485BPOS 1 d485bpos.txt PREFERENCE PLUS SELECT VARIABLE ANNUITY CONTRACTS REGISTRATION NOS. 333-52366/811-4001 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] PRE-EFFECTIVE AMENDMENT POST-EFFECTIVE AMENDMENT NO. 21 [X] AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 129 [X] ----------------- METROPOLITAN LIFE SEPARATE ACCOUNT E (EXACT NAME OF REGISTRANT) METROPOLITAN LIFE INSURANCE COMPANY (EXACT NAME OF DEPOSITOR) 200 PARK AVENUE, NEW YORK, NEW YORK 10166 (ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (212) 578-9414 (DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE) ----------------- JAMES L. LIPSCOMB, ESQ. EXECUTIVE VICE-PRESIDENT AND GENERAL COUNSEL METROPOLITAN LIFE INSURANCE COMPANY 200 PARK AVENUE NEW YORK, NEW YORK 10166 (NAME AND ADDRESS OF AGENT FOR SERVICE) ----------------- COPIES TO: DIANE E. AMBLER, ESQ. K&L GATES LLP 1601 K STREET, N.W. WASHINGTON, D.C. 20006 ----------------- IT IS PROPOSED THAT THE FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX) [_] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on May 1, 2009 pursuant to paragraph (b) of Rule 485 [_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [_] on pursuant to paragraph (a)(1) of Rule 485 Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant has registered an indefinite amount of securities. Registrant's Rule 24f-2 Notice for the year ended December 31, 2008 was filed with the Commission on or about March 15, 2009. ================================================================================ METROPOLITAN LIFE SEPARATE ACCOUNT E FORM N-4 UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940 CROSS REFERENCE SHEET (PURSUANT TO RULE 481(A))
FORM N-4 ITEM NO. PROSPECTUS HEADING -------- ------------------ 1. Cover Page.................................................. Cover Page 2. Definitions................................................. Important Terms You Should Know 3. Synopsis.................................................... Table of Expenses 4. Condensed Financial Information............................. General Information--Performance; General Information--Financial Statements; Accumulation Unit Value Tables 5. General Description of Registrant, Depositor, and Portfolio MetLife; Metropolitan Life Separate Account E; Your Companies................................................... Investment Choices; General Information--Voting Rights 6. Deductions and Expenses..................................... Table of Expenses; Deferred Annuities--Charges; Deferred Annuities--Withdrawal Charges; Deferred Annuities--Premium and Other Taxes; Income Options--Charges; General Information--Who Sells the Deferred Annuities; Appendix--Premium Tax Table 7. General Description of Variable Annuity Contracts........... Variable Annuities; Classes of the Deferred Annuity; Deferred Annuities--Purchase Payments (Allocation of Purchase Payments and Limits on Purchase Payments); Deferred Annuities--Transfer Privilege; General Information--Administration (Purchase Payments/Confirming Transactions/Transactions by Telephone or Internet/Processing Transactions/ Changes to Your Deferred Annuity/When We Can Cancel Your Deferred Annuity) 8. Annuity Period.............................................. Important Terms You Should Know; Deferred Annuities--Pay-out Options (or Income Options); Income Payment Types/The Value of Your Income Payments; Optional Benefits--Guaranteed Minimum Income Benefit 9. Death Benefit............................................... Deferred Annuities--Death Benefit--Generally; Basic Death Benefit; Optional Benefits 10. Purchases and Annuity Values................................ MetLife; Metropolitan Life Separate Account E; Deferred Annuities--Purchase Payments (Allocation of Purchase Payments and Limits on Purchase Payments); The Value of Your Investment; Pay-out Options (or Income Options); Allocation; The Value of Your Income Payments; General Information-- Administration (Purchase Payments)
1
FORM N-4 ITEM NO. PROSPECTUS HEADING -------- ------------------ 11. Redemptions................................................. Deferred Annuities--Access to Your Money (Systematic Withdrawal Program and Minimum Distribution); Deferred Annuities--Withdrawal Charges (When No Withdrawal Charge Applies); General Information-- When We Can Cancel Your Deferred Annuity 12. Taxes....................................................... Income Taxes 13. Legal Proceedings........................................... Legal Proceedings 14. Table of Contents of the Table of Contents of the Statement of Additional Statement of Additional Information......................... Information 15. Cover Page.................................................. Cover Page 16. Table of Contents........................................... Table of Contents 17. General Information and History............................. Not Applicable 18. Services.................................................... Independent Registered Public Accounting Firm; Services; Distribution of Certificates and Interests in the Deferred Annuities 19. Purchase of Securities Being Offered........................ Not Applicable 20. Underwriters................................................ Distribution of Certificates and Interests in the Deferred Annuities; Early Withdrawal Charge 21. Calculation of Performance Data............................. Advertisement of the Separate Account 22. Annuity Payments............................................ Variable Income Payments 23. Financial Statements........................................ Financial Statements of the Separate Account; Financial Statements of MetLife
2 MAY 1, 2009 PREFERENCE PLUS SELECT(R) VARIABLE ANNUITY CONTRACTS ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY This Prospectus describes individual Preference Plus Select contracts for deferred variable annuities ("Deferred Annuities"). -------------------------------------------------------------------------------- You decide how to allocate your money among the various available investment choices. The investment choices available to you are listed in the Contract for your Deferred Annuity. Your choices may include the Fixed Account (not offered or described in this Prospectus) and investment divisions available through Metropolitan Life Separate Account E which, in turn, invest in the following corresponding portfolios of the Metropolitan Series Fund, Inc. ("Metropolitan Fund"), portfolios of the Met Investors Series Trust ("Met Investors Fund") and funds of the American Funds Insurance Series(R) ("American Funds"). For convenience, the portfolios and the funds are referred to as "Portfolios" in this Prospectus. AMERICAN FUNDS(R) AMERICAN FUNDS BOND AMERICAN FUNDS GROWTH AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION AMERICAN FUNDS GROWTH-INCOME MET INVESTORS FUND AMERICAN FUNDS BALANCED ALLOCATION MET/FRANKLIN INCOME AMERICAN FUNDS GROWTH ALLOCATION MET/FRANKLIN MUTUAL SHARES AMERICAN FUNDS MODERATE ALLOCATION MET/FRANKLIN TEMPLETON FOUNDING STRATEGY BLACKROCK LARGE CAP CORE MET/TEMPLETON GROWTH CLARION GLOBAL REAL ESTATE MFS(R) RESEARCH INTERNATIONAL HARRIS OAKMARK INTERNATIONAL OPPENHEIMER CAPITAL APPRECIATION JANUS FORTY PIMCO INFLATION PROTECTED BOND LAZARD MID CAP PIMCO TOTAL RETURN LEGG MASON PARTNERS AGGRESSIVE GROWTH RCM TECHNOLOGY LEGG MASON VALUE EQUITY SSGA GROWTH AND INCOME ETF LORD ABBETT BOND DEBENTURE SSGA GROWTH ETF MET/AIM SMALL CAP GROWTH T. ROWE PRICE MID CAP GROWTH METROPOLITAN FUND ARTIO INTERNATIONAL STOCK METLIFE CONSERVATIVE ALLOCATION BARCLAYS CAPITAL AGGREGATE BOND INDEX METLIFE CONSERVATIVE TO MODERATE ALLOCATION BLACKROCK AGGRESSIVE GROWTH METLIFE MID CAP STOCK INDEX BLACKROCK BOND INCOME METLIFE MODERATE ALLOCATION BLACKROCK DIVERSIFIED METLIFE MODERATE TO AGGRESSIVE ALLOCATION BLACKROCK LARGE CAP VALUE METLIFE STOCK INDEX BLACKROCK LEGACY LARGE CAP GROWTH MFS(R) TOTAL RETURN BLACKROCK MONEY MARKET MFS(R) VALUE BLACKROCK STRATEGIC VALUE MORGAN STANLEY EAFE(R) INDEX DAVIS VENTURE VALUE NEUBERGER BERMAN MID CAP VALUE FI MID CAP OPPORTUNITIES OPPENHEIMER GLOBAL EQUITY FI VALUE LEADERS RUSSELL 2000(R) INDEX JENNISON GROWTH T. ROWE PRICE LARGE CAP GROWTH LOOMIS SAYLES SMALL CAP CORE T. ROWE PRICE SMALL CAP GROWTH LOOMIS SAYLES SMALL CAP GROWTH WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES MET/ARTISAN MID CAP VALUE WESTERN ASSET MANAGEMENT U.S. GOVERNMENT METLIFE AGGRESSIVE ALLOCATION
Certain Portfolios have been subject to a name change. Please see Appendix D -- "Additional Information Regarding the Portfolios". HOW TO LEARN MORE: Before investing, read this Prospectus. The Prospectus contains information about the Deferred Annuities and Metropolitan Life Separate Account E which you should know before investing. Keep this Prospectus for future reference. For more information, request a copy of the Statement of Additional Information ("SAI"), dated May 1, 2009. The SAI is considered part of this Prospectus as though it were included in the Prospectus. The Table of Contents of the SAI appears on page 139 of this Prospectus. To view and download the SAI, please visit our website www.metlife.com. To request a free copy of the SAI or to ask questions, write or call: Metropolitan Life Insurance Company Attn: Fulfillment Unit - PPS 1600 Division Road West Warwick, RI 02893 (800) 638-7732 DEFERRED ANNUITIES AVAILABLE: . Non-Qualified . Traditional IRA . Roth IRA . Simplified Employee Pensions (SEPs) . SIMPLE Individual Retirement Annuities CLASSES AVAILABLE FOR EACH DEFERRED ANNUITY . B . Bonus . C . L A WORD ABOUT INVESTMENT RISK: An investment in any of these variable annuities involves investment risk. You could lose money you invest. Money invested is NOT: . a bank deposit or obligation; . federally insured or guaranteed; or . endorsed by any bank or other financial institution. Each class of the Deferred Annuities has its own Separate Account charge and withdrawal charge schedule. Each provides the opportunity to invest for retirement. The expenses for the Bonus Class of the Deferred Annuity may be higher than similar contracts without a bonus. The purchase payment credits ("Bonus") may be more than offset by the higher expenses for the Bonus Class. The Securities and Exchange Commission has a Web site (http://www.sec.gov) which you may visit to view this Prospectus, SAI and other information. The Securities and Exchange Commission has not approved or disapproved these securities or determined if this Prospectus is truthful or complete. Any representation otherwise is a criminal offense. This Prospectus is not valid unless attached to the current Metropolitan Fund, Met Investors Fund and American Funds(R) prospectuses which are attached to the back of this Prospectus. You should read these prospectuses carefully before purchasing a Deferred Annuity. 2 TABLE OF CONTENTS Important Terms You Should Know................................................. 5 Table of Expenses............................................................... 8 Accumulation Unit Values Tables................................................. 22 MetLife......................................................................... 23 Metropolitan Life Separate Account E............................................ 23 Variable Annuities.............................................................. 23 Replacement of Annuity Contracts............................................ 24 The Deferred Annuity........................................................ 24 Classes of the Deferred Annuity................................................. 25 Your Investment Choices......................................................... 28 Deferred Annuities.............................................................. 37 The Deferred Annuity and Your Retirement Plan............................... 37 Automated Investment Strategies and Enhanced Dollar Cost Averaging Program.. 37 Purchase Payments........................................................... 41 Allocation of Purchase Payments......................................... 42 Debit Authorizations.................................................... 43 Limits on Purchase Payments............................................. 43 The Value of Your Investment................................................ 43 Transfer Privilege.......................................................... 44 Access to Your Money........................................................ 46 Systematic Withdrawal Program........................................... 47 Charges..................................................................... 48 Separate Account Charge................................................. 48 Investment-Related Charge............................................... 49 Annual Contract Fee......................................................... 49 Optional Enhanced Death Benefit......................................... 49 Optional Guaranteed Minimum Income Benefits............................. 49 Optional Guaranteed Withdrawal Benefits................................. 50 Optional Guaranteed Minimum Accumulation Benefit........................ 51 Premium and Other Taxes..................................................... 51 Withdrawal Charges.......................................................... 51 When No Withdrawal Charge Applies....................................... 52 Free Look................................................................... 53 Death Benefit--Generally.................................................... 54 Basic Death Benefit..................................................... 56 Optional Death Benefits..................................................... 57 Annual Step-Up Death Benefit............................................ 57 Greater of Annual Step-Up or 5% Annual Increase Death Benefit........... 59 The Enhanced Death Benefit.............................................. 61 Earnings Preservation Benefit........................................... 64 Living Benefits............................................................. 66 Overview of Living Benefits............................................. 66 Guaranteed Income Benefits........................................... 67 Guaranteed Withdrawal Benefits....................................... 83
3 Guaranteed Minimum Accumulation Benefit................................. 108 Pay-Out Options (or Income Options)......................................... 112 Income Payment Types.................................................... 113 Allocation.............................................................. 114 Minimum Size of Your Income Payment..................................... 114 The Value of Your Income Payments....................................... 114 Reallocation Privilege.................................................. 115 Charges................................................................. 116 General Information............................................................. 117 Administration.............................................................. 117 Purchase Payments....................................................... 117 Confirming Transactions................................................. 117 Processing Transactions................................................. 117 By Telephone or Internet............................................. 118 After Your Death..................................................... 118 Misstatement......................................................... 119 Third Party Requests................................................. 119 Valuation--Suspension of Payments.................................... 119 Advertising Performance..................................................... 119 Changes to Your Deferred Annuity............................................ 121 Voting Rights............................................................... 122 Who Sells the Deferred Annuities............................................ 122 Financial Statements........................................................ 125 Your Spouse's Rights........................................................ 125 When We Can Cancel Your Deferred Annuity.................................... 125 Income Taxes.................................................................... 126 Legal Proceedings............................................................... 138 Table of Contents for the Statement of Additional Information................... 139 Appendix A Premium Tax Table.................................................... 140 Appendix B Accumulation Unit Values For Each Investment Division Tables......... 141 Appendix C Portfolio Legal Names and Marketing Names............................ 161 Appendix D Additional Information Regarding the Portfolios...................... 162
The Deferred Annuities are not intended to be offered anywhere that they may not be lawfully offered and sold. MetLife has not authorized any information or representations about the Deferred Annuities other than the information in this Prospectus, the attached prospectuses, supplements to the prospectuses or any supplemental sales material we authorize. 4 IMPORTANT TERMS YOU SHOULD KNOW ACCOUNT BALANCE When you purchase a Deferred Annuity, an account is set up for you. Your Account Balance is the total amount of money credited to you under your Deferred Annuity including money in the investment divisions of the Separate Account, the Fixed Account and the Enhanced Dollar Cost Averaging Program. ACCUMULATION UNIT VALUE With a Deferred Annuity, money paid-in or transferred into an investment division of the Separate Account is credited to you in the form of accumulation units. Accumulation units are established for each investment division. We determine the value of these accumulation units at the close of the Exchange (see definition below) each day the Exchange is open for regular trading. The Exchange usually closes at 4 p.m. Eastern Time but may close earlier or later. The values increase or decrease based on the investment performance of the corresponding underlying Portfolios. ADMINISTRATIVE OFFICE Your Administrative Office is the MetLife office that will generally handle the administration of all your requests concerning your Deferred Annuity. Your Contract will indicate the address of your Administrative Office. We will notify you if there is a change in the address of your Administrative Office. The telephone number to initiate a request is 800-638-7732. ANNUITANT The natural person whose life is the measure for determining the duration and the dollar amount of income payments. ANNUITY UNIT VALUE With a variable pay-out option, the money paid-in or reallocated into an investment division of the Separate Account is held in the form of annuity units. Annuity units are established for each investment division. We determine the value of these annuity units at the close of the Exchange each day the Exchange is open for regular trading. The Exchange usually closes at 4 p.m. Eastern Time but may close earlier or later. The values increase or decrease based on the investment performance of the corresponding underlying Portfolios. ASSUMED INVESTMENT RETURN (AIR) Under a variable pay-out option, the AIR is the assumed percentage rate of return used to determine the amount of the first variable income payment. The AIR is also the benchmark that is used to calculate the investment performance of a given investment division to determine all subsequent payments to you. 5 BENEFICIARY The person or persons who receives a benefit, including continuing payments or a lump sum payment, if the contract owner dies. CONTRACT A Contract is the legal agreement between you and MetLife. This document contains relevant provisions of your Deferred Annuity. MetLife issues Contracts for each of the annuities described in this Prospectus. CONTRACT ANNIVERSARY An anniversary of the date we issue the Deferred Annuity. CONTRACT OWNER The person or entity which has all rights including the right to direct who receives income payments. CONTRACT YEAR The Contract Year for a Deferred Annuity is the one year period starting on the date we issue the Contract and each Contract Anniversary thereafter. EXCHANGE In this Prospectus, the New York Stock Exchange is referred to as the "Exchange." GOOD ORDER A request or transaction generally is considered in "good order" if it complies with our administrative procedures and the required information is complete and correct. A request or transaction may be rejected or delayed if not in good order. If you have any questions, you should contact us or your sales representative before submitting the form or request. INVESTMENT DIVISION Investment divisions are subdivisions of the Separate Account. When you allocate a purchase payment, transfer money or make reallocations of your income payment to an investment division, the investment division purchases shares of a Portfolio (with the same name) within the Metropolitan Fund, the Met Investors Fund or the American Funds(R). METLIFE MetLife is Metropolitan Life Insurance Company which is the company that issues the Deferred Annuities. Throughout this Prospectus, MetLife is also referred to as "we," "us" or "our." SEPARATE ACCOUNT A separate account is an investment account. All assets contributed to investment divisions under the Deferred Annuities are pooled in the Separate Account and maintained for the benefit of investors in Deferred Annuities. VARIABLE ANNUITY An annuity in which returns/income payments are based upon the performance of investments such as stocks and bonds held by one or more underlying Portfolios. You assume the investment risk for any amounts allocated to the investment divisions in a variable annuity. 6 WITHDRAWAL CHARGE The withdrawal charge is the amount we deduct from your Account Balance, if you withdraw money prematurely from a Deferred Annuity. This charge is often referred to as a deferred sales load or back-end sales load. YOU In this Prospectus "you" is the contract owner of the Deferred Annuity and can be a natural person, a trust established for the exclusive benefit of a natural person, a charitable remainder trust or other trust arrangement (if approved by MetLife). "You" can also be a beneficiary of a deceased person's Individual Retirement Account contract or non-qualified Deferred Annuity who purchases the Deferred Annuity in his or her capacity as beneficiary. A Contract generally may have two owners (both of whom must be individuals). The Contract is not available to corporations or other business organizations, except to the extent an employer is the purchaser of a SEP or SIMPLE IRA Contract. 7 TABLE OF EXPENSES--PREFERENCE PLUS SELECT DEFERRED ANNUITIES The following tables describe the expenses you will pay when you buy, hold or withdraw amounts from your Deferred Annuity. The first table describes charges you will pay at the time you purchase the Deferred Annuity, make withdrawals from your Deferred Annuity or make transfers between the investment divisions. The tables do not show premium taxes of up to 3.5% (See Appendix A) and other taxes which may apply. There are no fees for the Fixed Account and the Enhanced Dollar Cost Averaging Program. Table 1--Contract Owner Transaction Expenses Sales Charge Imposed on Purchase Payments........................ None -------------------------------------------------------------------------------------- Withdrawal Charge (as a percentage of each purchase payment) (1). Up to 9% -------------------------------------------------------------------------------------- Transfer Fee (2)................................................. Current Charge: None -------------------------------------------------------------------------------------- Maximum Guaranteed Charge: $25 --------------------------------------------------------------------------------------
The second set of tables describes the fees and expenses that you will bear periodically during the time you hold the Deferred Annuity, but does not include fees and expenses for the Portfolios. Table 2(a)--Fees Deducted on Each Contract Anniversary Annual Contract Fee (3). $30 ----------------------------
Table 2(b)--Separate Account Charge SEE BELOW FOR AN ADDITIONAL OPTIONAL DEATH BENEFIT, THE ENHANCED DEATH BENEFIT, FOR WHICH THE CHARGE IS ASSESSED ON THE DEATH BENEFIT BASE AND DEDUCTED ANNUALLY FROM YOUR ACCOUNT BALANCE. Current Separate Account Charge (as a percentage of your Account Balance) for American Funds Bond, American Funds Growth- Income, American Funds Growth and American Funds Global Small Capitalization Divisions (4) B CLASS BONUS CLASS (5) C CLASS L CLASS Death Benefit ------- --------------- ------- ------- Basic Death Benefit................................................ 1.50% 1.95% 1.90% 1.75% ------------------------------------------------------------------------------------------------------------------------- Optional Annual Step-Up Benefit.................................... 1.70% 2.15% 2.10% 1.95% ------------------------------------------------------------------------------------------------------------------------- Optional Greater of Annual Step-Up or 5% Annual Increase Amount.... 1.85% 2.30% 2.25% 2.10% ------------------------------------------------------------------------------------------------------------------------- Optional Earnings Preservation Benefit (6)........................... .25% .25% .25% .25% -------------------------------------------------------------------------------------------------------------------------
Current Separate Account Charge (as a percentage of your Account Balance) for all investment divisions except the American Funds Bond, American Funds Growth-Income, American Funds Growth and American Funds Global Small Capitalization Divisions (4) B CLASS BONUS CLASS (6) C CLASS L CLASS Death Benefit ------- --------------- ------- ------- Basic Death Benefit................................................. 1.25% 1.70% 1.65% 1.50% --------------------------------------------------------------------------------------------------------------------------- Optional Annual Step-Up Benefit..................................... 1.45% 1.90% 1.85% 1.70% --------------------------------------------------------------------------------------------------------------------------- Optional Greater of Annual Step-Up or 5% Annual Increase Amount..... 1.60% 2.05% 2.00% 1.85% --------------------------------------------------------------------------------------------------------------------------- Optional Earnings Preservation Benefit (6)............................ .25% .25% .25% .25% ---------------------------------------------------------------------------------------------------------------------------
8 Table 2(c)--Additional Optional Death Benefits Enhanced Death Benefit (Prior to Optional Step-Up) (issue age 69 or younger) (7) 0.75% of the Death Benefit Base ------------------------------------------------------------------------------------------------------------------ Enhanced Death Benefit (Prior to Optional Step-Up) (issue age 70-75) (7) 0.95% of the Death Benefit Base ------------------------------------------------------------------------------------------------------------------ Enhanced Death Benefit (Maximum upon Optional Step-Up) (7) 1.50% of the Death Benefit Base ------------------------------------------------------------------------------------------------------------------
Table 2(d)--Optional Guaranteed Income Benefits (8) Guaranteed Minimum Income Benefit Plus II (Prior to Optional Step-Up/Reset) (9) 1.00% of the Income Base ---------------------------------------------------------------------------------------------------------- Guaranteed Minimum Income Benefit Plus I (Prior to Optional Step-Up/Reset) (9) 0.80% of the Income Base ---------------------------------------------------------------------------------------------------------- Guaranteed Minimum Income Benefit Plus II/Guaranteed Minimum Income Benefit 1.50% of the Income Base Plus I (Maximum upon Optional Step-Up/Reset) (9) ---------------------------------------------------------------------------------------------------------- Guaranteed Minimum Income Benefit II and Guaranteed Minimum Income 0.50% of the Income Base Benefit I (9) ----------------------------------------------------------------------------------------------------------
Table 2(e)--Optional Guaranteed Withdrawal Benefits LIFETIME WITHDRAWAL BENEFITS ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit II (Single Life Version) (Prior to Automatic 1.25% of the Total Guaranteed Annual Step-Up) (10) Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit II (Single Life Version) (Maximum upon 1.60% of the Total Guaranteed Automatic Annual Step-Up) (10) Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit II (Joint Life Version) (Prior to Automatic 1.50% of the Total Guaranteed Annual Step-Up) (10) Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit II (Joint Life Version) (Maximum upon 1.80% of the Total Guaranteed Automatic Annual Step-Up) (10) Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit I (Single Life Version) (Prior to Automatic 0.50% of the Total Guaranteed Annual Step-Up) (10) Withdrawal Benefit ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit I (Single Life Version) (Maximum upon 0.95% of the Total Guaranteed Automatic Annual Step-Up) (10) Withdrawal Benefit ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit I (Joint Life Version) (Prior to Automatic 0.70% of the Total Guaranteed Annual Step-Up) (10) Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Lifetime Withdrawal Guarantee Benefit I (Joint Life Version) (Maximum upon 1.40% of the Total Guarantee Automatic Annual Step-Up) (10) Withdrawal Benefit Amount ---------------------------------------------------------------------------------------------------------------------- GUARANTEED WITHDRAWAL BENEFITS ---------------------------------------------------------------------------------------------------------------------- Enhanced Guaranteed Withdrawal Benefit (Prior to Optional Reset) (11) 0.55% of the Guaranteed Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Enhanced Guaranteed Withdrawal Benefit (Maximum upon Optional Reset) (11) 1.00% of the Guaranteed Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Guaranteed Withdrawal Benefit I (Prior to Optional Reset) (10) 0.50% of the Guaranteed Withdrawal Amount ---------------------------------------------------------------------------------------------------------------------- Guaranteed Withdrawal Benefit I (Maximum Upon Optional Reset) (10) 0.95% of the Guaranteed Withdrawal Amount ----------------------------------------------------------------------------------------------------------------------
Table 2(f)--Optional Guaranteed Asset Accumulation Benefit ---------------------------------------------------------------------- Guaranteed Minimum Accumulation Benefit (12) 0.75% of the Guaranteed Accumulation Amount ----------------------------------------------------------------------
9 The third table shows the minimum and maximum total operating expenses charged by the Portfolios, as well as the operating expenses for each Portfolio, that you may bear periodically while you hold the Deferred Annuity. All of the Portfolios listed below are Class B except for the Portfolios of the American Funds(R), which are Class 2 and the American Funds Balanced Allocation, American Funds Growth Allocation and American Funds Moderate Allocation Portfolios of the Met Investors Fund, which are Class C. Certain Portfolios may impose a redemption fee in the future. More details concerning the Metropolitan Fund, the Met Investors Fund and the American Funds(R) fees and expenses are contained in their respective prospectuses. Table 3--Portfolio Operating Expenses
Minimum Maximum -------------------------------- ------- (Does not take into consideration any American Funds(R) Portfolio, for which an additional separate account charge applies.) --------------------------------------------------------------------------------------------------- Total Annual Metropolitan Fund, Met Investors Fund and American Funds(R) Operating Expenses for the fiscal year ending December 31, 2008 (expenses that are deducted from these Fund's assets include management fees, distribution fees (12b-1 fees) and other expenses). 0.54% 1.60% ---------------------------------------------------------------------------------------------------
Notes /1/ A withdrawal charge may apply if you withdraw purchase payments that were credited to your Deferred Annuity. The charges on purchase payments for each class is calculated according to the following schedule:
IF WITHDRAWN DURING YEAR B CLASS BONUS CLASS C CLASS L CLASS ------------------------ ------- ----------- ------- ------- 1.................. 7% 9% None 7% ------------------------------------------------------------- 2.................. 6% 8% 6% ------------------------------------------------------------- 3.................. 6% 8% 5% ------------------------------------------------------------- 4.................. 5% 7% 0% ------------------------------------------------------------- 5.................. 4% 6% 0% ------------------------------------------------------------- 6.................. 3% 4% 0% ------------------------------------------------------------- 7.................. 2% 3% 0% ------------------------------------------------------------- Thereafter......... 0% 0% 0% -------------------------------------------------------------
There are times when the withdrawal charge does not apply. For example, you may always withdraw earnings without a withdrawal charge. After the first Contract Year, you may also withdraw up to 10% of your total purchase payments without a withdrawal charge. /2/ We reserve the right to limit transfers as described later in this Prospectus. We reserve the right to impose a transfer fee. The amount of this fee will be no greater than $25 per transfer. /3/ This fee is waived if the Account Balance is $50,000 or more. Regardless of the amount of your Account Balance, the entire fee will be deducted if you take a total withdrawal of your Account Balance. During the pay-out phase, we reserve the right to deduct this fee. /4/ You pay the Separate Account charge with the Basic Death Benefit for your class of the Deferred Annuity during the pay-out phase of your Contract. Charges for optional benefits are those for Deferred Annuities purchased after April 30, 2005. Different charges may have been in effect for prior time periods. We reserve the right to impose an additional Separate Account charge on investment divisions that we add to the Contract in the future. The additional amount will not exceed the annual rate of 0.25% of the average daily net assets in any such investment divisions as shown in the table labeled "Current Separate Account Charge for the American Funds Investment Divisions". Different Separate Account charges for the American Funds Growth-Income, American Funds Growth and American Funds Global Small Capitalization Divisions were in effect prior to May 1, 2004. 10 We are waiving 0.08% of the Separate Account charge for the investment division investing in the BlackRock Large-Cap Core Portfolio. /5/ The Separate Account charge for the Bonus Class will be reduced by 0.45% to 1.25% for the Basic Death Benefit (1.50% for amounts held in the American Funds Investment Divisions) after you have held the Contract for seven years. Similarly, the Separate Account charge will be reduced by 0.45% to 1.45% for the Annual Step-Up Death Benefit and 1.60% for the Greater of Annual Set-Up or 5% Annual Increase Death Benefit (1.70% and 1.85%, respectively, for amounts held in the American Funds Investment Divisions) after you have held the Contract for seven years. /6/ The Separate Account charge for the Earnings Preservation Benefit is in addition to the Separate Account charge for your class of the Deferred Annuity with the death benefit you have chosen. You pay the Separate Account charge designated under the appropriate class for the Basic Death Benefit, the Optional Annual Step-Up Death Benefit or the Optional Greater of Annual Step-Up or 5% Annual Increase Death Benefit. /7/ The charge for the Enhanced Death Benefit is a percentage of your Death Benefit Base, as defined later in this Prospectus. You do not pay this charge once you are in the pay-out phase of your Contract or after your rider terminates. Different charges for the Enhanced Death Benefit and the Enhanced Death Benefit purchased with the Guaranteed Minimum Income Benefit Plus II were in effect prior to May 4, 2009 and February 24, 2009. /8/ You may not have a Guaranteed Withdrawal Benefit, a Guaranteed Minimum Income Benefit or the Guaranteed Minimum Accumulation Benefit in effect at the same time. You may not have the Enhanced Death Benefit in effect with any living benefit rider except the Guaranteed Minimum Income Benefit Plus II. /9/ For Contracts issued in New York State only, the Guaranteed Minimum Income Benefit Plus II charge (prior to Optional Step-Up/Reset) is 0.95%. The charge for the Guaranteed Minimum Income Benefit is a percentage of your guaranteed minimum income base, as defined later in this Prospectus. You do not pay this charge once you are in the pay-out phase of your Contract or after your rider terminates. Different charges for the Guaranteed Minimum Income Benefit I and Guaranteed Minimum Income Benefit II were in effect prior to May 1, 2005. Different charges for the Guaranteed Minimum Income Benefit Plus I were in effect prior to February 26, 2007. Different charges for the Guaranteed Minimum Income Benefit Plus II were in effect prior to February 24, 2009. If, at the time your Contract was issued, the current charge for the benefit was equal to the maximum charge, then the charge for the benefit will not increase upon an Optional Step-Up or Optional Reset. Certain guaranteed income benefit riders are no longer available for sale. (See Guaranteed Income Benefits for more information.) /10/The charge for the Guaranteed Withdrawal Benefit I and the Enhanced Guaranteed Withdrawal Benefit is a percentage of your Guaranteed Withdrawal Amount, as defined later in this Prospectus. The charge for the Lifetime Withdrawal Guarantee Benefit I and Lifetime Withdrawal Guarantee Benefit II is a percentage of your Total Guaranteed Withdrawal Amount, as defined later in this Prospectus. Different charges for the Lifetime Withdrawal Guarantee Benefit II were in effect prior to February 24, 2009. If, at the time your Contract was issued, the current charge for the benefit was equal to the maximum charge, then the charge for the benefit will not increase upon an Optional Step-Up or Optional Reset. Certain guaranteed withdrawal benefit riders are no longer available for sale. (See Guaranteed Withdrawal Benefits for more information.) /11/The charge for the Guaranteed Minimum Accumulation Benefit is a percentage of your Guaranteed Accumulation Amount, as defined later in this Prospectus. You do not pay for this charge once you are in the pay-out phase of your Contract or after your rider terminates. This rider is no longer available for sale. (See Guaranteed Minimum Accumulation Benefit for more information.) 11 Table 4--Underlying Portfolio Fees and Expenses as of December 31, 2008 (unless otherwise noted) (as a percentage of average daily net assets)
AMERICAN FUNDS(R)--CLASS 2 DISTRIBUTION ACQUIRED TOTAL CONTRACTUAL FEE NET TOTAL AND/OR FUND FEES ANNUAL WAIVER AND/OR ANNUAL MANAGEMENT SERVICE OTHER AND OPERATING EXPENSE OPERATING FEE (12B-1) FEES EXPENSES EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** -------------------------------------------------------------------------------------------------------------- American Funds Bond Fund...... 0.39% 0.25% 0.01% -- 0.65% -- 0.65% American Funds Global Small Capitalization Fund......... 0.71% 0.25% 0.03% -- 0.99% -- 0.99% American Funds Growth Fund.... 0.32% 0.25% 0.01% -- 0.58% -- 0.58% American Funds Growth-Income Fund........................ 0.27% 0.25% 0.01% -- 0.53% -- 0.53% --------------------------
MET INVESTORS FUND DISTRIBUTION ACQUIRED TOTAL CONTRACTUAL FEE NET TOTAL AND/OR FUND FEES ANNUAL WAIVER AND/OR ANNUAL MANAGEMENT SERVICE OTHER AND OPERATING EXPENSE OPERATING FEE (12B-1) FEES EXPENSES EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** --------------------------------------------------------------------------------------------------------------- American Funds Balanced Allocation Portfolio -- Class C..................... 0.10% 0.55% 0.05% 0.40% 1.10% 0.05% 1.05%/1/ American Funds Growth Allocation Portfolio -- Class C..................... 0.10% 0.55% 0.05% 0.38% 1.08% 0.05% 1.03%/1/ American Funds Moderate Allocation Portfolio -- Class C..................... 0.10% 0.55% 0.05% 0.42% 1.12% 0.05% 1.07%/1/ BlackRock Large Cap Core Portfolio -- Class B........ 0.58% 0.25% 0.04% -- 0.87% -- 0.87% Clarion Global Real Estate Portfolio -- Class B........ 0.63% 0.25% 0.05% -- 0.93% -- 0.93% Harris Oakmark International Portfolio -- Class B........ 0.78% 0.25% 0.07% -- 1.10% -- 1.10% Janus Forty Portfolio -- Class B..................... 0.64% 0.25% 0.04% -- 0.93% -- 0.93% Lazard Mid Cap Portfolio -- Class B..................... 0.69% 0.25% 0.05% -- 0.99% -- 0.99%/2/ Legg Mason Partners Aggressive Growth Portfolio -- Class B.................. 0.63% 0.25% 0.02% -- 0.90% -- 0.90% Legg Mason Value Equity Portfolio -- Class B........ 0.63% 0.25% 0.04% -- 0.92% -- 0.92% Lord Abbett Bond Debenture Portfolio -- Class B........ 0.50% 0.25% 0.03% -- 0.78% -- 0.78% Met/AIM Small Cap Growth Portfolio -- Class B........ 0.86% 0.25% 0.03% -- 1.14% -- 1.14% Met/Franklin Income Portfolio -- Class B.................. 0.80% 0.25% 0.23% -- 1.28% 0.02% 1.26%/3/ Met/Franklin Mutual Shares Portfolio -- Class B........ 0.80% 0.25% 0.55% -- 1.60% 0.45% 1.15%/4/ Met/Franklin Templeton Founding Strategy Portfolio -- Class B.................. 0.05% 0.25% 0.08% 0.89% 1.27% 0.08% 1.19%/5/ Met/Templeton Growth Portfolio -- Class B........ 0.70% 0.25% 0.59% -- 1.54% 0.47% 1.07%/6/ MFS(R) Research International Portfolio -- Class B........ 0.70% 0.25% 0.06% -- 1.01% -- 1.01% Oppenheimer Capital Appreciation Portfolio -- Class B..................... 0.59% 0.25% 0.04% -- 0.88% -- 0.88% PIMCO Inflation Protected Bond Portfolio -- Class B... 0.49% 0.25% 0.04% -- 0.78% -- 0.78% PIMCO Total Return Portfolio -- Class B.................. 0.48% 0.25% 0.05% -- 0.78% -- 0.78% RCM Technology Portfolio -- Class B..................... 0.88% 0.25% 0.09% -- 1.22% -- 1.22% SSgA Growth and Income ETF Portfolio -- Class B........ 0.33% 0.25% 0.08% 0.20% 0.86% 0.03% 0.83%/7/ SSgA Growth ETF Portfolio -- Class B..................... 0.33% 0.25% 0.08% 0.21% 0.87% 0.03% 0.84%/8/ T. Rowe Price Mid Cap Growth Portfolio -- Class B........ 0.75% 0.25% 0.03% -- 1.03% -- 1.03% ---------------------------
12
METROPOLITAN FUND--CLASS B ---------------------------- DISTRIBUTION ACQUIRED TOTAL CONTRACTUAL FEE NET TOTAL AND/OR FUND FEES ANNUAL WAIVER AND/OR ANNUAL MANAGEMENT SERVICE OTHER AND OPERATING EXPENSE OPERATING FEE (12B-1) FEES EXPENSES EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** ----------------------------------------------------------------------------------------------------------------- Artio International Stock Portfolio.................... 0.82% 0.25% 0.13% -- 1.20% 0.03% 1.17%/9/ Barclays Capital Aggregate Bond Index Portfolio......... 0.25% 0.25% 0.04% -- 0.54% 0.01% 0.53%/10/ BlackRock Aggressive Growth Portfolio.................... 0.72% 0.25% 0.05% -- 1.02% -- 1.02% BlackRock Bond Income Portfolio.................... 0.38% 0.25% 0.05% -- 0.68% 0.01% 0.67%/11/ BlackRock Diversified Portfolio.................... 0.45% 0.25% 0.04% -- 0.74% -- 0.74% BlackRock Large Cap Value Portfolio.................... 0.67% 0.25% 0.05% -- 0.97% -- 0.97% BlackRock Legacy Large Cap Growth Portfolio............. 0.73% 0.25% 0.05% -- 1.03% 0.01% 1.02%/12/ BlackRock Money Market Portfolio.................... 0.32% 0.25% 0.02% -- 0.59% 0.01% 0.58%/13/ BlackRock Strategic Value Portfolio.................... 0.84% 0.25% 0.05% -- 1.14% -- 1.14% Davis Venture Value Portfolio.. 0.70% 0.25% 0.03% -- 0.98% 0.04% 0.94%/14/ FI Mid Cap Opportunities Portfolio.................... 0.68% 0.25% 0.07% -- 1.00% -- 1.00% FI Value Leaders Portfolio..... 0.65% 0.25% 0.06% -- 0.96% -- 0.96% Jennison Growth Portfolio...... 0.63% 0.25% 0.04% -- 0.92% -- 0.92% Loomis Sayles Small Cap Core Portfolio.................... 0.90% 0.25% 0.06% -- 1.21% 0.05% 1.16%/15/ Loomis Sayles Small Cap Growth Portfolio............. 0.90% 0.25% 0.13% -- 1.28% 0.06% 1.22%/16/ Met/Artisan Mid Cap Value Portfolio.................... 0.81% 0.25% 0.04% -- 1.10% -- 1.10% MetLife Aggressive Allocation Portfolio.................... 0.10% 0.25% 0.03% 0.72% 1.10% 0.03% 1.07%/17/ MetLife Conservative Allocation Portfolio......... 0.10% 0.25% 0.02% 0.56% 0.93% 0.02% 0.91%/17/ MetLife Conservative to Moderate Allocation Portfolio.................... 0.09% 0.25% 0.01% 0.61% 0.96% -- 0.96%/17/ MetLife Mid Cap Stock Index Portfolio.................... 0.25% 0.25% 0.08% -- 0.58% 0.01% 0.57%/10/ MetLife Moderate Allocation Portfolio.................... 0.07% 0.25% -- 0.65% 0.97% -- 0.97%/17/ MetLife Moderate to Aggressive Allocation Portfolio.................... 0.07% 0.25% -- 0.68% 1.00% -- 1.00%/17/ MetLife Stock Index Portfolio.. 0.25% 0.25% 0.04% -- 0.54% 0.01% 0.53%/10/ MFS(R) Total Return Portfolio.. 0.53% 0.25% 0.05% -- 0.83% -- 0.83% MFS(R) Value Portfolio......... 0.72% 0.25% 0.08% -- 1.05% 0.07% 0.98%/18/ Morgan Stanley EAFE(R) Index Portfolio.................... 0.30% 0.25% 0.12% 0.01% 0.68% 0.01% 0.67%/19/ Neuberger Berman Mid Cap Value Portfolio.............. 0.65% 0.25% 0.04% -- 0.94% -- 0.94% Oppenheimer Global Equity Portfolio.................... 0.52% 0.25% 0.09% -- 0.86% -- 0.86% Russell 2000(R) Index Portfolio.................... 0.25% 0.25% 0.07% 0.01% 0.58% 0.01% 0.57%/10/ T. Rowe Price Large Cap Growth Portfolio............. 0.60% 0.25% 0.07% -- 0.92% -- 0.92% T. Rowe Price Small Cap Growth Portfolio............. 0.51% 0.25% 0.08% -- 0.84% -- 0.84% Western Asset Management Strategic Bond Opportunities Portfolio...... 0.60% 0.25% 0.05% -- 0.90% -- 0.90% Western Asset Management U.S. Government Portfolio......... 0.48% 0.25% 0.04% -- 0.77% -- 0.77% ----------------------------
13 * Acquired Fund Fees and Expenses are fees and expenses incurred indirectly by a portfolio as a result of investing in shares of one or more underlying portfolios. **Net Total Annual Operating Expenses do not reflect: (1) voluntary waivers of fees or expenses; (2) contractual waivers that are in effect for less than one year from the date of this Prospectus; or (3) expense reductions resulting from custodial fee credits or directed brokerage arrangements. ------------------------------------------------------------------------------ /1/ The Portfolio is a "fund of funds" that invests substantially all of its assets in portfolios of the American Funds Insurance Series. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses (excluding aquired fund fees and expenses and 12b-1 fees) to 0.10%. /2/ Other Expenses include 0.02% of deferred expense reimbursement from a prior period. /3/ The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.90%, excluding 12b-1 fees. Due to a voluntary management fee waiver not reflected in the table, the Portfolio's actual net operating expenses for the year ended December 31, 2008 were 0.88% for the Class A shares and 1.14% for the Class B shares. /4/ The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.90%, excluding 12b-1 fees. /5/ The Portfolio is a "fund of funds" that invests equally in three other portfolios of the Met Investors Series Trust: the Met/Franklin Income Portfolio, the Met/Franklin Mutual Shares Portfolio and the Met/Templeton Growth Portfolio. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses (excluding acquired fund fees and expenses and 12b-1 fees) to 0.05%. /6/ The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.80%, excluding 12b-1 fees. Due to a voluntary management fee waiver not reflected in the table, the Portfolio's actual net operating expenses for the year ended December 31, 2008 were 0.80% for the Class A shares and 1.05% for the Class B shares. /7/ The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("underlying ETFs"). As an investor in an underlying ETF or other investment company, the Portfolio will bear its pro rata portion of the operating expenses of the underlying ETF or other investment company, including the management fee. The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to waive a portion of the management fee equal to 0.03% of the first $500 million of average daily net assets. The Management Fee has been restated to reflect an amended management fee agreement as if the fees had been in effect during the previous fiscal year. Other Expenses include 0.03% of deferred expense reimbursement from a prior period. /8/ The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("underlying ETFs"). As an investor in an underlying ETF or other investment company, the Portfolio will bear its pro rata portion of the operating expenses of the underlying ETF or other investment company, including the management fee. The Investment Manager has contractually agreed, for the period May 1, 2009 to April 30, 2010, to waive a portion of the management fee equal to 0.03% of the first $500 million of average daily net assets. The Management Fee has been restated to reflect an amended management fee agreement as if the fees had been in effect during the previous fiscal year. Other Expenses include 0.02% of deferred expense reimbursement from a prior period. /9/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.81% for the first $500 million of the Portfolio's average daily net assets and 0.78% for the next $500 million. /10/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to 0.243%. /11/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.325% for the Portfolio's average daily net assets in excess of $1 billion but less than $2 billion. 14 /12/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.73% for the first $300 million of the Portfolio's average daily net assets and 0.705% for the next $700 million. /13/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.345% for the first $500 million of the Portfolio's average daily net assets and 0.335% for the next $500 million. Other Expenses include Treasury Guarantee Program expenses of 0.012% incurred for the period September 19, 2008 through December 31, 2008. /14/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.75% for the first $50 million of the Portfolio's average daily net assets, 0.70% for the next $450 million, 0.65% for the next $4 billion, and 0.625% for amounts over $4.5 billion. /15/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.85% for the first $500 million of the Portfolio's average daily net assets and 0.80% for amounts over $500 million. /16/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.85% for the first $100 million of the Portfolio's average daily net assets and 0.80% for amounts over $100 million. /17/The Portfolio is a "fund of funds" that invests substantially all of its assets in other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to waive fees or pay all expenses (other than acquired fund fees and expenses, brokerage costs, taxes, interest and any extraordinary expenses) so as to limit net operating expenses of the Portfolio to 0.10% of the average daily net assets of the Class A shares, 0.35% of the average daily net assets of the Class B shares and 0.25% of the average daily net assets of the Class E shares. /18/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to the annual rate of 0.65% for the first $1.25 billion of the Portfolio's average daily net assets, 0.60% for the next $250 million, and 0.50% for amounts over $1.5 billion. /19/MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009 through April 30, 2010, to reduce the management fee for each Class of the Portfolio to 0.293%. EXAMPLES These Examples are intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include Contract owner transaction expenses, annual contract fees, if any, separate account charges, and underlying Portfolio fees and expenses. Examples 1 through 4 assume you purchased the Contract with optional benefits that result in the highest possible combination of charges. Example 1 relates to the purchase of the Deferred Annuity with the B Class; Example 2 relates to the purchase of the Deferred Annuity with the Bonus Class; Example 3 relates to the purchase of the Deferred Annuity with the C Class; and Example 4 relates to the purchase of the Deferred Annuity with the L Class. Examples 5 through 8 assume you purchased the Contract with no optional benefits that result in the least expensive combination of charges. Example 5 relates to the purchase of the Deferred Annuity with the B Class; Example 6 relates to the purchase of the Deferred Annuity with the Bonus Class; Example 7 relates to the purchase of the Deferred Annuity with the C Class; and Example 8 relates to the purchase of the Deferred Annuity with the L Class. 15 Example 1. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the B Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account or Enhanced Dollar Cost Averaging Program; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you paid the Annual Contract Fee; . the underlying Portfolio earns a 5% annual return; . you select the Enhanced Death Benefit and you are age 70 and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; . you select the Guaranteed Minimum Income Benefit Plus II ("GMIB Plus II") and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; and . you select the Earnings Preservation Benefit You fully surrender your Contract, with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------ Maximum............. $1,382 $2,613 $3,860 $7,230 Minimum............. $1,277 $2,312 $3,384 $6,421
You do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income payment type under which you receive income payments over your lifetime) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------- Maximum............. $682 $2,073 $3,500 $7,230 Minimum............. $577 $1,772 $3,024 $6,421
16 Example 2. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the Bonus Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you paid the Annual Contract Fee; . the underlying Portfolio earns a 5% annual return; . you select the Enhanced Death Benefit and you are age 70 and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; . you select the Guaranteed Minimum Income Benefit Plus II ("GMIB Plus II") and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; and . you select the Earnings Preservation Benefit You fully surrender your Contract, with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------------------------------------ Maximum........................................... $1,627 $2,918 $4,234 $7,544 Minimum........................................... $1,522 $2,621 $3,769 $6,777
You do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income payment type under which you receive income payments over your lifetime) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $727 $2,198 $3,694 $7,544 Minimum........................................... $622 $1,901 $3,229 $6,777
17 Example 3. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the C Class; . reimbursement and/or waiver of expenses was not in effect; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you pay the Annual Contract Fee; . the underlying Portfolio earns a 5% annual return; . you select the Enhanced Death Benefit and you are age 70 and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; . you select the Guaranteed Minimum Income Benefit Plus II ("GMIB Plus II") and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; and . you select the Earnings Preservation Benefit You surrender your Contract, you do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income type under which you receive income payments over your life time) (no withdrawal charges apply to the C Class).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $727 $2,198 $3,694 $7,544 Minimum........................................... $622 $1,901 $3,229 $6,777
18 Example 4. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the L Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account or the Enhanced Dollar Cost Averaging Program; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you paid the Annual Contract Fee; . the underlying Portfolio earns a 5% annual return; . you select the Enhanced Death Benefit and you are age 70 and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; . you select the Guaranteed Minimum Income Benefit Plus II ("GMIB Plus II") and assume that you elect the Optional Reset feature and as a result the charge increases to 1.50%, which is the maximum charge permitted; and . you select the Earnings Preservation Benefit You fully surrender your Contract with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------------------------------------ Maximum........................................... $1,407 $2,593 $3,608 $7,407 Minimum........................................... $1,302 $2,294 $3,139 $6,621
You do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income type under which you receive income payments over your life time) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $707 $2,143 $3,608 $7,407 Minimum........................................... $602 $1,844 $3,139 $6,621
19 Example 5. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower: Assumptions: . you select the B Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account or Enhanced Dollar Cost Averaging Program; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you pay the Annual Contract Fee; and . the underlying Portfolio earns a 5% annual return You fully surrender your Contract, with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------------------------------------ Maximum........................................... $1,018 $1,510 $2,005 $3,439 Minimum........................................... $ 912 $1,194 $1,481 $2,410
You do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income payment type under which you receive income payments over your lifetime) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS --------------------------------------------------------------------------- Maximum........................................... $318 $970 $1,645 $3,439 Minimum........................................... $212 $654 $1,121 $2,410
Example 6. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the Bonus Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you pay the Annual Contract Fee; and . the underlying Portfolio earns a 5% annual return You fully surrender your Contract, with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------------------------------------ Maximum........................................... $1,262 $1,821 $2,399 $3,840 Minimum........................................... $1,157 $1,509 $1,887 $2,862
You do not surrender your contract or elect to annuitize (elect a pay-out option with an income payment type under which you receive income payments over your lifetime) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $362 $1,101 $1,859 $3,840 Minimum........................................... $257 $ 789 $1,347 $2,862
20 Example 7. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the C Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you pay the Annual Contract Fee; and . the underlying Portfolio earns a 5% annual return You surrender your contract, you do not surrender your contract or elect to annuitize (elect a pay-out option with an income payment type under which you receive income payments over your lifetime) (no withdrawal charges apply to the C Class).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $362 $1,101 $1,859 $3,840 Minimum........................................... $257 $ 789 $1,347 $2,862
Example 8. This example shows the dollar amount of expenses that you would bear directly or indirectly on a $10,000 investment for the time periods indicated. Your actual costs may be higher or lower. Assumptions: . you select the L Class; . reimbursement and/or waiver of expenses was not in effect; . there was no allocation to the Fixed Account or the Enhanced Dollar Cost Averaging Program; . you bear the minimum or maximum fees and expenses of any of the Portfolios (see Table 3--Portfolio Operating Expenses); . you pay the Annual Contract Fee; and . the underlying Portfolio earns a 5% annual return You fully surrender your Contract with applicable withdrawal charges deducted.
1 3 5 10 YEAR YEARS YEARS YEARS ------------------------------------------------------------------------------ Maximum........................................... $1,043 $1,493 $1,764 $3,664 Minimum........................................... $ 937 $1,179 $1,247 $2,664
You do not surrender your Contract or you elect to annuitize (elect a pay-out option with an income type under which you receive income payments over your life time) (no withdrawal charges would be deducted).
1 3 5 10 YEAR YEARS YEARS YEARS ---------------------------------------------------------------------------- Maximum........................................... $343 $1,043 $1,764 $3,664 Minimum........................................... $237 $ 729 $1,247 $2,664
21 ACCUMULATION UNIT VALUES FOR EACH INVESTMENT DIVISION See Appendix B. 22 METLIFE Metropolitan Life Insurance Company ("MetLife" or the "Company") is a wholly-owned subsidiary of MetLife, Inc. (NYSE:MET). MetLife's home office is located at 200 Park Avenue, New York, New York 10166-0188. MetLife was formed under the laws of New York State in 1868. MetLife, Inc. is a leading provider of individual insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowners insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. For more information, please visit www.metlife.com. METROPOLITAN LIFE SEPARATE ACCOUNT E We established Metropolitan Life Separate Account E on September 27, 1983. The purpose of the Separate Account is to hold the variable assets that underlie the Preference Plus Select Variable Annuity Contracts and some other variable annuity contracts we issue. We have registered the Separate Account with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940, as amended ("1940 Act"). The Separate Account's assets are solely for the benefit of those who invest in the Separate Account and no one else, including our creditors. We are obligated to pay all money we owe under the Deferred Annuities even if that amount exceeds the assets in the Separate Account. Any such amount that exceeds the assets in the Separate Account is paid from our general account. Any such amount under the Guaranteed Minimum Income Benefits, the optional death benefits, the Earnings Preservation Benefit, Guaranteed Withdrawal Benefits, or the Guaranteed Minimum Accumulation Benefit that exceeds the assets in the Separate Account are also paid from our general account. Benefit amounts paid from the general account are subject to the financial strength and claims paying ability of the Company. The assets of the Separate Account are held in our name on behalf of the Separate Account and legally belong to us. All the income, gains, and losses (realized or unrealized) resulting from these assets are credited to or charged against the Contracts issued from this Separate Account without regard to our other business. VARIABLE ANNUITIES This Prospectus describes a type of variable annuity, a Deferred Annuity. These annuities are "variable" because the value of your account or income payment varies based on the investment performance of the investment divisions you choose. In short, the value of your Deferred Annuity and your income payments under a variable pay-out option of your Deferred Annuity may go up or down. Since the investment performance is not guaranteed, your money is at risk. The degree of risk will depend on the investment divisions you select. The Accumulation Unit Value or Annuity Unit Value for each investment division rises or falls based on the investment performance (or "experience") of the Portfolio with the same name. MetLife and its affiliates also offer other annuities not described in this Prospectus. The Deferred Annuities have a fixed interest rate option called the "Fixed Account." The Fixed Account is not available to all contract owners. The Fixed Account offers an interest rate that is guaranteed by us. The minimum interest rate depends on the year your Contract is issued but will not be less than 1%. The variable pay-out options under the Deferred Annuities have a fixed payment option called the "Fixed Income Option." Under the Fixed Income Option, we guarantee the amount of your fixed income payments. These fixed options are not described in this Prospectus although we occasionally refer to them. 23 REPLACEMENT OF ANNUITY CONTRACTS EXCHANGE PROGRAMS: From time to time we may offer programs under which certain fixed or variable annuity contracts previously issued by us may be exchanged for the Deferred Annuity offered by this Prospectus. Currently, with respect to exchanges from certain of our variable annuity contracts to this Deferred Annuity, an existing contract is eligible for exchange if a withdrawal from, or surrender of, the contract would not trigger a withdrawal charge. The Account Balance of this Deferred Annuity attributable to the exchanged assets will not be subject to any withdrawal charge or be eligible for the Enhanced Dollar Cost Averaging Program. Any additional purchase payments contributed to the new Deferred Annuity will be subject to all fees and charges, including the withdrawal charge described in this Prospectus. You should carefully consider whether an exchange is appropriate for you by comparing the death benefits, living benefits, and other guarantees provided by the contract you currently own to the benefits and guarantees that would be provided by the new Contract offered in this Prospectus. Then you should compare the fees and charges (E.G., the death benefit charges, the living benefit charges, and the separate account charge) of your current contract to the fees and charges of the new Contract, which may be higher than your current contract. These programs will be made available on terms and conditions determined by us, and any such programs will comply with applicable law. We believe the exchanges will be tax free for federal income tax purposes; however, you should consult your tax adviser before making any such exchange. OTHER EXCHANGES: Generally, you can exchange one variable annuity contract for another in a tax-free exchange under Section 1035 of the Internal Revenue Code. Before making an exchange you should compare both annuities carefully. If you exchange another annuity for the one described in this Prospectus, unless the exchange occurs under one of our exchange programs described above, you might have to pay a surrender charge on your old annuity, and there will be a new surrender charge period for this Deferred Annuity. Other charges may be higher (or lower) and the benefits may be different. Also, because we will not issue the Deferred Annuity until we have received the initial purchase payment from your existing insurance company, the issuance of the contract may be delayed. Generally, it is not advisable to purchase a Deferred Annuity as a replacement for an existing variable annuity contract. Before you exchange another annuity for our Deferred Annuity, ask your registered representative whether the exchange would be advantageous, given the contract features, benefits and charges. THE DEFERRED ANNUITY You accumulate money in your account during the pay-in phase by making one or more purchase payments. MetLife will hold your money and credit investment returns as long as the money remains in your account. All IRAs receive tax deferral under the Internal Revenue Code. There are no additional tax benefits from funding an IRA with a Deferred Annuity. Therefore, there should be reasons other than tax deferral for acquiring the Deferred Annuity, such as the availability of a guaranteed income for life, the death benefits or the other optional benefits available under this Deferred Annuity. Because the Contract proceeds must be distributed within the time periods required by the federal Internal Revenue Code, the right of a spouse to continue the Contract, and all Contract provisions relating to spousal continuation, are available only to a person who is defined as a "spouse" under the federal Defense of Marriage Act, or any other applicable federal law. Therefore, under current federal law, a purchaser who has or is contemplating a civil union or same sex marriage should note that the rights of a spouse under the spousal continuation provisions of this Contract will not be available to such partner or same sex marriage spouse. A Deferred Annuity consists of two phases: the accumulation or "pay-in" phase and the income or "pay-out" phase. The pay-out phase begins when you elect to have us pay you "income" payments using the money in your account. The number and the amount of the income payments you receive will depend on such things as the type of pay-out option you choose, your investment choices, and the amount used to provide your income payments. Because Deferred Annuities offer the insurance benefit of income payment options, including our guarantee of income for your lifetime, they are "annuities." 24 The Deferred Annuity is offered in several variations, which we call "classes." Each class offers you the ability to choose certain features. Each has its own Separate Account charge and applicable withdrawal charge (except C Class which has no withdrawal charges). The Deferred Annuity also offers you the opportunity to choose optional benefits, each for a charge in addition to the Separate Account charge with the Basic Death Benefit for that class. If you purchase any of the optional death benefits, you receive the optional benefit in place of the Basic Death Benefit. In deciding what class of the Deferred Annuity to purchase, you should consider the amount of Separate Account and withdrawal charges you are willing to bear relative to your needs. In deciding whether to purchase any of the optional benefits, you should consider the desirability of the benefit relative to its additional cost and to your needs. Unless you tell us otherwise, we will assume that you are purchasing the B Class Deferred Annuity with the Basic Death Benefit and no optional benefits. These optional benefits are: . an Annual Step-Up Death Benefit; . a Greater of Annual Step-Up or 5% Annual Increase Death Benefit; . an Enhanced Death Benefit; . an Earnings Preservation Benefit; . Guaranteed Minimum Income Benefits; . Guaranteed Withdrawal Benefits; and . a Guaranteed Minimum Accumulation Benefit. You may not have a Guaranteed Minimum Income Benefit, a Guaranteed Withdrawal Benefit or the Guaranteed Minimum Accumulation Benefit in effect at the same time. You may not have the Enhanced Death Benefit in effect with any living benefit rider except the Guaranteed Minimum Income Benefit Plus II. Not all optional benefits are currently available for sale. Each of these optional benefits is described in more detail later in this Prospectus. The availability of optional benefits and features of optional benefits may vary by state. CLASSES OF THE DEFERRED ANNUITY B CLASS The B Class has a 1.25% annual Separate Account charge (1.50% in the case of each American Funds investment division) and a declining seven year withdrawal charge on each purchase payment. If you choose the Annual Step-Up Death Benefit or the greater of Annual Step-Up or 5% Annual Increase Death Benefit, the Separate Account charge would range from 1.45% to 1.60% or, in the case of each American Funds investment division, 1.70% to 1.85%. If you choose the optional Earnings Preservation Benefit and either of these optional death benefits, the Separate Account charge would range from 1.70% to 1.85% or, in the case of each American Funds investment division, 1.95% to 2.10%. THE BONUS CLASS (MAY ALSO BE KNOWN AS THE "B PLUS CLASS" IN OUR SALES LITERATURE AND ADVERTISING) You may purchase a Contract in the Bonus Class before your 81st birthday. If there are joint contract owners, the age of the oldest joint contract owner will be used to determine eligibility. Under the Bonus Class Deferred Annuity, we currently credit 3% to each of your purchase payments made during the first Contract Year. The Bonus will be applied on a pro-rata basis to the Fixed Account, if available, and the investment divisions of the Separate Account based upon your allocation for your purchase payments. The Bonus Class has a 1.70% annual Separate Account charge (1.95% in the 25 case of each American Funds investment division) and a declining seven year withdrawal charge on each purchase payment. If you choose the Annual Step-Up Death Benefit or the Greater of Annual Step-Up or 5% Annual Increase Death Benefit, the Separate Account charge would range from 1.90% to 2.05% or, in the case of each American Funds investment division, 2.15% to 2.30%. If you choose the optional Earnings Preservation Benefit and either of these optional death benefits, the Separate Account charge would range from 2.15% to 2.30% or, in the case of each American Funds investment division, 2.40% to 2.55%. After you have held the Contract for seven years, the Separate Account charge declines 0.45% to 1.25% with the Basic Death Benefit (1.50% in the case of each American Funds investment division). After you have held the Contract for seven years, the Separate Account charge declines to 1.45% and 1.60%, respectively, for the Annual Step-Up Death Benefit and for the Greater of Annual Step-Up or 5% Annual Increase Death Benefit, or, in the case of each American Funds investment division, 1.70% to 1.85%. Investment returns for the Bonus Class Deferred Annuity may be lower than those for the B Class Deferred Annuity if Separate Account investment performance is not sufficiently high to offset increased Separate Account charges for the Bonus Class Deferred Annuity. (If the Fixed Account is available, Fixed Account rates for the Bonus Class may be lower than those declared for the other classes.) The Bonus Class Deferred Annuity may not be appropriate with certain qualified plans where there may be minimal initial purchase payments submitted in the first year. Therefore, the choice between the Bonus Class and the B Class Deferred Annuity is a judgment as to whether a higher Separate Account charge with a 3% credit is more advantageous than a lower Separate Account charge without the 3% credit. There is no guarantee that the Bonus Class Deferred Annuity will have higher returns than the B Class Deferred Annuity, the other classes of the Deferred Annuity, similar contracts without a bonus or any other investment. The Bonus will be credited only to purchase payments made during the first Contract Year, while the additional Separate Account charge of 0.45% for the Bonus will be assessed on all amounts in the Separate Account for the first seven years. The following table demonstrates hypothetical investment returns for a Deferred Annuity with the 3% credit compared to a Contract without the Bonus. Both Deferred Annuities are assumed to have no optional benefits. The figures are based on: a) a $50,000 initial purchase payment with no other purchase payments; b) deduction of the Separate Account charge at a rate of 1.70% (1.25% in years 8-10) (Bonus Class Deferred Annuity) and 1.25% (B Class Deferred Annuity); and c) an assumed investment return for the investment choices before Separate Account charges of 8.05% for each of 10 years.
-------------------------------------------------------------------------------- Bonus Class B Class (1.70% Separate Account (1.25% Separate Account Contract Year charge for first 7 years) charge all years) -------------------------------------------------------------------------------- 1 $54,770 $53,400 -------------------------------------------------------------------------------- 2 $58,248 $57,031 -------------------------------------------------------------------------------- 3 $61,947 $60,909 -------------------------------------------------------------------------------- 4 $65,881 $65,051 -------------------------------------------------------------------------------- 5 $70,064 $69,475 -------------------------------------------------------------------------------- 6 $74,513 $74,199 -------------------------------------------------------------------------------- 7 $79,245 $79,244 -------------------------------------------------------------------------------- 8 $84,633 $84,633 -------------------------------------------------------------------------------- 9 $90,388 $90,388 -------------------------------------------------------------------------------- 10 $96,535 $96,534 --------------------------------------------------------------------------------
26 Generally, the higher the rate of return, the more advantageous the Bonus Class is. The table above assumes no additional purchase payments are made after the first Contract Anniversary. If additional purchase payments were made to the Deferred Annuity, the rate of return would have to be higher in order to "break-even" by the end of the seventh year or the break-even point would otherwise occur sooner. The break-even point is when the Account Balance of a Bonus Class Contract will equal the Account Balance of a B Class Contract, assuming equal initial purchase payments and a level rate of return, and thereafter, the Account Balance would be higher in a B Class Contract. The decision to elect the Bonus Class is irrevocable. We may make a profit from the additional Separate Account charge. The Enhanced Dollar Cost Averaging Program is not available with the Bonus Class. The guaranteed annuity rates for the Bonus Class are the same as those for the other classes of the Deferred Annuity. Current rates for the Bonus Class may be lower than those for the other classes of the Deferred Annuity. Any 3% credit does not become yours until after the "free look" period; we retrieve it if you exercise the "free look". Your exercise of the "free look" is the only circumstance under which the 3% credit will be retrieved (commonly called "recapture"). We then will refund either your purchase payments or Account Balance, depending upon your state law. In the case of a refund of Account Balance, the refunded amount will include any investment performance on amounts attributable to the 3% credit. If there have been any losses from the investment performance on the amounts attributable to the 3% credit, we will bear that loss. If we agree to permit your beneficiary to hold the Traditional IRA Deferred Annuity in your name after your death for his/her benefit, a new Contract will be issued in order to facilitate the distribution of payments. The new Contract will be issued in the same contract class, except, if you had a Bonus Class Deferred Annuity, the Contract will be issued as a B Class Deferred Annuity. C CLASS The C Class has a 1.65% annual Separate Account charge (1.90% in the case of each American Funds investment division) and no withdrawal charge. If you choose the Annual Step-Up Death Benefit or the Greater of Annual Step-Up or 5% Annual Increase Death Benefit, the Separate Account charge would range from 1.85% to 2.00% or, in the case of each American Funds investment division, 2.10% to 2.25%. If you choose the optional Earnings Preservation Benefit and either of these optional death benefits, the Separate Account charge would range from 2.10% to 2.25% or, in the case of each American Funds investment division, 2.35% to 2.50%. The Fixed Account, the Enhanced Dollar Cost Averaging Program, Equity Generator/SM/ and the Allocator/SM/ are not available in the C Class Deferred Annuity purchased after April 30, 2003. A money market investment division is available in the C Class Deferred Annuity purchased after April 30, 2003. L CLASS The L Class has a 1.50% annual Separate Account charge (1.75% in the case of each American Funds investment division) and a declining three year withdrawal charge on each purchase payment. If you choose the Annual Step-Up Death Benefit or the Greater of Annual Step-Up or 5% Annual Increase Death Benefit, the Separate Account charge would range from 1.70% to 1.85% or, in the case of each American Funds investment division, 1.95% to 2.10%. If you choose the optional Earnings Preservation Benefit and either of these optional death benefits, the Separate Account charge would range from 1.95% to 2.10% or, in the case of each American Funds investment division, 2.20% to 2.35%. If the Fixed Account is available, Fixed Account rates for the L Class may be lower than those declared for the other classes. 27 YOUR INVESTMENT CHOICES The Metropolitan Fund, the Met Investors Fund and the American Funds(R) and each of their Portfolios are more fully described in their respective prospectuses and SAIs. The SAIs are available upon your request. The Metropolitan Fund, the Met Investors Fund and the American Funds(R) prospectuses are attached at the end of this Prospectus. You should read these prospectuses carefully before making purchase payments to the investment divisions. The classes of shares available to the Deferred Annuities, Class B of the Metropolitan Fund, Class B of the Met Investors Fund (except for the American Funds Balanced Allocation, American Funds Growth Allocation and American Funds Moderate Allocation Portfolios which are Class C), and Class 2 of the American Funds(R), each impose a 12b-1 Plan fee. The investment choices are listed in alphabetical order (based upon the Portfolio's legal names). (See Appendix C Portfolio Legal and Marketing Names.) The investment divisions generally offer the opportunity for greater returns over the long term than our Fixed Account. You should understand that each Portfolio incurs its own risk which will be dependent upon the investment decisions made by the respective Portfolio's investment manager. Furthermore, the name of a Portfolio may not be indicative of all the investments held by the Portfolio. The degree of investment risk you assume will depend on the investment divisions you choose. While the investment divisions and their comparably named Portfolios may have names, investment objectives and management which are identical or similar to publicly available mutual funds, these investment divisions and Portfolios are not those mutual funds. The Portfolios most likely will not have the same performance experience as any publicly available mutual fund. Please consult the appropriate Fund prospectus for more information regarding the investment objectives and investment practices of each Portfolio. Since your Account Balance or income payments are subject to the risks associated with investing in stocks and bonds, your Account Balance or variable income payments based on amounts allocated to the investment divisions may go down as well as up. METROPOLITAN FUND ASSET ALLOCATION PORTFOLIOS The MetLife Conservative Allocation Portfolio, the MetLife Conservative to Moderate Allocation Portfolio, the MetLife Moderate Allocation Portfolio, the MetLife Moderate to Aggressive Allocation Portfolio and the MetLife Aggressive Allocation Portfolio, also known as the "asset allocation portfolios", are "fund of funds" Portfolios that invest substantially all of their assets in other Portfolios of the Metropolitan Fund or the Met Investors Fund. Therefore, each of these asset allocation portfolios will bear its pro-rata share of the fees and expenses incurred by the underlying Portfolios in which it invests in addition to its own management fees and expenses. This will reduce the investment return of each of the asset allocation portfolios. The expense levels will vary over time, depending on the mix of underlying Portfolios in which the asset allocation portfolio invests. Contract owners may be able to realize lower aggregate expenses by investing directly in the underlying Portfolios instead of investing in the asset allocation portfolios. A contract owner who chooses to invest directly in the underlying Portfolios would not however, receive asset allocation services provided by MetLife Advisers, LLC. MET INVESTORS FUND ASSET ALLOCATION PORTFOLIOS The American Funds Balanced Allocation Portfolio, the American Funds Growth Allocation Portfolio and the American Funds Moderate Allocation Portfolio, also known as "asset allocation portfolios", are "funds of funds" Portfolios that invest substantially all of their assets in portfolios of the American Funds Insurance Series(R). Therefore, each of these asset allocation portfolios will bear its pro-rata share of the fees and expenses incurred by the underlying portfolio in which it invests in addition to its own management fees and expenses. This will reduce the investment return of each of the asset allocation portfolios. The expense levels will vary over time, depending on the mix of underlying portfolios in which the asset allocation portfolio invests. Underlying portfolios consist of American Funds(R) Portfolios that are currently available for investment directly under the Contract and other underlying American Funds(R) Portfolios which are not made available directly under the Contract. 28 MET/FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO The Met/Franklin Templeton Founding Strategy Portfolio is a "funds of funds" Portfolio that invests equally in three other portfolios of the Met Investors Fund: the Met/Franklin Income Portfolio, the Met/Franklin Mutual Shares Portfolio and the Met/Templeton Growth Portfolio. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. EXCHANGE-TRADED FUNDS PORTFOLIOS The SSgA Growth ETF Portfolio and the SSgA Growth and Income ETF Portfolio are asset allocation Portfolios and "funds of funds" which invest substantially all of their assets in other investment companies known as exchange-traded funds ("Underlying ETFs"). As an investor in an Underlying ETF or other investment company, each Portfolio also will bear its pro-rata portion of the fees and expenses incurred by the Underlying ETF or other investment company in which it invests in addition to its own management fees and expenses. This will reduce the investment return of each of the Portfolios. The expense levels will vary over time depending on the mix of Underlying ETFs in which these Portfolios invest.
INVESTMENT MANAGER/ PORTFOLIO INVESTMENT OBJECTIVE SUB-INVESTMENT MANAGER AMERICAN FUNDS(R) AMERICAN FUNDS BOND FUND SEEKS TO MAXIMIZE CURRENT INCOME AND CAPITAL RESEARCH AND MANAGEMENT COMPANY PRESERVE CAPITAL BY INVESTING PRIMARILY IN FIXED-INCOME SECURITIES. AMERICAN FUNDS GLOBAL SMALL SEEKS CAPITAL APPRECIATION THROUGH STOCKS. CAPITAL RESEARCH AND MANAGEMENT COMPANY CAPITALIZATION FUND AMERICAN FUNDS GROWTH FUND SEEKS CAPITAL APPRECIATION THROUGH STOCKS. CAPITAL RESEARCH AND MANAGEMENT COMPANY AMERICAN FUNDS GROWTH-INCOME FUND SEEKS BOTH CAPITAL APPRECIATION AND INCOME. CAPITAL RESEARCH AND MANAGEMENT COMPANY MET INVESTORS FUND# AMERICAN FUNDS BALANCED ALLOCATION SEEKS A BALANCE BETWEEN A HIGH LEVEL OF METLIFE ADVISERS, LLC PORTFOLIO CURRENT INCOME AND GROWTH OF CAPITAL WITH A GREATER EMPHASIS ON GROWTH OF CAPITAL. AMERICAN FUNDS GROWTH ALLOCATION SEEKS GROWTH OF CAPITAL. METLIFE ADVISERS, LLC PORTFOLIO AMERICAN FUNDS MODERATE ALLOCATION SEEKS A HIGH TOTAL RETURN IN THE FORM OF INCOME METLIFE ADVISERS, LLC PORTFOLIO AND GROWTH OF CAPITAL, WITH A GREATER EMPHASIS ON INCOME. BLACKROCK LARGE CAP CORE PORTFOLIO SEEKS LONG-TERM CAPITAL GROWTH. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC CLARION GLOBAL REAL ESTATE SEEKS TO PROVIDE TOTAL RETURN THROUGH METLIFE ADVISERS, LLC PORTFOLIO INVESTMENT IN REAL ESTATE SECURITIES, SUB-INVESTMENT MANAGER: ING CLARION REAL EMPHASIZING BOTH CAPITAL APPRECIATION AND ESTATE SECURITIES, L.P. CURRENT INCOME. HARRIS OAKMARK INTERNATIONAL SEEKS LONG-TERM CAPITAL APPRECIATION. METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: HARRIS ASSOCIATES L.P. JANUS FORTY PORTFOLIO SEEKS CAPITAL APPRECIATION. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: JANUS CAPITAL MANAGEMENT LLC LAZARD MID CAP PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: LAZARD ASSET MANAGEMENT LLC LEGG MASON PARTNERS AGGRESSIVE SEEKS CAPITAL APPRECIATION. METLIFE ADVISERS, LLC GROWTH PORTFOLIO SUB-INVESTMENT MANAGER: CLEARBRIDGE ADVISORS, LLC LEGG MASON VALUE EQUITY PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: LEGG MASON CAPITAL MANAGEMENT. INC.
