MetLife Announces Fourth Quarter and Full Year 2018 Results

February 6, 2019 4:15 PM

NEW YORK--(BUSINESS WIRE)-- MetLife, Inc. (NYSE: MET) today announced its results for the fourth quarter and full year ended December31, 2018.

Fourth Quarter Results Summary

Full Year Results Summary

"While market conditions were challenging in the fourth quarter, our businesses performed exceptionally well overall in 2018,” said Steven A. Kandarian, chairman, president and CEO of MetLife, Inc. “MetLife delivered 37 percent adjusted earnings per share growth, achieved a 12.6 percent adjusted return on equity**, and returned a record $5.7 billion in cash to shareholders through common stock repurchases and dividends.”

**Refers to adjusted ROE, excluding AOCI other than FCTA*.

Fourth Quarter & Full Year 2018 Summary

($ in millions, except per share data) Three months ended

December 31,

Year ended

December 31,

2018 2017 Change 2018 2017 Change
Premiums, fees & other revenues $11,116 $11,335 (2)% $51,222 $45,843 12%
Net investment income 3,462 4,454 (22)% 16,166 17,363 (7)%
Net investment gains (losses) 145 106 37% (298) (308) 3%
Net derivative gains (losses) 939 (55) 851 (590)
Total revenues $15,662 $15,840 (1)% $67,941 $62,308 9%
Total adjusted revenues $15,397 $15,403

$68,161 $62,744 9%
Adjusted premiums, fees & other revenues $11,022 $11,300 (2)% $50,778 $46,200 10%
Adjusted premiums, fees & other revenues, excluding pension risk transfer (PRT) $11,098 $10,703 4% $43,884 $42,895 2%
Net income (loss) $2,010 $2,272 (12)% $4,982 $3,907 28%
Net income (loss) per share $2.04 $2.14 (5)% $4.91 $3.62 36%
Adjusted earnings $1,336 $678 97% $5,461 $4,235 29%
Adjusted earnings per share $1.35 $0.64 111% $5.39 $3.93 37%
Book value per share $51.53 $54.24 (5)% $51.53 $54.24 (5)%
Book value per share, excluding AOCI other than FCTA $44.62 $42.92 4% $44.62 $42.92 4%
Expense ratio 20.7% 24.4% 18.9% 21.7%
Direct expense ratio, excluding total notable items related to direct expenses and PRT 12.5% 14.5% 12.9% 13.3%
Adjusted expense ratio, excluding total notable items related to other expenses and PRT 20.4% 21.9% 20.6% 21.0%
ROE 16.5% 16.3% 9.6% 6.3%
ROE, excluding AOCI other than FCTA 18.9% 20.6% 11.5% 7.7%
Adjusted ROE, excluding AOCI other than FCTA 12.5% 6.1% 12.6% 8.4%

MetLife reported fourth quarter 2018 premiums, fees & other revenues of $11.1billion, down 2percent over the fourth quarter of 2017. Adjusted premiums, fees & other revenues* were $11.0billion, down 2 percent, and 1 percent on a constant currency basis* over the prior-year period.

Net investment income was $3.5 billion, down 22 percent. The decline in net investment income was driven by 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 $4.4 billion, up 7 percent.

Net derivative gains amounted to $939million, and $742million after tax during the quarter.

Net income was $2.0billion, compared to net income of $2.3billion in the fourth quarter of 2017. On a per share basis, net income was $2.04, compared to net income of $2.14 in the prior-year period.

MetLife reported adjusted earnings of $1.3billion, up 97percent over the fourth quarter of 2017, and 104 percent on a constant currency basis. On a per share basis, which includes the impact of share repurchases, adjusted earnings were $1.35, up 111percent from the prior-year period.

For the full year 2018, MetLife reported net income of $5.0 billion, compared to net income of $3.9 billion for the full year 2017.

Full year 2018 adjusted earnings were $5.5 billion, up 29 percent. On a per share basis, 2018 adjusted earnings were $5.39, up 37 percent over 2017.

Supplemental slides for the fourth quarter of 2018, titled "4Q18 Supplemental Slides," are available on the MetLife Investor Relations website at www.metlife.com and in the Form8-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

December 31, 2018

Year ended

December 31, 2018

Segment Change from

prior-year

period

Change from

prior-year

period (on a

constant

currency

basis)

Change from

prior-year

period

Change from

prior-year

period (on a

constant

currency

basis)

U.S. 38% 38% 38% 38%
Asia (9)% (8)% 1% —%
Latin America 10% 19% 1% 3%
Europe, the Middle East and Africa (EMEA) (30)% (24)% (7)% (7)%
MetLife Holdings 15% 15% 6% 6%

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

Business Discussions

All comparisons of the results for the fourth quarter of 2018 in the business discussions that follow are with the fourth quarter of 2017, unless otherwise noted. See the fourth quarter of 2018 notable items table that follows the Business Discussions section of this release for additional information on notable items incurred in the fourth quarter of 2018.

U.S.

