The following table sets forth selected financial information for the Trust. The financial information for the years ended December 31, 2004, 2003 and 2002 and at December 31, 2004 and 2003, has been derived from the Trust's audited financial statements included elsewhere herein. The financial information for the year ended December 31, 2001 and for the period April 7, 2000 (date of inception) to December 31, 2000 and at December 31, 2002, 2001 and 2000 has been derived from the Trust's audited financial statements not included herein. The following statements of changes in net assets and balance sheet data have been prepared in conformity with accounting principles generally accepted in the United States of America. The following information should be read in conjunction with and is qualified entirely by the information contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the financial statements appearing elsewhere herein.
YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
allocated shares of Common Stock at any time by providing written notice to the Custodian. Net redemptions by Beneficiaries through the MetLife, Inc. Purchase and Sale Program and withdrawals by Beneficiaries from the Trust resulted in a $162 million and $421 million decrease in net assets, respectively, for the year ended December 31, 2004. Net investment income of $149 million, which consists of dividends received from the Holding Company on its Common Stock, and net realized investment gains recognized on the sale of Trust Shares sold in the Purchase and Sale Program of $256 million were fully distributed to Beneficiaries.
Net assets in the MetLife Policyholder Trust increased $1,658 million, or 16%, to $12,204 million for the year ended December 31, 2003 from $10,546 million for the comparable 2002 period. This increase is primarily due to a change in unrealized gains on the Trust Shares, partially offset by (i) the impact of withdrawals by Beneficiaries from the Trust, and (ii) activity under the MetLife, Inc. Purchase and Sale Program. Unrealized gains increased $2,048 million from the prior year and represent the difference between the fair value and the cost basis of the Trust Shares at December 31, 2003. A net reduction of 27,566,033 Trust Interests resulted from a net decrease of 16,290,644 Trust Interests due to withdrawals by Beneficiaries from the Trust and a net decrease of 11,275,389 Trust Interests in connection with sales under the MetLife, Inc. Purchase and Sale Program. The Trust Interests withdrawn primarily reflects the escheatment of unclaimed cash and shares of Common Stock. As part of Metropolitan Life's demutualization and the Holding Company's initial public offering, the Holding Company issued shares of its Common Stock to certain eligible policyholders of Metropolitan Life. Any unclaimed cash and Common Stock become property of the state of last known residence, as is the case with other types of unclaimed property. The schedule by which unclaimed property is escheated varies by state, but is generally within three to five years of abandonment. It is anticipated that the number of Trust Interests will continue to decrease over time as state dormancy periods expire. Beginning on April 7, 2001, Beneficiaries were able to withdraw all, but generally, not less than all, of their allocated shares of Common Stock at any time by providing written notice to the Custodian. Net redemptions by Beneficiaries through the MetLife, Inc. Purchase and Sale Program and withdrawals by Beneficiaries from the Trust resulted in a $158 million and $232 million decrease in net assets, respectively, for the year ended December 31, 2003. Net investment income of $84 million, which consists of dividends received from the Holding Company on its Common Stock, and net realized investment gains recognized on the sale of Trust Shares sold in the Purchase and Sale Program of $165 million were fully distributed to Beneficiaries.
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2004 AND 2003 (DOLLARS IN THOUSANDS, EXCEPT TRUST INTEREST AMOUNTS)
Equity securities are reported at their estimated fair value and unrealized investment gains and losses on securities are recorded in the Statements of Operations. Realized gains and losses on sales of securities are determined on a first-in first-out basis. Cash dividends, if any, collected or received by the Trustee with respect to the Trust Shares will be distributed by the Custodian semi-annually to the Beneficiaries within 90 days after receipt by the Trustee. Alternatively, the Trustee may arrange with the Holding Company for the direct payment by the Holding Company of such cash dividends to the Beneficiaries. All security transactions are recorded on a trade date basis.
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 11,780,561, 11,468,650 and 14,067,171 for the years ended December 31, 2004, 2003 and 2002, respectively, were withdrawn for this purpose. 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), beginning on the first trading day following the 90th day after the Effective Date, July 7, 2000. Trust Interests of 155,874, 193,261 and 267,080 for the years ended December 31, 2004, 2003 and 2002, 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.