MetLife to Take $792 Million Charge
17 September 2015 - 6:50AM
Dow Jones News
Life insurer MetLife Inc. said it would take a $792 million
charge against third-quarter earnings to reflect that it may owe
more federal taxes for past years, prompted by an adverse court
ruling earlier this month involving other companies in a similar
tax dispute.
The nation's biggest life insurer said it stands by its tax
treatment, but said the charge "is the result of the company's
consideration of recent decisions of the U.S. Court of Appeals for
the Second Circuit upholding the disallowance [by the Internal
Revenue Service] of foreign tax credits" claimed by other
companies. MetLife's action relates to tax years 2000 to 2009 and
involves the tax treatment of a wholly-owned U.K. investment
subsidiary of MetLife.
"There has been no change in the company's position on the
disallowance of its foreign tax credits" by the IRS, the company
said Wednesday. "MetLife continues to contest the disallowance of
these foreign tax credits by the IRS as management believes the
facts strongly support the company's position."
MetLife said the noncash, after-tax charge to operating earnings
and net income would be 70 cents a share. The company also said it
does not expect any additional charges related to this matter.
In the third quarter of 2014, MetLife reported net income of
$2.1 billion, or $1.81 per share.
MetLife's statement didn't name the companies that were the
subject of the appellate court ruling earlier this month. According
to the ruling, they are Bank of New York Mellon and American
International Group Inc. Their disputes involved hundreds of
millions of dollars of foreign tax credits.
MetLife's regulatory filing for its second-quarter earnings
cited a disagreement with the IRS over foreign tax credits. It said
the IRS in April had issued a "Statutory Notice of Deficiency" for
years 2000, 2001 and 2002, asserting that MetLife owes additional
taxes and interest for these years "primarily due to the
disallowance of foreign tax credits."
MetLife added in the filing that "the transactions that are the
subject of the notice continue through 2009, and it is likely that
the IRS will seek to challenge these later periods."
Write to Leslie Scism at leslie.scism@wsj.com
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(END) Dow Jones Newswires
September 16, 2015 16:35 ET (20:35 GMT)
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