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $685 $498 38%
Adjusted premiums, fees & other revenues $5,725 $6,038 (5)%
Adjusted premiums, fees & other revenues, excluding pension risk transfers $5,801 $5,441 7%
Notable item(s) $0 $(55)

Group Benefits

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $230 $230 —%
Adjusted premiums, fees & other revenues $4,283 $4,105 4%
Notable item(s) $0 $0

Retirement and Income Solutions

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $356 $173 106%
Adjusted premiums, fees & other revenues $523 $1,026 (49)%
Adjusted premiums, fees & other revenues, excluding pension risk transfers $599 $429 40%
Notable item(s) $0 $(62)

Property & Casualty

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $99 $95 4%
Adjusted premiums, fees & other revenues $919 $907 1%
Notable item(s) $0 $7

ASIA

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $281 $310 (9)%
Adjusted earnings (constant currency) $281 $305 (8)%
Adjusted premiums, fees & other revenues $2,095 $2,088 —%
Notable item(s) $0 $0

LATIN AMERICA

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $137 $125 10%
Adjusted earnings (constant currency) $137 $115 19%
Adjusted premiums, fees & other revenues $956 $988 (3)%
Notable item(s) $0 $0

EMEA

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $55 $79 (30)%
Adjusted earnings (constant currency) $55 $72 (24)%
Adjusted premiums, fees & other revenues $642 $651 (1)%
Notable item(s) $0 $0

METLIFE HOLDINGS

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $223 $194 15%
Adjusted premiums, fees & other revenues $1,385 $1,453 (5)%
Notable item(s) $0 $(48)

CORPORATE & OTHER

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Adjusted earnings $(45) $(528)
Notable item(s) $87 $(395)

INVESTMENTS

($ in millions)

Three months ended
December 31, 2018

Three months ended
December 31, 2017

Change
Net investment income (as reported on an adjusted basis) $4,375 $4,103 7%

FOURTH QUARTER 2018 NOTABLE ITEMS

($ in millions) Adjusted Earnings
Three months ended December 31, 2018
Notable Items U.S. Asia Latin

America

EMEA MetLife

Holdings

Corporate

&

Other

Total

Group
Benefits

Retirement
and Income
Solutions

Property &

Casualty

Litigation reserves & settlement costs $(60) $(60)
Expense initiative costs $(100) $(100)
Tax adjustments $247 $247
Total notable items $0 $0 $0 $0 $0 $0 $0 $87 $87

*Information regarding the non-GAAP and other financial measures included in this news release and the reconciliation of the non-GAAP financial measures to GAAP measures is provided in the Non-GAAP and Other Financial Disclosures discussions below, as well as the tables that accompany this news release. Adjusted measures were formerly referred to as operating measures.

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 countries 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 fourth quarter and full year 2018 earnings conference call and audio webcast on Thursday, February 7, 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 612-234-9959 (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, February 7, 2019, until Thursday, February 14, 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 462460. 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 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.

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) adjusted revenues; (i) revenues;
(ii) adjusted expenses; (ii) expenses;
(iii) adjusted premiums, fees and other revenues; (iii) premiums, fees and other revenues;
(iv) adjusted premiums, fees & other revenues, excluding pension risk transfer (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) other expenses, as reported on an adjusted basis (viii) other expenses
(ix) other expenses, as reported on an adjusted basis, on a constant currency basis (ix) other expenses
(x) adjusted earnings available to common shareholders; (x) net income (loss) available to MetLife, Inc.’s common shareholders;
(xi) adjusted earnings available to common shareholders on a constant currency basis; (xi) net income (loss) available to MetLife, Inc.’s common shareholders;
(xii) adjusted earnings available to common shareholders, excluding total notable items; (xii) net income (loss) available to MetLife, Inc.’s common shareholders;
(xiii) adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis; (xiii) net income (loss) available to MetLife, Inc.’s common shareholders;
(xiv) adjusted earnings available to common shareholders per diluted common share; (xiv) net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xv) adjusted earnings available to common shareholders on a constant currency basis per diluted common share; (xv) net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xvi) adjusted earnings available to common shareholders, excluding total notable items, per diluted common share; (xvi) net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xvii) adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis per diluted common share; (xvii) net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share;
(xviii) adjusted return on equity; (xviii) return on equity;
(xix) adjusted return on equity, excluding AOCI other than FCTA; (xix) return on equity;
(xx) adjusted return on equity, excluding net equity of assets and liabilities of disposed subsidiary (excludes AOCI other than FCTA) (xx) return on equity
(xxi) adjusted tangible return on equity; (xxi) return on equity;
(xxii) investment portfolio gains (losses); (xxii) net investment gains (losses);
(xxiii) derivative gains (losses); (xxiii) net derivative gains (losses);
(xxiv) MetLife, Inc.’s tangible common stockholders’ equity; (xxiv) MetLife, Inc.’s stockholders’ equity;
(xxv) MetLife, Inc.’s tangible common stockholders’ equity, excluding total notable items; (xxv) MetLife, Inc.’s stockholders’ equity;
(xxvi) MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA; (xxvi) MetLife, Inc.’s stockholders’ equity;
(xxvii) MetLife, Inc.’s common stockholders’ equity, excluding total notable items (excludes AOCI other than FCTA); (xxvii) MetLife, Inc.’s stockholders’ equity;
(xxviii) MetLife, Inc.’s common stockholders’ equity, excluding net equity of assets and liabilities of disposed subsidiary (excludes AOCI other than FCTA); (xxviii) MetLife, Inc.’s stockholders’ equity;
(xxix) book value per common share, excluding AOCI other than FCTA (xxix) book value per common share
(xxx) book value per common share - tangible common stockholders' equity (xxx) book value per common share
(xxxi) free cash flow of all holding companies; (xxxi) MetLife, Inc. (parent company only) net cash provided by (used in) operating activities;
(xxxii) adjusted expense ratio; (xxxii) expense ratio;
(xxxiii) adjusted expense ratio, excluding total notable items related to other expenses and PRT; (xxxiii) expense ratio;
(xxxiv) direct expense ratio; and (xxxiv) expense ratio; and
(xxxv) direct expense ratio, excluding total notable items related to direct expenses and PRT. (xxxv) expense ratio.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP 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 the various non-GAAP and other financial measures discussed in this news release may differ from those used by other companies:

