MetLife 2007 Annual Report Download - page 62

On January 2, 2008, the Company completed its acquisition of AFORE Actinver, S.A. de C.V. (“Actinver”) for approximately $125 million.
Actinver manages retirement accounts for approximately 1.1 million individuals in Mexico.
Stock Repurchases
On January 15, 2008, the Company’s Board of Directors authorized a $1 billion common stock repurchase program, which began after
the completion of an earlier $1 billion authorization that was announced in September 2007.
As previously described, in December 2007, the Company entered into an accelerated common stock repurchase agreement with a
major bank. Under the terms of the agreement, the Company paid the bank $450 million in cash in January 2008 in exchange for 6.6 million
shares of the Company’s outstanding common stock that the bank borrowed from third parties. Also, in January 2008, the bank delivered
1.1 million additional shares of the Company’s common stock to the Company resulting in a total of 7.7 million shares being repurchased
under the agreement. Upon settlement with the bank, the Company increased additional paid-in capital and reduced treasury stock.
In February 2008, the Company entered into an accelerated common stock repurchase agreement with a major bank. Under the
agreement, the Company paid the bank $711 million in cash and the bank delivered an initial amount of 11.2 million shares of the
Company’s outstanding common stock that the bank borrowed from third parties. Final settlement of the agreement is scheduled to take
place during the first half of 2008. The final number of shares the Company is repurchasing under the terms of the agreement and the
timing of the final settlement will depend on, among other things, prevailing market conditions and the market prices of the common stock
during the repurchase period. The Company recorded the consideration paid as a reduction to stockholders’ equity.
From January 1, 2008 to February 25, 2008, the Company also repurchased 1.6 million of its shares through open market purchases
for $89 million.
Off-Balance Sheet Arrangements
Commitments to Fund Partnership Investments
The Company makes commitments to fund partnership investments in the normal course of business for the purpose of enhancing the
Company’s total return on its investment portfolio. 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. There are no other obligations or liabilities arising from such arrangements that are reasonably likely to become material.
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. The purpose of these loans is to enhance the Company’s total return on its investment
portfolio. There are no other obligations or liabilities arising from such arrangements that are reasonably likely to become material.
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. The purpose of these
commitments and any related fundings is to enhance the Company’s total return on its investment portfolio. There are no other obligations
or liabilities arising from such arrangements that are reasonably likely to become material.
Lease Commitments
The Company, as lessee, has entered into various lease and sublease agreements for office space, data processing and other
equipment. The Company’s commitments under such lease agreements are included within the contractual obligations table. See
“— Liquidity and Capital Resources — The Company — Liquidity Uses — Investment and Other.”
Credit Facilities and Letters of Credit
The Company maintains committed and unsecured credit facilities and letters of credit with various financial institutions. See
“— Liquidity and Capital Resources — The Company — Liquidity Sources — Credit Facilities” and “— Letters of Credit” for further
descriptions of such arrangements.
Share-Based Arrangements
In connection with the issuance of common equity units, the Holding Company issued forward stock purchase contracts under which
the Holding Company will issue, in 2008 and 2009, between 39.0 and 47.8 million shares of its common stock, depending upon whether
the share price is greater than $43.35 and less than $53.10. See “— Liquidity and Capital Resources — The Holding Company — Liquidity
Sources — Common Equity Units.”
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.
In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies
its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not
subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum
potential amount that could become due under these indemnities in the future.
58 MetLife, Inc.