating Earnings Available to Common Shareholders
($ Millions) 2003 2004 2005 2006 2007
Total Individual
Net income available to common shareholders $ 566 $ 885 $ 1,499 $ 1,264 $ 1,357
Investment (gains) losses and related adjustments 60 (79) (248) 280 154
Operating earnings available to common shareholders 626 806 1,251 1,544 1,511
New England Financial charge 31 - - - -
Operating earnings available to common shareholders, as presented $ 657 $ 806 $ 1,251 $ 1,544 $ 1,511
2003 2004 2005 2006 2007
Total International
Net income available to common shareholders $ 208 $ 163 $ 193 $ 200 $ 635
Cumulative effect of a change in accounting - 30 - - -
Investment (gains) losses and related adjustments (7) (38) 41 56 (76)
Discontinued operations 5 9 (5) (28) 9
Operating earnings available to common shareholders 206 164 227 228 568
Merger of Mexican operations (40) - - - -
Change in reserve methodology (22) - - - -
Operating earnings available to common shareholders, as presented $ 144 $ 164 $ 227 $ 228 $ 568
11
12. Reconciliation of Book Value per Common Share
2003 2004 2005 2006 2007
Book value per common share, actual shares outstanding $ 27.93 $ 31.16 $ 35.72 $ 42.23 $ 45.44
Accumulated other comprehensive income 3.69 4.04 2.52 1.49 1.48
Book value per common share, actual shares outstanding,
excluding accumulated other comprehensive income $ 24.24 $ 27.12 $ 33.20 $ 40.74 $ 43.96
12
13. Reconciliation of Premiums, Fees & Other Revenues
($ Millions) 2003 2004 2005 2006 2007
Total Company
Premiums, Fees & Other Revenues $ 21,594 $ 22,869 $ 26,038 $ 28,147 $ 29,761
Adjustments related to universal life and investment-type product policy fees - - - 6 12
Premiums, Fees & Other Revenues, as presented $ 21,594 $ 22,869 $ 26,038 $ 28,153 $ 29,773
2006 2007
Individual
Premiums, Fees & Other Revenues $ 8,240 $ 8,609
Adjustments related to universal life and investment-type product policy fees 6 12
Premiums, Fees & Other Revenues, as presented $ 8,246 $ 8,621
13
14. Reconciliation of Operating Expenses and Expense Ratio
2003 2004 2005 2006 2007
($ Millions)
Total Company Operating Expenses $ 6,020 $ 6,422 $ 7,620 $ 8,840 $ 9,485
Other Expenses
IRS tax audit settlement - 22 - - -
Premium tax liability - 49 - - -
MetLife Foundation contribution - (50) - - -
Race conscious underwriting 144 - - - -
New England Financial charge (48) - - - -
Change in reserve methodology (45) - - - -
Operating Expenses, as presented $ 6,071 $ 6,443 $ 7,620 $ 8,840 $ 9,485
1
Operating Expense Ratio :
Premium, Fees & Other Revenues $ 21,594 $ 22,869 $ 26,038 $ 28,147 $ 29,761
Premium, Fees & Other Revenues, as presented $ 21,594 $ 22,869 $ 26,038 $ 28,153 $ 29,773
Operating Expense Ratio 27.9% 28.1% 29.3% 31.4% 31.9%
Operating Expense Ratio, as presented 28.1% 28.2% 29.3% 31.4% 31.9%
1 The operating expense ratio is calculated by dividing operating expenses by premiums, fees & other revenues. The operating expense
ratio, as presented, is calculated by dividing operating expenses, as presented, by premiums, fees & other revenues, as presented.
14
15. Reconciliation of Return on Common Equity
2003 2004 2005 2006 2007
($ Millions)
Net income available to common shareholders $ 2,196 $ 2,758 $ 4,651 $ 6,159 $ 4,180
Adjustments (See Slide 8) (63) (214) (1,494) (2,284) 403
Operating earnings available to common
shareholders 2,133 2,544 3,157 3,875 4,583
Reconciling items (See Slide 8) (123) (104) - - -
Operating earnings available to common
shareholders, as presented $ 2,010 $ 2,440 $ 3,157 $ 3,875 $ 4,583
Total equity $ 21,149 $ 22,824 $ 29,101 $ 33,798 $ 35,179
Less: Accumulated other comprehensive income 2,792 2,956 1,912 1,118 1,078
Less: Preferred stock - - 2,042 2,042 2,042
Adjusted equity $ 18,357 $ 19,868 $ 25,147 $ 30,638 $ 32,059
Average equity $ 16,868 $ 19,113 $ 22,508 $ 27,893 $ 31,349
Net income available to common shareholders
return on equity 13.1% 14.4% 20.7% 22.1% 13.3%
Operating earnings available to common
shareholders return on equity 12.6% 13.3% 14.0% 13.9% 14.6%
Operating earnings available to common
shareholders return on equity, as presented 11.9% 12.8% 14.0% 13.9% 14.6%
15
16. 2007 Reconciliation of Return on Common Equity
Institutional Individual International
($ Millions)
Net income $ 1,449 $ 1,357 $ 635
Adjustments 518 (63) (67)
Operating earnings $ 1,967 $ 1,511 $ 568
Average equity 9,551 9,956 2,889
Operating earnings return on equity 20.6% 15.2% 19.7%
16