Adjusted earnings and related measures

These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also MetLife’s GAAP measure of segment performance. Adjusted earnings and other financial measures based on adjusted earnings are also the measures by which MetLife senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and other financial measures based on adjusted earnings allow analysis of MetLife's performance relative to its business plan and facilitate comparisons to industry results.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as negative adjusted earnings. Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred stock dividends.

Adjusted revenues and adjusted expenses

These financial measures, along with the related adjusted premiums, fees and other revenues, focus on our primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also includes the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations under GAAP.

Adjusted revenues also excludes net investment gains (losses) (NIGL) and net derivative gains (losses) (NDGL). Adjusted expenses also excludes goodwill impairments.

The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:

The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:

Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from MetLife’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.

Investment portfolio gains (losses) and derivative gains (losses)

These are measures of investment and hedging activity. Investment portfolio gains (losses) principally excludes amounts that are reported within net investment gains (losses) but do not relate to the performance of the investment portfolio, such as gains (losses) on sales and divestitures of businesses, goodwill impairment or changes in estimated fair value. Derivative gains (losses) principally excludes earned income on derivatives and amortization of premium on derivatives, where such derivatives are either hedges of investments or are used to replicate certain investments, and where such derivatives do not qualify for hedge accounting. This earned income and amortization of premium is reported within adjusted earnings and not within derivative gains (losses).

Return on equity, allocated equity, tangible equity and related measures

The above measures represent a level of equity consistent with the view that, in the ordinary course of business, MetLife does not plan to sell most investments for the sole purpose of realizing gains or losses. Also refer to the utilization of adjusted earnings and other financial measures based on adjusted earnings mentioned above.

The above measures are, when considered in conjunction with regulatory capital ratios, a measure of capital adequacy.

Expense ratio, direct expense ratio, adjusted expense ratio and related measures

Statistical sales information:

Sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity.

The following additional information is relevant to an understanding of MetLife’s performance results:

Forward-Looking Statements

This news release 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. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” "will," and other words and terms of similar meaning, or are tied to future periods, in connection with a discussion of future performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.

Many factors will be important in determining the results of MetLife, Inc., its subsidiaries and affiliates. Forward-looking statements are based on our assumptions and current expectations, which may be inaccurate, and on the current economic environment, which may change. These statements are not guarantees of future performance. They involve a number of risks and uncertainties that are difficult to predict. Results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission. These factors include: (1)adverse effects which may arise in connection with the material weaknesses in our internal control over financial reporting or our failure to promptly remediate them; (2) difficult conditions in the global capital markets; (3)increased volatility and disruption of the global capital and credit markets, which may affect our ability to meet liquidity needs and access capital, including through our credit facilities, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets, including assets supporting risks ceded to certain of our captive reinsurers or hedging arrangements associated with those risks; (4)exposure to global financial and capital market risks, including as a result of the United Kingdom’s notice of withdrawal from the European Union or other disruption in global political, security or economic conditions; (5)impact on us of comprehensive financial services regulation reform; (6)numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact how we conduct our business, including those compelling the liquidation of certain financial institutions; (7)regulatory, legislative or tax changes relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products or services, or increase the cost or administrative burdens of providing benefits to employees; (8)adverse results or other consequences from litigation, arbitration or regulatory investigations; (9) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (10)investment losses and defaults, and changes to investment valuations; (11)changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (12)impairments of goodwill and realized losses or market value impairments to illiquid assets; (13)defaults on our mortgage loans; (14)the defaults or deteriorating credit of other financial institutions that could adversely affect us; (15)economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (16)downgrades in our claims paying ability, financial strength or credit ratings; (17)a deterioration in the experience of the closed block established in connection with the reorganization of Metropolitan Life Insurance Company; (18)availability and effectiveness of reinsurance, hedging or indemnification arrangements, as well as any default or failure of counterparties to perform; (19)differences between actual claims experience and underwriting and reserving assumptions; (20)ineffectiveness of risk management policies and procedures; (21)catastrophe losses; (22)increasing cost and limited market capacity for statutory life insurance reserve financings; (23)heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, and for personnel; (24)exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and any adjustment for nonperformance risk; (25) our ability to address difficulties, unforeseen liabilities, asset impairments, or rating agency actions arising from (a) business acquisitions and integrating and managing the growth of such acquired businesses, (b) dispositions of businesses via sale, initial public offering, spin-off or otherwise, including failure to achieve projected operational benefits from such transactions and any restrictions, liabilities, losses or indemnification obligations arising from any transitional services or tax arrangements related to the separation of any business, or from the failure of such a separation to qualify for any intended tax-free treatment, (c) entry into joint ventures, or (d) legal entity reorganizations; (26) unanticipated or adverse developments that could adversely affect our achieving expected operational or other benefits from the separation of Brighthouse Financial, Inc. and its subsidiaries (“Brighthouse”); (27) liabilities, losses or indemnification obligations arising from our transitional services, investment management or tax arrangements or other agreements with Brighthouse; (28) failure of the separation of Brighthouse to qualify for intended tax-free treatment; (29)legal, regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (30)MetLife, Inc.’s and its subsidiary holding companies’ primary reliance, as holding companies, on dividends from subsidiaries to meet free cash flow targets and debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (31)the possibility that MetLife, Inc.’s Board of Directors may influence the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; (32)changes in accounting standards, practices and/or policies; (33)increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (34)inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (35)difficulties in marketing and distributing products through our distribution channels; (36)provisions of laws and our incorporation documents that may delay, deter or prevent takeovers and corporate combinations involving MetLife; (37)the effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities, or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or other information security systems and management continuity planning; (38)any failure to protect the confidentiality of client information; (39) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; (40)the impact of technological changes on our businesses; and (41) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission.