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PORTFOLIO INVESTMENT OBJECTIVE LORD ABBETT BOND DEBENTURE SEEKS HIGH CURRENT INCOME AND THE OPPORTUNITY PORTFOLIO FOR CAPITAL APPRECIATION TO PRODUCE A HIGH TOTAL RETURN. MET/AIM SMALL CAP GROWTH PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. MET/FRANKLIN INCOME PORTFOLIO SEEKS TO MAXIMIZE INCOME WHILE MAINTAINING PROSPECTS FOR CAPITAL APPRECIATION. MET/FRANKLIN MUTUAL SHARES SEEKS CAPITAL APPRECIATION, WHICH MAY PORTFOLIO OCCASIONALLY BE SHORT-TERM. THE PORTFOLIO'S SECONDARY INVESTMENT OBJECTIVE IS INCOME. MET/FRANKLIN TEMPLETON FOUNDING SEEKS CAPITAL APPRECIATION AND SECONDARILY STRATEGY PORTFOLIO SEEKS INCOME. MET/TEMPLETON GROWTH PORTFOLIO SEEKS LONG-TERM CAPITAL GROWTH. MFS(R) RESEARCH INTERNATIONAL SEEKS CAPITAL APPRECIATION. PORTFOLIO OPPENHEIMER CAPITAL APPRECIATION SEEKS CAPITAL APPRECIATION. PORTFOLIO PIMCO INFLATION PROTECTED BOND SEEKS TO PROVIDE MAXIMUM REAL RETURN, PORTFOLIO CONSISTENT WITH PRESERVATION OF CAPITAL AND PRUDENT INVESTMENT MANAGEMENT. PIMCO TOTAL RETURN PORTFOLIO SEEKS MAXIMUM TOTAL RETURN, CONSISTENT WITH THE PRESERVATION OF CAPITAL AND PRUDENT INVESTMENT MANAGEMENT. RCM TECHNOLOGY PORTFOLIO SEEKS CAPITAL APPRECIATION; NO CONSIDERATION IS GIVEN TO INCOME. SSGA GROWTH AND INCOME ETF SEEKS GROWTH OF CAPITAL AND INCOME. PORTFOLIO SSGA GROWTH ETF PORTFOLIO SEEKS GROWTH OF CAPITAL. T. ROWE PRICE MID CAP GROWTH SEEKS LONG-TERM GROWTH OF CAPITAL. PORTFOLIO METROPOLITAN FUND ARTIO INTERNATIONAL STOCK PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. BARCLAYS CAPITAL AGGREGATE BOND SEEKS TO EQUAL THE PERFORMANCE OF THE INDEX PORTFOLIO BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX. BLACKROCK AGGRESSIVE GROWTH SEEKS MAXIMUM CAPITAL APPRECIATION. PORTFOLIO BLACKROCK BOND INCOME PORTFOLIO SEEKS A COMPETITIVE TOTAL RETURN PRIMARILY FROM INVESTING IN FIXED-INCOME SECURITIES.
INVESTMENT MANAGER/ PORTFOLIO SUB-INVESTMENT MANAGER LORD ABBETT BOND DEBENTURE METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: LORD, ABBETT & CO. LLC MET/AIM SMALL CAP GROWTH PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: INVESCO AIM CAPITAL MANAGEMENT, INC. MET/FRANKLIN INCOME PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: FRANKLIN ADVISERS, INC. MET/FRANKLIN MUTUAL SHARES METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: FRANKLIN MUTUAL ADVISERS, LLC MET/FRANKLIN TEMPLETON FOUNDING METLIFE ADVISERS, LLC STRATEGY PORTFOLIO MET/TEMPLETON GROWTH PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: TEMPLETON GLOBAL ADVISORS LIMITED MFS(R) RESEARCH INTERNATIONAL METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: MASSACHUSETTS FINANCIAL SERVICES COMPANY OPPENHEIMER CAPITAL APPRECIATION METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: OPPENHEIMERFUNDS, INC. PIMCO INFLATION PROTECTED BOND METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: PACIFIC INVESTMENT MANAGEMENT COMPANY LLC PIMCO TOTAL RETURN PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: PACIFIC INVESTMENT MANAGEMENT COMPANY LLC RCM TECHNOLOGY PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: RCM CAPITAL MANAGEMENT LLC SSGA GROWTH AND INCOME ETF METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: SSGA FUNDS MANAGEMENT, INC. SSGA GROWTH ETF PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: SSGA FUNDS MANAGEMENT, INC. T. ROWE PRICE MID CAP GROWTH METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: T. ROWE PRICE ASSOCIATES, INC. METROPOLITAN FUND ARTIO INTERNATIONAL STOCK PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: ARTIO GLOBAL MANAGEMENT, LLC BARCLAYS CAPITAL AGGREGATE BOND METLIFE ADVISERS, LLC INDEX PORTFOLIO SUB-INVESTMENT MANAGER: METLIFE INVESTMENT ADVISORS COMPANY, LLC BLACKROCK AGGRESSIVE GROWTH METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC BLACKROCK BOND INCOME PORTFOLIO METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC
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INVESTMENT MANAGER/ PORTFOLIO INVESTMENT OBJECTIVE SUB-INVESTMENT MANAGER BLACKROCK DIVERSIFIED PORTFOLIO SEEKS HIGH TOTAL RETURN WHILE ATTEMPTING TO METLIFE ADVISERS, LLC LIMIT INVESTMENT RISK AND PRESERVE CAPITAL. SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC BLACKROCK LARGE CAP VALUE PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC BLACKROCK LEGACY LARGE CAP GROWTH SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC BLACKROCK MONEY MARKET PORTFOLIO SEEKS A HIGH LEVEL OF CURRENT INCOME CONSISTENT METLIFE ADVISERS, LLC WITH PRESERVATION OF CAPITAL. SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC BLACKROCK STRATEGIC VALUE PORTFOLIO SEEKS HIGH TOTAL RETURN, CONSISTING PRINCIPALLY METLIFE ADVISERS, LLC OF CAPITAL APPRECIATION. SUB-INVESTMENT MANAGER: BLACKROCK ADVISORS, LLC DAVIS VENTURE VALUE PORTFOLIO SEEKS GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: DAVIS SELECTED ADVISERS, L.P. FI MID CAP OPPORTUNITIES PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: PYRAMIS GLOBAL ADVISORS, LLC FI VALUE LEADERS PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: PYRAMIS GLOBAL ADVISORS, LLC JENNISON GROWTH PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: JENNISON ASSOCIATES LLC LOOMIS SAYLES SMALL CAP CORE SEEKS LONG-TERM CAPITAL GROWTH FROM METLIFE ADVISERS, LLC PORTFOLIO INVESTMENTS IN COMMON STOCKS OR OTHER EQUITY SUB-INVESTMENT MANAGER: LOOMIS, SAYLES & SECURITIES. COMPANY, L.P. LOOMIS SAYLES SMALL CAP GROWTH SEEKS LONG-TERM CAPITAL GROWTH. METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: LOOMIS, SAYLES & COMPANY, L.P. MET/ARTISAN MID CAP VALUE PORTFOLIO SEEKS LONG-TERM CAPITAL GROWTH. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: ARTISAN PARTNERS LIMITED PARTNERSHIP METLIFE AGGRESSIVE ALLOCATION SEEKS GROWTH OF CAPITAL. METLIFE ADVISERS, LLC PORTFOLIO METLIFE CONSERVATIVE ALLOCATION SEEKS HIGH LEVEL OF CURRENT INCOME, WITH METLIFE ADVISERS, LLC PORTFOLIO GROWTH OF CAPITAL AS A SECONDARY OBJECTIVE. METLIFE CONSERVATIVE TO MODERATE SEEKS HIGH TOTAL RETURN IN THE FORM OF INCOME METLIFE ADVISERS, LLC ALLOCATION PORTFOLIO AND GROWTH OF CAPITAL, WITH A GREATER EMPHASIS ON INCOME. METLIFE MID CAP STOCK INDEX SEEKS TO EQUAL THE PERFORMANCE OF THE METLIFE ADVISERS, LLC PORTFOLIO STANDARD & POOR'S MID CAP 400(R) COMPOSITE SUB-INVESTMENT MANAGER: METLIFE INVESTMENT STOCK PRICE INDEX. ADVISORS COMPANY, LLC METLIFE MODERATE ALLOCATION SEEKS A BALANCE BETWEEN A HIGH LEVEL OF METLIFE ADVISERS, LLC PORTFOLIO CURRENT INCOME AND GROWTH OF CAPITAL, WITH A GREATER EMPHASIS ON GROWTH OF CAPITAL. METLIFE MODERATE TO AGGRESSIVE SEEKS GROWTH OF CAPITAL. METLIFE ADVISERS, LLC ALLOCATION PORTFOLIO METLIFE STOCK INDEX PORTFOLIO SEEKS TO EQUAL THE PERFORMANCE OF THE METLIFE ADVISERS, LLC STANDARD & POOR'S 500(R) COMPOSITE STOCK SUB-INVESTMENT MANAGER: METLIFE INVESTMENT PRICE INDEX. ADVISORS COMPANY, LLC
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INVESTMENT MANAGER/ PORTFOLIO INVESTMENT OBJECTIVE SUB-INVESTMENT MANAGER MFS(R) TOTAL RETURN PORTFOLIO SEEKS A FAVORABLE TOTAL RETURN THROUGH METLIFE ADVISERS, LLC INVESTMENT IN A DIVERSIFIED PORTFOLIO. SUB-INVESTMENT MANAGER: MASSACHUSETTS FINANCIAL SERVICES COMPANY MFS(R) VALUE PORTFOLIO SEEKS CAPITAL APPRECIATION. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: MASSACHUSETTS FINANCIAL SERVICES COMPANY MORGAN STANLEY EAFE(R) INDEX SEEKS TO EQUAL THE PERFORMANCE OF THE MSCI METLIFE ADVISERS, LLC PORTFOLIO EAFE(R) INDEX. SUB-INVESTMENT MANAGER: METLIFE INVESTMENT ADVISORS COMPANY, LLC NEUBERGER BERMAN MID CAP VALUE SEEKS CAPITAL GROWTH. METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: NEUBERGER BERMAN MANAGEMENT LCC OPPENHEIMER GLOBAL EQUITY PORTFOLIO SEEKS CAPITAL APPRECIATION. METLIFE ADVISERS, LLC SUB-INVESTMENT MANAGER: OPPENHEIMERFUNDS, INC. RUSSELL 2000(R) INDEX PORTFOLIO SEEKS TO EQUAL THE RETURN OF THE RUSSELL METLIFE ADVISERS, LLC 2000(R) INDEX. SUB-INVESTMENT MANAGER: METLIFE INVESTMENT ADVISORS COMPANY, LLC T. ROWE PRICE LARGE CAP GROWTH SEEKS LONG-TERM GROWTH OF CAPITAL AND, METLIFE ADVISERS, LLC PORTFOLIO SECONDARILY, DIVIDEND INCOME. SUB-INVESTMENT MANAGER: T. ROWE PRICE ASSOCIATES, INC. T. ROWE PRICE SMALL CAP GROWTH SEEKS LONG-TERM CAPITAL GROWTH. METLIFE ADVISERS, LLC PORTFOLIO SUB-INVESTMENT MANAGER: T. ROWE PRICE ASSOCIATES, INC. WESTERN ASSET MANAGEMENT STRATEGIC SEEKS TO MAXIMIZE TOTAL RETURN CONSISTENT WITH METLIFE ADVISERS, LLC BOND OPPORTUNITIES PORTFOLIO PRESERVATION OF CAPITAL. SUB-INVESTMENT MANAGER: WESTERN ASSET MANAGEMENT COMPANY WESTERN ASSET MANAGEMENT U.S. SEEKS TO MAXIMIZE TOTAL RETURN CONSISTENT WITH METLIFE ADVISERS, LLC GOVERNMENT PORTFOLIO PRESERVATION OF CAPITAL AND MAINTENANCE OF SUB-INVESTMENT MANAGER: WESTERN ASSET LIQUIDITY. MANAGEMENT COMPANY
----------- # Prior to May 1, 2009, Met Advisory, LLC was the investment manager of Met Investors Fund. On May 1, 2009, Met Investors Advisory, LLC merged with and into MetLife Advisers, LLC, and MetLife Advisers, LLC has now become the investment manager of the Met Investors Fund. Some of the investment choices may not be available under the terms of your Deferred Annuity. Your Contract or other correspondence we provide you will indicate the investment divisions that are available to you. The BlackRock Money Market Division is only available in the C Class Deferred Annuity purchased after April 30, 2003, and Deferred Annuities issued in New York State and Washington State with the Guaranteed Minimum Income Benefit I, the Guaranteed Minimum Income Benefit II, the Guaranteed Minimum Income Benefit Plus I, the Guaranteed Minimum Income Benefit Plus II, the Guaranteed Withdrawal Benefit I, the Enhanced Guaranteed Withdrawal Benefit, the Lifetime Withdrawal Guarantee Benefit I, the Lifetime Withdrawal Guarantee Benefit II or the Enhanced Death Benefit. Your investment choices may be limited because: . We have restricted the available investment divisions. . Some of the investment divisions are not approved in your state. . Your employer, association or other group contract owner limits the available investment divisions. 32 INVESTMENT ALLOCATION RESTRICTIONS FOR CERTAIN BENEFITS If you elect the Lifetime Withdrawal Guarantee Benefit II, the Guaranteed Minimum Income Benefit Plus II or the Enhanced Death Benefit, you must comply with certain investment allocation restrictions. Specifically, you must allocate according to either (A) or (B) (the "(B) Investment Allocation Restrictions") below. (A)You must allocate: . 100% of your purchase payments or Account Balance to the Fixed Account, BlackRock Money Market Investment Division (where available), American Funds Balanced Allocation Investment Division, American Funds Moderate Allocation Investment Division, the MetLife Conservative Allocation Investment Division, MetLife Conservative to Moderate Allocation Investment Division, MetLife Moderate Allocation Investment Division, and/or SSgA Growth and Income ETF Investment Division; OR (B)You must allocate: . AT LEAST 30% of purchase payments or Account Balance to Platform 1 investment choices and/or to the Fixed Account and the BlackRock Money Market Investment Division (where available); . UP TO 70% of purchase payments or Account Balance to Platform 2 investment choices; . UP TO 15% of purchase payments or Account Balance to Platform 3 investment choices; and . UP TO 15% of purchase payments or Account Balance to Platform 4 investment choices. The investment choices in each platform are as follows: PLATFORM 1 INVESTMENT CHOICES AMERICAN FUNDS BOND BARCLAYS CAPITAL AGGREGATE BOND INDEX BLACKROCK BOND INCOME PIMCO INFLATION PROTECTION BOND PIMCO TOTAL RETURN WESTERN ASSET MANAGEMENT U.S. GOVERNMENT PLATFORM 2 AMERICAN FUNDS GROWTH LORD ABBETT BOND DEBENTURE AMERICAN FUNDS GROWTH-INCOME MET/FRANKLIN INCOME ARTIO INTERNATIONAL STOCK MET/FRANKLIN MUTUAL SHARES BLACKROCK DIVERSIFIED MET/TEMPLETON GROWTH BLACKROCK LARGE CAP CORE METLIFE STOCK INDEX BLACKROCK LARGE CAP VALUE MFS(R) RESEARCH INTERNATIONAL BLACKROCK LEGACY LARGE CAP GROWTH MFS(R) TOTAL RETURN DAVIS VENTURE VALUE MFS(R) VALUE FI VALUE LEADERS MORGAN STANLEY EAFE(R) INDEX HARRIS OAKMARK INTERNATIONAL OPPENHEIMER CAPITAL APPRECIATION JANUS FORTY OPPENHEIMER GLOBAL EQUITY JENNISON GROWTH T. ROWE PRICE LARGE CAP GROWTH LEGG MASON PARTNERS AGGRESSIVE GROWTH WESTERN ASSET MANAGEMENT STRATEGIC BOND LEGG MASON VALUE EQUITY OPPORTUNITIES
33 PLATFORM 3 INVESTMENT CHOICES BLACKROCK AGGRESSIVE GROWTH FI MID CAP OPPORTUNITIES LAZARD MID CAP MET/ARTISAN MID CAP VALUE METLIFE MID CAP STOCK INDEX NEUBERGER BERMAN MID CAP VALUE T. ROWE PRICE MID CAP GROWTH PLATFORM 4 AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION BLACKROCK STRATEGIC VALUE CLARION GLOBAL REAL ESTATE LOOMIS SAYLES SMALL CAP CORE LOOMIS SAYLES SMALL CAP GROWTH MET/AIM SMALL CAP GROWTH RUSSELL 2000(R) INDEX RCM TECHNOLOGY T. ROWE PRICE SMALL CAP GROWTH
The Enhanced Dollar Cost Averaging Program is available in either (A) or (B). For Contracts for which applications and necessary information are received at your Administrative Office prior to May 4, 2009, the following investment divisions are also available under Option (A): American Funds Growth Allocation Investment Division, Met /Franklin Templeton Founding Strategy Investment Division, MetLife Moderate to Aggressive Allocation Investment Division and the SSgA Growth ETF Investment Division. In addition, the following investment allocation restrictions apply under Option (B): you must allocate at least 15% of purchase payments or Account Balance to Platform 1 investment choices and/or the Fixed Account and the BlackRock Money Market Investment Division (where available) and you may allocate up to 85% of purchase payments or Account Balance to Platform 2 investment choices (the percentages for Platforms 3 and 4 are the same as those listed above). ENHANCED DOLLAR COST AVERAGING PROGRAM. If you choose to allocate according to (B) above, and you choose to allocate a purchase payment to the Enhanced Dollar Cost Averaging Program, you must allocate the entire purchase payment to that program. Any transfer from an Enhanced Dollar Cost Averaging Program balance must be allocated in accordance with the limitations described above. In addition, if you made previous purchase payments before allocating a purchase payment to the Enhanced Dollar Cost Averaging Program, all transfers from the Enhanced Dollar Cost Averaging Program balance must be allocated to the same investment divisions as your most recent allocations for purchase payments. YOUR PURCHASE PAYMENTS AND TRANSFER REQUESTS MUST BE ALLOCATED IN ACCORDANCE WITH THE ABOVE LIMITATIONS. WE WILL REJECT ANY PURCHASE PAYMENTS OR TRANSFER REQUESTS THAT DO NOT COMPLY WITH THE ABOVE LIMITATIONS. We determine whether an investment choice is classified as Platform 1, Platform 2, Platform 3 or Platform 4. We may determine or change the classification of an investment choice in the event that an investment choice is added, deleted, substituted, merged or otherwise reorganized. In that case, any change in classification will only take effect as to your Contract in the event you make a new purchase payment or request a transfer among investment choices. We will provide you with prior written notice of any changes in classification of investment choices. REBALANCING. If you choose to allocate according to (B) above, we will rebalance your Account Balance on a quarterly basis based on your most recent allocation of purchase payments that complies with the allocation limitations described above. We will also rebalance your Account Balance when we receive a subsequent purchase payment that is accompanied 34 by new allocation instructions (in addition to the quarterly rebalancing). We will first rebalance your Account Balance on the date that is three months from the optional benefit issue date; provided however, if a quarterly rebalancing date occurs on the 29th, 30th or 31st of a month, we will instead rebalance on the first day of the following month. We will subsequently rebalance your Account Balance on each quarter thereafter on the same day. In addition, if a quarterly rebalancing date is not a business day, the reallocation will occur on the next business day. Withdrawals from the Contract will not result in rebalancing on the date of withdrawal. CHANGING ALLOCATION INSTRUCTIONS. You may change your purchase payment allocation instructions under (B) at anytime by providing notice to us at your Administrative Office, or any other method acceptable to us, provided that such instructions comply with the allocation limits described above. If you provide new allocation instructions for purchase payments and if these instructions conform to the allocation limits described above, then we will rebalance in accordance with the revised allocation instructions. Any future purchase payment, Enhanced Dollar Cost Averaging Program balance transfer and quarterly rebalancing allocations will be automatically updated in accordance with these new instructions. TRANSFERS. Please note that any transfer request must result in an Account Balance that meets the allocation limits described above. Any transfer request will not cause your allocation instructions to change unless you provide us with separate instructions at the time of transfer. ADDITIONAL INFORMATION. The investment divisions buy and sell shares of corresponding mutual fund portfolios. These Portfolios, which are part of either the Metropolitan Fund, the Met Investors Fund or the American Funds(R), invest in stocks, bonds and other investments. All dividends declared by the Portfolios are earned by the Separate Account and are reinvested. Therefore, no dividends are distributed to you under the Deferred Annuities. You pay no transaction expenses (I.E., front-end or back-end sales load charges) as a result of the Separate Account's purchase or sale of these mutual fund shares. The Portfolios of the Metropolitan Fund and the Met Investors Fund are available by purchasing annuities and life insurance policies from MetLife or certain of its affiliated insurance companies and are never sold directly to the public. The American Funds(R) Portfolios are made available by the American Funds(R) only through various insurance company annuities and life insurance policies. The Metropolitan Fund, the Met Investors Fund and the American Funds(R) are each "series" type funds registered with the Securities and Exchange Commission as an "open-end management investment company" under the 1940 Act. A "series" fund means that each Portfolio is one of several available through the fund. The Portfolios of the Metropolitan Fund and the Met Investors Fund pay MetLife Advisers, LLC ("MetLife Advisers"), a MetLife affiliate, a monthly fee for its services as their investment manager. The Portfolios of the American Funds(R) pay Capital Research and Management Company a monthly fee for its services as their investment manager. These fees, as well as the operating expenses paid by each Portfolio, are described in the applicable prospectus and SAI for the Metropolitan Fund, the Met Investors Fund and the American Funds(R). In addition, the Metropolitan Fund and the Met Investors Fund prospectuses each discuss other separate accounts of MetLife and its affiliated insurance companies and certain qualified retirement plans that invest in the Metropolitan Fund or the Met Investors Fund. The risks of these arrangements are discussed in each Fund's prospectus. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS. An investment manager (other than our affiliate MetLife Advisers) or sub-investment manager of a Portfolio, or its affiliates, may make payments to us and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment of expenses for certain administrative, marketing, and support services with respect to the Deferred Annuities and, in the Company's role as an intermediary, with respect to the Portfolios. The Company and its affiliates may profit from these payments. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. Contract Owners, through their indirect 35 investment in the Portfolios, bear the costs of these advisory fees (see the Portfolios' prospectuses for more information). The amount of the payments we receive is based on a percentage of assets of the Portfolios attributable to the Deferred Annuities and certain other variable insurance products that we and our affiliates issue. These percentages differ and some investment managers or sub-investment managers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment manager or sub-investment manager of a Portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the Contracts and may pay us and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the investment managers or sub-investment manager (or their affiliate) with increased access to persons involved in the distribution of the Contracts. We and/or certain of our affiliated insurance companies have a joint ownership interest in our affiliated investment manager MetLife Advisers which is formed as a "limited liability company". Our ownership interest in MetLife Advisers entitles us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from the Portfolios. We will benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to the adviser. (See the Table of Expenses for information on the investment management fees paid by the Portfolios and the Statement of Additional Information for information on the investment management fees paid to the investment managers and sub-investment managers.) Certain Portfolios have adopted a Distribution Plan under Rule 12b-1 of the 1940 Act. A Portfolio's 12b-1 Plan, if any, is described in more detail in the prospectuses for the Portfolios. See the Table of Expenses and "Who Sells the Deferred Annuities". Any payments we receive pursuant to those 12b-1 Plans are paid to us or our distributor. Payments under a Portfolio's 12b-1 Plan decrease the Portfolios' investment returns. We select the Portfolios offered through this Contract based on a number of criteria, including asset class coverage, the strength of the investment manager's or sub-investment manager's reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolios' investment manager or sub-investment manager is one of our affiliates or whether the Portfolio, its investment manager, its sub-investment manager(s), or an affiliate will make payments to us or our affiliates. In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to portfolios advised by our affiliates than those that are not, we may be more inclined to offer portfolios advised by our affiliates in the variable insurance products we issue. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new purchase payments and/or transfers of contract value if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Contract Owners. In some cases, we have included Portfolios based on recommendations made by selling firms. These selling firms may receive payments from the Portfolios they recommend and may benefit accordingly from the allocation of contract value to such Portfolios. WE DO NOT PROVIDE ANY INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR PORTFOLIO. YOU BEAR THE RISK OF ANY DECLINE IN THE CONTRACT VALUE OF YOUR DEFERRED ANNUITY RESULTING FROM THE PERFORMANCE OF THE PORTFOLIO YOU HAVE CHOSEN. We make certain payments to American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series(R). (See "Who Sells the Deferred Annuities".) 36 DEFERRED ANNUITIES This Prospectus describes the following Deferred Annuities under which you can accumulate money: . Non-Qualified . Traditional IRAs (Individual Retirement Annuities) . Roth IRAs (Roth Individual Retirement Annuities) . SEPs (Simplified Employee Pensions)* . SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Annuities)* * Only available in certain states and for new participants where the employer has previously purchased this Deferred Annuity. We will continue to accept additional purchase payments from participants who presently have this contract. THE DEFERRED ANNUITY AND YOUR RETIREMENT PLAN If you participate through a retirement plan or other group arrangement, the Deferred Annuity may provide that all or some of your rights or choices as described in this Prospectus are subject to the plan's terms. For example, limitations on your rights may apply to investment choices, purchase payments, withdrawals, transfers, the death benefit and pay-out options. We may rely on your employer's or plan administrator's statements to us as to the terms of the plan or your entitlement to any amounts. We are not a party to your employer's retirement plan. We will not be responsible for determining what your plan says. You should consult your Deferred Annuity contract and plan document to see how you may be affected. AUTOMATED INVESTMENT STRATEGIES AND ENHANCED DOLLAR COST AVERAGING PROGRAM There are four automated investment strategies and an Enhanced Dollar Cost Averaging Program available to you. We created these investment strategies to help you manage your money. You decide if one is appropriate for you, based upon your risk tolerance and savings goals. Also, the strategies were designed to help you take advantage of the tax-deferred status of a Non-Qualified annuity. The Enhanced Dollar Cost Averaging Program is not available to the Bonus and the C Class Deferred Annuities or to purchase payments which consist of money exchanged from other MetLife or its affiliates' annuities. The Index Selector/SM/ is not available if you purchase the Guaranteed Minimum Income Benefit Plus I, the Lifetime Withdrawal Guarantee Benefit I, the Guaranteed Minimum Accumulation Benefit or the (B) Investment Allocation Restrictions for the Enhanced Death Benefit, Guaranteed Minimum Income Benefit Plus II or the Lifetime Withdrawal Guarantee Benefit II. The Moderate to Aggressive and Aggressive Models are not available with the Enhanced Death Benefit, the Guaranteed Minimum Income Benefit Plus II or the Lifetime Withdrawal Benefit II. The Equity Generator/SM/ and the Allocator/SM/ are not available in the C Class Deferred Annuity purchased after April 30, 2003, the Deferred Annuity issued in New York State and Washington State with the Guaranteed Minimum Income Benefit I, Guaranteed Minimum Income Benefit II, the Guaranteed Withdrawal Benefit I, the Enhanced Guaranteed Withdrawal Benefit or the Lifetime Withdrawal Guarantee Benefit I or if you purchase the Guaranteed Minimum Income Benefit Plus I, the Guaranteed Minimum Accumulation Benefit, Guaranteed Minimum Income Benefit Plus II, Lifetime Withdrawal Guarantee Benefit II, or Enhanced Death Benefit. The Rebalancer(R) is not available with the Guaranteed Minimum Accumulation Benefit or if you have chosen the (B) Investment Allocation Restrictions for the Enhanced Death Benefit, the Guaranteed Minimum Income Benefit Plus II or the Lifetime Withdrawal Guarantee Benefit II. The automated investment strategies and the Enhanced Dollar Cost Averaging Program are available to you without any additional 37 charges. As with any investment program, none of them can guarantee a gain -- you can lose money. We may modify or terminate any of the strategies at any time. You may have only one strategy in effect at a time. You may have the Enhanced Dollar Cost Averaging Program and either the Index Selector/SM/ or Rebalancer(R) in effect at the same time, but you may not have the Enhanced Dollar Cost Averaging Program in effect at the same time as the Equity Generator/SM/ or the Allocator./SM/ ENHANCED DOLLAR COST AVERAGING PROGRAM: Each month, for a specified period, for example three, six or twelve months, a portion of a specified dollar amount of a purchase payment that you have agreed to allocate to the Enhanced Dollar Cost Averaging Program will be transferred from the program to any of the investment divisions you choose. While amounts are in the program, we may credit them with a higher rate than that declared for the Fixed Account in general. (Amounts in the Enhanced Dollar Cost Averaging Program are in our Fixed Account. For convenience, we may refer to it as "the program" or the "Enhanced Dollar Cost Averaging Program balance" to avoid confusion with the Fixed Account in general.) The transferred amount will be equal to the amount allocated to the program divided by the number of months in the program. The interest attributable to your Enhanced Dollar Cost Averaging Program is transferred separately in the month after the last scheduled payment. Transfers from the Enhanced Dollar Cost Averaging Program to the Separate Account begin on any day we receive your payment and the Exchange is open, other than the 29th, 30th or 31st of the month. If purchase payments are received on those days, transfers begin on the first day of the next month. Subsequent transfers will be made on the same day in succeeding months. If the scheduled transfer date occurs on a date the Exchange is not open, the transfer will be deducted from the Enhanced Dollar Cost Averaging Program on the selected day but will be applied to the investment divisions on the next day the Exchange is open. Enhanced Dollar Cost Averaging Program interest will not be credited on the transferred amount between the selected day and the next day the Exchange is open. Transfers are made on a first-in-first-out basis. If a subsequent purchase payment is allocated to the program, that subsequent payment will receive the enhanced program interest rate in effect on that date. The allocation of a subsequent purchase payment to the program increases the dollar amount transferred each month. We determine the increase in your monthly dollar a mount by dividing your new allocation by the number of months in the program you chose. Your existing monthly transfer amount is then increased by this additional amount to determine the total new dollar amount to be transferred each month. Then, the time period for the transfer of a specific purchase payment and interest attributable to that purchase payment will be accelerated. Your Enhanced Dollar Cost Averaging Program will terminate on the date of the last transfer. Unless you instruct us otherwise, if you cancel your participation in the Enhanced Dollar Cost Averaging Program, any remaining dollar amounts will be transferred to the available investment divisions in accordance with the percentages you had chosen for the Enhanced Dollar Cost Averaging Program. For Contracts issued prior to November 1, 2005, any remaining dollar amounts will be transferred to the Fixed Account. We may impose minimum purchase payments and other restrictions to utilize this program. 38 EXAMPLE:
--------------------------------------------------------------------------------------------------------------- Amount Transferred from EDCA Fixed Account to EDCA 6-Month Selected Program PPS Investment Date Amount Interest Rate Division(s) --------- --------- ------------- ---------------- A Enhanced Dollar Cost Averaging Program ("EDCA") 6-Month Program Initial Purchase Payment 5/1/2009 $12,000* 9.00% $2,000* --------------------------------------------------------------------------------------------------------------- B 6/1/2009 $2,000 --------------------------------------------------------------------------------------------------------------- C 7/1/2009 $2,000 --------------------------------------------------------------------------------------------------------------- D EDCA 6-Month Program Subsequent Purchase Payment 8/1/2009 $18,000** 8.00% $5,000** --------------------------------------------------------------------------------------------------------------- E 9/1/2009 $5,000 --------------------------------------------------------------------------------------------------------------- F 10/1/2009 $5,000 --------------------------------------------------------------------------------------------------------------- G 11/1/2009 $5,000 --------------------------------------------------------------------------------------------------------------- H 12/1/2009 $4,483.22 ---------------------------------------------------------------------------------------------------------------
* $2,000/month to be transferred from first purchase payment of $12,000 divided by 6 months. ** Additional $3,000/month to be transferred from subsequent purchase payment of $18,000 divided by 6 months. Amounts transferred are from the oldest purchase payment and its interest, and so forth, until the EDCA balance is exhausted. The example is hypothetical and is not based upon actual previous or current rates. The Equity Generator/SM/: An amount equal to the interest earned in the Fixed Account is transferred on the day of the month that is the same as the Contract Anniversary date (e.g., the 10th, 11th, etc.), to any one investment division, based on your selection. If the Contract Anniversary day is the 29th, 30th or 31st of the month, transfers are made on the first day of the next month. If the scheduled transfer date occurs on a date the Exchange is closed, the transfer will be made on the next date the Exchange is open. If your Fixed Account balance at the time of a scheduled transfer is zero, this strategy is automatically discontinued. The Rebalancer(R): You select a specific asset allocation for your entire Account Balance from among the investment divisions and the Fixed Account, if available. Every three months, on the day of the month that is the same as the Contract Anniversary date (e.g., the 10th, 11th, etc.), we transfer amounts among these options to bring the percentage of your Account Balance in each option back to your original allocation. If the Contract Anniversary day is the 29th, 30th or 31st of the month, transfers are made on the first day of the next month. If the scheduled transfer date occurs on a date the Exchange is closed, the transfer will be made on the next date the Exchange is open. You may utilize the Rebalancer with the Enhanced Dollar Cost Averaging Program, provided that 100% of your Account Balance (other than amounts in the Enhanced Dollar Cost Averaging Program) is allocated to this strategy. The Index Selector/SM/: You may select one of five asset allocation models which are designed to correlate to various risk tolerance levels. Based on the model you choose, your entire Account Balance is divided among the Barclays Capital Aggregate Bond Index, MetLife Stock Index, Morgan Stanley EAFE(R) Index, Russell 2000(R) Index and MetLife Mid Cap Stock Index investment divisions and the Fixed Account (or the BlackRock Money Market Investment Division in lieu of the Fixed Account for the C Class Deferred Annuities, a Deferred Annuity issued in New York State and Washington State with Guaranteed Minimum Income Benefit I, Guaranteed Minimum Income Benefit II, Guaranteed Withdrawal Benefit I, Enhanced Guaranteed Withdrawal Benefit or the Lifetime Withdrawal Guarantee Benefit I). Every three months, on the 39 day of the month that is the same as the Contract Anniversary date (e.g., the 10th, 11th, etc.), the percentage in each of these investment divisions and the Fixed Account (or the BlackRock Money Market Investment Division) is brought back to the selected model percentage by transferring amounts among the investment divisions and the Fixed Account. If the Contract Anniversary day is the 29th, 30th or 31st of the month, transfers are made on the first day of the next month. If the scheduled transfer date occurs on a date the Exchange is closed, the transfer will be made on the next date the Exchange is open. You may utilize the Index Selector with the Enhanced Dollar Cost Averaging Program, provided that 100% of your Account Balance (other than amounts in the Enhanced Dollar Cost Averaging Program) is allocated to this strategy. In the future, we may permit you to allocate less than 100% of your Account Balance to this strategy other than when utilized with the Enhanced Dollar Cost Averaging Program. We will continue to implement the Index Selector strategy using the percentage allocations of the model that were in effect when you elected the Index Selector strategy. You should consider whether it is appropriate for you to continue this strategy over time if your risk tolerance, time horizon or financial situation changes. This strategy may experience more volatility than our other strategies. We provide the elements to formulate the models. We may rely on a third party for its expertise in creating appropriate allocations. The asset allocation models used in the Index Selector strategy may change from time to time. If you are interested in an updated model, please contact your sales representative. The Allocator/SM/: Each month a dollar amount you choose is transferred from the Fixed Account to any of the investment divisions you choose. You select the day of the month (other than the 29th, 30th or 31st of the month) and the number of months over which the transfers will occur. A minimum periodic transfer of $50 is required. Once your Fixed Account balance is exhausted, this strategy is automatically discontinued. The Allocator, Equity Generator and the Enhanced Dollar Cost Averaging Program are dollar cost averaging strategies. Dollar cost averaging involves investing at regular intervals of time. Since this involves continuously investing regardless of fluctuating prices, you should consider whether you can continue the strategy through periods of fluctuating prices. 40 The chart below summarizes the availability of the Enhanced Dollar Cost Averaging Program and the automated investment strategies:
---------------------------------------------------------------------------------------------------------------------- Bonus Class B Class ----------- C Class L Class ----------- ------- ----------- a. EnhancedDollar Cost Averaging Program ("EDCA") Yes No No Yes ---------------------------------------------------------------------------------------------------------------------- (may not be used with purchase payments which consist of money from other MetLife or its affiliates' variable annuities) ---------------------------------------------------------------------------------------------------------------------- b. Choiceof One Automated Investment Strategy ---------------------------------------------------------------------------------------------------------------------- 1. EquityGenerator Yes Yes No Yes (but not (but not with EDCA) with EDCA) ---------------------------------------------------------------------------------------------------------------------- (but not available with the Guaranteed Minimum Income Benefit I, Guaranteed Minimum Income Benefit II, Guaranteed Withdrawal Benefit I, Enhanced Guaranteed Withdrawal Benefit or Lifetime Withdrawal Guarantee Benefit I in New York State and in Washington State, or Guaranteed Minimum Income Benefit Plus I, Guaranteed Minimum Income Benefit Plus II, Lifetime Withdrawal Benefit II, Enhanced Death Benefit, or the Guaranteed Minimum Accumulation Benefit) ---------------------------------------------------------------------------------------------------------------------- 2. Rebalancer Yes Yes Yes Yes ---------------------------------------------------------------------------------------------------------------------- (but not available with Guaranteed Minimum Accumulation Benefit or the (B) Investment Allocation Restrictions for the Enhanced Death Benefit, the Guaranteed Minimum Income Plus II or the Lifetime Withdrawal Benefit II) ---------------------------------------------------------------------------------------------------------------------- 3. IndexSelector Yes Yes Yes Yes ---------------------------------------------------------------------------------------------------------------------- (but not available with Guaranteed Minimum Income Benefit Plus I, the Lifetime Withdrawal Guarantee Benefit I, the Guaranteed Minimum Accumulation Benefit or the (B) Investment Allocation Restrictions for the Enhanced Death Benefit, the Guaranteed Minimum Income Benefit Plus II or the Lifetime Withdrawal Benefit II; Moderate to Aggressive and Aggressive Models not available with the Enhanced Death Benefit, the Guaranteed Minimum Income Benefit Plus II or the Lifetime Withdrawal Benefit II) ---------------------------------------------------------------------------------------------------------------------- 4. Allocator Yes Yes No Yes (but not (but not with EDCA) with EDCA) ---------------------------------------------------------------------------------------------------------------------- (but not available with the Guaranteed Minimum Income Benefit I, the Guaranteed Minimum Income Benefit II, Guaranteed Withdrawal Benefit I, Enhanced Guaranteed Withdrawal Benefit or Lifetime Withdrawal Guarantee Benefit I in New York State and in Washington State, or the Guaranteed Minimum Income Benefit Plus I, Guaranteed Minimum Income Benefit Plus II, Lifetime Withdrawal Benefit II, Enhanced Death Benefit, or the Guaranteed Minimum Accumulation Benefit) -----------------------------------------------------------------------------------------------------------------------
PURCHASE PAYMENTS The B Class minimum initial purchase payment is $5,000 for the Non-Qualified Deferred Annuity and $2,000 for the Traditional IRA, Roth IRA , SEP and SIMPLE IRA Deferred Annuities. The minimum initial purchase payment through debit authorization for the B Class Non-Qualified Deferred Annuity is $500; the minimum initial purchase payment through debit authorization for the B Class Traditional IRA, Roth IRA, SEP and SIMPLE IRA Deferred Annuities is $100. If you choose to purchase a Bonus Class Deferred Annuity, the minimum initial purchase payment is $10,000. The minimum initial purchase payment for the C Class and L Class is $25,000. We reserve the right to accept amounts transferred from other annuity contracts that meet the minimum initial purchase payment at the time of the transfer request, but, at the time of receipt in good order, do not meet such requirements because of loss in market value. If you are purchasing the Deferred Annuity as the beneficiary of a deceased person's IRA, purchase payments must consist of monies which are direct transfers (as defined under the tax law) from other IRA contracts in the name of the same decedent. You may continue to make purchase payments while you receive Systematic Withdrawal Program payments, as described later in this Prospectus, unless your purchase payments are made through debit authorization. The minimum subsequent 41 purchase payment for all Deferred Annuities is $500, except for debit authorizations, where the minimum subsequent purchase payment is $100, or any amount we are required to accept under applicable tax law. We will also accept at least once every 24 months any otherwise allowable contribution to your Traditional IRA or Roth IRA provided it is at least $50. SEP and SIMPLE IRA Deferred Annuities are issued on an individual basis, however, purchase payments are generally forwarded to us on a collective ("group") basis by the employer, either directly or automatically. If purchase payments are made on this type of "group" basis by the employer for SEP and SIMPLE IRA Deferred Annuities, the "group" needs only to satisfy the minimum subsequent purchase payment amounts based upon the number of persons in the "group". We will issue the B, C or L Class Deferred Annuity to you before your 86th birthday. We will issue the Bonus Class Deferred Annuity to you before your 81st birthday. We will accept your purchase payments up to your 91st birthday (89 in Massachusetts for the B and Bonus Class). Please see "Lifetime Withdrawal Guarantee Benefit I" for minimum issue age requirements for a Contract issued with this optional benefit in New York State. The chart below summarizes the minimum initial and subsequent purchase payments for each contract class:
--------------------------------------------------------------------------- Bonus Class B Class ----------- C Class L Class ---------------- -------- -------- InitialPurchase Payment $5,000 $10,000 $25,000 $25,000 ($2,000: Traditional IRA and Roth IRA, SEP and SIMPLE IRA) --------------------------------------------------------------------------- SubsequentPurchase Payment $500 $500 $500 $500 --------------------------------------------------------------------------- (or any amount we are required to accept under applicable tax law) --------------------------------------------------------------------------- DebitAuthorizations --------------------------------------------------------------------------- Initial $500 $10,000 $25,000 $25,000 ($100: Traditional IRA and Roth IRA, SEP and SIMPLE IRA) --------------------------------------------------------------------------- Subsequent $100 $100 $100 $100 --------------------------------------------------------------------------- (or any amount we are required to accept under applicable tax law) ---------------------------------------------------------------------------
ALLOCATION OF PURCHASE PAYMENTS You decide how your money is allocated among the Fixed Account, if available, the Enhanced Dollar Cost Averaging Program, if available, and the investment divisions. You may not choose more than 18 funding choices at the time your initial purchase payment is allocated among the funding choices. You can change your allocations for future purchase payments. We will make allocation changes when we receive your request for a change. Unless we have a record of your request to allocate future purchase payments to more than 18 funding choices, you may not choose more than 18 funding choices at the time your subsequent purchase payment is allocated among the funding choices. You may also specify an effective date for the change as long as it is within 30 days after we receive the request. See "Investment Choices --Investment Allocation Restrictions for Certain Benefits", "Enhanced Death Benefit", "Guaranteed Income Benefits" and "Guaranteed Withdrawal Benefits" for allocation restrictions if you elect certain optional benefits. 42 DEBIT AUTHORIZATIONS You may elect to have purchase payments made automatically. With this payment method, your bank deducts money from your bank account and makes the purchase payment for you. LIMITS ON PURCHASE PAYMENTS Your ability to make purchase payments may be limited by: . Federal tax laws or regulatory requirements; . Our right to limit the total of your purchase payments to $1,000,000; and . Our right to restrict purchase payments to the Fixed Account, if available, and the Enhanced Dollar Cost Averaging Program if (1) the interest rate we credit in the Fixed Account is equal to the guaranteed minimum rate as stated in your Deferred Annuity; or (2) your Fixed Account balance and Enhanced Dollar Cost Averaging Program balance is equal to or exceeds our maximum for a Fixed Account allocation (e.g., $1,000,000). THE VALUE OF YOUR INVESTMENT Accumulation Units are credited to you when you make purchase payments or transfers into an investment division. When you withdraw or transfer money from an investment division (as well as when we apply the Annual Contract Fee and the Guaranteed Minimum Income Benefit charge, if chosen as an optional benefit), accumulation units are liquidated. We determine the number of accumulation units by dividing the amount of your purchase payment, transfer or withdrawal by the Accumulation Unit Value on the date of the transaction. This is how we calculate the Accumulation Unit Value for each investment division: [_]First, we determine the change in investment performance (including any investment-related charge) for the underlying Portfolio from the previous trading day to the current trading day; [_]Next, we subtract the daily equivalent of the Separate Account charge (for the class of the Deferred Annuity you have chosen, including any optional benefits where the charge is assessed on the Separate Account) for each day since the last Accumulation Unit Value was calculated; and [_]Finally, we multiply the previous Accumulation Unit Value by this result. Examples Calculating the Number of Accumulation Units Assume you make a purchase payment of $500 into one investment division and that investment division's Accumulation Unit Value is currently $10.00. You would be credited with 50 accumulation units. $500 = 50 accumulation units $10 Calculating the Accumulation Unit Value Assume yesterday's Accumulation Unit Value was $10.00 and the number we calculate for today's investment experience (minus charges) for an underlying Portfolio is 1.05. Today's Accumulation Unit Value is $10.50. The value of your $500 investment is then $525 (50 x $10.50 = $525). $10.00 x 1.05 = $10.50 is the new Accumulation Unit Value However, assume that today's investment experience (minus charges) is .95 instead of 1.05. Today's Accumulation Unit Value is $9.50. The value of your $500 investment is then $475 (50 x $.950 = $475). $10.00 x .95 = $9.50 is the new Accumulation Unit Value 43 TRANSFER PRIVILEGE You may make tax-free transfers among investment divisions or between the investment divisions and the Fixed Account, if available. Each transfer must be at least $500 or, if less, your entire balance in an investment division (unless the transfer is in connection with an automated investment strategy or the Enhanced Dollar Cost Averaging Program). You may not make a transfer to more than 18 funding options at any one time if this request is made through our telephone voice response system or by Internet. A request to transfer to more than 18 funding options may be made by calling your Administrative Office. For us to process a transfer, you must tell us: . The percentage or dollar amount of the transfer; . The investment divisions (or Fixed Account) from which you want the money to be transferred; . The investment divisions (or Fixed Account) to which you want the money to be transferred; and . Whether you intend to start, stop, modify or continue unchanged an automated investment strategy by making the transfer. We reserve the right to restrict transfers to the Fixed Account (which is not available in the C Class Deferred Annuity purchased after April 20, 2003 and the Deferred Annuity with any Living Benefit rider issued in New York State and Washington State) if (1) the interest rate we credit in the Fixed Account is equal to the guaranteed minimum rate as stated in your Deferred Annuity; or (2) your Fixed Annuity balance is equal to or exceeds our maximum for Fixed Account allocations (I.E., $1,000,000.00). Please see "Investment Choices -- Investment Allocation Restrictions For Certain Benefits" for transfer restrictions in effect if you have the Enhanced Death Benefit, the Guaranteed Minimum Income Benefit Plus II or Lifetime Withdrawal Guarantee II. Your transfer request must be in good order and completed prior to the close of the Exchange on a business day, if you want the transaction to take place on that day. All other transfer requests in good order will be processed on our next business day. We may require you to use our original forms. "MARKET TIMING" POLICIES AND PROCEDURES The following is a discussion of our market timing policies and procedures. They apply to both the "pay-in" and "pay-out" phase of your Deferred Annuity. Frequent requests from contract owners to make transfers/reallocations may dilute the value of a Portfolio's shares if the frequent transfers/reallocations involve an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Portfolio and the reflection of that change in the Portfolio's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers/reallocations may also increase brokerage and administrative costs of the underlying Portfolios and may disrupt portfolio management strategy, requiring a Portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the Portfolios, which may in turn adversely affect contract owners and other persons who may have an interest in the Contracts (e.g., annuitants and beneficiaries). 44 We have policies and procedures that attempt to detect and deter frequent transfers/reallocations in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be present in the international, small-cap, and high-yield portfolios (I.E., the American Funds Global Small Capitalization, Artio International Stock, BlackRock Strategic Value, Clarion Global Real Estate, Harris Oakmark International, Loomis Sayles Small Cap Core, Loomis Sayles Small Cap Growth, Lord Abbett Bond Debenture, Met/AIM Small Cap Growth, Met/Templeton Growth, MFS(R) Research International, Morgan Stanley EAFE(R) Index, Oppenheimer Global Equity, Russell 2000(R) Index, T. Rowe Price Small Cap Growth and Western Asset Management Strategic Bond Opportunities Portfolios -- the "Monitored Portfolios") and we monitor transfer/reallocation activity in those Monitored Portfolios. In addition, as described below, we intend to treat all American Funds Insurance Series(R) Portfolios ("American Funds portfolios") as Monitored Portfolios. We employ various means to monitor transfer/reallocation activity, such as examining the frequency and size of transfers/reallocations into and out of the Monitored Portfolios within given periods of time. For example, we currently monitor transfer activity to determine if, for each category of international, small-cap, and high-yield portfolios, in a 12-month period there were, (1) six or more transfers/reallocations involving the given category; (2) cumulative gross transfers/reallocations involving the given category that exceed the current account balance; and (3) two or more "round-trips" involving any Monitored Portfolio in the given category. A round-trip generally is defined as a transfer/reallocation in followed by a transfer/reallocation out within the next seven calendar days or a transfer/reallocation out followed by a transfer/reallocation in within the next seven calendar days, in either case subject to certain other criteria. We do not believe that other Portfolios present a significant opportunity to engage in arbitrage trading and therefore do not monitor transfer/reallocation activity in those Portfolios. We may change the Monitored Portfolios at any time without notice in our sole discretion. In addition to monitoring transfer/reallocation activity in certain Portfolios, we rely on the underlying Portfolios to bring any potential disruptive transfer/reallocation activity they identify to our attention for investigation on a case-by-case basis. We will also investigate other harmful transfer/reallocation activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. AMERICAN FUNDS(R) MONITORING POLICY. As a condition to making their portfolios available in our products, American Funds(R) requires us to treat all American Funds portfolios as Monitored Portfolios under our current market timing and excessive trading policies and procedures. Further, American Funds(R) requires us to impose additional specified monitoring criteria for all American Funds portfolios available under the Contract, regardless of the potential for arbitrage trading. We are required to monitor transfer/reallocation activity in American Funds portfolios to determine if there were two or more transfers/reallocations in followed by transfers/reallocations out, in each case of a certain dollar amount or greater, in any 30-day period. A first violation of the American Funds(R) monitoring policy will result in a written notice of violation; each additional violation will result in the imposition of a six-month restriction, during which period we will require all reallocation/transfer requests to or from an American Funds portfolio to be submitted with an original signature. Further, as Monitored Portfolios, all American Funds portfolios also will be subject to our current market timing and excessive trading policies, procedures and restrictions (described below) and reallocation/transfer restrictions may be imposed upon a violation of either monitoring policy. Our policies and procedures may result in transfer/reallocation restrictions being applied to deter market timing. Currently, when we detect transfer/reallocation activity in the Monitored Portfolios that exceeds our current transfer/ reallocation limits, or other transfer/reallocation activity that we believe may be harmful to other contract owners or other persons who have an interest in the Contracts, we require all future requests to or from any Monitored Portfolios or other identified Portfolios under that Contract to be submitted with an original signature. Transfers made under a dollar cost averaging program, a rebalancing program or, if applicable, any asset allocation program described in this prospectus are not treated as transfers when we evaluate trading patterns for market timing. 45 The detection and deterrence of harmful transfer/reallocation activity involves judgments that are inherently subjective, such as the decision to monitor only those Portfolios we believe are susceptible to arbitrage trading or the determination of the transfer/reallocation limits. Our ability to detect and/or restrict such transfer/reallocation activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by contract owners to avoid such detection. Our ability to restrict such transfer/reallocation activity also may be limited by provisions of the Contract. Accordingly, there is no assurance that we will prevent all transfer/reallocation activity that may adversely affect contract owners and other persons with interests in the Contracts. We do not accommodate market timing in any Portfolios and there are no arrangements in place to permit any contract owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The Portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares, and we reserve the right to enforce these policies and procedures. For example, Portfolios may assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period. The prospectuses for the Portfolios describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual authority or the operational capacity to apply the frequent trading policies and procedures of the Portfolios, we have entered into a written agreement as required by SEC regulation with each Portfolio or its principal underwriter that obligates us to provide to the Portfolio promptly upon request certain information about the trading activity of individual contract owners, and to execute instructions from the Portfolio to restrict or prohibit further purchases or transfers/reallocations by specific contract owners who violate the frequent trading policies established by the Portfolio. In addition, contract owners and other persons with interests in the Contracts should be aware that the purchase and redemption orders received by the Portfolios generally are "omnibus" orders from intermediaries, such as retirement plans or separate accounts funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual contract owners of variable insurance contracts and/or individual retirement plan participants. The omnibus nature of these orders may limit the Portfolios in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Portfolios (and thus Contract owners) will not be harmed by transfer/reallocation activity relating to other insurance companies and/or retirement plans that may invest in the Portfolios. If a Portfolio believes that an omnibus order reflects one or more reallocation/transfer requests from Contract owners engaged in disruptive trading activity, the Portfolio may reject the entire omnibus order. In accordance with applicable law, we reserve the right to modify or terminate the transfer/reallocation privilege at any time. We also reserve the right to defer or restrict the transfer/reallocation privilege at any time that we are unable to purchase or redeem shares of any of the Portfolios, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single contract owner). You should read the Portfolio prospectuses for more details. ACCESS TO YOUR MONEY You may withdraw either all or part of your Account Balance from the Deferred Annuity. Other than those made through the Systematic Withdrawal Program, withdrawals must be at least $500 or the Account Balance, if less. If any withdrawal would decrease your Account Balance below $2,000, we will consider this a request for a full withdrawal. To process your request, we need the following information: . The percentage or dollar amount of the withdrawal; and . The investment divisions (or Fixed Account and Enhanced Dollar Cost Averaging Program) from which you want the money to be withdrawn. 46 Your withdrawal may be subject to withdrawal charges. Generally, if you request, we will make payments directly to other investments on a tax-free basis. You may only do so if all applicable tax and state regulatory requirements are met and we receive all information necessary for us to make the payment. We may require you to use our original forms. We may withhold payment of withdrawal if any portion of those proceeds would be derived from a Contract Owner's check that has not yet cleared (I.E., that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communication to verify that payment from the Contract has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Contract Owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. SYSTEMATIC WITHDRAWAL PROGRAM Under this program and subject to approval in your state, you may choose to automatically withdraw a certain amount each Contract Year. This amount is then paid throughout the Contract Year according to the time frame you select, e.g., monthly, quarterly, semi-annually or annually. For all contract classes, except for the C Class, payments may be made monthly or quarterly during the first Contract Year. Unless we agree otherwise, this program will not begin within the first 60 days after the date we have issued you the Contract. Once the Systematic Withdrawal Program is initiated, the payments will automatically renew each Contract Year. Income taxes, tax penalties and withdrawal charges may apply to your withdrawals. Program payment amounts are subject to our required minimums and administrative restrictions. Your Account Balance will be reduced by the amount of your Systematic Withdrawal Program payments and applicable withdrawal charges. Payments under this program are not the same as income payments you would receive from a Deferred Annuity pay-out option. If you do not provide us with your desired allocation, or there are insufficient amounts in the investment divisions, Enhanced Dollar Cost Averaging Program or the Fixed Account that you selected, the payments will be taken out pro-rata from the Fixed Account, Enhanced Dollar Cost Averaging Program and any investment divisions in which you then have money. Selecting a Payment Date: Your payment date is the date we make the withdrawal. You may choose any calendar day for the payment date, other than the 29th, 30th or 31st of the month. When you select or change a payment date, we must receive your request at least 10 days prior to the selected payment date. (If you would like to receive your Systematic Withdrawal Program payment on or about the first of the month, you should make your request by the 20th day of the month.) If we do not receive your request in time, we will make the payment the following month after the date you selected. If you do not select a payment date, we will automatically begin systematic withdrawals within 30 days after we receive your request (other than the 29th, 30th or 31st of the month). You may request to stop your Systematic Withdrawal Program at any time. We must receive any request in good order at least 30 days in advance. Although we need your written authorization to begin this program, you may cancel this program at any time by telephone or by writing to us (or over the Internet, if we agree) at our Administrative Office. Systematic Withdrawal Program payments may be subject to a withdrawal charge unless an exception to this charge applies. We will determine separately the withdrawal charge and any relevant factors (such as applicable exceptions) for each Systematic Withdrawal Program payment as of the date it is withdrawn from your Deferred Annuity. 47 CHARGES There are two types of charges you pay while you have money in an investment division: . Separate Account charge, and . Investment-related charge. We describe these charges below. The amount of the charge may not necessarily correspond to costs associated with providing the services or benefits indicated by the designation of the charge or associated with the Deferred Annuity. For example, the withdrawal charge may not fully cover all of the sales and distribution expenses actually incurred by us, and proceeds from other charges, including the Separate Account charge, may be used in part to cover such expenses. We can profit from certain Deferred Annuity charges. The Separate Account charges you pay will not reduce the number of accumulation units credited to you. Instead, we deduct the charges as part of the calculation of the Accumulation Unit Value. We guarantee that the Separate Account insurance-related charge will not increase while you have the Deferred Annuity. SEPARATE ACCOUNT CHARGE Each class of the Deferred Annuity has a different Separate Account charge. You will pay the Separate Account charge annually based on the average daily value of the amount you have in the Separate Account. This charge includes insurance-related charges that pay us for the risk that you may live longer than we estimated. Then, we could be obligated to pay you more in payments from a pay-out option than we anticipated. Also, we bear the risk that the guaranteed death benefit we would pay should you die during your pay-in phase is larger than your Account Balance. This charge also includes the risk that our expenses in administering the Deferred Annuities may be greater than we estimated. The Separate Account charge also pays us for our distribution costs to both our licensed salespersons and other broker-dealers. The chart below summarizes the Separate Account charge for each class of the Deferred Annuity with each death benefit that has an asset-based Separate Account charge prior to entering the pay-out phase of the Contract. SEPARATE ACCOUNT CHARGES*
B CLASS BONUS CLASS** C CLASS L CLASS - ------- ------------- ------- ------- Basic Death Benefit....................... 1.25% 1.70% 1.65% 1.50% Optional Annual Step-Up Death Benefit..... 1.45% 1.90% 1.85% 1.70% Optional Greater of Annual Step-Up or 5%.. 1.60% 2.05% 2.00% 1.85% Annual Increase Death Benefit Optional Earnings Preservation Benefit***. .25% .25% .25% .25%
* We currently charge an additional Separate Account charge of 0.25% of average daily net assets in the American Funds Bond, American Funds Growth-Income, American Funds Growth and American Funds Global Small Capitalization investment divisions. We reserve the right to impose an additional Separate Account charge on investment divisions that we add to the Contract in the future. The additional amount will not exceed the annual rate of 0.25% of average daily net assets in any such investment divisions. ** The Separate Account charge for the Bonus Class will be reduced by 0.45% after you have held the Contract for seven years. *** This charge is in addition to the Separate Account charge with the death benefit chosen. 48 INVESTMENT-RELATED CHARGE This charge has two components. The first pays the investment managers for managing money in the Portfolios. The second consists of Portfolio operating expenses and 12b-1 Plan fees. The percentage you pay for the investment-related charge depends on which investment divisions you select. Each class of shares available to the Deferred Annuities has a 12b-1 Plan fee, which pays for distribution expenses. The class of shares available in the Metropolitan Fund and the Met Investors Fund is Class B, which has a 0.25% 12b-1 Plan fee (except for the American Funds Balanced Allocation, American Funds Growth Allocation and American Funds Moderate Allocation Portfolios of the Met Investors Fund which are Class C and have a 0.55% 12b-1 Plan fee). Class 2 shares of the available American Funds(R) have a 0.25% 12b-1 Plan fee. Amounts for each investment division for the previous year are listed in the Table of Expenses. ANNUAL CONTRACT FEE There is a $30 Annual Contract Fee. This fee is waived if your Account Balance is at least $50,000. It is deducted on a pro-rata basis from the investment divisions on the Contract Anniversary. No portion of the fee is deducted from the Fixed Account. Regardless of the amount of your Account Balance, the entire fee will be deducted at the time of a total withdrawal of your Account Balance. This charge pays us for our miscellaneous administrative costs. These costs which we incur include financial, actuarial, accounting and legal expenses. We reserve the right to deduct this fee during the pay-out phase. OPTIONAL ENHANCED DEATH BENEFIT The Enhanced Death Benefit is available for an additional charge of 0.75% for issue ages 69 or younger and 0.95% for issue ages 70-75 of the Death Benefit Base (as defined later in this Prospectus), deducted at the end of each Contract Year prior to taking into account any Optional Step-Up by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. If you elect the Optional Step-Up of the Enhanced Death Benefit, we may increase the charge to a rate that does not exceed the lower of (a) the maximum Optional Step-Up charge (1.50%) or (b) the current rate we charge for the same rider available for new Contract purchases at the time of the Optional Step-Up. For Contracts for which an application and any necessary information are received in good order at your Administrative Office from February 24, 2009 through May 1, 2009, the charge for the Enhanced Death Benefit is 0.65% of the Death Benefit Base for issue ages 0-69 and 0.90% of the Death Benefit Base for issue ages 70-75. For Contracts issued prior to February 24, 2009, the charge is 0.65% of the Death Benefit Base for issue ages 0-69 and 0.85% of the Death Benefit Base for issue ages 70-75. For Contracts for which an application and any necessary information were received in good order prior to May 4, 2009, if you elected both the Guaranteed Minimum Income Benefit Plus II and the Enhanced Death Benefit, the percentage charge for the Enhanced Death Benefit is reduced by 0.05%. OPTIONAL GUARANTEED MINIMUM INCOME BENEFITS All Guaranteed Minimum Income Benefits are available for an additional charge based on the guaranteed minimum income base (as defined later in this Prospectus), deducted at the end of each Contract Year prior to taking into account any applicable Step-Up by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. The Guaranteed Minimum Income Benefit Plus II charge is 1.00% in all states except New York, where the charge is 0.95%, and the Guaranteed Minimum Income Benefit Plus I charge is 0.80%. The Guaranteed Minimum Income Benefit Plus I is no longer available for sale. If you elect the Optional Reset of the Guaranteed Minimum Income Benefit Plus II, we may increase the charge to a rate that does not exceed the lower of (a) the maximum Optional Step-Up charge (1.50%) or (b) the current rate we charge for the same rider available for new Contract purchases at the time of the Optional Step-Up. 49 If your income base is increased due to an Optional Step-Up under the Guaranteed Minimum Income Benefit Plus I rider, we may increase the Guaranteed Minimum Income Benefit Plus I charge to the charge applicable to Contract purchases of the same optional benefit at the time of the increase, but to no more than a maximum of 1.50%. The Guaranteed Minimum Income Benefit I and Guaranteed Minimum Income Benefit II charge is 0.50% of the guaranteed minimum income base and is deducted at the end of the Contract Year in the same manner as described above. The Guaranteed Minimum Income Benefit I and Guaranteed Minimum Income Benefit II are no longer available for sale, effective for Contracts for which applications and necessary information are received in good order at your Administrative Office on or after May 4, 2009. For Contracts issued prior to February 24, 2009, the charge for the Guaranteed Minimum Income Benefit Plus II is 0.80% in all states except New York, where the charge is 0.75%. For Contracts issued prior to February 26, 2007, the charge for the Guaranteed Minimum Income Benefit Plus I is 0.75% of the guaranteed minimum income base. For the Guaranteed Minimum Income Benefit I and Guaranteed Minimum Income Benefit II available in Contracts issued from May 1, 2003 and prior to May 1, 2005, the charge is reduced to 0.45% of the guaranteed minimum income base if you choose either the Annual Step-Up Death Benefit or the Greater of Annual Step-Up or 5% Annual Increase Death Benefit. For Contracts for which a completed application and any other required paper work were received in good order at our Administrative Office by February 14, 2003, and for which an initial purchase payment was received within 60 days, the charge for the Guaranteed Minimum Income Benefit I is 0.15% lower (0.35% rather than 0.50%). OPTIONAL GUARANTEED WITHDRAWAL BENEFITS The Lifetime Withdrawal Guarantee Benefit II and the Lifetime Withdrawal Guarantee Benefit I are available for an additional charge of a percentage of the Total Guaranteed Withdrawal Amount (as defined later in this Prospectus). The Lifetime Withdrawal Guarantee Benefit I is no longer available for sale. The percentage is deducted at the end of each Contract Year after applying any Compounding Income Amount and prior to taking into account any Automatic Annual Step-Up occurring on the Contract Anniversary, by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. The Lifetime Withdrawal Guarantee Benefit II is available for an additional charge of 1.25% for the Single Life Version and 1.50% for the Joint Life Version. If you elect Automatic Annual Step-Ups, we may increase the Lifetime Withdrawal Guarantee II charge to a rate that does not exceed the lower of: (a) the maximum Automatic Annual Step-Up charge (1.60% for the Single Life Version and 1.80% for the Joint Life Version) or (b) the current rate that we charge for the same rider available for new Contract purchases at the time of the Automatic Annual Step-Up. For Contracts issued prior to February 24, 2009, the charge for the Lifetime Withdrawal Guarantee Benefit II is 0.65% for the Single Life Version and 0.85% for the Joint Life Version. If you elect Automatic Annual Step-Ups for these Contracts, we may increase the Lifetime Withdrawal Guarantee II charge to a rate we shall determine, but no more than a maximum of 1.25% for the Single Life Version or 1.50% for Joint Life Version. The Lifetime Withdrawal Guarantee Benefit I charge is of 0.50% for the Single Life version and 0.70% for the Joint Life version of the Total Guaranteed Withdrawal Amount, deducted at the end of each Contract Year in the same manner. If an Automatic Annual Step-Up occurs under the Lifetime Withdrawal Guarantee Benefit I, we may increase the Lifetime Withdrawal Guarantee Benefit I charge to a rate we shall determine (provided that this rate will not exceed the rate currently applicable to new contract purchases of the same optional benefit at the time of the step-up), but no more than a maximum of 0.95% for the Single Life version or 1.40% for the Joint Life version. If a Lifetime Withdrawal Guarantee Benefit is in effect, the charge will continue even if your Remaining Guaranteed Withdrawal Amount equals zero. The Guaranteed Withdrawal Benefit are available for an additional charge of a percentage of the Guaranteed Withdrawal Amount (as defined later in this Prospectus), deducted at the end of each Contract Year prior to taking into account any Optional Reset by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost 50 Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. The charge for the Enhanced Guaranteed Withdrawal Benefit is 0.55% and the charge for the Guaranteed Withdrawal Benefit I is 0.50%. The Guaranteed Withdrawal Benefit I is no longer available for sale. If you elect an Optional Reset, we may increase the Enhanced Guaranteed Withdrawal Benefit and the Guaranteed Withdrawal Benefit I charge to the charge applicable to current Contract purchases of the same rider at the time of the Step-Up, but no more than a maximum of 1.00% for the Enhanced Guaranteed Withdrawal Benefit and 0.95% for the Guaranteed Withdrawal Benefit I. (For Contracts issued prior to July 16, 2007, the charge for the Enhanced Guaranteed Withdrawal Benefit prior to any Optional Reset is 0.50% of the Guaranteed Withdrawal Amount and the maximum charge upon an Optional Reset is 0.95%.) If the Enhanced Guaranteed Withdrawal Benefit or the Guaranteed Withdrawal Benefit I is in effect, the charge will not continue if your Benefit Base equals zero. OPTIONAL GUARANTEED MINIMUM ACCUMULATION BENEFIT The Guaranteed Minimum Accumulation Benefit charge is of 0.75% of the Guaranteed Accumulation Amount (as defined in this Prospectus), deducted at the end of each Contract Year by withdrawing amounts on a pro-rata basis from your Enhanced Dollar Cost Averaging Program and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. The Guaranteed Minimum Accumulation Benefit is no longer available for sale, effective for Contracts for which applications and necessary information are received at your Administrative Office on or after May 4, 2009. PREMIUM AND OTHER TAXES Some jurisdictions tax what are called "annuity considerations." These may apply to purchase payments, Account Balances and death benefits. In most jurisdictions, we currently do not deduct any money from purchase payments, Account Balances or death benefits to pay these taxes. Generally, our practice is to deduct money to pay premium taxes (also known as "annuity" taxes) only when you exercise a pay-out option. In certain jurisdictions, we may deduct money to pay premium taxes on lump sum withdrawals or when you exercise a pay-out option. We may deduct an amount to pay premium taxes some time in the future since the laws and the interpretation of the laws relating to annuities are subject to change. Premium taxes, if applicable, currently range from 0.5% to 3.5% depending on the Deferred Annuity you purchase and your home state or jurisdiction. The chart in Appendix A shows the jurisdictions where premium taxes are charged and the amount of these taxes. We also reserve the right to deduct from purchase payments, Account Balances, withdrawals or income payments, any taxes (including, but not limited to, premium taxes) paid by us to any government entity relating to the Contracts. Examples of these taxes include, but are not limited to, generation skipping transfer tax or a similar excise tax under Federal or state tax law which is imposed on payments we make to certain persons and income tax withholdings on withdrawals and income payments to the extent required by law. We will, at our sole discretion, determine when taxes relate to the Contracts. We may, at our sole discretion, pay taxes when due and deduct that amount from the Account Balance at a later date. Payment at an earlier date does not waive any right we may have to deduct amounts at a later date. WITHDRAWAL CHARGES A withdrawal charge may apply if you withdraw purchase payments that were credited to your Deferred Annuity. There are no withdrawal charges for the C Class Deferred Annuity or in certain situations or upon the occurrence of certain events (see "When No Withdrawal Charge Applies"). Unless the withdrawal qualifies under one of these situations, events or circumstances, withdrawal charges will apply where there is a request to divide the Account Balance due to a divorce. 51 To determine the withdrawal charge for the Deferred Annuities, we treat your Fixed Account, Enhanced Dollar Cost Averaging Program and Separate Account as if they were a single account and ignore both your actual allocations and the Fixed Account, Enhanced Dollar Cost Averaging Program or investment division from which the withdrawal is actually coming. To do this, we first assume that your withdrawal is from earnings, then from amounts (other than earnings) that can be withdrawn without a withdrawal charge and then from purchase payments, each on a "first-in-first-out" (oldest money first) basis. Once we have determined the amount of the withdrawal charge, we will then withdraw it from the Fixed Account, Enhanced Dollar Cost Averaging Program and the investment divisions in the same proportion as the withdrawal is being made. For a full withdrawal, we multiply the amount to which the withdrawal charge applies by the percentage shown, keep the result as a withdrawal charge and pay you the rest. For partial withdrawals, we multiply the amount to which the withdrawal charge applies by the percentage shown, keep the result as a withdrawal charge and pay you the rest. We will treat your request as a request for a full withdrawal if your Account Balance is not sufficient to pay both the requested withdrawal and the withdrawal charge, or if the withdrawal leaves an Account Balance that is less than the minimum required. The withdrawal charge on purchase payments withdrawn for each class is as follows:
IF WITHDRAWN DURING CONTRACT YEAR B CLASS BONUS CLASS C CLASS L CLASS --------------------------------- ------- ----------- ------- ------- 1...................... 7% 9% None 7% 2...................... 6% 8% 6% 3...................... 6% 8% 5% 4...................... 5% 7% 0% 5...................... 4% 6% 0% 6...................... 3% 4% 0% 7...................... 2% 3% 0% Thereafter............. 0% 0% 0%
The withdrawal charge reimburses us for our costs in selling the Deferred Annuities. We may use our profits (if any) from the Separate Account charge to pay for our costs to sell the Deferred Annuities which exceed the amount of withdrawal charges we collect. WHEN NO WITHDRAWAL CHARGE APPLIES In some cases, we will not charge you the withdrawal charge when you make a withdrawal. We may, however, ask you to prove that you meet any of the conditions listed below. You do not pay a withdrawal charge: . If you have a C Class Deferred Annuity. . On transfers you make within your Deferred Annuity among the investment divisions and transfers to or from the Fixed Account. . On withdrawals of purchase payments you made over seven Contract Years ago for the B Class, seven Contract Years ago for the Bonus Class and three Contract Years ago for the L Class. . If you choose payments over one or more lifetimes except, in certain cases, under the Guaranteed Minimum Income Benefit. . If you die during the pay-in phase. Your beneficiary will receive the full death benefit without deduction. 52 . If your Contract permits and your spouse is substituted as the contract owner of the Deferred Annuity and continues the Contract, that portion of the Account Balance that is equal to the "step-up" portion of the death benefit. . If you withdraw only your earnings from the investment divisions. . During the first Contract Year, if you are in the Systematic Withdrawal Program, and you withdraw up to 10% of your total purchase payments at the rate of 1/12 of such 10% each month on a non-cumulative basis, if withdrawals are on a monthly basis, or 1/4 of such 10% each quarter on a non-cumulative basis, if withdrawals are on a quarterly basis. . After the first Contract Year, if you withdraw up to 10% of your total purchase payments, per Contract Year. This 10% total withdrawal may be taken in an unlimited number of partial withdrawals during that Contract Year. . If the withdrawal is to avoid required Federal income tax penalties (not including Section 72(t) or (q) under the Internal Revenue Code) or to satisfy Federal income tax rules concerning minimum distribution requirements that apply to your Deferred Annuity. For purposes of this exception, we assume that the Deferred Annuity is the only contract or funding vehicle from which distributions are required to be taken and we will ignore all other account balances. This exception does not apply if you have a Non-Qualified or Roth IRA Deferred Annuity. . If you accept an amendment converting your Traditional IRA Deferred Annuity to a Roth IRA Deferred Annuity. . If you properly "recharacterize" as permitted under Federal tax law your Traditional IRA Deferred Annuity or a Roth IRA Deferred Annuity using the same Deferred Annuity. . This Contract feature is only available if you are less than 80 years old on the Contract issue date. After the first Contract Year, if approved in your state, and your Contract provides for this, to withdrawals to which a withdrawal charge would otherwise apply, if you have been either the contract owner continuously since the issue of the Contract or the spouse who continues the Contract: . Has been a resident of certain nursing home facilities or a hospital for a minimum of 90 consecutive days or for a minimum total of 90 days where there is no more than a 6 month break in that residency and the residencies are for related causes, where you have exercised this right no later than 90 days of exiting the nursing home facility or hospital; or . Is diagnosed with a terminal illness and not expected to live more than 12 months. . This Contract feature is only available if you are less than 65 years old on the date you became disabled and if the disability commences subsequent to the first Contract Anniversary. After the first Contract Year, if approved in your state, and your Contract provides for this, if you are disabled as defined in the Federal Social Security Act (or as defined by the Internal Revenue Code for Oregon contracts) and if you have been the contract owner continuously since the issue of the Contract or the spouse who continues the Contract. . If you have transferred money which is not subject to a withdrawal charge (because you have satisfied contractual provisions for a withdrawal without the imposition of a contract withdrawal charge) from certain eligible MetLife contracts or certain eligible contracts of MetLife affiliates into the Deferred Annuity, and the withdrawal is of these transferred amounts and we agree. Any purchase payments made after the transfer are subject to the usual withdrawal charge schedule. . Subject to availability in your state, if the early withdrawal charge that would apply if not for this provision (1) would constitute less than 0.50% of your Account Balance and (2) you transfer your total Account Balance to certain eligible contracts issued by MetLife or one of its affiliated companies and we agree. FREE LOOK You may cancel your Deferred Annuity within a certain time period. This is known as a "free look." Not all contracts issued are subject to free look provisions under state law. We must receive your request to cancel in writing by the appropriate day in your state, which varies from state to state. The time period may also vary depending on your age and 53 whether you purchased your Deferred Annuity from us directly, through the mail or with money from another annuity or life insurance policy. Depending on state law, we may refund all of your purchase payments or your Account Balance as of the date your refund request is received at your Administrative Office in good order. Any Bonus does not become yours until after the "free look" period; we retrieve it if you exercise the "free look". Your exercise of any "free look" is the only circumstance under which the 3% credit will be retrieved (commonly called "recapture"). If your state requires us to refund your Account Balance, the refunded amount will include any investment performance attributable to the 3% credit. If there are any losses from investment performance attributable to the 3% credit, we will bear that loss. DEATH BENEFIT--GENERALLY One of the insurance guarantees we provide you under your Deferred Annuity is that your beneficiaries will be protected during the "pay-in" phase against market downturns. You name your beneficiary(ies). If you intend to purchase the Deferred Annuity for use with a Traditional IRA, Roth IRA, SEP or SIMPLE IRA, please refer to the discussion concerning IRAs in the Tax Section of this Prospectus. The basic death benefit is described below. Additional optional death benefits are described in the "Optional Death Benefits" section. Check your contract and riders for the specific provisions applicable to you. One or more optional death benefits may not be available in your state (check with your registered representative regarding availability). The death benefit is determined as of the end of the business day on which we receive both due proof of death and on election for the payment method. Where there are multiple beneficiaries, the death benefit will only be determined as of the time the first beneficiary submits the necessary documentation in good order. If the death benefit payable is an amount that exceeds the Account Balance on the day it is determined, we will apply to the Contract an amount equal to the difference between the death benefit payable and the Account Balance, in accordance with the current allocation of the Account Balance. This death benefit amount remains in the investment divisions until each of the other beneficiaries submits the necessary documentation in good order to claim his/her death benefit. Any death benefit amounts held in the investment divisions on behalf of the remaining beneficiaries are subject to investment risk. There is no additional death benefit guarantee. Your beneficiary has the option to apply the death benefit less any applicable premium taxes to a pay-out option offered under your Deferred Annuity. Your beneficiary may, however, decide to take a lump sum payment. If you purchased the Contract as a deceased person's beneficiary under an IRA, your beneficiary may be limited by tax law as to the method of distribution of any death benefit. Please see the Tax Section of this Prospectus. If you are a non-natural person, then the life of the annuitant is the basis for determining the death benefit. If there are joint contract owners, the oldest of the two will be used as a basis for determining the death benefit. If you are a natural person and you change ownership of the Deferred Annuity to someone other than your spouse, the death benefit is calculated as described in the following pages except all values used to calculate the death benefit, which may include, Highest Anniversary Value as of each fifth Contract Anniversary, Highest Anniversary Value as of each Contract Anniversary and Annual Increase Amount (depending on whether you choose an optional benefit), are reset on the date of the change in contract owner. SPOUSAL CONTINUATION. If the beneficiary is your spouse, the beneficiary may be substituted as the contract owner of the Deferred Annuity and continue the Contract under the terms and conditions of the Contract that applied prior to the owner's death, with certain exceptions described in the Contract. In that case, the Account Balance will be adjusted to 54 equal the death benefit. (Any additional amounts added to the Account Balance will be allocated in the same proportions to each balance in an investment division, Enhanced Dollar Cost Averaging Program and the Fixed Account as each bears to the total Account Balance.) There would be a second death benefit payable upon the death of the spouse. The spouse is permitted to make additional purchase payments. The spouse would not be permitted to choose any optional benefit available under the Contract, unless the deceased spouse had previously purchased the benefit at issue of the Contract. Any amounts in the Deferred Annuity would be subject to applicable withdrawal charges except for that portion of the Account Balance that is equal to the "step-up" portion of the death benefit. If the spouse continues the Deferred Annuity, the second death benefit is calculated as described in the following pages except all values used to calculate the death benefit, which may include, Highest Anniversary Value as of each fifth Contract Anniversary, Highest Anniversary Value as of each Contract Anniversary and Annual Increase Amount (depending on whether you choose an optional benefit), are reset on the date the spouse continues the Deferred Annuity. Spousal continuation will not satisfy required minimum distribution rules for tax qualified contracts other than IRAs. "STRETCH IRA" CONTRACTS. We permit your beneficiary to hold the Traditional IRA Deferred Annuity in your name after your death for his/her benefit. We issue a new Deferred Annuity to your beneficiary to facilitate the distribution of payments. The new Contract is issued in the same contract class as your Contract, except, if you had a Bonus Class Deferred Annuity, the Contract is issued as a B Class Deferred Annuity. In that case the Account Balance would be reset to equal the death benefit on the date the beneficiary submits the necessary documentation in good order. (Any additional amounts added to the Account Balance would be allocated in the same proportions to each balance in an investment division and the Fixed Account as each bears to the total Account Balance.) There would be a second death benefit payable upon the death of the beneficiary. Your beneficiary is permitted to make additional purchase payments consisting generally of monies which are direct transfers (as defined under the tax law) from other IRA contracts in the name of the same decedent. Any additional purchase payments would be subject to applicable withdrawal charges. The beneficiary may be permitted to choose some optional benefits available under the Contract, but certain contract provisions or programs may not be available. If your beneficiary holds the Traditional IRA Deferred Annuity in your name after your death for his/her benefit, the death benefit would be calculated as described in the following pages except all values used to calculate the death benefit, which may include, Highest Anniversary Value as of each fifth Contract Anniversary, Highest Anniversary Value as of each Contract Anniversary and Annual Increase Amount (depending on whether you choose an optional benefit), would be reset on the date the beneficiary then holds the Deferred Annuity. At the death of the beneficiary, the beneficiary's beneficiary may be limited by tax law as to the method of distribution of any death benefit. "STRETCH NON-QUALIFIED" CONTRACTS. If available in your state, we permit your beneficiary to hold the Non-Qualified Deferred Annuity in your name after your death for his/her benefit. We issue a new Deferred Annuity to your beneficiary to facilitate the distribution of payments. The designated beneficiary's interest in the contract must be distributed in accordance with minimum required distribution rules for deferred annuities under the income tax regulations over a period no longer than the designated beneficiary's single life expectancy with the distributions beginning within 12 months after the date of your death. The new Contract is issued in the same contract class as your Contract, except, if you had a Bonus Class Deferred Annuity, the Contract is issued as a B Class Deferred Annuity. In that case the Account Balance would be reset to equal the death benefit on the date the beneficiary submits the necessary documentation in good order. (Any additional amounts added to the Account Balance would be allocated in the same proportions to each balance in an investment division and the Fixed Account as each bears to the total Account Balance.) There would be a second death benefit payable upon the death of the beneficiary. Your beneficiary is permitted to make additional purchase payments consisting generally of monies which are direct transfers (as defined under the tax law) from other non-qualified contracts in the name of the same decedent. Any additional purchase payments would be subject to applicable withdrawal charges. The beneficiary may be permitted to choose some of the optional benefits available under the Contract, but no optional living benefit options are available and certain contract provisions or programs may not be available. 55 If your beneficiary holds the Non-Qualified Deferred Annuity in your name after your death for his/her benefit, the death benefit would be calculated as described in the following pages except all values used to calculate the death benefit, which may include, Highest Anniversary Value as of each fifth Contract Anniversary, Highest Anniversary Value as of each Contract Anniversary and Annual Increase Amount (depending on whether you choose an optional benefit), would be reset on the date the beneficiary then holds the Deferred Annuity. At the death of the beneficiary, the beneficiary's beneficiary may be limited by tax law and our administrative procedures as to the available methods and period of distribution of any death benefit. TOTAL CONTROL ACCOUNT. The beneficiary may elect to have the Contract's death proceeds paid through an account called the Total Control Account at the time for payment. The Total Control Account is an interest-bearing account through which the beneficiary has complete access to the proceeds, with unlimited check writing privileges. We credit interest to the account at a rate that will not be less than a minimum guaranteed rate. You may also elect to have any Contract surrender proceeds paid into a Total Control Account established for you. Assets backing the Total Control Accounts are maintained in our general account and are subject to the claims of our creditors. We will bear the investment experience of such assets; however, regardless of the investment experience of such assets, the interest credited to the Total Control Account will never fall below the applicable guaranteed minimum rate. Because we bear the investment experience of the assets backing the Total Control Accounts, we may receive a profit from these assets. The Total Control Account is not insured by the FDIC or any other governmental agency. BASIC DEATH BENEFIT The Basic Death Benefit is designed to provide protection against adverse investment experience. In general, it guarantees that the death benefit will not be less than the greater of (1) your Account Balance; (2) total purchase payment less partial withdrawals; or (3) your "Highest Anniversary Value" (as described below) as of each fifth Contract Anniversary. If you die during the pay-in phase and you have not chosen one of the optional death benefits, the death benefit the beneficiary receives will be equal to the greatest of: 1. Your Account Balance; or 2. Total purchase payments reduced proportionately by the percentage reduction in Account Balance attributable to each partial withdrawal; or 3. "Highest Anniversary Value" as of each fifth Contract Anniversary, determined as follows: . At issue, the Highest Anniversary Value is your initial purchase payment; . Increase the Highest Anniversary Value by each subsequent purchase payment; . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal; . On each fifth Contract Anniversary before your 81st birthday, compare the (1) then-Highest Anniversary Value to the (2) current Account Balance and (3) total purchase payments reduced proportionately by the percentage reduction in Account Balance attributable to each partial withdrawal and set the Highest Anniversary Value equal to the greatest of the three. . After the Contract Anniversary immediately preceding your 81st birthday, adjust the Highest Anniversary Value only to: . Increase the Highest Anniversary Value by each subsequent purchase payment or . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal. 56 For purposes of determining the Highest Anniversary Value as of the applicable Contract Anniversary, purchase payments increase the Highest Anniversary Value on a dollar for dollar basis. Partial withdrawals however, reduce the Highest Anniversary Value proportionately, that is the percentage reduction is equal to the dollar amount of the withdrawal (plus applicable withdrawal charges) divided by the Account Balance before the withdrawal. EXAMPLE:
------------------------------------------------------------------------------------------------------ Date Amount ------------------------------ ------------------------ A Initial Purchase Payment 10/1/2009 $100,000 ------------------------------------------------------------------------------------------------------ B Account Balance 10/1/2010 $104,000 (First Contract Anniversary) ------------------------------------------------------------------------------------------------------ C Death Benefit As of 10/1/2010 $104,000 (= greater of A and B) ------------------------------------------------------------------------------------------------------ D Account Balance 10/1/2011 $90,000 (Second Contract Anniversary) ------------------------------------------------------------------------------------------------------ E Death Benefit 10/1/2011 $100,000 (= greater of A and D) ------------------------------------------------------------------------------------------------------ F Withdrawal 10/2/2011 $9,000 ------------------------------------------------------------------------------------------------------ G Percentage Reduction in Account Balance 10/2/2011 10% (= F/D) ------------------------------------------------------------------------------------------------------ H Account Balance after Withdrawal 10/2/2011 $81,000 (= D-F) ------------------------------------------------------------------------------------------------------ I Purchase Payments reduced for Withdrawal As of 10/2/2011 $90,000 (= A-(A X G)) ------------------------------------------------------------------------------------------------------ J Death Benefit 10/2/2011 $90,000 (= greater of H and I) ------------------------------------------------------------------------------------------------------ K Account Balance 10/1/2014 $125,000 ------------------------------------------------------------------------------------------------------ L Death Benefit (Highest Anniversary Value) As of 10/1/2014 $125,000 (Fifth Anniversary) (= greater of I and K) ------------------------------------------------------------------------------------------------------ M Account Balance 10/2/2014 $110,000 ------------------------------------------------------------------------------------------------------ N Death Benefit As of 10/2/2014 $125,000 (= greatest of I, L, M) ------------------------------------------------------------------------------------------------------
Notes to Example Purchaser is age 60 at issue. Any withdrawal charge withdrawn from the Account Balance is included when determining the percentage of Account Balance withdrawn. Account Balances on 10/1/11 and 10/2/11 are assumed to be equal prior to the withdrawal. OPTIONAL DEATH BENEFITS ANNUAL STEP-UP DEATH BENEFIT The Annual Step-Up Death Benefit is designed to provide protection against adverse investment experience. In general, it guarantees that the death benefit will not be less than the greater of (1) your Account Balance; or (2) your "Highest Anniversary Value" (as described below) as of each Contract Anniversary. 57 You may purchase at application a death benefit that provides that the death benefit amount is equal to the greater of: 1. The Account Balance; or 2. "Highest Anniversary Value" as of each Contract Anniversary, determined as follows: . At issue, the Highest Anniversary Value is your initial purchase payment; . Increase the Highest Anniversary Value by each subsequent purchase payment; . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal; . On each Contract Anniversary before your 81st birthday, compare the (1) then-Highest Anniversary Value to the (2) current Account Balance and set the Highest Anniversary Value equal to the greater of the two. . After the Contract Anniversary immediately preceding your 81st birthday, adjust the Highest Anniversary Value only to: . Increase the Highest Anniversary Value by each subsequent purchase payment or . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal. For purposes of determining the Highest Anniversary Value as of the applicable Contract Anniversary, purchase payments increase the Highest Anniversary Value on a dollar for dollar basis. Partial withdrawals, however, reduce the Highest Anniversary Value proportionately, that is, the percentage reduction is equal to the dollar amount of the withdrawal (plus applicable withdrawal charges) divided by the Account Balance immediately before the withdrawl. You may not purchase this benefit if you are 80 years of age or older. The Annual Step-Up Death Benefit is available in Deferred Annuities purchased after April 30, 2003, for a charge, in addition to the Basic Death Benefit charge, of 0.20% annually of the average daily value of the amount you have in the Separate Account. EXAMPLE:
------------------------------------------------------------------------------------------------------------- Date Amount ------------------------------ ----------------------- A Initial Purchase Payment 10/1/2009 $100,000 ------------------------------------------------------------------------------------------------------------- B Account Balance 10/1/2010 $104,000 (First Contract Anniversary) ------------------------------------------------------------------------------------------------------------- C Death Benefit (Highest Anniversary Value) As of 10/1/2010 $104,000 (= greater of A and B) ------------------------------------------------------------------------------------------------------------- D Account Balance 10/1/2011 $90,000 (Second Contract Anniversary) ------------------------------------------------------------------------------------------------------------- E Death Benefit (Highest Contract Year Anniversary) 10/1/2011 $104,000 (= greater of B and D) ------------------------------------------------------------------------------------------------------------- F Withdrawal 10/2/2011 $9,000 ------------------------------------------------------------------------------------------------------------- G Percentage Reduction in Account Balance 10/2/2011 10% (= F/D) ------------------------------------------------------------------------------------------------------------- H Account Balance after Withdrawal 10/2/2011 $81,000 (= D-F) ------------------------------------------------------------------------------------------------------------- I Highest Anniversary Value reduced for Withdrawal As of 10/2/2011 $93,600 (= E-(E X G)) ------------------------------------------------------------------------------------------------------------- J Death Benefit 10/2/2011 $93,600 (= greater of H and I) -------------------------------------------------------------------------------------------------------------
58 Notes to Example Purchaser is age 60 at issue. Any withdrawal charge withdrawn from the Account Balance is included when determining the percentage of Account Balance withdrawn. The Account Balances on 10/1/11 and 10/2/11 are assumed to be equal prior to the withdrawal. GREATER OF ANNUAL STEP-UP OR 5% ANNUAL INCREASE DEATH BENEFIT In states where approved, only one of either the Greater of Annual Step-Up or 5% Annual Increase Death Benefit or Enhanced Death Benefit will be available. The Greater of Annual Step-Up or 5% Annual Increase Amount is designed to protect against adverse investment experience. In general, it provides that the death will be not less than the greater of (1) your Account Balance or (2) the "Annual Increase Amount" which is the total of your purchase payments (adjusted for withdrawals) accumulated at 5% per year or (3) your "Highest Anniversary Value", as described below. You may purchase at application a death benefit that provides that the death benefit amount is equal to the greatest of: 1. Your Account Balance; or 2. The Annual Increase Amount which is equal to the sum total of each purchase payment accumulated at a rate of 5% a year, through the Contract Anniversary date immediately preceding your 81st birthday, reduced by the sum total of each withdrawal adjustment accumulated at the rate of 5% a year from the date of the withdrawal (the withdrawal adjustment is the Annual Increase Amount immediately prior to the withdrawal multiplied by the percentage reduction in Account Balance attributable to the withdrawal); or 3. "Highest Anniversary Value" as of each Contract Anniversary, determined as follows: . At issue, the Highest Anniversary Value is your initial purchase payment; . Increase the Highest Anniversary Value by each subsequent purchase payment; . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal; . On each Contract Anniversary before your 81st birthday, compare the (1) then-Highest Anniversary Value to the (2) current Account Balance and set the Highest Anniversary Value equal to the greater of the two. . After the Contract Anniversary immediately preceding your 81st birthday, adjust the Highest Anniversary Value only to: . Increase the Highest Anniversary Value by each subsequent purchase payment or . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal. For purposes of determining the Highest Anniversary Value as of the applicable Contract Anniversary, purchase payments increase the Highest Anniversary Value on a dollar for dollar basis. Partial withdrawals, however, reduce the Highest Anniversary Value proportionately, that is the percentage reduction is equal to the dollar amount of the withdrawal (plus applicable withdrawal charges), divided by the Account Balance immediately before the withdrawal. You may not purchase this benefit if you are 80 years of age or older. 59 The Greater of Annual Step-Up or 5% Annual Increase Death Benefit is available in Deferred Annuities purchased after April 30, 2003, for a charge, in addition to the Basic Death Benefit charge, of 0.35% annually of the average daily value of the amount you have in the Separate Account. EXAMPLE:
---------------------------------------------------------------------------------------------------------------- Date Amount ----------------------------- ---------------------------- A Initial Purchase Payment 10/1/2009 $100,000 ---------------------------------------------------------------------------------------------------------------- B Account Balance 10/1/2010 $104,000 (First Contract Anniversary) ---------------------------------------------------------------------------------------------------------------- C1 Account Balance (Highest Anniversary Value) 10/1/2010 $104,000 (= greater of A and B) ---------------------------------------------------------------------------------------------------------------- C2 5% Annual Increase Amount 10/1/2010 $105,000 (= A X 1.05) ---------------------------------------------------------------------------------------------------------------- C3 Death Benefit As of 10/1/2010 $105,000 (= greater of C1 and C2) ---------------------------------------------------------------------------------------------------------------- D Account Balance 10/1/2011 $90,000 (Second Contract Anniversary) ---------------------------------------------------------------------------------------------------------------- E1 Highest Anniversary Value 10/1/2011 $104,000 (= greater of C1 and D) ---------------------------------------------------------------------------------------------------------------- E2 5% Annual Increase Amount As of 10/1/2011 $110,250 (= A X 1.05 X 1.05) ---------------------------------------------------------------------------------------------------------------- E3 Death Benefit 10/1/2011 $110,250 (= greater of E1 and E2) ---------------------------------------------------------------------------------------------------------------- F Withdrawal 10/2/2011 $9,000 ---------------------------------------------------------------------------------------------------------------- G Percentage Reduction in Account Balance 10/2/2011 10% (= F/D) ---------------------------------------------------------------------------------------------------------------- H Account Balance after Withdrawal 10/2/2011 $81,000 (= D-F) ---------------------------------------------------------------------------------------------------------------- I1 Highest Anniversary Value reduced for Withdrawal As of 10/2/2011 $93,600 (= E1-(E1 X G)) ---------------------------------------------------------------------------------------------------------------- I2 5% Annual Increase Amount reduced for Withdrawal As of 10/2/2011 $99,238 (= E2-(E2 X G). Note: E2 includes additional day of interest at 5%) ---------------------------------------------------------------------------------------------------------------- I3 Death Benefit 10/2/2011 $99,238 (= greatest of H, I1 and I2) ----------------------------------------------------------------------------------------------------------------
Notes to Example Purchaser is age 60 at issue. Any withdrawal charge withdrawn from the Account Balance is included when determining the percentage of Account Balance withdrawn. The Account Balances on 10/1/11 and 10/02/11 are assumed to be equal prior to the withdrawal. All amounts are rounded to the nearest dollar. 60 THE ENHANCED DEATH BENEFIT In states where approved, the version of the Enhanced Death Benefit described below is available for Contracts issued based on applications and necessary information that we receive in good order at your Administrative Office on and after May 4, 2009. In order for us to issue you the previous version of this rider (that has a lower charge and/or different features), we must receive your application and necessary information in your Administrative Office, in good order, before the close of the New York Stock Exchange on May 1, 2009. If you have not elected any optional living benefit (other than the Guaranteed Minimum Income Benefit Plus II, which is also known as the "Predictor Plus II" in our sales literature and advertising ), you may select the Enhanced Death Benefit. The Enhanced Death Benefit is not available with a B Plus Class or C Class Contract in Washington or New York State. The Enhanced Death Benefit is designed to provide protection against adverse investment experience. In general, it guarantees that the death benefit will not be less than the greater of (1) your Account Balance or (2) the "death benefit base" which is the greater of (a) the amount of your initial investment (adjusted for withdrawals), accumulated at 5% per year or (b) your "Highest Anniversary Value," as described below. The Enhanced Death Benefit is equal to the greater of: 1. The Account Balance; or 2. The "Death Benefit Base", which is the greater of the following: a. The Annual Increase Amount which is the sum total of each purchase payment accumulated at a rate of 5% a year, through the Contract Anniversary date immediately prior to your 91st birthday and 0% thereafter, reduced by the sum total of each withdrawal adjustment accumulated at the rate or 5% a year from the date of the withdrawal. . For this purpose, all purchase payments credited within 120 days of the date we issued the Deferred Annuity will be treated as if they were received on the date we issued the Deferred Annuity. . The withdrawal adjustment is the Annual Increase Amount immediately prior to the withdrawal multiplied by the percentage reduction in Account Balance attributable to the withdrawal if total withdrawals in a Contract Year are more than 5% of the Annual Increase Amount at the previous Contract Anniversary. . If total withdrawals in a Contract Year are less than or equal to 5% of the Annual Increase Amount at the previous Contract Anniversary, the withdrawal adjustment is the dollar amount of total withdrawals treated as a single withdrawal at the end of the Contract Year. . The Annual Increase Amount does not change after the Contract Anniversary on or following your 91st birthday, except that it is increased for each subsequent purchase payment and reduced proportionately by each withdrawal as described here where the annual increase rate is set at 0%; or b. "Highest Anniversary Value" as of each Contract Anniversary, determined as follows: . At issue, the Highest Anniversary Value is your initial purchase payment; . Increase the Highest Anniversary Value by each subsequent purchase payment; . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent withdrawal; . On each Contract Anniversary before your 81st birthday, compare the (1) then-Highest Anniversary Value to the (2) current Account Balance and set the Highest Anniversary Value equal to the greater of the two. . After the Contract Anniversary immediately preceding your 81st birthday, adjust the Highest Anniversary Value only to: . Increase the Highest Anniversary Value by each subsequent purchase payment or . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent withdrawal. 61 For purposes of determining the Highest Anniversary Value as of the applicable Contract Anniversary, purchase payments increase the Highest Anniversary Value on a dollar for dollar basis. Partial withdrawals, however, reduce the Highest Anniversary Value proportionately, that is, the percentage reduction is equal to the dollar amount of the withdrawal (plus applicable withdrawal charges) divided by the Account Balance immediately before the withdrawal. You may not purchase the Enhanced Death Benefit if you are 76 years of age or older. For Contracts for which applications and necessary information were received at your Administrative Office on or before May 1, 2009, we offered a version of the Enhanced Death Benefit that is no longer available. The prior version is the same as the current version except that the annual increase rate for the Annual Increase Amount and for withdrawal adjustments is 6%, with respect to section 2(a) above, different investment allocation restrictions apply and different charges apply. OPTIONAL STEP-UP On each Contract Anniversary on or after the first anniversary following the effective date of this optional benefit, you may elect an Optional Step-Up provided that (1) the Account Balance exceeds the Annual Increase Amount immediately before the step-up; and (2) the Contract owner (or oldest joint owner or annuitant if the Contract is owned by a non-natural person) is not older than age 80 on the date of the Optional Step-Up. We must receive your request to exercise the Optional Step-Up in writing or any other method acceptable to us. We must receive your request prior to the Contract Anniversary for an Optional Step-Up to occur on that Contract Anniversary. The Optional Step-Up will: a) reset the Annual Increase Amount to the Account Balance on the Contract Anniversary following the receipt of an Optional Step-Up election; and b) reset the Enhanced Death Benefit charge to a rate we determine, as long as that rate does not exceed the maximum Optional Step-Up charge of 1.50%, provided that this rate will not exceed the rate currently applicable to the same rider available for new Contract purchases at the time of the step-up. On the date of the step-up, the Account Balance on that day will be treated as a single purchase payment received on the date of the step-up for purposes of determining the Annual Increase Amount after the step-up. All purchase payments and withdrawal adjustments previously used to calculate the annual increase amount will be set equal to zero on the date of the step-up. When you elect the Optional Step-Up, provided the above requirements are met, you may elect either: 1) a one time Optional Step-Up at any Contract Anniversary; or 2) Optional Step-Ups to occur under the Automatic Annual Step-Up (on any Contract Anniversary while this election is in effect, the Annual Increase Amount will reset to the Account Balance automatically). If you have also elected the Guaranteed Minimum Income Benefit Plus II and you elect Optional Step-Ups to occur under the Automatic Annual Step-Up, it will remain in effect through the seventh Contract Anniversary following the date you make the election. You may make a new election if you want Automatic Annual Step-Ups to continue, after the seventh Contract Anniversary. In the event that the charge applicable to Contract purchases at the time of the step-up is higher than your current charge, you will be notified in writing a minimum of 30 days in advance of the applicable Contract Anniversary and be informed that you may choose to decline the Automatic Annual Step-Up. If you choose to decline the Automatic Annual Step-Up, you must notify us in writing at our Administrative Office no less than seven calendar days prior to the applicable Contract Anniversary. 62 Once you notify us of your decision to decline the Automatic Annual Step-Up, you will no longer be eligible for future Automatic Annual Step-Ups until you notify us in writing at our Administrative Office that you wish to reinstate the step-ups. This reinstatement will take effect at the next Contract Anniversary after we receive your request for reinstatement. You may discontinue Automatic Annual Step-Ups at any time by notifying us in writing (or by any other method acceptable to us) at least 30 days prior to the Contract Anniversary following the date you make this election. If you discontinue Automatic Step-Ups, the Enhanced Death Benefit and charge will continue, and you may choose to elect a one time Optional Step-Up or reinstate Automatic Annual Step-Ups as described above. INVESTMENT ALLOCATION RESTRICTIONS. If you elect the Enhanced Death Benefit, there are certain investment allocation restrictions. Please see "Investment Allocation Restrictions For Certain Benefits." TERMINATION OF THE ENHANCED DEATH BENEFIT. The Enhanced Death Benefit will terminate upon the earliest of: (a)The date you make a total withdrawal of your Account Balance (pro-rata portion of the annual charge will apply); (b)When your Account Balance is not sufficient to pay the charge for this benefit; (c)The date you annuitize your Contract (a pro-rata portion of the annual charge will apply); (d)A change of the Contract owner or joint contract owner (or annuitant if the owner is a non-natural person), subject to our administrative procedures; (e)The date you assign your Contract, subject to our administrative procedures; (f)The date the death benefit amount is determined (excluding the determination of the death benefit amount under the spousal continuation option); or (g)The Deferred Annuity is terminated. CHARGES. The Enhanced Death Benefit is available for an additional charge of 0.75% of the Death Benefit Base for issue ages 69 and younger and 0.95% for issue ages 70-75, deducted at the end of each Contract Year, prior to taking into account any Optional Step-Up. As described above, as a result of an Optional Step-Up, the charge may be increased up to a maximum of 1.50%. The charge is made by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. (The Fixed Account is not available in the C Class Deferred Annuity purchased after April 30, 2003. The Enhanced Dollar Cost Averaging Program is not available in the C and Bonus Class Deferred Annuity.) EXAMPLE:
----------------------------------------------------------------------------------------------------------- Date Amount ----------------------------- ------------------------- A Initial Purchase Payment 10/1/2009 $100,000 ----------------------------------------------------------------------------------------------------------- B Account Balance 10/1/2010 $90,000 (First Contract Anniversary) ----------------------------------------------------------------------------------------------------------- C1 Account Balance (Highest Anniversary Value) As of 10/1/2010 $100,000 (= greater of A and B) ----------------------------------------------------------------------------------------------------------- C2 5% Annual Increase Amount As of 10/1/2010 $105,000 (= A X 1.05) ----------------------------------------------------------------------------------------------------------- C3 Death Benefit 10/1/2010 $105,000 (= greater of C1 and C2) ----------------------------------------------------------------------------------------------------------- D Withdrawal (Dollar-For-Dollar within 5% limit) 10/2/2010 $5,000 -----------------------------------------------------------------------------------------------------------
63
------------------------------------------------------------------------------------------------------------- Date Amount ------------------------------ ----------------------------- E Percentage Reduction in Account Balance 10/2/2010 5.56% (= D/B) ------------------------------------------------------------------------------------------------------------- F Account Balance after Withdrawal 10/2/2010 $85,000 (= B-D) ------------------------------------------------------------------------------------------------------------- G1 Highest Anniversary Value reduced As of 10/2/2010 $94,444 for Withdrawal (=C1-(C1 X E)) ------------------------------------------------------------------------------------------------------------- G2 5% Annual Increase Amount reduced for As of 10/2/2010 $100,014 Withdrawal (=C2-D) Note: C2 includes additional day of interest at 5% ------------------------------------------------------------------------------------------------------------- G3 Death Benefit 10/2/2010 $100,014 (= greater of G1 and G2) ------------------------------------------------------------------------------------------------------------- H Account Balance 10/1/2011 $110,000 (Second Contract Anniversary) ------------------------------------------------------------------------------------------------------------- I1 Account Balance (Highest Anniversary Value) 10/1/2011 $110,000 (= greater of G1 and H) ------------------------------------------------------------------------------------------------------------- I2 5% Annual Increase Amount 10/1/2011 $105,250 (= C2 X 1.05-D) ------------------------------------------------------------------------------------------------------------- I3 Death Benefit 10/1/2011 $110,000 (= greater of I1 and I2) ------------------------------------------------------------------------------------------------------------- J Withdrawal (Proportional above 5% limit) 10/2/2011 $11,000 ------------------------------------------------------------------------------------------------------------- K Percentage Reduction in Account Balance 10/2/2011 10% (= J/H) ------------------------------------------------------------------------------------------------------------- L Account Balance after Withdrawal 10/2/2011 $99,000 (= H-J) ------------------------------------------------------------------------------------------------------------- M1 Highest Anniversary Value reduced for As of 10/2/2011 $99,000 Withdrawal (= I1-(I1 X K)) ------------------------------------------------------------------------------------------------------------- M2 5% Annual Increase Amount reduced for As of 10/2/2011 $94,738 Withdrawal (= I2-(I2 X K)) Note: I2 includes additional day of interest at 5% ------------------------------------------------------------------------------------------------------------- M3 Death Benefit 10/2/2011 $99,000 (= greater of M1 and M2) -------------------------------------------------------------------------------------------------------------
Notes to Example Purchaser is age 60 at issue. Any withdrawal charge withdrawn from the Account Balance is included when determining the percentage of Account Balance withdrawn. The Account Balances on 10/1/10, 10/2/10, 10/1/11 and 10/2/11 are assumed to be equal prior to the withdrawal. All amounts are rounded to the nearest dollar. EARNINGS PRESERVATION BENEFIT You may purchase this benefit at application. The Earnings Preservation Benefit is intended to provide additional amounts at death to pay expenses that may be due upon your death. We do not guarantee that the amounts provided by the Earnings Preservation Benefit will be sufficient to cover any such expenses that your heirs may have to pay. 64 This benefit provides that an additional death benefit is payable equal to: The difference between 1. Your death benefit (either the basic death benefit or an optional death benefit for which you pay an additional charge); and 2. Total purchase payments not withdrawn. In this case, partial withdrawals are first applied against earnings and then purchase payments, or On or after the Contract Anniversary immediately preceding your 81st birthday, the additional death benefit that is payable is equal to: 1. The difference between a. Your death benefit amount on the Contract Anniversary immediately preceding your 81st birthday, plus subsequent purchase payments made after each Contract Anniversary, reduced proportionately by the percentage reduction in Account Balance attributable to each subsequent partial withdrawal; and b. Total purchase payments not withdrawn. In this case, partial withdrawals are first applied against earnings and then purchase payments. 2. In each case, multiplied by the following percentage, depending upon your age when you purchased the Contract:
Purchase Age Percentage Ages 69 or younger 40% Ages 70-79 25% Ages 80 and above 0%
You may not purchase this benefit if you are 80 years of age or older. For purposes of the above calculation, purchase payments increase the Account Balance on a dollar for dollar basis. Partial withdrawals, however, reduce Account Balance proportionately, that is, the percentage reduction is equal to the dollar amount of the withdrawal plus applicable withdrawal charges divided by the Account Balance immediately before the withdrawal. If the spouse continues the Contract, the spouse can choose one of the following two options: . Continue the Earnings Preservation Benefit. Then the additional death benefit is calculated in the same manner as above except the calculation takes into account the surviving spouse's age for purposes of determining what is the Contract Anniversary prior to the 81st birthday. In this case, the benefit is paid as of the death of the surviving spouse, rather than the first spouse. . Stop the Earnings Preservation Benefit. Then, the Account Balance is reset to equal the death benefit plus the additional death benefit on the date the spouse continues the Contract. The Earnings Preservation Benefit will cease and the Separate Account charge will be reduced by 0.25%. If we do not receive notification from the surviving spouse either to elect to continue or to discontinue the Earnings Preservation Benefit within 90 days of notice to us of the death of a spouse, we will treat the absence of a notification as if the Earnings Preservation Benefit had been discontinued and the amount of the benefits will be added to the Account Balance. If you are a natural person and you change ownership of the Deferred Annuity to someone other than your spouse, this benefit is calculated in the same manner except (1) purchase payments (for the purpose of calculating the Earnings 65 Preservation Benefit) are set equal to the Account Balance on the date of the change in contract owners (gain is effectively reset to zero) and (2) the percentage from the table above is based on the age of the new contract owner as of the date of the change in contract owner. If you are a non-natural person, the life of the annuitant is the basis for determining the additional death benefit. If there are joint contract owners, the oldest of the two will be used as a basis for determining the additional death benefit. The Earnings Preservation Benefit is available for an additional charge of 0.25% annually of the average daily value of the amount you have in the Separate Account. EXAMPLE:
--------------------------------------------------------------------- Date Amount ---------- -------------------- A Purchase Payments Not Withdrawn 10/1/2009 $100,000 --------------------------------------------------------------------- B Death Benefit 10/1/2010 $105,000 --------------------------------------------------------------------- C Additional Death Benefit 10/1/2010 $2,000 (= 40% X (B - A)) --------------------------------------------------------------------- D Account Balance 10/1/2011 $90,000 --------------------------------------------------------------------- E Withdrawal 10/2/2011 $9,000 --------------------------------------------------------------------- F Account Balance after Withdrawal 10/2/2011 $81,000 (= D - E) --------------------------------------------------------------------- G Purchase Payments Not Withdrawn 10/2/2011 $91,000 --------------------------------------------------------------------- (= A - E, because there is no gain at time of withdrawal) --------------------------------------------------------------------- H Death Benefit 10/2/2011 $99,238 --------------------------------------------------------------------- I Additional Death Benefit $3,296 (= 40% X (H - G)) ---------------------------------------------------------------------
Notes to Example Purchaser is age 60 at issue. Any withdrawal charge from the Account Balance is included when determining the percentage of Account Balance withdrawn. All amounts are rounded to the nearest dollar. LIVING BENEFITS OVERVIEW OF LIVING BENEFITS We offer a suite of optional living benefits that, for certain additional charges, can offer some protection against market risk (the risk that your investments may decline in value or underperform your expectations). Only one of these benefits may be elected, and the benefit must be elected at Contract issue. These optional benefits are described briefly below. Please see the more detailed description that follows for important information on the costs, restrictions and availability of each optional benefit. 66 We currently offer two types of Living Benefits (the Guaranteed Asset Accumulation Benefit is no longer available for sale):
Guaranteed Income Guaranteed Withdrawal Benefits Benefits -------------------------------------------- ------------------------------------------- .Guaranteed Minimum Income Benefit .Lifetime Withdrawal Guarantee (LWG I and Plus (GMIB Plus I and GMIB Plus II or, the LWG II) Predictor Plus, or Predictor Plus I and .Enhanced Guaranteed Withdrawal Benefit Predictor Plus II) (Enhanced GWB) .Guaranteed Minimum Income Benefit .Guaranteed Withdrawal Benefit (GWB I) (GMIB I and GMIB II or the Predictor) Our guaranteed income benefits are These optional benefits are designed to designed to allow you to invest your guarantee that at least the entire amount Account Balance in the market while of purchase payments you make will be at the same time assuring a specified returned to you through a series of guaranteed, level of minimum fixed withdrawals (without annuitizing), income payments if you elect to regardless of investment performance, as annuitize. The fixed annuity payment long as withdrawals in any Contract Year amount is guaranteed regardless of do not exceed the maximum amount investment performance or the actual allowed. With the LWG, you get the same Account Balance at the time you elect benefits, but in addition, if you make pay-outs. Prior to exercising this your first withdrawal on or after the date benefit and annuitizing your Contract, you reach age 59 1/2, you are you may make withdrawals up to a guaranteed income, without annuitizing, maximum level specified in the rider for your life (and, for states other than and still maintain the benefit amount. New York, the life of your spouse, if the [GMIB I and GMIB II were formerly Joint Life version was elected and the known as "Versions I and Versions II spouse elects to continue the Contract is of the Guaranteed Minimum Income at least age 59 1/2 at spousal Benefit"; and GMIB Plus I was continuation), even after the entire formerly known as "Version III of the amount of purchase payments has been Guaranteed Minimum Income returned. [GWBI was formerly known as Benefit".] "Version I of the Guaranteed Withdrawal Benefit"; Enhanced GWB was formerly known as "Version II of the Guaranteed Withdrawal Benefit"; and LWG I was formerly known as "Version III - the Lifetime Withdrawal Guarantee Benefit".]
Guaranteed Income Guaranteed Asset Accumulation Benefits Benefit -------------------------------------------- ----------------------------------------- .Guaranteed Minimum Income Benefit .Guaranteed Minimum Accumulation Benefit Plus (GMIB Plus I and GMIB Plus II or, the (GMAB) Predictor Plus, or Predictor Plus I and Predictor Plus II) .Guaranteed Minimum Income Benefit (GMIB I and GMIB II or the Predictor) Our guaranteed income benefits are GMAB is designed to guarantee that designed to allow you to invest your your Account Balance will not be less Account Balance in the market while than a minimum amount at the end of at the same time assuring a specified the 10-year waiting period. guaranteed, level of minimum fixed The amount of the guarantee depends income payments if you elect to on which of three permitted investment annuitize. The fixed annuity payment divisions you select. amount is guaranteed regardless of investment performance or the actual Account Balance at the time you elect pay-outs. Prior to exercising this benefit and annuitizing your Contract, you may make withdrawals up to a maximum level specified in the rider and still maintain the benefit amount. [GMIB I and GMIB II were formerly known as "Versions I and Versions II of the Guaranteed Minimum Income Benefit"; and GMIB Plus I was formerly known as "Version III of the Guaranteed Minimum Income Benefit".]
GUARANTEED INCOME BENEFITS At the time you buy the Contract, you may elect a guaranteed income benefit ("GMIB") for an additional charge. Each version of this benefit is designed to guarantee a predictable, minimum level of fixed income payments, regardless of investment performance during the pay-in phase. HOWEVER, IF APPLYING YOUR ACTUAL ACCOUNT BALANCE AT THE TIME YOU ANNUITIZE THE CONTRACT TO THEN CURRENT ANNUITY PURCHASE RATES (OUTSIDE OF THE GMIB) PRODUCES HIGHER INCOME PAYMENTS, YOU WILL RECEIVE THE HIGHER PAYMENTS, AND THUS YOU WILL HAVE PAID FOR THE BENEFIT EVEN THOUGH IT WAS NOT USED. Also, prior to exercising the GMIB, you may make specified withdrawals that reduce your income base (as explained below) during the pay-in phase and still leave the benefit guarantees intact, provided the conditions of the benefit are met. Your registered representative can provide you an illustration of the amounts you would receive, with or without withdrawals, if you exercised the benefit. Only one version of the GMIB is currently available with the Contract, GMIB Plus II, which features may vary by state. The three other versions of the GMIB that have been available with this Contract, GMIB Plus I, GMIB II and GMIB I, vary by 67 issue date and state availability. Please check with your registered representative regarding which versions are available in your state. GMIB II is no longer available for sale, effective for Contracts for which applications and necessary information are received on or after May 4, 2009. GMIB I is not available for sale. You may not have this benefit and another living benefit (LWG, GWB or GMAB) in effect at the same time. Once elected, the benefit cannot be terminated except as discussed below. FACTS ABOUT GUARANTEED INCOME BENEFITS INCOME BASE AND GMIB INCOME PAYMENTS. Under all versions of the GMIB, we calculate an "income base" (as described below) that determines, in part, the minimum amount you receive as an income payment upon exercising the GMIB and annuitizing the contract. IT IS IMPORTANT TO RECOGNIZE THAT THIS INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND DOES NOT ESTABLISH OR GUARANTEE YOUR ACCOUNT BALANCE OR A MINIMUM RETURN FOR ANY INVESTMENT DIVISION. After a minimum 10-year waiting period, and then only within 30 days following a Contract Anniversary, you may exercise the benefit. We then will apply the income base calculated at the time of exercise to the GMIB Annuity Table (as described below) specified in the rider in order to determine your minimum guaranteed lifetime fixed monthly income payments (your actual payment may be higher than this minimum if, as discussed above, the base Contract under its terms would provide a higher payment). THE GMIB ANNUITY TABLE. The GMIB Annuity Table is specified in the rider. For GMIB Plus II, this table is calculated based on the Annuity 2000 Mortality Table with a 10-year age set back with interest of 1.5% per year. This table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per year for GMIB I, GMIB II and GMIB Plus I. As with other pay-out types, the amount you receive as an income payment also depends on your age, your sex, (where permitted by state law), and the income type you select. For GMIB Plus II, the annuity rates for attained ages 86 to 90 are the same as those for attained age 85. THE ANNUITY RATES IN THE GMIB ANNUITY TABLE ARE CONSERVATIVE AND A WITHDRAWAL CHARGE MAY BE APPLICABLE, SO THE AMOUNT OF GUARANTEED MINIMUM LIFETIME INCOME THAT THE GMIB PRODUCES MAY BE LESS THAN THE AMOUNT OF ANNUITY INCOME THAT WOULD BE PROVIDED BY APPLYING YOUR ACCOUNT BALANCE ON YOUR ANNUITY DATE TO THEN-CURRENT ANNUITY PURCHASE RATES. Your registered representative can provide you an illustration of the amounts you would receive if you exercised the rider. If you exercise a GMIB rider, your income payments will be the greater of: . the income payment determined by applying the amount of the income base to the GMIB Annuity Table, or . the income payment determined for the same income type in accordance with the base Contract. (See "Pay-Out Options".) If you choose not to receive income payments as guaranteed under the GMIB, you may elect any of the income options available under the Contract. If the amount of the guaranteed minimum lifetime income that the GMIB Plus II produces is less than the amount of annuity income that would be provided by applying your Account Balance on the annuity date to the then-current annuity purchase rates, then you would have paid for a benefit you did not use. OWNERSHIP. If the owner is a natural person, the owner must be the annuitant. If a non-natural person owns the Contract, then the annuitant will be considered the owner in determining the income base and GMIB income payments. If joint owners are named, the age of the older will be used to determine the income base and GMIB income payments. For purposes of the Guaranteed Income Benefits section of the prospectus, "you" always means the owner, oldest joint owner or the annuitant, of the owner is a non-natural person. 68 Note on Graphs and Examples The purpose of these examples is to illustrate the operation of the GMIB. The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including investment allocations and the investment experience of the investment divisions chosen. THE EXAMPLES DO NOT REFLECT THE DEDUCTION OF FEES AND CHARGES, WITHDRAWAL CHARGES OR INCOME TAXES OR TAX PENALTIES. How the GMIB Works (1)THE ANNUAL INCREASE AMOUNT OF THE INCOME BASE Determining a value upon which future income payments will be based Assume that you make an initial purchase payment of $100,000. Prior to annuitization, your Account Balance fluctuates above and below your initial purchase payment depending on the investment performance of the investment divisions you selected. Your purchase payments accumulate at the annual increase rate, until the Contract Anniversary on or immediately after the Contract owner's specified birthday. Your purchase payments are also adjusted for any withdrawals (including any applicable withdrawal charge) made during this period. The line (your purchase payments accumulated at the specified percentage each year adjusted for withdrawals and charges the "Annual Increase Amount of the Income Base") is the value upon which future income payments can be based. [Compounding Income Base Chart] Determining your guaranteed lifetime income stream Assume that you decide to annuitize your Contract and begin taking annuity payments after 30 years. In this example, your Annual Increase Amount of the Income Base is higher than the Highest Anniversary Value and will produce a higher income benefit. Accordingly, the Annual Increase Amount of the Income Base will be applied to the annuity pay-out rates in the GMIB Annuity Table to determine your lifetime annuity payments. THE INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE GMIB PAYMENT AND THE CHARGE FOR THE BENEFIT. [10 Year Waiting Period with Compounding Income Base and Annuity for life CHART] 69 (2)THE "HIGHEST ANNIVERSARY VALUE" ("HAV") Determining a value upon which future income payments will be based Prior to annuitization, the Highest Anniversary Value begins to lock in any growth. The Highest Anniversary Value is adjusted upward each Contract Anniversary if the Account Balance at that time is greater than the amount of the current Highest Anniversary Value. Upward adjustments will continue until the Contract Anniversary immediately prior to the Contract owner's 81/st/ birthday. The Highest Anniversary Value also is adjusted for any withdrawals taken (including any applicable withdrawal charge) or any additional payments made. The Highest Anniversary Value line is the value upon which future income payments can be based. [Highest Account Balance Income Base Chart] Determining your guaranteed lifetime income stream Assume that you decide to annuitize your Contract and begin taking annuity payments after 30 years. In this example, the Highest Anniversary Value is higher than the Account Balance. Accordingly, the Highest Anniversary Value will be applied to the annuity payout rates in the GMIB Annuity Table to determine your lifetime annuity payments. THE INCOME BASE IS NOT AVAILABLE FOR CASH WITHDRAWALS AND IS ONLY USED FOR PURPOSES OF CALCULATING THE GMIB PAYMENT AND THE CHARGE FOR THE BENEFIT. [10 Year Waiting Period with Highest Account Balance Income Base and Annuity for Life Chart] (3)PUTTING IT ALL TOGETHER Prior to annuitization, the two components of the income base (the Annual Increase Amount of the Income Base and the Highest Anniversary Value of the Income Base) work together to protect your future income. Upon annuitization of the Contract, you will receive income payments for life and the guaranteed minimum income base and the Account Balance will cease to exist. Also, the GMIB may only be exercised only after a 10 year waiting period, and then only within a 30 day period following the Contract Anniversary, provided that the exercise must occur no later than the 30-day period following the Contract Anniversary on or following the owner's specified birthday. 70 [10 Year Waiting Period with Highest Account Balance Income Base and Compounding Income Base Chart] With the GMIB, the income base is applied to special, conservative GMIB annuity purchase factors, which are guaranteed at the time the Contract and Contract rider is issued. However, if then-current annuity purchase factors applied to the Account Balance would produce a greater amount of income, then you will receive the greater amount. In other words, when you annuitize your Contract you will receive whatever amount produces the greatest income payment. THEREFORE, IF YOUR ACCOUNT BALANCE WOULD PROVIDE GREATER INCOME THAN WOULD THE AMOUNT PROVIDED UNDER THE GMIB, YOU WILL HAVE PAID FOR THE GMIB ALTHOUGH IT WAS NEVER USED. [10 Year Waiting Period with Highest Account Balance Income Base and Compounding Income Base with Income Annuity for Life Chart] DESCRIPTION OF GMIB PLUS II In states where approved, the version of the Guaranteed Minimum Income Benefit Plus II described below is available for Contracts issued based on applications and necessary information that we receive in good order at your Administrative Office on and after May 4, 2009. In order for us to issue you the previous version of this rider (that has different features), we must receive your application and necessary information in your Administrative Office, in good order, before the close of the New York Stock Exchange on May 1, 2009. In states where approved, the GMIB Plus II is available only for owners up through age 78 and you can only elect the GMIB Plus II at the time you purchase the contract. THE GMIB PLUS II MAY BE EXERCISED AFTER A 10-YEAR WAITING PERIOD AND THEN ONLY WITHIN 30 DAYS FOLLOWING A CONTRACT ANNIVERSARY, PROVIDED THAT THE EXERCISE MUST OCCUR NO LATER THAN THE 30-DAY PERIOD FOLLOWING THE CONTRACT ANNIVERSARY ON OR FOLLOWING THE OWNER'S 90TH BIRTHDAY. INCOME BASE The income base is equal to the greatest of (a) or (b) below: a. The Annual Increase Amount which is the sum total of each purchase payment accumulated at a rate of 5% a year, through the Contract Anniversary date immediately prior to your 91st birthday and 0% thereafter, reduced by the sum total of each withdrawal adjustment accumulated at the rate of 5% a year from the date of the withdrawal. 71 . For this purpose, all purchase payments credited within 120 days of the date we issued the Deferred Annuity will be treated as if they were received on the date we issued the Deferred Annuity. . The withdrawal adjustment is the Annual Increase Amount immediately prior to the withdrawal multiplied by the percentage reduction in Account Balance attributable to the withdrawal if total withdrawals in a Contract Year are more than 5% of the Annual Increase Amount at the previous Contract Anniversary. . If total withdrawals in a Contract Year are less than or equal to 5% of the Annual Increase Amount at the previous Contract Anniversary, the withdrawal adjustment is the dollar amount of total withdrawals treated as a single withdrawal at the end of the Contract Year. . For Contracts issued in New York State, the Annual Increase Amount shall not exceed 270% of total purchase payments or, if greater, 270% of the Annual Increase Amount as of the most recent Optional Step-Up. or b. "Highest Anniversary Value" as of each Contract Anniversary, determined as follows: . At issue, the Highest Anniversary Value is your initial purchase payment; . Increase the Highest Anniversary Value by each subsequent purchase payment; . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent withdrawal; . On each Contract Anniversary before your 81st birthday, compare the (1) then-Highest Anniversary Value to the (2) current Account Balance and set the Highest Anniversary Value equal to the greater of the two. . After the Contract Anniversary immediately preceding your 81st birthday, adjust the Highest Anniversary Value only to: . Increase the Highest Anniversary Value by each subsequent purchase payment or . Reduce the Highest Anniversary Value proportionately by the percentage reduction in Account Balance attributable to each subsequent withdrawal. For purpose of determining the Highest Anniversary Value as of the applicable Contract Anniversary, purchase payments increase the Highest Anniversary Value on a dollar for dollar basis. Partial withdrawals, however, reduce the Highest Anniversary Value proportionately, that is the percentage reduction is equal to the dollar amount of the withdrawal (plus applicable withdrawal charges), divided by the Account Balance immediately before the withdrawal. Partial annuitizations are not permitted. IN DETERMINING THE GMIB PLUS II INCOME PAYMENTS, AN AMOUNT EQUAL TO THE WITHDRAWAL CHARGE THAT WOULD APPLY UPON A COMPLETE WITHDRAWAL AND THE AMOUNT OF ANY PREMIUM AND OTHER TAXES THAT MAY APPLY WILL BE DEDUCTED FROM THE INCOME BASE. FOR PURPOSES OF CALCULATING THE INCOME BASE, PURCHASE PAYMENT CREDITS (I.E., BONUS PAYMENTS) ARE NOT INCLUDED. OPTIONAL STEP-UP. On each Contract Anniversary as permitted, you may elect to reset the Annual Increase Amount to the Account Balance. An Optional Step-Up may be beneficial if your Account Balance has grown at a rate above the 5% accumulation rate on the Annual Increase Amount. HOWEVER, IF YOU ELECT TO RESET THE ANNUAL INCREASE AMOUNT, WE WILL RESTART THE 10-YEAR WAITING PERIOD. IN ADDITION, WE MAY RESET THE GMIB PLUS II RIDER CHARGE TO A RATE THAT DOES NOT EXCEED THE LOWER OF: (A) THE MAXIMUM OPTIONAL STEP-UP CHARGE (1.50%) OR (B) THE CURRENT RATE THAT WE CHARGE FOR THE SAME RIDER AVAILABLE FOR NEW CONTRACT PURCHASES AT THE TIME OF THE OPTIONAL STEP-UP. An Optional Step-Up is permitted only if: (1) the Account Balance exceeds the Annual Increase Amount immediately before the reset; and (2) the owner (or oldest joint owner or annuitant if the contract is owned by a non-natural person) is not older than age 80 on the date of the Optional Step-Up. 72 You may elect either: (1) a one-time Optional Step-Up at any Contract Anniversary provided the above requirements are met, or (2) Optional Step-Ups to occur under the Automatic Annual Step-Up. If you elect Automatic Annual Step-Ups, on any Contract Anniversary while this election is in effect, the Annual Increase Amount will reset to the Account Balance automatically, provided the above requirements are met. The same conditions described above will apply to each automatic step-up. You may discontinue this election at any time by notifying us in writing, at your Administrative Office (or by any other method acceptable to us), at least 30 days prior to the Contract Anniversary on which a reset may otherwise occur. Otherwise, it will remain in effect through the seventh Contract Anniversary following the date you make the election, at which point you must make a new election if you want Automatic Annual Step-Ups to continue. If you discontinue or do not re-elect the Automatic Annual Step-Up, no Optional Step-Up will occur automatically on any subsequent Contract Anniversary unless you make a new election under the terms described above. If you discontinue Automatic Annual Step-Ups, the GMIB Plus II (and the charge) will continue, and you may choose to elect a one time Optional Step-Up or reinstate Automatic Annual Step-Ups as described above. We must receive your request to exercise the Optional Step-Up in writing at your Administrative Office, or by any other method acceptable to us. We must receive your request prior to the Contract Anniversary for an Optional Step-Up to occur on that Contract Anniversary. The Optional Step-Up will: (1)resets the Annual Increase Amount to the Account Balance on the Contract Anniversary following the receipt of an Optional Step-Up election; (2)resets the GMIB Plus II waiting period to the 10th Contract Anniversary following the date the Optional Step-Up took effect; and (3)may reset the GMIB Plus II charge to a rate that does not exceed the lower of: (a) a maximum Optional Step-Up charge (1.50%) or (b) the current rate we charge for the same rider available for new Contract purchases at the time of the Optional Step-Up. (4)For Contracts issued in New York State only, reset the maximum Annual Increase Amount to 270% multiplied by the reset Annual Increase Amount, if greater than the maximum Annual Increase Amount immediately before the Step-Up. On the date of the Optional Step-Up, the Account Balance on that day will be treated as a single purchase payment received on the date of the step-up for purposes of determining the Annual Increase Amount after the reset. All purchase payments and withdrawal adjustments previously used to calculate the Annual Increase Amount will be set equal to zero on the date of the step-up. In the event that the charge applicable to Contract purchases at the time of the reset is higher than your current GMIB Plus II charge, we will notify you in writing a minimum of 30 days in advance of the applicable Contract Anniversary and inform you that you may choose to decline the Automatic Annual Step-Up. INVESTMENT ALLOCATION RESTRICTIONS. If you elect the GMIB Plus II, there are certain investment allocation restrictions. Please see "Investment Choices -- Investment Allocation Restrictions for Certain Benefits" If you elect the GMIB Plus II, you may elect to participate in the Enhanced Dollar Cost Averaging Program, provided that your destination investment divisions are selected in accordance with the investment allocation restrictions. GUARANTEED PRINCIPAL OPTION (DOES NOT APPLY TO CONTRACTS ISSUED IN WASHINGTON STATE). On each Contract Anniversary, starting with the tenth Contract Anniversary and through the Contract Anniversary prior to the owner's 91st birthday, you may exercise the Guaranteed Principal Option. If the owner is a non-natural person, the annuitant's age is the basis for determining the birthday. If there are joint owners, 73 the age of the oldest owner is used for determining the birthday. We must receive your request to exercise the Guaranteed Principal Option in writing, or any other method that we agree to, within 30 days following the eligible Contract Anniversary. The Guaranteed Principal Option will take effect at the end of this 30-day period following the eligible Contract Anniversary. By exercising the Guaranteed Principal Option, you elect to receive an additional amount to be added to your Account Balance intended to restore your initial investment in the Contract, in lieu of receiving GMIB payments. The additional amount is called the Guaranteed Principal Adjustment and is equal to (a) minus (b) where: (a)is purchase payments credited within 120 days of the date we issued the Contract (reduced proportionately by the percentage reduction in Account Balance attributable to each partial withdrawal (including applicable withdrawal charges) prior to the exercise of the Guaranteed Principal Option) and (b)the Account Balance on the Contract Anniversary immediately preceding exercise of the Guaranteed Principal Option. For purposes of calculating the Guaranteed Principal Adjustment, purchase payment credits are not included. The Guaranteed Principal Option can only be exercised if (a) exceeds (b), as defined above. The Guaranteed Principal Adjustment will be added to each applicable investment division in the ratio the portion of the Account Balance in such investment division bears to the total Account Balance in all investment divisions. IT IS IMPORTANT TO NOTE THAT ONLY PURCHASE PAYMENTS MADE DURING THE FIRST 120 DAYS THAT YOU HOLD THE CONTRACT ARE TAKEN INTO CONSIDERATION IN DETERMINING THE GUARANTEED PRINCIPAL ADJUSTMENT. IF YOU ANTICIPATE MAKING PURCHASE PAYMENTS AFTER 120 DAYS, YOU SHOULD UNDERSTAND THAT SUCH PAYMENTS WILL NOT INCREASE THE GUARANTEED PRINCIPAL ADJUSTMENT. However, because purchase payments made after 120 days will increase your Account Balance, such payments may have a significant impact on whether or not a Guaranteed Principal Adjustment is due. Therefore, GMIB Plus II may not be appropriate for you if you intend to make additional purchase payments after the 120-day period and are purchasing the GMIB Plus II for this feature. The Guaranteed Principal Adjustment will never be less than zero. If the Guaranteed Principal Option is exercised, the GMIB Plus II will terminate as of the date the option takes effect and no additional GMIB charges will apply thereafter. The Contract, however, will continue, and the GMIB Plus II allocation restrictions, described above, will no longer apply. EXERCISING THE GMIB PLUS II. If you exercise the GMIB Plus II, you must select to receive income payments under one of the following income types: (1)Lifetime Income Annuity with a 5 Year Guarantee Period . (2)Lifetime Income Annuity for Two with a 5 Year Guarantee Period . Based on federal tax rules, this option is not available for qualified contracts where the difference in ages of the joint annuitants, who are non-spouses, is greater than 10 years. See "Pay-Out Options." For Contracts issued in New York State, if you exercise the GMIB Plus II, you must elect to receive payments under one of the following income types: (a)Lifetime Income Annuity with a 5-Year Guarantee Period. (b)Lifetime Income Annuity for Two with a 5-Year Guarantee Period. Based on federal tax rules, this option is not available for qualified Contracts where the difference in ages of the joint annuitants, who are non-spouses, is greater than 10 years. See "Pay-Out Options." This income type is only available if the youngest annuitant's attained age is 35 or older. 74 If you take a full withdrawal of your Account Balance, your Contract is terminated by us due to its small Account Balance and inactivity (see "When We Can Cancel Your Contract"), or your Contract lapses and there remains any income base, we will commence making income payments within 30 days of the date of the full withdrawal, termination or lapse. In such cases, your income payments under this benefit, if any, will be determined using the income base after any applicable withdrawal adjustment that was taken on account of the withdrawal, termination or lapse. GMIB PLUS II PAYOUT RATES (DOES NOT APPLY TO CONTRACTS ISSUED IN NEW YORK STATE). The GMIB payout rates are enhanced under either of the following circumstances, if: (a)you begin withdrawals on or after your 62nd birthday; (b)your Account Balance is fully withdrawn or decreases to zero on or after your 62nd birthday and there is an income base remaining; and (c)the income type you select is the Lifetime Income Annuity with a 5-Year Guarantee Period; Then the annual income payments under the GMIB Plus II will equal or exceed 5.50% of the income base (calculated on the date the payments are determined). Similarly if; (a)you begin withdrawals on or after your 60th birthday; (b)your Account Balance is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and (c)the income type you select is the Lifetime Income Annuity with a 5 Year Guarantee Period. Then the annual income payments under the GMIB Plus II will equal or exceed 5% of the income base (calculated on the date the payments are determined). If the income base being annuitized is less than $5,000, we reserve the right to make one lump sum payment to you instead of income payments. If the amount of the initial income payment would be less than $100, we may reduce the frequency of payments so that the payment is a minimum of $100, but not less frequently then annually. TERMINATING THE GMIB PLUS II. Except as otherwise provided, the GMIB Plus II will terminate upon the earliest of: a) The 30th day following the Contract Anniversary on or following your 90th birthday; b) The date you make a complete withdrawal of your Account Balance (a pro rata portion of the charge will be applied). (If there is still an income base remaining after a full withdrawal of your Account Balance, we will commence making income payments based on the remaining income base within 30 days of the date of the full withdrawal.) c) The date you elect to receive income payments under the contract and you do not elect to receive payments under the GMIB Plus II (a pro rata portion of the charge will be applied); d) Death of the owner or joint owner (unless the spouse (aged 89 or younger) is the beneficiary and elects to continue the contract), or death of the annuitant if a non-natural person owns the contract; e) A change for any reason of the owner or joint owner or annuitant, if a non-natural person owns the Contract, subject to our administrative procedures; f) The effective date of the Guaranteed Principal Option; or g) The date you assign your Contract, subject to our administrative procedures. 75 When the GMIB Plus II terminates, the corresponding GMIB Plus II charge terminates and GMIB Plus II investment restrictions no longer apply. For Contracts issued in all states except New York between February 24, 2009 through May 1, 2009, the following differences apply: (1)The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 1.5% per year; (2)The GMIB payout rates are enhanced to be at least (a) 6% of the income base (calculated on the date the payments are determined) in the event: (i) you begin withdrawals on or after your 62nd birthday; (ii) your Account Balance is fully withdrawn or decreases to zero on or after your 62nd birthday and there is an income base remaining; and (iii) the annuity option you select is the Lifetime Income Annuity with a 10 Year Guarantee Period, or (b) 5% of the income base (calculated on the date the payments are determined) if: (i) you begin withdrawals on or before your 60th birthday; (ii) your Account Balance is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and (iii) you select the Lifetime Income Annuity with a 10-Year Guarantee Period; (3)Different investment allocation restrictions apply; (4)The annual increase rate is 6% through the Contract Anniversary immediately prior to your 91st birthday, and 0% per year thereafter; (5)If total withdrawals in a contract year are 6% or less of the Annual Increase Amount on the issue date or on the prior Contract Anniversary after the first contract year, and if these withdrawals are paid to you (or the annuitant if the contract is owned by a non-natural person) or to another payee we agree to, the total withdrawal adjustments for that contract year will be set equal to the dollar amount of total withdrawals (including any applicable withdrawal charge) in that contract year; and (6)The fixed annuity options are the Lifetime Income Annuity with a 10 year Guaranteed Period (if you choose to start the annuity option after age 79, the year of the guarantee period component of the annuity option is reduced to: 9 years at age 80, 8 years at age 81, 7 years at age 82, 6 years at age 83, or 5 years at ages 84 through 90) or the Lifetime Income Annuity for Two with a 10 Year Guarantee Period. (Based upon federal tax rules, this option is not available for qualified Contracts where the difference in ages of the joint annuitants, who are non-spouses, is greater than 10 years). For Contracts issued in New York State on or before May 1, 2009, the following differences apply: (1) The annual increase rate is 6% through the Contract Anniversary immediately prior to your 91st birthday, and 0% per year thereafter; (2) The GMIB annuity rates for attained ages 85-90 are the same as those for attained age 84; (3) Different investment allocation restrictions apply; (4) The Lifetime Income Annuity for Two income option type is only available if the oldest annuitant's attained age is 55 or older; (5) The Annual Increase Amount shall not exceed 190% of total purchase payments or, if greater, 190% of the Annual Increase Amount as of the most recent Optional Step-Up; (6) If total withdrawals in a contract year are 6% or less of the Annual Increase Amount on the issue date or on the prior Contract Anniversary after the first contract year, and if these withdrawals are paid to you (or the annuitant if the contract is owned by a non-natural person) or to another payee we agree to, the total withdrawal adjustments for that contract year will be set equal to the dollar amount of total withdrawals (including any applicable withdrawal charge) in that contract year; and (7) The GMIB Annuity Table is calculated based upon the Annuity Mortality Table with a 7-year age set back with interest of 1.5% per year. 76 For Contracts issued in all states except New York prior to February 24, 2009, the GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per year; the GMIB payout rates are enhanced to be at least 6% of the Annual Increase Amount (calculated on the date the payments are determined) in the event: (i) you begin withdrawals on or after your 60th birthday; (ii) your Account Balance is fully withdrawn or decreases to zero on or after your 60th birthday and there is an income base remaining; and (iii) the annuity option you select is the Lifetime Income Annuity with a 10 Year Guarantee Period and difference (3) through (6) in the non-New York version apply. CHARGES. The GMIB Plus II is available, for an additional charge of 1.00% (0.95% for Contracts issued in New York State) of the income base, deducted at the end of each Contract Year, prior to taking into account any applicable Step-Up, by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. (The Fixed Account is not available in the C Class Deferred Annuity purchased after April 30, 2003, a Deferred Annuity issued in New York State and Washington State with this optional benefit. The Enhanced Dollar Cost Averaging program is not available in the C and Bonus Classes Deferred Annuity) THE GUARANTEED PRINCIPAL OPTION -- GRAPH AND EXAMPLE Initial investment is $100,000. Assume that no withdrawals are taken. Assume that Account Balance at the 10th Contract Anniversary is $50,000 due to poor market performance, and the Guaranteed Principal Option is exercised at this time. The effect of exercising the Guaranteed Principal Option: 1) A Guaranteed Principal Adjustment of $100,000 - $50,000 = $50,000 is added to the Account Balance 30 days after the 10th Contract Anniversary bringing it back up to $100,000. 2) The GMIB Plus II benefit and the benefit charge terminate as of the date that the adjustment is made to the Account Balance; the Contract continues. 3) The GMIB Plus II allocation and transfer restrictions terminate as of the date that the adjustment is made to the Account Balance. [Exercise Guaranteed Principal Option and Guaranteed Principal Adjustment Chart] Withdrawals reduce the original purchase payment (I.E., those payments credited within 120 days of the Contract's issue date) proportionately and, therefore, may have a significant impact on the amount of the Guaranteed Principal Adjustment. THE OPTIONAL STEP-UP: OPTIONAL AUTOMATIC ANNUAL STEP-UP Assume your initial investment is $100,000 and no withdrawals are taken. The 5% Annual Increase Amount of the Income Base increases to $105,500 on the first anniversary ($100,000 increased by 5% per year, compounded annually). Assume your Account Balance at the first Contract Anniversary is $110,000 due to good market performance, and you elected Optional Step-Ups to occur under the Optional Automatic Annual Step-Up feature prior to the first Contract Anniversary. Because your Account Balance is higher than your 5% Annual Increase Amount of the Income Base, an Optional Step-Up will automatically occur. 77 The effect of the Optional Step-Up is: (1)The 5% Annual Increase Amount of the Income Base automatically resets from $105,000 to $110,000; (2)The 10-year waiting period to annuitize the Contract under the GMIB Plus II is reset to 10 years from the first Contract Anniversary; (3)The charge is reset to the fee we charge new contract owners at that time; and (4)The Guaranteed Principal Option can still be elected on the 10th Contract Anniversary. The 5% Annual Increase Amount of the Income Base increases to $115,500 on the second anniversary ($110,000 increased by 5% per year, compounded annually). Assume your Account Balance at the second Contract Anniversary is $120,000 due to good market performance, and you have not discontinued the Automatic Annual Step-Up feature. Because your Account Balance is higher than your 5% Annual Increase Amount of the Income Base, an Optional Step-Up will automatically occur. The effect of the Optional Step-Up is: (1)The 5% Annual Increase Amount of the Income Base automatically resets from $115,500 to $120,000; (2)The 10-year waiting period to annuitize the Contract under the GMIB Plus II is reset to 10 years from the second Contract Anniversary; (3)The charge is reset to the fee we charge new contract owners for the same GMIB Plus II rider at that time; and (4)The Guaranteed Principal Option can still be elected on the 10th Contract Anniversary. Assume your Account Balance increases by $10,000 at each Contract Anniversary in years three through seven. At each Contract Anniversary, your Account Balance would exceed the 5% Annual Increase Amount of the Income Base and an Optional Step-Up would automatically occur (provided you had not discontinued the Automatic Annual Step-Up feature, and other requirements were met). The effect of each Optional Step-Up is: (1)The 5% Annual Increase Amount of the Income Base automatically resets to the higher Account Balance; (2)The 10-year waiting period to annuitize the Contract under the GMIB Plus II is reset to 10 years from the date of the Optional Reset; (3)The charge is reset to the fee we charge new Contract owners for the same GMIB Plus II rider; and (4)The Guaranteed Principal Option can still be elected on the 10th Contract Anniversary. After the seventh Contract Anniversary, the initial Optional Automatic Annual Step-Up election expires. Assume you do not make a new election of the Optional Automatic Annual Step-Up. The 5% Annual Increase Amount of the Income Base increases to $178,500 on the eighth anniversary ($170,000 increased by 5% per year, compounded annually). Assume your Account Balance at the eighth Contract Anniversary is $160,000 due to poor market performance. An Optional Step-Up is NOT permitted because your Account Balance is lower than your 5% Annual Increase Amount of the Income Base. However, because the Optional Reset has locked-in previous gains, the 5% Annual Increase Amount of the Income Base remains at $178,500 despite poor market performance, and, provided the benefit continues in effect, will continue to grow at 6% annually (subject to adjustments for additional purchase payments and/or withdrawals) through the Contract Anniversary on or after your 90th birthday (for Contracts issued in New York State, the Annual Increase Amount is subject to a 270% maximum increase limitation). Also, please note: (1)The 10-year waiting period to annuitize the Contract under the GMIB Plus II remains at the 17th Contract Anniversary (10 years from the date of the last Optional Reset); 78 (2)The charge remains at its current level; and (3)The Guaranteed Principal Option can still be elected on the 10th Contract Anniversary. [GRAPHIC] DESCRIPTION OF GMIB PLUS I (GMIB PLUS I IS NO LONGER AVAILABLE FOR SALE, EFFECTIVE FOR CONTRACTS FOR WHICH APPLICATIONS AND NECESSARY INFORMATION ARE RECEIVED AT YOUR ADMINISTRATIVE OFFICE ON OR AFTER MAY 4, 2009) GMIB Plus I is available only for owners up through age 75, and you can only elect GMIB Plus I at the time you purchase the Contract. GMIB Plus I may be exercised after a 10-year waiting period and then only within 30 days following a Contract Anniversary, provided that the exercise must occur no later than the 30-day period following the Contract Anniversary on or following the owner's 85th birthday. GMIB Plus I is otherwise identical to GMIB Plus II, with the following exceptions: (1)The GMIB Plus I Income Base is calculated as described above, except that the annual increase rate is 6% per year through the Contract Anniversary on or following the owner's 85th birthday and 0% thereafter. (2)An Optional Step-Up is permitted only if: (1) the Account Balance exceeds the Annual Increase Amount immediately before the reset; and (2) the owner (or oldest joint owner or annuitant if the contract is owned by a non-natural person) is not older than age 75 on the date of the Optional Step-Up. (Please note that "Step-Up" is referred to as "Reset" in the rider.) (3)If your income base is increased due to an Optional Step-Up under the GMIB Plus I rider, we may increase the GMIB Plus I charge to the charge applicable to Contract purchases of the same optional benefit at the time of the increase, but to no more than a maximum of 1.50%. (4)Termination provision g) above does not apply and the following replaces termination provision a), above: The 30th day following the Contract Anniversary on or following your 85th birthday. and the following replaces provision d) above: Death of the owner or joint owner (unless the spouse (age 84 or younger) is the beneficiary and elects to continue the contract), or the death of the annuitant if a non-natural person owns the contract. (5)If you elect the GMIB Plus I, you are limited to allocating your purchase payments and Account Balance among the following funding options: (a)the MetLife Conservative Allocation Investment Division (b)the MetLife Conservative to Moderate Allocation Investment Division, 79 (c)the MetLife Moderate Allocation Investment Division, (d)the MetLife Moderate to Aggressive Allocation Investment Division, (e)the American Funds Moderation Allocation Investment Division, (f)the American Funds Balanced Allocation Investment Division, (g)the American Funds Growth Allocation Investment Division (h)the Met/Franklin Templeton Founding Strategy Investment Division (i)the Fixed Account (j)the SSgA Growth ETF Investment Division (k)the SSgA Growth and Income ETF Investment Division (l)the BlackRock Money Market Investment Division (where available) (6)The Guaranteed Principal Option may be exercised starting with the tenth Contract Anniversary prior to the Contract owner's 86th birthday. (7)We reserve the right to prohibit an Optional Reset if we no longer offer this benefit for a class of the Contract. We are waiving this right with respect to purchasers of the Contract offered by this prospectus who elect or have elected the GMIB Plus I benefit and will allow Optional Resets by those purchasers even if this benefit is no longer offered for a class of the Contract. (8)If you exercise the GMIB Plus I benefit under the life annuity with 10 years of annuity payments guaranteed option, the Guaranteed Period is 5 years for ages 84-85. (9)If you exercise the GMIB Plus I benefit under the life annuity, 10 years of annuity payments are guaranteed. (10)If approved in your state, the GMIB payout rates are enhanced to be at least 6% of the income base (calculated on the date the payments are determined) in the event; (i) you begin withdrawals on or after your 60th birthday; (ii) your Account Balance is fully withdrawn or decreases to zero on or after your 60th birthday and there is no income base remaining; and (iii) the annuity option you select is the Lifetime Income Annuity with a 10 Year Guarantee Period. (11)The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per year. You may elect to participate in the Enhanced Dollar Cost Averaging program, provided that your destination investment divisions are one or more of the above-listed investment choices. For Contracts issued prior to JULY 16, 2007, the GMIB Plus II payout rates described in (10) above will not be applied. For Contracts issued prior to FEBRUARY 26, 2007, we offered a version of the GMIB Plus I that is no longer available. This prior version of the GMIB Plus I differs from the current version with respect to the calculation of the Annual Increase Amount and the applicable benefit charge. Specifically: (1) for purposes of calculating the Annual Increase Amount, (a) the annual increase rate is 5% per year through the Contract Anniversary on or following the Owner's 85th birthday, and (b) the amount of total withdrawal adjustments for a Contract Year as calculated in paragraph "a" of the "Income Base'' section above will be set equal to the dollar amount of total withdrawals in such Contract Year provided that such total withdrawals do not exceed 5% of the Annual Increase Amount on the issue date or on the prior Contract Anniversary after the first Contract Year; and (2) the additional charge for the GMIB Plus I is 0.75% of the Income Base (with a maximum charge of 1.50% of the Income Base applicable upon the exercise of the Optional Step-Up feature). 80 EXAMPLE THE OPTIONAL STEP-UP Assume your initial purchase payment is $100,000 and no withdrawals are taken. The 5% Annual Increase Amount of the Income Base increases to $105,000 on the first Contract Anniversary ($100,000 increased by 5% per year, compounded annually). Assume your Account Balance at the first Contract Anniversary is $110,000 due to good market performance, and you elect an Optional Step-Up. The effect of the Optional Step-Up election is: (1)The 5% Annual Increase Amount of the Income Base resets from $105,000 to $110,000; (2)The 10-year waiting period to annuitize the Contract under the GMIB Plus I is reset to 10 years from the first Contract Anniversary; (3)The charge is reset to the fee we charge new contract owners at that time; (4)The Guaranteed Principal Option can still be elected on the 10th Contract Anniversary; and The 5% Annual Increase Amount of the Income Base increases to $115,500 on the second anniversary ($110,000 increased by 5% per year, compounded annually). Assume your Account Balance at the second Contract Anniversary is $112,000 due to poor market performance. You may NOT elect an Optional Step-Up at this time, because the Account Balance is less than the 5% Annual Increase Amount of the Income Base. For Contracts issued prior to FEBRUARY 27, 2006, you may elect an Optional Step-Up as described above, except that: 1) you may elect an Optional Step-Up on any Contract Anniversary only on or after the third Contract Anniversary, and you may then elect an Optional Step-Up at any subsequent Contract Anniversary only if it has been at least three years since the last Optional Step-Up; and 2) you are required to affirmatively elect an Optional Step-Up in accordance with the procedures described above, the Automatic Annual Step-Up feature is not available. Subject to state approval, we will enhance your Contract to change the frequency of the resets from every third Contract Anniversary to each Contract Anniversary and you will also be able to elect Optional Automatic Resets under the Automatic Annual Step-Ups, following the same procedure, as described above. DESCRIPTION OF GMIB II (GUARANTEED MINIMUM INCOME BENEFIT II IS NO LONGER AVAILABLE FOR SALE FOR CONTRACTS FOR WHICH APPLICATIONS AND NECESSARY INFORMATION ARE RECEIVED AT YOUR ADMINISTRATIVE OFFICE ON OR AFTER MAY 4, 2009) The GMIB II is available only for owners up through age 75, and you can only elect the GMIB II at the time you purchase the contract. The GMIB II may be exercised after a 10-year waiting period and then only within 30 days following a Contract Anniversary, provided that the exercise must occur no later than the 30-day period following the Contract Anniversary on or following the owner's 85th birthday. The GMIB II is otherwise identical to the GMIB Plus II, with the following exceptions: (1)The additional charge for GMIB II is 0.50% (2)The GMIB II Income Base is calculated as described above, except that, for purposes of calculating the Annual Increase Amount: a. the annual increase rate is 5% per year through the Contract Anniversary on or following the owner's 85th birthday and 0% thereafter, and b. the amount of total withdrawal adjustments for a Contract Year as calculated in paragraph "a" of the "Income Base" section of "Description of GMIB Plus II" above will be set equal to the dollar amount of total withdrawals (including any applicable withdrawal charge) in such Contract Year provided that such total withdrawals do not exceed 5% of the Annual Increase Amount on the issue date or on the prior Contract Anniversary after the first Contract Year. 81 (3)There is no Guaranteed Principal Option. (4)There is no Optional Step-Up feature. (5)There are no limitations to how you may allocate your purchase payments and Account Balance among the investment choices. (6)The following replaces termination provision a), above: The 30th day following the Contract Anniversary on or following your 85th birthday. (7)The following replaces termination provision e), above: A change for any reason of the owner or joint owner or the annuitant if a non-natural person owns the contract. (8)Termination provisions, f) and g) above, do not apply. (9)The fixed annuity options are the Lifetime Income Annuity with a 10-year Guarantee Period (if you choose to annuitize after age 79, the Guarantee Period is reduced to: 9 years at age 80, 8 years at age 81, 7 years at age 82, 6 years at age 83, or 5 years at age 84 and 85) or the Lifetime Income Annuity for Two with a 10-year Guarantee Period. (not available for qualified Contracts where the difference in ages of the joint annuitants, who are non-spouses, is greater than 10 years) (10)The following replaces termination provision d) above: Death of the owner or joint owner unless the spouse (age 84 or younger) is the beneficiary and elects to continue the contract, or death of the annuitant if a non-natural person owns the contract. (11)There are no enhanced payout rates. (12)The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table with a 7-year age set back with interest of 2.5% per year. DESCRIPTION OF GMIB I (NO LONGER AVAILABLE FOR SALE) In states where GMIB I has been approved and GMIB II has not been approved you can only elect GMIB I at the time you purchase the Contract and if you are age 75 or less. Once elected, this optional benefit cannot be terminated except as described below. The GMIB I may be exercised after a 10-year waiting period, up through age 85, within 30 days following a Contract Anniversary. The GMIB I is identical to the GMIB II, with the following exceptions: (1)The GMIB I Income Base is calculated as described above in "Description of GMIB Plus II -- Income Base", except that: a) Withdrawals may be payable as you direct without affecting the withdrawal adjustments; b) The annual increase rate is 6% per year through the Contract Anniversary immediately prior to the owner's 81st birthday and 0% thereafter; and (c)If total withdrawals in a Contract Year are 6% or less of the Annual Increase Amount on the issue date or previous Contract Anniversary, if later, the total withdrawal adjustments for the Contract Year will be set equal to the dollar amount of total withdrawals in that Contract Year. (2)The following replaces termination provision d), above: Death of the owner or death of the annuitant if a non-natural person owns the contract. (3)If you take a full withdrawal of your Account Balance, your contract is terminated by us due to its small Account Balance and inactivity or your contract lapses, the GMIB I terminates (even if there remains any income base) and no payments will be made under the benefit. 82 We currently waive the contractual requirement that terminates the GMIB I in the event of the death of the owner in circumstances where the spouse of the owner elects to continue the contract. See "Death Benefit -- Generally." In such event, the GMIB I will automatically continue unless the spouse elects to terminate the rider. We are permanently waiving this requirement with respect to purchasers of the Contract offered by this Prospectus who have elected GMIB I. GMIB, QUALIFIED CONTRACTS AND DECEDENT CONTRACTS THE GMIB MAY HAVE LIMITED USEFULNESS IN CONNECTION WITH A QUALIFIED CONTRACT, SUCH AS IRA (SEE "INCOME TAXES"), IN CIRCUMSTANCES WHERE, DUE TO THE TEN YEAR WAITING PERIOD AFTER PURCHASE (AND, FOR THE GMIB PLUS II AND GMIB PLUS I, AFTER AN OPTIONAL STEP-UP), THE OWNER IS UNABLE TO EXERCISE THE BENEFIT UNTIL AFTER THE REQUIRED BEGINNING DATE OF REQUIRED MINIMUM DISTRIBUTIONS UNDER THE CONTRACT. In such event, required minimum distributions received from the Contract during the ten year waiting period will have the effect of reducing the income base either on a proportionate or dollar for dollar basis, as the case may be. This may have the effect of reducing or eliminating the value of income payments under the GMIB. You should consult your tax adviser prior to electing the GMIB. Additionally, the GMIB is not available for purchase by a beneficiary under a decedent's Non-Qualified Contract or IRA (or where otherwise offered, under any other Contract which is being "stretched" by a beneficiary after the death of the owner or after the death of the annuitant in certain cases). The GMIB may not be exercised until 10 years after purchase (and, for the GMIB Plus II and GMIB Plus I, after an Optional Step-Up/Optional Reset), and the benefit provides guaranteed monthly fixed income payments for life (or joint lives, if applicable), with payments guaranteed for a specified number of years. However, the tax rules require distributions prior to the end of the 10-year waiting period, commencing generally in the year after the owner's death, and also prohibit payments for as long as the beneficiary's life in certain circumstances. GUARANTEED WITHDRAWAL BENEFITS We offer optional guaranteed withdrawal benefits for an additional charge. There are four Guaranteed Withdrawal Benefits, two versions of the GWB and two versions of the LWG under this Contract: . Lifetime Withdrawal Guarantee II ("LWG II") . Lifetime Withdrawal Guarantee I ("LWG I") . Enhanced Guaranteed Withdrawal Benefit ("Enhanced GWB") . Guaranteed Withdrawal Benefit I ("GWB I") Each of the guaranteed withdrawal benefits guarantees that the entire amount of purchase payments you make will be returned to you through a series of withdrawals that you may begin taking immediately or at a later time, provided withdrawals in any Contract Year do not exceed the maximum amount allowed. This means that, regardless of negative investment performance, you can take specified annual withdrawals until the entire amount of the purchase payments you made during the time period specified in your benefit has been returned to you. Moreover, if you make your first withdrawal on or after the date you reach age 59 1/2, the Lifetime Withdrawal Guarantee riders guarantee income, without annuitizing the Contract, for your life (and, for Contracts not issued in New York State, the life of your spouse, if the Joint Life version of this optional benefit was elected, and your spouse elects to continue the contract and is at least age 59 1/2 at continuation), even after the entire amount of purchase payments has been returned. (See "Description of the Lifetime Withdrawal Guarantee II" below.) If you purchase a guaranteed withdrawal benefit, you must elect one version at the time you purchase the contract, prior to age 86. A maximum of two versions of the guaranteed withdrawal benefits are offered in any particular state. Please check with your registered representative regarding which version(s) are available in your state. You may not have this benefit and another living benefit (GMIB or GMAB) or the Enhanced Death Benefit in effect at the same time. Once elected, the rider may not be terminated except as stated below. 