The following table sets forth selected financial data for the Trust. The selected financial data for the years ended December 31, 2015, 2014 and 2013 and at December 31, 2015 and 2014 has been derived from the Trust’s audited financial statements included elsewhere herein. The financial data for the years ended December 31, 2012 and 2011 and at December 31, 2013, 2012 and 2011 has been derived from the Trust’s audited financial statements not included herein. The following changes in net assets data, balance sheet data and other data have been prepared in conformity with accounting principles generally accepted in the United States of America. The selected financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited financial statements and related notes included elsewhere herein.
Under the Plan and the Trust Agreement, each policyholder’s membership interest was extinguished and certain eligible policyholders of Metropolitan Life (the “Trust Eligible Policyholders”) received, in exchange for that interest, a number of interests in the Trust (“Trust Interests”) equal to the number of shares of common stock of MetLife, Inc., par value $0.01 per share (the “Common Stock”), allocated to them in accordance with the Plan. The assets of the Trust consist principally of the shares of Common Stock issued to the Trust (the “Trust Shares”) for the benefit of the Trust Eligible Policyholders and permitted transferees (collectively, the “Beneficiaries”). Additionally, after the passage of sufficient time, any unclaimed cash and Common Stock becomes property of the state of last known residence of the Beneficiary, as is the case with other types of unclaimed property. The schedule by which unclaimed property escheats varies by state, but is generally within three to five years of abandonment. Beginning on April 7, 2001, Beneficiaries were able to withdraw all, but generally, not less than all, of their allocated shares of Common Stock in the Trust at any time by providing written notice to the Custodian.
The number of Trust Interests outstanding at December 31, 2015 and 2014 was 170,988,137 and 180,481,253, respectively. The decrease of 9,493,116 in the number of Trust Interests is primarily attributable to Trust Interests redeemed, Trust Interests withdrawn and Trust Interests escheated. Net assets of the Trust consist solely of Trust Shares which will increase or decrease depending upon, among other things, the movement of Trust Shares into or out of the Trust as directed by the Beneficiaries.
Year ended December 31, 2015 compared with the year ended December 31, 2014
Net assets in the Trust decreased $1.6 billion, or 16%, to $8.2 billion at December 31, 2015 from $9.8 billion at December 31, 2014. This decrease is primarily due to a decrease in net unrealized investment gains on the Trust Shares, as well as (i) net activity under the MetLife, Inc. Purchase and Sale Program (the “Purchase and Sale Program”); (ii) the impact of withdrawals by Beneficiaries from the Trust; and (iii) the impact of escheatment of unclaimed cash and Trust Shares. Net unrealized investment gains, which represent the difference between the estimated fair value and the cost basis of the Trust Shares, decreased $1.4 billion from the prior year. A net reduction of 9,493,116 Trust Interests resulted from a net decrease of 5,853,999 Trust Interests in connection with redemptions and issuances under the Purchase and Sale Program, a decrease of 1,295,708 Trust Interests due to withdrawals by Beneficiaries from the Trust, and a decrease of 2,343,409 Trust Interests due to escheatment of Trust Shares. Net redemptions by Beneficiaries through the Purchase and Sale Program, withdrawals by Beneficiaries from the Trust and escheatment of unclaimed cash and Trust Shares, resulted in decreases in net assets for the year ended December 31, 2015 of $81 million, $18 million and $33 million, respectively. Net investment income of $259 million, which consisted of Common Stock dividends received from MetLife, Inc., and net realized investment gains of $223 million recognized on the sale of Trust Shares sold in the Purchase and Sale Program, were fully allocated to Beneficiaries.
Withdrawals of Trust Shares are recorded as reductions in Trust Interests at cost and classified as Trust Interests withdrawn; and
The Trust Agreement provides that MetLife, Inc. shall pay, or reimburse directly, each of the Trustee and the Custodian for, all costs and expenses relating to the Trust, in the case of the Trustee, and relating to the holding of Trust Interests, in the case of the Custodian, including, but not limited to, the fees and expenses as provided in the Trust Agreement. MetLife, Inc. pays the Trustee an annual fee of $50 thousand. MetLife, Inc. paid to the Trustee $23 thousand, $17 thousand and $24 thousand for out-of-pocket expenses for the years ended December 31, 2015, 2014 and 2013, respectively. MetLife, Inc. paid to the Trust’s independent auditors $68 thousand, $66 thousand and $66 thousand for audit fees for the years ended December 31, 2015, 2014 and 2013, respectively. None of the aforementioned fees and expenses is included in the Trust’s financial statements. MetLife, Inc. also provides the Trustee with certain management and administrative services.
Pursuant to the Trust Agreement, the Trust is eligible to be terminated at MetLife, Inc.’s discretion, as the Trust Shares constitute less than 25% of the number of issued and outstanding shares of Common Stock at December 31, 2015. See “- Common Stock Issuances.” MetLife, Inc. has advised the Trustee that it currently has no intention of voluntarily terminating the Trust.
See Note 5 for information regarding repurchases of Common Stock subsequent to December 31, 2015.
Beneficiaries may instruct the program agent for the Purchase and Sale Program to withdraw their allocated shares from the Trust for sale through the Purchase and Sale Program. Trust Interests of 5,950,881, 7,064,546 and 9,078,999 were redeemed for this purpose, which generated net realized investment gains of $222,943 thousand, $274,104 thousand and $268,040 thousand for the years ended December 31, 2015, 2014 and 2013, respectively. Beneficiaries allocated less than 1,000 shares of Common Stock under the Plan are also entitled to purchase in the Purchase and Sale Program additional shares to bring their Trust Interests up to 1,000 shares, subject to a minimum of $250 per purchase (or such lesser amount that would cause the Beneficiary to hold the 1,000 maximum number of Trust Interests). Trust Interests of 96,882, 73,014 and 70,001 for the years ended December 31, 2015, 2014 and 2013, respectively, were issued for this purpose. The number of Trust Interests allocated to Beneficiaries will be adjusted for any shares of Common Stock purchased or sold in the Purchase and Sale Program such that the Trust Interests held by a Beneficiary will always equal the number of shares of Common Stock allocated to the Beneficiary.
In 2016, through January 7, 2016, MetLife, Inc. repurchased 1,445,864 shares of its Common Stock in the open market for $70 million, completing the September 2015 authorization.
On January 6, 2016, MetLife, Inc.’s Board of Directors declared a first quarter 2016 Common Stock dividend of $0.375 per share, which was paid on March 14, 2016 to shareholders of record as of February 5, 2016. The aggregate dividend payment to Beneficiaries was $63,949 thousand.