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the U.S. Securities and Exchange Commission.

MetLife, Inc.
GAAP Consolidated Statements of Operations
(Unaudited)
(In millions)
For the Three Months Ended For the Year Ended
December 31, December 31,
2018 2017 2018 2017
Revenues
Premiums $ 9,267 $ 9,571 $ 43,840 $ 38,992
Universal life and investment-type product policy fees 1,397 1,358 5,502 5,510
Net investment income 3,462 4,454 16,166 17,363
Other revenues 452 406 1,880 1,341
Net investment gains (losses) 145 106 (298 ) (308 )
Net derivative gains (losses) 939 (55 ) 851 (590 )
Total revenues 15,662 15,840 67,941 62,308
.
Expenses
Policyholder benefits and claims 8,992 9,295 42,656 38,313
Interest credited to policyholder account balances 486 1,526 4,013 5,607
Policyholder dividends 318 306 1,251 1,231
Capitalization of DAC (814 ) (784 ) (3,254 ) (3,002 )
Amortization of DAC and VOBA 843 736 2,975 2,681
Amortization of negative VOBA (11 ) (27 ) (56 ) (140 )
Interest expense on debt 260 278 1,122 1,129
Other expenses 3,117 3,549 12,927 12,953
Total expenses 13,191 14,879 61,634 58,772
Income (loss) from continuing operations before provision for income tax 2,471 961 6,307 3,536
Provision for income tax expense (benefit) 409 (1,354 ) 1,179 (1,470 )
Income (loss) from continuing operations, net of income tax 2,062 2,315 5,128 5,006
Income (loss) from discontinued operations, net of income tax (986 )
Net income (loss) 2,062 2,315 5,128 4,020
Less: Net income (loss) attributable to noncontrolling interests (5 ) (2 ) 5 10
Net income (loss) attributable to MetLife, Inc. 2,067 2,317 5,123 4,010
Less: Preferred stock dividends 57 45 141 103
Net income (loss) available to MetLife, Inc.'s common shareholders $ 2,010 $ 2,272 $ 4,982 $ 3,907
See footnotes on last page.
MetLife, Inc.
(Unaudited)
(In millions, except per share data)
For the Three Months Ended For the Year Ended
December 31, December 31,
2018 2017 2018 2017
Reconciliation to Adjusted Earnings Available to Common Shareholders Earnings Per
Weighted Average
Common Share Diluted (1)
Earnings Per
Weighted Average
Common Share Diluted (1)
Earnings Per
Weighted Average
Common Share Diluted (1)
Earnings Per
Weighted Average
Common Share Diluted (1)
Net income (loss) available to MetLife, Inc.'s common shareholders $ 2,010 $ 2.04 $ 2,272 $ 2.14 $ 4,982 $ 4.91 $ 3,907 $ 3.62
Adjustments from net income (loss) available to common shareholders to adjusted earnings available to common shareholders:
Less: Net investment gains (losses) 145 0.15 106 0.10 (298 ) (0.29 ) (308 ) (0.29 )
Net derivative gains (losses) 939 0.95 (55 ) (0.05 ) 851 0.84 (590 ) (0.55 )
Premiums (347 ) (0.32 )
Universal life and investment-type product policy fees 19 0.02 29 0.03 120 0.12 103 0.10
Net investment income (913 ) (0.92 ) 351 0.33 (1,217 ) (1.21 ) 819 0.75
Other revenues 75 0.08 6 0.01 324 0.31 (113 ) (0.10 )
Policyholder benefits and claims and policyholder dividends 78 0.08 2 (174 ) (0.17 ) (204 ) (0.19 )
Interest credited to policyholder account balances 731 0.73 (420 ) (0.40 ) 680 0.67 (1,294 ) (1.21 )
Capitalization of DAC 1 (34 ) (0.03 )
Amortization of DAC and VOBA (112 ) (0.11 ) 7 0.01 (215 ) (0.21 ) (33 ) (0.03 )
Amortization of negative VOBA 1 1 9 0.01
Interest expense on debt (18 ) (0.02 ) (63 ) (0.06 ) 16 0.01
Other expenses (62 ) (0.06 ) (272 ) (0.26 ) (398 ) (0.40 ) (544 ) (0.50 )
Goodwill impairment
Provision for income tax (expense) benefit (213 ) (0.22 ) 1,837 1.73 (86 ) (0.08 ) 3,188 2.96
Income (loss) from discontinued operations, net of income tax (986 ) (0.91 )
Add: Net income (loss) attributable to noncontrolling interests (5 ) (0.01 ) (2 ) 5 10 0.01
Adjusted earnings available to common shareholders 1,336 1.35 678 0.64 5,461 5.39 4,235 3.93
Less: Total notable items (2) 87 0.09 (498 ) (0.47 ) (103 ) (0.10 ) (622 ) (0.58 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 1,249 $ 1.26 $ 1,176 $ 1.11 $ 5,564 $ 5.49 $ 4,857 $ 4.50
Adjusted earnings available to common shareholders on a constant currency basis $ 1,336 $ 1.35 $ 656 $ 0.62 $ 5,461 $ 5.39 $ 4,230 $ 3.92
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2) $ 1,249 $ 1.26 $ 1,154 $ 1.09 $ 5,564 $ 5.49 $ 4,852 $ 4.50
Weighted average common shares outstanding - diluted 987.6 1,062.1 1,013.9 1,078.5
See footnotes on last page.
