MetLife 2012 Annual Report Download - page 69

In addition to the amounts presented in the table above, for the years ended December 31, 2012, 2011 and 2010, cash dividends in the
aggregate amount of $150 million, $139 million and $0, respectively, were paid to MetLife, Inc. by certain of its other subsidiaries. Additionally, for
the years ended December 31, 2012, 2011 and 2010, MetLife, Inc. received cash of $9 million, $771 million and $54 million, respectively,
representing returns of capital from certain subsidiaries.
The dividend capacity of our non-U.S. operations is subject to similar restrictions established by the local regulators. The non-U.S. regulatory
regimes also commonly limit the dividend payments to the parent to a portion of the prior year’s statutory income, as determined by the local
accounting principles. The regulators of our non-U.S. operations, including Japan’s Financial Services Agency, may also limit or not permit profit
repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-
U.S. operations, or for other reasons. Most of the non-U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S. holding
companies. The capital and rating considerations applicable to the first tier subsidiaries may also impact the dividend flow into MetLife, Inc.
We actively manage target and excess capital levels and dividend flows on a proactive basis and forecast local capital positions as part of the
financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to business targets in excess of the
minimum capital necessary to maintain the desired rating or level of financial strength in the relevant market. We cannot provide assurance that
MetLife, Inc.’s subsidiaries will have statutory earnings to support payment of dividends to MetLife, Inc. in an amount sufficient to fund its cash
requirements and pay cash dividends and that the applicable regulators will not disapprove any dividends that such subsidiaries must submit for
approval. See “Risk Factors — Capital-Related Risks — As a Holding Company, MetLife, Inc. Depends on the Ability of Its Subsidiaries to Transfer
Funds to It to Meet Its Obligations and Pay Dividends” in the 2012 Form 10-K and Note 16 of the Notes to the Consolidated Financial Statements.
Short-term Debt. MetLife, Inc. maintains a commercial paper program, proceeds of which can be used to finance the general liquidity needs of
MetLife, Inc. and its subsidiaries. MetLife, Inc. had no short-term debt outstanding at both December 31, 2012 and 2011.
Debt Issuances and Other Borrowings. For information on MetLife, Inc.’s debt issuances and other borrowings, see “— The Company —
Liquidity and Capital Sources — Debt Issuances and Other Borrowings.”
Collateral Financing Arrangements and Junior Subordinated Debt Securities. For information on MetLife, Inc.’s collateral financing arrangements
and junior subordinated debt securities, see Notes 13 and 14 of the Notes to the Consolidated Financial Statements, respectively.
Credit and Committed Facilities. At December 31, 2012, MetLife, Inc., along with MetLife Funding, maintained $4.0 billion in unsecured credit
facilities, the proceeds of which are available for general corporate purposes, to support our commercial paper programs and for the issuance of
letters of credit. At December 31, 2012, MetLife, Inc. had outstanding $2.6 billion in letters of credit and no drawdowns against these facilities.
Remaining unused commitments were $1.4 billion at December 31, 2012.
MetLife, Inc. maintains committed facilities with a capacity of $300 million. At December 31, 2012, MetLife, Inc. had outstanding $300 million in
letters of credit and no drawdowns against these facilities. There were no remaining unused commitments at December 31, 2012. In addition,
MetLife, Inc. is a party to committed facilities of certain of its subsidiaries, which aggregated $12.1 billion at December 31, 2012. The committed
facilities are used as collateral for certain of the Company’s affiliated reinsurance liabilities.
See Note 12 of the Notes to the Consolidated Financial Statements for further detail on these facilities.
Long-term Debt Outstanding. The following table summarizes the outstanding long-term debt of MetLife, Inc. at:
December 31,
2012 2011
(In millions)
Long-term debt — unaffiliated ............................................................. $15,669 $15,666
Long-term debt — affiliated (1), (2), (3) ....................................................... $ 3,250 $ 500
Collateral financing arrangements ........................................................... $ 2,797 $ 2,797
Junior subordinated debt securities ......................................................... $ 1,748 $ 1,748
(1) In September 2012, $750 million of senior notes issued by Exeter Reassurance Company, Ltd. (“Exeter”), a subsidiary, payable to MLIC, were
reassigned to MetLife, Inc. MetLife, Inc. received $750 million of preferred stock of Exeter in exchange for the assumption of this affiliated debt. On
September 30, 2012, $250 million of the assumed senior notes matured and subsequently, in October 2012, a new $250 million senior note was
issued by MetLife, Inc. to MLIC. The new $250 million senior note matures on October 1, 2019 and bears interest at a fixed rate of 3.57%, payable
semi-annually. The remaining $500 million senior note matures on June 30, 2014 and bears interest at a fixed rate of 6.44%, payable semi-annually.
(2) In December 2012, $1.25 billion of Exeter senior notes payable to affiliates, which are comprised of three notes, were reassigned to MetLife, Inc.
MetLife, Inc. received $1.25 billion of preferred stock of Exeter in exchange for the assumption of this affiliated debt. A $250 million senior note
matures on September 30, 2016 and bears interest at a fixed rate of 7.44%, payable semi-annually. A $500 million senior note matures on July 15,
2021 and bears interest at a fixed rate of 5.64%, payable semi-annually. A $500 million senior note matures on December 16, 2021 and bears
interest at a fixed rate of 5.86%, payable semi-annually.
(3) In December 2012, MetLife, Inc. issued a $750 million senior note to MRD due September 30, 2032. The senior note bears interest at a fixed rate
of 4.21%, payable semi-annually. MRD issued a $750 million surplus note to MetLife, Inc. in exchange for the senior note.
Dispositions. During the years ended December 31, 2012 and 2010, there were no cash proceeds from dispositions. Cash proceeds from
dispositions during the year ended December 31, 2011 was $180 million. See Note 3 of the Notes to the Consolidated Financial Statements for
information regarding certain of these dispositions.
Liquidity and Capital Uses
In addition to the description of liquidity and capital uses in “— The Company — Liquidity and Capital Uses” and “— Contractual Obligations,” the
following additional information is provided regarding MetLife, Inc.’s primary uses of liquidity and capital:
The primary uses of liquidity of MetLife, Inc. include debt service, cash dividends on common and preferred stock, capital contributions to
subsidiaries, payment of general operating expenses and acquisitions. Based on our analysis and comparison of our current and future cash inflows
from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval, our investment portfolio and
other cash flows and anticipated access to the capital markets, we believe there will be sufficient liquidity and capital to enable MetLife, Inc. to make
payments on debt, make cash dividend payments on its common and preferred stock, contribute capital to its subsidiaries, pay all general operating
expenses and meet its cash needs.
MetLife, Inc. 63