83 FACTS ABOUT GUARANTEED WITHDRAWAL BENEFITS MANAGING YOUR WITHDRAWALS. The GWB guarantee may be reduced if your annual withdrawals or any amount applied to a pay-out option are greater than the maximum amount allowed, called the Annual Benefit Payment, which is described in more detail below. The GWB does not establish or guarantee an Account Balance or minimum return for any investment division. The Benefit Base (as described below) under the GWB I and Enhanced GWB and the Remaining Guaranteed Withdrawal Amount (as described below) under the Lifetime Withdrawal Guarantees cannot be taken as a lump sum. (However, if you cancel a Lifetime Withdrawal Guarantee Benefit after a waiting period of at least fifteen years, the Guaranteed Principal Adjustment will increase your Account Balance to the purchase payments credited within the first 120 days of the date that we issue the contract, reduced proportionately for any withdrawals. See "Description of the Lifetime Withdrawal Guarantee II -- Cancellation and Guaranteed Principal Adjustment" below.) INCOME TAXES AND PENALTIES MAY APPLY TO YOUR WITHDRAWALS, AND WITHDRAWAL CHARGES MAY APPLY TO WITHDRAWALS DURING THE FIRST CONTRACT YEAR UNLESS YOU TAKE THE NECESSARY STEPS TO ELECT TO TAKE SUCH WITHDRAWALS UNDER A SYSTEMATIC WITHDRAWAL PROGRAM. WITHDRAWAL CHARGES WILL ALSO APPLY TO WITHDRAWALS OF PURCHASE PAYMENTS THAT EXCEED THE FREE WITHDRAWAL AMOUNT. IF IN ANY CONTRACT YEAR YOU TAKE CUMULATIVE WITHDRAWALS THAT EXCEED THE ANNUAL BENEFIT PAYMENT, THE TOTAL PAYMENTS THAT THE GWB GUARANTEES THAT YOU OR YOUR BENEFICIARY WILL RECEIVE FROM THE CONTRACT OVER TIME MAY BE LESS THAN THE INITIAL GUARANTEED WITHDRAWAL AMOUNT (TOTAL GUARANTEED WITHDRAWAL AMOUNT FOR THE LIFETIME WITHDRAWAL GUARANTEES). THIS REDUCTION MAY BE SIGNIFICANT AND MEANS THAT RETURN OF YOUR PURCHASE PAYMENTS MAY BE LOST. THE GWB CHARGE WILL CONTINUE TO BE DEDUCTED AND CALCULATED BASED ON THE GUARANTEED WITHDRAWAL AMOUNT (TOTAL GUARANTEED WITHDRAWAL AMOUNT FOR THE LIFETIME WITHDRAWAL GUARANTEES) UNTIL TERMINATION OF THE RIDER. For purposes of calculating the Guaranteed Withdrawal Amount or the Total Guaranteed Withdrawal Amount (for the Lifetime Withdrawal Guarantees), purchase payment credits (I.E., bonus payments) are not included. In any event, withdrawals under the GWB will reduce your Account Balance and death benefits. CHARGES. If the Lifetime Withdrawal Guarantee is in effect, we will continue to assess the GWB benefit charge even in the case where your Remaining Guaranteed Withdrawal Amount, as described below, equals zero. However, if the GWB I or Enhanced GWB is in effect, we will not continue to assess the GWB charge if your Benefit Base, as described below, equals zero. TAX TREATMENT. The tax treatment of withdrawals under the GWB and LWG is uncertain. It is conceivable that the amount of potential gain could be determined based on the Benefit Base (Remaining Guaranteed Withdrawal Amount under the Lifetime Withdrawal Guarantees) at the time of the withdrawal, if the Benefit Base (or Remaining Guaranteed Withdrawal Amount) is greater than the Account Balance (prior to withdrawal charges, if applicable). This could result in a greater amount of taxable income reported under a withdrawal and conceivably a limited ability to recover any remaining basis if there is a loss on surrender of the Contract. Consult your tax advisor prior to purchase. CIVIL UNIONS. A purchaser who has or is contemplating a civil union or same sex marriage should note that such partner/spouse would not be able to receive continued payments upon the death of the owner under the Joint Life version of the Lifetime Withdrawal Guarantee. DESCRIPTION OF THE LIFETIME WITHDRAWAL GUARANTEE II In states where approved, the version of the Lifetime Withdrawal Guarantee II described below is available for Contracts issued based on applications and necessary information that we receive in good order at your Administrative Office on and after May 4, 2009. In order for us to issue you the previous version of this rider (that different investment allocation restrictions), we must receive your application and necessary information in your Administrative Office, in good order, before the close of the New York Stock Exchange on May 1, 2009. 84 TOTAL GUARANTEED WITHDRAWAL AMOUNT. While the Lifetime Withdrawal Guarantee Benefit II is in effect, we guarantee that you will receive a minimum amount over time. We refer to this minimum amount as the TOTAL GUARANTEED WITHDRAWAL AMOUNT. The initial Total Guaranteed Withdrawal Amount is equal to your initial purchase payment. We increase the Total Guaranteed Withdrawal Amount (up to a maximum of $10,000,000) by each additional purchase payment. If you take a withdrawal that does NOT exceed the Annual Benefit Payment (see "Annual Benefit Payment" below), then we will not reduce the Total Guaranteed Withdrawal Amount. We refer to this type of withdrawal as a NON-EXCESS WITHDRAWAL. If, however, you take a withdrawal that results in cumulative withdrawals for the current Contract Year that exceeds the Annual Benefit Payment, then we will reduce the Total Guaranteed Withdrawal Amount in the same proportion that the withdrawal (including any applicable withdrawal charge) reduces the Account Balance. We refer to this type of withdrawal as an EXCESS WITHDRAWAL. REMAINING GUARANTEED WITHDRAWAL AMOUNT. The REMAINING GUARANTEED WITHDRAWAL AMOUNT is the remaining amount you are guaranteed to receive over time. We increase the Remaining Guaranteed Withdrawal Amount (up to a maximum of $10,000,000) by additional purchase payments. If you take a Non-Excess Withdrawal, we will decrease the Remaining Guaranteed Withdrawal Amount by the amount of the Non-Excess Withdrawal (including any applicable withdrawal charge). If, however, you take an Excess Withdrawal, then we will reduce the Remaining Total Guaranteed Withdrawal Amount in the same proportion that the withdrawal (including any applicable withdrawal charge) reduces the Account Balance. 7.25% COMPOUNDING INCOME AMOUNT. For all Contracts except Contracts issued in New York, on each Contract Anniversary until the earlier of: (a) the date of the second withdrawal from the Contract or (b) the tenth Contract Anniversary, we increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by an amount equal to 7.25% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase (up to a maximum of $10,000,000). We may also increase the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount by the Automatic Annual Step-Up (discussed below), if that would result in a higher Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount. 6% COMPOUNDING INCOME AMOUNT (NEW YORK STATE ONLY). For Contracts issued in New York State, if you elect the Single Life Version of LWG II, on each Contract Anniversary beginning with the Contract Anniversary following the date you reach age 63, until the earlier of: (a) five years or (b) the date of the first withdrawal from the Contract, we increase the Total Guaranteed Withdrawal Amount and the Remaining Withdrawal Amount by an amount equal to 6% multiplied by the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount before such increase (up to a maximum of $10,000,000). If the first withdrawal is taken before the Contract Anniversary following the date you reach age 63, the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount will never be increased by the 6% Compounding Income Amount. If you elect the Joint Life Version of LWG II, on each Contract Anniversary beginning with the Contract Anniversary following the date the younger spouse reaches age 66, until the earlier of: (a) five years or (b) the date of the first withdrawal from the Contract, we increase the Total Guaranteed Withdrawal Amount and the Remaining Withdrawal Amount by an amount equal to 6% multiplied by the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount before such increase (up to a maximum of $10,000,000). We may increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by the Automatic Annual Step-up (discussed below), if that would result in a higher Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount. If the first withdrawal is taken before the Contract Anniversary following the date the youngest spouse reaches age 66, the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount will never be increased by the 6% Compounding Income Amount. ANNUAL BENEFIT PAYMENT. For all Contracts except Contracts issued in New York, the initial ANNUAL BENEFIT PAYMENT is equal to the initial Total Guaranteed Withdrawal Amount multiplied by the 5% withdrawal rate (6% withdrawal rate if you 85 make the first withdrawal on or after the date you reach age 76). If the Total Guaranteed Withdrawal Amount is later recalculated (for example, because of additional purchase payments, the 7.25% Compounding Income Amount, the Automatic Annual Step-Up, or Excess Withdrawals), the Annual Benefit Payment is reset equal to the new Total Guaranteed Withdrawal Amount multiplied by the 5% withdrawal rate (6% withdrawal rate if you make your first withdrawal on or after the date you reach age 76). ANNUAL BENEFIT PAYMENT (NEW YORK STATE ONLY). For Contracts issued in New York State, if you elect the Single Life Version of LWG II, the Annual Benefit Payment is equal to the initial Total Guaranteed Withdrawal Amount multiplied by the 5% withdrawal rate (6% if you make the first withdrawal on or after the Contract Anniversary following the date you reach age 76). If you elect the Joint Life Version of LWG II, the initial Annual Benefit Payment is equal to the Total Guaranteed Withdrawal Amount multiplied by the 4.5% withdrawal rate (5% withdrawal rate if you make the first withdrawal on or after the Contract Anniversary following the date you and your spouse are at least age 63). If the Total Guaranteed Withdrawal Amount is later recalculated (for example, because of additional purchase payments, the 6% Compounding Income Amount, the Automatic Step-Up, or Excess Withdrawals), the Annual Benefit Payment is reset to equal the new Total Guaranteed Withdrawal Amount multiplied by the 4.5% withdrawal rate (5% withdrawal rate if you make your first withdrawal on or after the Contract Anniversary following the date you and your spouse reach age 63). IT IS IMPORTANT TO NOTE: . If you take your first withdrawal before the date you reach age 59 1/2 (or, for Contracts issued in New York State with the Joint Life Version, if you take your first withdrawal before the date when both you and your spouse are at least 59 1/2 ), we will continue to pay the Annual Benefit Payment each year until the Remaining Guaranteed Withdrawal Amount is depleted, even if your Account Balance declines to zero. This means if your Account Balance is depleted due to a Non-Excess Withdrawal or the deduction of the benefit charge and your Remaining Guaranteed Withdrawal Amount is greater than zero, we will pay you the remaining Annual Benefit Payment, if any, not yet withdrawn during the Contract Year that the Account Balance was depleted, and beginning in the following Contract Year, we will continue paying the Annual Benefit Payment to you each year until your Remaining Guaranteed Withdrawal Amount is depleted. This guarantees that you will receive your purchase payments regardless of market performance so long as you do not take Excess Withdrawals, however, you will not be guaranteed income for the rest of your life. . If you take your first withdrawal on or after the date your reach age 59 1/2, we will continue to pay the Annual Benefit Payment each year for the rest of your life (and the life of your spouse, if the Joint Life Version is elected and your spouse elects to continue the Contract and is at least age 59 1/2 at continuance, and, for Contracts issued in New York State, if you take your first withdrawal when both you and your spouse are at least age 591/2), even if your Remaining Guaranteed Withdrawal Amount or your Account Value declines to zero. This means if your Remaining Guaranteed Withdrawal Amount and/or your Account Balance is depleted due to a Non-Excess Withdrawal or the deduction of the benefit charge we will pay to you the remaining Annual Benefit Payment, if any, not yet withdrawn during that Contract Year that the Account Balance was depleted, and beginning in the following Contract Year, we will continue paying the Annual Benefit Payment to you each year for the rest of your life (and your spouse's life, if applicable). Therefore, you will be guaranteed income for life. . If you take your first withdrawal on or after the date you reach age 76, your Annual Benefit Payment will be set equal to a 6% withdrawal rate multiplied by the Total Guaranteed Withdrawal Amount. For Contracts issued in New York State, if you elect the Joint Life Version, if you take your first withdrawal on or after the Contract Anniversary following the date you and your spouse are at least age 63, your Annual Benefit Payment will be set equal to 5% withdrawal rate multiplied by the Total Guaranteed Withdrawal Amount. . If you have elected the LWG II, you should carefully consider when to begin taking withdrawals. If you begin taking withdrawals too soon, you may limit the value of the LWG II. For example, we no longer increase your Total 86 Guaranteed Withdrawal Amount by the 7.25% Compounding Income Amount (6% Compounding Income Amount for Contracts issued in New York State) once you make your second withdrawal (first withdrawal for Contracts issued in New York State). However, if you delay taking withdrawals for too long, you may limit the number of years available for you to take withdrawals in the future (due to life expectancy) and you may be paying for a benefit you are not using. . At any time during the pay-in phase, you can elect to annuitize under current annuity rates in lieu of continuing the LWG II. . Annuitization may provide higher income amounts if the current income payment type rates applied to the adjusted Account Balance exceed the payments under the LWG II rider. Also, income payments provided by annuitizing under current annuity rates may be higher due to different tax treatment of this income compared to the tax treatment of the payments received under the LWG II rider. MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your annual withdrawals. To retain the full guarantees of this benefit, your annual withdrawals cannot exceed the Annual Benefit Payment each Contract Year. In other words, you should not take Excess Withdrawals. We do not include withdrawal charges for the purpose of calculating whether you have made an Excess Withdrawal. If you do take an Excess Withdrawal, we will recalculate the Total Guaranteed Withdrawal Amount and reduce the Annual Benefit Payment to the new Total Guaranteed Withdrawal Amount multiplied by the 5% withdrawal rate (6% withdrawal rate if you make your first withdrawal on or after the date you reach age 76). In addition, as noted above, if you take an Excess Withdrawal, we will reduce the Remaining Total Guaranteed Withdrawal Amount in the same proportion that the withdrawal reduces the Account Balance. These reductions in the Total Guaranteed Withdrawal Amount, Annual Benefit Payment, and Remaining Guaranteed Withdrawal Amount may be significant. You are still eligible to receive either lifetime payments or the remainder of the Remaining Guaranteed Withdrawal Amount so long as the withdrawal that exceeded the Annual Benefit Payment did not cause your Account Balance to decline to zero. You can always take Non-Excess Withdrawals. However, if you choose to receive only a part of your Annual Benefit Payment in any given Contract Year, your Annual Benefit Payment is not cumulative and your Remaining Guaranteed Withdrawal Amount and Annual Benefit Payment will not increase. For example, if your Annual Benefit Payment is 5% of your Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount, you cannot withdraw 3% in one year and then withdraw 7% the next year without making an Excess Withdrawal in the second year. AUTOMATIC ANNUAL STEP-UP. On each Contract Anniversary prior to the Contract owner's 91st birthday (or in New York State, the youngest spouse's 91st birthday, if the Joint Life Version is elected), an Automatic Annual Step-Up will occur, provided that the Account Balance exceeds the Total Guaranteed Withdrawal Amount (after compounding) immediately before the step-up (and provided that you have not chosen to decline the step-up as described below). The Automatic Annual Step-Up will: . resets the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount to the Account Balance on the date of the step-up, up to a maximum of $10,000,000 regardless of whether or not you have taken any withdrawals; . resets the Annual Benefit Payment equal to 5% of the Total Guaranteed Withdrawal Amount after the Step-Up (or 6% if you make your first withdrawal on or after the date you reach age 76) or, for Contracts issued in New York State, if the Joint Life version of LWG II was elected, reset the Annual Benefit Payment equal to 4.5% of the Total Guaranteed Withdrawal Amount after the step-up (or 5% if you make your first withdrawal on or after the Contract Anniversary following the date you and your spouse are at least age 63); and 87 . may reset the Lifetime Withdrawal Guarantee Benefit II charge to a rate that does not exceed the lower of: (a) the maximum of 1.60% (Single Life version) or 1.80% (Joint Life version) or (b) the current rate that we charge for the same rider available for new Contract purchases at the time of the Automatic Annual Step-Up. In the event that the charge applicable to Contract purchases at the time of the step-up is higher than your current LWG II charge, we will notify you in writing a minimum of 30 days in advance of the applicable Contract Anniversary and inform you that you may choose to decline the Automatic Annual Step-Up. If you choose to decline the Automatic Annual Step-Up, you must notify us in writing at our Administrative Office no less than seven calendar days prior to the Contract Anniversary. Once you notify us of your decision to decline the Automatic Annual Step-Up, you will no longer be eligible for future Automatic Annual Step-Ups until you notify us in writing at our Administrative Office that you wish to reinstate the Automatic Annual Step-Ups. This reinstatement will take effect at the next Contract Anniversary after we receive your request for reinstatement. Please note that the Automatic Annual Step-Up may be of limited benefit if you intend to make purchase payments that would cause your Account Balance to approach $10,000,000, because the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount cannot exceed $10,000,000. REQUIRED MINIMUM DISTRIBUTIONS. For IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code, you may be required to take withdrawals to fulfill minimum distribution requirements generally beginning at age 70 1/2. These required distributions may be larger than your Annual Benefit Payment. If you enroll in the automated required minimum distribution service, AFTER THE FIRST CONTRACT YEAR, we will increase your Annual Benefit Payment to equal your most recently calculated required minimum distribution amount, if such amount is greater than your Annual Benefit Payment. You must be enrolled only in the automated required minimum distribution service to qualify for this increase in the Annual Benefit Payment. You may not be enrolled in any other Systematic Withdrawal Program. The frequency of your withdrawals must be annual. The automated required minimum distribution service is based on information relating to this Contract only. To enroll in the automated required minimum distribution service, please contact your Administrative Office. INVESTMENT ALLOCATION RESTRICTIONS. If you elect the Lifetime Withdrawal Guarantee Benefit II, there are certain investment allocation restrictions. Please see "Your Investment Choices -- Investment Allocation Restrictions For Certain Benefits" above. JOINT LIFE VERSION. Like the Single Life version of the LWG II, the Joint Life version must be elected at the time you purchase the contract, and the Contract owner (or oldest joint owner) must be age 85 or younger. Under the Joint Life version, when the owner of the Contract dies (or when the first joint owner dies), the LWG II will automatically remain in effect only if the spouse is the primary beneficiary and elects to continue the contract under the spousal continuation provisions. This means that if you purchase the Joint Life version and subsequently get divorced, or your spouse is no longer the primary beneficiary at the time of your death, he or she will not be eligible to receive payments under the Lifetime Withdrawal Guarantee Benefit II. If the spouse is younger than age 59 1/2 when he or she elects to continue the Contract, the spouse will receive the Annual Benefit Payment each year until the Remaining Guaranteed Withdrawal Amount is depleted. If the spouse is age 59 1/2 or older when he or she elects to continue the Contract, the spouse will receive the Annual Benefit Payment each year for the remainder of his or her life. If the first withdrawal was taken before the Contract owner died (or before the first joint owner died), the withdrawal rate upon continuation of the Contract and the LWG II rider by the spouse will be based on the age of the Contract owner, oldest joint owner or youngest spouse (if the Joint Life version is elected in New York) at the time the first withdrawal was taken. In situations in which a trust is both the owner and beneficiary of the Contract, the Joint Life version of the benefit would not apply. 88 For Contracts issued in New York State, in order for you and your spouse to receive lifetime income, both you and your spouse must be at least age 59 1/2 at the time of the first withdrawal. Please note that a change of the primary beneficiary will terminate the LWG II rider in New York State. The age at which the 6% Compounding Income Amount may begin to be applied to the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount is different for the Single Life and Joint Life versions of LWG II for Contracts issued in New York State (see "6% Compounding Income Amount" above.) In addition, the withdrawal rate for the Joint Life Version of LWG II may differ from the withdrawal rate for the Single Life Version for Contracts issued in New York State -- (see "Annual Benefit Payment" above). CANCELLATION AND GUARANTEED PRINCIPAL ADJUSTMENT. You may elect to cancel the Lifetime Withdrawal Guarantee Benefit II on the Contract Anniversary every five Contract Years for the first 15 Contract Years and annually thereafter. We must receive your cancellation request within 30 days following the eligible Contract Anniversary in writing at our Administrative Office. The cancellation will take effect on receipt of your request. If cancelled, the Lifetime Withdrawal Guarantee Benefit II will terminate, we will no longer deduct the Lifetime Withdrawal Guarantee Benefit II charge and, the investment allocation restrictions described in "Investment Choices -- Investment Allocation Restrictions for Certain Benefits" will no longer apply. The Contract, however, will continue. If you cancel the Lifetime Withdrawal Guarantee Benefit II on the fifteenth Contract Anniversary or any eligible Contract Anniversary thereafter, we will add a GUARANTEED PRINCIPAL ADJUSTMENT to your Account Balance (does not apply to Contracts issued in Washington State). The Guaranteed Principal Adjustment is intended to restore your initial investment in the Contract in the case of poor investment performance. The Guaranteed Principal Adjustment is equal to (a) - (b) where: (a)is purchase payments credited within 120 days of the date that we issued the Contract, reduced proportionately by the percentage reduction in Account Balance attributable to any partial withdrawals taken (including any applicable withdrawal charges) and (b)is the Account Balance on the date of cancellation. The Guaranteed Principal Adjustment will be added to each applicable investment division in the ratio the portion of the Account Balance in such investment division bears to the total Account Balance in all investment divisions. The Guaranteed Principal Adjustment will never be less than zero. Only purchase payments made during the first 120 days that you hold the Contract are taken into consideration in determining the Guaranteed Principal Adjustment. Contract Owners who anticipate making purchase payments after 120 days should understand that such payments will not increase the Guaranteed Principal Adjustment. Purchase payments made after 120 days are added to your Account Balance and impact whether or not a benefit is due. Therefore, the Lifetime Withdrawal Guarantee Benefit II may not be appropriate for you if you intend to make additional purchase payments after the 120 day period and are purchasing the Lifetime Withdrawal Guarantee Benefit II for its Guaranteed Principal Adjustment feature. TERMINATION OF THE LIFETIME WITHDRAWAL GUARANTEE BENEFIT II. The Lifetime Withdrawal Guarantee Benefit II will terminate upon the earliest of: (1)The date of a full withdrawal of the Account Balance (a pro rata portion of the charge will be assessed; you are still eligible to receive either the Remaining Guaranteed Withdrawal Amount or lifetime payments, provided the withdrawal did not exceed the Annual Benefit Payment and the provisions and conditions of this optional benefit have been met); (2)The date the Account Balance is applied to a pay-out option (a pro rata portion of the charge for this benefit will be assessed); (3)The date there are insufficient amounts to deduct the Lifetime Withdrawal Guaranteed Benefit charge and your Contract is thereby terminated (whatever Account Balance is available will be applied to pay the charge and you are 89 still eligible to receive either the Remaining Guaranteed Withdrawal Amount or lifetime payments, provided the provisions and conditions of this optional benefit have been met, however you will have no other benefits under the Contract); (4)Death of the Contract owner or joint Contract owner (or the annuitant if the owner is a non-natural person), except where the contract is issued under the Joint Life version of the Lifetime Withdrawal Guarantee Benefit II, the primary beneficiary is the spouse, and the spouse elects to continue the contract under the spousal continuation provisions of the contract; (5)Change in contract owners or joint contract owners or annuitants (if the contract owner is a non-natural person), subject to our administrative procedures (a pro rata portion of the charge for this benefit will be assessed, except for termination due to death; (6)The Deferred Annuity is terminated (a pro-rata portion of the charge will be assessed, except for termination due to death.) (7)Effective date of the cancellation of this benefit by the Contract Owner; (8)The date you assign your Contract (a pro-rata portion of the rider charge will be assessed), subject to our administrative procedures; or (9)For Contracts issued in New York State with the Joint Life Version, the effective date of a change of the primary beneficiary (a pro-rata portion of the rider charge will be assessed), subject to our administrative procedures. Once the benefit is terminated, the Lifetime Withdrawal Guarantee Benefit II charge will no longer be deducted and the Lifetime Withdrawal Guarantee II investment allocation restrictions will no longer apply. ADDITIONAL INFORMATION. The Lifetime Withdrawal Guarantee Benefit II may affect the death benefit available under your Contract. If the owner or joint owner should die while the Lifetime Withdrawal Guarantee Benefit II is in effect, an alternative death benefit amount will be calculated under the Lifetime Withdrawal Guarantee Benefit II that can be taken in a lump sum. The Lifetime Withdrawal Guarantee Benefit II death benefit amount that may be taken as a lump sum will be equal to total purchase payments less any partial withdrawals (deducted on a dollar-for-dollar basis). If this death benefit amount is greater than the death benefit provided by your Contract, and if you made no Excess Withdrawals, then this death benefit amount will be paid instead of the death benefit provided by the Contract. All other provisions of your Contract's death benefit will apply. Alternatively, the beneficiary may elect to receive the Remaining Guaranteed Withdrawal Amount as a death benefit, in which case we will pay the Remaining Guaranteed Withdrawal Amount on a monthly basis (or any mutually agreed upon frequency, but no less frequently than annually) until the Remaining Guaranteed Withdrawal Amount is exhausted. The surviving spouse's withdrawal rights then come to an end. Currently, there is no minimum dollar amount for the payments; however, we reserve the right to accelerate any payment, in a lump sum, that is less than $500 (see below). This death benefit will be paid instead of the applicable contractual death benefit or the alternative death benefit amount calculated under the Lifetime Withdrawal Guarantee Benefit II as described above. Otherwise, the provisions of those contractual death benefits will determine the amount of the death benefit. Except as may be required by the Internal Revenue Code, an annual payment will not exceed the Annual Benefit Payment. If your beneficiary dies while such payments are made, we will continue making the payments to the beneficiary's estate unless we have agreed to another payee in writing. If the Contract is a Non-Qualified Contract, any death benefit must be paid out over a time period and in a manner that satisfies Section 72(s) of the Internal Revenue Code. If the Contract owner (or the annuitant, if the Contract owner is not a natural person) dies prior to the "annuity starting date" (as defined under the Internal Revenue Code and regulations thereunder), the period over which the Remaining Guaranteed Withdrawal Amount is paid as a death benefit cannot exceed the remaining life expectancy of the payee under the appropriate IRS tables. For purposes of the preceding 90 sentence, if the payee is a non-natural person, the Remaining Guaranteed Withdrawal Amount must be paid out within 5 years from the date of death. Payments under this death benefit must begin within 12 months following the date of death. We reserve the right to accelerate any payment in a lump sum that is less than $500 or to comply with requirements under the Internal Revenue Code (including minimum distribution requirements for IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code and Non-Qualified Contracts subject to Section 72(s) of the Internal Revenue Code). If you terminate the Lifetime Withdrawal Guarantee Benefit II because (1) you make a total withdrawal of your Account Balance; (2) your Account Balance is insufficient to pay the Lifetime Withdrawal Guarantee Benefit II charge; or (3) the Contract Owner dies, except where the beneficiary or joint owner is the spouse of the Contract owner and the spouse elects to continue the Contract and the spouse is less than 85 years old, you may not make additional purchase payments under the Contract. CHARGES. For the Lifetime Withdrawal Guarantee Benefit II the current charges are 1.25% of the Total Guaranteed Withdrawal Amount for the Single Life version and 1.50% for the Joint Life version. If an Automatic Annual Step-Up occurs we may increase the Lifetime Withdrawal Guarantee Benefit II charge to the then current charge for the same optional benefit, but no more than a maximum of 1.60% for the Single Life version or 1.80% for the Joint life version. The charge is deducted at the end of each Contract Year after applying any 7.25% Compounding Income Amount (6% Compounding Income Amount for Contracts issued in New York State) and prior to taking into account any Automatic Annual Step-Up occurring on the Contract Anniversary by withdrawing amounts on a pro rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. The Fixed Account is not available with the C Class Deferred Annuity or in the State of New York if this optional benefit is selected. DESCRIPTION OF LIFETIME WITHDRAWAL GUARANTEE I (NO LONGER AVAILABLE FOR SALE) In states where the LWG II is not yet approved, we offer (in states where approved) the LWG I. The LWG I is identical to LWG II, with except as described below. TOTAL GUARANTEED WITHDRAWAL AMOUNT. The maximum Total Guaranteed Withdrawal Amount under the Lifetime Guarantee I is $5,000,000. If you elect the Lifetime Withdrawal Guarantee I and take an Excess Withdrawal, we will reduce the Total Guaranteed Withdrawal Amount by an amount equal to the difference between the Total Guaranteed Withdrawal Amount after the withdrawal and the Account Balance after the withdrawal (if lower). On the other hand, if you elect the LWG II and take an Excess Withdrawal, we will reduce the Total Guaranteed Withdrawal Amount in the same proportion that the withdrawal reduces the Account Balance. REMAINING GUARANTEED WITHDRAWAL AMOUNT. The maximum Remaining Total Guaranteed Withdrawal Amount under the Lifetime Withdrawal Guarantee is $5,000,000. If you elect the Lifetime Withdrawal Guarantee I and take a withdrawal, we will reduce the Remaining Guaranteed Withdrawal Amount by the amount of each withdrawal regardless of whether it is an Excess or Non-Excess withdrawal. However, if the withdrawal is an Excess Withdrawal, then we will additionally reduce the Remaining Guaranteed Withdrawal Amount to equal the difference between the Remaining Guaranteed Withdrawal Amount after the withdrawal and the Account Balance after the withdrawal (if lower). On the other hand, if you elect the LWG II and take a withdrawal, we will reduce the Remaining Guaranteed Withdrawal Amount by the amount of each withdrawal for withdrawals that are Non-Excess Withdrawals and for Excess Withdrawals, we will reduce the Remaining Guaranteed Withdrawal Amount in the same proportion that the withdrawal reduces the Account Balance. COMPOUNDING INCOME AMOUNT. If you elect the Lifetime Withdrawal Guarantee I on each Contract Anniversary until the earlier of: (a) the date of the first withdrawal from the Contract or (b) the tenth Contract Anniversary, we increase the 91 Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by an amount equal to 5% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase. On the other hand, if you elect the LWG II, on each Contract Anniversary until the earlier of: (a) the date of the second withdrawal from the Contract or (b) the tenth Contract Anniversary, we increase the Total Guaranteed Withdrawal Amount and the Remaining Guaranteed Withdrawal Amount by an amount equal to 7.25% multiplied by the Total Guaranteed Withdrawal Amount and Remaining Guaranteed Withdrawal Amount before such increase. ANNUAL BENEFIT PAYMENT. Under the Lifetime Withdrawal Guarantee I, the Annual Benefit Payment is set equal to the Total Guaranteed Withdrawal Amount multiplied by the 5% withdrawal rate (there is no 6% withdrawal rate for taking later withdrawals). AUTOMATIC ANNUAL STEP-UP. If an Automatic Annual Step-Up occurs under the Lifetime Withdrawal Guarantee I, we may increase the Lifetime Withdrawal Guarantee I charge to the charge applicable to current contract purchases of the same optional benefit at the time of the step-up, but to no more than a maximum of 0.95% (Single Life version) or 1.40% (Joint Life version) of the Total Guaranteed Withdrawal Amount. Automatic Annual Step-Ups may occur on each Contract Anniversary prior to the owner's 86th birthday. ISSUE AGES. For Contracts issued in New York State, the following issue age requirements apply: (1) the owner or oldest joint owner (or annuitant if the owner is a non-natural person) is at least 60 years old for the Single Life Version and (2) the Joint Life Version must be owned by joint owners who are spouses and both joint owners must be at least 63 years old. (Because of the requirement that the Contract be owned by joint owners, the Joint Life Version is only available for Non-Qualified Contracts). INVESTMENT ALLOCATION RESTRICTIONS. If you elect the LWG I, you are limited to allocating your purchase payments and Account Balance among the Fixed Account and the following investment divisions: (a)MetLife Conservative Allocation Investment Division (b)MetLife Moderate to Conservative Allocation Investment Division (c)MetLife Moderate Allocation Investment Division (d)MetLife Moderate to Aggressive Allocation Investment Division (e)BlackRock Money Market Investment Division (Available with C Class Deferred Annuities issued after April 30, 2003, and in New York State and Washington State only.) (f)the American Funds Moderate Allocation Investment Division (g)the American Funds Balanced Allocation Investment Division (h)the American Funds Growth Allocation Investment Division (i)the Met/Franklin Templeton Founding Strategy Investment Division (j)the SSgA Growth ETF Investment Division (k)the SSgA Growth and Income ETF Investment Division The Fixed Account is not available in New York State and Washington State with this optional benefit. You may elect to participate in the Enhanced Dollar Cost Averaging Program provided that your destination investment divisions are one or more of the above listed investment choices. CHARGES. The Lifetime Withdrawal Guarantee Benefit I is available for an additional charge of 0.50% for the Single Life version and 0.70% for the Joint Life version of the Total Guaranteed Withdrawal Amount each Contract Anniversary, prior 92 to taking into account any Automatic Annual Step-Up. As described above, this charge may change as a result of an Automatic Annual Step-Up. This charge is made by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. (The Fixed Account is not available in the C Class Deferred Annuity purchased after April 30, 2003 or when available, a Deferred Annuity issued in New York State and Washington State with this optional benefit.) EXAMPLES OF LIFETIME WITHDRAWAL GUARANTEE BENEFIT I AND II The purpose of these examples is to illustrate the operation of the Guaranteed Withdrawal Benefit. The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including investment allocations and the investment experience of the investment divisions chosen. The examples do not reflect the deduction of fees and charges, withdrawal charges and applicable income taxes and penalties. The Lifetime Withdrawal Guarantee Benefits do not guarantee an Account Balance or minimum investment return for any investment division. The Remaining Guaranteed Withdrawal Amount cannot be taken as a lump sum. A. Lifetime Withdrawal Guarantee Benefit 1. When Withdrawals Do Not Exceed the Annual Benefit Payment Assume that a contract had an initial purchase payment of $100,000. The initial Account Balance would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 X 5%). Assume that $5,000 is withdrawn each year, beginning before the contract owner attains age 59 1/2. The Remaining Guaranteed Withdrawal Amount is reduced by $5,000 each year as withdrawals are taken (the Guaranteed Total Withdrawal Amount is not reduced by these withdrawals). The Annual Benefit Payment of $5,000 is guaranteed to be received until the Remaining Guaranteed Withdrawal Amount is depleted, even if the Account Balance is reduced to zero. If the first withdrawal is taken after age 59 1/2, then the Annual Benefit Payment of $5,000 is guaranteed to be received for the owner's lifetime, even if the Remaining Guaranteed Withdrawal Amount and the Account Balance are reduced to zero. (Under the Lifetime Withdrawal Guarantee II, if the Contract Owner makes the first withdrawal at on after age 76, the Withdrawal Rate is 6% instead of 5% and the Annual Benefit Payment is $6,000.) 93 [CHART] Annual Benefit Cumulative Account Payment Withdrawals Balance -------------- ----------- ----------- 1 $5,000 $ 5,000 $100,000.00 2 5,000 10,000 90,250.00 3 5,000 15,000 80,987.50 4 5,000 20,000 72,188.13 5 5,000 25,000 63,828.72 6 5,000 30,000 55,887.28 7 5,000 35,000 48,342.92 8 5,000 40,000 41,175.77 9 5,000 45,000 34,366.98 10 5,000 50,000 27,898.63 11 5,000 55,000 21,753.70 12 5,000 60,000 15,916.02 13 5,000 65,000 10,370.22 14 5,000 70,000 5,101.71 15 5,000 75,000 96.62 16 5,000 80,000 0 17 5,000 85,000 0 18 5,000 90,000 -13,466.53 19 5,000 95,000 0 20 5,000 100,000 0 2. When Withdrawals Do Exceed the Annual Benefit Payment a. Lifetime Withdrawal Guarantee II -- Proportionate Reduction Assume that a contract had an initial purchase payment of $100,000. The initial Account Balance would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 X 5%). (If the Contract Owner makes the first withdrawal on or after the date he or she reaches age 76, the Withdrawal rate is 6% instead of 5% and the initial Annual Benefit Payment would be $6,000. For purposes of the example, assume the Contract Owner makes the first withdrawal before he or she reaches age 76 and the Withdrawal Rate is therefore 5%.) Assume that the Remaining Guaranteed Withdrawal Amount is reduced to $95,000 due to a withdrawal of $5,000 in the first year. Assume the Account Balance was further reduced to $80,000 at year two due to poor market performance. If you withdrew $10,000 at this time, your Account Balance would be reduced to $80,000 - $10,000 = $70,000. Since the withdrawal of $10,000 exceeded the Annual Benefit Payment of $5,000, there would be a proportional reduction to the Remaining Guaranteed Withdrawal Amount and the Total Guaranteed Withdrawal Amount. The proportional reduction is equal to the entire withdrawal ($10,000) divided by the Account Balance before the withdrawal ($80,000), or 12.5%. The Remaining Guaranteed Withdrawal Amount after the withdrawal would be $83,125 ($95,000 reduced by 12.5%). This new Remaining Guaranteed Withdrawal Amount of $83,125 would now be the amount guaranteed to be available to be withdrawn over time. The Total Guaranteed Withdrawal Amount would be reduced to $87,500 ($100,000 reduced by 12.5%). The Annual Benefit Payment would be set equal to 5% X $87,500 = $4,375. (Assume instead that you withdrew $10,000 during year two in two separate withdrawals of $4,000 and $6,000, Since the first withdrawal of $4,000 did not exceed the Annual Benefit Payment of $5,000, there would be no proportional reduction to the Remaining Guaranteed Withdrawal Amount and the Total Guaranteed Withdrawal Amount at the time of that withdrawal. The second withdrawal ($6,000), however, results in cumulative withdrawals of $10,000 during year two and causes a proportional reduction to the Remaining Guaranteed Withdrawal Amount and the Total Guaranteed Withdrawal Amount. The proportional reduction would be equal to the entire amount of the second withdrawal ($6,000) divided by the account value before that withdrawal.) 94 b. Lifetime Withdrawal Guarantee I -- Reduction to Account Balance Assume that a Contract with the Lifetime Withdrawal Guarantee I rider had an initial purchase payment of $100,000. The initial Account Balance would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, the initial Remaining Guaranteed Withdrawal Amount would be $100,000 and the initial Annual Benefit Payment would be $5,000 ($100,000 X 5%). Assume that the Remaining Guaranteed Withdrawal Amount is reduced to $95,000 due to a withdrawal of $5,000 in the first year. Assume the Account Balance was further reduced to $75,000 at year two due to poor market performance. If you withdrew $10,000 at this time, your Account Balance would be reduced to $75,000 - $10,000 = $65,000. Your Remaining Guaranteed Withdrawal Amount would be reduced to $95,000 - $10,000 = $85,000. Since the withdrawal of $ 10,000 exceeded the Annual Benefit Payment of $5,000 and the resulting Remaining Guaranteed Withdrawal Amount would be greater than the resulting Account Balance, there would be an additional reduction to the Remaining Guaranteed Withdrawal Amount. The Remaining Guaranteed Withdrawal Amount after the withdrawal would be set equal to the Account Balance after the withdrawal ($65,000). This new Remaining Guaranteed Withdrawal Amount of $65,000 would now be the amount guaranteed to be available to be withdrawn over time. The Total Guaranteed Withdrawal Amount would also be reduced to $65,000. The Annual Benefit Payment would be set equal to 5% X $65,000 = $3,250. B. Lifetime Withdrawal Guarantee Benefit -- Compounding Income Amount (for all states except New York) Assume that a contract with LWG II had an initial purchase payment of $100,000. The initial Remaining Guaranteed Withdrawal Amount would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, and the Annual Benefit Payment would be $5,000 ($100,000 X 5%). (If the Contract Owner makes the first withdrawal on or after the date he or she reaches age 76, the Withdrawal rate is 6% instead of 5% and the initial Annual Benefit Payment would be $6,000. For purposes of the example, assume the Contract Owner makes the first withdrawal before he or she reaches age 76 and the Withdrawal Rate is therefore 5%.) The Total Guaranteed Withdrawal Amount will increase by 7.25% of the previous year's Total Guaranteed Withdrawal Amount until the earlier of the second withdrawal or the 10th Contract Anniversary. The Annual Benefit Payment will be recalculated as 5% of the new Total Guaranteed Withdrawal Amount. If the second withdrawal is taken in the first Contract Year then there would be no increase: the Total Guaranteed Withdrawal Amount would remain at $100,000 and the Annual Benefit Payment will remain at $5,000 ($100,000 X 5%). If the second withdrawal is taken in the second Contract Year then the Total Guaranteed Withdrawal Amount would increase to $107,250 ($100,000 X 107.25%), and the Annual Benefit Payment would increase to $5,362 ($107,250 X 5%). If the second withdrawal is taken in the third Contract Year then the Total Guaranteed Withdrawal Amount would increase to $115,025 ($105,000 X 107.25%), and the Annual Benefit Payment would increase to $5,751 ($115,025 X 5%). If the second withdrawal is taken after the 10th Contract Year then the Total Guaranteed Withdrawal Amount would increase to $201,360 (the initial $100,000, increased by 7.25% per year, compounded annually for 10 years), and the Annual Benefit Payment would increase to $10,068 ($201,360 X 5%). (In contrast to the Lifetime Withdrawal Guarantee II, the Lifetime Withdrawal Guarantee I has a 5% Compounding Income Amount and the Total Guaranteed Withdrawal Amount is increased by 5% on each Contract Anniversary until the earlier of the date of the first withdrawal or the tenth Contract Anniversary.) 95 Delay taking withdrawals and receive higher guaranteed payments [Chart] Year of Second Withdrawal Annual Benefit Payment ------------------------- ---------------------- 1 $ 5,000 2 5,363 3 5,751 4 6,168 5 6,615 6 7,095 7 7,609 8 8,161 9 8,753 10 9,387 11 10,068 C. Lifetime Withdrawal Guarantee Benefit -- Automatic Annual Step-Ups and 7.25% Compounding Amount (No Withdrawals) Assume that a contract with LWG II had an initial purchase payment of $100,000. Assume that no withdrawals are taken. At the first Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $107,250 ($100,000 increased by 7.25%, compounded annually). Assume the Account Balance has increased to $110,000 at the first Contract Anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $107,250 to $110,000 and reset the Annual Benefit Payment to $5,500 ($110,000 X 5%). At the second Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $117,975 ($110,000 increased by 7.25%, compounded annually). Assume the Account Balance has increased to $120,000 at the second Contract Anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $117,975 to $120,000 and reset the Annual Benefit Payment to $6,000 ($120,000 X 5%). Provided that no withdrawals are taken, each year the Total Guaranteed Withdrawal Amount would increase by 7.25%, compounded annually, from the second Contract Anniversary through the ninth Contract Anniversary, and at that point would be equal to $195,867. Assume that during these contract years the Account Balance does not exceed the Total Guaranteed Withdrawal Amount due to poor market performance. Assume the Account Balance at the ninth Contract Anniversary has increased to $200,000 due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $195,867 to $200,000 and reset the Annual Benefit Payment to $10,000 ($200,000 X 5%). At the 10th Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $214,500 ($200,000 increased by 7.25%, compounded annually). Assume the Account Balance is less than 96 $214,500. There is no Automatic Annual Step-Up since the Account Balance is below the Total Guaranteed Withdrawal Amount; however, due to the 7.25% increase in the Total Guaranteed Withdrawal Amount, the Annual Benefit Payment is increased to $10,725 ($214,500 X 5%). [CHART] D. FOR CONTRACTS ISSUED IN NEW YORK STATE: Lifetime Withdrawal Guarantee Benefit -- Compounding Income Amount Assume that a Contract owner, age 63 at issue, elected the Single Life version of the LWG II and made an initial purchase payment of $100,000. The initial Remaining Guaranteed Withdrawal Amount would be $100,000, the Total Guaranteed Withdrawal Amount would be $100,000, and the Annual Benefit Payment would be $5,000 ($100,000 X 5%). (If the Contract owner makes the first withdrawal on or after the Contract Anniversary following the date he or she reaches age 76, the Withdrawal rate is 6% instead of 5% and the initial Annual Benefit Payment would be $6,000. For purposes of the example, assume the Contract owner makes the first withdrawal before the Contract Anniversary following the date he or she reaches age 76 and the Withdrawal Rate is therefore 5%.) The Total Guaranteed Withdrawal Amount will increase by 6% of the previous year's Total Guaranteed Withdrawal Amount until the earlier of the first withdrawal or the 5th Contract Anniversary. The Annual Benefit Payment will be recalculated as 5% of the new Total Guaranteed Withdrawal Amount. If the first withdrawal is taken in the first Contract Year then there would be no increase: the Total Guaranteed Withdrawal Amount would remain at $100,000 and the Annual Benefit Payment will remain at $5,000 ($100,000 X 5%). If the first withdrawal is taken in the second Contract Year then the Total Guaranteed Withdrawal Amount would increase to $106,000 ($100,000 X 106%), and the Annual Benefit Payment would increase to $5,300 ($106,000 X 5%). If the first withdrawal is taken in the third Contract Year then the Total Guaranteed Withdrawal Amount would increase to $112,360 ($106,000 X 106%), and the Annual Benefit Payment would increase to $5,618 ($112,360 X 5%). If the first withdrawal is taken after the 5th Contract Year then the Total Guaranteed Withdrawal Amount would increase to $133,822 (the initial $100,000, increased by 6% per year, compounded annually for 5 years), and the Annual Benefit Payment would increase to $6,691 ($133,822 X 5%). 97 Delay taking withdrawals and receive higher guaranteed payments [GRAPHIC APPEARS HERE] Annual Benefit Payment 1 2 3 4 5 6 ------ ------ ------ ------ ------ ------ $5,000 $5,300 $5,618 $5,955 $6,312 $6,691 E. FOR CONTRACTS ISSUED IN NEW YORK STATE: Lifetime Withdrawal Guarantee Benefit -- Automatic Annual Step-Ups and 6% Compounding Income Amount (No Withdrawals) Assume that a Contract owner, age 63 at issue, elected the Single Life version of LWG II and made an initial purchase payment of $100,000. Assume that no withdrawals are taken. At the first Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $106,000 ($100,000 increased by 6%, compounded annually). Assume the Account Value has increased to $110,000 at the first Contract Anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $106,000 to $110,000 and reset the Annual Benefit Payment to $5,500 ($110,000 X 5%). At the second Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $116,600 ($110,000 increased by 6%, compounded annually). Assume the Account Value has increased to $120,000 at the second Contract Anniversary due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $116,600 to $120,000 and reset the Annual Benefit Payment to $6,000 ($120,000 X 5%). Provided that no withdrawals are taken, each year the Total Guaranteed Withdrawal Amount would increase by 6%, compounded annually, from the second Contract Anniversary through the fourth Contract Anniversary, and at that point would be equal to $134,832. Assume that during these Contract years the Account Value does not exceed the Total Guaranteed Withdrawal Amount due to poor market performance. Assume the Account Value at the fourth Contract Anniversary has increased to $150,000 due to good market performance. The Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal Amount from $134,832 to $150,000 and reset the Annual Benefit Payment to $7,500 ($150,000 X 5%). At the 5th Contract Anniversary, provided that no withdrawals are taken, the Total Guaranteed Withdrawal Amount is increased to $159,000 ($150,000 increased by 6%, compounded annually). Assume the Account Value is less than $159,000. There is no Automatic Annual Step-Up since the Account Value is below the Total Guaranteed Withdrawal Amount; however, due to the 6% increase in the Total Guaranteed Withdrawal Amount, the Annual Benefit Payment is increased to $7,950 ($159,000 X 5%). 98 DESCRIPTION OF ENHANCED GUARANTEED WITHDRAWAL BENEFIT BENEFIT BASE. The Guaranteed Withdrawal Amount is the maximum TOTAL amount of money that you are guaranteed to receive over time under the Enhanced GWB. At issue, the Guaranteed Withdrawal Amount and the BENEFIT BASE are both equal to your initial purchase payment plus the GWB Bonus. At any subsequent point in time, the Benefit Base is the remaining amount of money that you are guaranteed to receive through withdrawals under the Enhanced GWB. Your Benefit Base will change with each purchase payment, or as the result of an Optional Reset. Also, each withdrawal will reduce your Benefit Base. If negative investment performance reduces your Account Balance below the Benefit Base, you are still guaranteed to be able to withdraw the entire amount of your Benefit Base. The Benefit Base is equal to: . Your initial purchase payment, increased by the 5% GWB Bonus; . Increased by each subsequent purchase payment, and by the 5% GWB Bonus; . Reduced dollar for dollar by withdrawals, which are withdrawals (including any applicable withdrawal charge) and amounts applied to an income option (currently, you may not apply amounts less than your entire Account Balance to an annuity option); and . If any withdrawal from your Contract is not payable to the Contract Owner or the Contract Owner's bank account (or to the annuitant or the annuitant's bank account, if the owner is a non-natural person), or results in cumulative withdrawals for the current Contract Year exceeding the Annual Benefit Payment, and the resulting Benefit Base exceeds the Account Balance, an additional reduction in the Benefit Base will be made. This additional reduction will be equal to the difference between the Benefit Base and your Account Balance, after the decrease for withdrawals. The Benefit Base will also be reset as a result of an Optional Reset as described below. ANNUAL BENEFIT PAYMENT. The Annual Benefit Payment is the maximum amount of your Benefit Base you may withdraw each Contract Year without adversely impacting the amount guaranteed to be available to you through withdrawals over time. The initial Annual Benefit Payment is equal to the initial Benefit Base multiplied by the GWB withdrawal rate (7%). The Annual Benefit Payment is reset after each subsequent purchase payment to the greater of: (1) the Annual Benefit Payment before the subsequent purchase payment, and (2) the GWB withdrawal rate multiplied by the Benefit Base after the subsequent purchase payment. The Annual Benefit Payment will also be reset as a result of an Optional Reset as described below. You can continue to receive annual withdrawals in an amount equal to or less than your Annual Benefit Payment until your Benefit Base is depleted. MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your annual withdrawals. To retain the guarantees of this benefit, your annual withdrawals (including any applicable withdrawal charge) cannot exceed the Annual Benefit Payment each Contract Year. If a withdrawal from your Contract does result in annual withdrawals during a Contract Year (including any applicable withdrawal charge) exceeding the Annual Benefit Payment, or if the withdrawal is not payable to the Contract Owner or the Contract Owner's bank account (or to the annuitant or the annuitant's bank account, if the owner is a non-natural person), the Annual Benefit Payment will be recalculated and may be reduced. The new Annual Benefit Payment will equal the lower of (1) the Annual Benefit Payment before the withdrawal and (2) your Account Balance after the reduction for the withdrawal (including any applicable withdrawal charge) multiplied by the GWB withdrawal rate. This reduction may be significant. Furthermore, because the GWB charge is assessed as a percentage of the Guaranteed Withdrawal Amount, any decrease of the Annual Benefit Payment caused by an excess withdrawal results in an increase in the cost of the benefit relative to the benefits you will receive. You can always take annual withdrawals less than the Annual Benefit Payment. However, if you choose to receive only a part of, or none of, your Annual Benefit Payment in any given Contract Year, your Annual Benefit Payment is not cumulative and your Benefit Base and Annual Benefit Payment will not increase. For example, if your Annual Benefit 99 Payment is 7% of your Benefit Base and you withdraw only 4% one year, you cannot then withdraw 10% the next year without exceeding your Annual Benefit Payment. ALL WITHDRAWALS ARE SUBJECT TO APPLICABLE EARLY WITHDRAWAL CHARGES AND TAXES. REQUIRED MINIMUM DISTRIBUTIONS. For IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code, you may be required to take withdrawals to fulfill minimum distribution requirements generally beginning at age 70 1/2. These required distributions may be larger than your Annual Benefit Payment. If you enroll in the automated required minimum distribution service, AFTER THE FIRST CONTRACT YEAR, we will increase your Annual Benefit Payment to equal your most recently calculated required minimum distribution amount, if such amount is greater than your Annual Benefit Payment. You must be enrolled in the automated required minimum distribution service to qualify for this increase in the Annual Benefit Payment. The frequency of your withdrawals must be annual. The automated required minimum distribution service is based on information relating to this Contract only. To enroll in the automated required minimum distribution service, please contact your Administrative Office. GUARANTEED WITHDRAWAL AMOUNT. We assess the GWB charge as a percentage of the Guaranteed Withdrawal Amount, which is initially set at an amount equal to your initial purchase payment plus the GWB Bonus. The Guaranteed Withdrawal Amount may increase with subsequent purchase payments. In this case, the Guaranteed Withdrawal Amount will be reset equal to the greater of: (1) the Guaranteed Withdrawal Amount before the purchase payment and (2) the Benefit Base after the purchase payment. Withdrawals do not decrease the Guaranteed Withdrawal Amount. The Guaranteed Withdrawal Amount will also be reset as a result of an Optional Reset as described below. If your Guaranteed Withdrawal Amount increases, the amount of the Enhanced GWB charge we deduct will increase because the charge is a percentage of your Guaranteed Withdrawal Amount. OPTIONAL RESET. At any Contract Anniversary prior to the 86th birthday of the owner (or oldest joint owner or annuitant if the Contract is owned by a non-natural person) you may elect an Optional Reset. The purpose of an Optional Reset is to "lock-in" a higher Benefit Base, which may increase the amount of the Annual Benefit Payment and lengthen the period of time over which these withdrawals can be taken. We reserve the right to prohibit an Optional Reset election if we no longer offer this benefit. An Optional Reset will: . Reset your Guaranteed Withdrawal Amount and Benefit Base equal to the Account Balance on the date of the reset; . Reset your Annual Benefit Payment equal to the Account Balance on the date of the reset multiplied by the GWB withdrawal rate (7%); and . Reset the Enhanced GWB charge equal to the then current level we charge for the same benefit at the time of the reset, up to the maximum charge of 1.00%. You may elect either a one-time Optional Reset or Automatic Annual Resets. A one-time Optional Reset is permitted only if: (1) your Account Value is larger than the Benefit Base immediately before the reset, and (2) the reset occurs prior to the 86th birthday of the owner (or oldest joint owner or annuitant if the Contract is owned by a non-natural person). We must receive your request for a one-time Optional Reset in accordance with our administrative procedures (currently we require you to submit your request in writing) before the applicable Contract Anniversary. The Optional Reset will take effect on the next Contract Anniversary following our receipt of your written request. If you elect Automatic Annual Resets, a reset will occur automatically on any Contract Anniversary if: (1) your Account Balance is larger than the Guaranteed Withdrawal Amount immediately before the reset, and (2) the Contract 100 Anniversary is prior to the 86th birthday of the owner (or oldest joint owner or annuitant if the Contract is owned by a non-natural person). The same conditions will apply to each Automatic Annual Reset. In the event that the charge applicable to Contract purchases at the time of the Automatic Annual Reset is higher than your current Enhanced GWB rider charge, we will notify you in writing a minimum of 30 days in advance of the applicable Contract Anniversary and inform you that you may choose to decline the Automatic Annual Reset. You may discontinue Automatic Annual Resets by notifying us in writing (or by any other method acceptable to us), prior to the Contract Anniversary on which a reset may otherwise occur. If you discontinue the Automatic Annual Resets, no reset will occur automatically on any subsequent Contract Anniversary unless you make a new election under the terms described above. (If you discontinue Automatic Annual Resets, the Enhanced GWB rider (and the rider charge) will continue, and you may choose to elect a one-time Optional Reset or reinstate Automatic Annual Resets.) It is possible to elect a one-time Optional Reset when the Account Balance is larger than the Benefit Base but smaller than the Guaranteed Withdrawal Amount. (By contrast, an Automatic Annual Reset will never occur if the Account Balance is smaller than the Guaranteed Withdrawal Amount.) If you elect a one-time Optional Reset when the Account Balance before the reset was less than the Guaranteed Withdrawal Amount, you would lock in a higher Benefit Base which would increase the total amount you are guaranteed to receive through withdrawals under the Enhanced GWB rider, and extend the period of time over which you could make those withdrawals. However, you would also decrease the Annual Benefit Payment and the Guaranteed Withdrawal Amount. You should consider electing a one-time Optional Reset when your Account Balance is smaller than the Guaranteed Withdrawal Amount only if you are willing to accept the decrease in the Annual Benefit Payment and Guaranteed Withdrawal Amount in return for locking in the higher Benefit Base. Otherwise, you should only elect a one-time Optional Reset when your Account Balance is larger than the Guaranteed Withdrawal Amount. Any benefit of a one-time Optional Reset or Automatic Annual Reset also depends on the current Enhanced GWB rider charge. If the current charge in effect at the time of the reset is higher than the charge you are paying, it may not be beneficial to elect a reset because we will begin applying the higher current charge at the time of the reset (even if a one-time Optional Reset results in a decrease of your Annual Benefit Payment and/or your Guaranteed Withdrawal Amount). For Contracts issued prior to JULY 16, 2007, you may elect an Optional Reset beginning with the third Contract Anniversary (as long as it is prior to the owner's 86th birthday) and at any subsequent Contract Anniversary prior to the owner's 86th birthday as long as it has been at least three years since the last Optional Reset. Automatic Annual Resets are not available. WITHDRAWAL CHARGE. We will apply a withdrawal charge to withdrawals from purchase payments of up to 7% of purchase payments taken in the first seven years following receipt of the applicable purchase payment. TAXES. Withdrawals of taxable amounts will be subject to ordinary income tax and, if made prior to age 59 1/2, a 10% federal tax penalty may apply. CANCELLATION OF THE ENHANCED GWB. You may elect to cancel the Enhanced GWB in accordance with our administrative procedures (currently we require you to submit your cancellation request in writing to our Administrative Office) during the 90-day period following your fifth Contract Anniversary. Such cancellation will take effect upon our receipt of your request. If you cancel the Enhanced GWB, you may not re-elect it. Upon cancellation, the Enhanced GWB charge will no longer apply. The Contract, however, will continue. 101 TERMINATION OF THE ENHANCED GWB. The Enhanced GWB will terminate upon the earliest of: (1)the date you make a full withdrawal of your Account Balance (a pro rata portion of the charge will apply); (You are still eligible to receive annual payments until the Benefit Base declines to zero, provided the withdrawal did not exceed the Annual Benefit Payment and the provisions and conditions of the rider have been met.) (2)the date you apply all of your Account Balance to a pay-out option (a pro rata portion of the charge will apply); (3)the date there are insufficient amounts to deduct the Enhanced GWB charge from your Account Balance (whatever Account Balance is available will be applied to pay the annual Enhanced GWB benefit charge); (You are still eligible to receive annual payments until the Benefit Base declines to zero, provided your withdrawals did not exceed the Annual Benefit Payment and the provisions and conditions of the rider have been met.) (4)the date we receive due proof of the owner's death and a beneficiary claim form, except where the beneficiary or joint owner is the spouse of the owner and the spouse elects to continue the contract and the spouse is less than 85 years old, or the annuitant dies if the owner is a non-natural person; note: (a) if the spouse elects to continue the contract (so long as the spouse is less than 85 years old and the Enhanced GWB is in effect at the time of continuation), all terms and conditions of the Enhanced GWB will apply to the surviving spouse; and (b) we will not terminate the benefit until we receive both due proof of the owner's death and a beneficiary claim form (from certain beneficiaries, such as a trust, we may require additional information, such as the trust document), which means we will continue to deduct the Enhanced GWB charge until we receive this information; (5)the effective date of cancellation of the rider; (6)a change of the owner or joint owner (or the annuitant if the owner is a non-natural person) for any reason (a pro rata portion of the charge will apply); or (7)the termination of the Deferred Annuity (a pro rata portion of the charge will apply). ADDITIONAL INFORMATION. If you take a full withdrawal of your Account Balance and the withdrawal does not exceed the Annual Benefit Payment, or your Account Balance is reduced to zero because you do not have a sufficient Account Balance to pay the Enhanced GWB charge and your Benefit Base after the withdrawal is greater than zero, we will commence making payments to the owner or joint owner (or to the annuitant if the owner is a non-natural person) on a monthly basis (or any mutually agreed upon frequency, but not less frequently than annually) until the Benefit Base is exhausted. Your withdrawal rights then come to an end. Currently, there is no minimum dollar amount for the payments; however, we reserve the right to accelerate any payment, in a lump sum, that is less than $500 (see below). The total annual payments cannot exceed the Annual Benefit Payment, except to the extent required under the Internal Revenue Code. If you or the joint owner (or the annuitant if the owner is a non-natural person) should die while these payments are being made, your beneficiary will receive these payments. No other death benefit will be paid. If the owner or joint owner (or the annuitant if the owner is a non-natural person) should die while the Enhanced GWB is in effect, your beneficiary may elect to receive the Benefit Base as a death benefit in lieu of any other contractual death benefits. Otherwise, the provisions of those death benefits will determine the amount of the death benefit and no benefit will be payable under the Enhanced GWB. If the beneficiary elects the Benefit Base as a death benefit, we will pay the remaining Benefit Base on a monthly basis (or any mutually agreed-upon frequency, but no less frequently than annually) until the Benefit Base is exhausted. Except as may be required by the Internal Revenue Code, an annual payment will not exceed the Annual Benefit Payment. If your beneficiary dies while such payments are made, we will continue making the payments to the beneficiary's estate unless we have agreed to another payee in writing. If the Contract is a Non-Qualified Contract, any death benefit must be paid out over a time period and in a manner that satisfies Section 72(s) of the Internal Revenue Code. If the owner (or the annuitant, if the owner is not a natural person) dies prior to the "annuity starting date" (as defined under the Internal 102 Revenue Code and regulations thereunder), the period over which the Benefit Base is paid as a death benefit cannot exceed the remaining life expectancy of the payee under the appropriate IRS tables. For purposes of the preceding sentence, if the payee is a non-natural person, the Benefit Base must be paid out within 5 years from the date of death. Payments under this death benefit must begin within 12 months following the date of death. We reserve the right to accelerate any payment, in a lump sum, that is less than $500 or to comply with requirements under the Internal Revenue Code (including minimum distribution requirements for IRAs and other contracts subject to Section 401(a)(9) of the Internal Revenue Code and Non-Qualified Contracts subject to Section 72(s) of the Internal Revenue Code). If you terminate the Enhanced GWB because (1) you make a total withdrawal of your Account Balance; (2) your Account Balance is insufficient to pay the Enhanced GWB charge; or (3) the Contract Owner or joint owner (or the annuitant, if the owner is a non-natural person) dies, except where the beneficiary or joint owner is the spouse of the owner and the spouse elects to continue the Contract and the spouse is less than 85 years old, you may not make additional purchase payments under the Contract. CHARGES. The Enhanced GWB is available for an additional charge of 0.55% of the Guaranteed Withdrawal Amount each Contract Anniversary, prior to taking into account any Optional Reset. As described above, this charge may change as a result of an Optional Reset. We will not continue to assess the charge if your Benefit Base equals zero. The charge is made by withdrawing amounts on a pro-rata basis from your Fixed Account balance, Enhanced Dollar Cost Averaging Program balance and Separate Account balance. We take amounts from the Separate Account by canceling accumulation units from your Separate Account balance. (The Fixed Account is not available in the C Class Deferred Annuity purchased after April 30, 2003 or a Deferred Annuity issued in New York State and Washington State with this optional benefit. The Enhanced Dollar Cost Averaging Program is not available in the C and Bonus Class Deferred Annuity.) EXAMPLES The purpose of these examples is to illustrate the operation of the Guaranteed Withdrawal Benefit. The investment results shown are hypothetical and are not representative of past or future performance. Actual investment results may be more or less than those shown and will depend upon a number of factors, including investment allocations and the investment experience of the investment divisions chosen. The examples do not reflect the deduction of fees and charges, withdrawal charges and applicable income taxes and penalties. A. How Withdrawals Affect the Benefit Base 1. An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000. ($100,000 X 5%). Assume that the Account Balance grew to $110,000 because of market performance. If a subsequent withdrawal of $10,000 were made, the Benefit Base would be reduced to $105,000 - $10,000 = $95,000. Assume the withdrawal of $10,000 exceeded the Annual Benefit Payment. Since the Account Balance of $100,000 exceeds the Benefit Base of $95,000, no further reduction to the Benefit Base is made. 2. An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000. Assume that the Account Balance shrank to $90,000 because of market performance. If a subsequent withdrawal of $10,000 were made, the Benefit Base would be reduced to $95,000 and the Account Balance would be reduced to $80,000. Assume the withdrawal of $10,000 exceeded the Annual Benefit Payment. Since the Account Balance of $80,000 is less than the Benefit Base of $95,000, a further reduction of the $15,000 difference is made, bringing the Benefit Base to $80,000. B. How Withdrawals and Subsequent Purchase Payments Affect the Annual Benefit Payment An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000 and the initial Annual Benefit Payment would be $7,350. If $7,000 withdrawals were then made for each of the next five years, the Benefit Base would be 103 decreased to $70,000. If a subsequent purchase payment of $10,000 were made the next day, the Benefit Base would be increased to $70,000 + $10,000 + (5% X $10,000) = $80,500. The Annual Benefit Payment would be reset to the greater of a) $7,350 (the Annual Benefit Payment before the second purchase payment) and b) $5,635 (7% multiplied by the Benefit Base after the second purchase payment). In this case, the Annual Benefit Payment would remain at $7,350. C. How Withdrawals Affect the Annual Benefit Payment 1. An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000 and the initial Annual Benefit Payment would be $7,350. If a withdrawal of $9,000 was made the next day, and negative market performance reduced the Account Balance by an additional $1,000, the Account Balance would be reduced to $100,000 - $9,000 - $1,000 = $90,000. Since the withdrawal of $9,000 exceeded the Annual Benefit Payment of $7,350, the Annual Benefit Payment would be reset to the lower of a) $7,350 (the Annual Benefit Payment before the withdrawal) and b) $6,300 (7% multiplied by the Account Balance after the withdrawal). In this case the Annual Benefit Payment would be reset to $6,300. 2. An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000 and the initial Annual Benefit Payment would be $7,350. If a withdrawal of $10,000 was made two years later after the Account Balance had increased to $150,000, the Account Balance would be reduced to $140,000. Since the withdrawal of $10,000 exceeded the Annual Benefit Payment of $7,350, the Annual Benefit Payment would be reset to the lower of a) $7,350 (the Annual Benefit Payment before the withdrawal) and b) $9,800 (7% multiplied by the Account Balance after the withdrawal). In this case the Annual Benefit Payment would remain at $7,350. D. How Withdrawals and Subsequent Purchase Payments Affect the Guaranteed Withdrawal Amount An initial purchase payment is made of $100,000 and the initial Guaranteed Withdrawal Amount and initial Benefit Base would both be $105,000. Assume that over the next five years, withdrawals reduced the Benefit Base to $70,000. If a subsequent purchase payment of $10,000 was made, the Benefit Base would be increased to $70,000 + $10,000 + (5% X $10,000) = $80,500. The Guaranteed Withdrawal Amount would be reset to the greater of a) $105,000 (the Guaranteed Withdrawal Amount before the second purchase payment) and b) $80,500 (the Benefit Base after the second purchase payment). In this case, the Guaranteed Withdrawal Amount would remain at $105,000. E. Putting It All Together 1. When Withdrawals Do Not Exceed the Annual Benefit Payment An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000, the Guaranteed Withdrawal Amount would be $105,000, and the Annual Benefit Payment would be $7,350. Assume that the Benefit Base was reduced to $82,950 due to 3 years of withdrawing $7,350 each year and assume that the Account Balance was further reduced to $50,000 at year four due to poor market performance. If you withdrew $7,350 at this time, your Account Balance would be reduced to $50,000 - $7,350 = $42,650. Your Benefit Base would be reduced to $82,950 - $7,350 = $75,600. Since the withdrawal of $7,350 did not exceed the Annual Benefit Payment, there would be no additional reduction to the Benefit Base. The Guaranteed Withdrawal Amount would remain at $105,000 and the Annual Benefit Payment would remain at $7,350. 104 [CHART] Annual Benefit Cumulative Account Benefit Payment Withdrawals Balance Base ------- ----------- ------- ------- 0 0 0 100,000 105,000 1 7,350 7,350 85,000 97,650 2 7,350 7,350 68,000 90,300 3 7,350 7,350 50,000 82,950 4 7,350 7,350 42,650 75,600 5 7,350 7,350 35,300 68,250 6 7,350 7,350 27,950 60,900 7 7,350 7,350 20,600 53,550 8 7,350 7,350 13,250 46,200 9 7,350 7,350 5,900 38,850 10 7,350 7,350 0 31,500 11 7,350 7,350 0 24,150 12 7,350 7,350 0 16,800 13 7,350 7,350 0 9,450 14 7,350 7,350 0 2,100 15 2,100 2,100 0 0 16 17 18 2. When Withdrawals Do Exceed the Annual Benefit Payment An initial purchase payment is made of $100,000. The initial Benefit Base would be $105,000, the Guaranteed Withdrawal Amount would be $105,000, and the Annual Benefit Payment would be $7,350. Assume that the Benefit Base was reduced to $82,950 due to 3 years of withdrawing $7,350 each year. Assume the Account Balance was further reduced to $50,000 at year four due to poor market performance. If you withdrew $10,000 at this time, your Account Balance would be reduced to $50,000 - $10,000 = $40,000. Your Benefit Base would be reduced to $82,950 - $10,000 = $72,950. Since the withdrawal of $10,000 exceeded the Annual Benefit Payment of $7,350 and the resulting Benefit Base would be greater than the resulting Account Balance, there would be an additional reduction to the Benefit Base. The Benefit Base after the withdrawal would be set equal to the Account Balance after the withdrawal = $40,000. The Annual Benefit Payment would be set equal to the lesser of $7,350 and 7% X $40,000 = $2,800. The Guaranteed Withdrawal Amount would remain at $105,000, but this amount now no longer would be guaranteed to be received over time. The new Benefit Base of $40,000 would be now the amount guaranteed to be available to be withdrawn over time. [CHART] Annual Benefit Cumulative Account Benefit Payment Withdrawals Balance Base ------- ----------- ------- ------- 0 $0 $0 $100,000 $105,000 1 7,350 7,350 85,000 97,650 2 7,350 7,350 68,000 90,300 3 7,350 7,350 50,000 82,950 4 7,350 10,000 40,000 40,000 5 2,800 2,800 37,200 37,200 6 2,800 2,800 34,400 34,400 7 2,800 2,800 31,600 31,600 8 2,800 2,800 28,800 28,800 9 2,800 2,800 26,000 26,000 10 2,800 2,800 23,200 23,200 11 2,800 2,800 20,400 20,400 12 2,800 2,800 17,600 17,600 13 2,800 2,800 14,800 14,800 14 2,800 2,800 12,000 12,000 15 2,800 2,800 9,200 9,200 16 2,800 2,800 6,400 6,400 17 2,800 2,800 3,600 3,600 18 2,800 2,800 800 800 105 F. Annual Benefit Payment Continuing When Account Balance Reaches Zero An initial purchase payment is made of $100,000. The initial Account Balance would be $100,000, the initial Benefit Base would be $105,000 and the Annual Benefit Payment would be $7,350 ($105,000 X 7%). Assume that the Benefit Base was reduced to $31,500 due to 10 years of withdrawing $7,350 each year. Assume that the Account Balance was further reduced to $0 at year 11 due to poor market performance. We would commence making payments to you (equal on an annual basis, to the Annual Benefit Payment) until the Benefit Base is exhausted. In this situation (assuming there are monthly payments), there would be 51 payments of $612.50 and a final payment of $262.50, which, in sum, would deplete the $31,500 Benefit Base. The total amount withdrawn over the life of the Contract would then be $105,000. [CHART] Annual Benefit Payment Benefit Base Account Balance ---------------------- ------------ --------------- 1 $7,350 $105,000 $100,000 2 7,350 97,650 73,000 3 7,350 90,300 52,750 4 7,350 82,950 37,562.50 5 7,350 75,600 26,171.88 6 7,350 68,250 17,628.91 7 7,350 60,900 11,221.68 8 7,350 53,550 6,416.26 9 7,350 46,200 2,812.20 10 7,350 38,850 109.14 11 7,350 31,500 0 12 7,350 24,150 0 13 7,350 16,800 0 14 7,350 9,450 0 15 2,100 2,100 0 16 0 0 0 G. How the Optional Reset Works if Elected on the 3rd Contract Anniversary (may be elected prior to age 86) Assume that a Contract had an initial purchase payment of $100,000 and the fee is .55%. The initial Account Balance would be $100,000, the initial Benefit Base would be $105,000, the Guaranteed Withdrawal Amount would be $105,000 and the Annual Benefit Payment would be $7,350. The Account Balance on the third Contract Anniversary grew due to market performance to $148,350. Assume the fee remains at .55%. If an Optional Reset is elected or Automatic Annual Resets are in effect, the charge would remain at .55%, the Guaranteed Withdrawal Amount and the Benefit Base would be reset to $148,350, and the Annual Benefit Payment would become 7% X $148,350 = $10,385. The Account Balance on the sixth Contract Anniversary grew due to market performance to $179,859. Assume the fee has been increased to .60%. If an Optional Reset is elected or Automatic Annual Resets are in effect, the charge would increase to .60%, the Guaranteed Withdrawal Amount and the Benefit Base would both be reset to $179,859, and the Annual Benefit Payment would become 7% X $179,859 = $12,590. The Account Balance on the ninth Contract Anniversary grew due to market performance to $282,582. Assume the fee is still .60%. If an Optional Reset is elected or Automatic Annual Resets are in effect, the charge would remain at .60%, the Guaranteed Withdrawal Amount and the Benefit Base would both be reset to $282,582, and the Annual Benefit Payment would become 7% X $282,582= $19,781. 106 The period of time over which the Annual Benefit Payment may be taken would be lengthened. [CHART] Annual Benefit Cumulative Payment Withdrawals Account Balance -------------- ----------- --------------- 1 $ 7,350 $ 7,350 $105,000 2 7,350 14,700 125,000 3 7,350 22,050 130,000 4 10,385 32,435 148,350 5 10,385 42,819 185,000 6 10,385 53,204 195,000 7 12,590 65,794 179,859 8 12,590 78,384 210,000 9 12,590 90,974 223,000 10 19,781 110,755 282,582 11 19,781 130,535 270,000 12 19,781 150,316 278,000 4 How an Optional Reset May Increase the Benefit Base While Decreasing the Guaranteed Withdrawal Amount and Annual Benefit Payment Assume that a Contract had an initial purchase payment of $100,000. The initial Account Balance would be $100,000, the initial Benefit Base would be $105,000, the Guaranteed Withdrawal Amount would be $105,000 and the Annual Benefit Payment would be $7,350. Assume that the Benefit Base is reduced to $70,000 due to 5 years of withdrawing $7,000 each year, but also assume that, due to positive market performance, the Account Balance at the end of 5 years is $80,000. If a one-time Optional Reset is elected, the Benefit Base would be reset from $70,000 to $80,000, the Guaranteed Withdrawal Amount would be reduced from $105,000 to $80,000, and the Annual Benefit Payment would be reduced from $7,350 to $5,600 ($80,000 X 7%). (If you elect Automatic Annual Resets, a rest will not occur if the Account Balance is lower than the Guaranteed Withdrawal Amount.) Under these circumstances, the Optional Reset increases the Benefit Base (the remaining amount of money you are guaranteed to receive) by $10,000, but also reduces the Annual Benefit Payment, thereby lengthening the period of time over which you will receive the money. This Optional Reset also reduces the Guaranteed Withdrawal Amount, against which the benefit charge is calculated. If the benefit charge rate does not increase in connection with the Optional Reset, the reduced Guaranteed Withdrawal Amount will result in a reduction in the amount of the annual benefit charge. 107 DESCRIPTION OF THE GUARANTEED WITHDRAWAL BENEFIT I (NO LONGER AVAILABLE FOR SALE) In states where the Enhanced Guaranteed Withdrawal Benefit is not yet approved, we currently offer the GWB I instead of the Enhanced GWB. The GWB I is the same as the Enhanced GWB described above with the following differences: (1) there is no favorable treatment of required minimum distributions; (2) the GWB charge continues even if your Benefit Base equals zero; (3) you may only elect the Optional Reset once every five contract years instead of every Contract Year; (4) the GWB I charge is 0.50% and the maximum GWB I charge upon an Optional Reset is 0.95%; and (5) you do not have the ability to cancel the benefit following your fifth Contract Anniversary. By endorsement, the GWB I has been enhanced so that items (1) and (2) above no longer apply and the interval between Optional Resets in item (3) has been decreased to every three Contract Years. You may now elect an Optional Reset under the GWB I starting with the third Contract Anniversary (as long as it is prior to the owner's 86th birthday), and you may elect an Optional Reset at any subsequent Contract Anniversary prior to the owner's 86th birthday, as long as it has been at least three years since the last Optional Reset. Automatic annual resets are not available. LIFETIME WITHDRAWAL GUARANTEE, GWB AND DECEDENT CONTRACTS The Lifetime Withdrawal Guarantee is not available for purchase by a beneficiary under a decedent's Non-Qualified Contract or IRA (or where otherwise offered, under any other Contract which is being "stretched" by a beneficiary after the death of the owner or after the death of the annuitant in certain cases). Under the tax rules, such contracts generally require distributions to commence in accordance with tax regulations by the end of the calendar year following the year of the owner's death. However, these required distributions can in certain circumstances exceed the Annual Benefit Payment, and any such excess will have the effect of reducing the lifetime payments under the Lifetime Withdrawal Guarantee. Note that the Lifetime Withdrawal Guarantee, Enhanced GWB, and GWB I are not appropriate for purchase by a beneficiary under a decedent's Non-Qualified Contract. GUARANTEED MINIMUM ACCUMULATION BENEFIT (GUARANTEED MINIMUM ACCUMULATION BENEFIT IS NO LONGER AVAILABLE FOR SALE, EFFECTIVE FOR APPLICATIONS AND NECESSARY INFORMATION RECEIVED AT YOUR ADMINISTRATIVE OFFICE ON OR AFTER MAY 4, 2009) The Guaranteed Minimum Accumulation Benefit ("GMAB") guarantees that your Account Balance will not be less than a minimum amount at the end of a specified number of years (the "Maturity Date"). If your Account Balance is less than the minimum guaranteed amount at the Maturity Date, we will apply an additional amount to increase your Account Balance so that it is equal to the guaranteed amount. This benefit is intended to protect you against poor investment performance during the accumulation or "pay-in" phase of your Deferred Annuity. If you have elected the GMAB, we require you to allocate your purchase payments and all of your Account Balance to one of the asset allocation investment divisions available in your Deferred Annuity (the MetLife Moderate to Aggressive and the MetLife Aggressive Allocation Investment Divisions are not available for this purpose). You may also allocate purchase payments to the Enhanced Dollar Cost Averaging Program, if available, provided that any amounts transferred from the program to an investment division must be transferred to the one investment division you have chosen. The Fixed Account is not available. No transfers are permitted while this optional benefit is in effect. The asset allocation investment division you choose will determine the percentage of purchase payments that equal the guaranteed amount. The asset allocation investment divisions available, if you choose the GMAB, and the percentage of purchase payments that determine the guaranteed amount and the number of years to the Maturity Date for each, are:
GUARANTEED AMOUNT INVESTMENT DIVISION* (% OF PURCHASE PAYMENTS) YEARS TO MATURITY DATE -------------------- ------------------------ ---------------------- MetLife Conservative Allocation Investment Division............. 130% 10 years MetLife Conservative to Moderate Allocation Investment Division. 120% 10 years MetLife Moderate Allocation Investment Division................. 110% 10 years
----------- * You can learn more about these investment divisions in the Prospectus under the section "Your Investment Choices" and the attached prospectus for these portfolios. 108 You may elect the GMAB when you purchase the Deferred Annuity through age 80. You may not have this benefit and another living benefit or the Enhanced Death Benefit in effect at the same time. BENEFIT DESCRIPTION. The GMAB guarantees that at the Maturity Date, your Account Balance will at least be equal to a percentage of the purchase payments you made during the first 120 days that you held the Deferred Annuity (the "Eligibility Period"), less reductions for any withdrawals (and related withdrawal charges) that you made at any time before the Maturity Date. The percentage of purchase payments made that determines the guaranteed amount range from 110% to 130%, depending on the asset allocation investment division you selected. This guaranteed amount is the "Guaranteed Accumulation Amount." The Guaranteed Accumulation Amount is used only to determine the amount of any benefit payable under the GMAB and the amount of the annual charge for the GMAB. There is a maximum Guaranteed Accumulation Amount (currently $5 million). Purchase payments made after this maximum Guaranteed Accumulation Amount is reached will not increase the Guaranteed Accumulation Amount above the maximum. However, if you make a withdrawal during the GMAB Eligibility Period that reduces the Guaranteed Accumulation Amount below the maximum, then purchase payments made after the withdrawal and during the Eligibility Period will increase the Guaranteed Accumulation Amount until it reaches the maximum. Only purchase payments made during the first 120 days that you hold the Deferred Annuity are taken into consideration in determining the Guaranteed Accumulation Amount. Contract owners who anticipate making purchase payments after 120 days should understand that such payments will not increase the Guaranteed Accumulation Amount. Purchase payments made after 120 days are added to your Account Balance and impact whether or not a benefit is due under the GMAB at the Maturity Date. At issue, the Guaranteed Accumulation Amount is equal to a percentage of your initial purchase payment. Subsequent purchase payments made during the Eligibility Period increase the Guaranteed Accumulation Amount by the target percentage of the asset allocation investment division you have selected. When you make a withdrawal, the Guaranteed Accumulation Amount is reduced in the same proportion that the amount of the withdrawal (including any related withdrawal charge) bears to the Account Balance. Purchase payment credits (I.E., bonus payments) are not considered to be purchase payments in the calculation of the Guaranteed Accumulation Amount. The Guaranteed Accumulation Amount does not represent an amount of money available for withdrawal and is used to calculate any benefits under the contract prior to the Maturity Date. EXAMPLE: Assume your Account Balance is $100,000 and your Guaranteed Accumulation Amount is $120,000, prior to making a $10,000 withdrawal from the Deferred Annuity. The withdrawal amount is 10% of the Account Balance. Therefore, after the withdrawal, your Account Balance would be $90,000 and your Guaranteed Accumulation Amount would be $108,000 (90% of $120,000). At the Maturity Date, after deduction of the annual charge for the GMAB, we will compare your Account Balance to the Guaranteed Accumulation Amount. If the Account Balance is less than the Guaranteed Accumulation Amount, we will contribute to your Account Balance the amount needed to make it equal the Guaranteed Accumulation Amount. (This added amount is the "Guaranteed Accumulation Payment.") The Guaranteed Accumulation Payment is allocated entirely to the investment division you have selected. (No portion of the Guaranteed Accumulation Payment is allocated to the Enhanced Dollar Cost Averaging Program.) If your Account Balance is greater than or equal to the Guaranteed Accumulation Amount at the Maturity Date, then no Guaranteed Accumulation Payment will be paid into your Account Balance. The GMAB terminates at the Maturity Date. We no longer assess the charge after that date, and the related investment requirements and restrictions will no longer apply. If your Account Balance is reduced to zero for any reason other than a full withdrawal of the Account Balance or application of your Account Balance to a pay-out option prior to the Maturity Date, but your Deferred Annuity has a positive Guaranteed Accumulation Amount remaining, the Deferred Annuity and the GMAB will remain in force. No 109 charge for the GMAB will be deducted or accrue while there is an insufficient Account Balance to cover the deductions for the charge. At the Maturity Date, the Guaranteed Accumulation Payment will be paid into the Account Balance. Purchase payments made after the 120 day Eligibility Period may have a significant impact on whether or not a Guaranteed Accumulation Payment is due at the Maturity Date. Even if the purchase payments you made during the 120 day Eligibility Period lose significant value, if the Account Balance, which includes all purchase payments, is equal to or greater than the target percentage amount of your purchase payments made during the first 120 day period (depending on which asset allocation investment you have selected), then no Guaranteed Accumulation Payment is made. Therefore, the Guaranteed Minimum Accumulation Benefit may not be appropriate for you, if you intend to make additional purchase payments after the end of the Eligibility Period. EXAMPLE Assume that you make one $10,000 purchase payment during the 120 Eligibility Period and you select the MetLife Moderate Allocation Investment Division. Therefore, the Guaranteed Accumulation Amount is $11,000 (110% of your purchase payment). At the Maturity Date, your Account Balance is $0. The Guaranteed Accumulation Amount payable is $11,000 ($11,000-$0 = $11,000). In contrast, assume that you make one $10,000 purchase payment during the 120 day Eligibility Period and you select the MetLife Moderate Allocation Investment Division. Therefore, the Guaranteed Accumulation Amount is $11,000. Also assume that on the day before the Maturity Date your Account Balance is $0. Assume that you decide to make one purchase payment on the day before the Maturity Date of $11,000. At the Maturity Date, assume that there has not been any positive or negative investment experience for the one day between your purchase payment and the Maturity Date. Consequently, your Account Balance is $11,000. We would not pay a Guaranteed Accumulation Payment, because the Account Balance of $11,000 would equal the Guaranteed Accumulation Amount of $11,000 ($11,000-$11,000 = $0.) TERMINATION. The GMAB will terminate at the earliest of: (1) the Maturity Date; (2) the date you take a total withdrawal of your Account Balance (A pro-rata portion of the charge will be applied); (3) the date you cancel this benefit, as described below; (4) the date you apply all of your Account Balance to a pay-out option (A pro-rata portion of the charge will be applied); and (5) the date of death of the owner or joint owner (or annuitant if the owner is a non-natural person) unless the beneficiary is the spouse of the owner and elects to continue the Deferred Annuity under the spousal continuation provisions of the Deferred Annuity. Once the GMAB is terminated, the GMAB charge will no longer be deducted and the related investment requirements and limitations will no longer apply. If the GMAB is terminated before the Maturity Date, the Guaranteed Accumulation Payment will not be paid. CANCELLATION. You have a one-time right to cancel this optional benefit in accordance with our administrative procedures (currently we require you to submit your request to cancel in writing at our Administrative Office) during the 90 day period after your fifth Contract Anniversary. Such cancellation will take effect upon our receipt of your request. Once you have cancelled the benefit, you will no longer be eligible to receive the Guaranteed Accumulation Payment or be bound by the investment requirements and restrictions and we will no longer deduct the charge for this benefit. CHARGE. The Guaranteed Minimum Accumulation Benefit is available for an additional charge of 0.75% of the Guaranteed Accumulation Amount determined at the end the prior Contract Year and deducted each Contract Anniversary, by withdrawing amounts on a pro-rata basis from your Enhanced Dollar Cost Averaging Program and Separate Account balance. (We take the amount from the Separate Account by canceling accumulation units from your Separate Account balance.) GMAB AND DECEDENT CONTRACTS. Note that the GMAB is not available for purchase by a beneficiary under a decedent's Non-Qualified Contract or IRA Contract (or where otherwise offered, under any other Contract which is being "stretched" by a beneficiary after the death of the owner or after the death of the annuitant in certain cases) because, under tax rules, such contracts generally require distributions to commence by the end of the calendar year following the year of the owner's death and such distributions will have the effect of reducing the usefulness of the GMAB. 110 SUMMARY OF LIVING BENEFITS The chart below highlights certain differences among the living benefits. Please refer to the detailed descriptions above for specific information about the features, costs and restrictions associated with the riders.*