MetLife, Inc.
(Unaudited)
(In millions)
For the Three Months Ended For the Year Ended
December 31, December 31,
2018 2017 2018 2017
Premiums, Fees and Other Revenues
Premiums, fees and other revenues $ 11,116 $ 11,335 $ 51,222 $ 45,843
Less: Unearned revenue adjustments (8 ) (2 ) (7 ) 12
GMIB fees 27 31 120 125
Settlement of foreign currency earnings hedges 5 6 19 22
TSA fees 70 305
Divested businesses 7 (516 )
Adjusted premiums, fees and other revenues $ 11,022 $ 11,300 $ 50,778 $ 46,200
Net Investment Income
Net investment income $ 3,462 $ 4,454 $ 16,166 $ 17,363
Less: Investment hedge adjustments (121 ) (85 ) (475 ) (435 )
Operating joint venture adjustments 1
Unit-linked contract income (765 ) 436 (683 ) 1,300
Securitization entities income
Certain partnership distributions (27 ) (61 )
Divested businesses 1 (46 )
Net investment income, as reported on an adjusted basis $ 4,375 $ 4,103 $ 17,383 $ 16,544
Revenues and Expenses
Total revenues $ 15,662 $ 15,840 $ 67,941 $ 62,308
Less: Net investment gains (losses) 145 106 (298 ) (308 )
Less: Net derivative gains (losses) 939 (55 ) 851 (590 )
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses) (8 ) (2 ) (7 ) 12
Less: Other adjustments to revenues:
GMIB fees 27 31 120 125
Investment hedge adjustments (121 ) (85 ) (475 ) (435 )
Operating joint venture adjustments 1
Unit-linked contract income (765 ) 436 (683 ) 1,300
Securitization entities income
Settlement of foreign currency earnings hedges 5 6 19 22
Certain partnership distributions (27 ) (61 )
TSA fees 70 305
Divested businesses 8 (562 )
Total adjusted revenues $ 15,397 $ 15,403 $ 68,161 $ 62,744
Total expenses $ 13,191 $ 14,879 $ 61,634 $ 58,772
Less: Adjustments related to net investment (gains) losses and net derivative (gains) losses 44 (28 ) 109 (60 )
Less: Goodwill impairment
Less: Other adjustments to expenses:
Inflation and pass-through adjustments 1 (77 ) 29 (31 )
GMIB costs and amortization of DAC and VOBA related to GMIB fees and GMIB costs (10 ) 93 252 352
Market value adjustments and amortization of DAC, VOBA and negative VOBA related to market value adjustments (1 ) 2 (2 ) 13
PAB hedge adjustments (1 ) (4 ) (3 )
Unit-linked contract costs (730 ) 420 (676 ) 1,264
Securitization entities debt expense
Noncontrolling interest 5 5 (10 ) (12 )
Regulatory implementation costs 5 11
Acquisition, integration and other costs (14 ) 23 24 65
TSA fees 70 305
Divested businesses 14 244 130 496
Total adjusted expenses $ 13,808 $ 14,197 $ 61,466 $ 56,688
See footnotes on last page.
MetLife, Inc.
(Unaudited)
(In millions, except per share and ratio data)
December 31,
Book Value (3) 2018 2017
Book value per common share $ 51.53 $ 54.24
Less: Net unrealized investment gains (losses), net of income tax 9.03 13.09
Defined benefit plans adjustment, net of income tax (2.12 ) (1.77 )
Book value per common share, excluding AOCI other than FCTA 44.62 42.92
Less: Goodwill, net of income tax 9.52 8.93
VODA and VOCRA, net of income tax 0.33 0.36
Book value per common share - tangible common stockholders' equity $ 34.77 $ 33.63
Common shares outstanding, end of period 958.6 1,043.6
For the Three Months Ended
December 31,
Expense Detail and Ratios 2018 2017
Reconciliation of Capitalization of DAC to Capitalization of DAC, as reported on an adjusted basis.
Capitalization of DAC $ (814 ) $ (784 )
Less: Divested businesses
Capitalization of DAC, as reported on an adjusted basis $ (814 ) $ (784 )
Reconciliation of Other Expenses to Other Expenses, as reported on an adjusted basis
Other expenses $ 3,117 $ 3,549
Less: Noncontrolling interest 5 5
Less: Regulatory implementation costs 5
Less: Acquisition, integration and other costs (14 ) 23
Less: TSA fees 70
Less: Divested businesses (4 ) 244
Other expenses, as reported on an adjusted basis $ 3,055 $ 3,277
Other detail and ratios
Other expenses $ 3,117 $ 3,549
Capitalization of DAC (814 ) (784 )
Other expenses, net of capitalization of DAC $ 2,303 $ 2,765
Premiums, fees and other revenues $ 11,116 $ 11,335
Expense ratio 20.7 % 24.4 %
Direct expenses $ 1,369 $ 1,697
Less: Total notable items related to direct expenses (19 ) 149
Direct expenses, excluding total notable items related to direct expenses $ 1,388 $ 1,548
Other expenses, as reported on an adjusted basis $ 3,055 $ 3,277
