MetLife 2007 Annual Report Download - page 155

Casualty Insurance Company intends to vigorously defend these matters. However, any adverse rulings could result in an increase in the
Company’s hurricane-related claim exposure and losses. Based on information known by management, it does not believe that additional
claim losses resulting from Hurricane Katrina will have a material adverse impact on the Company’s consolidated financial statements.
Argentina
The Argentinean economic, regulatory and legal environment, including interpretations of laws and regulations by regulators and courts,
is uncertain. Potential legal or governmental actions related to pension reform, fiduciary responsibilities, performance guarantees and tax
rulings could adversely affect the results of the Company. Upon acquisition of Citigroup’s insurance operations in Argentina, the Company
established insurance liabilities, most significantly death and disability policy liabilities, based upon its interpretation of Argentinean law at
the time and the Company’s best estimate of its obligations under such law. In 2006, a decree was issued by the Argentine Government
regarding the taxability of pesification-related gains resulting in the reduction of certain tax liabilities. In 2007, pension reform legislation in
Argentina was enacted which changed the Company’s obligations and resulted in the elimination of the death and disability liabilities and
the establishment of a liability for servicing obligations.
Commitments
Leases
In accordance with industry practice, certain of the Company’s income from lease agreements with retail tenants are contingent upon
the level of the tenants’ sales revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for
office space, data processing and other equipment. Future minimum rental and sublease income, and minimum gross rental payments
relating to these lease agreements are as follows:
Rental
Income Sublease Income
Gross
Rental
Payments
(In millions)
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $455 $21 $ 254
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $421 $13 $ 234
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $368 $ 8 $ 208
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $292 $ 8 $ 177
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $217 $ 7 $ 139
Thereafter ....................................................... $766 $ 7 $1,155
Commitments to Fund Partnership Investments
The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded
commitments were $5.3 billion and $3.0 billion at December 31, 2007 and 2006, respectively. The Company anticipates that these
amounts will be invested in partnerships over the next five years.
Mortgage Loan Commitments
The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were
$4.0 billion at both December 31, 2007 and 2006.
Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments
The Company commits to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of
these unfunded commitments were $1.2 billion and $1.9 billion at December 31, 2007 and 2006, respectively.
Other Commitments
In December 2005, RGA repurchased 1.6 million shares of its outstanding common stock at an aggregate price of $76 million under an
accelerated share repurchase agreement with a major bank. The bank borrowed the stock sold to RGA from third parties and purchased
the shares in the open market over the subsequent few months to return to the lenders. RGA would either pay or receive an amount based
on the actual amount paid by the bank to purchase the shares. These repurchases resulted in an increase in the Company’s ownership
percentage of RGA to approximately 53% at December 31, 2005 from approximately 52% at December 31, 2004. In February 2006, the
final purchase price was determined, resulting in a cash settlement substantially equal to the aggregate cost. RGA recorded the initial
repurchase of shares as treasury stock and recorded the amount received as an adjustment to the cost of the treasury stock. At
December 31, 2007, the Company’s ownership was approximately 52% of RGA.
Guarantees
In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties
pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other
transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific
liabilities, and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or
covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counter-
parties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third party lawsuits. These
obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of
law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is
subject to a contractual limitation ranging from less than $1 million to $800 million, with a cumulative maximum of $2.3 billion, while in other
cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does
not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future.
F-59MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)