--------------------------------------------------------------------------------------------------------------------- Income Guarantees Withdrawal Guarantees --------------------------------------------------------------------------------- GMIB Plus II Lifetime Withdrawal Enhanced GWB Guarantee II --------------------------------------------------------------------------------------------------------------------- LifetimeIncome Yes Yes No (after waiting period) (if first withdrawal on or after age 59 1/2) --------------------------------------------------------------------------------------------------------------------- BenefitInvolves Annuitization Yes No No --------------------------------------------------------------------------------------------------------------------- WithdrawalsPermitted (1) Prior to annuitization Yes Yes --------------------------------------------------------------------------------------------------------------------- WaitingPeriod Must wait 10 years to None None annuitize under rider: (age 59 1/2 for lifetime Optional Step-Up (2) withdrawals) restarrs waiting period; withdrawals available immediately --------------------------------------------------------------------------------------------------------------------- Reset/Step-Up Yes Yes Yes --------------------------------------------------------------------------------------------------------------------- May Invest in Investment Choices Prior to annuitization Yes Yes --------------------------------------------------------------------------------------------------------------------- Investment Allocation Requirements Yes Yes No --------------------------------------------------------------------------------------------------------------------- Abilityto Cancel Rider Yes, after 10 years, can Yes, at 5th, 10th & 15th Yes, within 90 days after take lump-sum option Contract Anniversary, 5th Contract Anniversary under the GPO provisions annually thereafter; or, lump-sum option under the GPA provisions after 15 years --------------------------------------------------------------------------------------------------------------------- DeathBenefit Prior to annuitization, Contract death benefit or Ability to receive Benefit Contract death benefit alternate rider death Base in series of available (3) benefit available; ability payments instead of to receive Remaining Contract death benefit Guaranteed Withdrawal Amount in series of payments instead of Contract death benefit --------------------------------------------------------------------------------------------------------------------- CurrentCharges (4) GMIB Plus II LWG II: 1.25% (Single Enhanced GWB: 0.55% 1.00% Life version) or 1.50% (Joint Life version) ---------------------------------------------------------------------------------------------------------------------
----------- * For a description of the following riders (GMIB Plus I, GMIB II, GMIB I, LWGI, GWB, GMAB) that are not longer available as of May 4, 2009, please see "Living Benefits" above. /1/ Withdrawals will reduce the living and death benefits and Account Balance. /2/ For GMIB Plus I, the Optional Step-Up is called the "Optional Reset." /3/ If the Contract is annuitized, income payments may be guaranteed for a certain period of time (depending on the income payment type selected) and therefore payable upon death of the annuitant. See "Pay-Out Options" and the rider descriptions for more information. /4/ Certain charges may increase upon a Reset or Step-Up. Generally, charges are assessed as a percentage of the guaranteed benefit rather than Account Balance. For example, the charge for GMIB II is 0.50% of the Income Base. See the Charges section and the individual rider descriptions for more information. /5/ For Contracts issued in New York State, the charge for GMIB Plus II is 0.95% of the Income Base. 111 PAY-OUT OPTIONS (OR INCOME OPTIONS) You may convert your Deferred Annuity into a regular stream of income after your "pay-in" or "accumulation" phase. The pay-out phase is often referred to as either "annuitizing" your Contract or taking an income annuity. When you select your pay-out option, you will be able to choose from the range of options we then have available. You have the flexibility to select a stream of income to meet your needs. If you decide you want a pay-out option, we withdraw some or all of your Account Balance (less any premium taxes and applicable contract fees), then we apply the net amount to the option. See "Income Taxes" for a discussion of partial annuitization. You are required to hold your Deferred Annuity for at least 30 days from the date we issue the Contract before you annuitize. However, the annuitant may not be older than 95 years old when you select a pay-out option (age 90 or ten years after you have purchased your Deferred Annuity in New York State). Although guaranteed annuity rates for the Bonus Class are the same as those for the other classes of the Deferred Annuity, current rates for the Bonus Class may be lower than the other classes of the Deferred Annuity. You must convert at least $5,000 of your Account Balance to receive income payments. Please be aware that once your Contract is annuitized, you are ineligible to receive the Death Benefit you have selected. Additionally, if you have selected a living benefit rider such as a Guaranteed Minimum Income Benefit, a Guaranteed Withdrawal Benefit, or the Guaranteed Minimum Accumulation Benefit, annuitizing your Contract terminates the rider, including any Death Benefit provided by the rider and any Guaranteed Principal Option or Guaranteed Principal Adjustment (for GMIB Plus I and GMIB Plus II or Lifetime Withdrawal Guarantees, respectively) or Guaranteed Accumulation Payment (for the Guaranteed Minimum Accumulation Benefit) that may also be provided by the rider. When considering a pay-out option, you should think about whether you want: . Payments guaranteed by us for the rest of your life (or for the rest of two lives) or the rest of your life (or for the rest of two lives) with a guaranteed period; and . A fixed dollar payment or a variable payment. Your income option provides you with a regular stream of payments for either your lifetime or your lifetime with a guaranteed period. You may choose the frequency of your income payments. For example, you may receive your payments on a monthly, quarterly, semiannual or annual basis. Your income payment amount will depend upon your choices. For lifetime options, the age and sex (where permitted), of the measuring lives (annuitants) will also be considered. For example, if you select a pay-out option guaranteeing payments for your lifetime and your spouse's lifetime, your payments will typically be lower than if you select a pay-out option with payments over only your lifetime. We do not guarantee that your variable payments will be a specific amount of money. You may choose to have a portion of the payment fixed and guaranteed under the Fixed Income Option. Should our current annuity rates for a fixed pay-out option for your class of the Deferred Annuity provide for greater payments than those guaranteed in your Contract, the greater payment will be made. By the time the annuitant reaches age 95 (age 90 or ten years after issue of your Deferred Annuity in New York State), and if you do not either elect to continue the Contract, select a pay-out option or withdraw your entire Account Balance, and your Deferred Annuity was not issued under certain retirement plans, we will automatically issue you a life annuity with a 10 year guarantee. In that case, if you do not tell us otherwise, your Fixed Account balance and Enhanced Dollar Cost Averaging Program balance will be used to provide a Fixed Income Option and your Separate Account balance will be used to provide a variable pay-out option. 112 INCOME PAYMENT TYPES Currently, we provide you with a wide variety of income payment types to suit a range of personal preferences. You decide the income pay-out type when you decide to take a pay-out option. Your decision is irrevocable. There are three people who are involved in payments under your pay-out option: . Contract owner: the person or entity which has all rights including the right to direct who receives payment. . Annuitant: the natural person whose life is the measure for determining the duration and the dollar amount of payments. . Beneficiary: the person who receives continuing payments or a lump sum payment, if any, if the contract owner dies. Many times, the Contract Owner and the Annuitant are the same person. When deciding how to receive income, consider: . The amount of income you need; . The amount you expect to receive from other sources; . The growth potential of other investments; and . How long you would like your income to be guaranteed. The following income payment types are currently available. We may make available other income payment types if you so request and we agree. Where required by state law or under a qualified retirement plan, the annuitant's sex will be not taken into account in calculating income payments. Annuity rates will not be less than the rates guaranteed in the Contract at the time of purchase for the AIR and income payment type elected. Due to underwriting, administrative or Internal Revenue Code considerations, the choice of the percentage reduction and/or the duration of the guarantee period may be limited under Lifetime Income Annuity for Two income payment types. LIFETIME INCOME ANNUITY: A variable income that is paid as long as the annuitant is living. LIFETIME INCOME ANNUITY WITH A GUARANTEE PERIOD: A variable income that continues as long as the annuitant is living but is guaranteed to be paid for a number of years. If the annuitant dies before all of the guaranteed payments have been made, payments are made to the contract owner of the annuity (or the beneficiary, if the contract owner dies during the guarantee period) until the end of the guarantee period. No payments are made once the guarantee period has expired and the annuitant is no longer living. LIFETIME INCOME ANNUITY FOR TWO: A variable income that is paid as long as either of the two annuitants is living. After one annuitant dies, payments continue to be made as long as the other annuitant is living. In that event, payments may be the same as those made while both annuitants were living or may be a smaller percentage that is selected when the annuity is first converted to an income stream. No payments are made once both annuitants are no longer living. LIFETIME INCOME ANNUITY FOR TWO WITH A GUARANTEE PERIOD: A variable income that continues as long as either of the two annuitants is living but is guaranteed to be paid (unreduced by any percentage selected) for a number of years. If both annuitants die before all of the guaranteed payments have been made, payments are made to the contract owner of the annuity (or the beneficiary, if the contract owner dies during the guarantee period) until the end of the guaranteed period. If one annuitant dies after the guarantee period has expired, payments continue to be made as long as the other annuitant is living. In that event, payments may be the same as those made while both annuitants were living or may be a smaller percentage that is selected when the annuity is first converted to an income stream. No payments are made once the guarantee period has expired and both annuitants are no longer living. 113 ALLOCATION You decide how your money is allocated among the Fixed Income Option and the investment divisions. MINIMUM SIZE OF YOUR INCOME PAYMENT Your initial income payment must be at least $100. This means that the amount used from a Deferred Annuity to provide a pay-out option must be large enough to produce this minimum initial income payment. We may reduce the frequency of your income payments to produce a payment of at least $100, in which case your payment will be made at least annually. THE VALUE OF YOUR INCOME PAYMENTS AMOUNT OF INCOME PAYMENTS Variable Income Payments from an investment division will depend upon the number of annuity units held in that investment division (described below) and the Annuity Unit Value (described later) as of the 10th day prior to a payment date. The initial variable income payment is computed based on the amount of the purchase payment applied to the specific investment division (net any applicable premium tax owed or Contract charge), the AIR, the age of the measuring lives and the income payment type selected. The initial payment amount is then divided by the Annuity Unit Value for the investment division to determine the number of annuity units held in that investment division. The number of annuity units held remains the same for duration of the Contract if no reallocations are made. The dollar amount of subsequent variable income payments will vary with the amount by which investment performance less the Separate Account Charge is greater or less than the AIR. Each Deferred Annuity provides that, when a pay-out option is chosen, the payment will not be less than the payment produced by the then current Fixed Income Option purchase rates for that contract class. The purpose of this provision is to assure the owner that, at retirement, if the Fixed Income Option purchase rates for new contracts are significantly more favorable than the rates guaranteed by a Deferred Annuity of the same class, the owner will be given the benefit of the higher rates. ANNUITY UNITS Annuity units are credited to you when you first convert your Deferred Annuity into an income stream or make a reallocation of your income payment into an investment division during the pay-out phase. Before we determine the number of annuity units to credit to you, we reduce your Account Balance by any premium taxes and the Annual Contract Fee, if applicable. (The premium taxes and the Annual Contract Fee are not applied against reallocations.) We then compute an initial income payment amount using the AIR, your income payment type and the age and sex (where permitted) of the measuring lives. We then divide the initial income payment (allocated to an investment division) by the Annuity Unit Value on the date of the transaction. The result is the number of annuity units credited for that investment division. The initial variable income payment is a hypothetical payment which is calculated based on the AIR. This initial variable income payment is used to establish the number of annuity units. It is not the amount of your actual first variable income payment unless your first income payment happens to be within 10 days after the date you convert your Deferred Annuity into an income stream. When you reallocate an income payment from an investment division, annuity units supporting that portion of your income payment in that investment division are liquidated. 114 AIR Your income payments are determined by using the AIR to benchmark the investment experience of the investment divisions you select. We currently offer an AIR of 3% and 4%. The higher your AIR, the higher your initial variable income payment will be. Your next payment will increase approximately in proportion to the amount by which the investment experience (for the time period between the payments) for the underlying Portfolio minus the Basic Death Benefit Separate Account charge (the resulting number is the net investment return) exceeds the AIR (for the time period between the payments). Likewise, your next payment will decrease to the approximate extent the investment experience (for the time period between the payments) for the underlying Portfolio minus the Basic Death Benefit Separate Account (the net investment return) charge is less than the AIR (for the time period between the payments). A lower AIR will result in a lower initial variable income payment, but subsequent variable income payments will increase more rapidly or decline more slowly than if you had elected a higher AIR as changes occur in the investment experience of the investment divisions. The amount of each variable income payment is determined 10 days prior to your income payment date. If your first income payment is scheduled to be paid less than 10 days after you convert your Deferred Annuity to an income stream, then the amount of that payment will be determined on the date you convert your Deferred Annuity to a pay-out option. VALUATION This is how we calculate the Annuity Unit Value for each investment division: . First, we determine the change in investment experience (which reflects the deduction for any investment-related charge) for the underlying Portfolio from the previous trading day to the current trading day; . Next, we subtract the daily equivalent of the Basic Death Benefit Separate Account charge for each day since the last day the Annuity Unit Value was calculated; the resulting number is the net investment return. . Then, we multiply by an adjustment based on your AIR for each day since the last Annuity Unit Value was calculated; and . Finally, we multiply the previous Annuity Unit Value by this result. REALLOCATION PRIVILEGE During the pay-out phase of the Deferred Annuity, you may make reallocations among investment divisions or from the investment divisions to the Fixed Income Option. Each reallocation must be at least $500 or, if less, your entire income payment allocated to the investment division. Once you reallocate your income payment into the Fixed Income Option, you may not later reallocate it into an investment division. There is no withdrawal charge to make a reallocation. For us to process a reallocation, you must tell us: . The percentage of the income payment to be reallocated; . The investment divisions (or Fixed Income Option) to which you want to reallocate your income payment; and . The investment divisions from which you want to reallocate your income payment. We may require that you use our original forms to make reallocations. Reallocations will be made at the end of the business day, at the close of the Exchange, if received in good order prior to the close of the Exchange, on that business day. All other reallocation requests will be processed on the next business day. When you request a reallocation from an investment division to the Fixed Income Option, the payment amount will be adjusted at the time of reallocation. Your payment may either increase or decrease due to this adjustment. The adjusted payment will be calculated in the following manner. . First, we update the income payment amount to be reallocated from the investment division based upon the applicable Annuity Unit Value at the time of the reallocation; 115 . Second, we use the AIR to calculate an updated annuity purchase rate based upon your age, if applicable, and expected future income payments at the time of the reallocation; . Third, we calculate another updated annuity purchase rate using our current annuity purchase rates for the Fixed Income Option on the date of your reallocation; . Finally, we determine the adjusted payment amount by multiplying the updated income amount determined in the first step by the ratio of the annuity purchase rate determined in the second step divided by the annuity purchase rate determined in the third step. When you request a reallocation from one investment division to another, annuity units in one investment division are liquidated and annuity units in the other investment division are credited to you. There is no adjustment to the income payment amount. Future income payment amounts will be determined based on the Annuity Unit Value for the investment division to which you have reallocated. You generally may make a reallocation on any day the Exchange is open. At a future date we may limit the number of reallocations you may make, but never to fewer than one a month. If we do so, we will give you advance written notice. We may limit a beneficiary's ability to make a reallocation. Here are examples of the effect of a reallocation on the income payment: . Suppose you choose to reallocate 40% of your income payment supported by investment division A to the Fixed Income Option and the recalculated income payment supported by investment division A is $100. Assume that the updated annuity purchase rate based on the AIR is $125, while the updated annuity purchase rate based on fixed income annuity pricing is $100. In that case, your income payment from the Fixed Income Option will be increased by $40 x ($125/$100) or $50, and your income payment supported by investment division A will be decreased by $40. (The number of annuity units in investment division A will be decreased as well.) . Suppose you choose to reallocate 40% of your income payment supported by investment division A to investment division B and the recalculated income payment supported by investment division A is $100. Then, your income payment supported by investment division B will be increased by $40 and your income payment supported by investment division A will be decreased by $40. (Changes will also be made to the number of annuity units in both investment divisions as well.) Please see the "Transfer Privilege" section regarding our market timing policies and procedures. CHARGES You pay the Basic Death Benefit Separate Account charge for your contract class during the pay-out phase of the Deferred Annuity. In addition, you pay the applicable investment-related charge during the pay-out phase of your Deferred Annuity. During the pay-out phase, we reserve the right to deduct the $30 Annual Contract Fee. If we do so, it will be deducted pro-rata from each income payment. The Separate Account charge you pay will not reduce the number of annuity units credited to you. Instead, we deduct the charges as part of the calculation of the Annuity Unit Value. 116 GENERAL INFORMATION ADMINISTRATION All transactions will be processed in the manner described below. PURCHASE PAYMENTS Send your purchase payments, by check, cashier's check or certified check, made payable to "MetLife," to MetLife Preference Plus Select, P.O. Box 371537, Pittsburgh, PA 15250-7537. (We reserve the right to receive purchase payments by other means acceptable to us.) We do not accept cash, money orders or traveler's checks. We will provide you with all necessary forms. We must have all documents in good order to credit your purchase payments. If you send your purchase payments or transaction requests to an address other than the one we have designated for receipt of such purchase payments or requests, we may return the purchase payment to you, or there may be delay in applying the purchase payment or transaction to your contract. We reserve the right to refuse purchase payments made via a personal check in excess of $100,000. Purchase payments over $100,000 may be accepted in other forms, including but not limited to, EFT/wire transfers, certified checks, corporate checks, and checks written on financial institutions. The form in which we receive a purchase payment may determine how soon subsequent disbursement requests may be fulfilled. Purchase payments (including any portion of your Account Balance under a Deferred Annuity which you apply to a pay-out option) are effective and valued as of the close of the Exchange on the day we receive them in good order at your Administrative Office, except when they are received: . On a day when the Accumulation Unit Value/Annuity Unit Value is not calculated, or . After the close of the Exchange. In those cases, the purchase payments will be effective the next day the Accumulation Unit Value or Annuity Unit Value, as applicable, is calculated. We reserve the right to credit your initial purchase payment to you within two days after its receipt at your Administrative Office or MetLife sales office, if applicable. However, if you fill out our forms incorrectly or incompletely or other documentation is not completed properly or otherwise not in good order, we have up to five business days to credit the payment. If the problem cannot be resolved by the fifth business day, we will notify you and give you the reasons for the delay. At that time, you will be asked whether you agree to let us keep your money until the problem is resolved. If you do not agree or we cannot reach you by the fifth business day, your money will be returned. CONFIRMING TRANSACTIONS You will receive a written statement confirming that a transaction was recently completed. Certain transactions made on a periodic basis, such as check-o-matic, Systematic Withdrawal Program payments, and automated investment strategy transfers, may be confirmed quarterly. Unless you inform us of any errors within 60 days of receipt, we will consider these communications to be accurate and complete. PROCESSING TRANSACTIONS We permit you to request transactions by mail and telephone. We make Internet access available to you. We may suspend or eliminate telephone or Internet privileges at any time, without prior notice. We reserve the right not to accept requests for transactions by facsimile. 117 If mandated by applicable law, including, but not limited to, Federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block a contract owner's account and, consequently, refuse to implement requests for transfers, withdrawals, surrenders or death benefits, until instructions are received from the appropriate governmental authority. BY TELEPHONE OR INTERNET You may obtain information and initiate a variety of transactions by telephone or the Internet virtually 24 hours a day, 7 days a week, unless prohibited by state law. Some of the information and transactions accessible to you include: . Account Balance . Unit Values . Current rates for the Fixed Account . Transfers . Changes to investment strategies . Changes in the allocation of future purchase payments. Your transaction must be in good order and completed prior to the close of the Exchange on one of our business days if you want the transaction to be valued and effective on that day. Transactions will not be valued and effective on a day when the Accumulation or Annuity Unit Value is not calculated or after the close of the Exchange. We will value and make effective these transactions on our next business day. We have put into place reasonable security procedures to insure that instructions communicated by telephone or Internet are genuine. For example, all telephone calls are recorded. Also, you will be asked to provide some personal data prior to giving your instructions over the telephone or through the Internet. When someone contacts us by telephone or Internet and follows our security procedures, we will assume that you are authorizing us to act upon those instructions. Neither the Separate Account nor MetLife will be liable for any loss, expense or cost arising out of any requests that we or the Separate Account reasonably believe to be authentic. In the unlikely event that you have trouble reaching us, requests should be made in writing to your Administrative Office. Response times for the telephone or Internet may vary due to a variety of factors, including volumes, market conditions and performance of the systems. We are not responsible or liable for: . any inaccuracy, error, or delay in or omission of any information you transmit or deliver to us; or . any loss or damage you may incur because of such inaccuracy, error, delay or omission; non-performance; or any interruption of information beyond our control. AFTER YOUR DEATH If we are presented in good order with notification of your death before any requested transaction is completed (including transactions under automated investment strategies), we will cancel the request and pay your beneficiary the the death benefit instead. If the beneficiary is your spouse, the spouse may be substituted as the contract owner of the Deferred Annuity and continue the Contract. We permit the beneficiary of a Traditional IRA Deferred Annuity to hold the Deferred Annuity in your name for his/her benefit. If you are receiving income payments, we will cancel the request and continue making payments to your beneficiary if your income type so provides. Or, depending on the income type, we may continue making payments to a joint annuitant. 118 MISSTATEMENT We may require proof of age or sex (where permitted) of the Owner, annuitant or beneficiary before making any payments under this Contract that are measured by the Owner's, annuitant's or beneficiary's life. If the age or sex (where permitted) of the measuring life has been misstated, the amount payable will be the amount that would have been provided at the correct age and sex (where permitted). Once income payments have begun, any overpayments or underpayments will be made up in one sum with the next income payment in a manner agreed to by us. Any overpayments will be deducted first from future income payments. In certain states we may be required to pay interest on any underpayment. THIRD PARTY REQUESTS Generally, we only accept requests for transactions or information from you. In addition, we reserve the right not to accept or to process transactions requested on your behalf by third parties. This includes processing transactions by an agent you designate, through a power of attorney or other authorization, who has the ability to control the amount and timing of transfers/reallocations for a number of other contract owners and who simultaneously makes the same request or series of requests on behalf of other contract owners. VALUATION -- SUSPENSION OF PAYMENTS We separately determine the Accumulation Unit Value and Annuity Unit Value, as applicable, for each investment division once each day when the Exchange is open for trading. If permitted by law, we may change the period between calculations but we will give you 30 days notice. When you request a transaction, we will process the transaction using the next available Accumulation Unit Value or Annuity Unit Value. Subject to our procedure, we will make withdrawals and transfers/reallocations at a later date, if you request. If your withdrawal request is to elect a variable pay-out option under your Deferred Annuity, we base the number of annuity units you receive on the next available Annuity Unit Value. We reserve the right to suspend or postpone payment for a withdrawal or transfer/reallocation when: . rules of the Securities and Exchange Commission so permit (trading on the Exchange is restricted, the Exchange is closed other than for customary weekend or holiday closings or an emergency exists which makes pricing or sale of securities not practicable); or . during any other period when the Securities and Exchange Commission by order so permits. ADVERTISING PERFORMANCE We periodically advertise the performance of the investment divisions. You may get performance information from a variety of sources including your quarterly statements, your MetLife representative, the Internet, annual reports and semiannual reports. All performance numbers are based upon historical earnings. These numbers are not intended to indicate future results. We may state performance in terms of "yield," "change in Accumulation Unit Value/Annuity Unit Value," "average annual total return" or some combination of these terms. YIELD is the net income generated by an investment in a particular investment division for 30 days or a month. These figures are expressed as percentages. This percentage yield is compounded semiannually; for the money market investment division, we state yield for a seven day period. 119 CHANGE IN ACCUMULATION/ANNUITY UNIT VALUE ("Non-Standard Performance") is calculated by determining the percentage change in the value of an accumulation (or annuity) unit for a certain period. These numbers may also be annualized. Change in Accumulation/Annuity Unit Value may be used to demonstrate performance for a hypothetical investment (such as $10,000) over a specified period. These performance numbers reflect the deduction of the Separate Account charges (with the Basic Death Benefit), the additional Separate Account charge for the American Funds Bond, American Funds Growth, American Funds Growth-Income and American Funds Global Small Capitalization investment divisions and the Annual Contract Fee; however, yield and change in Accumulation/Annuity Unit Value performance do not reflect the possible imposition of withdrawal charges and the charge for the Enhanced Death Benefit, the Earnings Preservation Benefit, Guaranteed Minimum Income Benefits, the Guaranteed Withdrawal Benefits or Guaranteed Minimum Accumulation Benefit. Withdrawal charges would reduce performance experience. AVERAGE ANNUAL TOTAL RETURN ("Standard Performance") calculations reflect the Separate Account charge, the additional Separate Account charge for the American Funds Growth, American Funds Growth-Income, American Funds Bond, and American Funds Global Small Capitalization investment divisions and the Annual Contract Fee and applicable withdrawal charges since the investment division inception date, which is the date the corresponding Portfolio or predecessor Portfolio was first offered under the Separate Account that funds the Deferred Annuity. These figures also assume a steady annual rate of return. They assume that combination of optional benefits (including the greater of Annual Step-Up or 5% Annual Increase Death Benefit) that would produce the greatest total Separate Account charge. Performance figures will vary among the various classes of the Deferred Annuities and the investment divisions as a result of different Separate Account charges and withdrawal charges. We may calculate performance for certain investment strategies including Equity Generator and each asset allocation model of the Index Selector. We calculate the performance as a percentage by presuming a certain dollar value at the beginning of a period and comparing this dollar value with the dollar value based on historical performance at the end of that period. We assume the Separate Account charge reflects the Basic Death Benefit. The information does not assume the charges for the Enhanced Death Benefit, the Earnings Preservation Benefit, Guaranteed Minimum Income Benefits, Guaranteed Minimum Accumulation Benefit or the Guaranteed Withdrawal Benefits. This percentage return assumes that there have been no withdrawals or other unrelated transactions. For purposes of presentation of Non-Standard Performance, we may assume the Deferred Annuities were in existence prior to the inception date of the investment divisions in the Separate Account that funds the Deferred Annuity. In these cases, we calculate performance based on the historical performance of the underlying Metropolitan Fund, Met Investors Fund and American Funds(R) Portfolios since the Portfolio inception date. We use the actual accumulation unit or annuity unit data after the inception date. Any performance data that includes all or a portion of the time between the Portfolio inception date and the investment division inception date is hypothetical. Hypothetical returns indicate what the performance data would have been if the Deferred Annuity had been introduced as of the Portfolio inception date. We may also present average annual total return calculations which reflect all Separate Account charges and applicable withdrawal charges since the Portfolio inception date. We use the actual accumulation unit or annuity unit data after the inception date. Any performance data that includes all or a portion of the time between the Portfolio inception date and the investment division inception date is hypothetical. Hypothetical returns indicate what the performance data would have been if the Deferred Annuities had been introduced as of the Portfolio inception date. Past performance is no guarantee of future results. We may demonstrate hypothetical future values of Account Balances over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios. These presentations reflect the deduction of the Separate Account charge, the Annual Contract Fee, if any, and the weighted average of investment-related charges for all Portfolios to depict investment-related charges. 120 We may demonstrate hypothetical future values of Account Balances for a specific Portfolio based upon the assumed rates of return previously described, the deduction of the Separate Account charge and the Annual Contract Fee, if any, and the investment-related charges for the specific Portfolio to depict investment-related charges. We may demonstrate the hypothetical historical value of each optional benefit for a specified period based on historical net asset values of the Portfolios and the annuity purchase rate, if applicable, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge and the Annual Contract Fee, if any, the investment-related charge and the charge for the optional benefit being illustrated. We may demonstrate hypothetical future values of each optional benefit over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios, the annuity purchase rate, if applicable, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge and the Annual Contract Fee, if any, the weighted average of investment-related charges for all Portfolios to depict investment-related charges and the charge for the optional benefit being illustrated. We may demonstrate hypothetical values of income payments over a specified period based on historical net asset values of the Portfolios and the applicable annuity purchase rate, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge, the investment-related charge and the Annual Contract Fee, if any. We may demonstrate hypothetical future values of income payments over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios, the applicable annuity purchase rate, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge, the Annual Contract Fee, if any, and the weighted average of investment-related charges for all Portfolios to depict investment-related charges. Any illustration should not be relied on as a guarantee of future results. CHANGES TO YOUR DEFERRED ANNUITY We have the right to make certain changes to your Deferred Annuity, but only as permitted by law. We make changes when we think they would best serve the interest of annuity contract owners or would be appropriate in carrying out the purposes of the Deferred Annuity. If the law requires, we will also get your approval and the approval of any appropriate regulatory authorities. Examples of the changes we may make include: . To operate the Separate Account in any form permitted by law. . To take any action necessary to comply with or obtain and continue any exemptions under the law (including favorable treatment under the Federal income tax laws) including limiting the number, frequency or types of transfers/reallocations permitted. . To transfer any assets in an investment division to another investment division, or to one or more separate accounts, or to our general account, or to add, combine or remove investment divisions in the Separate Account. . To substitute for the Portfolio shares in any investment division, the shares of another class of the Metropolitan Fund, the Met Investors Fund or the shares of another investment company or any other investment permitted by law. . To make any necessary technical changes in the Deferred Annuities in order to conform with any of the above-described actions. 121 If any changes result in a material change in the underlying investments of an investment division in which you have a balance or an allocation, we will notify you of the change. You may then make a new choice of investment divisions. For Deferred Annuities issued in Pennsylvania, we will ask your approval before making any technical changes. VOTING RIGHTS Based on our current view of applicable law, you have voting interests under your Deferred Annuity concerning Metropolitan Fund, Met Investors Fund or American Funds(R) proposals that are subject to a shareholder vote. Therefore, you are entitled to give us instructions for the number of shares which are deemed attributable to your Deferred Annuity. We will vote the shares of each of the underlying Portfolios held by the Separate Account based on instructions we receive from those having a voting interest in the corresponding investment divisions. However, if the law or the interpretation of the law changes, we may decide to exercise the right to vote the Portfolio's shares based on our own judgment. You are entitled to give instructions regarding the votes attributable to your Deferred Annuity in your sole discretion. There are certain circumstances under which we may disregard voting instructions. However, in this event, a summary of our action and the reasons for such action will appear in the next semiannual report. If we do not receive your voting instructions, we will vote your interest in the same proportion as represented by the votes we receive from other investors. The effect of this proportional voting is that a small number of Contract Owners may control the outcome of a vote. Shares of the Metropolitan Fund, the Met Investors Fund or the American Funds(R) that are owned by our general account or by any of our unregistered separate accounts will be voted in the same proportion as the aggregate of: . The shares for which voting instructions are received, and . The shares that are voted in proportion to such voting instructions. However, if the law or the interpretation of the law changes, we may decide to exercise the right to vote the Portfolio's shares based on our judgment. WHO SELLS THE DEFERRED ANNUITIES MetLife Investors Distribution Company (''MLIDC'') is the principal underwriter and distributor of the securities offered through this Prospectus. MLIDC, which is our affiliate, also acts as the principal underwriter and distributor of some of the other variable annuity contracts and variable life insurance policies we and our affiliated companies issue. We reimburse MLIDC for expenses MLIDC incurs in distributing the Deferred Annuities (e.g., commissions payable to the retail broker-dealers who sell the Deferred Annuities, including our affiliated broker-dealers). MLIDC does not retain any fees under the Deferred Annuities. MLIDC's principal executive offices are located at 5 Park Plaza, Suite 1900, Irvine, CA 92614. MLIDC is registered as a broker-dealer with the Securities and Exchange Commission (''SEC'') under the Securities Exchange Act of 1934, as well as the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority ("FINRA"). An investor brochure that includes information describing FINRA's Public Disclosure Program is available by calling FINRA's Public Disclosure Program hotline at 1-800-289-9999, or by visiting FINRA's website at www.finra.org. Deferred Annuities are sold through MetLife licensed sales representatives who are associated with MetLife Securities, Inc. (''MSI''), our affiliate and a broker-dealer, which is paid compensation for the promotion and sale of the Deferred Annuities. The Deferred Annuities are also sold through the registered representatives of our other affiliated broker-dealers. MSI and our affiliated broker-dealers are registered with the SEC as broker-dealers under the Securities 122 Exchange Act of 1934 and are also members of FINRA. The Deferred Annuities may also be sold through other registered broker-dealers. Deferred Annuities also may be sold through the mail or over the Internet. There is no front-end sales load deducted from purchase payments to pay sales commissions. Distribution costs are recovered through the Separate Account charge. MetLife sales representatives who are not in our MetLife Resources division ("non-MetLife Resources MetLife sales representatives") must meet a minimum level of sales of proprietary products in order to maintain employment with us. Sales representatives in our MetLife Resources division must meet a minimum level of sales production in order to maintain employment with us. Non-MetLife Resources MetLife sales representatives and MetLife Resources sales representatives receive cash payments for the products they sell and service based upon a 'gross dealer concession' model. With respect to the Deferred Annuity, the gross dealer concession ranges from 1.0% to 7.15% of each purchase payment (depending on the class purchased) and, starting as early as the second Contract Year, ranges from 0.00% to 1.00% (depending on the class purchased) of the Account Balance each year the Contract is in force for servicing the Deferred Annuity. Gross dealer concession may also be paid when the Contract is annuitized. The amount of this gross dealer concession payable upon annuitization depends on several factors, including the number of years the Contract has been in force. Compensation to the sales representative is all or part of the gross dealer concession. Compensation to sales representatives in the MetLife Resources division is based upon premiums and purchase payments applied to all products sold and serviced by the representative. Compensation to non-MetLife Resources MetLife sales representatives is determined based upon a formula that recognizes premiums and purchase payments applied to proprietary products sold and serviced by the representative as well as certain premiums and purchase payments applied to non-proprietary products sold by the representative. Proprietary products are those issued by us or our affiliates. Because one of the factors determining the percentage of gross dealer concession that applies to non-MetLife Resources MetLife sales representative's compensation is sales of proprietary products, these sales representatives have an incentive to favor the sale of proprietary products. Because non-MetLife Resources MetLife sales managers' compensation is based on the sales made by the representatives they supervise, these sales managers also have an incentive to favor the sales of proprietary products. Non-MetLife Resources MetLife sales representatives and MetLife Resources sales representatives and their managers and the sales representatives and managers of our affiliates may be eligible for additional cash compensation, such as bonuses, equity awards (such as stock options), training allowances, supplemental salary, financial arrangements, marketing support, medical and other insurance benefits, and retirement benefits and other benefits based primarily on the amount of proprietary products sold. Because additional cash compensation paid to non-MetLife Resources MetLife sales representatives and MetLife Resources sales representatives and their managers and the sales representatives and their managers of our affiliates is based primarily on the sales of proprietary products, non-MetLife Resources MetLife sales representatives and MetLife Resources sales representatives and their managers and the sales representatives and their managers of our affiliates have an incentive to favor the sale of proprietary products. Sales representatives who meet certain productivity, persistency, and length of service standards and/or their managers may be eligible for additional cash compensation. Moreover, managers may be eligible for additional cash compensation based on the sales production of the sales representatives that the manager supervises. Our sales representatives and their managers may be eligible for non-cash compensation incentives, such as conferences, trips, prizes and awards. Other non-cash compensation payments may be made for other services that are not directly related to the sale of products. These payments may include support services in the form of recruitment and training of personnel, production of promotional services and other support services. Other incentives and additional cash compensation provide sales representatives and their managers with an incentive to favor the sale of proprietary products. The business unit responsible for the operation of our distribution system is also paid. 123 MLIDC also pays compensation for the sale of the Deferred Annuities by affiliated broker-dealers. The compensation paid to affiliated broker-dealers for sales of the Deferred Annuities is generally not expected to exceed, on a present value basis, the aggregate amount of total compensation that is paid with respect to sales made through MetLife representatives. (The total compensation includes payments that we make to our business unit that is responsible for the operation of the distribution systems through which the Deferred Annuities are sold.) These firms pay their sales representatives all or a portion of the commissions received for their sales of Deferred Annuities; some firms may retain a portion of commissions. The amount that selling firms pass on to their sales representatives is determined in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. Sales representatives of affiliated broker-dealers and their managers may be eligible for various cash benefits and non-cash compensation (as described above) that we may provide jointly with affiliated broker-dealers. Because of the receipt of this cash and non-cash compensation, sales representatives and their managers of our affiliated broker-dealers have an incentive to favor the sale of proprietary products. MLIDC may also enter into preferred distribution arrangements with certain affiliated selling firms such as New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. These arrangements are sometimes called "shelf space" arrangements. Under these arrangements, MLIDC may pay separate, additional compensation to the broker-dealer firm for services the selling firm provides in connection with the distribution of the Contracts. These services may include providing us with access to the distribution network of the selling firm, the hiring and training of the selling firm's sales personnel, the sponsoring of conferences and seminars by the selling firm, or general marketing services performed by the selling firm. The selling firm may also provide other services or incur other costs in connection with distributing the Contracts. MLIDC also pays compensation for the sale of Contracts by unaffiliated broker-dealers. The compensation paid to unaffiliated broker-dealers for sales of the Deferred Annuities is generally not expected to exceed, on a present value basis, the aggregate amount of total compensation that is paid with respect to sales made through MetLife representatives. (The total compensation includes payments that we make to our business unit that is responsible for the operation of the distribution systems through which the Deferred annuities are sold.) Broker-dealers pay their sales representatives all or a portion of the commissions received for their sales of the Contracts. Some firms may retain a portion of commissions. The amount that the broker-dealer passes on to its sales representatives is determined in accordance with its internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. We and our affiliates may also provide sales support in the form of training, sponsoring conferences, defraying expenses at vendor meetings, providing promotional literature and similar services. An unaffiliated broker-dealer or sales representative of an unaffiliated broker-dealer may receive different compensation for selling one product over another and/or may be inclined to favor one product provider over another product provider due to differing compensation rates. Ask your sales representative further information about what your sales representative and the broker-dealer for which he or she works may receive in connection with your purchase of a Contract. We or our affiliates pay American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series(R), a percentage of all purchase payments allocated to the American Funds Bond Fund, American Funds Global Small Capitalization Fund, the American Funds Growth Fund, and the American Funds Growth-Income Fund for services it provides in marketing the Fund's shares in connection with the Contract. 124 FINANCIAL STATEMENTS Our financial statements and the financial statements of the Separate Account have been included in the SAI. YOUR SPOUSE'S RIGHTS If you received your Contract through a qualified retirement plan and your plan is subject to ERISA (the Employee Retirement Income Security Act of 1974) and you are married, the income payments, withdrawal and loan provisions, and methods of payment of the death benefit under your Deferred Annuity may be subject to your spouse's rights. If your benefit is worth $5,000 or less, your plan may provide for distribution of your entire interest in a lump sum without your spouse's consent. For details or advice on how the law applies to your circumstances, consult your tax advisor or attorney. WHEN WE CAN CANCEL YOUR DEFERRED ANNUITY We may cancel your Deferred Annuity only if we do not receive any purchase payments from you for 24 consecutive months (36 consecutive months in New York State) and your Account Balance is less than $2,000. Accordingly, no Deferred Annuity will be terminated due solely to negative investment performance. We will only do so to the extent allowed by law. If we do so, we will return the full Account Balance. Federal tax law may impose additional restrictions on our right to cancel your Traditional IRA, Roth IRA SEP and SIMPLE IRA Deferred Annuity. 125 INCOME TAXES The following information on taxes is a general discussion of the subject. It is not intended as tax advice. The Internal Revenue Code ("Code") is complex and subject to change regularly. Failure to comply with the tax law may result in significant adverse tax consequences and IRS penalties. Consult your own tax adviser about your circumstances, any recent tax developments, and the impact of state income taxation. For purposes of this section, we address Deferred Annuities and income payments under the Deferred Annuities together. You are responsible for determining whether your purchase of a Deferred Annuity, withdrawals, income payments and any other transactions under your Deferred Annuity satisfy applicable tax law. We are not responsible for determining if your employer's plan or arrangement satisfies the requirements of the Code and/or the Employee Retirement Income Security Act of 1974 (ERISA). Where otherwise permitted under the Deferred Annuity, the transfer of ownership of a Deferred Annuity, the designation or change in designation of an annuitant, payee or other beneficiary who is not also a contract owner, the selection of certain maturity dates, the exchange of a Deferred Annuity, or the receipt of a Deferred Annuity in an exchange, may result in income tax and other tax consequences, including additional withholding, estate tax, gift tax and generation skipping transfer tax, that are not discussed in this Prospectus. The SAI may contain additional information. Please consult your tax adviser. PUERTO RICO TAX CONSIDERATIONS The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") taxes distributions from non-qualified annuity contracts differently than in the U.S. Distributions that are not in the form of an annuity (including partial surrenders and period certain payments) are treated under the 1994 Code first as a return of investment. Therefore, a substantial portion of the amounts distributed generally will be excluded from gross income for Puerto Rico tax purposes until the cumulative amount paid exceeds your tax basis. The amount of income on annuity distributions (payable over your lifetime) is also calculated differently under the 1994 Code. Since Puerto Rico residents are also subject to U.S. income tax on all income other than income sourced to Puerto Rico and the Internal Revenue Service issued guidance in 2004 which indicated that the income from an annuity contract issued by a U.S. life insurer would be considered U.S. source income, the timing of recognition of income from an annuity contract could vary between the two jurisdictions. Although the 1994 Code provides a credit against the Puerto Rico income tax for U.S. income taxes paid, an individual may not get full credit because of the timing differences. You should consult with a personal tax adviser regarding the tax consequences of purchasing an annuity contract and/or any proposed distribution, particularly a partial distribution or election to annuitize. ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS Purchasers that are not U.S. citizens or residents will generally be subject to U.S. Federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S. state and foreign taxation with respect to purchasing an annuity contract. MetLife does not expect to incur federal, state or local income taxes on the earnings or realized capital gains attributable to the Separate Account. However, if we do incur such taxes in the future, we reserve the right to charge amounts allocated to the Separate Account for these taxes. To the extent permitted under federal tax law, we may claim the benefit of the corporate dividends received deduction and of certain foreign tax credits attributable to taxes paid by certain of the Portfolios to foreign jurisdictions. 126 GENERAL Deferred annuities are a means of setting aside money for future needs- usually retirement. Congress recognizes how important saving for retirement is and has provided special rule in the Code. All IRAs receive tax deferral under the Code. Although there are no additional tax benefits by funding your IRA with an annuity, it does offer you additional insurance benefits such as availability of a guaranteed income for life. Under current federal income tax law, the taxable portion of distributions and withdrawals from variable annuity contracts are subject to ordinary income tax and are not eligible for the lower tax rates that apply to long term capital gains and qualifying dividends. WITHDRAWALS When money is withdrawn from your Contract (whether by you or your beneficiary), the amount treated as taxable income and taxed as ordinary income differs depending on the type of: annuity you purchase (e.g., Non-Qualified or IRA); and payment method or income payment type you elect. If you meet certain requirements, your Roth IRA earnings are free from Federal income taxes. We will withhold a portion of the amount of your withdrawal for income taxes, unless you elect otherwise. The amount we withhold is determined by the Code. WITHDRAWALS BEFORE AGE 59 1/2 Because these products are intended for retirement, if you make a taxable withdrawal before age 59 1/2 you may incur a 10% tax penalty, in addition to ordinary income taxes. Also, please see the section below titled Separate Account Charges for further information regarding withdrawals. As indicated in the chart below, some taxable distributions prior to age 59 1/2 are exempt from the penalty. Some of these exceptions include amounts received:
Type of Contract -------------------- Non Trad. Roth SIMPLE Qualified IRA IRA IRA* SEP --------- ----- ---- ------ --- In a series of substantially equal payments made annually (or more frequently) for life or life expectancy (SEPP) x x x x x After you die x x x x x After you become totally disabled (as defined in the Code) x x x x x To pay deductible medical expenses x x x x To pay medical insurance premiums if you are unemployed x x x x For qualified higher education expenses, or x x x x For qualified first time home purchases up to $10,000 x x x x After December 31, 1999 for IRS levies x x x x Certain immediate income annuities providing a series of substantially equal periodic payments made annually (or more frequently) over the specified payment period x
* For SIMPLE IRAs the tax penalty for early withdrawals is generally increased to 25% for withdrawals within the first two years of your participation in the SIMPLE IRA. 127 SYSTEMATIC WITHDRAWAL PROGRAM FOR SUBSTANTIALLY EQUAL PERIODIC PAYMENTS (SEPP) AND INCOME OPTIONS If you are considering using the Systematic Withdrawal Program or selecting an income option for the purpose of meeting the SEPP exception to the 10% tax penalty, consult with your tax adviser. It is not clear whether certain withdrawals or income payments under a variable annuity will satisfy the SEPP exception. If you receive systematic payments that you intend to qualify for the SEPP exception, any modifications (except due to death or disability) to your payment before age 59 1/2 or within five years after beginning SEPP payments, whichever is later, will result in the retroactive imposition of the 10% penalty with interest. Such modifications may include additional purchase payments or withdrawals (including tax-free transfers or rollovers of income payments) from the Deferred Annuity. SEPARATE ACCOUNT CHARGES It is conceivable that the charges for certain benefits such as any of the guaranteed death benefits (including but not limited to the Earnings Preservation Benefit) and certain living benefits (e.g. Guaranteed Withdrawal Benefit and the Guaranteed Minimum Income Benefit) could be considered to be taxable each year as deemed distributions from the Contract to pay for non-annuity benefits. We currently treat these charges as an intrinsic part of the annuity contract and do not report these as taxable income. However, it is possible that this may change in the future if we determine that this is required by the IRS. If so, the charge could also be subject to a 10% penalty tax if the taxpayer is under age 59 1/2. NON-QUALIFIED ANNUITIES . Purchase payments to Non-Qualified contracts are on an "after-tax" basis, so you only pay income taxes on your earnings. Generally, these earnings are taxed when received from the Contract. . Under the Code, withdrawals need not be made by a particular age. However, it is possible that the Internal Revenue Service may determine that the Deferred Annuity must be surrendered or income payments must commence by a certain age (e.g., 85 or older) or your Contract may require that you commence payments by a certain age. . Your Non-Qualified contract may be exchanged for another Non-Qualified annuity under Section 1035 without paying income taxes if certain Code requirements are met. Once income payments have commenced, you may not be able to transfer withdrawals to another non-qualified annuity contract in a tax-free Section 1035 exchange. . The IRS recently issued guidance under which direct transfers of less than the entire account value from one non-qualified annuity to another non-qualified annuity ("partial exchanges") on or after June 30, 2008, may be treated as a taxable withdrawal rather than a non-taxable exchange under certain circumstances. Such circumstances generally include situations where amounts are withdrawn or income payments are made from either contract involved in the partial exchange within a period of twelve months following transfers. Certain exception may apply. Consult your own independent tax advisor prior to a partial exchange. . Consult your tax adviser prior to changing the annuitant or prior to changing the date you determine to commence income payments if permitted under the terms of your Contract. It is conceivable that the IRS could consider such actions to be a taxable exchange of annuity contracts. . Where otherwise permitted under the Deferred Annuity, pledges, assignments and other types of transfers of all or a portion of your Account Balance generally result in the immediate taxation of the gain in your Deferred Annuity. This rule may not apply to certain transfers between spouses. . Deferred annuities issued after October 21, 1988 by the same insurance company or affiliates to an owner in the same year are combined for tax purposes. As a result, a greater portion of your withdrawals may be considered taxable income than you would otherwise expect. 128 . When a non-natural person owns a Non-Qualified contract, the annuity will generally not be treated as an annuity for tax purposes and thus loses the benefit of tax deferral. Corporations and certain other entities are generally considered non-natural persons. However, an annuity owned by a non-natural person as agent for an individual will be treated as an annuity for tax purposes. . In those limited situations where the annuity is beneficially owned by a non-natural person and the annuity qualifies as such for Federal income tax purposes, the entity may have a limited ability to deduct interest expenses. Certain income annuities under Section 72(u)(4) of the Code purchased with a single payment consisting of substantially equal periodic payments with an annuity starting date within 12 months of purchase may also be considered annuities for federal income tax purposes where owned by a non- natural person. PURCHASE PAYMENTS Although the Code does not limit the amount of your purchase payments, your Contract may limit them. PARTIAL AND FULL WITHDRAWALS Generally, when you (or your beneficiary in the case of a death benefit) make a partial withdrawal from your Non-Qualified annuity, the Code treats such a partial withdrawal as: first coming from earnings (and thus subject to income tax); and then from your purchase payments (which are not subject to income tax). This rule does not apply to payments made pursuant to an income pay-out option under your Contract. In the case of a full withdrawal, the withdrawn amounts are treated as first coming from your non-taxable return of purchase payment and then from a taxable payment of earnings. Generally, once the total amount treated as a return of your purchase payment equals the amount of such purchase payment (reduced by any refund or guarantee feature as required by Federal tax law), all remaining withdrawals are fully taxable. If you die before the purchase payment is returned, the unreturned amount may be deductible on your final income tax return or deductible by your beneficiary if income payments continue after your death. We will tell you what your purchase payment was and whether a withdrawal includes a non-taxable return of your purchase payment. INCOME PAYMENTS Income payments are subject to an "exclusion ratio" or "excludable amount" which determines how much of each payment is treated as: a non-taxable return of your purchase payments and a taxable payment of earnings. Income payments and amounts received on the exercise of a withdrawal or partial withdrawal option under your Non-Qualified Annuity may not be transferred in a tax-free exchange into another annuity contract. In accordance with our procedures, such amounts will instead be taxable under the rules for income payment or withdrawals, whichever is applicable. Generally, once the total amount treated as a return of your purchase payment equals the amount of such purchase payment (reduced by any refund or guarantee feature as required by Federal tax law), all remaining income payments are fully taxable. If you die before the purchase payment is returned, the unreturned amount may be deductible on your final income tax return or deductible by your beneficiary if income payments continue after your death. We will tell you what your purchase payment was and to what extent an income payment includes a non-taxable return of your purchase payment. The IRS has not approved the use of an exclusion ratio or excludable amount when only part of an account balance is used to convert to income payments. We will treat the application of less than your entire Account Balance under a Non-Qualified Contract to a pay-out option (taking an income annuity) as a taxable withdrawal for Federal income tax purposes and also as subject to the 10% 129 penalty tax (if you are under age 59 1/2) in addition to ordinary income tax. We will then treat the amount of the withdrawal as the purchase price of an income annuity and tax report the income payments received under the rules for variable income annuities. Consult your tax attorney prior to partially annuitizing your Contract. The IRS has not specifically approved the use of a method to calculate an excludable amount with respect to a variable income annuity where transfers/ reallocations are permitted between investment divisions or from an investment division into a fixed option. We generally will tell you how much of each income payment is a return of non-taxable purchase payments. We will determine such excludable amount for each income payment under the Contract as a whole by using the rules applicable to variable income payments in general (I.E., by dividing your after-tax purchase price, as adjusted for any refund or guarantee feature by the number of expected income payments from the appropriate IRS table). However, it is possible that the IRS could conclude that the taxable portion of income payments under a Non-Qualified Deferred Annuity is an amount greater (or lesser) than the taxable amount determined by us and reported by us to you and the IRS. Generally, once the total amount treated as a non-taxable return of your purchase payment equals your purchase payment, then all remaining payments are fully taxable. We will withhold a portion of the taxable amount of your income payment for income taxes, unless you elect otherwise. The amount we withhold is determined by the Code. If the amount of income payments received in any calendar year is less than the excludable amount applicable to the year, the excess is not allowable as a deduction. However, you may generally elect the year in which to begin to apply this excess ratably to increase the excludable amount attributable to future years. Consult your tax advisor as to the details and consequences of making such election. Also, consult your tax advisor as to the tax treatment of any unrecovered after-tax cost in the year that the Contract terminates. DEATH BENEFITS The death benefit under an annuity is generally taxable to the recipient in the same manner as if paid to the contract owner (under the rules for withdrawals or income payments, whichever is applicable). If you die before the annuity starting date, as defined under Treasury Regulations, payments must begin for a period and in a manner allowed by the Code (and any regulations thereunder) to your beneficiary within one year of the date of your death or, if not, payment of your entire interest in the Contract must be made within five years of the date of your death. If your spouse is your beneficiary, he or she may elect to continue as owner of the Contract. If you die on or after the annuity starting date, as defined under Treasury Regulations, payments must continue to be made at least as rapidly as before your death in accordance with the income type selected. If you die before all purchase payments are returned, the unreturned amount may be deductible on your final income tax return or excluded from income by your beneficiary if income payments continue after your death. In the case of joint contract owners, the above rules will be applied on the death of any contract owner. Where the contract owner is not a natural person, these rules will be applied on the death of any annuitant (or on the change in annuitant, if permitted under the Contract). If death benefit payments are being made to your designated beneficiary and he/she dies prior to receiving the entire remaining interest in the Contract, such remaining interest will be paid out at least as rapidly as under the distribution method being used at the time of your designated beneficiary's death. 130 After your death, if your designated beneficiary dies prior to electing a method for the payment of the death benefit, the remaining interest in the Contract will be paid out in a lump sum. In all cases, such payments will be made within five years of the date of your death. GUARANTEED WITHDRAWAL BENEFITS If you have purchased the Guaranteed Withdrawal Benefit, Enhanced Guaranteed Withdrawal Benefit or Lifetime Withdrawal Guarantee Benefit, where otherwise made available, note the following: The tax treatment of withdrawals under such a benefit is uncertain. It is conceivable that the amount of potential gain could be determined based on the remaining amounts guaranteed to be available for withdrawal at the time of the withdrawal if greater than the Account Balance (prior to withdrawal charges). This could result in a greater amount of taxable income in certain cases. In general, at the present time, MetLife intends to report such withdrawals using the Account Balance rather than the remaining benefit to determine gain. However, in cases where the maximum permitted withdrawal in any year under any version of the Guaranteed Withdrawal Benefit exceeds the Account Balance, the portion of the withdrawal treated as taxable gain (not to exceed the amount of the withdrawal) should be measured as the difference between the maximum permitted withdrawal amount under the benefit and the remaining after-tax basis immediately preceding the withdrawal. In the event that the Account Balance goes to zero, and either the Remaining Guaranteed Withdrawal Amount is paid out in fixed installments or the Annual Benefit Payment is paid for life, we will treat such payments as income annuity payments under the tax law and allow recovery of any remaining basis ratably over the expected number of payments. MetLife reserves the right to change its tax reporting practices where we determine that it is not in accordance with IRS guidance (whether formal or informal). DIVERSIFICATION In order for your Non-Qualified Deferred Annuity to be considered an annuity contract for Federal income tax purposes, we must comply with certain diversification standards with respect to the investments underlying the Contract. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be correctable. Failure to meet these standards would result in immediate taxation to contract owners of gains under their Contract. INVESTOR CONTROL In certain circumstances, owners of variable annuity contracts have been considered to be the owners of the assets of the underlying Separate Account for Federal Income tax purposes due to their ability to exercise investment control over those assets. When this is the case, the Contract owners have been currently taxed on income and gains attributable to the variable account assets. There is little guidance in this area, and some features of the Contract, such as the number of funds available and the flexibility of the contract owner to allocate premium payments and transfer amounts among the funding options have not been addressed in public rulings. While we believe that the contract does not give the Contract owner investment control over Separate Account assets, we reserve the right to modify the Contract as necessary to prevent a contract owner from being treated as the owner of the Separate Account assets supporting the Contract. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax rules and interpretations can adversely affect the tax treatment of your Contract. These changes may take effect retroactively. Examples of changes that could create adverse tax consequences include: . Possible taxation of transfers/reallocations between investment divisions or transfers/reallocations from an investment division to the Fixed Account or Fixed Income Option. 131 . Possible taxation as if you were the contract owner of your portion of the Separate Account's assets. . Possible limits on the number of funding options available or the frequency of transfers/reallocations among them. We reserve the right to amend your Deferred Annuity where necessary to maintain its status as a variable annuity contract under Federal tax law and to protect you and other contract owners in the investment divisions from adverse tax consequences. INDIVIDUAL RETIREMENT ANNUITIES [TRADITIONAL IRA, ROTH IRA, SIMPLE IRA AND SEPS] The sale of a Contract for use with an IRA may be subject to special disclosure requirements of the IRS. Purchasers of a Contract for use with IRAs will be provided with supplemental information required by the IRS or other appropriate agency. A Contract issued in connection with an IRA may be amended as necessary to conform to the requirements of the Code. IRA Contracts may not invest in life insurance. The Deferred Annuity offers death benefits and optional benefits that in some cases may exceed the greater of the purchase payments or the Account Balance which could conceivably be characterized as life insurance. The IRS has approved the form of the Traditional and SIMPLE IRA endorsement for use with the Contract and certain riders, including riders providing for death benefits in excess of premiums paid. Please be aware that the IRA Contract issued to you may differ from the form of the Traditional IRA approved by the IRS because of several factors such as different riders and state insurance department requirements. The Roth IRA tax endorsement is based on the IRS model form 5305-RB (rev 0302). Consult your tax adviser prior to the purchase of the Contract as a Traditional IRA, Roth IRA, SIMPLE IRA or SEP. Generally, except for Roth IRAs, IRAs can accept deductible (or pre-tax) purchase payments. Deductible or pre-tax purchase payments will be taxed when distributed from the Contract. You must be both the contract owner and the annuitant under the Contract. Your IRA annuity is not forfeitable and you may not transfer, assign or pledge it to someone else. You are not permitted to borrow from the Contract. You can transfer your IRA proceeds to a similar IRA, certain eligible retirement plans of an employer (or a SIMPLE IRA to a Traditional IRA or eligible retirement plan after two years) without incurring Federal income taxes if certain conditions are satisfied. TRADITIONAL IRA ANNUITIES PURCHASE PAYMENTS Purchase payments (except for permissible rollovers and direct transfers) are generally not permitted after the calendar year in which you attain age 69 1/2. Except for permissible rollovers and direct transfers, purchase payments to Traditional and Roth IRAs for individuals under age 50 are limited to the lesser of 100% of compensation or the deductible amount established each year under the Code. A purchase payment up to the deductible amount can also be made for a non-working spouse provided the couple's compensation is at least equal to their aggregate contributions. See the SAI for additional information. Also, see IRS Publication 590 available at www.irs.gov. . Individuals age 50 or older can make an additional "catch-up" purchase payment (assuming the individual has sufficient compensation). 132 . If you are an active participant in a retirement plan of an employer, your contributions may be limited. . Purchase payments in excess of these amounts may be subject to a penalty tax. . If contributions are being made under a SEP or a SAR-SEP plan of your employer, additional amounts may be contributed as permitted by the Code and the terms of the employer's plan. . These age and dollar limits do not apply to tax-free rollovers or transfers from other IRAs or other eligible retirement plans. . If certain conditions are met, you can change your Traditional IRA purchase payment to a Roth IRA before you file your income tax return (including filing extensions). WITHDRAWALS AND INCOME PAYMENTS Withdrawals (other than tax free transfers or rollovers to other individual retirement arrangements or eligible retirement plans) and income payments are included in income except for the portion that represents a return of non- deductible purchase payments. This portion is generally determined based on a ratio of all non-deductible purchase payments to the total values of all your Traditional IRAs. We will withhold a portion of the taxable amount of your withdrawal for income taxes, unless you elect otherwise. The amount we withhold is determined by the Code. Also see general section titled "Withdrawals" above. MINIMUM DISTRIBUTION REQUIREMENTS FOR IRAS Generally, for IRAs (see discussion below for Roth IRAs), you must begin receiving withdrawals by April 1 of the calendar year following the year in which you reach age 70 1/2. Complex rules apply to the calculation of these withdrawals. A tax penalty of 50% applies to withdrawals which should have been taken but were not. It is not clear whether income payments under a variable annuity will satisfy these rules. Consult your tax adviser prior to choosing a pay-out option. Under recently enacted legislation, you (and after your death, your designated beneficiaries) generally do not have to take the required minimum distribution ("RMD") for 2009. The waiver does not apply to any 2008 payments even if received in 2009, so for those payments, you are still required to receive your first RMD payment by April 1, 2009. In contrast, if your first RMD would have been due by April 1, 2010, you are not required to take such distribution; however, your 2010 RMD is due by December 31, 2010. For after-death RMDs, the five year rule is applied without regard to calendar year 2009. For instance, if you died in 2007, the five year period ends in 2013 instead of 2012. This RMD waiver does not apply if you are receiving annuitized payments under your contract. The RMD rules are complex, so consult with your tax adviser before waiving your 2009 RMD payment. In general, Income Tax regulations permit income payments to increase based not only with respect to the investment experience of the underlying funds but also with respect to actuarial gains. Additionally, these regulations permit payments under income annuities to increase due to a full withdrawal or to a partial withdrawal under certain circumstances. The regulations also require that beginning for the 2006 distribution year, the value of all benefits under a deferred annuity including death benefits in excess of cash value must be added to the account value in computing the amount required to be distributed over the applicable period. The new rules are not entirely clear and you should consult your own tax advisors as to how these rules affect your own Contract. We will provide you with additional information regarding the amount that is subject to minimum distribution under this new rule. If you intend to receive your minimum distributions which are payable over the joint lives of you and a beneficiary who is not your spouse (or over a period not exceeding the joint life expectancy of you and your non-spousal beneficiary), be 133 advised that Federal tax rules may require that payments be made over a shorter period or may require that payments to the beneficiary be reduced after your death to meet the minimum distribution incidental benefit rules and avoid the 50% excise tax. Consult your tax advisor. DEATH BENEFITS The death benefit is taxable to the recipient in the same manner as if paid to the contract owner (under the rules for withdrawals or income payments, whichever is applicable). Generally, if you die before required minimum distribution withdrawals have begun, we must make payment of your entire interest by December 31st of the year that is the fifth anniversary of your death or begin making payments over a period and in a manner allowed by the Code to your beneficiary by December 31st of the year after your death. Consult your tax adviser because the application of these rules to your particular circumstances may have been impacted by the 2009 RMD waiver (see Minimum Distribution Requirements for IRAs section for additional information). If your spouse is your beneficiary, and your Contract permits, your spouse may delay the start of these payments until December 31 of the year in which you would have reached age 70 1/2. Alternatively, if your spouse is your beneficiary, he or she may elect to continue as "contract owner" of the Contract. If you die after required distributions begin, payments of your entire remaining interest must be made in a manner and over a period as provided under the Code (and any applicable regulations). If the Contract is issued in your name after your death for the benefit of your designated beneficiary with a purchase payment which is directly transferred to the Contract from another IRA account or IRA annuity you owned, the death benefit must continue to be distributed to your beneficiary's beneficiary in a manner at least as rapidly as the method of distribution in effect at the time of your beneficiary's death. SIMPLE IRAS AND SEPS ANNUITIES The Code provides for certain contribution limitations and eligibility requirements under SIMPLE IRAs and SEP arrangements. The minimum distribution requirements are generally the same as Traditional IRAs. There are some differences in the contribution limits and the tax treatment of certain premature distribution rules, transfers and rollovers. Some of these differences are explained below. Please see the SAI for additional information on contribution limits. ROLLOVERS INTO YOUR SIMPLE IRA. You may make rollovers and direct transfers into your SIMPLE IRA annuity contract from another SIMPLE IRA annuity contract or account. No other contributions, rollovers or transfers can be made to your SIMPLE IRA. You may not make Traditional IRA contributions or Roth IRA contributions to your SIMPLE IRA. You may not make eligible rollover contributions from other types of qualified retirement plans to your SIMPLE IRA. ROLLOVERS FROM YOUR SIMPLE IRA. Tax-free 60-day rollovers and direct transfers from a SIMPLE IRA can only be made to another SIMPLE IRA annuity or account during the first two years that you participate in the SIMPLE IRA plan. After this two year period, tax-free 60-day rollovers and transfers may be made from your SIMPLE IRA into a Traditional IRA annuity or account, as well as into another SIMPLE IRA. ROTH IRA ANNUITIES GENERAL Roth IRAs are different from other IRAs because you have the opportunity to enjoy tax-free earnings. However, you can only make after-tax purchase payments to a Roth IRA. 134 PURCHASE PAYMENTS Roth IRA purchase payments for individuals under age 50 are non-deductible and are limited, in a manner similar to IRAs, to the lesser of 100% of compensation or the annual deductible IRA amount. This limit includes contributions to all your Traditional and Roth IRAs for the year. Individuals age 50 or older can make an additional "catch- up" purchase payment each year (assuming the individual has sufficient compensation). You may contribute up to the annual purchase payment limit if your modified adjusted gross income does not exceed certain limits. Purchase payments are phased out depending on your modified adjusted gross income and your filing status. See the SAI for additional information. Also, see IRS Publication 590 available at www. irs.gov. Further, with respect to Traditional IRA amounts which were converted to a Roth IRA, such conversion must have occurred at least five years prior to purchase of this Contract. Consult your independent tax advisor. Annual purchase payments limits do not apply to a rollover from a Roth IRA to another Roth IRA or a conversion from a Traditional IRA to a Roth IRA. You can contribute to a Roth IRA after age 70 1/2. If certain conditions are met, you can change your Roth IRA contribution to a Traditional IRA before you file your income return (including filing extensions). Beginning in 2008, Roth IRAs may also accept a rollover from other types of eligible retirement plans (e.g., 403(b), 401(a) and 457(b) plans of a state or local government employer) if Code requirements are met. The taxable portion of the proceeds are subject to income tax in the year of the rollover. If you exceed the purchase payment limits you may be subject to a tax penalty. WITHDRAWALS Generally, withdrawals of earnings from Roth IRAs are free from federal income tax if they meet the following two requirements: . The withdrawal is made at least five taxable years after your first purchase payment to a Roth IRA, AND . The withdrawal is made: on or after the date you reach age 59 1/2; upon your death or disability; or for a qualified first-time home purchase (up to $10,000). Withdrawals of earnings which do not meet these requirements are taxable and a 10% penalty tax may apply if made before age 59 1/2. See withdrawals chart above. Consult your tax adviser to determine if an exception applies. Withdrawals from a Roth IRA are made first from purchase payments and then from earnings. Generally, you do not pay income tax on withdrawals of purchase payments. However, withdrawals of taxable amounts converted from a non-Roth IRA prior to age 59 1/2 will be subject to the 10% penalty tax (unless you meet an exception) if made within 5 taxable years of such conversion. See withdrawals chart above. The order in which money is withdrawn from a Roth IRA is as follows (all Roth IRAs owned by a taxpayer are combined for withdrawal purposes): . The first money withdrawn is any annual (non-conversion/rollover) contributions to the Roth IRA. These are received tax and penalty free. . The next money withdrawn is from conversion/rollover contributions from a non-Roth IRA or an eligible retirement plan (other than a designated Roth account), on a first-in, first-out basis. For these purposes, distributions are treated as coming first from the taxable portion of the conversion/rollover contribution. As previously discussed, depending upon when it occurs, withdrawals of taxable converted amounts may be subject to a penalty tax, or result in the acceleration of inclusion of income. 135 . The next money withdrawn is from earnings in the Roth IRA. This is received tax-free if it meets the requirements previously discussed; otherwise it is subject to Federal income tax and an additional 10% penalty tax may apply if you are under age 59 1/2. . We may be required to withhold a portion of your withdrawal for income taxes, unless you elect otherwise. The amount will be determined by the Code. CONVERSION You may convert/rollover a Traditional IRA or an eligible retirement plan (other than a designated Roth account) to a Roth IRA if your modified adjusted gross income does not exceed $100,000 in the year you convert. If you are married but file separately, you may not convert a Traditional IRA or an eligible retirement plan (other than a designated Roth account) into a ROTH IRA. The above income limit and filing status restriction will not apply for tax years beginning in 2010. Except to the extent you have non-deductible contributions, the amount converted from an existing IRA or eligible retirement plan (other than a designated Roth account) into a Roth IRA is taxable. Generally, the 10% withdrawal penalty does not apply to conversions/rollovers. (See exception discussed previously.) For conversions occurring in 2010, the amount converted into a Roth IRA may be included in your taxable income ratably over 2011 and 2012 and does not have to be included in your taxable income in 2010. Caution: The IRS issued guidance in 2005 requiring that the taxable amount converted be based on the fair market value of the entire IRA annuity contract being converted or redesignated into a Roth IRA. Such fair market value, in general, is to be determined by taking into account the value of all benefits (both living benefits and death benefits) in addition to the account balance; as well as adding back certain loads and charges incurred during the prior 12 month period. Your Contract may include such benefits, and applicable charges. Accordingly, taxpayers considering redesignating a Traditional IRA annuity into a Roth IRA annuity should consult their own tax advisor prior to converting. The taxable amount may exceed the account value at date of conversion. Unless you elect otherwise, amounts converted from a Traditional IRA or an eligible retirement plan (other than a designated Roth account) to a Roth IRA will be subject to income tax withholding. The amount withheld is determined by the Code. If you mistakenly convert or otherwise wish to change your Roth IRA contribution to a Traditional IRA contribution, the tax law allows you to reverse your conversion provided you do so before you file your tax return for the year of the contribution and if certain conditions are met. REQUIRED DISTRIBUTIONS Required minimum distribution rules that apply to other types of IRAs while you are alive do not apply to Roth IRAs. However, in general, the same rules with respect to minimum distributions required to be made to a beneficiary after your death under Traditional IRAs do apply to Roth IRAs. Note, as previously mentioned, certain required minimum distributions are waived for 2009. Consult your tax adviser prior to waiving your 2009 RMD. Note that where payments under a Roth Income Annuity have begun prior to your death the remaining interest in the Contract must be paid to your designated beneficiary by the end of the fifth year following your death or over a period no longer than the beneficiary's remaining life expectancy at the time you die. 136 DEATH BENEFITS Generally, when you die we must make payment of your entire interest by the December 31st of the year that is the fifth anniversary of your death or begin making payments over a period and in a manner allowed by the Code to your beneficiary by December 31st of the year after your death. If your spouse is your beneficiary, your spouse may delay the start of required payments until December 31st of the year in which you would have reached age 70 1/2. If your spouse is your beneficiary, he or she may elect to continue as "contract owner" of the Contract. 137 LEGAL PROCEEDINGS In the ordinary course of business, MetLife, similar to other life insurance companies, is involved in lawsuits (including class action lawsuits), arbitrations and other legal proceedings. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance industries. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. It is not possible to predict with certainty the ultimate outcome of any pending legal proceeding or regulatory action. However, MetLife does not believe any such action or proceeding will have a material adverse effect upon the Separate Account or upon the ability of MLIDC to perform its contract with the Separate Account or of MetLife to meet its obligations under the Contracts. 138 TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION
PAGE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.................... 2 PRINCIPAL UNDERWRITER............................................ 2 DISTRIBUTION AND PRINCIPAL UNDERWRITER AGREEMENT................. 2 EXPERIENCE FACTOR................................................ 2 VARIABLE INCOME PAYMENTS......................................... 3 CALCULATING THE ANNUITY UNIT VALUE............................... 5 ADVERTISEMENT OF THE SEPARATE ACCOUNT............................ 6 VOTING RIGHTS.................................................... 9 ERISA............................................................ 10 TAXES--SIMPLE IRAS ELIGIBILITY AND CONTRIBUTIONS................. 10 WITHDRAWALS...................................................... 11 ACCUMULATION UNIT VALUES TABLES.................................. 11 FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT..................... 1 FINANCIAL STATEMENTS OF METLIFE.................................. F-1
139 APPENDIX A PREMIUM TAX TABLE If you are a resident of one of the following jurisdictions, the percentage amount listed by that jurisdiction is the premium tax rate applicable to your annuity.
