MetLife, Inc. (NYSE:MET) Q3 2019 Earnings Conference Call - Final Transcript
Oct 31, 2019 • 09:10 am ET
Welcome to the MetLife third-quarter 2019 earnings release conference call. [Operator Instructions] As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note on the forward-looking statements in yesterday's earnings release. With that, I will turn the call over to John Hall, head of investor relations.
Thank you, operator. Good morning, everyone, and welcome to MetLife's third-quarter 2019 earnings call. Before we begin, I refer you to the information on non-GAAP measures on the Investor Relations portion of metlife.com, in our earnings release and in our quarterly financial supplements, which you can review. Joining me this morning on the call are Michel Khalaf, president and Chief Executive Officer; and John McCallion, Chief Financial Officer.
Also here to participate in the discussions are other members of senior management. Last night, we released an expanded set of supplemental slides. They are available on our website. John McCallion will speak to those supplemental slides in his prepared remarks if you wish to follow along. The content for the slides begins following the romanette pages that feature a number of GAAP reconciliations. After prepared remarks, we will have a Q&A session that will extend to the top of the hour. [Operator Instructions] With that, I'll turn the call over to Michel.
Michel A. Khalaf
Thank you, John, and good morning, everyone. There is a growing sense of urgency and excitement at MetLife. We are renewing our commitment to being a purpose-driven company. We are making good progress on a strategy that defines the right markets, solutions and competitive differentiators, and we are building a culture that is customer-focused and highly collaborative. I am confident we are assembling all the right ingredients to win in the marketplace and create long-term value for our shareholders.
Turning to our third-quarter results, MetLife delivered solid earnings despite a challenging capital markets environment marked by falling interest rates. We continue to build a company that can perform well across economic cycles. As we reported last night, net income totaled $2.2 billion, up from $880 million in the third quarter of 2018. This result mainly reflected the impact of declining interest rates on our derivative portfolio as accounting rules require us to mark our hedges to market through the income statement but not the assets or liabilities being hedged. Quarterly adjusted earnings totaled $1.2 billion or $1.27 per share compared with $1.4 billion or $1.38 per share in the third quarter of 2018. Excluding all notable items, we reported quarterly adjusted earnings of $1.4 billion or $1.54 per share compared with $1.5 billion or $1.53 per share a year ago. Our adjusted return on equity, excluding AOCI other than FCTA and ex-notables, was 12.9%, and MetLife's book value per share, as noted in our press release was up 13% to $48.56 from a year ago.
During the third quarter, we completed our annual actuarial assumption review, which John McCallion will discuss in greater detail. As part of the review, MetLife changed its long-term interest rate assumption