Capitalization of DAC, as reported on an adjusted basis (814 ) (784 )
Other expenses, net of capitalization of DAC, as reported on an adjusted basis 2,241 2,493
Less: Total notable items related to other expenses, as reported on an adjusted basis (19 ) 149
Other expenses, net of capitalization of DAC, excluding total notable items related to other expenses, as reported on an adjusted basis $ 2,260 $ 2,344
Adjusted premiums, fees and other revenues $ 11,022 $ 11,300
Less: Pension risk transfer (PRT) (76 ) 597
Adjusted premiums, fees and other revenues, excluding PRT $ 11,098 $ 10,703
Direct expense ratio 12.4 % 15.0 %
Direct expense ratio, excluding total notable items related to direct expenses and PRT 12.5 % 14.5 %
Adjusted expense ratio 20.3 % 22.1 %
Adjusted expense ratio, excluding total notable items related to other expenses and PRT 20.4 % 21.9 %
See footnotes on last page.
MetLife, Inc.
(Unaudited)
For the Three Months Ended For the Year Ended
December 31, (4) December 31,
Return on Equity 2018 2017 2018 2017
Return on MetLife, Inc.'s:
Common stockholders' equity 16.5 % 16.3 % 9.6 % 6.3 %
Common stockholders' equity, excluding AOCI other than FCTA 18.9 % 20.6 % 11.5 % 7.7 %
Tangible common stockholders' equity 24.4 % 26.4 % 14.8 % 9.6 %
Adjusted return on MetLife, Inc.'s:
Common stockholders' equity 10.9 % 4.9 % 10.6 % 6.8 %
Common stockholders' equity, excluding AOCI other than FCTA 12.5 % 6.1 % 12.6 % 8.4 %
Common stockholders' equity, excluding total notable items (excludes AOCI other than FCTA) (2) 11.7 % 10.6 % 12.8 % 9.6 %
Common stockholders' equity, excluding net equity of assets and liabilities of disposed subsidiary (excludes AOCI other than FCTA) 12.5 % 6.1 % 12.6 % 10.3 %
Tangible common stockholders' equity 16.2 % 8.0 % 16.3 % 10.4 %
Tangible common stockholders' equity, excluding total notable items (2) 15.1 % 13.6 % 16.5 % 11.9 %
Return on Allocated Equity:
U.S. 25.8 % 21.5 %
Asia 21.7 % 11.8 %
Latin America 4.7 % 8.0 %
EMEA 9.2 % 11.3 %
MetLife Holdings 16.1 % 9.4 %
Return on Allocated Tangible Equity:
U.S. 29.9 % 25.0 %
Asia 32.9 % 18.8 %
Latin America 7.9 % 13.8 %
EMEA 15.1 % 18.4 %
MetLife Holdings 18.0 % 10.5 %
Adjusted Return on Allocated Equity:
U.S. 25.2 % 19.5 %
Asia 7.9 % 9.9 %
Latin America 17.5 % 17.0 %
EMEA 6.3 % 9.8 %
MetLife Holdings 8.9 % 6.9 %
Adjusted Return on Allocated Tangible Equity:
U.S. 29.2 % 22.7 %
Asia 12.0 % 15.8 %
Latin America 29.1 % 29.3 %
EMEA 10.5 % 16.1 %
MetLife Holdings 10.0 % 7.8 %
See footnotes on last page.
Condensed Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc.
to Free Cash Flow of All Holding Companies
(Unaudited)
For the Year Ended December 31,
2018 2017
(In billions, except ratios)
MetLife, Inc. (parent company only) net cash provided by operating activities $ 5.5 $ 6.5
Adjustments from net cash provided by operating activities to free cash flow:
Add: Incremental debt to be at or below target leverage ratios
Add: Adjustments from net cash provided by operating activities to free cash flow (5) (1.1 ) (0.3 )
MetLife, Inc. (parent company only) free cash flow 4.4 6.2
Other MetLife, Inc. holding companies free cash flow (6) (1.0 ) (0.5 )
Free cash flow of all holding companies $ 3.4 $ 5.7
Ratio of net cash provided by operating activities to consolidated net income (loss) available to MetLife, Inc.'s common shareholders:
MetLife, Inc. (parent company only) net cash provided by operating activities $ 5.5 $ 6.5
Consolidated net income (loss) available to MetLife, Inc.'s common shareholders (7) $ 5.0 $ 3.9
Ratio of net cash provided by operating activities (parent company only) to consolidated net income (loss) available to MetLife, Inc.'s common shareholders (7) (8) 110 % 165 %
Ratio of free cash flow to adjusted earnings available to common shareholders:
Free cash flow of all holding companies (9) $ 3.4 $ 5.7
Consolidated adjusted earnings available to common shareholders (9) $ 5.5 $ 4.2
Ratio of free cash flow of all holding companies to consolidated adjusted earnings available to common shareholders (9) 62 % 134 %
See footnotes on last page.
MetLife, Inc.
Adjusted Earnings Available to Common Shareholders
(Unaudited)
(In millions)
For the Three Months Ended For the Year Ended
December 31, December 31,
2018 2017 2018 2017
U.S.:
Adjusted earnings available to common shareholders $ 685 $ 498 $ 2,804 $ 2,027