Non-Qualified IRA and SEP Annuities Annuities(1) California........ 2.35% 0.5% Florida........... 1.0% 1.0%(2) Maine............. 2.0% -- Nevada............ 3.5% -- Puerto Rico....... 1.0% 1.0% South Dakota...... 1.25%(3) -- West Virginia..... 1.0% 1.0% Wyoming........... 1.0% --
--- /1/Premium tax rates applicable to IRA and SEP annuities purchased for use in connection with individual retirement trust or custodial accounts meeting the requirements of Section 408(a) of the Code are included under the column heading "IRA and SEP Annuities." /2/Annuity premiums are exempt from taxation provided the tax savings are passed back to the contract holders. Otherwise, they are taxable at 1%. /3/Special rate applies for large case annuity policies. Rate is 8/100 of 1% for that portion of the annuity considerations received on a contract exceeding $500,000 annually. Special rate on large case policies is not subject to retaliation. 140 APPENDIX B ACCUMULATION UNIT VALUES FOR EACH INVESTMENT DIVISION These tables and bar charts show fluctuations in the Accumulation Unit Values for two of the possible mixes offered within the Deferred Annuity for each investment division from year end to year end. A different share class of the Metropolitan Fund and Met Investors Fund Portfolios was available prior to May 1, 2004. Lower Separate Account charges for the American Funds Investment Divisions were in effect prior to May 1, 2004. The accumulation unit values prior to May 1, 2004 reflect the lower 12b-1 Plan fees for the Metropolitan Fund and the Met Investors Fund Portfolios and lower Separate Account charges for the American Funds(R) Investment Divisions then in effect. Values after April 30, 2004 reflect the higher 12b-1 Plan fees and Separate Account charges currently in place. In addition, different charges for certain optional benefits were in effect prior to May 1, 2003. Therefore, the accumulation unit values prior to May 1, 2003, for Deferred Annuities with these optional benefits reflect the lower charges then in effect. Values after April 30, 2003, reflect the higher charges currently in place. A lower charge for the Guaranteed Minimum Income Benefit when it was purchased with either of the optional death benefits was in effect from May 1, 2004 through April 30, 2005. A lower charge for the GMIB Plus I was in effect prior to February 26, 2007. Lower charges for the GMIB Plus II, Enhanced Death Benefit and LWG II were in effect prior to February 24, 2009 and/or May 4, 2009. These lower charges are not reflected in the tables below. The information in these tables and charts has been derived from the Separate Account's full financial statements or other reports (such as the annual report). The first table and charts show the Deferred Annuity mix that bears the total highest charge, and the second table and charts show the Deferred Annuity mix that bears the total lowest charge. The mix with the total highest charge has these features: Bonus Class, the Greater of Annual Step-Up or 5% Annual Increase Death Benefit, Earnings Preservation Benefit. Charges for the Enhanced Death Benefit, the optional Guaranteed Minimum Income Benefits, the optional Guaranteed Withdrawal Benefits, and the optional Guaranteed Minimum Accumulation Benefit are made by canceling accumulation units and, therefore, these charges are not reflected in the Accumulation Unit Value. However, purchasing these options with the others will result in a higher overall charge. The mix with the total lowest charge has these features: B Class and no optional benefit. All other possible mixes for each investment division within the Deferred Annuity appear in the SAI, which is available upon request without charge by calling 1-800-638-7732. PREFERENCE PLUS SELECT DEFERRED ANNUITIES HIGHEST POSSIBLE MIX 2.30 SEPARATE ACCOUNT CHARGE
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $10.00 $ 6.96 412.25 American Funds Bond Division (Class 2)/(k)/................. 2006 13.48 14.05 2,260.99 2007 14.05 14.17 9,257.00 2008 14.17 12.53 7,101.80 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2001 13.39 13.03 0.00 2002 13.03 10.29 0.00 2003 10.29 15.42 0.00 2004 15.42 18.19 13,630.80 2005 18.19 22.25 19,596.91 2006 22.25 26.94 24,763.77 2007 26.94 31.92 28,149.24 2008 31.92 14.47 23,694.86 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.32 111,993.18
141
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ American Funds Growth Division (Class 2)/(c)/............... 2001 $105.45 $ 95.15 0.00 2002 95.15 70.14 0.00 2003 70.14 93.63 0.00 2004 93.63 102.78 11,491.63 2005 102.78 116.54 11,889.33 2006 116.54 125.35 12,469.33 2007 125.35 137.40 11,555.27 2008 137.40 75.11 10,853.89 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 73.98 70.77 0.00 2002 70.77 56.39 0.00 2003 56.39 72.87 0.00 2004 72.87 78.48 11,225.16 2005 78.48 81.05 10,819.00 2006 81.05 91.12 13,217.06 2007 91.12 93.39 13,454.75 2008 93.39 56.63 10,951.54 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.63 11,468.33 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 32.98 30.99 0.00 2002 30.99 21.56 0.00 2003 21.56 29.63 0.00 BlackRock Aggressive Growth Division (Class B).............. 2004 29.05 32.02 470.09 2005 32.02 34.56 351.47 2006 34.56 35.96 342.15 2007 35.96 42.25 1,604.22 2008 42.25 22.36 5,150.56 BlackRock Bond Income Division (formerly SSR Income Class E) (Class E)/(a)/......................................... 2001 34.86 35.69 0.00 2002 35.69 320.53 0.00 BlackRock Bond Income Division (Class E)/(a)/............... 2002 35.97 37.72 0.00 2003 37.72 38.96 0.00 BlackRock Bond Income Division (Class B).................... 2004 35.93 37.01 4,465.70 2005 37.01 36.95 7,893.69 2006 36.95 37.60 8,645.26 2007 37.60 38.96 12,697.65 2008 38.96 36.67 9,177.68 BlackRock Diversified Division (Class E)/(c)/............... 2001 32.43 31.50 0.00 2002 31.50 26.49 0.00 2003 26.49 31.17 0.00 BlackRock Diversified Division (Class B).................... 2004 30.09 32.27 6,385.61 2005 32.27 32.43 15,553.06 2006 32.43 34.94 17,189.51 2007 34.94 36.06 6,540.78 2008 36.06 26.44 4,369.81 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 63.00 63.16 368.02 2008 63.16 38.69 807.79 BlackRock Large Cap Division (Class E)/(c)/................. 2001 59.93 55.73 0.00 2002 55.73 40.18 0.00 2003 40.18 51.07 0.00
142
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ BlackRock Large Cap Division (Class B)...................... 2004 $49.31 $54.09 253.57 2005 54.09 54.62 367.03 2006 54.62 60.76 366.86 2007 60.76 63.54 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.87 0.00 2003 7.87 10.42 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.49 11.51 18,591.97 2005 11.51 11.87 20,493.04 2006 11.87 13.83 18,855.81 2007 13.83 13.93 27,445.10 2008 13.93 8.83 22,432.06 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.29 23.19 1,500.34 2005 23.19 24.19 2,741.85 2006 24.19 24.56 6,579.00 2007 24.56 28.42 8,317.88 2008 28.42 17.58 14,557.19 BlackRock Money Market Division (Class E)/(f)/.............. 2003 18.93 18.72 82.45 BlackRock Money Market Division (Class B)................... 2004 18.23 18.06 0.00 2005 18.06 18.11 0.00 2006 18.11 18.51 0.00 2007 18.51 18.96 0.00 2008 18.96 19.01 6,331.55 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.08 13.79 0.00 2002 13.79 10.58 0.00 2003 10.58 15.50 0.00 BlackRock Strategic Value Division (Class B)................ 2004 15.56 17.40 22,097.11 2005 17.40 17.67 44,679.62 2006 17.67 20.11 47,952.92 2007 20.11 18.93 45,574.31 2008 18.93 11.36 31,573.50 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.75 17,259.85 2005 12.75 14.12 62,406.06 2006 14.12 18.99 103,829.51 2007 18.99 15.77 80,509.83 2008 15.77 8.98 43,231.44 Davis Venture Value Division (Class E)/(c)/................. 2001 25.57 24.79 0.00 2002 24.79 20.22 0.00 2003 20.22 25.83 0.00 Davis Venture Value Division (Class B)...................... 2004 26.22 28.05 4,134.00 2005 28.05 30.16 14,938.08 2006 30.16 33.70 22,597.68 2007 33.70 34.36 22,729.70 2008 34.36 20.30 13,575.92 FI Large Cap Division (Class B)/(k)/........................ 2006 15.66 15.75 0.00 2007 15.75 15.96 0.00 2008 15.96 8.58 0.00
143
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class E)/(c)(h)/......... 2001 $ 17.49 $ 15.00 0.00 2002 15.00 10.39 0.00 2003 10.39 13.66 0.00 FI Mid Cap Opportunities Division (Class B)................. 2004 13.73 15.37 893.10 2005 15.37 16.02 3,485.86 2006 16.02 17.47 8,070.45 2007 17.47 18.45 8,128.61 2008 18.45 8.03 7,520.42 FI Value Leaders Division (Class E)/(d)/.................... 2002 20.96 17.15 0.00 2003 17.15 21.24 0.00 FI Value Leaders Division (Class B)......................... 2004 20.84 23.36 1,782.38 2005 23.36 25.22 5,676.29 2006 25.22 27.52 10,229.10 2007 27.52 27.95 5,072.74 2008 27.95 16.63 4,622.22 Franklin Templeton Small Cap Growth Division (Class E)/(c)/. 2001 9.15 8.74 0.00 2002 8.74 6.16 0.00 2003 6.16 8.71 0.00 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.57 9.43 2,857.38 2005 9.43 9.62 1,790.05 2006 9.62 10.32 5,012.27 2007 10.32 10.52 3,786.65 2008 10.52 6.03 3,041.61 Harris Oakmark Focused Value Division (Class E)/(c)/........ 2001 23.58 24.30 0.00 2002 24.30 21.61 0.00 2003 21.61 27.98 0.00 Harris Oakmark Focused Value Division (Class B)............. 2004 27.27 29.42 5,359.15 2005 29.42 31.55 13,128.60 2006 31.55 34.58 13,048.19 2007 34.58 31.40 10,632.92 2008 31.40 16.53 9,683.33 Harris Oakmark International Division (Class E)/(d)/........ 2002 10.54 8.74 0.00 2003 8.74 11.54 0.00 Harris Oakmark International Division (Class B)............. 2004 11.75 13.56 6,279.34 2005 13.56 15.14 13,426.94 2006 15.14 19.07 21,768.49 2007 19.07 18.43 37,386.16 2008 18.43 10.64 17,901.75 Janus Forty Division (Class B)/(n)/......................... 2007 116.32 141.83 1,112.92 2008 141.83 80.39 6,337.55 Jennison Growth Division (Class B)/(g)/..................... 2005 3.88 4.64 3,987.32 2006 4.64 4.65 9,269.22 2007 4.65 5.06 11,750.99 2008 5.06 3.14 18,853.62 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class E)/(c)(g)/............................... 2001 5.33 4.84 0.00 2002 4.84 3.36 0.00 2003 3.36 4.13 0.00
144
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 $ 4.07 $ 4.22 3,585.58 2005 4.22 3.84 4,660.68 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.17 10.41 0.00 2002 10.41 8.38 0.00 2003 8.38 10.47 0.00 Julius Baer International Stock Division (Class B).......... 2004 10.51 11.93 206.73 2005 11.93 13.71 6,088.01 2006 13.71 15.58 11,733.97 2007 15.58 16.76 7,917.55 2008 16.76 9.13 5,767.09 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.33 9.57 0.00 2003 9.57 11.82 0.00 Lazard Mid Cap Division (Class B)........................... 2004 12.27 13.17 492.49 2005 13.17 13.91 521.73 2006 13.91 15.59 805.23 2007 15.59 14.82 3,369.92 2008 14.82 8.93 3,398.11 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.84 7.70 0.00 2002 7.70 5.21 0.00 2003 5.21 6.62 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.46 6.62 0.00 Legg Mason Partners Aggressive Growth (Class B)............. 2004 6.41 6.93 2,180.74 2005 6.93 7.69 9,274.78 2006 7.69 7.38 14,905.88 2007 7.38 7.38 9,416.59 2008 7.38 4.39 9,644.05 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.78 9.35 496.66 2007 9.35 8.60 454.92 2008 8.60 3.81 454.01 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class E)/(c)(l)/............................... 2001 8.54 8.09 0.00 2002 8.09 6.31 0.00 2003 6.31 7.49 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.35 8.10 813.14 2005 8.10 8.46 0.00 2006 8.46 8.81 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/................................................... 2001 10.91 11.08 0.00 2002 11.08 11.92 0.00 2003 11.92 12.05 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 11.81 12.08 68,675.99 2005 12.08 12.03 104,347.97 2006 12.03 12.20 175,669.65 2007 12.20 12.72 164,982.41 2008 12.72 13.13 106,196.81 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 21.50 20.96 0.00 2002 20.96 16.05 0.00 2003 16.05 21.38 0.00
145
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ Loomis Sayles Small Cap Division (Class B).................. 2004 $21.40 $24.10 117.66 2005 24.10 25.13 2,403.10 2006 25.13 28.58 7,496.79 2007 28.58 31.18 8,345.65 2008 31.18 19.48 7,015.22 Lord Abbett Bond Debenture Division (formerly Loomis Sayles High Yield Bond Division) (Class E)/(b)/.................. 2001 10.34 10.05 0.00 2002 10.05 14.43 0.00 2003 14.43 16.83 0.00 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.31 9.94 0.00 2003 9.94 11.59 0.00 2004 11.59 12.26 6,995.83 Lord Abbett Bond Debenture Division (Class B)............... 2004 14.84 15.72 5,296.69 2005 15.72 15.59 9,814.85 2006 15.59 16.63 11,157.25 2007 16.63 17.31 19,214.94 2008 17.31 13.77 18,982.21 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.17 8.39 0.00 2003 8.39 11.41 0.00 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.10 11.82 1,582.34 2005 11.82 12.51 7,237.93 2006 12.51 13.96 9,838.79 2007 13.96 15.15 5,026.02 2008 15.15 9.07 1,675.61 Met/Franklin Income Division/(o)/........................... 2008 9.99 7.93 218.39 Met/Franklin Mutual Shares Division/(o)/.................... 2008 9.99 6.55 0.00 Met/Franklin Templeton Founding Strategy Division/(o)/...... 2008 9.99 6.99 0.00 Met/Templeton Growth Division/(o)/.......................... 2008 9.99 6.52 0.00 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.33 10.18 0.00 2002 10.18 8.45 0.00 2003 8.45 11.14 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.25 12.53 29,621.98 2005 12.53 13.72 34,678.10 2006 13.72 14.72 40,318.22 2007 14.72 15.47 34,384.52 2008 15.47 9.62 32,274.06 MetLife Stock Index Division (Class E)/(c)/................. 2001 34.43 32.39 0.00 2002 32.39 24.56 0.00 2003 24.56 30.72 0.00 MetLife Stock Index Division (Class B)...................... 2004 29.89 32.20 64,157.86 2005 32.20 32.84 82,221.18 2006 32.84 36.97 92,276.05 2007 36.97 37.93 85,289.32 2008 37.93 23.25 84,347.16 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.98 8.32 0.00 2002 8.32 7.18 0.00 2003 7.18 9.27 0.00
146
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ MFS(R) Research International Division (Class B)............ 2004 $ 9.46 $10.80 4,438.20 2005 10.80 12.29 5,803.58 2006 12.29 15.20 8,237.59 2007 15.20 16.83 20,401.23 2008 16.83 9.48 16,044.22 MFS(R) Total Return Division (Class B)/(i)/................. 2004 31.54 34.09 166.11 2005 34.09 34.27 847.21 2006 34.27 37.49 504.29 2007 37.49 38.14 8,629.69 2008 38.14 28.94 6,112.80 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.37 11.16 0.00 2002 11.16 9.35 0.00 2003 9.35 11.46 0.00 MFS(R) Value Division (Class B)............................. 2004 11.54 12.38 11,105.37 2005 12.38 11.90 18,025.09 2006 11.90 13.71 15,566.56 2007 13.71 12.86 24,430.23 2008 12.86 8.33 12,126.59 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.15 8.37 0.00 2002 8.37 6.81 0.00 2003 6.81 9.14 0.00 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.10 10.52 54,022.71 2005 10.52 11.61 60,495.83 2006 11.61 14.23 64,630.68 2007 14.23 15.37 70,746.36 2008 15.37 8.68 60,820.49 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.00 14.64 0.00 2002 14.64 12.92 0.00 2003 12.92 17.22 0.00 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.66 20.48 9,930.93 2005 20.48 22.40 23,315.35 2006 22.40 24.35 33,167.26 2007 24.35 24.55 34,211.63 2008 24.55 12.60 24,143.27 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.65 8.25 0.00 2006 8.25 8.68 0.00 2007 8.68 9.70 2,709.85 2008 9.70 5.12 4,618.19 Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 12.43 11.67 0.00 2002 11.67 9.57 0.00 2003 9.57 12.19 0.00 Oppenheimer Global Equity Division (Class B)................ 2004 11.95 13.70 2,158.26 2005 13.70 15.53 2,542.63 2006 15.53 17.67 9,884.47 2007 17.67 18.34 8,128.40 2008 18.34 10.65 9,320.55 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.70 10.74 11,668.63 2007 10.74 11.63 5,173.12 2008 11.63 10.58 52,328.27
147
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ PIMCO Total Return Division (Class E)/(c)/.................. 2001 $10.20 $10.36 0.00 2002 10.36 11.07 0.00 2003 11.07 11.30 0.00 PIMCO Total Return Division (Class B)....................... 2004 11.33 11.67 15,237.83 2005 11.67 11.66 36,721.36 2006 11.66 11.91 38,133.46 2007 11.91 12.52 34,418.86 2008 12.52 12.29 35,120.75 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.02 6.04 0.00 2002 6.04 2.92 0.00 2003 2.92 4.49 0.00 RCM Technology Division (Class B)........................... 2004 4.04 4.19 476.42 2005 4.19 4.54 2,929.51 2006 4.54 4.68 8,407.27 2007 4.68 6.01 42,291.29 2008 6.01 3.26 43,620.83 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.73 11.63 0.00 2002 11.63 9.03 0.00 2003 9.03 12.88 0.00 Russell 2000(R) Index Division (Class B).................... 2004 12.82 14.59 34,337.97 2005 14.59 14.87 37,915.77 2006 14.87 17.09 33,144.79 2007 17.09 16.41 33,390.67 2008 16.41 10.64 24,804.11 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.64 11.28 0.00 2007 11.28 11.65 12,944.63 2008 11.65 7.63 614.50 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.45 11.03 0.00 2007 11.03 11.36 245.33 2008 11.36 8.32 1,439.57 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.37 11.19 0.00 2002 11.19 8.39 0.00 2003 8.39 10.71 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.62 11.44 2,945.42 2005 11.44 11.89 7,481.91 2006 11.89 13.12 6,550.37 2007 13.12 13.99 10,385.59 2008 13.99 7.93 12,169.18 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.60 8.19 0.00 2002 8.19 4.47 0.00 2003 4.47 5.98 0.00 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.09 6.87 22,926.76 2005 6.87 7.69 42,374.54 2006 7.69 7.98 56,689.17 2007 7.98 9.18 41,537.89 2008 9.18 5.40 48,436.73
148
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $11.79 $11.56 0.00 2002 11.56 8.27 0.00 2003 8.27 11.37 0.00 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.60 12.30 1,150.84 2005 12.30 13.31 1,258.39 2006 13.31 13.48 6,599.94 2007 13.48 14.42 3,920.01 2008 14.42 8.97 4,219.15 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.66 14.89 0.00 2002 14.89 15.91 0.00 2003 15.91 17.50 0.00 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.12 18.04 11,888.85 2005 18.04 18.09 30,125.39 2006 18.09 18.53 34,601.97 2007 18.53 18.78 31,440.86 2008 18.78 15.55 23,086.19 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 13.63 13.85 0.00 2002 13.85 14.56 0.00 2003 14.56 14.45 0.00 Western Asset Management U.S Government Division (Class B).. 2004 14.15 14.40 9,018.77 2005 14.40 14.27 21,812.04 2006 14.27 14.49 16,953.71 2007 14.49 14.73 18,818.23 2008 14.73 14.32 21,805.55 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.08 66.32 2006 11.08 12.52 22,474.20 2007 12.52 12.64 24,687.28 2008 12.64 7.35 21,574.44 MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 9.99 10.23 2,651.88 2006 10.23 10.69 2,557.48 2007 10.69 11.03 2,357.64 2008 11.03 9.23 3,329.81 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.45 42,338.63 2006 10.45 11.17 186,748.34 2007 11.17 11.45 213,396.47 2008 11.45 8.77 140,729.65 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.68 26,758.05 2006 10.68 11.67 135,735.37 2007 11.67 11.90 384,431.59 2008 11.90 8.30 210,997.07 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.90 3,633.02 2006 10.90 12.17 295,572.42 2007 12.17 12.35 397,849.27 2008 12.35 7.83 104,859.66 At 2.55 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.36 13.92 5,946.69 2007 13.92 14.02 7,845.31 2008 14.02 12.39 4,754.23
149
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2004 $ 15.33 $ 18.07 15,247.27 2005 18.07 22.08 29,683.18 2006 22.08 26.71 44,812.05 2007 26.71 31.61 52,489.35 2008 31.61 14.32 47,184.56 American Funds Growth Division (Class 2)/(c)/............... 2004 91.79 100.65 7,212.98 2005 100.65 114.01 12,716.12 2006 114.01 122.51 16,853.27 2007 122.51 134.15 16,934.86 2008 134.15 73.26 14,663.23 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 71.43 76.85 7,041.60 2005 76.85 79.29 13,993.24 2006 79.29 89.06 19,606.13 2007 89.06 91.18 23,431.93 2008 91.18 55.23 16,761.80
150 PREFERENCE PLUS SELECT DEFERRED ANNUITIES LOWEST POSSIBLE MIX 1.25 SEPARATE ACCOUNT CHARGE
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------- American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 7.01 5,363,317.01 American Funds Bond Division (Class 2)/(k)/................. 2006 14.82 15.56 365,887.51 2007 15.56 15.85 768,194.65 2008 15.85 14.17 554,431.26 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2001 13.86 13.54 0.00 2002 13.54 10.81 176,357.64 2003 10.81 16.37 793,521.46 2004 16.37 19.51 1,684,630.59 2005 19.51 24.12 1,942,621.89 2006 24.12 29.51 2,014,130.80 2007 29.51 35.33 2,066,061.06 2008 35.33 16.19 1,676,113.20 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.36 11,381,509.85 American Funds Growth Division (Class 2)/(c)/............... 2001 126.65 114.77 0.00 2002 114.77 85.50 100,894.63 2003 85.50 115.34 484,308.87 2004 115.34 127.95 832,307.70 2005 127.95 146.61 850,455.08 2006 146.61 159.35 855,979.03 2007 159.35 176.52 789,249.89 2008 176.52 97.52 685,332.95 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 88.85 85.37 0.00 2002 85.37 68.74 127,625.35 2003 68.74 89.76 634,858.72 2004 89.76 97.69 1,040,319.53 2005 97.69 101.96 992,089.03 2006 101.96 115.83 915,468.87 2007 115.83 119.97 847,614.09 2008 119.97 73.52 701,937.54 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.69 11,825,226.62 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 37.91 35.78 0.00 2002 35.78 25.16 26,852.28 2003 25.16 34.93 154,691.04 BlackRock Aggressive Growth Division (Class B).............. 2004 34.38 38.15 48,586.98 2005 38.15 41.61 126,036.87 2006 41.61 43.76 228,956.11 2007 43.76 51.95 383,639.24 2008 51.95 27.79 600,156.98 BlackRock Bond Income Division (formerly SSR Income Class E) (Class E)/(a)/......................................... 2001 42.17 43.36 0.00 2002 43.36 46.31 0.00 BlackRock Bond Income Division (Class E)/(a)/............... 2002 43.84 46.31 207,477.01 2003 46.31 48.33 536,896.98
151
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class B).................... 2004 $44.66 $46.31 301,057.28 2005 46.31 46.72 1,046,108.64 2006 46.72 48.05 1,637,036.48 2007 48.05 50.31 1,973,936.78 2008 50.31 47.86 1,847,352.77 BlackRock Diversified Division (Class E)/(c)/............... 2001 37.99 37.06 0.00 2002 37.06 31.50 212,999.18 2003 31.50 37.46 752,001.31 BlackRock Diversified Division (Class B).................... 2004 36.28 39.19 277,202.91 2005 39.19 39.79 535,541.81 2006 39.79 43.33 698,275.54 2007 43.33 45.19 830,380.34 2008 45.19 33.48 880,343.66 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 80.94 81.72 197,425.91 2008 81.72 50.59 268,816.94 BlackRock Large Cap Division (Class E)/(c)/................. 2001 72.49 67.70 0.00 2002 67.70 49.33 79,863.05 2003 49.33 63.36 303,829.18 BlackRock Large Cap Division (Class B)...................... 2004 61.39 67.81 63,985.52 2005 67.81 69.20 115,756.61 2006 69.20 77.79 153,608.48 2007 77.79 81.62 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.93 62,035.81 2003 7.93 10.60 462,050.50 BlackRock Large Cap Value Division (Class B)................ 2004 10.72 11.84 507,414.37 2005 11.84 12.34 1,191,101.20 2006 12.34 14.52 4,017,678.88 2007 14.52 14.79 6,203,097.15 2008 14.79 9.47 6,677,973.23 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 23.52 25.80 71,095.54 2005 25.80 27.20 179,456.51 2006 27.20 27.91 329,519.56 2007 27.91 32.64 677,955.31 2008 32.64 20.41 1,381,085.09 BlackRock Money Market Division (Class E)/(f)/.............. 2003 23.28 23.18 24,871.02 BlackRock Money Market Division (Class B)................... 2004 22.66 22.60 51,565.74 2005 22.60 22.91 104,247.78 2006 22.91 23.65 220,864.59 2007 23.65 24.48 423,149.02 2008 24.48 24.81 1,019,197.09 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.24 14.01 0.00 2002 14.01 10.86 796,790.61 2003 10.86 16.08 2,552,703.05 BlackRock Strategic Value Division (Class B)................ 2004 16.20 18.24 1,029,329.75 2005 18.24 18.72 2,350,319.89 2006 18.72 21.53 3,429,455.89 2007 21.53 20.48 3,851,949.52 2008 20.48 12.42 3,625,580.48
152
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ Clarion Global Real Estate Division (Class B)/(i)/........ 2004 $ 9.99 $12.84 1,489,317.40 2005 12.84 14.37 4,338,464.48 2006 14.37 19.52 7,835,572.48 2007 19.52 16.39 8,113,130.91 2008 16.39 9.44 7,850,669.54 Davis Venture Value Division (Class E)/(c)/............... 2001 27.45 26.73 0.00 2002 26.73 22.03 115,244.86 2003 22.03 28.44 448,782.09 Davis Venture Value Division (Class B).................... 2004 28.98 31.22 499,387.83 2005 31.22 33.91 2,131,611.21 2006 33.91 38.29 3,988,041.56 2007 38.29 39.45 5,074,167.58 2008 39.45 23.56 5,669,478.45 FI Large Cap Division (Class B)/(k)/...................... 2006 17.34 17.56 64,686.86 2007 17.56 17.98 159,771.44 2008 17.98 9.77 298,616.98 FI Mid Cap Opportunities Division (Class E)/(c)(h)/....... 2001 18.33 15.78 0.00 2002 15.78 11.04 147,252.83 2003 11.04 14.68 490,905.38 FI Mid Cap Opportunities Division (Class B)............... 2004 14.81 16.69 195,292.90 2005 16.69 17.58 550,747.76 2006 17.58 19.37 1,043,827.16 2007 19.37 20.68 1,436,202.13 2008 20.68 9.10 1,753,470.54 FI Value Leaders Division (Class E)/(d)/.................. 2002 23.04 18.98 11,626.22 2003 18.98 23.76 129,119.95 FI Value Leaders Division (Class B)....................... 2004 23.39 26.41 85,618.72 2005 26.41 28.81 420,979.54 2006 28.81 31.77 1,116,072.48 2007 31.77 32.61 1,237,524.46 2008 32.61 19.61 1,167,465.68 Franklin Templeton Small Cap Growth Division (Class E)/(c)/................................................. 2001 9.18 8.80 0.00 2002 8.80 6.27 139,794.65 2003 6.27 8.96 528,179.62 Franklin Templeton Small Cap Growth Division (Class B).... 2004 8.85 9.80 157,161.05 2005 9.80 10.11 469,945.62 2006 10.11 10.95 779,710.51 2007 10.95 11.28 982,451.23 2008 11.28 6.54 1,137,061.65 Harris Oakmark Focused Value Division (Class E)/(c)/...... 2001 25.72 26.62 0.00 2002 26.62 23.93 320,020.25 2003 23.93 31.30 1,040,971.04 Harris Oakmark Focused Value Division (Class B)........... 2004 30.62 33.26 377,040.95 2005 33.26 36.04 1,158,798.80 2006 36.04 39.92 1,544,583.01 2007 39.92 36.63 1,646,083.75 2008 36.63 19.49 1,530,577.09
153
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ Harris Oakmark International Division (Class E)/(d)/.............................. 2002 $ 10.60 $ 8.85 26,567.87 2003 8.85 11.81 324,128.40 Harris Oakmark International Division (Class B)................................... 2004 12.08 14.03 517,942.94 2005 14.03 15.83 2,479,089.48 2006 15.83 20.15 5,230,310.81 2007 20.15 19.67 6,878,657.12 2008 19.67 11.48 5,848,438.73 Janus Forty Division (Class B)/(n)/............................................... 2007 151.43 185.95 110,979.76 2008 185.95 106.51 712,494.40 Jennison Growth Division (Class B)/(g)/........................................... 2005 4.09 4.92 412,176.02 2006 4.92 4.99 1,003,446.89 2007 4.99 5.49 1,164,068.68 2008 5.49 3.44 1,376,073.02 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class E)/(c)(g)/. 2001 5.40 4.93 0.00 2002 4.93 3.46 205,815.65 2003 3.46 4.29 639,387.86 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.... 2004 4.25 4.44 114,586.68 2005 4.44 4.05 152,249.83 Julius Baer International Stock Division (Class E)/(c)/........................... 2001 12.45 11.64 0.00 2002 11.64 9.47 178,292.61 2003 9.47 11.96 635,794.86 Julius Baer International Stock Division (Class B)................................ 2004 12.05 13.78 230,542.93 2005 13.78 16.00 882,635.15 2006 16.00 18.37 1,788,847.70 2007 18.37 19.96 2,326,601.22 2008 19.96 10.99 3,102,643.46 Lazard Mid Cap Division (Class E)/(d)/............................................ 2002 11.40 9.69 60,166.50 2003 9.69 12.09 396,340.58 Lazard Mid Cap Division (Class B)................................................. 2004 12.61 13.63 145,014.30 2005 13.63 14.54 369,364.09 2006 14.54 16.47 693,216.68 2007 16.47 15.83 1,336,971.62 2008 15.83 9.64 1,227,543.36 Legg Mason Partners Aggressive Growth (Class E)/(e)/.............................. 2001 8.87 7.75 0.00 2002 7.75 5.30 121,621.58 2003 5.30 6.80 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/.............................. 2003 5.57 6.80 310,403.07 Legg Mason Partners Aggressive Growth (Class B)................................... 2004 6.63 7.22 157,905.31 2005 7.22 8.09 441,946.14 2006 8.09 7.86 854,039.26 2007 7.86 7.93 829,924.69 2008 7.93 4.77 784,974.04 Legg Mason Value Equity (Class B)/(l)/............................................ 2006 9.45 10.14 752,191.91 2007 10.14 9.42 819,936.03 2008 9.42 4.22 972,413.11
154
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------- Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class E)/(c)(l)/............................... 2001 $ 8.75 $ 8.32 0.00 2002 8.32 6.56 73,963.77 2003 6.56 7.87 308,442.38 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.74 8.59 58,522.26 2005 8.59 9.07 300,403.79 2006 9.07 9.49 378,586.99 Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/................................................... 2001 11.23 11.46 0.00 2002 11.46 12.45 1,271,700.30 2003 12.45 12.72 5,134,183.52 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.51 12.89 3,850,658.98 2005 12.89 12.96 11,887,466.57 2006 12.96 13.29 16,455,776.79 2007 13.29 14.00 20,099,380.29 2008 14.00 14.61 17,439,769.63 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 23.20 22.72 0.00 2002 22.72 17.58 30,590.67 2003 17.58 23.67 113,829.25 Loomis Sayles Small Cap Division (Class B).................. 2004 23.77 26.96 62,988.78 2005 26.96 28.40 282,001.02 2006 28.40 32.65 807,342.10 2007 32.65 35.99 1,230,226.05 2008 35.99 22.73 1,465,820.56 Lord Abbett Bond Debenture Division (formerly Loomis Sayles High Yield Bond Division) (Class E)/(b)/.................. 2001 10.83 10.58 0.00 2002 10.58 10.57 0.00 2003 10.57 12.45 0.00 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.88 10.57 108,830.52 2003 10.57 12.45 906,935.62 2004 12.45 13.31 1,418,152.43 Lord Abbett Bond Debenture Division (Class B)............... 2004 16.14 17.21 433,517.32 2005 17.21 17.26 1,644,680.08 2006 17.26 18.60 3,053,153.34 2007 18.60 19.57 4,120,667.18 2008 19.57 15.73 3,918,705.43 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.24 8.50 46,307.54 2003 8.50 11.68 213,981.76 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.40 12.23 88,967.34 2005 12.23 13.08 249,141.21 2006 13.08 14.75 379,516.68 2007 14.75 16.18 570,283.63 2008 16.18 9.79 657,668.14 Met/Franklin Income Division/(o)/........................... 2008 9.99 7.99 717,060.40 Met/Franklin Mutual Shares Division/(o)/.................... 2008 9.99 6.60 472,356.75 Met/Franklin Templeton Founding Strategy Division/(o)/...... 2008 9.99 7.04 2,102,778.94 Met/Templeton Growth Division/(o)/.......................... 2008 9.99 6.57 235,437.29
155
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------- MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 $10.44 $10.34 0.00 2002 10.34 8.68 570,356.88 2003 8.68 11.55 2,466,067.51 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.72 13.13 728,656.68 2005 13.13 14.53 2,195,285.87 2006 14.53 15.76 3,611,990.93 2007 15.76 16.74 4,712,683.58 2008 16.74 10.51 5,825,162.10 MetLife Stock Index Division (Class E)/(c)/................. 2001 38.76 36.62 0.00 2002 36.62 28.06 444,695.20 2003 28.06 35.46 2,189,805.85 MetLife Stock Index Division (Class B)...................... 2004 34.63 37.56 1,750,875.84 2005 37.56 38.72 5,047,439.87 2006 38.72 44.05 7,044,246.68 2007 44.05 45.66 8,542,859.25 2008 45.66 28.29 10,548,323.10 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.02 8.38 0.00 2002 8.38 7.31 128,885.57 2003 7.31 9.54 378,131.36 MFS(R) Research International Division (Class B)............ 2004 9.79 11.25 141,755.48 2005 11.25 12.94 604,819.44 2006 12.94 16.17 2,068,708.66 2007 16.17 18.09 3,262,143.43 2008 18.09 10.30 5,451,172.86 MFS(R) Total Return Division (Class B)/(i)/................. 2004 37.71 41.05 119,277.39 2005 41.05 41.69 328,191.42 2006 41.69 46.09 465,431.08 2007 46.09 47.39 692,542.07 2008 47.39 36.34 626,555.67 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.70 11.54 0.00 2002 11.54 9.77 842,299.12 2003 9.77 12.09 2,688,090.95 MFS(R) Value Division (Class B)............................. 2004 12.23 13.21 1,304,722.64 2005 13.21 12.83 3,878,821.73 2006 12.83 14.93 5,009,373.07 2007 14.93 14.15 5,535,834.88 2008 14.15 9.26 5,163,417.72 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.42 8.65 0.00 2002 8.65 7.12 634,864.59 2003 7.12 9.65 3,114,501.40 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.64 11.22 1,310,419.46 2005 11.22 12.51 3,920,106.79 2006 12.51 15.51 5,695,313.60 2007 15.51 16.92 7,382,320.70 2008 16.92 9.66 9,419,926.46 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.44 15.13 0.00 2002 15.13 13.49 222,971.85 2003 13.49 18.18 832,486.66
156
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------- Neuberger Berman Mid Cap Value Division (Class B)........... 2004 $18.71 $21.85 745,718.74 2005 21.85 24.15 2,759,258.03 2006 24.15 26.52 4,556,951.22 2007 26.52 27.03 5,637,167.55 2008 27.03 14.02 5,869,624.31 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.99 8.69 173,317.48 2006 8.69 9.23 620,638.28 2007 9.23 10.42 1,169,995.30 2008 10.42 5.56 1,627,935.42 Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 13.02 12.28 0.00 2002 12.28 10.17 112,537.61 2003 10.17 13.10 406,709.15 Oppenheimer Global Equity Division (Class B)................ 2004 12.89 14.88 105,601.25 2005 14.88 17.04 579,290.68 2006 17.04 19.59 1,334,400.29 2007 19.59 20.55 1,761,289.24 2008 20.55 12.06 1,967,019.42 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 11.04 11.16 595,123.74 2007 11.16 12.21 1,865,528.17 2008 12.21 11.23 8,801,830.82 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.25 10.45 0.00 2002 10.45 11.29 1,551,710.35 2003 11.29 11.65 4,544,053.32 PIMCO Total Return Division (Class B)....................... 2004 11.72 12.16 1,912,529.08 2005 12.16 12.28 6,758,354.02 2006 12.28 12.67 9,627,248.36 2007 12.67 13.46 11,407,084.04 2008 13.46 13.35 13,686,460.81 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.05 6.10 0.00 2002 6.10 2.97 203,039.18 2003 2.97 4.62 1,637,949.51 RCM Technology Division (Class B)........................... 2004 4.18 4.36 327,216.18 2005 4.36 4.78 700,834.84 2006 4.78 4.98 1,303,161.54 2007 4.98 6.46 3,643,893.87 2008 6.46 3.54 3,951,772.02 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 12.07 12.02 0.00 2002 12.02 9.43 325,845.30 2003 9.43 13.60 1,535,666.47 Russell 2000(R) Index Division (Class B).................... 2004 13.58 15.56 523,546.85 2005 15.56 16.03 1,502,294.21 2006 16.03 18.61 2,585,775.71 2007 18.61 18.07 3,079,763.14 2008 18.07 11.83 3,245,644.32 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.71 11.43 139,058.25 2007 11.43 11.92 536,203.16 2008 11.92 7.89 377,748.91
157
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------ SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 $10.52 $11.18 94,584.11 2007 11.18 11.63 196,239.06 2008 11.63 8.61 564,644.37 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.70 11.57 0.00 2002 11.57 8.76 192,844.11 2003 8.76 11.30 794,026.43 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 11.25 12.21 551,747.60 2005 12.21 12.82 1,706,948.80 2006 12.82 14.29 2,574,599.46 2007 14.29 15.41 3,515,295.61 2008 15.41 8.82 3,604,235.54 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.64 8.26 0.00 2002 8.26 4.56 160,883.93 2003 4.56 6.17 921,458.24 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.30 7.15 529,644.79 2005 7.15 8.10 1,695,381.23 2006 8.10 8.49 3,268,219.53 2007 8.49 9.86 5,090,130.40 2008 9.86 5.87 6,860,173.97 T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 12.35 12.17 0.00 2002 12.17 8.80 104,912.42 2003 8.80 12.22 500,675.63 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.51 13.35 169,438.00 2005 13.35 14.60 639,929.00 2006 14.60 14.94 1,140,830.69 2007 14.94 16.16 1,319,130.58 2008 16.16 10.16 1,553,144.93 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.73 16.05 0.00 2002 16.05 17.34 206,607.47 2003 17.34 19.26 1,097,298.95 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.92 20.08 516,840.38 2005 20.08 20.34 2,362,619.16 2006 20.34 21.06 4,193,499.21 2007 21.06 21.56 5,163,420.43 2008 21.56 18.05 4,354,047.28 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 14.63 14.93 0.00 2002 14.93 15.87 884,065.72 2003 15.87 15.91 1,650,276.43 Western Asset Management U.S Government Division (Class B).. 2004 15.64 16.03 792,980.55 2005 16.03 16.05 2,828,550.05 2006 16.05 16.47 4,232,158.83 2007 16.47 16.92 5,021,955.31 2008 16.92 16.62 4,769,314.77 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.16 306,141.65 2006 11.16 12.74 1,484,809.90 2007 12.74 13.00 2,807,072.03 2008 13.00 7.64 3,137,332.27
158
Beginning of Number of Year End of Year Accumulation Accumulation Accumulation Units End of Investment Division Year Unit Value Unit Value Year ------------------- ---- ------------ ------------ ------------- MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.31 578,943.02 2006 10.31 10.88 1,938,160.76 2007 10.88 11.34 5,674,741.59 2008 11.34 9.59 10,836,517.50 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.52 2,293,499.61 2006 10.52 11.37 10,459,920.40 2007 11.37 11.77 24,715,462.78 2008 11.77 9.11 36,347,326.24 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.75 3,641,353.32 2006 10.75 11.88 22,508,484.97 2007 11.88 12.24 62,197,203.38 2008 12.24 8.63 94,830,810.05 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.98 2,829,696.46 2006 10.98 12.39 17,897,969.38 2007 12.39 12.70 54,331,986.81 2008 12.70 8.14 81,663,563.59 At 1.50 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.69 15.41 1,384,257.31 2007 15.41 15.68 4,872,016.01 2008 15.68 14.00 4,398,070.70 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2004 16.28 19.38 559,036.42 2005 19.38 23.94 1,993,369.67 2006 23.94 29.25 3,865,644.25 2007 29.25 34.99 5,518,755.68 2008 34.99 16.02 6,340,014.81 American Funds Growth Division (Class 2)/(c)/+A537.......... 2004 113.13 125.36 321,875.82 2005 125.36 143.50 1,076,810.53 2006 143.50 155.82 1,897,452.19 2007 155.82 172.44 2,357,806.14 2008 172.44 95.17 2,786,511.47 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 88.04 95.72 337,328.74 2005 95.72 99.80 1,024,224.45 2006 99.80 113.26 1,585,446.89 2007 113.26 117.20 1,989,561.74 2008 117.20 71.75 2,053,174.67
----------- (a)The assets of State Street Research Income Division were merged into this investment division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of State Street Research Income Division. (b)The assets of Loomis Sayles High Yield Bond Division were merged into this investment division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of Loomis Sayles High Yield Bond Division. (c)Inception date: August 3, 2001. (d)Inception date: May 1, 2002. (e)The assets of the Janus Growth Division were merged into the Janus Aggressive Growth Division on April 28, 2003. Accumulation unit values prior to April 28, 2003 are those of Janus Growth Division. (f)Inception date: May 1, 2003. (g)The assets of the Met/Putnam Voyager Division were merged into this division prior to the opening of business on May 2, 2005. Accumulation unit values prior to May 2, 2005 are those of the Met/Putnam Voyager Division. (h)The division with the name FI Mid Cap Opportunities was merged into the Janus Mid Cap Division prior to the opening of business on May 3, 2004, and was renamed FI Mid Cap Opportunities. The investment division with the name FI Mid Cap Opportunities on April 30, 2004 ceased to exist. The accumulation unit values history prior to May 1, 2004 is that of the Janus Mid Cap Division. 159 (i)Inception date: May 1, 2004. (j)Inception date: May 1, 2005. (k)Inception date: May 1, 2006. (l)The assets of MFS Investors Trust Division were merged into the Legg Mason Value Equity Division prior to the opening of business on May 1, 2006. Accumulation unit values prior to May 1, 2006 are those of MFS Investors Trust Division. (m)The assets of BlackRock Large Cap Division (formerly BlackRock Investment Trust Division) of the Metropolitan Fund were merged into the BlackRock Large Cap Core Division of the Met Investors Fund on April 30, 2007. Accumulation unit values prior to April 30, 2007 are those of the BlackRock Large Cap Division. (n)Inception date: April 30, 2007. (o)Inception date: April 28, 2008. * We are waiving a portion of the Separate Account charge for the investment division investing in the BlackRock Large Cap Core Portfolio. Please see the Table of Expenses for more information. 160 APPENDIX C PORTFOLIO LEGAL AND MARKETING NAMES
SERIES FUND/TRUST LEGAL NAME OF PORTFOLIO SERIES MARKETING NAME American Funds Insurance Series(R) Bond Fund American Funds Bond Fund American Funds Insurance Series(R) Global Small Capitalization Fund American Funds Global Small Capitalization Fund American Funds Insurance Series(R) Growth - Income Fund American Funds Growth-Income Fund American Funds Insurance Series(R) Growth Fund American Funds Growth Fund Metropolitan Series Fund, Inc. FI Mid Cap Opportunities Portfolio FI Mid Cap Opportunities Portfolio (Fidelity) Metropolitan Series Fund, Inc. FI Value Leaders Portfolio FI Value Leaders Portfolio (Fidelity)
161 APPENDIX D ADDITIONAL INFORMATION REGARDING THE PORTFOLIOS The Portfolios below were subject to a merger or name change. The chart identifies the former name and new name of each of these Portfolios. PORTFOLIO MERGER
FORMER PORTFOLIO NEW PORTFOLIO METROPOLITAN FUND METROPOLITAN FUND FI Large Cap BlackRock Legacy Large Cap Growth Portfolio Portfolio
PORTFOLIO NAME CHANGES
FORMER NAME NEW NAME MET INVESTORS FUND MET INVESTORS FUND Cyclical Growth SSgA Growth and Income ETF Portfolio and Income ETF Portfolio Cyclical Growth SSgA Growth ETF Portfolio ETF Portfolio METROPOLITAN FUND METROPOLITAN FUND Franklin Loomis Sayles Small Cap Growth Portfolio Templeton Small Cap Growth Portfolio Harris Oakmark Met/Artisan Mid Cap Value Portfolio Focused Value Portfolio Julius Baer Artio International Stock Portfolio International Stock Portfolio Lehman Barclays Capital Aggregate Bond Index Portfolio Brothers(R) Aggregate Bond Index Portfolio Loomis Sayles Loomis Sayles Small Cap Core Portfolio Small Cap Portfolio
162 Request For a Statement of Additional Information/Change of Address If you would like any of the following Statements of Additional Information, or have changed your address, please check the appropriate box below and return to the address below. [_] Metropolitan Life Separate Account E [_] Metropolitan Series Fund, Inc. [_] Met Investors Series Trust [_] American Funds Insurance Series(R) [_] I have changed my address. My current address is: _________________ Name ___ (Contract Number) Address _________________ _ (Signature) zip Metropolitan Life Insurance Company Attn: Fulfillment Unit - PPS 1600 Division Road West Warwick, RI 02893 163 METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT E PREFERENCE PLUS SELECT(R) INDIVIDUAL VARIABLE ANNUITY CONTRACTS STATEMENT OF ADDITIONAL INFORMATION FORM N-4 PART B May 1, 2009 This Statement of Additional Information is not a prospectus but contains information in addition to and more detailed than that set forth in the Prospectus for Preference Plus Select Deferred Annuities dated May 1, 2009 and should be read in conjunction with the Prospectus. Copies of the Prospectus may be obtained from Metropolitan Life insurance Company, Attn: Fulfillment Unit-PPS, 1600 Division Road, West Warwick, RI 02893. A Statement of Additional Information for the Metropolitan Series Fund, Inc. ("Metropolitan Fund"), the Met Investors Series Trust ("Met Investors Fund") and the American Funds Insurance Series(R) ("American Funds(R)") are attached at the end of this Statement of Additional Information. Unless otherwise indicated, the Statement of Additional Information continues the use of certain terms as set forth in the section entitled "Important Terms You Should Know" of the Prospectus for Preference Plus Select Individual Annuity Contracts dated May 1, 2009. TABLE OF CONTENTS
PAGE ---- Independent Registered Public Accounting Firm..... 2 Principal Underwriter............................. 2 Distribution and Principal Underwriting Agreement. 2 Experience Factor................................. 2 Variable Income Payments.......................... 3 Calculating the Annuity Unit Value................ 5 Advertisement of the Separate Account............. 6 Voting Rights..................................... 9 ERISA............................................. 10 Taxes--SIMPLE IRAs Eligibility and Contributions.. 10 Withdrawals....................................... 11 Accumulation Unit Values Tables................... 11 Financial Statements of Separate Account.......... 1 Financial Statements of MetLife................... F-1
1 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of each of the Investment Divisions of Metropolitan Life Separate Account E included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. The consolidated financial statements of Metropolitan Life Insurance Company and subsidiaries (the "Company") included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the fact that the Company changed its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008, and changed its method of accounting for deferred acquisition costs and for income taxes as required by accounting guidance adopted on January 1, 2007), and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. PRINCIPAL UNDERWRITER MetLife Investors Distribution Company ("MLIDC") serves as principal underwriter for the Separate Account and the Contracts. The offering is continuous. MLIDC's principal executive offices are located at 5 Park Plaza, Suite 1900, Irvine, CA 92614. MLIDC is affiliated with the Company and the Separate Account. DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT Information about the distribution of the Contracts is contained in the prospectus (see "Who Sells the Deferred Annuities"). Additional information is provided below. Under the terms of the Distribution and Principal Underwriting Agreement among the Separate Account, MLIDC and the Company, MLIDC acts as agent for the distribution of the Contracts and as principal underwriter for the Contracts. The Company reimburses MLIDC for certain sales and overhead expenses connected with sales functions. The following table shows the amount of commissions paid to and the amount of commissions retained by the Distributor and Principal Underwriter over the past three years. UNDERWRITING COMMISSIONS
UNDERWRITING COMMISSIONS PAID AMOUNT OF UNDERWRITING TO THE DISTRIBUTOR BY THE COMMISSIONS RETAINED BY THE YEAR COMPANY DISTRIBUTOR ---- ----------------------------- --------------------------- 2008. $144,689,685 $0 2007. $161,262,394 $0 2006. $135,095,926 $0
EXPERIENCE FACTOR We use the term "experience factor" to describe the investment performance for an investment division. The experience factor changes from Valuation Period (described later) to Valuation Period to reflect the upward or 2 downward performance of the assets in the underlying Portfolios. The experience factor is calculated as of the end of each Valuation Period using the net asset value per share of the underlying Portfolio. The net asset value includes the per share amount of any dividend or capital gain distribution paid by the Portfolio during the current Valuation Period, and subtracts any per share charges for taxes and reserve for taxes. We then divide that amount by the net asset value per share as of the end of the last Valuation Period to obtain a factor that reflects investment performance. We then subtract a charge for each day in the valuation period which is the daily equivalent of the Separate Account charge. This charge varies, depending on the class of the Deferred Annuity. Below is a chart of the daily factors for each class of the Deferred Annuity and the various death benefits and Earnings Preservation Benefit: Separate Account Charges for all investment divisions except American Funds Growth-Income, American Funds Growth and American Funds Global Small Capitalization (Daily Factor)
BONUS CLASS B CLASS (YEARS 1-7)* C CLASS L CLASS ----------- ------------ ----------- ----------- Basic Death Benefit............................. 0.000034247 0.000046575 0.000045205 0.000041096 Annual Step Up Death Benefit.................... 0.000039726 0.000052055 0.000050685 0.000046575 Greater of Annual Step Up or 5% Annual Increase Death Benefit................................. 0.000043836 0.000056164 0.000054795 0.000050685 Additional Charge for Earnings Preservation Benefit....................................... 0.000006849 0.000006849 0.000006849 0.000006849
-------- * Applies only for the first seven years; Separate Account charges are reduced after seven years to those of B Class. Separate Account Charges for the American Funds Growth-Income, American Funds Growth and American Funds Global Small Capitalization Investment Divisions (Daily Factor)
BONUS CLASS B CLASS (YEARS 1-7)* C CLASS L CLASS ----------- ------------ ----------- ----------- Basic Death Benefit............................. 0.000041096 0.000053425 0.000052055 0.000047945 Annual Step Up Death Benefit.................... 0.000046575 0.000058904 0.000057534 0.000053425 Greater of Annual Step Up or 5% Annual Increase Death Benefit................................. 0.000050685 0.000063014 0.000061644 0.000057534 Additional Charge for Earnings Preservation Benefit....................................... 0.000006849 0.000006849 0.000006849 0.000006849
-------- * Applies only for the first seven years; Separate Account charges are reduced after seven years to those of B Class. VARIABLE INCOME PAYMENTS ASSUMED INVESTMENT RETURN (AIR) The following discussion concerning the amount of variable income payments is based on an Assumed Investment Return of 4% per year. It should not be inferred that such rates will bear any relationship to the actual net investment experience of the Separate Account. AMOUNT OF INCOME PAYMENTS The cash you receive periodically from an investment division (after your first payment if paid within 10 days of the issue date) will depend upon the number of annuity units held in that investment division (described below) and the Annuity Unit Value (described later) as of the 10th day prior to a payment date. 3 The Deferred Annuity specifies the dollar amount of the initial variable income payment for each investment division (this equals the first payment amount if paid within 10 days of the issue date). This initial variable income payment is computed based on the amount of the purchase payment applied to the specific investment division (net any applicable premium tax owed or contract charge), the AIR, the age and/or sex of the measuring lives and the income payment type selected. The initial payment amount is then divided by the Annuity Unit Value for the investment division to determine the number of annuity units held in that investment division. The number of annuity units held remains fixed for the duration of the Contract if no reallocating are made. The dollar amount of subsequent variable income payments will vary with the amount by which investment performance is greater or lesser than the AIR and Separate Account charges. Each Deferred Annuity provides that, when a pay-out option is chosen, the payment will not be less than the payment produced by the then current Fixed Income Option purchase rates for that contract class. The purpose of this provision is to assure the owner that, at retirement, if the Fixed Income Option purchase rates for new contracts are significantly more favorable than the rates guaranteed by a Deferred Annuity of the same class, the owner will be given the benefit of the higher rates. Although guaranteed annuity rates for the Bonus Class are the same as for the other classes of the Deferred Annuity, current rates for the Bonus Class may be lower than the other classes of the Deferred Annuity and may be less than the currently issued contract rates. ANNUITY UNIT VALUE The Annuity Unit Value is calculated at the same time that the Accumulation Unit Value for Deferred Annuities is calculated and is based on the same change in investment performance in the Separate Account. (See "The Value of Your Income Payment" in the Prospectus.) REALLOCATION PRIVILEGE The annuity purchase rate is the dollar amount you would need when you annuitize your Deferred Annuity to receive $1 per payment period. For example, if it would cost $50 to buy an annuity that pays you $1 a month for the rest of your life, then the annuity purchase rate for that life income annuity is $50. The annuity purchase rate is based on the annuity income payment type you choose, an interest rate, and your age, sex (where permitted) and number of payments remaining. The annuity purchase rate is reset each valuation date to reflect any changes in these components. The reset annuity purchase rate represents the cost you would incur if you were choosing the same income option you have in light of this updated information. When you request a reallocation from an investment division to the Fixed Income Option, the payment amount will be adjusted at the time of reallocation. Your payment may either increase or decrease due to this adjustment. The adjusted payment will be calculated in the following manner. . First, we update the income payment amount to be reallocated from the investment division based upon the applicable Annuity Unit Value at the time of the reallocation; . Second, we use the AIR to calculate an updated annuity purchase rate based upon your age, if applicable, and expected future income payments at the time of the reallocation; . Third, we calculate another updated annuity purchase rate using our current annuity purchase rates for the Fixed Income Option on the date of your reallocation; . Finally, we determine the adjusted payment amount by multiplying the updated income amount determined in the first step by the ratio of the annuity purchase rate determined in the second step divided by the annuity purchase rate determined in the third step. 4 When you request a reallocation from one investment division to another, annuity units in one investment division are liquidated and annuity units in the other investment division are credited to you. There is no adjustment to the income payment amount. Future income payment amounts will be determined based on the Annuity Unit Value for the investment division to which you have reallocated. You generally may make a reallocation on any day the Exchange is open. At a future date we may limit the number of reallocations you may make, but never to fewer than one a month. If we do so, we will give you advance written notice. We may limit a beneficiary's ability to make a reallocation. Here are examples of the effect of a reallocation on the income payment: . Suppose you choose to reallocate 40% of your income payment supported by investment division A to the Fixed Income Option and the recalculated income payment supported by investment division A is $100. Assume that the updated annuity purchase rate based on the AIR is $125, while the updated annuity purchase rate based on fixed income annuity pricing is $100. In that case, your income payment from the Fixed Income Option will be increased by $40 x ($125/$100) or $50, and your income payment supported by investment division A will be decreased by $40. (The number of annuity units in investment division A will be decreased as well.) . Suppose you choose to reallocate 40% of your income payment supported by investment division A to investment division B and the recalculated income payment supported by investment division A is $100. Then, your income payment supported by investment division B will be increased by $40 and your income payment supported by investment division A will be decreased by $40. (Changes will also be made to the number of annuity units in both investment divisions as well.) CALCULATING THE ANNUITY UNIT VALUE We calculate Annuity Unit Values once a day on every day the New York Stock Exchange is open for trading. We call the time between two consecutive Annuity Unit Value calculations the "Valuation Period." We have the right to change the basis for the Valuation Period, on 30 days' notice, as long as it is consistent with the law. All purchase payments and reallocations are valued as of the end of the Valuation Period during which the transaction occurred. The Annuity Unit Values can increase or decrease, based on the investment performance of the corresponding underlying Portfolios. If the investment performance is positive, after payment of Separate Account expenses and the deduction for the AIR, Annuity Unit Values will go up. Conversely, if the investment performance is negative, after payment of Separate Account expenses and the deduction for the AIR, Annuity Unit Values will go down. To calculate an Annuity Unit Value, we first multiply the experience factor for the period by a factor based on the AIR and the number of days in the Valuation Period. For an AIR of 4% and a one day Valuation Period, the factor is .99989255, which is the daily discount factor for an effective annual rate of 4%. (The AIR may be in the range of 3% to 6%, as defined in your Deferred Annuity and the laws in your state.) The resulting number is then multiplied by the last previously calculated Annuity Unit Value to produce the new Annuity Unit Value. The following illustrations show, by use of hypothetical examples, the method of determining the Annuity Unit Value and the amount of variable income payments upon annuitization. ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE 1. Annuity Unit Value, beginning of period........... $ 10.20000 2. "Experience factor" for period.................... 1.023558 3. Daily adjustment for 4% Assumed Investment Return. .99989255 4. (2) X (3)......................................... 1.023448 5. Annuity Unit Value, end of period (1) X (4)....... $ 10.43917
5 ILLUSTRATION OF ANNUITY PAYMENTS (ASSUMES THE FIRST MONTHLY PAYMENT IS MADE WITHIN 10 DAYS OF THE ISSUE DATE OF THE INCOME ANNUITY) ANNUITANT AGE 65, LIFE ANNUITY WITH 120 PAYMENTS GUARANTEED 1. Number of Accumulation Units as of Annuity Date.................................... 1,500.00 2. Accumulation Unit Value............................................................ $ 11.80000 3. Accumulation Unit Value of the Deferred Annuity (1) X (2).......................... $17,700.00 4. First monthly income payment per $1,000 of Accumulation Value...................... $ 5.63 5. First monthly income payment (3) X (4) / 1,000..................................... $ 99.65 6. Assume Annuity Unit Value as of Annuity Date equal to.............................. $ 10.80000 7. Number of Annuity Units (5) / (6).................................................. 9.2269 8. Assume Annuity Unit Value for the second month equal to (10 days prior to payment). $ 10.97000 9. Second monthly Annuity Payment (7) X (8)........................................... $ 101.22 10. Assume Annuity Unit Value for third month equal to................................ $ 10.52684 11. Next monthly Annuity Payment (7) X (10)........................................... $ 97.13
DETERMINING THE VARIABLE INCOME PAYMENT Variable income payments can go up or down based upon the investment performance of the investment divisions in the Separate Account. AIR is the rate used to determine the first variable income payment and serves as a benchmark against which the investment performance of the investment divisions is compared. The higher the AIR, the higher the first variable income payment will be. Subsequent variable income payments increase only to the extent that the investment performance of the investment divisions exceeds the AIR (and Separate Account charges). Variable income payments will decline if the investment performance of the Separate Account does not exceed the AIR (and Separate Account charges). A lower AIR will result in a lower first variable income payment, but variable income payments will increase more rapidly or decline more slowly due to investment performance of the investment divisions. ADVERTISEMENT OF THE SEPARATE ACCOUNT From time to time we advertise the performance of various Separate Account investment divisions. For the investment divisions, this performance will be stated in terms of either "yield", "change in Accumulation Unit Value," "change in Annuity Unit Value" or "average annual total return" or some combination of the foregoing. Yield, change in Accumulation Unit Value, change in Annuity Unit Value and average annual total return figures are based on historical earnings and are not intended to indicate future performance. Yield figures quoted in advertisements state the net income generated by an investment in a particular investment division for a thirty-day period or month, which is specified in the advertisement, and then expressed as a percentage yield of that investment. Yield is calculated by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period, according to this formula 2[(a-b/cd+1)/6/-1], where "a" represents dividends and interest earned during the period; "b" represents expenses accrued for the period (net of reimbursements); "c" represents the average daily number of shares outstanding during the period that were entitled to receive dividends; and "d" represents the maximum offering price per share on the last day of the period. This percentage yield is then compounded semiannually. For the money market investment division, we state yield for a seven day period. Change in Accumulation Unit Value or Annuity Unit Value ("Non-Standard Performance") refers to the comparison between values of accumulation units or annuity units over specified periods in which an investment division has been in operation, expressed as a percentages and may also be expressed as an annualized figure. In addition, change in Accumulation Unit Value or Annuity Unit Value may be used to illustrate performance for a hypothetical investment (such as $10,000) over the time period specified. Change in Accumulation Unit Value is expressed by this formula [UV\1\/UV\0\ (annualization factor)]-1, where UV\1\ represents the current unit value and UV\0\ represents the prior unit value. The annualization factor can be 6 either (1/number of years) or (365/number of days). Yield and change in Accumulation Unit Value figures do not reflect the possible imposition of a withdrawal charge for the Deferred Annuities, of up to 9% of the amount withdrawn attributable to a purchase payment, which may result in a lower figure being experienced by the investor. Average annual total return ("Standard Performance") differs from the change in Accumulation Unit Value and Annuity Unit Value because it assumes a steady rate of return and reflects all expenses and applicable withdrawal charges. Average annual total return is calculated by finding the average annual compounded rates of return over the 1-, 5-, and 10-year periods that would equate the initial amount invested to the ending redeemable value, according to this formula P(1+T)/n/=ERV, where "P" represents a hypothetical initial payment of $1,000; "T" represents average annual total return; "n" represents number of years; and "ERV" represents ending redeemable value of a hypothetical $1,000 payment made at the beginning of 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10- year period (or fractional portion). Performance figures will vary among the various classes of the Deferred Annuities and the investment divisions as a result of different Separate Account charges and withdrawal charges since the investment division inception date, which is the date the corresponding Portfolio or predecessor Portfolio was first offered under the Separate Account that funds the Deferred Annuity. Performance may be calculated based upon historical performance of the underlying Portfolios of the Metropolitan Fund, Met Investors Fund, and American Funds and may assume that the Deferred Annuities were in existence prior to their inception date. After the inception date, actual accumulation unit or annuity unit data is used. Historical performance information should not be relied on as a guarantee of future performance results. Advertisements regarding the Separate Account may contain comparisons of hypothetical after-tax returns of currently taxable investments versus returns of tax deferred investments. From time to time, the Separate Account may compare the performance of its investment divisions with the performance of common stocks, long-term government bonds, long-term corporate bonds, intermediate-term government bonds, Treasury Bills, certificates of deposit and savings accounts. The Separate Account may use the Consumer Price Index in its advertisements as a measure of inflation for comparison purposes. From time to time, the Separate Account may advertise its performance ranking among similar investments or compare its performance to averages as compiled by independent organizations, such as Lipper Analytical Services, Inc., Morningstar, Inc., VARDS(R) and The Wall Street Journal. The Separate Account may also advertise its performance in comparison to appropriate indices, such as the Standard & Poor's 500 Composite Stock Price Index, the Standard & Poor's Mid Cap 400 Index, the Standard & Poor's Small Cap 600 Index, the Russell 2000(R) Index, the Russell Mid Cap Growth Index, the Russell 2500/TM/ Growth Index, the Russell(R) Growth Index, the Russell 2000(R) Value Index, the Russell 1000(R) Growth Index, the Lehman Brothers(R) Aggregate Bond Index, the Lehman Brothers(R) Government/Corporate Bond Index, the Merrill Lynch High Yield Bond Index, the Morgan Stanley Capital International All Country World Index, the Salomon Smith Barney World Small Cap Index and the Morgan Stanley Capital International Europe, Australasia, Far East Index. Performance may be shown for certain investment strategies that are made available under the Deferred Annuities. The first is the "Equity Generator." Under the "Equity Generator," an amount equal to the interest earned during a specified interval (i.e., monthly, quarterly) in the Fixed Account is transferred to an investment division. The second strategy is the "Index Selector/SM/". Under this strategy, once during a specified period (i.e., quarterly, annually) transfers are made among the Lehman Brothers(R) Aggregate Bond Index, MetLife Stock Index, Morgan Stanley EAFE(R) Index, Russell 2000(R) Index and MetLife Mid Cap Stock Index Divisions and the Fixed Account (or the BlackRock Money Market Investment Division for the C Class Deferred Annuity or a Deferred Annuity, when available, with an optional Guaranteed Minimum Income Benefit issued in New York State) in order to bring the percentage of the total Account Balance in each of these investment divisions and Fixed Account (or Money Market investment division) back to the current allocation of your choice of one of several asset allocation models. The elements which form the basis of the models are provided by MetLife which may rely on a third party for its expertise in creating appropriate allocations. The models are designed to correlate to various risk tolerance levels associated with investing and are subject to change from time to time. 7 An "Equity Generator Return" or "Index Selector Return" for a model will be calculated by presuming a certain dollar value at the beginning of a period and comparing this dollar value with the dollar value, based on historical performance, at the end of the period, expressed as a percentage. The "Return" in each case will assume that no withdrawals have occurred other or unrelated transactions. We assume the Separate Account charge reflects the Basic Death Benefit. The information does not assume the charges for the Earnings Preservation Benefit or Guaranteed Minimum Income Benefit. We may also show Index Selector investment strategies using other investment divisions for which these strategies are made available in the future. If we do so, performance will be calculated in the same manner as described above, using the appropriate account and/or investment divisions. For purposes of presentation of Non-Standard Performance, we may assume the Deferred Annuities were in existence prior to the inception date of the investment divisions in the Separate Account that funds the Deferred Annuity. In these cases, we calculate performance based on the historical performance of the underlying Metropolitan Fund, Met Investors Fund and American Funds Portfolios since the Portfolio inception date. We use the actual accumulation unit or annuity unit data after the inception date. Any performance data that includes all or a portion of the time between the Portfolio inception date and the investment division inception date is hypothetical. Hypothetical returns indicate what the performance data would have been if the Deferred Annuity had been introduced as of the Portfolio inception date. We may also present average annual total return calculations which reflect all Separate Account charges and applicable withdrawal charges since the Portfolio inception date. We use the actual accumulation unit or annuity unit data after the inception date. Any performance data that includes all or a portion of the time between the Portfolio inception date and the investment division inception date is hypothetical. Hypothetical returns indicate what the performance data would have been if the Deferred Annuities had been introduced as of the Portfolio inception date. Past performance is no guarantee of future results. We may demonstrate hypothetical future values of Account Balances over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios. These presentations reflect the deduction of the Separate Account charge, the Annual Contract Fee, if any, and the weighted average of investment-related charges for all Portfolios to depict investment-related charges. We may demonstrate hypothetical future values of Account Balances for a specific Portfolio based upon the assumed rates of return previously described, the deduction of the Separate Account charge and the Annual Contract Fee, if any, and the investment-related charges for the specific Portfolio to depict investment-related charges. We may demonstrate the hypothetical historical value of each optional benefit for a specified period based on historical net asset values of the Portfolios and the annuity purchase rate, if applicable, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge and the Annual Contract Fee, if any, the investment-related charge and the charge for the optional benefit being illustrated. We may demonstrate hypothetical future values of each optional benefit over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios, the annuity purchase rate, if applicable, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge and the Annual Contract Fee, if any, the weighted average of investment-related charges for all Portfolios to depict investment-related charges and the charge for the optional benefit being illustrated. We may demonstrate hypothetical values of income payments over a specified period based on historical net asset values of the Portfolios and the applicable annuity purchase rate, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge, the investment-related charge and the Annual Contract Fee, if any. 8 We may demonstrate hypothetical future values of income payments over a specified period based on assumed rates of return (which will not exceed 12% and which will include an assumption of 0% as well) for the Portfolios, the applicable annuity purchase rate, either for an individual for whom the illustration is to be produced or based upon certain assumed factors (e.g., male, age 65). These presentations reflect the deduction of the Separate Account charge, the Annual Contract Fee, if any, and the weighted average of investment-related charges for all Portfolios to depict investment-related charges. Any illustration should not be relied on as a guarantee of future results. VOTING RIGHTS In accordance with our view of the present applicable law, we will vote the shares of each of the Portfolios held by the Separate Account (which are deemed attributable to all the Deferred Annuities described in the Prospectus) at regular and special meetings of the shareholders of the Portfolio based on instructions received from those having the voting interest in corresponding investment divisions of the Separate Account. However, if the 1940 Act or any rules thereunder should be amended or if the present interpretation thereof should change, and as a result we determine that we are permitted to vote the shares of the Portfolios in our own right, we may elect to do so. Accordingly, you have voting interests under all the Deferred Annuities described in the Prospectus. The number of shares held in each Separate Account investment division deemed attributable to you is determined by dividing the value of accumulation or annuity units attributable to you in that investment division, if any, by the net asset value of one share in the Portfolio in which the assets in that Separate Account investment division are invested. Fractional votes will be counted. The number of shares for which you have the right to give instructions will be determined as of the record date for the meeting. Portfolio shares held in each registered separate account of MetLife or any affiliate that are or are not attributable to life insurance policies or annuities (including all the Deferred Annuities described in the Prospectus) and for which no timely instructions are received will be voted in the same proportion as the shares for which voting instruction are received by that separate account. Portfolio shares held in the general accounts or unregistered separate accounts of MetLife or its affiliates will be voted in the same proportion as the aggregate of (i) the shares for which voting instructions are received and (ii) the shares that are voted in proportion to such voting instructions. However, if we or an affiliate determine that we are permitted to vote any such shares, in our own right, we may elect to do so subject to the then current interpretation of the 1940 Act or any rules thereunder. Qualified retirement plans do not have voting interests through life insurance or annuity contracts and do not vote these interests based upon the number of shares held in the Separate Account investment division deemed attributable to those qualified retirement plans. Shares are held by the plans themselves and are voted directly; the instruction process does not apply. You will be entitled to give instructions regarding the votes attributable to your Deferred Annuity, in your sole discretion. You may give instructions regarding, among other things, the election of the board of directors, ratification of the election of an independent registered public accounting firm, and the approval of investment and sub-investment managers. DISREGARDING VOTING INSTRUCTIONS MetLife may disregard voting instructions under the following circumstances (1) to make or refrain from making any change in the investments or investment policies for any Portfolio if required by any insurance 9 regulatory authority; (2) to refrain from making any change in the investment policies for any investment manager or principal underwriter or any Portfolio which may be initiated by those having voting interests or the Metropolitan Fund's or Met Investors Fund's or American Funds(R)' boards of directors, provided MetLife's disapproval of the change is reasonable and, in the case of a change in investment policies or investment manager, based on a good faith determination that such change would be contrary to state law or otherwise inappropriate in light of the Portfolio's objective and purposes; or (3) to enter into or refrain from entering into any advisory agreement or underwriting contract, if required by any insurance regulatory authority. In the event that MetLife does disregard voting instructions, a summary of the action and the reasons for such action will be included in the next semiannual report. ERISA If your plan is subject to ERISA (the Employee Retirement Income Security Act of 1974) and you are married, the income payments, withdrawal provisions and methods of payment of the death benefit under your Deferred Annuity or Income Annuity may be subject to your spouse's rights as described below. Generally, the spouse must give qualified consent whenever you elect to: a. choose income payments other than on a qualified joint and survivor annuity basis ("QJSA") (one under which we make payments to you during your lifetime and them make payments reduced by no more than 50% to your spouse for his or her remaining life, if any); or choose to waive the qualified pre-retirement survivor annuity benefit ("QPSA") (the benefit payable to the surviving spouse of a participant who dies with a vested interest in an accrued retirement benefit under the plan before payment of the benefit has begun); b. make certain withdrawals under plans for which a qualified consent is required; c. name someone other than the spouse as your beneficiary; d. use your accrued benefit as security for a loan exceeding $5,000. Generally, there is no limit to the number of your elections as long as a qualified consent is given each time. The consent to waive the QJSA must meet certain requirements, including that it be in writing, that it acknowledges the identity of the designated beneficiary and the form of benefit selected, dated, signed by your spouse, witnessed by a notary public or plan representative, and that it be in a form satisfactory to us. The waiver of a QJSA generally must be executed during the 90-day period ending on the date on which income payments are to commence, or the withdrawal or the loan is to be made, as the case may be. If you die before benefits commence, your surviving spouse will be your beneficiary unless he or she has given a qualified consent otherwise. The qualified consent to waive the QPSA benefit and the beneficiary designation must be made in writing that acknowledges the designated beneficiary, dated, signed by your spouse, witnessed by a notary public or plan representative and in a form satisfactory to us. Generally, there is no limit to the number of beneficiary designations as long as a qualified consent accompanies each designation. The waiver of and the qualified consent for the QPSA benefit generally may not be given until the plan year in which you attain age 35. The waiver period for the QPSA ends on the date of your death. If the present value of your benefit is worth $5,000 or less, your plan generally may provide for distribution of your entire interest in a lump sum without spousal consent. TAXES-SIMPLE IRAS ELIGIBILITY AND CONTRIBUTIONS To be eligible to establish a SIMPLE IRA plan, your employer must have no more than 100 employees and the SIMPLE IRA must be the only tax qualified retirement plan maintained by your employer. Many of the same tax rules that apply to Traditional IRAs also apply to SIMPLE IRAs. However, the contribution limits, premature distribution rules, and rules applicable to eligible rollovers and transfers differ as explained below. 10 If you are participating in a SIMPLE IRA plan you may generally make contributions which are excluded from your gross income under a qualified salary reduction arrangement on a pre-tax basis of up to the limits in the table shown below.
