MetLife 2011 Annual Report Download - page 73

which are mandatorily convertible securities, will initially consist of (i) purchase contracts obligating the holder to purchase a variable number of shares of
MetLife, Inc.’s common stock on each of three specified future settlement dates (expected to be approximately two, three and four years after closing of
the Acquisition) for a fixed amount per purchase contract (an aggregate of $1.0 billion on each settlement date) and (ii) an interest in each of three series
of Debt Securities of MetLife, Inc. The value of the purchase contracts at issuance of $247 million was calculated as the present value of the future
contract payments and was recorded in other liabilities. At future dates, the Series C, D and E Debt Securities will be subject to remarketing and sold to
investors. Holders of the Equity Units who elect to include their Debt Securities in a remarketing can use the proceeds thereof to meet their obligations
under the purchase contracts.
See Note 14 of the Notes to the Consolidated Financial Statements for further discussion of the Equity Units.
Liquidity and Capital Uses
Acquisitions. Cash outflows for acquisitions during the years ended December 31, 2011 and 2010 were $233 million and $7.2 billion,
respectively. During the year ended December 31, 2009, there were no cash outflows for acquisitions. See Note 2 of the Notes to the Consolidated
Financial Statements for information regarding certain of these acquisitions.
Debt Repayments. In December 2011, MetLife, Inc. repaid its $750 million senior note with an interest rate of 6.13%. During the years ended
December 31, 2011, 2010 and 2009, MetLife Bank made repayments of $750 million, $349 million and $497 million, respectively, to the FHLB of NY
related to long-term borrowings. During the years ended December 31, 2011, 2010 and 2009, MetLife Bank made repayments to the FHLB of NY
related to short-term borrowings of $9.7 billion, $12.9 billion and $26.4 billion, respectively. During the year ended December 31, 2009, MetLife Bank
made repayments of $21.2 billion to the FRB of NY and MICC made repayments of $300 million to the FHLB of Boston, each related to short-term
borrowings.
Debt Repurchases. We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for other
securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases or exchanges will be dependent upon
several factors, including our liquidity requirements, contractual restrictions, general market conditions, and applicable regulatory, legal and accounting
factors. Whether or not to repurchase any debt and the size and timing of any such repurchases will be determined in the Company’s discretion. In
December 2011, following regulatory approval, the Company repurchased $650 million in aggregate principal amount of the surplus notes included in
collateral financing arrangements.
Insurance Liabilities. The Company’s principal cash outflows primarily relate to the liabilities associated with its various life insurance, property and
casualty, annuity and group pension products, operating expenses and income tax, as well as principal and interest on its outstanding debt obligations.
Liabilities arising from its insurance activities primarily relate to benefit payments under the aforementioned products, as well as payments for policy
surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse product behavior differs somewhat by segment. In the
Retirement Products segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. During the
years ended December 31, 2011 and 2010, general account surrenders and withdrawals from annuity products were $4.1 billion and $3.8 billion,
respectively. In Corporate Benefit Funding, which includes pension closeouts, bank-owned life insurance and other fixed annuity contracts, as wellas
funding agreements (including funding agreements with the FHLB of NY, the FHLB of Des Moines and the FHLB of Boston) and other capital market
products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With regard to Corporate Benefit Funding
liabilities that provide customers with limited liquidity rights, at December 31, 2011 there were $2.4 billion of funding agreements and other capital
market products that could be put back to the Company after a period of notice. Of these liabilities, $535 million were subject to a notice period of
90 days. The remainder was subject to a notice period of five months or greater. An additional $188 million of Corporate Benefit Funding liabilities were
subject to credit ratings downgrade triggers that permit early termination subject to a notice period of 90 days. See “ — The Company — Liquidity and
Capital Uses — Contractual Obligations.”
Dividends. Thetable below presents declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the
common stock:
Dividend
Declaration Date Record Date Payment Date Per Share Aggregate
(In millions, except per
share data)
October 25, 2011 ................................ November 9, 2011 December 14, 2011 $0.74 $787
October 26, 2010 ................................ November 9, 2010 December 14, 2010 0.74 784(1)
October 29, 2009 ................................ November 9, 2009 December 14, 2009 0.74 610
(1) Includes dividends on convertible preferred stock issued in November 2010. See “ — The Company — Liquidity and Capital Sources — Convertible
Preferred Stock.”
Common stock dividend decisions are determined by MetLife, Inc.’s Board of Directors after taking into consideration factors such as the
Company’s current earnings, expected medium-term and long-term earnings, financial condition, regulatory capital position, and applicable
governmental regulations and policies. The payment of dividends and other distributions by MetLife, Inc. to its security holders is subject to regulation by
the Federal Reserve. See “Business — U.S. Regulation — Financial Holding Company Regulation” in the 2011 Form 10-K and Note 18 of the Notes to
the Consolidated Financial Statements.
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