Less: Total notable items (2) (55 ) 37 (88 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 685 $ 553 $ 2,767 $ 2,115
Adjusted earnings available to common shareholders on a constant currency basis (10) $ 685 $ 498 $ 2,804 $ 2,027
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ 685 $ 553 $ 2,767 $ 2,115
Group Benefits:
Adjusted earnings available to common shareholders $ 230 $ 230 $ 1,079 $ 868
Less: Total notable items (2) 37 3
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 230 $ 230 $ 1,042 $ 865
Adjusted earnings available to common shareholders on a constant currency basis (10) $ 230 $ 230 $ 1,079 $ 868
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ 230 $ 230 $ 1,042 $ 865
Retirement & Income Solutions:
Adjusted earnings available to common shareholders $ 356 $ 173 $ 1,381 $ 956
Less: Total notable items (2) (62 ) (45 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 356 $ 235 $ 1,381 $ 1,001
Adjusted earnings available to common shareholders on a constant currency basis (10) $ 356 $ 173 $ 1,381 $ 956
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ 356 $ 235 $ 1,381 $ 1,001
Property & Casualty:
Adjusted earnings available to common shareholders $ 99 $ 95 $ 344 $ 203
Less: Total notable items (2) 7 (46 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 99 $ 88 $ 344 $ 249
Adjusted earnings available to common shareholders on a constant currency basis (10) $ 99 $ 95 $ 344 $ 203
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ 99 $ 88 $ 344 $ 249
Asia:
Adjusted earnings available to common shareholders $ 281 $ 310 $ 1,237 $ 1,229
Less: Total notable items (2) (86 ) 5
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 281 $ 310 $ 1,323 $ 1,224
Adjusted earnings available to common shareholders on a constant currency basis $ 281 $ 305 $ 1,237 $ 1,235
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2) $ 281 $ 305 $ 1,323 $ 1,230
Latin America:
Adjusted earnings available to common shareholders $ 137 $ 125 $ 592 $ 585
Less: Total notable items (2) 28 14
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 137 $ 125 $ 564 $ 571
Adjusted earnings available to common shareholders on a constant currency basis $ 137 $ 115 $ 592 $ 573
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2) $ 137 $ 115 $ 564 $ 559
EMEA:
Adjusted earnings available to common shareholders $ 55 $ 79 $ 277 $ 297
Less: Total notable items (2) (23 ) (8 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 55 $ 79 $ 300 $ 305
Adjusted earnings available to common shareholders on a constant currency basis $ 55 $ 72 $ 277 $ 298
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2) $ 55 $ 72 $ 300 $ 306
MetLife Holdings:
Adjusted earnings available to common shareholders $ 223 $ 194 $ 1,255 $ 1,182
Less: Total notable items (2) (48 ) 38 111
Adjusted earnings available to common shareholders, excluding total notable items (2) $ 223 $ 242 $ 1,217 $ 1,071
Adjusted earnings available to common shareholders on a constant currency basis (10) $ 223 $ 194 $ 1,255 $ 1,182
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ 223 $ 242 $ 1,217 $ 1,071
Corporate & Other:
Adjusted earnings available to common shareholders $ (45 ) $ (528 ) $ (704 ) $ (1,085 )
Less: Total notable items (2) 87 (395 ) (97 ) (656 )
Adjusted earnings available to common shareholders, excluding total notable items (2) $ (132 ) $ (133 ) $ (607 ) $ (429 )
Adjusted earnings available to common shareholders on a constant currency basis (10) $ (45 ) $ (528 ) $ (704 ) $ (1,085 )
Adjusted earnings available to common shareholders, excluding total notable items, on a constant currency basis (2), (10) $ (132 ) $ (133 ) $ (607 ) $ (429 )
See footnotes on last page.
MetLife, Inc.
(Unaudited)
(1) Adjusted earnings available to common shareholders is calculated on a standalone basis and may not equal the sum of (i) adjusted earnings available to common shareholders, excluding total notable items and (ii) total notable items.
(2) Notable items reflect the unexpected impact of events that affect MetLife’s results, but that were unknown and that MetLife could not anticipate when it devised its Business Plan. Notable items also include certain items regardless of the extent anticipated in the Business Plan to help investors have a better understanding of MetLife's results and to evaluate and forecast those results. Notable items can affect MetLife’s results either positively or negatively.