FOR TAX YEARS CONTRIBUTION LIMIT FOR CATCH-UP FOR TAXPAYERS BEGINNING IN TAXPAYERS UNDER AGE 50 AGE 50 AND OLDER ------------- ---------------------- ---------------------- 2009 and thereafter $11,500 $2,500
Note: the Contribution limit above will be adjusted for inflation in years after 2007. These contributions, not including the age 50+catch-up, (as well as any other salary reduction contributions to qualified plans of an employer), are also subject to the aggregate annual limitation under section 402 (g) of the Internal Revenue Code as shown below.
FOR TAXABLE YEARS BEGINNING IN CALENDAR YEAR APPLICABLE DOLLAR LIMIT -------------------------- ----------------------- 2009 and thereafter $16,500
You may also make rollovers and direct transfers into your SIMPLE IRA annuity contract from another SIMPLE IRA annuity contract or account. No other contributions, rollovers or transfers can be made to your SIMPLE IRA. You may not make Traditional IRA contributions or Roth IRA contributions to your SIMPLE IRA. You may not make eligible rollover contributions from other types of qualified retirement plans. WITHDRAWALS We will normally pay withdrawal proceeds within seven days after receipt of a request for a withdrawal at your Administrative Office, but we may delay payment as permitted by law, under certain circumstances. (See " Valuation -- Suspension of Payments" in the Prospectus). We reserve the right to defer payment for a partial withdrawal, withdrawal or transfer from the Fixed Account for the period permitted by law, but for not more than six months. ACCUMULATION UNIT VALUES TABLES These tables show fluctuations in the Accumulation Unit Values for the possible mixes offered in the Deferred Annuity for each investment division from year-end to year-end (except the highest possible and lowest possible mix which are in the prospectus). 11 TABLES GROUP I METROPOLITAN FUND AND MET INVESTORS FUND SHARE CLASS E PORTFOLIOS AND AMERICAN FUNDS(R) CLASS 2 PORTFOLIOS Share Class E of the Metropolitan Fund and Met Investors Fund Portfolios was available prior to May 1, 2004. Lower Separate Account charges for the American Funds Divisions were in effect prior to May 1, 2004. The accumulation unit values prior to May 1, 2004 reflect the lower Separate Account charges for the American Funds Investment Divisions then in effect. The accumulation unit values for the Metropolitan Fund and Met Investors Fund Share Class E Portfolios reflect lower 12b-1 Plan fees which were available prior to May 1, 2004. In addition, different charges for certain optional benefits were in effect prior to May 1, 2003. Accumulation unit values prior to May 1, 2003, for Deferred Annuities with these optional benefits reflect the lower charges then in effect. Values after April 30, 2003, reflect the higher charges currently in place. The information in these tables has been derived from the Separate Account's full financial statements or other reports (such as the annual report). Charges for all versions of the Optional Guaranteed Minimum Income Benefit, Optional Enhanced Guaranteed Minimum Income Benefit, Optional Guaranteed Withdrawal Benefit, Optional Lifetime Withdrawal Guarantee Benefit and the Optional Guaranteed Minimum Accumulation Benefit are made by canceling accumulation units and, therefore, these charges are not reflected in the Accumulation Unit Value. However, purchasing these options with the others will result in a higher overall charge. TABLES GROUP II METROPOLITAN FUND AND MET INVESTORS FUND SHARE CLASS B PORTFOLIOS AND AMERICAN FUNDS(R) CLASS 2 PORTFOLIOS Lower charges for the GMIB Plus II, Enhanced Death Benefit and LWG II were in effect prior to February 24, 2009 and/or May 4, 2009. Share Class B of the Metropolitan Fund and Met Investors Fund Portfolios was made available May 1, 2004. The accumulation unit values for the Deferred Annuity with the Metropolitan Fund and Met Investors Fund Share Class B Portfolios reflect 12b-1 Plan fees currently in place. The information in these tables has been derived from the Separate Account's full financial statements or other reports (such as the annual report). Charges for all versions of the Optional Guaranteed Minimum Income Benefit, Optional Enhanced Guaranteed Minimum Income Benefit, Optional Guaranteed Withdrawal Benefit, Optional Lifetime Withdrawal Guarantee Benefit and the Optional Guaranteed Minimum Accumulation Benefit are made by canceling accumulation units and, therefore, these charges are not reflected in the Accumulation Unit Value. However, purchasing these options with the others will result in a higher overall charge. 12 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.25 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division (Class 2)/(k)/................. 2006 $ 14.82 $ 15.56 365,887.51 2007 15.56 15.85 768,194.65 2008 15.85 14.17 554,431.26 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.86 13.54 0.00 2002 13.54 10.81 176,357.64 2003 10.81 16.37 793,521.46 2004 16.37 19.51 1,684,630.59 2005 19.51 24.12 1,942,621.89 2006 24.12 29.51 2,014,130.80 2007 29.51 35.33 2,066,061.06 2008 35.33 16.19 1,676,113.20 American Funds Growth Division (Class 2)/(c)/............... 2001 126.65 114.77 0.00 2002 114.77 85.50 100,894.63 2003 85.50 115.34 484,308.87 2004 115.34 127.95 832,307.70 2005 127.95 146.61 850,455.08 2006 146.61 159.35 855,979.03 2007 159.35 176.52 789,249.89 2008 176.52 97.52 685,332.95 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 88.85 85.37 0.00 2002 85.37 68.74 127,625.35 2003 68.74 89.76 634,858.72 2004 89.76 97.69 1,040,319.53 2005 97.69 101.96 992,089.03 2006 101.96 115.83 915,468.87 2007 115.83 119.97 847,614.09 2008 119.97 73.52 701,937.54 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 37.91 35.78 0.00 2002 35.78 25.16 26,852.28 2003 25.16 34.93 154,691.04 2004 34.93 38.91 216,073.56 2005 38.91 42.48 199,283.86 2006 42.48 44.70 181,091.10 2007 44.70 53.14 209,017.66 2008 53.14 28.45 229,470.97 BlackRock Bond Income Division (Class E)/(a)/............... 2002 43.84 46.31 207,477.01 2003 46.31 48.33 536,896.98 2004 48.33 49.77 757,818.00 2005 49.77 50.26 745,485.37 2006 50.26 51.76 667,510.62 2007 51.76 54.24 621,942.99 2008 54.24 51.66 497,045.94
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $42.17 $43.36 0.00 2002 43.36 43.89 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 37.99 37.06 0.00 2002 37.06 31.50 212,999.18 2003 31.50 37.46 752,001.31 2004 37.46 40.06 1,234,083.04 2005 40.06 40.73 1,155,328.40 2006 40.73 44.38 1,030,051.46 2007 44.38 46.32 922,793.71 2008 46.32 34.37 774,407.42 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 82.87 83.74 302,267.47 2008 83.74 51.89 270,904.98 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 72.49 67.70 0.00 2002 67.70 49.33 79,863.05 2003 49.33 63.36 303,829.18 2004 63.36 69.27 418,586.06 2005 69.27 70.77 379,976.69 2006 70.77 79.62 328,519.67 2007 79.62 83.57 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.93 62,035.81 2003 7.93 10.60 462,050.50 2004 10.60 11.87 908,349.10 2005 11.87 12.39 886,967.70 2006 12.39 14.58 1,484,705.08 2007 14.58 14.87 1,474,670.98 2008 14.87 9.54 1,234,224.28 BlackRock Money Market Division (Class E)/(f)/.............. 2003 23.28 23.18 24,871.02 2004 23.18 23.09 191,283.32 2005 23.09 23.42 142,355.22 2006 23.42 24.21 128,028.43 2007 24.21 25.09 123,075.12 2008 25.09 25.44 114,354.28 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.24 14.01 0.00 2002 14.01 10.86 796,790.61 2003 10.86 16.08 2,552,703.05 2004 16.08 18.29 4,104,591.02 2005 18.29 18.78 3,853,381.72 2006 18.78 21.63 3,399,477.64 2007 21.63 20.60 3,003,297.27 2008 20.60 12.51 2,468,118.32
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $27.45 $26.73 0.00 2002 26.73 22.03 115,244.86 2003 22.03 28.44 448,782.09 2004 28.44 31.50 943,883.17 2005 31.50 34.26 1,082,320.11 2006 34.26 38.71 1,196,386.84 2007 38.71 39.92 1,116,886.34 2008 39.92 23.87 971,602.54 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 18.33 15.78 0.00 2002 15.78 11.04 147,252.83 2003 11.04 14.68 490,905.38 2004 14.68 16.96 1,349,674.49 2005 16.96 17.87 1,259,761.54 2006 17.87 19.71 1,190,252.12 2007 19.71 21.06 1,052,899.12 2008 21.06 9.27 980,681.78 FI Value Leaders Division (Class E)/(d)/.......... 2002 23.04 18.98 11,626.22 2003 18.98 23.76 129,119.95 2004 23.76 26.65 223,572.04 2005 26.65 29.09 282,379.76 2006 29.09 32.11 341,023.72 2007 32.11 32.99 287,935.09 2008 32.99 19.86 229,972.81 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.18 8.80 0.00 2002 8.80 6.27 139,794.65 2003 6.27 8.96 528,179.62 2004 8.96 9.84 750,510.25 2005 9.84 10.16 695,707.18 2006 10.16 11.02 655,570.12 2007 11.02 11.37 615,476.46 2008 11.37 6.58 506,871.53 Harris Oakmark Focused Value Division (Class E)/(c)/......................................... 2001 25.72 26.62 0.00 2002 26.62 23.93 320,020.25 2003 23.93 31.30 1,040,971.04 2004 31.30 33.93 1,617,109.79 2005 33.93 36.80 1,628,972.80 2006 36.80 40.81 1,384,163.75 2007 40.81 37.48 1,176,615.51 2008 37.48 19.96 981,992.16 Harris Oakmark International Division (Class E)/(d)/......................................... 2002 10.60 8.85 26,567.87 2003 8.85 11.81 324,128.40 2004 11.81 14.08 967,386.26 2005 14.08 15.89 1,339,210.21 2006 15.89 20.24 1,642,308.17 2007 20.24 19.79 1,481,049.15 2008 19.79 11.56 1,020,887.92
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.10 $ 4.94 723,683.86 2006 4.94 5.00 782,230.91 2007 5.00 5.51 703,362.38 2008 5.51 3.45 571,518.60 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.40 4.93 0.00 2002 4.93 3.46 205,815.65 2003 3.46 4.29 639,387.86 2004 4.29 4.44 731,995.26 2005 4.44 4.06 736,052.17 Julius Baer International Stock Division (Class E)/(c)/..... 2001 12.45 11.64 0.00 2002 11.64 9.47 178,292.61 2003 9.47 11.96 635,794.86 2004 11.96 13.94 771,378.37 2005 13.94 16.22 827,888.50 2006 16.22 18.63 907,739.12 2007 18.63 20.27 880,696.65 2008 20.27 11.17 847,225.14 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.40 9.69 60,166.50 2003 9.69 12.09 396,340.58 2004 12.09 13.67 619,345.68 2005 13.67 14.61 587,800.90 2006 14.61 16.56 568,404.89 2007 16.56 15.92 602,867.37 2008 15.92 9.71 487,589.04 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.57 6.80 310,403.07 2004 6.80 7.30 392,106.14 2005 7.30 8.19 417,097.50 2006 8.19 7.96 425,337.52 2007 7.96 8.04 351,434.02 2008 8.04 4.84 316,321.07 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.87 7.75 0.00 2002 7.75 5.30 121,621.58 2003 5.30 5.57 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.53 10.23 539,621.68 2007 10.23 9.51 472,613.07 2008 9.51 4.26 420,513.03 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.75 8.32 0.00 2002 8.32 6.56 73,963.77 2003 6.56 7.87 308,442.38 2004 7.87 8.65 519,685.45 2005 8.65 9.15 543,667.98 2006 9.15 9.57 546,915.66
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................. 2001 $11.23 $11.46 0.00 2002 11.46 12.45 1,271,700.30 2003 12.45 12.72 5,134,183.52 2004 12.72 13.06 8,999,457.29 2005 13.06 13.16 8,533,403.02 2006 13.16 13.50 7,766,369.61 2007 13.50 14.23 7,336,307.44 2008 14.23 14.86 5,087,134.64 Loomis Sayles Small Cap Division (Class E)/(c)/... 2001 23.20 22.72 0.00 2002 22.72 17.58 30,590.67 2003 17.58 23.67 113,829.25 2004 23.67 27.16 178,336.28 2005 27.16 28.64 236,648.77 2006 28.64 32.96 300,736.30 2007 32.96 36.36 334,916.98 2008 36.36 22.98 298,154.20 Lord Abbett Bond Debenture Division (Class E)/(b)/ 2002 10.88 10.57 108,830.52 2003 10.57 12.45 906,935.62 2004 12.45 13.31 1,418,152.43 2005 13.31 13.36 1,404,653.05 2006 13.36 14.41 1,362,497.98 2007 14.41 15.18 1,342,220.52 2008 15.18 12.22 1,101,945.72 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)....................................... 2001 10.83 10.58 0.00 2002 10.58 10.88 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.. 2002 11.24 8.50 46,307.54 2003 8.50 11.68 213,981.76 2004 11.68 12.29 362,439.31 2005 12.29 13.16 348,954.53 2006 13.16 14.85 303,360.64 2007 14.85 16.31 329,554.00 2008 16.31 9.87 260,774.54 MetLife Mid Cap Stock Index Division (Class E)/(c)/......................................... 2001 10.44 10.34 0.00 2002 10.34 8.68 570,356.88 2003 8.68 11.55 2,466,067.51 2004 11.55 13.22 2,674,970.32 2005 13.22 14.64 2,583,753.41 2006 14.64 15.89 2,589,233.99 2007 15.89 16.89 2,460,352.19 2008 16.89 10.62 2,153,959.35
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $38.76 $36.62 0.00 2002 36.62 28.06 444,695.20 2003 28.06 35.46 2,189,805.85 2004 35.46 38.66 4,375,880.34 2005 38.66 39.89 4,174,789.79 2006 39.89 45.42 3,779,370.21 2007 45.42 47.12 3,532,996.55 2008 47.12 29.23 3,363,124.91 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.02 8.38 0.00 2002 8.38 7.31 128,885.57 2003 7.31 9.54 378,131.36 2004 9.54 11.28 529,237.61 2005 11.28 12.98 577,046.26 2006 12.98 16.25 865,604.95 2007 16.25 18.19 1,013,541.82 2008 18.19 10.36 1,042,044.09 MFS(R) Total Return Division (Class E)/(i)/................. 2004 37.71 41.05 119,277.39 2005 41.05 41.69 328,191.42 2006 41.69 46.09 465,431.08 2007 46.09 47.39 692,542.07 2008 47.39 36.34 626,555.67 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.70 11.54 0.00 2002 11.54 9.77 842,299.12 2003 9.77 12.09 2,688,090.95 2004 12.09 13.29 4,009,979.73 2005 13.29 12.92 3,945,338.48 2006 12.92 15.05 3,372,387.00 2007 15.05 14.28 3,032,426.90 2008 14.28 9.36 2,697,027.11 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.42 8.65 0.00 2002 8.65 7.12 634,864.59 2003 7.12 9.65 3,114,501.40 2004 9.65 11.39 3,602,166.40 2005 11.39 12.71 3,317,221.36 2006 12.71 15.77 3,031,757.31 2007 15.77 17.22 2,877,630.78 2008 17.22 9.83 2,796,815.99 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.44 15.13 0.00 2002 15.13 13.49 222,971.85 2003 13.49 18.18 832,486.66 2004 18.18 22.04 1,810,459.47 2005 22.04 24.40 2,105,952.17 2006 24.40 26.81 1,858,433.89 2007 26.81 27.34 1,697,807.19 2008 27.34 14.20 1,410,908.34
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BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $13.02 $12.28 0.00 2002 12.28 10.17 112,537.61 2003 10.17 13.10 406,709.15 2004 13.10 15.03 550,723.24 2005 15.03 17.23 651,568.46 2006 17.23 19.83 666,634.22 2007 19.83 20.81 653,391.71 2008 20.81 12.23 490,373.02 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.25 10.45 0.00 2002 10.45 11.29 1,551,710.35 2003 11.29 11.65 4,544,053.32 2004 11.65 12.08 5,804,502.80 2005 12.08 12.21 5,682,275.41 2006 12.21 12.63 4,865,688.64 2007 12.63 13.42 4,559,147.92 2008 13.42 13.31 3,873,609.12 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.05 6.10 0.00 2002 6.10 2.97 203,039.18 2003 2.97 4.62 1,637,949.51 2004 4.62 4.37 2,443,480.52 2005 4.37 4.80 2,087,513.19 2006 4.80 4.99 1,893,822.84 2007 4.99 6.50 2,352,962.18 2008 6.50 3.56 1,898,680.91 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 12.07 12.02 0.00 2002 12.02 9.43 325,845.30 2003 9.43 13.60 1,535,666.47 2004 13.60 15.78 1,766,547.81 2005 15.78 16.27 1,664,179.07 2006 16.27 18.92 1,638,621.46 2007 18.92 18.37 1,484,310.60 2008 18.37 12.05 1,281,282.96 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.70 11.57 0.00 2002 11.57 8.76 192,844.11 2003 8.76 11.30 794,026.43 2004 11.30 12.25 1,219,617.60 2005 12.25 12.88 1,225,277.14 2006 12.88 14.37 1,166,910.77 2007 14.37 15.51 1,195,546.39 2008 15.51 8.89 1,003,023.65 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.64 8.26 0.00 2002 8.26 4.56 160,883.93 2003 4.56 6.17 921,458.24 2004 6.17 7.19 1,640,762.91 2005 7.19 8.14 1,659,153.46 2006 8.14 8.55 1,649,785.51 2007 8.55 9.93 2,050,018.89 2008 9.93 5.92 1,658,057.16
19
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.35 $ 12.17 0.00 2002 12.17 8.80 104,912.42 2003 8.80 12.22 500,675.63 2004 12.22 13.40 771,778.83 2005 13.40 14.66 761,468.45 2006 14.66 15.01 704,955.38 2007 15.01 16.26 616,681.57 2008 16.26 10.24 608,516.37 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.73 16.05 0.00 2002 16.05 17.34 206,607.47 2003 17.34 19.26 1,097,298.95 2004 19.26 20.26 1,832,959.07 2005 20.26 20.54 1,977,911.29 2006 20.54 21.27 1,760,927.58 2007 21.27 21.82 1,620,353.39 2008 21.82 18.29 1,202,776.44 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 14.63 14.93 0.00 2002 14.93 15.87 884,065.72 2003 15.87 15.91 1,650,276.43 2004 15.91 16.16 1,751,365.92 2005 16.16 16.21 1,688,272.27 2006 16.21 16.65 1,448,834.33 2007 16.65 17.12 1,288,550.95 2008 17.12 16.83 1,078,581.67 At 1.50 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.69 15.41 1,384,257.31 2007 15.41 15.68 4,872,016.01 2008 15.68 14.00 4,398,070.70 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 16.28 19.38 559,036.42 2005 19.38 23.94 1,993,369.67 2006 23.94 29.25 3,865,644.25 2007 29.25 34.99 5,518,755.68 2008 34.99 16.02 6,340,014.81 American Funds Growth Division (Class 2)/(c)/............... 2004 113.13 125.36 321,875.82 2005 125.36 143.50 1,076,810.53 2006 143.50 155.82 1,897,452.19 2007 155.82 172.44 2,357,806.14 2008 172.44 95.17 2,786,511.47 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 88.04 95.72 337,328.74 2005 95.72 99.80 1,024,224.45 2006 99.80 113.26 1,585,446.89 2007 113.26 117.20 1,989,561.74 2008 117.20 71.75 2,053,174.67
20 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.45 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.56 $ 15.26 28,569.70 2007 15.26 15.52 149,814.19 2008 15.52 13.84 47,001.89 American Funds Global Small Capitalization Division/(c)/.... 2001 13.77 13.45 0.00 2002 13.45 10.71 0.00 2003 10.71 16.18 107,784.55 2004 16.18 19.25 281,007.79 2005 19.25 23.75 313,233.26 2006 23.75 29.00 270,716.25 2007 29.00 34.66 293,038.02 2008 34.66 15.85 229,143.49 American Funds Growth Division/(c)/......................... 2001 122.35 110.79 0.00 2002 110.79 82.36 0.00 2003 82.36 110.90 46,696.36 2004 110.90 122.77 112,711.09 2005 122.77 140.39 113,022.31 2006 140.39 152.29 108,746.95 2007 152.29 168.36 99,935.58 2008 168.36 92.82 86,140.60 American Funds Growth-Income Division/(c)/.................. 2001 85.84 82.40 0.00 2002 82.40 66.22 0.00 2003 66.22 86.30 59,813.89 2004 86.30 93.74 130,811.15 2005 93.74 97.64 124,289.21 2006 97.64 110.70 117,188.16 2007 110.70 114.43 111,462.86 2008 114.43 69.98 96,246.95 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 36.92 34.81 0.00 2002 34.81 24.43 0.00 2003 24.43 33.85 24,635.07 2004 33.85 37.63 47,882.75 2005 37.63 41.00 45,689.14 2006 41.00 43.06 41,297.69 2007 43.06 51.09 33,398.73 2008 51.09 27.30 30,633.92 BlackRock Bond Income Division (Class E)/(a)/............... 2002 42.22 44.53 0.00 2003 44.53 46.39 35,414.49 2004 46.39 47.68 70,112.32 2005 47.68 48.05 74,904.06 2006 48.05 49.38 70,579.02 2007 49.38 51.65 61,959.21 2008 51.65 49.08 54,310.84
21
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $40.67 $ 41.78 0.00 2002 41.78 359.10 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 36.87 35.93 0.00 2002 35.93 30.48 0.00 2003 30.48 36.17 63,226.55 2004 36.17 38.60 136,889.73 2005 38.60 39.17 133,601.49 2006 39.17 42.59 114,791.83 2007 42.59 44.37 101,862.26 2008 44.37 32.85 84,562.68 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 79.01 79.73 31,043.42 2008 79.73 49.30 25,395.96 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 69.91 65.23 0.00 2002 65.23 47.44 0.00 2003 47.44 60.81 21,946.12 2004 60.81 66.35 43,113.60 2005 66.35 67.65 37,748.49 2006 67.65 75.96 33,784.59 2007 75.96 79.67 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.92 0.00 2003 7.92 10.57 95,061.21 2004 10.57 11.80 180,805.09 2005 11.80 12.30 160,449.56 2006 12.30 14.45 248,401.80 2007 14.45 14.70 214,750.95 2008 14.70 9.41 176,299.11 BlackRock Money Market Division (Class E)/(f)/.............. 2003 22.39 22.26 6,556.58 2004 22.26 22.12 28,818.00 2005 22.12 22.40 25,847.59 2006 22.40 23.11 27,458.21 2007 23.11 23.89 20,371.08 2008 23.89 24.18 21,668.65 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.21 13.96 0.00 2002 13.96 10.80 0.00 2003 10.80 15.97 251,687.65 2004 15.97 18.12 499,178.98 2005 18.12 18.57 449,154.44 2006 18.57 21.35 410,979.23 2007 21.35 20.29 359,946.92 2008 20.29 12.30 302,138.46
22
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............... 2001 $27.09 $26.35 0.00 2002 26.35 21.67 0.00 2003 21.67 27.93 30,312.18 2004 27.93 30.86 103,247.87 2005 30.86 33.51 107,349.44 2006 33.51 37.78 124,574.98 2007 37.78 38.89 111,810.22 2008 38.89 23.20 102,623.60 FI Mid Cap Opportunities Division (Class E)/(c) (h)/...... 2001 18.16 15.63 0.00 2002 15.63 10.91 0.00 2003 10.91 14.48 27,218.83 2004 14.48 16.69 144,473.15 2005 16.69 17.56 136,671.29 2006 17.56 19.33 135,654.97 2007 19.33 20.61 120,949.07 2008 20.61 9.06 135,907.25 FI Value Leaders Division (Class E)/(d)/.................. 2002 22.63 18.62 0.00 2003 18.62 23.26 7,003.77 2004 23.26 26.04 28,986.63 2005 26.04 28.37 40,391.30 2006 28.37 31.25 45,430.52 2007 31.25 32.04 38,146.64 2008 32.04 19.25 26,036.40 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.......................................... 2001 9.17 8.79 0.00 2002 8.79 6.25 0.00 2003 6.25 8.91 63,963.08 2004 8.91 9.77 106,338.31 2005 9.77 10.06 78,553.10 2006 10.06 10.90 80,982.19 2007 10.90 11.22 70,074.75 2008 11.22 6.48 62,494.20 Harris Oakmark Focused Value Division (Class E)/(c)/...... 2001 25.30 26.16 0.00 2002 26.16 23.47 0.00 2003 23.47 30.64 95,044.25 2004 30.64 33.14 185,134.88 2005 33.14 35.88 173,787.79 2006 35.88 39.71 154,485.29 2007 39.71 36.40 130,818.69 2008 36.40 19.34 121,899.38 Harris Oakmark International Division (Class E)/(d)/...... 2002 10.59 8.83 0.00 2003 8.83 11.76 23,418.79 2004 11.76 13.99 157,295.51 2005 13.99 15.76 151,139.31 2006 15.76 20.03 199,502.16 2007 20.03 19.55 166,704.72 2008 19.55 11.40 113,224.07
23
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.06 $ 4.88 52,167.37 2006 4.88 4.93 44,932.37 2007 4.93 5.42 51,308.46 2008 5.42 3.39 38,907.86 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.39 4.91 0.00 2002 4.91 3.44 0.00 2003 3.44 4.26 32,610.52 2004 4.26 4.40 57,580.19 2005 4.40 4.02 57,550.47 Julius Baer International Stock Division (Class E)/(c)/..... 2001 12.19 11.40 0.00 2002 11.40 9.25 0.00 2003 9.25 11.66 34,399.87 2004 11.66 13.57 71,716.66 2005 13.57 15.75 113,878.43 2006 15.75 18.05 90,369.13 2007 18.05 19.61 88,675.07 2008 19.61 10.78 105,754.35 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.39 9.67 0.00 2003 9.67 12.04 58,322.52 2004 12.04 13.58 98,196.55 2005 13.58 14.49 94,316.75 2006 14.49 16.39 96,748.96 2007 16.39 15.72 104,909.86 2008 15.72 9.57 93,543.74 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.55 6.77 12,502.92 2004 6.77 7.24 26,758.73 2005 7.24 8.12 39,423.38 2006 8.12 7.87 31,402.39 2007 7.87 7.94 27,818.16 2008 7.94 4.77 29,274.29 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.86 7.74 0.00 2002 7.74 5.29 0.00 2003 5.29 5.55 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.39 10.07 82,047.02 2007 10.07 9.35 66,897.73 2008 9.35 4.18 60,822.85 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.71 8.28 0.00 2002 8.28 6.51 0.00 2003 6.51 7.79 14,467.31 2004 7.79 8.55 47,907.97 2005 8.55 9.02 86,692.72 2006 9.02 9.43 81,123.38
24
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.17 $11.38 0.00 2002 11.38 12.35 0.00 2003 12.35 12.59 337,928.72 2004 12.59 12.90 909,684.24 2005 12.90 12.97 875,676.07 2006 12.97 13.28 858,763.61 2007 13.28 13.97 784,444.17 2008 13.97 14.56 611,234.70 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 22.87 22.38 0.00 2002 22.38 17.28 0.00 2003 17.28 23.21 9,515.41 2004 23.21 26.59 23,017.07 2005 26.59 27.98 25,835.24 2006 27.98 32.13 38,371.35 2007 32.13 35.38 52,045.85 2008 35.38 22.32 38,880.19 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.77 10.44 0.00 2003 10.44 12.29 109,251.70 2004 12.29 13.11 186,732.76 2005 13.11 13.13 175,765.80 2006 13.13 14.13 174,705.35 2007 14.13 14.86 161,552.42 2008 14.86 11.93 134,259.20 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)................................................. 2001 10.74 10.47 0.00 2002 10.47 15.64 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.22 8.48 0.00 2003 8.48 11.62 28,663.89 2004 11.62 12.21 62,374.40 2005 12.21 13.05 55,127.15 2006 13.05 14.70 57,454.91 2007 14.70 16.11 43,624.65 2008 16.11 9.73 38,730.93 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.42 10.31 0.00 2002 10.31 8.63 0.00 2003 8.63 11.47 178,510.90 2004 11.47 13.10 300,664.65 2005 13.10 14.48 294,439.06 2006 14.48 15.68 276,322.43 2007 15.68 16.64 270,365.66 2008 16.64 10.44 236,119.79
25
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $37.89 $35.77 0.00 2002 35.77 27.35 0.00 2003 27.35 34.51 162,077.32 2004 34.51 37.54 465,903.25 2005 37.54 38.66 440,477.42 2006 38.66 43.93 396,989.41 2007 43.93 45.49 370,813.44 2008 45.49 28.16 363,473.21 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.01 8.38 0.00 2002 8.38 7.30 0.00 2003 7.30 9.50 25,599.56 2004 9.50 11.21 70,828.12 2005 11.21 12.87 94,222.73 2006 12.87 16.09 120,925.48 2007 16.09 17.98 119,243.99 2008 17.98 10.21 123,987.72 MFS(R) Total Return Division (Class E)/(i)/................. 2004 36.45 39.62 17,149.94 2005 39.62 40.16 50,509.77 2006 40.16 44.31 71,124.70 2007 44.31 45.47 114,974.67 2008 45.47 34.80 86,913.95 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.64 11.47 0.00 2002 11.47 9.69 0.00 2003 9.69 11.97 214,996.50 2004 11.97 13.13 448,372.16 2005 13.13 12.74 452,608.06 2006 12.74 14.81 372,921.00 2007 14.81 14.02 332,206.15 2008 14.02 9.17 335,654.65 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.37 8.59 0.00 2002 8.59 7.06 0.00 2003 7.06 9.55 213,668.04 2004 9.55 11.25 429,594.36 2005 11.25 12.53 414,334.00 2006 12.53 15.52 363,187.49 2007 15.52 16.91 316,096.12 2008 16.91 9.64 321,287.17 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.35 15.04 0.00 2002 15.04 13.38 0.00 2003 13.38 17.99 76,319.02 2004 17.99 21.77 251,133.28 2005 21.77 24.05 281,027.93 2006 24.05 26.38 220,656.00 2007 26.38 26.85 202,718.14 2008 26.85 13.92 172,510.66
26
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.90 $12.16 0.00 2002 12.16 10.06 0.00 2003 10.06 12.92 32,601.95 2004 12.92 14.79 59,343.76 2005 14.79 16.93 65,372.72 2006 16.93 19.44 62,930.90 2007 19.44 20.37 61,234.70 2008 20.37 11.94 46,221.82 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.24 10.43 0.00 2002 10.43 11.25 0.00 2003 11.25 11.58 384,622.02 2004 11.58 11.99 650,652.49 2005 11.99 12.09 722,177.32 2006 12.09 12.48 548,420.10 2007 12.48 13.24 679,792.80 2008 13.24 13.11 426,006.69 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.05 6.09 0.00 2002 6.09 2.96 0.00 2003 2.96 4.60 222,773.97 2004 4.60 4.34 334,452.62 2005 4.34 4.75 289,437.15 2006 4.75 4.94 226,227.02 2007 4.94 6.41 391,805.49 2008 6.41 3.51 248,780.83 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 12.01 11.95 0.00 2002 11.95 9.35 0.00 2003 9.35 13.46 119,112.34 2004 13.46 15.59 225,634.05 2005 15.59 16.04 207,349.65 2006 16.04 18.61 191,942.00 2007 18.61 18.04 171,927.11 2008 18.04 11.81 138,761.89 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.64 11.50 0.00 2002 11.50 8.69 0.00 2003 8.69 11.19 69,718.44 2004 11.19 12.11 127,519.84 2005 12.11 12.70 128,655.91 2006 12.70 14.14 117,337.97 2007 14.14 15.23 116,866.38 2008 15.23 8.71 112,491.80 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.64 8.25 0.00 2002 8.25 4.55 0.00 2003 4.55 6.13 47,071.94 2004 6.13 7.14 192,193.87 2005 7.14 8.06 243,026.42 2006 8.06 8.45 190,725.55 2007 8.45 9.79 397,174.12 2008 9.79 5.83 273,492.99
27
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.24 $ 12.05 0.00 2002 12.05 8.69 0.00 2003 8.69 12.05 37,571.37 2004 12.05 13.19 72,976.35 2005 13.19 14.41 82,879.59 2006 14.41 14.72 82,048.16 2007 14.72 15.91 68,985.23 2008 15.91 10.00 85,639.95 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.52 15.83 0.00 2002 15.83 17.06 0.00 2003 17.06 18.91 88,203.94 2004 18.91 19.85 253,519.43 2005 19.85 20.09 288,847.54 2006 20.09 20.76 261,032.48 2007 20.76 21.26 178,702.82 2008 21.26 17.78 140,983.01 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.43 14.72 0.00 2002 14.72 15.61 0.00 2003 15.61 15.63 57,331.18 2004 15.63 15.83 142,372.65 2005 15.83 15.85 165,505.99 2006 15.85 16.24 129,658.26 2007 16.24 16.67 112,248.93 2008 16.67 16.36 98,909.76 At 1.70 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.43 15.11 151,771.39 2007 15.11 15.35 809,310.13 2008 15.35 13.68 625,986.65 American Funds Global Small Capitalization Division/(c)/.... 2004 16.09 19.13 140,092.44 2005 19.13 23.57 422,435.60 2006 23.57 28.75 654,541.21 2007 28.75 34.32 950,653.20 2008 34.32 15.68 987,379.12 American Funds Growth Division/(c)/......................... 2004 108.71 120.23 59,830.80 2005 120.23 137.35 192,657.05 2006 137.35 148.84 308,943.53 2007 148.84 164.39 382,632.01 2008 164.39 90.54 421,284.58 American Funds Growth-Income Division/(c)/.................. 2004 84.60 91.80 72,778.03 2005 91.80 95.52 188,347.32 2006 95.52 108.19 271,342.46 2007 108.19 111.72 342,131.86 2008 111.72 68.26 347,890.95
28 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.50 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................ 2006 $ 14.49 $ 15.19 9,855.83 2007 15.19 15.43 68,169.42 2008 15.43 13.76 16,239.77 American Funds Global Small Capitalization Division/(c)/. 2001 13.75 13.42 0.00 2002 13.42 10.68 32,019.34 2003 10.68 16.14 85,398.57 2004 16.14 19.19 128,270.84 2005 19.19 23.66 149,896.21 2006 23.66 28.88 146,893.34 2007 28.88 34.49 141,939.77 2008 34.49 15.76 93,838.28 American Funds Growth Division/(c)/...................... 2001 121.23 109.75 0.00 2002 109.75 81.55 16,230.12 2003 81.55 109.74 58,503.83 2004 109.74 121.43 69,240.32 2005 121.43 138.80 68,272.08 2006 138.80 150.48 63,238.49 2007 150.48 166.28 54,048.73 2008 166.28 91.63 42,147.59 American Funds Growth-Income Division/(c)/............... 2001 85.05 81.63 0.00 2002 81.63 65.56 26,270.23 2003 65.56 85.41 68,725.41 2004 85.41 92.72 96,552.45 2005 92.72 96.53 87,866.03 2006 96.53 109.39 82,701.17 2007 109.39 113.01 69,156.14 2008 113.01 69.08 55,948.52 BlackRock Aggressive Growth Division (Class E)/(c)/...... 2001 36.68 34.57 0.00 2002 34.57 24.25 2,205.03 2003 24.25 33.59 13,521.08 2004 33.59 37.32 13,940.22 2005 37.32 40.64 13,270.58 2006 40.64 42.66 12,514.16 2007 42.66 50.59 12,156.89 2008 50.59 27.02 10,590.38 BlackRock Bond Income Division (Class E)/(a)/............ 2002 41.82 44.10 49,047.68 2003 44.10 45.92 73,820.33 2004 45.92 47.17 75,491.45 2005 47.17 47.51 62,562.45 2006 47.51 48.80 51,457.60 2007 48.80 51.02 39,380.69 2008 51.02 48.46 30,754.13
29
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $40.30 $41.40 0.00 2002 41.40 41.87 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 36.59 35.65 0.00 2002 35.65 30.23 22,516.66 2003 30.23 35.85 86,986.27 2004 35.85 38.25 81,027.13 2005 38.25 38.79 67,148.30 2006 38.79 42.16 60,729.08 2007 42.16 43.90 55,172.11 2008 43.90 32.49 43,769.76 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 78.07 78.75 21,837.96 2008 78.75 48.68 20,064.90 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 69.28 64.63 0.00 2002 64.63 46.98 17,213.09 2003 46.98 60.19 36,210.83 2004 60.19 65.64 37,496.53 2005 65.64 66.89 30,776.69 2006 66.89 75.07 25,465.88 2007 75.07 78.73 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.91 7,077.93 2003 7.91 10.56 38,323.74 2004 10.56 11.79 74,675.57 2005 11.79 12.27 63,527.67 2006 12.27 14.41 98,182.02 2007 14.41 14.66 99,140.93 2008 14.66 9.38 57,156.94 BlackRock Money Market Division (Class E)/(f)/.............. 2003 22.17 22.03 0.29 2004 22.03 21.88 0.00 2005 21.88 22.15 0.00 2006 22.15 22.84 0.00 2007 22.84 23.60 0.00 2008 23.60 23.88 660.36 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.20 13.95 0.00 2002 13.95 10.79 157,228.27 2003 10.79 15.94 281,458.32 2004 15.94 18.08 324,910.05 2005 18.08 18.52 276,821.58 2006 18.52 21.28 230,814.40 2007 21.28 20.21 182,013.02 2008 20.21 12.24 144,165.58
30
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............... 2001 $26.99 $26.26 0.00 2002 26.26 21.58 20,393.14 2003 21.58 27.80 67,574.71 2004 27.80 30.71 88,324.73 2005 30.71 33.32 93,290.01 2006 33.32 37.55 85,709.13 2007 37.55 38.63 73,834.53 2008 38.63 23.04 64,479.49 FI Mid Cap Opportunities Division (Class E)/(c) (h)/...... 2001 18.12 15.59 0.00 2002 15.59 10.88 22,430.00 2003 10.88 14.43 52,317.71 2004 14.43 16.63 121,218.28 2005 16.63 17.48 104,969.16 2006 17.48 19.23 87,624.88 2007 19.23 20.50 63,408.93 2008 20.50 9.00 56,222.49 FI Value Leaders Division (Class E)/(d)/.................. 2002 22.53 18.53 223.05 2003 18.53 23.14 13,791.50 2004 23.14 25.88 13,941.77 2005 25.88 28.18 20,535.34 2006 28.18 31.03 23,927.32 2007 31.03 31.81 21,344.57 2008 31.81 19.10 9,222.86 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.......................................... 2001 9.17 8.79 0.00 2002 8.79 6.25 11,663.67 2003 6.25 8.90 40,149.06 2004 8.90 9.75 46,339.50 2005 9.75 10.04 35,241.03 2006 10.04 10.86 27,964.36 2007 10.86 11.18 22,600.94 2008 11.18 6.46 13,470.51 Harris Oakmark Focused Value Division (Class E)/(c)/...... 2001 25.19 26.05 0.00 2002 26.05 23.35 61,782.22 2003 23.35 30.47 126,748.23 2004 30.47 32.95 142,365.16 2005 32.95 35.65 132,410.14 2006 35.65 39.43 108,633.17 2007 39.43 36.13 89,156.62 2008 36.13 19.19 66,805.26 Harris Oakmark International Division (Class E)/(d)/...... 2002 10.59 8.82 1,624.24 2003 8.82 11.75 22,986.28 2004 11.75 13.97 64,678.33 2005 13.97 15.72 90,841.07 2006 15.72 19.98 105,485.85 2007 19.98 19.49 76,795.16 2008 19.49 11.36 56,722.39
31
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.05 $ 4.87 66,299.15 2006 4.87 4.92 52,029.23 2007 4.92 5.40 47,576.81 2008 5.40 3.37 26,859.49 Jennison Growth Division (Class E)/(c) (g) /(formerly Met/Putnam Voyager Division).............................. 2001 5.38 4.91 0.00 2002 4.91 3.43 45,343.63 2003 3.43 4.25 79,960.85 2004 4.25 4.39 75,497.51 2005 4.39 4.01 69,047.11 Julius Baer International Stock Division (Class E)/(c)/..... 2001 12.13 11.34 0.00 2002 11.34 9.20 37,654.63 2003 9.20 11.59 83,923.39 2004 11.59 13.47 80,449.46 2005 13.47 15.64 74,019.49 2006 15.64 17.91 58,927.42 2007 17.91 19.44 41,579.91 2008 19.44 10.69 44,634.46 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.39 9.66 4,191.09 2003 9.66 12.03 33,152.01 2004 12.03 13.56 31,103.06 2005 13.56 14.46 22,140.83 2006 14.46 16.34 18,497.85 2007 16.34 15.67 24,229.79 2008 15.67 9.53 12,214.19 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.55 6.76 13,831.86 2004 6.76 7.23 14,051.04 2005 7.23 8.10 11,590.10 2006 8.10 7.85 15,611.50 2007 7.85 7.91 12,187.90 2008 7.91 4.75 8,626.43 Legg Mason Partners Aggressive Growth (Class E)/(e)/ (formerly Janus Aggressive Growth)................ 2001 8.86 7.74 0.00 2002 7.74 5.28 10,865.55 2003 5.28 5.55 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.36 10.03 47,818.28 2007 10.03 9.31 47,245.59 2008 9.31 4.16 42,413.08 Legg Mason Value Equity (Class E)/(c)/ /(l)/ (formerly MFS(R) Investors Trust Division).......................... 2001 8.70 8.27 0.00 2002 8.27 6.50 45,626.76 2003 6.50 7.78 49,778.26 2004 7.78 8.52 63,412.17 2005 8.52 8.99 48,904.31 2006 8.99 9.40 47,933.82
32
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.15 $11.37 0.00 2002 11.37 12.32 225,577.36 2003 12.32 12.56 489,599.55 2004 12.56 12.86 655,019.23 2005 12.86 12.92 602,654.35 2006 12.92 13.23 568,967.74 2007 13.23 13.90 504,058.33 2008 13.90 14.49 331,765.98 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 22.78 22.29 0.00 2002 22.29 17.21 5,404.06 2003 17.21 23.10 13,258.14 2004 23.10 26.45 22,106.95 2005 26.45 27.82 22,775.37 2006 27.82 31.93 24,849.16 2007 31.93 35.14 24,753.05 2008 35.14 22.15 18,218.89 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.74 10.41 22,289.80 2003 10.41 12.24 162,905.90 2004 12.24 13.06 169,809.79 2005 13.06 13.07 145,143.27 2006 13.07 14.06 138,459.15 2007 14.06 14.78 132,329.97 2008 14.78 11.86 94,722.60 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division). 2001 10.71 10.45 0.00 2002 10.45 10.74 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.22 8.48 5,135.49 2003 8.48 11.61 21,224.05 2004 11.61 12.19 25,847.06 2005 12.19 13.03 21,235.25 2006 13.03 14.66 23,324.10 2007 14.66 16.06 13,171.09 2008 16.06 9.70 11,955.41 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.42 10.30 0.00 2002 10.30 8.62 78,973.23 2003 8.62 11.45 223,014.58 2004 11.45 13.07 190,838.70 2005 13.07 14.44 176,794.28 2006 14.44 15.63 153,807.28 2007 15.63 16.58 142,204.00 2008 16.58 10.40 119,921.71
33
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $37.68 $35.56 0.00 2002 35.56 27.18 73,429.97 2003 27.18 34.27 232,487.84 2004 34.27 37.27 334,555.05 2005 37.27 38.36 301,810.28 2006 38.36 43.57 276,481.35 2007 43.57 45.09 236,025.99 2008 45.09 27.90 224,173.71 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.01 8.36 0.00 2002 8.36 7.28 14,134.50 2003 7.28 9.47 40,564.90 2004 9.47 11.17 40,356.36 2005 11.17 12.82 50,325.80 2006 12.82 16.01 65,068.38 2007 16.01 17.88 67,475.24 2008 17.88 10.16 63,115.75 MFS(R) Total Return Division (Class E)/(i)/................. 2004 36.14 39.27 3,841.22 2005 39.27 39.79 19,800.66 2006 39.79 43.88 18,561.86 2007 43.88 45.00 26,133.41 2008 45.00 34.42 19,043.01 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.62 11.45 0.00 2002 11.45 9.67 157,233.62 2003 9.67 11.94 374,576.28 2004 11.94 13.09 381,446.78 2005 13.09 12.69 370,944.59 2006 12.69 14.75 311,742.01 2007 14.75 13.96 252,505.10 2008 13.96 9.13 187,770.96 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.35 8.58 0.00 2002 8.58 7.04 103,380.86 2003 7.04 9.53 300,308.08 2004 9.53 11.21 279,646.40 2005 11.21 12.49 240,656.92 2006 12.49 15.45 203,566.38 2007 15.45 16.83 189,661.67 2008 16.83 9.59 177,187.70 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.33 15.01 0.00 2002 15.01 13.35 39,868.38 2003 13.35 17.94 98,355.96 2004 17.94 21.70 139,529.27 2005 21.70 23.96 162,780.19 2006 23.96 26.27 130,877.69 2007 26.27 26.72 110,625.45 2008 26.72 13.85 89,005.48
34
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.87 $12.14 0.00 2002 12.14 10.03 12,043.68 2003 10.03 12.88 48,580.88 2004 12.88 14.73 50,623.96 2005 14.73 16.85 84,323.91 2006 16.85 19.35 69,770.52 2007 19.35 20.26 53,041.19 2008 20.26 11.87 36,168.26 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.24 10.43 0.00 2002 10.43 11.24 192,230.30 2003 11.24 11.56 457,793.39 2004 11.56 11.97 448,711.92 2005 11.97 12.06 437,621.91 2006 12.06 12.44 339,991.43 2007 12.44 13.19 320,435.69 2008 13.19 13.05 241,963.04 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.04 6.08 0.00 2002 6.08 2.96 33,839.41 2003 2.96 4.59 204,467.46 2004 4.59 4.33 218,860.34 2005 4.33 4.74 183,127.85 2006 4.74 4.92 114,166.50 2007 4.92 6.39 164,987.80 2008 6.39 3.49 93,495.91 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.99 11.93 0.00 2002 11.93 9.33 47,437.21 2003 9.33 13.42 152,903.89 2004 13.42 15.54 159,019.77 2005 15.54 15.99 134,767.43 2006 15.99 18.54 124,440.52 2007 18.54 17.96 99,969.76 2008 17.96 11.75 78,538.42 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.62 11.48 0.00 2002 11.48 8.67 46,957.26 2003 8.67 11.16 112,546.54 2004 11.16 12.07 145,216.04 2005 12.07 12.65 127,320.85 2006 12.65 14.08 108,699.39 2007 14.08 15.16 88,159.23 2008 15.16 8.67 78,559.71 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.63 8.25 0.00 2002 8.25 4.54 49,683.45 2003 4.54 6.12 95,673.83 2004 6.12 7.12 149,231.13 2005 7.12 8.04 151,849.44 2006 8.04 8.42 146,926.10 2007 8.42 9.76 152,151.38 2008 9.76 5.80 88,627.46
35
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.22 $ 12.02 0.00 2002 12.02 8.67 22,446.79 2003 8.67 12.01 65,089.51 2004 12.01 13.14 90,183.89 2005 13.14 14.34 86,962.24 2006 14.34 14.65 55,763.37 2007 14.65 15.83 36,639.92 2008 15.83 9.94 35,351.76 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.47 15.77 0.00 2002 15.77 16.99 47,849.94 2003 16.99 18.83 135,043.24 2004 18.83 19.75 134,643.80 2005 19.75 19.98 156,504.38 2006 19.98 20.63 119,427.82 2007 20.63 21.12 97,149.91 2008 21.12 17.66 63,131.20 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.39 14.67 0.00 2002 14.67 15.55 142,366.92 2003 15.55 15.55 181,326.65 2004 15.55 15.75 166,629.20 2005 15.75 15.76 164,780.37 2006 15.76 16.15 123,813.46 2007 16.15 16.56 109,662.08 2008 16.56 16.24 78,800.63 At 1.75 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.36 15.04 27,290.50 2007 15.04 15.27 115,031.70 2008 15.27 13.60 82,599.38 American Funds Global Small Capitalization Division/(c)/.... 2004 16.05 19.06 11,997.08 2005 19.06 23.48 31,614.64 2006 23.48 28.63 68,262.25 2007 28.63 34.16 115,956.39 2008 34.16 15.60 133,303.40 American Funds Growth Division/(c)/......................... 2004 107.63 118.98 7,893.55 2005 118.98 135.85 22,647.91 2006 135.85 147.14 39,329.74 2007 147.14 162.43 48,154.21 2008 162.43 89.42 57,498.77 American Funds Growth-Income Division/(c)/.................. 2004 83.76 90.85 7,525.57 2005 90.85 94.48 18,899.21 2006 94.48 106.96 30,350.55 2007 106.96 110.40 43,158.87 2008 110.40 67.42 42,230.34
36 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.60 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.36 $ 15.04 3,602.47 2007 15.04 15.27 26,795.36 2008 15.27 13.60 23,110.57 American Funds Global Small Capitalization Division/(c)/.... 2001 13.70 13.37 0.00 2002 13.37 10.63 50,260.05 2003 10.63 16.05 33,583.22 2004 16.05 19.06 128,537.65 2005 19.06 23.48 142,590.73 2006 23.48 28.63 152,181.41 2007 28.63 34.16 150,471.52 2008 34.16 15.60 106,380.52 American Funds Growth Division/(c)/......................... 2001 119.13 107.80 0.00 2002 107.80 80.02 10,214.32 2003 80.02 107.58 39,810.16 2004 107.58 118.92 64,053.28 2005 118.92 135.79 63,053.30 2006 135.79 147.07 56,753.68 2007 147.07 162.35 49,908.02 2008 162.35 89.38 40,843.02 American Funds Growth-Income Division/(c)/.................. 2001 83.58 80.18 0.00 2002 80.18 64.34 4,959.21 2003 64.34 83.72 44,066.19 2004 83.72 90.80 74,849.64 2005 90.80 94.43 74,211.75 2006 94.43 106.91 69,152.27 2007 106.91 110.34 62,927.94 2008 110.34 67.38 41,806.81 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 36.19 34.10 0.00 2002 34.10 23.90 2,861.07 2003 23.90 33.07 14,524.85 2004 33.07 36.70 18,023.58 2005 36.70 39.93 16,332.73 2006 39.93 41.87 15,390.63 2007 41.87 49.60 16,286.47 2008 49.60 26.46 15,839.09 BlackRock Bond Income Division (Class E)/(a)/............... 2002 41.04 43.25 19,652.89 2003 43.25 44.98 37,113.50 2004 44.98 46.16 42,622.53 2005 46.16 46.45 47,470.82 2006 46.45 47.67 38,522.42 2007 47.67 49.78 38,829.14 2008 49.78 47.24 34,859.94
37
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $39.58 $40.64 0.00 2002 40.64 41.09 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 36.04 35.10 409.22 2002 35.10 29.73 5,960.15 2003 29.73 35.23 65,994.47 2004 35.23 37.55 72,695.82 2005 37.55 38.04 66,948.04 2006 38.04 41.31 58,566.61 2007 41.31 42.97 57,537.12 2008 42.97 31.76 42,321.30 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 76.23 76.85 15,370.10 2008 76.85 47.45 13,018.91 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 68.03 63.45 0.00 2002 63.45 46.07 3,991.94 2003 46.07 58.96 12,824.81 2004 58.96 64.24 24,089.72 2005 64.24 65.40 21,248.45 2006 65.40 73.33 16,772.72 2007 73.33 76.87 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.91 547.02 2003 7.91 10.54 21,598.96 2004 10.54 11.76 44,681.26 2005 11.76 12.23 47,804.22 2006 12.23 14.35 78,485.77 2007 14.35 14.58 93,422.52 2008 14.58 9.32 59,143.07 BlackRock Money Market Division (Class E)/(f)/.............. 2003 21.73 21.59 416.51 2004 21.59 21.42 4,802.10 2005 21.42 21.66 4,720.32 2006 21.66 22.31 4,092.73 2007 22.31 23.03 4,010.24 2008 23.03 23.28 3,862.21 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.18 13.93 689.38 2002 13.93 10.76 91,901.46 2003 10.76 15.88 205,124.95 2004 15.88 18.00 309,839.67 2005 18.00 18.42 284,193.77 2006 18.42 21.14 247,478.57 2007 21.14 20.06 209,751.69 2008 20.06 12.14 155,793.49
38
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.81 $26.07 552.10 2002 26.07 21.41 2,228.67 2003 21.41 27.54 27,983.13 2004 27.54 30.40 63,371.98 2005 30.40 32.95 63,396.39 2006 32.95 37.10 64,584.87 2007 37.10 38.12 63,901.79 2008 38.12 22.71 54,801.73 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 18.04 15.52 0.00 2002 15.52 10.82 54,192.31 2003 10.82 14.33 72,345.81 2004 14.33 16.50 76,342.26 2005 16.50 17.33 60,450.88 2006 17.33 19.05 55,461.48 2007 19.05 20.28 48,611.58 2008 20.28 8.90 47,544.36 FI Value Leaders Division (Class E)/(d)/.......... 2002 22.33 18.35 344.36 2003 18.35 22.89 4,734.87 2004 22.89 25.58 9,998.64 2005 25.58 27.83 13,005.67 2006 27.83 30.61 20,010.70 2007 30.61 31.34 15,000.87 2008 31.34 18.80 10,659.00 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.17 8.78 0.00 2002 8.78 6.24 87,945.12 2003 6.24 8.88 78,729.98 2004 8.88 9.72 69,053.06 2005 9.72 9.99 69,997.35 2006 9.99 10.80 56,182.52 2007 10.80 11.11 36,836.28 2008 11.11 6.41 28,509.86 Harris Oakmark Focused Value Division (Class E)/(c)/......................................... 2001 24.99 25.82 0.00 2002 25.82 23.13 53,739.83 2003 23.13 30.15 101,690.43 2004 30.15 32.57 145,020.25 2005 32.57 35.20 144,749.46 2006 35.20 38.90 110,653.46 2007 38.90 35.60 99,062.45 2008 35.60 18.89 69,854.83 Harris Oakmark International Division (Class E)/(d)/......................................... 2002 10.58 8.81 257.86 2003 8.81 11.72 13,203.02 2004 11.72 13.92 59,358.39 2005 13.92 15.66 63,924.08 2006 15.66 19.88 92,513.91 2007 19.88 19.36 85,403.61 2008 19.36 11.27 65,831.79
39
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.03 $ 4.84 48,296.42 2006 4.84 4.89 35,917.55 2007 4.89 5.36 26,102.53 2008 5.36 3.35 17,678.92 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.38 4.90 0.00 2002 4.90 3.42 5,925.30 2003 3.42 4.24 40,814.30 2004 4.24 4.37 50,532.37 2005 4.37 3.99 50,373.04 Julius Baer International Stock Division (Class E)/(c)/..... 2001 12.01 11.21 0.00 2002 11.21 9.09 4,532.27 2003 9.09 11.44 11,902.93 2004 11.44 13.29 21,623.90 2005 13.29 15.41 35,957.35 2006 15.41 17.63 34,052.49 2007 17.63 19.12 37,045.63 2008 19.12 10.50 32,314.25 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.38 9.65 3,736.83 2003 9.65 12.00 17,487.67 2004 12.00 13.52 25,697.55 2005 13.52 14.40 23,666.59 2006 14.40 16.26 17,294.99 2007 16.26 15.58 18,295.41 2008 15.58 9.47 15,086.65 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.54 6.74 34,626.57 2004 6.74 7.20 45,035.05 2005 7.20 8.06 39,699.03 2006 8.06 7.80 21,907.69 2007 7.80 7.86 16,303.05 2008 7.86 4.71 12,589.08 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.86 7.73 0.00 2002 7.73 5.27 15,617.30 2003 5.27 5.54 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.30 9.96 30,378.03 2007 9.96 9.23 21,734.59 2008 9.23 4.12 22,489.67 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.68 8.25 0.00 2002 8.25 6.47 7,238.41 2003 6.47 7.74 14,117.05 2004 7.74 8.48 31,628.18 2005 8.48 8.93 30,737.30 2006 8.93 9.34 25,132.03
40
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.......................................... 2001 $11.12 $11.33 0.00 2002 11.33 12.27 58,494.60 2003 12.27 12.50 210,344.65 2004 12.50 12.78 491,673.43 2005 12.78 12.83 460,530.48 2006 12.83 13.12 409,720.50 2007 13.12 13.78 377,855.71 2008 13.78 14.34 259,878.56 Loomis Sayles Small Cap Division (Class E)/(c)/........... 2001 22.62 22.12 0.00 2002 22.12 17.06 405.03 2003 17.06 22.88 3,696.18 2004 22.88 26.16 7,319.76 2005 26.16 27.49 7,781.13 2006 27.49 31.53 13,575.83 2007 31.53 34.66 15,606.95 2008 34.66 21.83 10,954.83 Lord Abbett Bond Debenture Division (Class E)/(b)/........ 2002 10.69 10.35 5,269.21 2003 10.35 12.16 61,536.62 2004 12.16 12.95 78,480.75 2005 12.95 12.95 95,558.26 2006 12.95 13.92 106,900.37 2007 13.92 14.62 80,964.05 2008 14.62 11.72 55,750.72 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)............................................... 2001 10.67 10.40 0.00 2002 10.40 10.69 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.......... 2002 11.21 8.47 2,943.67 2003 8.47 11.58 19,935.27 2004 11.58 12.15 30,221.45 2005 12.15 12.97 27,847.43 2006 12.97 14.58 27,312.09 2007 14.58 15.96 15,643.93 2008 15.96 9.63 15,671.83 MetLife Mid Cap Stock Index Division (Class E)/(c)/....... 2001 10.40 10.29 0.00 2002 10.29 8.60 25,550.08 2003 8.60 11.41 103,605.72 2004 11.41 13.01 225,411.46 2005 13.01 14.36 224,579.71 2006 14.36 15.53 217,458.83 2007 15.53 16.45 195,780.63 2008 16.45 10.31 136,150.21
41
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $37.26 $35.15 271.19 2002 35.15 26.84 12,940.91 2003 26.84 33.81 92,140.62 2004 33.81 36.72 256,357.39 2005 36.72 37.76 241,434.67 2006 37.76 42.85 202,424.49 2007 42.85 44.30 184,094.62 2008 44.30 27.38 170,802.69 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.01 8.36 0.00 2002 8.36 7.26 6,530.97 2003 7.26 9.45 15,749.60 2004 9.45 11.12 20,155.59 2005 11.12 12.76 26,995.69 2006 12.76 15.92 45,480.70 2007 15.92 17.76 56,182.22 2008 17.76 10.08 50,625.98 MFS(R) Total Return Division (Class E)/(i)/................. 2004 35.53 38.58 2,372.87 2005 38.58 39.05 24,860.40 2006 39.05 43.02 30,424.70 2007 43.02 44.08 41,943.27 2008 44.08 33.68 50,483.60 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.59 11.41 842.25 2002 11.41 9.63 101,695.49 2003 9.63 11.88 185,167.26 2004 11.88 13.01 256,273.56 2005 13.01 12.60 254,824.41 2006 12.60 14.63 231,537.60 2007 14.63 13.83 208,773.93 2008 13.83 9.03 134,853.70 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.33 8.55 1,134.44 2002 8.55 7.01 25,760.25 2003 7.01 9.48 133,476.39 2004 9.48 11.14 287,065.06 2005 11.14 12.40 272,867.19 2006 12.40 15.33 232,173.38 2007 15.33 16.68 232,062.93 2008 16.68 9.49 162,142.98 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.29 14.97 0.00 2002 14.97 13.30 6,269.48 2003 13.30 17.85 31,952.14 2004 17.85 21.57 89,084.49 2005 21.57 23.79 111,909.44 2006 23.79 26.06 101,661.82 2007 26.06 26.48 89,607.53 2008 26.48 13.71 91,618.06
42
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.82 $12.08 798.99 2002 12.08 9.97 59,029.65 2003 9.97 12.79 50,809.38 2004 12.79 14.62 30,241.53 2005 14.62 16.71 36,252.15 2006 16.71 19.16 39,787.21 2007 19.16 20.04 35,420.70 2008 20.04 11.73 29,180.26 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.24 10.42 1,850.40 2002 10.42 11.22 60,604.80 2003 11.22 11.53 169,677.41 2004 11.53 11.92 280,191.91 2005 11.92 12.01 273,415.16 2006 12.01 12.37 230,979.81 2007 12.37 13.10 184,999.63 2008 13.10 12.95 144,421.80 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.04 6.08 0.00 2002 6.08 2.95 8,671.20 2003 2.95 4.58 113,791.22 2004 4.58 4.31 183,366.81 2005 4.31 4.72 147,301.34 2006 4.72 4.89 126,962.77 2007 4.89 6.35 177,287.90 2008 6.35 3.46 148,694.94 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.96 11.89 0.00 2002 11.89 9.29 16,474.52 2003 9.29 13.36 64,591.94 2004 13.36 15.44 105,022.07 2005 15.44 15.87 99,246.07 2006 15.87 18.39 81,405.18 2007 18.39 17.79 69,065.26 2008 17.79 11.63 59,133.65 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.59 11.44 0.00 2002 11.44 8.64 3,940.27 2003 8.64 11.10 33,643.59 2004 11.10 11.99 69,107.79 2005 11.99 12.56 64,461.91 2006 12.56 13.97 72,983.39 2007 13.97 15.02 61,879.65 2008 15.02 8.58 53,597.70 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.63 8.24 0.00 2002 8.24 4.53 5,929.63 2003 4.53 6.10 42,207.20 2004 6.10 7.09 80,945.59 2005 7.09 8.00 90,556.35 2006 8.00 8.37 100,788.98 2007 8.37 9.69 120,524.47 2008 9.69 5.76 93,622.77
43
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.16 $ 11.96 0.00 2002 11.96 8.62 1,569.75 2003 8.62 11.93 25,339.99 2004 11.93 13.03 43,390.83 2005 13.03 14.22 29,163.60 2006 14.22 14.51 30,804.38 2007 14.51 15.66 27,747.03 2008 15.66 9.82 26,696.26 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.37 15.66 0.00 2002 15.66 16.85 38,992.83 2003 16.85 18.66 63,281.83 2004 18.66 19.55 137,096.33 2005 19.55 19.75 145,499.72 2006 19.75 20.38 102,957.82 2007 20.38 20.84 94,541.36 2008 20.84 17.41 76,323.43 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 14.29 14.56 0.00 2002 14.56 15.42 40,568.39 2003 15.42 15.41 47,499.44 2004 15.41 15.59 58,788.42 2005 15.59 15.59 63,276.92 2006 15.59 15.95 50,359.82 2007 15.95 16.35 41,529.52 2008 16.35 16.02 35,385.34 At 1.85 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.23 14.89 104,580.49 2007 14.89 15.11 296,130.88 2008 15.11 13.44 264,484.04 American Funds Global Small Capitalization Division/(c)/.... 2004 15.96 18.93 68,677.50 2005 18.93 23.30 237,611.10 2006 23.30 28.38 407,554.60 2007 28.38 33.83 454,460.12 2008 33.83 15.43 381,495.88 American Funds Growth Division/(c)/......................... 2004 105.51 116.52 31,410.78 2005 116.52 132.91 109,541.48 2006 132.91 143.81 161,281.14 2007 143.81 158.59 181,913.28 2008 158.59 87.22 162,427.62 American Funds Growth-Income Division/(c)/.................. 2004 82.11 88.97 32,405.93 2005 88.97 92.43 95,865.42 2006 92.43 104.54 129,393.14 2007 104.54 107.79 148,871.59 2008 107.79 65.76 135,977.45
44 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.65 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.30 $ 14.97 11,049.75 2007 14.97 15.19 20,204.36 2008 15.19 13.52 4,521.35 American Funds Global Small Capitalization Division/(c)/.... 2001 13.68 13.35 0.00 2002 13.35 10.61 5,433.81 2003 10.61 16.00 21,510.49 2004 16.00 19.00 47,884.39 2005 19.00 23.39 47,538.52 2006 23.39 28.50 55,052.75 2007 28.50 33.99 61,494.55 2008 33.99 15.51 37,206.10 American Funds Growth Division/(c)/......................... 2001 118.09 106.84 0.00 2002 106.84 79.27 4,653.65 2003 79.27 106.52 13,948.66 2004 106.52 117.68 17,556.29 2005 117.68 134.31 18,899.19 2006 134.31 145.40 18,346.30 2007 145.40 160.42 15,964.61 2008 160.42 88.27 11,078.19 American Funds Growth-Income Division/(c)/.................. 2001 82.85 79.47 0.00 2002 79.47 63.73 6,550.73 2003 63.73 82.89 22,621.15 2004 82.89 89.86 31,348.41 2005 89.86 93.41 23,724.36 2006 93.41 105.69 19,735.20 2007 105.69 109.03 15,766.98 2008 109.03 66.55 11,621.18 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 35.95 33.87 0.00 2002 33.87 23.72 475.18 2003 23.72 32.81 11,117.02 2004 32.81 36.40 5,263.32 2005 36.40 39.58 4,507.47 2006 39.58 41.48 3,349.95 2007 41.48 49.11 3,720.71 2008 49.11 26.19 3,469.37 BlackRock Bond Income Division (Class E)/(a)/............... 2002 40.66 42.83 10,272.63 2003 42.83 44.52 21,404.04 2004 44.52 45.67 26,012.22 2005 45.67 45.93 23,754.49 2006 45.93 47.11 19,602.77 2007 47.11 49.17 16,715.47 2008 49.17 46.64 10,842.32
45
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $39.22 $40.26 0.00 2002 40.26 40.70 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 35.77 34.83 0.00 2002 34.83 29.49 10,779.15 2003 29.49 34.93 32,182.31 2004 34.93 37.20 30,935.25 2005 37.20 37.67 21,230.83 2006 37.67 40.88 15,218.37 2007 40.88 42.51 12,319.20 2008 42.51 31.41 8,350.17 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 75.33 75.91 4,265.45 2008 75.91 46.85 3,824.78 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 67.42 62.86 0.00 2002 62.86 45.62 2,290.86 2003 45.62 58.36 11,483.80 2004 58.36 63.55 9,152.51 2005 63.55 64.67 5,056.12 2006 64.67 72.47 4,687.33 2007 72.47 75.96 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.91 1,871.28 2003 7.91 10.53 26,518.17 2004 10.53 11.74 25,909.78 2005 11.74 12.21 16,736.83 2006 12.21 14.31 21,642.24 2007 14.31 14.54 20,295.57 2008 14.54 9.29 31,979.55 BlackRock Money Market Division (Class E)/(f)/.............. 2003 21.52 21.37 197,429.98 2004 21.37 21.19 156,476.24 2005 21.19 21.42 103,605.08 2006 21.42 22.05 97,461.14 2007 22.05 22.76 103,836.48 2008 22.76 22.99 134,957.31 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.18 13.92 0.00 2002 13.92 10.75 30,235.93 2003 10.75 15.86 90,367.52 2004 15.86 17.96 100,432.05 2005 17.96 18.37 71,401.86 2006 18.37 21.08 53,394.82 2007 21.08 19.99 38,195.63 2008 19.99 12.09 29,997.64
46
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.72 $25.97 0.00 2002 25.97 21.32 2,465.58 2003 21.32 27.42 8,223.47 2004 27.42 30.24 16,266.92 2005 30.24 32.76 17,865.06 2006 32.76 36.87 17,157.19 2007 36.87 37.87 18,197.55 2008 37.87 22.55 11,896.07 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 18.00 15.48 0.00 2002 15.48 10.79 3,562.42 2003 10.79 14.28 10,960.78 2004 14.28 16.43 26,607.25 2005 16.43 17.25 23,598.05 2006 17.25 18.95 23,250.27 2007 18.95 20.17 17,824.40 2008 20.17 8.85 12,513.78 FI Value Leaders Division (Class E)/(d)/.......... 2002 22.23 18.26 734.72 2003 18.26 22.77 1,435.43 2004 22.77 25.43 4,129.33 2005 25.43 27.65 6,228.53 2006 27.65 30.40 8,031.61 2007 30.40 31.11 5,063.76 2008 31.11 18.66 2,761.25 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.17 8.78 0.00 2002 8.78 6.23 3,928.09 2003 6.23 8.87 19,763.43 2004 8.87 9.70 21,407.68 2005 9.70 9.97 15,213.23 2006 9.97 10.77 10,734.67 2007 10.77 11.07 8,697.45 2008 11.07 6.39 5,407.86 Harris Oakmark Focused Value Division (Class E)/(c)/......................................... 2001 24.88 25.71 0.00 2002 25.71 23.02 11,986.43 2003 23.02 29.99 30,818.04 2004 29.99 32.38 38,051.70 2005 32.38 34.98 37,166.33 2006 34.98 38.63 28,597.30 2007 38.63 35.34 20,035.21 2008 35.34 18.74 11,485.60 Harris Oakmark International Division (Class E)/(d)/......................................... 2002 10.58 8.81 557.90 2003 8.81 11.71 15,937.45 2004 11.71 13.90 27,231.82 2005 13.90 15.62 48,626.25 2006 15.62 19.83 57,524.79 2007 19.83 19.30 37,242.55 2008 19.30 11.23 17,628.67
47
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.02 $ 4.82 4,794.05 2006 4.82 4.87 9,278.95 2007 4.87 5.34 6,093.91 2008 5.34 3.33 6,441.64 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.37 4.90 0.00 2002 4.90 3.42 1,492.87 2003 3.42 4.23 9,294.38 2004 4.23 4.36 1,931.55 2005 4.36 3.98 1,537.07 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.95 11.16 0.00 2002 11.16 9.04 4,373.56 2003 9.04 11.37 7,106.89 2004 11.37 13.20 10,816.58 2005 13.20 15.30 19,130.74 2006 15.30 17.50 23,467.36 2007 17.50 18.96 15,831.73 2008 18.96 10.41 12,307.70 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.38 9.64 951.01 2003 9.64 11.99 16,090.55 2004 11.99 13.49 21,366.82 2005 13.49 14.37 16,054.05 2006 14.37 16.22 16,678.76 2007 16.22 15.53 19,916.61 2008 15.53 9.43 7,689.89 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.53 6.73 11,784.81 2004 6.73 7.19 3,090.76 2005 7.19 8.04 4,774.01 2006 8.04 7.78 9,012.35 2007 7.78 7.83 5,055.75 2008 7.83 4.69 4,328.05 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.86 7.73 0.00 2002 7.73 5.27 4,955.25 2003 5.27 5.53 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.26 9.92 3,831.37 2007 9.92 9.19 3,187.43 2008 9.19 4.10 3,491.18 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.67 8.23 0.00 2002 8.23 6.46 398.10 2003 6.46 7.72 15,428.45 2004 7.72 8.45 9,379.60 2005 8.45 8.90 3,932.27 2006 8.90 9.30 3,926.65
