MetLife 2013 Annual Report Download - page 73

insurance subsidiaries and other factors deemed relevant by the Board. On January 6, 2014, the MetLife, Inc. Board of Directors declared a first
quarter 2014 common stock dividend of $0.275 per share payable on March 13, 2014 to shareholders of record as of February 6, 2014. The
Company estimates the aggregate dividend payment will be $310 million.
Preferred stock dividends are paid quarterly in accordance with the terms of MetLife, Inc.’s Floating Rate Non-Cumulative Preferred Stock, Series
A, and 6.50% Non-Cumulative Preferred Stock, Series B. The payment of dividends and other distributions by MetLife, Inc. to its security holders may
be subject to regulation by the Federal Reserve Board, if, in the future, MetLife, Inc. is designated as a non-bank SIFI. See “Business — U.S.
Regulation — Potential Regulation as a Non-Bank SIFI” in the 2013 Form 10-K. In addition, if additional capital requirements are imposed on MetLife,
Inc. as a G-SII, its ability to pay dividends could be reduced by any such additional capital requirements that might be imposed. See “Business —
International Regulation — Global Systemically Important Insurers” in the 2013 Form 10-K. The payment of dividends is also subject to restrictions
under the terms of our preferred stock and junior subordinated debentures in situations where we may be experiencing financial stress. See “Risk
Factors — Capital-Related Risks — We Have Been, and May Continue to be, Prevented from Repurchasing Our Stock and Paying Dividends at the
Level We Wish as a Result of Regulatory Restrictions and Restrictions Under the Terms of Certain of Our Securities” in the 2013 Form 10-K and
Note 16 of the Notes to the Consolidated Financial Statements elsewhere herein.
Debt Repayments
See Notes 12 and 13 of the Notes to the Consolidated Financial Statements for further information on long-term and short-term debt and
collateral financing arrangements, respectively, including:
‰In November and August 2013, MetLife, Inc. repaid at maturity its $500 million and $250 million senior notes, respectively;
‰In June and December 2012, MetLife, Inc. repaid at maturity its $397 million and $400 million senior notes, respectively;
‰In December 2011, MetLife, Inc. repaid at maturity its $750 million senior note;
‰During the years ended December 31, 2012 and 2011, MetLife Bank made to the FHLB of NY long-term debt repayments of $374 million and
$750 million, and short-term debt repayments of $735 million and $9.7 billion, respectively; and
‰In June 2012 and December 2011, following regulatory approval, MetLife Reinsurance Company of Charleston, a wholly-owned subsidiary of
MetLife, Inc., repurchased and canceled $451 million and $650 million, respectively, in aggregate principal amounts of surplus notes.
Debt and Facility Covenants
Certain of our debt instruments, credit facilities and committed facilities contain various administrative, reporting, legal and financial covenants. We
believe we were in compliance with all such covenants at December 31, 2013.
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 is determined at our discretion.
Support Agreements
MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments, guarantees and contingent
reinsurance agreements with certain subsidiaries of MetLife, Inc. Under these arrangements, each Obligor, with respect to the applicable entity, has
agreed to cause such entity to meet specified capital and surplus levels, has guaranteed certain contractual obligations or has agreed to provide,
upon the occurrence of certain contingencies, reinsurance for such entity’s insurance liabilities. We anticipate that in the event that these
arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet anticipated demands. See “— MetLife, Inc. —
Liquidity and Capital Uses — Support Agreements.”
Insurance Liabilities
Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance, property & casualty, annuity and
group pension 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 Retail segment, which includes individual annuities, lapses and surrenders tend to occur in the
normal course of business. In each of the years ended December 31, 2013 and 2012, general account surrenders and withdrawals from annuity
products were $4.3 billion. In the Corporate Benefit Funding segment, which includes pension closeouts, bank-owned life insurance and other fixed
annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly
predictable surrenders or withdrawals. With regard to the Corporate Benefit Funding segment liabilities that provide customers with limited rightsto
accelerate payments, there were $2.2 billion at December 31, 2013 of funding agreements and other capital market products that could be put back
to the Company after a period of notice. Of these liabilities, $135 million were subject to a notice period of 90 days. The remaining liabilities are
subject to a notice period of five months or greater. See “— Contractual Obligations.”
Pledged Collateral
We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At December 31, 2013 and 2012,
we were obligated to return cash collateral under our control of $2.0 billion and $6.0 billion, respectively. At December 31, 2013 and 2012, we had
pledged cash collateral of $3 million and $1 million, respectively, for OTC-bilateral derivative contracts between two counterparties (“OTC-bilateral”) in
a net liability position. With respect to OTC-bilateral derivatives in a net liability position that have credit contingent provisions, a one-notch downgrade
in the Company’s credit rating would require $27 million of additional collateral be provided to our counterparties as of December 31, 2013. See
Note 9 of the Notes to the Consolidated Financial Statements for additional information about collateral pledged to us, collateral we pledge and
derivatives subject to credit contingent provisions. In addition, we have pledged collateral and have had collateral pledged to us, and may be required
from time to time to pledge additional collateral or be entitled to have additional collateral pledged to us, in connection with collateral financing
arrangements related to the reinsurance of closed block liabilities and universal life secondary guarantee liabilities. See Note 13 of the Notes to the
Consolidated Financial Statements.
Securities Lending
We participate in a securities lending program whereby securities are loaned to third parties, primarily brokerage firms and commercial banks. We
obtain collateral, usually cash, from the borrower, which must be returned to the borrower when the loaned securities are returned to us. Under our
MetLife, Inc. 65