(3) Book values exclude $3,340 million and $2,066 million of equity related to preferred stock at December 31, 2018 and 2017, respectively.
(4) Annualized using quarter-to-date results.
(5) Adjustments include: (i) capital contributions to subsidiaries; (ii) returns of capital from subsidiaries; (iii) repayments on and (issuances of) loans to subsidiaries, net; and (iv) investment portfolio and derivatives changes and other, net.
(6) Components include: (i) dividends and returns of capital from subsidiaries; (ii) capital contributions from MetLife, Inc.; (iii) capital contributions to subsidiaries; (iv) repayments on and (issuances of) loans to subsidiaries, net; (v) other expenses; (vi) dividends and returns of capital to MetLife, Inc. and (vii) investment portfolio changes and other, net.
(7) Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for 2018 includes costs related to the separation of Brighthouse Financial, Inc. (Brighthouse) and its subsidiaries (Separation) of $0.08 billion, net of income tax. Excluding this amount from the denominator of the ratio, this ratio, as adjusted, would be 109%. Consolidated net income (loss) available to MetLife, Inc.'s common shareholders for 2017 includes Separation-related costs of $0.3 billion, net of income tax. Excluding this amount from the denominator of the ratio, this ratio, as adjusted, would be 153%.
(8) Including the free cash flow of other MetLife, Inc. holding companies of ($1.0) billion and ($0.5) billion for the years ended December 31, 2018 and 2017, respectively, in the numerator of the ratio, this ratio, as adjusted, would be 90% and 153%, respectively. Including the free cash flow of other MetLife, Inc. holding companies in the numerator of the ratio and excluding the Separation-related costs from the denominator of the ratio, this ratio, as adjusted, would be 88% and 141% for the years ended December 31, 2018 and 2017, respectively.
(9) In 2018, $0.3 billion of Separation-related items (comprised of certain Separation-related inflows primarily related to reinsurance benefit from Brighthouse) were included, which increased MetLife, Inc. holding companies’ liquid assets, as well as MetLife, Inc.'s free cash flow. Excluding these Separation-related items, adjusted free cash flow would be $3.1 billion for the year ended December 31, 2018. Consolidated adjusted earnings available to common shareholders for 2018 was negatively impacted by notable items, primarily related to expense initiative costs of $0.3 billion, net of income tax, partially offset by tax adjustments of $0.2 billion, net of income tax. Excluding the Separation-related items, which increased free cash flow, from the numerator of the ratio and excluding such notable items and Separation-related costs negatively impacting consolidated adjusted earnings available to common shareholders from the denominator of the ratio, the adjusted free cash flow ratio for 2018 would be 56%.

In 2017, $2.1 billion of Separation-related items (comprised of certain Separation-related inflows primarily related to dividends from Brighthouse, net of outflows) were included, which increased MetLife, Inc. holding companies’ liquid assets, as well as MetLife, Inc.'s free cash flow. Excluding these Separation-related items, adjusted free cash flow would be $3.6 billion for the year ended December 31, 2017. Consolidated adjusted earnings available to common shareholders for 2017 was negatively impacted by notable items, primarily related to tax adjustments, of $0.6 billion, net of income tax. Excluding the Separation-related items, which increased free cash flow, from the numerator of the ratio and excluding such notable items and Separation-related costs negatively impacting consolidated adjusted earnings available to common shareholders from the denominator of the ratio, the adjusted free cash flow ratio for 2017 would be 75%.
(10) Amounts on a reported basis, as constant currency impact is not significant.

For Media: Ashia Razzaq

MetLife

(212) 578-1538

For Investors: John Hall

MetLife

(212) 578-7888

Source: MetLife, Inc.

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