48
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................. 2001 $11.11 $11.31 0.00 2002 11.31 12.25 96,438.86 2003 12.25 12.46 242,877.17 2004 12.46 12.74 323,883.67 2005 12.74 12.79 258,565.00 2006 12.79 13.07 192,160.94 2007 13.07 13.71 163,276.28 2008 13.71 14.27 95,506.01 Loomis Sayles Small Cap Division (Class E)/(c)/... 2001 22.54 22.04 0.00 2002 22.04 16.98 785.43 2003 16.98 22.77 2,946.99 2004 22.77 26.03 4,237.26 2005 26.03 27.33 5,334.87 2006 27.33 31.33 6,476.43 2007 31.33 34.43 4,129.06 2008 34.43 21.67 3,384.67 Lord Abbett Bond Debenture Division (Class E)/(b)/ 2002 10.66 10.32 5,875.58 2003 10.32 12.12 62,740.59 2004 12.12 12.90 46,779.36 2005 12.90 12.90 39,674.00 2006 12.90 13.85 57,821.83 2007 13.85 14.54 31,208.97 2008 14.54 11.65 24,793.16 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)....................................... 2001 10.64 10.37 0.00 2002 10.37 10.66 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.. 2002 11.21 8.46 416.76 2003 8.46 11.57 3,082.61 2004 11.57 12.13 5,425.25 2005 12.13 12.94 2,892.63 2006 12.94 14.55 2,296.18 2007 14.55 15.91 5,764.11 2008 15.91 9.59 5,400.68 MetLife Mid Cap Stock Index Division (Class E)/(c)/......................................... 2001 10.40 10.28 0.00 2002 10.28 8.59 36,618.07 2003 8.59 11.39 89,355.97 2004 11.39 12.98 72,807.65 2005 12.98 14.32 61,119.82 2006 14.32 15.48 46,587.87 2007 15.48 16.39 40,786.78 2008 16.39 10.26 39,596.61
49
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $37.05 $34.94 0.00 2002 34.94 26.67 42,323.92 2003 26.67 33.58 106,327.26 2004 33.58 36.45 135,338.06 2005 36.45 37.47 109,128.30 2006 37.47 42.49 81,941.48 2007 42.49 43.91 67,036.12 2008 43.91 27.13 57,933.47 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.00 8.35 0.00 2002 8.35 7.26 2,213.82 2003 7.26 9.43 7,079.60 2004 9.43 11.10 8,159.69 2005 11.10 12.72 6,648.82 2006 12.72 15.87 22,985.81 2007 15.87 17.70 24,792.65 2008 17.70 10.04 23,232.04 MFS(R) Total Return Division (Class E)/(i)/................. 2004 35.23 38.24 4,251.94 2005 38.24 38.69 7,910.43 2006 38.69 42.60 6,982.51 2007 42.60 43.63 7,881.47 2008 43.63 33.32 7,731.63 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.57 11.40 0.00 2002 11.40 9.61 33,394.38 2003 9.61 11.84 82,579.35 2004 11.84 12.97 113,615.88 2005 12.97 12.56 95,288.30 2006 12.56 14.57 78,448.29 2007 14.57 13.77 57,758.54 2008 13.77 8.99 41,589.93 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.32 8.54 0.00 2002 8.54 7.00 54,870.76 2003 7.00 9.46 144,231.71 2004 9.46 11.11 115,105.83 2005 11.11 12.35 87,206.62 2006 12.35 15.26 84,792.72 2007 15.26 16.60 66,211.48 2008 16.60 9.44 49,112.93 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.27 14.94 0.00 2002 14.94 13.27 10,022.41 2003 13.27 17.80 20,734.88 2004 17.80 21.50 57,168.96 2005 21.50 23.71 59,794.24 2006 23.71 25.95 39,707.62 2007 25.95 26.36 35,049.75 2008 26.36 13.64 23,169.25
50
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.79 $12.05 0.00 2002 12.05 9.94 1,548.73 2003 9.94 12.75 5,390.09 2004 12.75 14.56 5,071.74 2005 14.56 16.63 11,373.43 2006 16.63 19.06 11,057.32 2007 19.06 19.93 10,974.17 2008 19.93 11.66 7,344.86 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.24 10.42 0.00 2002 10.42 11.21 55,315.06 2003 11.21 11.51 113,905.47 2004 11.51 11.90 129,642.54 2005 11.90 11.98 117,484.49 2006 11.98 12.33 104,817.34 2007 12.33 13.06 81,641.65 2008 13.06 12.90 67,345.50 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.04 6.08 0.00 2002 6.08 2.95 1,924.22 2003 2.95 4.57 118,041.94 2004 4.57 4.30 69,091.57 2005 4.30 4.71 45,966.33 2006 4.71 4.88 40,365.66 2007 4.88 6.32 69,206.13 2008 6.32 3.45 30,019.11 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.94 11.87 0.00 2002 11.87 9.27 22,404.84 2003 9.27 13.32 58,941.26 2004 13.32 15.40 49,381.26 2005 15.40 15.81 33,606.31 2006 15.81 18.31 36,172.64 2007 18.31 17.71 28,740.09 2008 17.71 11.57 35,072.74 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.57 11.42 0.00 2002 11.42 8.62 4,831.74 2003 8.62 11.07 23,065.50 2004 11.07 11.96 25,824.19 2005 11.96 12.52 71,171.71 2006 12.52 13.91 63,250.49 2007 13.91 14.95 43,920.87 2008 14.95 8.53 33,263.74 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.63 8.23 0.00 2002 8.23 4.53 5,976.56 2003 4.53 6.10 34,028.06 2004 6.10 7.08 36,633.80 2005 7.08 7.98 46,792.70 2006 7.98 8.35 38,708.87 2007 8.35 9.66 58,323.81 2008 9.66 5.74 35,760.39
51
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.14 $ 11.93 0.00 2002 11.93 8.59 4,643.13 2003 8.59 11.89 25,344.62 2004 11.89 12.98 20,175.49 2005 12.98 14.15 18,832.17 2006 14.15 14.43 18,951.70 2007 14.43 15.57 13,793.22 2008 15.57 9.76 13,273.43 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.31 15.60 0.00 2002 15.60 16.78 12,246.45 2003 16.78 18.57 48,159.00 2004 18.57 19.45 58,749.91 2005 19.45 19.64 57,914.26 2006 19.64 20.26 39,654.32 2007 20.26 20.70 37,384.92 2008 20.70 17.28 19,902.98 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 14.24 14.51 0.00 2002 14.51 15.36 77,484.37 2003 15.36 15.34 36,893.18 2004 15.34 15.51 61,533.63 2005 15.51 15.50 52,941.33 2006 15.50 15.85 31,199.16 2007 15.85 16.24 28,526.17 2008 16.24 15.90 18,471.16 At 1.90 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.17 14.82 8,654.37 2007 14.82 15.03 64,679.57 2008 15.03 13.36 27,408.60 American Funds Global Small Capitalization Division/(c)/.... 2004 15.91 18.87 4,289.64 2005 18.87 23.21 27,075.11 2006 23.21 28.26 58,485.92 2007 28.26 33.66 41,391.23 2008 33.66 15.35 26,114.42 American Funds Growth Division/(c)/......................... 2004 104.47 115.31 3,649.80 2005 115.31 131.46 8,989.65 2006 131.46 142.18 11,261.16 2007 142.18 156.71 11,033.18 2008 156.71 86.14 10,264.18 American Funds Growth-Income Division/(c)/.................. 2004 81.30 88.04 5,115.63 2005 88.04 91.43 12,031.87 2006 91.43 103.35 13,277.30 2007 103.35 106.51 14,919.20 2008 106.51 64.94 12,346.01
52 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.70 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.23 $ 14.89 110,668.18 2007 14.89 15.11 252,107.71 2008 15.11 13.44 158,993.33 American Funds Global Small Capitalization Division/(c)/.... 2001 13.66 13.32 0.00 2002 13.32 10.59 32,229.47 2003 10.59 15.96 171,695.10 2004 15.96 18.93 369,097.08 2005 18.93 23.30 429,939.53 2006 23.30 28.38 467,603.88 2007 28.38 33.83 501,389.85 2008 33.83 15.43 399,490.96 American Funds Growth Division/(c)/......................... 2001 117.06 105.89 0.00 2002 105.89 78.52 21,502.34 2003 78.52 105.46 124,946.44 2004 105.46 116.46 226,287.64 2005 116.46 132.85 227,880.56 2006 132.85 143.74 219,738.44 2007 143.74 158.52 200,783.72 2008 158.52 87.18 165,466.58 American Funds Growth-Income Division/(c)/.................. 2001 82.13 78.76 0.00 2002 78.76 63.13 26,184.96 2003 63.13 82.07 152,150.41 2004 82.07 88.92 272,765.78 2005 88.92 92.39 271,138.47 2006 92.39 104.49 255,679.74 2007 104.49 107.74 235,028.44 2008 107.74 65.72 184,407.55 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 35.71 33.64 0.00 2002 33.64 23.55 6,355.49 2003 23.55 32.55 49,584.72 2004 32.55 36.09 85,446.03 2005 36.09 39.23 75,755.67 2006 39.23 41.09 56,665.34 2007 41.09 48.63 60,080.59 2008 48.63 25.92 49,365.78 BlackRock Bond Income Division (Class E)/(a)/............... 2002 40.28 42.41 32,642.61 2003 42.41 44.07 95,087.79 2004 44.07 45.18 159,875.35 2005 45.18 45.42 156,764.32 2006 45.42 46.56 136,626.17 2007 46.56 48.57 128,409.22 2008 48.57 46.05 101,609.40
53
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $38.87 $39.89 0.00 2002 39.89 40.32 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 35.50 34.56 0.00 2002 34.56 29.25 33,839.50 2003 29.25 34.62 182,456.49 2004 34.62 36.86 328,679.57 2005 36.86 37.31 301,648.08 2006 37.31 40.47 270,681.95 2007 40.47 42.05 244,966.47 2008 42.05 31.06 176,707.83 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 74.43 74.98 76,161.42 2008 74.98 46.25 63,191.81 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 66.81 62.28 0.00 2002 62.28 45.18 17,311.12 2003 45.18 57.77 78,563.82 2004 57.77 62.87 113,317.00 2005 62.87 63.95 96,220.84 2006 63.95 71.62 81,565.90 2007 71.62 75.06 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.90 10,104.90 2003 7.90 10.52 105,281.63 2004 10.52 11.72 205,632.61 2005 11.72 12.18 193,829.73 2006 12.18 14.28 292,964.92 2007 14.28 14.50 322,628.67 2008 14.50 9.26 254,520.03 BlackRock Money Market Division (Class E)/(f)/.............. 2003 21.31 21.15 23,796.96 2004 21.15 20.97 77,164.49 2005 20.97 21.18 64,536.89 2006 21.18 21.80 52,857.00 2007 21.80 22.48 70,573.23 2008 22.48 22.70 73,386.88 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.17 13.91 0.00 2002 13.91 10.74 169,031.00 2003 10.74 15.83 605,282.33 2004 15.83 17.92 990,589.26 2005 17.92 18.32 884,650.92 2006 18.32 21.01 728,462.68 2007 21.01 19.91 639,737.38 2008 19.91 12.04 507,986.95
54
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/................. 2001 $26.63 $25.88 0.00 2002 25.88 21.23 11,981.23 2003 21.23 27.29 83,657.59 2004 27.29 30.09 213,727.47 2005 30.09 32.58 241,918.06 2006 32.58 36.65 259,451.17 2007 36.65 37.63 247,258.35 2008 37.63 22.39 216,091.31 FI Mid Cap Opportunities Division (Class E)/(c) (h)/........ 2001 17.96 15.44 0.00 2002 15.44 10.76 39,250.82 2003 10.76 14.23 95,625.78 2004 14.23 16.37 351,650.03 2005 16.37 17.18 315,807.06 2006 17.18 18.86 282,601.79 2007 18.86 20.06 251,053.73 2008 20.06 8.79 196,081.89 FI Value Leaders Division (Class E)/(d)/.................... 2002 22.13 18.18 1,615.62 2003 18.18 22.65 41,670.14 2004 22.65 25.29 58,891.73 2005 25.29 27.48 74,892.27 2006 27.48 30.20 62,546.05 2007 30.20 30.89 59,394.89 2008 30.89 18.51 51,751.67 Franklin Templeton Small Cap Growth Division (Class E)/(c)/. 2001 9.16 8.77 0.00 2002 8.77 6.23 36,153.26 2003 6.23 8.85 152,007.81 2004 8.85 9.68 245,041.76 2005 9.68 9.94 227,942.71 2006 9.94 10.74 202,132.37 2007 10.74 11.03 199,169.79 2008 11.03 6.36 145,161.35 Harris Oakmark Focused Value Division (Class E)/(c)/........ 2001 24.78 25.60 0.00 2002 25.60 22.91 65,291.73 2003 22.91 29.83 224,402.29 2004 29.83 32.19 350,585.58 2005 32.19 34.76 353,511.57 2006 34.76 38.37 304,038.22 2007 38.37 35.09 262,802.15 2008 35.09 18.60 205,329.07 Harris Oakmark International Division (Class E)/(d)/........ 2002 10.57 8.80 4,400.67 2003 8.80 11.69 67,210.38 2004 11.69 13.88 205,407.95 2005 13.88 15.59 274,721.74 2006 15.59 19.77 445,092.22 2007 19.77 19.24 362,817.99 2008 19.24 11.19 232,404.70
55
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.01 $ 4.81 171,031.23 2006 4.81 4.85 170,050.45 2007 4.85 5.32 110,664.56 2008 5.32 3.32 107,506.11 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.37 4.89 0.00 2002 4.89 3.42 29,993.32 2003 3.42 4.22 99,124.54 2004 4.22 4.34 112,709.98 2005 4.34 3.97 114,317.78 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.89 11.10 0.00 2002 11.10 8.99 22,563.72 2003 8.99 11.30 98,396.94 2004 11.30 13.11 168,957.84 2005 13.11 15.19 185,306.41 2006 15.19 17.36 191,749.15 2007 17.36 18.81 173,612.65 2008 18.81 10.31 149,204.71 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.37 9.64 6,385.26 2003 9.64 11.97 96,476.49 2004 11.97 13.47 170,397.38 2005 13.47 14.34 159,693.72 2006 14.34 16.17 149,216.09 2007 16.17 15.48 138,997.54 2008 15.48 9.40 104,889.06 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.52 6.72 107,992.73 2004 6.72 7.18 128,012.69 2005 7.18 8.02 125,711.91 2006 8.02 7.76 120,597.29 2007 7.76 7.81 84,001.26 2008 7.81 4.68 69,283.31 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.86 7.73 0.00 2002 7.73 5.26 36,517.20 2003 5.26 5.52 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.23 9.88 142,965.72 2007 9.88 9.15 125,041.32 2008 9.15 4.08 122,680.27 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.66 8.22 0.00 2002 8.22 6.45 45,099.73 2003 6.45 7.70 92,835.82 2004 7.70 8.43 131,592.98 2005 8.43 8.88 144,007.46 2006 8.88 9.27 142,418.79
56
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.09 $11.29 0.00 2002 11.29 12.22 329,425.76 2003 12.22 12.43 1,133,217.06 2004 12.43 12.70 1,702,061.46 2005 12.70 12.74 1,629,973.65 2006 12.74 13.01 1,336,727.57 2007 13.01 13.65 1,217,980.98 2008 13.65 14.19 851,627.56 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 22.45 21.95 0.00 2002 21.95 16.91 6,102.15 2003 16.91 22.66 27,978.35 2004 22.66 25.89 45,909.28 2005 25.89 27.18 44,148.06 2006 27.18 31.13 61,094.69 2007 31.13 34.19 70,508.13 2008 34.19 21.51 56,358.01 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.63 10.29 28,941.20 2003 10.29 12.08 226,434.99 2004 12.08 12.85 387,105.11 2005 12.85 12.84 421,415.83 2006 12.84 13.78 391,082.87 2007 13.78 14.46 389,016.48 2008 14.46 11.58 270,404.08 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)................................................. 2001 10.62 10.35 0.00 2002 10.35 10.63 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.21 8.46 8,483.00 2003 8.46 11.56 27,537.97 2004 11.56 12.11 45,662.56 2005 12.11 12.92 44,682.75 2006 12.92 14.51 40,476.14 2007 14.51 15.86 47,672.34 2008 15.86 9.56 41,250.62 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.39 10.27 0.00 2002 10.27 8.58 103,252.38 2003 8.58 11.37 469,867.64 2004 11.37 12.95 557,458.64 2005 12.95 14.29 572,483.55 2006 14.29 15.43 517,653.36 2007 15.43 16.33 495,979.59 2008 16.33 10.22 420,627.54
57
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $36.84 $34.74 0.00 2002 34.74 26.50 111,594.95 2003 26.50 33.35 559,552.89 2004 33.35 36.19 1,016,927.27 2005 36.19 37.18 1,018,080.88 2006 37.18 42.14 865,584.38 2007 42.14 43.52 788,687.46 2008 43.52 26.88 702,361.00 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.00 8.35 0.00 2002 8.35 7.25 13,552.24 2003 7.25 9.42 71,751.51 2004 9.42 11.08 130,885.31 2005 11.08 12.69 156,924.95 2006 12.69 15.83 231,828.09 2007 15.83 17.64 214,497.93 2008 17.64 10.00 282,397.59 MFS(R) Total Return Division (Class E)/(i)/................. 2004 34.93 37.91 57,702.72 2005 37.91 38.33 124,020.75 2006 38.33 42.19 132,486.50 2007 42.19 43.18 145,281.71 2008 43.18 32.96 120,025.00 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.56 11.38 0.00 2002 11.38 9.59 172,192.29 2003 9.59 11.81 616,141.67 2004 11.81 12.93 941,616.59 2005 12.93 12.51 875,618.84 2006 12.51 14.51 735,640.68 2007 14.51 13.70 626,330.00 2008 13.70 8.94 505,198.87 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.30 8.53 0.00 2002 8.53 6.99 165,362.08 2003 6.99 9.43 650,933.67 2004 9.43 11.08 720,329.01 2005 11.08 12.31 704,046.82 2006 12.31 15.20 594,964.09 2007 15.20 16.53 557,830.26 2008 16.53 9.40 522,845.54 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.25 14.92 0.00 2002 14.92 13.24 45,135.94 2003 13.24 17.76 191,491.56 2004 17.76 21.44 453,847.33 2005 21.44 23.62 530,789.61 2006 23.62 25.85 464,939.19 2007 25.85 26.24 417,721.00 2008 26.24 13.57 331,195.06
58
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.76 $12.02 0.00 2002 12.02 9.91 35,660.29 2003 9.91 12.70 89,765.33 2004 12.70 14.50 141,395.54 2005 14.50 16.56 165,101.70 2006 16.56 18.97 181,645.39 2007 18.97 19.82 179,956.07 2008 19.82 11.60 152,625.54 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.23 10.41 0.00 2002 10.41 11.20 160,869.03 2003 11.20 11.50 862,426.47 2004 11.50 11.87 1,312,202.22 2005 11.87 11.95 1,222,076.13 2006 11.95 12.30 1,081,083.66 2007 12.30 13.01 1,046,539.28 2008 13.01 12.85 833,704.05 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.04 6.07 0.00 2002 6.07 2.95 65,642.36 2003 2.95 4.57 418,424.55 2004 4.57 4.29 598,729.31 2005 4.29 4.70 492,117.51 2006 4.70 4.86 404,865.60 2007 4.86 6.30 415,296.64 2008 6.30 3.44 286,079.64 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.93 11.85 0.00 2002 11.85 9.25 74,852.73 2003 9.25 13.29 368,425.02 2004 13.29 15.35 465,748.17 2005 15.35 15.76 482,698.26 2006 15.76 18.24 458,985.33 2007 18.24 17.63 381,171.79 2008 17.63 11.51 291,674.85 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.56 11.41 0.00 2002 11.41 8.60 30,641.29 2003 8.60 11.04 175,711.09 2004 11.04 11.92 293,450.40 2005 11.92 12.47 276,995.23 2006 12.47 13.86 253,115.43 2007 13.86 14.88 262,823.16 2008 14.88 8.49 203,750.53 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.63 8.23 0.00 2002 8.23 4.53 46,325.36 2003 4.53 6.09 236,930.75 2004 6.09 7.07 425,938.60 2005 7.07 7.96 407,430.08 2006 7.96 8.32 372,075.20 2007 8.32 9.63 444,120.13 2008 9.63 5.71 366,510.86
59
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.11 $ 11.90 0.00 2002 11.90 8.57 12,440.89 2003 8.57 11.85 100,236.57 2004 11.85 12.93 166,959.06 2005 12.93 14.09 160,464.49 2006 14.09 14.36 152,219.64 2007 14.36 15.49 111,542.87 2008 15.49 9.70 121,234.23 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.26 15.54 0.00 2002 15.54 16.71 32,880.60 2003 16.71 18.49 239,187.67 2004 18.49 19.35 527,932.02 2005 19.35 19.53 527,773.65 2006 19.53 20.14 464,358.14 2007 20.14 20.57 402,565.61 2008 20.57 17.16 259,083.25 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.19 14.46 0.00 2002 14.46 15.30 108,090.83 2003 15.30 15.27 285,566.06 2004 15.27 15.43 350,140.83 2005 15.43 15.41 323,413.19 2006 15.41 15.76 280,486.66 2007 15.76 16.13 247,563.93 2008 16.13 15.79 203,692.75 At 1.95 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.10 14.75 357,999.08 2007 14.75 14.95 823,793.83 2008 14.95 13.29 516,021.08 American Funds Global Small Capitalization Division/(c)/.... 2004 15.87 18.81 154,178.34 2005 18.81 23.12 388,885.90 2006 23.12 28.13 690,957.63 2007 28.13 33.50 932,881.79 2008 33.50 15.27 856,429.19 American Funds Growth Division/(c)/......................... 2004 103.43 114.11 97,615.02 2005 114.11 130.03 234,076.91 2006 130.03 140.56 338,346.73 2007 140.56 154.85 382,373.62 2008 154.85 85.07 383,696.41 American Funds Growth-Income Division/(c)/.................. 2004 80.49 87.13 102,191.11 2005 87.13 90.43 253,909.56 2006 90.43 102.17 351,895.32 2007 102.17 105.24 383,293.04 2008 105.24 64.14 326,500.85
60 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.75 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.17 $ 14.82 366.37 2007 14.82 15.03 7,044.56 2008 15.03 13.36 1,550.22 American Funds Global Small Capitalization Division/(c)/.... 2001 13.64 13.30 0.00 2002 13.30 10.56 6,440.52 2003 10.56 15.91 26,264.88 2004 15.91 18.87 32,210.40 2005 18.87 23.21 34,001.23 2006 23.21 28.26 37,575.75 2007 28.26 33.66 36,898.97 2008 33.66 15.35 30,590.88 American Funds Growth Division/(c)/......................... 2001 116.04 104.94 0.00 2002 104.94 77.78 6,100.79 2003 77.78 104.42 15,014.89 2004 104.42 115.25 20,010.20 2005 115.25 131.40 21,095.03 2006 131.40 142.11 14,704.81 2007 142.11 156.63 14,216.90 2008 156.63 86.10 13,079.93 American Funds Growth-Income Division/(c)/.................. 2001 81.41 78.06 0.00 2002 78.06 62.54 7,458.73 2003 62.54 81.26 22,882.90 2004 81.26 88.00 19,915.47 2005 88.00 91.38 18,399.97 2006 91.38 103.30 16,270.03 2007 103.30 106.46 15,894.19 2008 106.46 64.91 12,181.32 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 35.48 33.41 0.00 2002 33.41 23.38 795.23 2003 23.38 32.30 8,668.62 2004 32.30 35.79 6,348.02 2005 35.79 38.88 4,678.86 2006 38.88 40.71 3,527.37 2007 40.71 48.16 3,234.78 2008 48.16 25.65 3,470.02 BlackRock Bond Income Division (Class E)/(a)/............... 2002 39.90 42.00 6,322.07 2003 42.00 43.62 14,570.11 2004 43.62 44.69 15,440.31 2005 44.69 44.91 15,345.62 2006 44.91 46.01 10,273.58 2007 46.01 47.98 13,455.88 2008 47.98 45.46 10,332.44
61
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $38.52 $39.52 0.00 2002 39.52 39.94 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 35.23 34.30 0.00 2002 34.30 29.01 14,236.48 2003 29.01 34.32 23,378.07 2004 34.32 36.52 17,533.44 2005 36.52 36.94 16,135.32 2006 36.94 40.06 15,760.25 2007 40.06 41.60 16,591.57 2008 41.60 30.71 21,147.34 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 73.55 74.09 4,835.44 2008 74.09 45.70 3,489.82 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 66.21 61.71 0.00 2002 61.71 44.74 2,941.32 2003 44.74 57.18 14,091.56 2004 57.18 62.20 12,268.95 2005 62.20 63.23 8,568.10 2006 63.23 70.78 7,083.31 2007 70.78 74.17 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.90 1,045.39 2003 7.90 10.51 48,663.04 2004 10.51 11.71 55,203.09 2005 11.71 12.16 45,218.23 2006 12.16 14.25 56,598.05 2007 14.25 14.46 37,205.09 2008 14.46 9.23 30,250.35 BlackRock Money Market Division (Class E)/(f)/.............. 2003 21.10 20.94 0.00 2004 20.94 20.75 14,397.06 2005 20.75 20.95 6,726.55 2006 20.95 21.54 6,598.21 2007 21.54 22.21 13,943.82 2008 22.21 22.41 3,706.66 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.16 13.90 0.00 2002 13.90 10.72 36,657.40 2003 10.72 15.80 133,125.92 2004 15.80 17.88 125,137.37 2005 17.88 18.27 82,075.51 2006 18.27 20.94 78,157.11 2007 20.94 19.84 52,575.77 2008 19.84 11.99 39,185.93
62
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/................. 2001 $26.54 $25.79 0.00 2002 25.79 21.15 14,097.12 2003 21.15 27.17 26,493.94 2004 27.17 29.94 32,146.17 2005 29.94 32.40 28,348.25 2006 32.40 36.43 26,891.98 2007 36.43 37.38 26,961.05 2008 37.38 22.23 20,513.42 FI Mid Cap Opportunities Division (Class E)/(c) (h)/........ 2001 17.93 15.41 0.00 2002 15.41 10.72 13,186.17 2003 10.72 14.18 18,417.63 2004 14.18 16.30 30,255.26 2005 16.30 17.10 29,161.06 2006 17.10 18.77 22,578.45 2007 18.77 19.95 14,833.65 2008 19.95 8.74 13,026.78 FI Value Leaders Division (Class E)/(d)/.................... 2002 22.03 18.09 19.39 2003 18.09 22.53 1,116.03 2004 22.53 25.14 1,587.42 2005 25.14 27.31 6,548.25 2006 27.31 29.99 7,095.20 2007 29.99 30.66 1,776.32 2008 30.66 18.36 1,268.59 Franklin Templeton Small Cap Growth Division (Class E)/(c)/. 2001 9.16 8.77 0.00 2002 8.77 6.22 6,357.84 2003 6.22 8.84 23,716.37 2004 8.84 9.66 31,466.07 2005 9.66 9.92 82,657.70 2006 9.92 10.71 52,493.05 2007 10.71 11.00 28,151.52 2008 11.00 6.34 23,263.85 Harris Oakmark Focused Value Division (Class E)/(c)/........ 2001 24.68 25.49 0.00 2002 25.49 22.80 17,099.53 2003 22.80 29.67 36,613.61 2004 29.67 32.00 51,842.70 2005 32.00 34.54 49,013.95 2006 34.54 38.11 36,024.63 2007 38.11 34.83 25,878.85 2008 34.83 18.45 19,926.60 Harris Oakmark International Division (Class E)/(d)/........ 2002 10.57 8.79 150.24 2003 8.79 11.68 5,756.99 2004 11.68 13.85 34,650.85 2005 13.85 15.56 41,855.73 2006 15.56 19.72 39,538.95 2007 19.72 19.18 32,222.14 2008 19.18 11.15 27,179.02
63
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.00 $ 4.80 52,607.91 2006 4.80 4.84 101,828.21 2007 4.84 5.30 86,398.28 2008 5.30 3.30 60,801.97 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.37 4.89 0.00 2002 4.89 3.41 24,704.65 2003 3.41 4.21 37,202.23 2004 4.21 4.33 52,744.65 2005 4.33 3.96 52,278.68 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.82 11.04 0.00 2002 11.04 8.93 16,594.78 2003 8.93 11.23 26,664.14 2004 11.23 13.02 32,657.37 2005 13.02 15.07 37,830.08 2006 15.07 17.22 29,461.14 2007 17.22 18.65 17,125.94 2008 18.65 10.22 13,496.90 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.37 9.63 2,470.81 2003 9.63 11.96 30,292.08 2004 11.96 13.45 9,434.25 2005 13.45 14.31 6,722.56 2006 14.31 16.13 3,655.38 2007 16.13 15.43 4,515.64 2008 15.43 9.36 2,851.63 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.52 6.71 3,673.77 2004 6.71 7.16 37,982.89 2005 7.16 8.00 37,355.96 2006 8.00 7.74 25,963.33 2007 7.74 7.78 1,510.00 2008 7.78 4.66 1,086.05 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.72 0.00 2002 7.72 5.26 2,432.85 2003 5.26 5.52 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.20 9.84 9,707.66 2007 9.84 9.11 7,328.14 2008 9.11 4.06 8,577.38 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.65 8.21 0.00 2002 8.21 6.44 5,638.13 2003 6.44 7.68 12,776.81 2004 7.68 8.40 13,415.67 2005 8.40 8.85 12,773.23 2006 8.85 9.24 9,870.97
64
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.......................................... 2001 $11.08 $11.28 0.00 2002 11.28 12.20 128,740.60 2003 12.20 12.40 198,429.22 2004 12.40 12.67 214,084.86 2005 12.67 12.70 214,835.07 2006 12.70 12.96 189,479.52 2007 12.96 13.59 174,075.24 2008 13.59 14.12 125,344.68 Loomis Sayles Small Cap Division (Class E)/(c)/........... 2001 22.37 21.87 0.00 2002 21.87 16.84 3,284.79 2003 16.84 22.55 7,404.12 2004 22.55 25.75 7,869.50 2005 25.75 27.02 5,428.42 2006 27.02 30.93 7,759.46 2007 30.93 33.96 7,648.84 2008 33.96 21.36 4,330.70 Lord Abbett Bond Debenture Division (Class E)/(b)/........ 2002 10.61 10.26 13,361.69 2003 10.26 12.04 28,790.84 2004 12.04 12.80 26,022.93 2005 12.80 12.78 25,118.04 2006 12.78 13.72 27,719.53 2007 13.72 14.38 24,032.42 2008 14.38 11.52 16,917.67 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)............................................... 2001 10.60 10.32 0.00 2002 10.32 10.61 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.......... 2002 11.20 8.45 46.45 2003 8.45 11.55 1,303.68 2004 11.55 12.09 3,924.92 2005 12.09 12.89 3,898.14 2006 12.89 14.47 5,365.87 2007 14.47 15.81 3,747.57 2008 15.81 9.52 2,799.41 MetLife Mid Cap Stock Index Division (Class E)/(c)/....... 2001 10.39 10.26 0.00 2002 10.26 8.57 69,423.06 2003 8.57 11.35 110,971.65 2004 11.35 12.93 67,646.38 2005 12.93 14.25 58,434.72 2006 14.25 15.38 58,809.73 2007 15.38 16.27 48,510.07 2008 16.27 10.18 34,491.19
65
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $36.64 $34.54 0.00 2002 34.54 26.33 55,462.75 2003 26.33 33.12 109,787.51 2004 33.12 35.92 103,328.81 2005 35.92 36.89 101,768.38 2006 36.89 41.79 94,586.71 2007 41.79 43.14 79,108.18 2008 43.14 26.63 68,076.34 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.00 8.35 0.00 2002 8.35 7.24 6,182.46 2003 7.24 9.41 11,285.02 2004 9.41 11.06 9,595.61 2005 11.06 12.66 10,216.81 2006 12.66 15.78 36,388.15 2007 15.78 17.58 36,821.03 2008 17.58 9.96 39,742.06 MFS(R) Total Return Division (Class E)/(i)/................. 2004 34.63 37.57 720.93 2005 37.57 37.98 2,111.55 2006 37.98 41.77 3,022.66 2007 41.77 42.73 6,662.41 2008 42.73 32.61 10,151.25 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.54 11.36 0.00 2002 11.36 9.57 37,049.39 2003 9.57 11.78 83,937.88 2004 11.78 12.89 83,672.91 2005 12.89 12.47 77,760.42 2006 12.47 14.45 64,598.15 2007 14.45 13.64 48,695.41 2008 13.64 8.90 34,418.14 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.29 8.51 0.00 2002 8.51 6.97 107,905.08 2003 6.97 9.41 171,239.43 2004 9.41 11.04 89,102.11 2005 11.04 12.27 74,504.10 2006 12.27 15.14 77,545.05 2007 15.14 16.45 70,784.08 2008 16.45 9.35 54,566.45 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.23 14.90 0.00 2002 14.90 13.22 6,018.15 2003 13.22 17.71 22,239.61 2004 17.71 21.37 29,408.03 2005 21.37 23.54 34,357.82 2006 23.54 25.74 34,738.67 2007 25.74 26.12 25,191.81 2008 26.12 13.50 16,000.99
66
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.73 $11.99 0.00 2002 11.99 9.88 7,044.98 2003 9.88 12.66 15,909.39 2004 12.66 14.45 14,135.84 2005 14.45 16.49 13,459.92 2006 16.49 18.88 14,078.39 2007 18.88 19.72 12,000.04 2008 19.72 11.53 6,251.01 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.23 10.41 0.00 2002 10.41 11.19 57,074.25 2003 11.19 11.48 120,232.46 2004 11.48 11.85 101,401.69 2005 11.85 11.92 95,789.48 2006 11.92 12.26 69,778.52 2007 12.26 12.97 65,619.78 2008 12.97 12.80 55,472.33 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.04 6.07 0.00 2002 6.07 2.95 18,208.18 2003 2.95 4.56 110,059.90 2004 4.56 4.29 126,854.19 2005 4.29 4.68 108,475.16 2006 4.68 4.85 65,208.91 2007 4.85 6.28 74,543.57 2008 6.28 3.42 68,302.81 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.91 11.84 0.00 2002 11.84 9.24 41,245.18 2003 9.24 13.25 71,358.34 2004 13.25 15.30 41,010.44 2005 15.30 15.70 35,330.02 2006 15.70 18.17 30,610.87 2007 18.17 17.55 21,569.60 2008 17.55 11.45 15,118.40 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.54 11.39 0.00 2002 11.39 8.58 6,864.43 2003 8.58 11.01 22,250.70 2004 11.01 11.88 46,365.22 2005 11.88 12.43 45,104.21 2006 12.43 13.80 46,801.80 2007 13.80 14.82 31,115.85 2008 14.82 8.45 24,928.76 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.62 8.23 0.00 2002 8.23 4.52 11,666.87 2003 4.52 6.08 36,089.22 2004 6.08 7.05 35,783.95 2005 7.05 7.94 35,319.40 2006 7.94 8.30 44,402.06 2007 8.30 9.59 45,884.34 2008 9.59 5.69 35,438.52
67
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.08 $ 11.87 0.00 2002 11.87 8.54 12,713.95 2003 8.54 11.81 26,106.42 2004 11.81 12.88 28,700.52 2005 12.88 14.03 28,152.93 2006 14.03 14.29 20,522.63 2007 14.29 15.40 8,873.48 2008 15.40 9.65 6,601.63 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.21 15.49 0.00 2002 15.49 16.65 6,548.67 2003 16.65 18.40 31,477.12 2004 18.40 19.25 34,624.63 2005 19.25 19.43 36,476.03 2006 19.43 20.02 23,569.48 2007 20.02 20.43 18,993.14 2008 20.43 17.04 14,582.46 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.14 14.40 0.00 2002 14.40 15.23 46,463.29 2003 15.23 15.20 40,539.86 2004 15.20 15.36 41,984.65 2005 15.36 15.33 34,445.94 2006 15.33 15.66 23,937.23 2007 15.66 16.03 36,764.12 2008 16.03 15.68 21,302.55 At 2.00 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 14.04 14.68 0.00 2007 14.68 14.87 0.00 2008 14.87 13.21 1,130.12 American Funds Global Small Capitalization Division/(c)/.... 2004 15.82 18.75 0.00 2005 18.75 23.04 42.87 2006 23.04 28.01 58.25 2007 28.01 33.34 0.00 2008 33.34 15.18 0.00 American Funds Growth Division/(c)/......................... 2004 102.41 112.92 0.00 2005 112.92 128.61 30.26 2006 128.61 138.96 46.32 2007 138.96 153.01 0.00 2008 153.01 84.02 0.00 American Funds Growth-Income Division/(c)/.................. 2004 79.70 86.22 0.00 2005 86.22 89.45 32.66 2006 89.45 101.01 47.81 2007 101.01 103.99 0.00 2008 103.99 63.35 156.59
68 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.85 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 14.04 $ 14.68 285.76 2007 14.68 14.87 2,966.80 2008 14.87 13.21 5,323.72 American Funds Global Small Capitalization Division/(c)/.... 2001 13.59 13.25 0.00 2002 13.25 10.51 0.00 2003 10.51 15.82 16,276.78 2004 15.82 18.75 35,175.14 2005 18.75 23.04 41,539.10 2006 23.04 28.01 76,385.21 2007 28.01 33.34 66,717.75 2008 33.34 15.18 60,337.00 American Funds Growth Division/(c)/......................... 2001 114.03 103.08 0.00 2002 103.08 76.33 0.00 2003 76.33 102.36 9,687.49 2004 102.36 112.86 20,523.05 2005 112.86 128.55 19,557.50 2006 128.55 138.89 18,383.62 2007 138.89 152.93 16,417.04 2008 152.93 83.98 14,835.46 American Funds Growth-Income Division/(c)/.................. 2001 80.00 76.67 0.00 2002 76.67 61.37 595.67 2003 61.37 79.66 16,673.18 2004 79.66 86.18 28,078.77 2005 86.18 89.40 20,444.99 2006 89.40 100.96 18,095.73 2007 100.96 103.94 16,950.80 2008 103.94 63.31 13,873.69 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 35.01 32.96 0.00 2002 32.96 23.04 0.00 2003 23.04 31.79 5,474.13 2004 31.79 35.20 6,719.22 2005 35.20 38.20 4,043.86 2006 38.20 39.96 12,244.97 2007 39.96 47.22 7,191.33 2008 47.22 25.13 8,198.16 BlackRock Bond Income Division (Class E)/(a)/............... 2002 39.15 41.19 0.00 2003 41.19 42.73 8,766.14 2004 42.73 43.74 25,563.56 2005 43.74 43.91 14,215.57 2006 43.91 44.94 13,307.82 2007 44.94 46.82 20,624.84 2008 46.82 44.32 12,896.03
69
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $37.83 $38.80 0.00 2002 38.80 39.19 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 34.71 33.77 0.00 2002 33.77 28.53 2,247.60 2003 28.53 33.73 12,352.98 2004 33.73 35.85 25,735.63 2005 35.85 36.23 28,451.08 2006 36.23 39.24 21,678.25 2007 39.24 40.72 20,073.29 2008 40.72 30.03 20,927.10 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 71.82 72.27 6,132.85 2008 72.27 44.51 4,951.05 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 65.02 60.57 0.00 2002 60.57 43.88 18.27 2003 43.88 56.01 4,401.11 2004 56.01 60.87 10,013.36 2005 60.87 61.82 8,337.32 2006 61.82 69.14 7,240.96 2007 69.14 72.42 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.90 0.00 2003 7.90 10.50 19,011.38 2004 10.50 11.68 32,971.81 2005 11.68 12.12 32,531.60 2006 12.12 14.18 41,217.36 2007 14.18 14.37 36,217.61 2008 14.37 9.16 25,717.55 BlackRock Money Market Division (Class E)/(f)/.............. 2003 20.69 20.52 21,858.50 2004 20.52 20.31 17,399.33 2005 20.31 20.48 15,285.58 2006 20.48 21.04 5,782.47 2007 21.04 21.67 4,700.57 2008 21.67 21.85 6,610.48 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.15 13.88 0.00 2002 13.88 10.70 2,688.19 2003 10.70 15.75 51,317.85 2004 15.75 17.80 93,511.01 2005 17.80 18.17 86,008.74 2006 18.17 20.80 78,846.01 2007 20.80 19.69 75,542.93 2008 19.69 11.88 67,262.75
70
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............ 2001 $26.36 $25.60 0.00 2002 25.60 20.97 0.00 2003 20.97 26.92 3,786.98 2004 26.92 29.63 15,500.44 2005 29.63 32.04 15,937.08 2006 32.04 35.99 17,394.56 2007 35.99 36.89 16,599.66 2008 36.89 21.92 13,555.01 FI Mid Cap Opportunities Division (Class E)/(c) (h)/... 2001 17.85 15.33 0.00 2002 15.33 10.66 0.00 2003 10.66 14.09 4,921.87 2004 14.09 16.18 25,111.91 2005 16.18 16.95 23,907.92 2006 16.95 18.58 26,431.38 2007 18.58 19.73 22,714.49 2008 19.73 8.64 23,983.07 FI Value Leaders Division (Class E)/(d)/............... 2002 21.83 17.91 0.00 2003 17.91 22.29 2,266.10 2004 22.29 24.85 3,345.28 2005 24.85 26.96 22,313.31 2006 26.96 29.58 20,520.91 2007 29.58 30.21 11,143.64 2008 30.21 18.08 4,642.56 Franklin Templeton Small Cap Growth Division (Class E)/(c)/....................................... 2001 9.16 8.77 0.00 2002 8.77 6.21 0.00 2003 6.21 8.82 3,269.14 2004 8.82 9.63 10,060.58 2005 9.63 9.87 9,320.83 2006 9.87 10.65 8,812.48 2007 10.65 10.92 9,436.31 2008 10.92 6.29 6,159.24 Harris Oakmark Focused Value Division (Class E)/(c)/... 2001 24.48 25.27 0.00 2002 25.27 22.58 1,307.84 2003 22.58 29.36 34,839.96 2004 29.36 31.63 51,850.34 2005 31.63 34.10 54,715.60 2006 34.10 37.59 33,272.54 2007 37.59 34.32 24,541.16 2008 34.32 18.16 17,998.70 Harris Oakmark International Division (Class E)/(d)/... 2002 10.56 8.78 0.00 2003 8.78 11.66 858.80 2004 11.66 13.81 18,761.62 2005 13.81 15.49 21,405.85 2006 15.49 19.62 37,922.17 2007 19.62 19.07 34,317.06 2008 19.07 11.07 19,156.17
71
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.98 $ 4.77 16,188.24 2006 4.77 4.80 15,352.54 2007 4.80 5.26 13,338.99 2008 5.26 3.27 4,472.86 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.36 4.88 0.00 2002 4.88 3.40 0.00 2003 3.40 4.20 8,874.34 2004 4.20 4.31 17,382.06 2005 4.31 3.94 17,670.96 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.70 10.92 0.00 2002 10.92 8.83 0.00 2003 8.83 11.09 2,710.93 2004 11.09 12.84 6,372.07 2005 12.84 14.85 9,346.37 2006 14.85 16.96 14,776.72 2007 16.96 18.34 18,467.12 2008 18.34 10.04 17,770.84 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.36 9.62 0.00 2003 9.62 11.93 11,194.49 2004 11.93 13.41 12,591.01 2005 13.41 14.25 14,798.27 2006 14.25 16.05 16,355.97 2007 16.05 15.34 21,151.73 2008 15.34 9.30 9,017.43 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.51 6.70 6,261.25 2004 6.70 7.14 10,008.87 2005 7.14 7.97 10,463.75 2006 7.97 7.69 8,597.02 2007 7.69 7.73 6,076.74 2008 7.73 4.62 9,764.62 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.72 0.00 2002 7.72 5.25 0.00 2003 5.25 5.51 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.13 9.77 3,911.20 2007 9.77 9.03 4,743.52 2008 9.03 4.02 1,836.51 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.63 8.19 0.00 2002 8.19 6.41 0.00 2003 6.41 7.65 194.76 2004 7.65 8.36 4,289.97 2005 8.36 8.79 3,574.99 2006 8.79 9.17 3,334.78
72
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.......................................... 2001 $11.05 $11.24 0.00 2002 11.24 12.14 0.00 2003 12.14 12.34 67,158.56 2004 12.34 12.59 171,181.28 2005 12.59 12.61 160,102.82 2006 12.61 12.86 139,979.46 2007 12.86 13.47 131,688.50 2008 13.47 13.98 104,043.86 Loomis Sayles Small Cap Division (Class E)/(c)/........... 2001 22.21 21.70 0.00 2002 21.70 16.69 0.00 2003 16.69 22.33 1,110.52 2004 22.33 25.48 3,460.40 2005 25.48 26.70 3,613.34 2006 26.70 30.54 6,980.67 2007 30.54 33.50 7,310.03 2008 33.50 21.04 5,202.60 Lord Abbett Bond Debenture Division (Class E)/(b)/........ 2002 10.55 10.20 1,191.86 2003 10.20 11.95 33,108.92 2004 11.95 12.70 27,217.40 2005 12.70 12.67 21,479.48 2006 12.67 13.58 21,717.91 2007 13.58 14.23 20,997.86 2008 14.23 11.38 23,505.96 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)............................................... 2001 10.55 10.27 0.00 2002 10.27 10.55 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.......... 2002 11.20 8.44 0.00 2003 8.44 11.52 1,199.21 2004 11.52 12.05 5,484.99 2005 12.05 12.83 5,359.32 2006 12.83 14.39 9,891.28 2007 14.39 15.71 5,766.17 2008 15.71 9.45 6,251.83 MetLife Mid Cap Stock Index Division (Class E)/(c)/....... 2001 10.38 10.25 0.00 2002 10.25 8.55 95.26 2003 8.55 11.31 64,927.67 2004 11.31 12.87 74,990.67 2005 12.87 14.17 80,435.88 2006 14.17 15.28 78,535.41 2007 15.28 16.15 68,078.34 2008 16.15 10.09 58,410.60
73
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $36.22 $34.14 0.00 2002 34.14 26.00 30.99 2003 26.00 32.67 78,326.89 2004 32.67 35.40 113,355.91 2005 35.40 36.31 114,020.79 2006 36.31 41.10 86,703.53 2007 41.10 42.38 79,508.03 2008 42.38 26.13 84,730.94 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.00 8.34 0.00 2002 8.34 7.23 0.00 2003 7.23 9.38 5,245.98 2004 9.38 11.02 9,084.93 2005 11.02 12.60 10,534.66 2006 12.60 15.69 26,086.51 2007 15.69 17.46 29,483.95 2008 17.46 9.88 20,671.81 MFS(R) Total Return Division (Class E)/(i)/................. 2004 34.05 36.91 2,362.83 2005 36.91 37.27 21,930.33 2006 37.27 40.96 12,278.96 2007 40.96 41.86 22,416.46 2008 41.86 31.91 26,643.32 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.51 11.32 0.00 2002 11.32 9.53 85.63 2003 9.53 11.72 47,626.01 2004 11.72 12.81 75,434.86 2005 12.81 12.38 67,934.93 2006 12.38 14.33 54,497.06 2007 14.33 13.52 50,718.40 2008 13.52 8.81 41,501.27 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.27 8.49 0.00 2002 8.49 6.94 0.00 2003 6.94 9.36 56,548.44 2004 9.36 10.97 78,514.09 2005 10.97 12.18 83,251.25 2006 12.18 15.02 69,397.19 2007 15.02 16.30 81,797.44 2008 16.30 9.25 54,682.46 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.19 14.85 0.00 2002 14.85 13.16 0.00 2003 13.16 17.62 17,441.95 2004 17.62 21.24 59,079.76 2005 21.24 23.37 77,812.63 2006 23.37 25.53 71,512.90 2007 25.53 25.88 61,609.83 2008 25.88 13.36 53,391.33
74
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.68 $11.93 0.00 2002 11.93 9.82 0.00 2003 9.82 12.57 5,569.13 2004 12.57 14.33 11,169.65 2005 14.33 16.34 13,658.21 2006 16.34 18.69 17,362.38 2007 18.69 19.50 20,229.78 2008 19.50 11.39 17,288.07 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.23 10.40 0.00 2002 10.40 11.17 2,833.60 2003 11.17 11.45 56,801.90 2004 11.45 11.81 101,512.08 2005 11.81 11.86 57,082.34 2006 11.86 12.19 45,629.93 2007 12.19 12.88 52,878.64 2008 12.88 12.70 46,071.42 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.03 6.06 0.00 2002 6.06 2.94 395.85 2003 2.94 4.55 47,359.68 2004 4.55 4.27 51,989.76 2005 4.27 4.66 51,768.53 2006 4.66 4.82 37,104.91 2007 4.82 6.24 95,339.67 2008 6.24 3.40 35,816.39 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.88 11.80 0.00 2002 11.80 9.20 87.99 2003 9.20 13.18 24,197.78 2004 13.18 15.21 29,525.34 2005 15.21 15.59 27,898.11 2006 15.59 18.02 44,470.27 2007 18.02 17.39 24,872.41 2008 17.39 11.34 16,450.26 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.51 11.35 0.00 2002 11.35 8.55 94.47 2003 8.55 10.96 12,347.63 2004 10.96 11.81 25,543.47 2005 11.81 12.34 28,663.46 2006 12.34 13.69 25,822.06 2007 13.69 14.68 27,330.57 2008 14.68 8.36 28,191.45 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.62 8.22 0.00 2002 8.22 4.51 0.00 2003 4.51 6.06 12,580.19 2004 6.06 7.03 15,833.09 2005 7.03 7.90 22,194.00 2006 7.90 8.25 26,839.68 2007 8.25 9.53 48,357.23 2008 9.53 5.65 48,546.16
75
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 12.03 $ 11.82 0.00 2002 11.82 8.49 0.00 2003 8.49 11.73 11,939.27 2004 11.73 12.78 21,342.59 2005 12.78 13.90 20,272.55 2006 13.90 14.15 14,223.45 2007 14.15 15.24 10,688.00 2008 15.24 9.53 10,545.45 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.11 15.38 0.00 2002 15.38 16.51 246.17 2003 16.51 18.23 17,349.99 2004 18.23 19.06 52,882.29 2005 19.06 19.21 52,995.05 2006 19.21 19.77 52,831.41 2007 19.77 20.16 37,746.74 2008 20.16 16.80 28,074.63 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.05 14.30 0.00 2002 14.30 15.11 516.28 2003 15.11 15.06 10,000.40 2004 15.06 15.20 19,636.40 2005 15.20 15.16 15,547.01 2006 15.16 15.47 12,946.30 2007 15.47 15.82 13,130.41 2008 15.82 15.46 18,408.71 At 2.10 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 13.91 14.54 22,784.06 2007 14.54 14.71 108,865.66 2008 14.71 13.06 136,815.91 American Funds Global Small Capitalization Division/(c)/.... 2004 15.73 18.62 29,197.21 2005 18.62 22.86 65,064.34 2006 22.86 27.77 111,854.84 2007 27.77 33.02 155,236.14 2008 33.02 15.02 151,446.97 American Funds Growth Division/(c)/......................... 2004 100.39 110.58 13,152.20 2005 110.58 125.83 29,151.88 2006 125.83 135.81 46,224.23 2007 135.81 149.39 59,508.91 2008 149.39 81.95 53,584.06 American Funds Growth-Income Division/(c)/.................. 2004 78.13 84.44 10,297.47 2005 84.44 87.51 29,267.22 2006 87.51 98.72 48,176.05 2007 98.72 101.54 59,832.77 2008 101.54 61.79 52,677.64
76 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.95 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.91 $ 14.54 609.09 2007 14.54 14.71 8,556.70 2008 14.71 13.06 5,627.05 American Funds Global Small Capitalization Division/(c)/.... 2001 13.55 13.20 0.00 2002 13.20 10.46 6,770.73 2003 10.46 15.73 19,818.67 2004 15.73 18.62 27,055.05 2005 18.62 22.86 27,764.62 2006 22.86 27.77 33,806.46 2007 27.77 33.02 31,194.78 2008 33.02 15.02 25,007.49 American Funds Growth Division/(c)/......................... 2001 112.05 101.25 0.00 2002 101.25 74.90 2,729.99 2003 74.90 100.34 9,349.78 2004 100.34 110.53 14,562.37 2005 110.53 125.77 15,316.45 2006 125.77 135.74 16,484.29 2007 135.74 149.32 14,638.88 2008 149.32 81.91 11,738.22 American Funds Growth-Income Division/(c)/.................. 2001 78.61 75.31 0.00 2002 75.31 60.22 3,960.17 2003 60.22 78.09 20,009.43 2004 78.09 84.39 24,296.87 2005 84.39 87.47 24,577.59 2006 87.47 98.68 23,058.63 2007 98.68 101.49 17,968.87 2008 101.49 61.76 14,155.02 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 34.55 32.51 0.00 2002 32.51 22.70 594.07 2003 22.70 31.30 1,824.32 2004 31.30 34.62 3,245.89 2005 34.62 37.53 3,140.57 2006 37.53 39.22 3,847.61 2007 39.22 46.30 2,597.66 2008 46.30 24.61 2,775.23 BlackRock Bond Income Division (Class E)/(a)/............... 2002 38.42 40.39 8,226.83 2003 40.39 41.86 8,479.83 2004 41.86 42.81 8,223.39 2005 42.81 42.93 9,694.81 2006 42.93 43.90 7,742.40 2007 43.90 45.68 5,580.37 2008 45.68 43.20 4,708.42
77
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $37.15 $38.08 0.00 2002 38.08 38.46 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 34.19 33.25 0.00 2002 33.25 28.07 4,057.91 2003 28.07 33.14 14,130.18 2004 33.14 35.19 11,645.66 2005 35.19 35.53 11,758.61 2006 35.53 38.45 11,027.45 2007 38.45 39.85 11,083.92 2008 39.85 29.36 8,631.96 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 70.12 70.52 2,721.75 2008 70.52 43.39 2,344.73 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 63.85 59.46 0.00 2002 59.46 43.03 3,682.98 2003 43.03 54.88 6,585.98 2004 54.88 59.58 7,034.37 2005 59.58 60.44 7,261.42 2006 60.44 67.53 3,380.64 2007 67.53 70.71 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.89 477.34 2003 7.89 10.48 9,377.85 2004 10.48 11.65 9,436.09 2005 11.65 12.07 9,210.78 2006 12.07 14.11 8,409.84 2007 14.11 14.29 14,454.65 2008 14.29 9.10 9,196.33 BlackRock Money Market Division (Class E)/(f)/.............. 2003 20.29 20.10 0.00 2004 20.10 19.88 0.00 2005 19.88 20.03 0.00 2006 20.03 20.56 0.00 2007 20.56 21.15 0.00 2008 21.15 21.30 0.00 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.13 13.86 0.00 2002 13.86 10.67 45,836.72 2003 10.67 15.69 55,838.46 2004 15.69 17.72 77,153.87 2005 17.72 18.07 70,668.67 2006 18.07 20.67 62,782.40 2007 20.67 19.54 52,123.68 2008 19.54 11.78 39,734.67
78
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.19 $25.42 0.00 2002 25.42 20.80 4,173.04 2003 20.80 26.67 12,986.92 2004 26.67 29.33 16,350.50 2005 29.33 31.69 14,462.41 2006 31.69 35.55 13,603.83 2007 35.55 36.41 13,567.88 2008 36.41 21.61 12,072.64 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 17.77 15.26 0.00 2002 15.26 10.60 3,885.54 2003 10.60 13.99 7,446.88 2004 13.99 16.05 19,045.42 2005 16.05 16.80 17,985.10 2006 16.80 18.40 14,282.10 2007 18.40 19.52 12,182.56 2008 19.52 8.54 9,391.87 FI Value Leaders Division (Class E)/(d)/.......... 2002 21.63 17.74 0.00 2003 17.74 22.05 1,166.59 2004 22.05 24.56 5,242.21 2005 24.56 26.62 7,862.59 2006 26.62 29.18 7,629.36 2007 29.18 29.77 6,876.53 2008 29.77 17.80 3,902.67 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.16 8.76 0.00 2002 8.76 6.20 13,248.07 2003 6.20 8.79 15,372.27 2004 8.79 9.59 15,871.81 2005 9.59 9.83 15,368.28 2006 9.83 10.59 11,245.93 2007 10.59 10.85 8,006.67 2008 10.85 6.24 7,574.97 Harris Oakmark Focused Value Division (Class E)/(c)/.................................. 2001 24.27 25.05 0.00 2002 25.05 22.36 17,966.44 2003 22.36 29.04 24,903.78 2004 29.04 31.26 32,921.43 2005 31.26 33.67 33,023.25 2006 33.67 37.08 28,516.77 2007 37.08 33.82 25,127.80 2008 33.82 17.88 16,813.78 Harris Oakmark International Division (Class E)/(d)/.................................. 2002 10.56 8.77 249.64 2003 8.77 11.63 16,902.37 2004 11.63 13.76 35,058.24 2005 13.76 15.43 38,676.82 2006 15.43 19.52 40,632.00 2007 19.52 18.95 35,647.09 2008 18.95 10.99 26,316.57
79
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.96 $ 4.74 16,008.68 2006 4.74 4.77 14,895.86 2007 4.77 5.22 12,373.90 2008 5.22 3.24 7,912.62 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.35 4.87 0.00 2002 4.87 3.39 12,319.02 2003 3.39 4.18 18,669.32 2004 4.18 4.29 17,612.61 2005 4.29 3.92 17,352.62 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.58 10.80 0.00 2002 10.80 8.73 4,289.94 2003 8.73 10.95 10,133.66 2004 10.95 12.67 8,229.47 2005 12.67 14.64 5,687.67 2006 14.64 16.69 12,354.92 2007 16.69 18.04 7,011.85 2008 18.04 9.87 9,173.26 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.36 9.61 69.89 2003 9.61 11.91 12,770.05 2004 11.91 13.36 9,935.82 2005 13.36 14.19 8,696.22 2006 14.19 15.96 6,084.03 2007 15.96 15.24 14,329.56 2008 15.24 9.23 7,832.76 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.50 6.68 6,879.18 2004 6.68 7.11 6,273.61 2005 7.11 7.93 5,488.26 2006 7.93 7.65 5,572.00 2007 7.65 7.68 3,616.83 2008 7.68 4.59 6,325.78 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.71 0.00 2002 7.71 5.24 7,458.10 2003 5.24 5.50 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.07 9.69 15,780.06 2007 9.69 8.95 10,801.52 2008 8.95 3.98 11,884.53 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.61 8.17 0.00 2002 8.17 6.39 4,389.51 2003 6.39 7.61 3,579.58 2004 7.61 8.31 15,052.67 2005 8.31 8.73 15,629.23 2006 8.73 9.11 15,493.81
80
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.02 $11.21 0.00 2002 11.21 12.09 58,400.34 2003 12.09 12.27 79,022.18 2004 12.27 12.51 121,799.63 2005 12.51 12.52 112,600.60 2006 12.52 12.75 98,805.08 2007 12.75 13.34 88,052.22 2008 13.34 13.84 48,570.56 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 22.05 21.54 0.00 2002 21.54 16.55 1,676.09 2003 16.55 22.12 4,146.38 2004 22.12 25.21 5,628.28 2005 25.21 26.39 4,754.63 2006 26.39 30.16 6,152.92 2007 30.16 33.04 4,929.11 2008 33.04 20.74 4,792.79 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.50 10.14 4,888.16 2003 10.14 11.87 26,926.45 2004 11.87 12.60 38,285.38 2005 12.60 12.56 31,566.35 2006 12.56 13.45 29,249.49 2007 13.45 14.08 32,121.86 2008 14.08 11.25 21,582.99 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)................................................. 2001 10.50 10.22 0.00 2002 10.22 10.50 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.19 8.43 323.39 2003 8.43 11.49 1,226.43 2004 11.49 12.01 1,678.49 2005 12.01 12.78 1,742.83 2006 12.78 14.32 1,575.15 2007 14.32 15.62 1,739.88 2008 15.62 9.38 1,723.95 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.37 10.23 0.00 2002 10.23 8.53 15,540.54 2003 8.53 11.27 25,373.69 2004 11.27 12.81 22,986.81 2005 12.81 14.09 18,766.32 2006 14.09 15.18 16,984.17 2007 15.18 16.03 15,218.70 2008 16.03 10.01 9,132.32
81
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $35.82 $33.74 0.00 2002 33.74 25.67 17,492.15 2003 25.67 32.23 31,968.99 2004 32.23 34.88 58,929.48 2005 34.88 35.75 53,478.98 2006 35.75 40.42 48,113.89 2007 40.42 41.64 43,991.39 2008 41.64 25.65 34,755.34 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.99 8.33 0.00 2002 8.33 7.22 1,282.29 2003 7.22 9.35 3,561.59 2004 9.35 10.97 5,435.30 2005 10.97 12.54 4,840.19 2006 12.54 15.59 7,290.25 2007 15.59 17.34 6,843.35 2008 17.34 9.80 7,076.96 MFS(R) Total Return Division (Class E)/(i)/................. 2004 33.48 36.27 646.66 2005 36.27 36.58 1,203.01 2006 36.58 40.16 1,029.13 2007 40.16 41.00 5,429.37 2008 41.00 31.22 1,821.85 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.48 11.29 0.00 2002 11.29 9.49 52,800.59 2003 9.49 11.66 68,038.59 2004 11.66 12.73 67,289.86 2005 12.73 12.29 62,456.59 2006 12.29 14.22 52,884.48 2007 14.22 13.39 37,010.57 2008 13.39 8.72 29,963.97 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.24 8.46 0.00 2002 8.46 6.91 19,127.95 2003 6.91 9.31 43,523.07 2004 9.31 10.91 46,098.93 2005 10.91 12.09 36,008.12 2006 12.09 14.90 29,754.89 2007 14.90 16.15 22,381.51 2008 16.15 9.16 17,411.04 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.14 14.80 0.00 2002 14.80 13.11 8,500.57 2003 13.11 17.53 21,064.27 2004 17.53 21.11 28,083.59 2005 21.11 23.21 30,508.33 2006 23.21 25.33 32,506.02 2007 25.33 25.65 25,772.22 2008 25.65 13.23 22,709.76
82
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.62 $11.87 0.00 2002 11.87 9.77 11,930.27 2003 9.77 12.49 14,622.39 2004 12.49 14.22 21,811.17 2005 14.22 16.20 16,832.32 2006 16.20 18.51 16,225.78 2007 18.51 19.29 20,220.85 2008 19.29 11.26 12,204.99 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.22 10.39 0.00 2002 10.39 11.15 33,719.11 2003 11.15 11.41 82,993.61 2004 11.41 11.76 93,168.41 2005 11.76 11.80 76,792.21 2006 11.80 12.12 64,263.27 2007 12.12 12.79 59,620.79 2008 12.79 12.60 59,267.08 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.03 6.06 0.00 2002 6.06 2.93 17,669.78 2003 2.93 4.53 58,809.62 2004 4.53 4.25 67,918.14 2005 4.25 4.64 57,877.70 2006 4.64 4.79 57,103.73 2007 4.79 6.19 41,569.23 2008 6.19 3.37 50,226.41 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.84 11.76 0.00 2002 11.76 9.16 8,241.82 2003 9.16 13.12 15,600.66 2004 13.12 15.11 22,910.79 2005 15.11 15.48 21,394.44 2006 15.48 17.87 18,862.85 2007 17.87 17.23 12,195.22 2008 17.23 11.22 19,433.09 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.48 11.32 0.00 2002 11.32 8.51 661.16 2003 8.51 10.90 9,314.88 2004 10.90 11.74 13,503.43 2005 11.74 12.25 12,718.47 2006 12.25 13.58 11,811.70 2007 13.58 14.55 18,313.28 2008 14.55 8.28 11,748.20 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.62 8.21 0.00 2002 8.21 4.50 23,974.10 2003 4.50 6.04 28,660.07 2004 6.04 7.00 48,665.58 2005 7.00 7.86 47,518.75 2006 7.86 8.20 40,664.46 2007 8.20 9.46 38,053.18 2008 9.46 5.60 40,528.39
83
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 11.98 $ 11.76 0.00 2002 11.76 8.44 3,071.10 2003 8.44 11.65 7,849.46 2004 11.65 12.68 9,355.46 2005 12.68 13.78 7,628.18 2006 13.78 14.01 8,804.37 2007 14.01 15.07 6,016.29 2008 15.07 9.42 5,523.44 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.01 15.27 0.00 2002 15.27 16.38 12,628.58 2003 16.38 18.07 44,182.76 2004 18.07 18.86 35,112.90 2005 18.86 19.00 38,553.13 2006 19.00 19.53 34,205.69 2007 19.53 19.90 25,852.64 2008 19.90 16.56 14,902.48 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 13.95 14.20 0.00 2002 14.20 14.99 91,770.36 2003 14.99 14.93 52,239.43 2004 14.93 15.05 31,829.09 2005 15.05 14.99 32,306.49 2006 14.99 15.29 28,795.81 2007 15.29 15.61 26,641.38 2008 15.61 15.24 19,997.20 At 2.20 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 13.79 14.40 0.00 2007 14.40 14.55 3,535.61 2008 14.55 12.90 3,513.81 American Funds Global Small Capitalization Division/(c)/.... 2004 15.64 18.50 1,548.37 2005 18.50 22.68 3,303.35 2006 22.68 27.53 9,878.37 2007 27.53 32.70 14,621.74 2008 32.70 14.86 12,731.69 American Funds Growth Division/(c)/......................... 2004 98.41 108.29 1,538.99 2005 108.29 123.10 2,730.25 2006 123.10 132.73 4,551.06 2007 132.73 145.86 5,997.42 2008 145.86 79.94 5,837.37 American Funds Growth-Income Division/(c)/.................. 2004 76.59 82.69 1,555.89 2005 82.69 85.61 3,032.38 2006 85.61 96.49 4,108.55 2007 96.49 99.14 4,891.86 2008 99.14 60.27 4,698.06
84 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.35 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division (Class 2)/(k)/................. 2006 $ 14.69 $ 15.41 18,359.10 2007 15.41 15.68 128,590.78 2008 15.68 14.00 61,824.03 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.82 13.49 0.00 2002 13.49 10.76 42,895.22 2003 10.76 16.28 112,324.42 2004 16.28 19.38 0.00 2005 19.38 23.94 176,130.69 2006 23.94 29.25 166,426.72 2007 29.25 34.99 172,388.70 2008 34.99 16.02 153,163.94 American Funds Growth Division (Class 2)/(c)/............... 2001 124.45 112.74 49.73 2002 112.74 83.90 24,968.30 2003 83.90 113.07 76,886.54 2004 113.07 125.30 0.00 2005 125.30 143.43 81,958.32 2006 143.43 155.74 82,960.99 2007 155.74 172.35 77,590.70 2008 172.35 95.12 68,051.02 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 87.31 83.85 67.94 2002 83.85 67.45 34,473.47 2003 67.45 87.99 98,731.01 2004 87.99 95.67 0.00 2005 95.67 99.75 100,353.40 2006 99.75 113.21 95,626.75 2007 113.21 117.14 84,725.44 2008 117.14 71.71 72,996.66 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 37.41 35.29 0.00 2002 35.29 24.79 7,386.06 2003 24.79 34.39 24,452.47 2004 34.39 38.26 22,934.30 2005 38.26 41.73 17,352.17 2006 41.73 43.87 16,678.26 2007 43.87 52.10 16,010.84 2008 52.10 27.87 13,734.18 BlackRock Bond Income Division (Class E)/(a)/............... 2002 43.02 45.41 48,510.98 2003 45.41 47.35 80,135.60 2004 47.35 48.71 77,023.59 2005 48.71 49.14 71,138.99 2006 49.14 50.55 66,530.41 2007 50.55 52.93 59,097.00 2008 52.93 50.35 44,379.74
85
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $41.41 $42.56 1,904.42 2002 42.56 43.07 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 37.43 36.49 0.00 2002 36.49 30.98 52,924.09 2003 30.98 36.81 126,613.75 2004 36.81 39.32 110,693.31 2005 39.32 39.94 102,872.09 2006 39.94 43.48 85,131.07 2007 43.48 45.34 76,257.70 2008 45.34 33.60 62,219.81 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 80.92 81.71 26,345.77 2008 81.71 50.58 21,368.12 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 71.19 66.45 0.00 2002 66.45 48.38 22,126.54 2003 48.38 62.07 54,067.88 2004 62.07 67.79 44,561.24 2005 67.79 69.19 37,120.79 2006 69.19 77.77 29,819.58 2007 77.77 81.60 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.92 26,007.00 2003 7.92 10.58 114,758.59 2004 10.58 11.83 124,616.77 2005 11.83 12.34 132,351.74 2006 12.34 14.51 144,939.13 2007 14.51 14.79 180,099.46 2008 14.79 9.48 166,205.79 BlackRock Money Market Division (Class E)/(f)/.............. 2003 22.83 22.72 0.00 2004 22.72 22.60 24,745.68 2005 22.60 22.91 15,864.88 2006 22.91 23.65 12,085.62 2007 23.65 24.48 9,760.24 2008 24.48 24.80 12,590.37 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.22 13.99 417.61 2002 13.99 10.83 238,452.23 2003 10.83 16.02 505,050.18 2004 16.02 18.21 506,824.52 2005 18.21 18.67 467,174.61 2006 18.67 21.49 402,430.01 2007 21.49 20.44 342,620.13 2008 20.44 12.40 289,251.46
86
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/................. 2001 $27.27 $26.54 0.00 2002 26.54 21.85 26,063.03 2003 21.85 28.18 79,580.31 2004 28.18 31.18 86,014.48 2005 31.18 33.88 100,194.76 2006 33.88 38.24 113,046.24 2007 38.24 39.40 120,101.76 2008 39.40 23.53 107,824.93 FI Mid Cap Opportunities Division (Class E)/(c) (h)/........ 2001 18.25 15.71 0.00 2002 15.71 10.98 28,007.26 2003 10.98 14.58 79,667.48 2004 14.58 16.82 117,857.25 2005 16.82 17.72 99,136.78 2006 17.72 19.52 88,442.15 2007 19.52 20.83 81,596.15 2008 20.83 9.17 70,188.23 FI Value Leaders Division (Class E)/(d)/.................... 2002 22.83 18.80 1,227.76 2003 18.80 23.51 19,216.51 2004 23.51 26.34 18,013.62 2005 26.34 28.73 25,281.89 2006 28.73 31.68 29,139.19 2007 31.68 32.51 16,035.93 2008 32.51 19.55 15,150.00 Franklin Templeton Small Cap Growth Division (Class E)/(c)/. 2001 9.17 8.79 641.28 2002 8.79 6.26 42,198.43 2003 6.26 8.94 129,883.22 2004 8.94 9.81 110,100.66 2005 9.81 10.11 100,061.07 2006 10.11 10.96 87,697.00 2007 10.96 11.29 74,865.08 2008 11.29 6.53 58,518.43 Harris Oakmark Focused Value Division (Class E)/(c)/........ 2001 25.51 26.39 3,000.25 2002 26.39 23.69 100,372.64 2003 23.69 30.96 197,310.42 2004 30.96 33.53 187,826.49 2005 33.53 36.33 173,904.88 2006 36.33 40.25 156,465.27 2007 40.25 36.94 135,918.88 2008 36.94 19.65 117,493.11 Harris Oakmark International Division (Class E)/(d)/........ 2002 10.59 8.84 1,376.82 2003 8.84 11.79 23,574.96 2004 11.79 14.03 50,647.63 2005 14.03 15.82 63,311.72 2006 15.82 20.14 108,757.14 2007 20.14 19.67 94,536.00 2008 19.67 11.48 66,791.15
87
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 4.08 $ 4.91 102,688.22 2006 4.91 4.97 99,855.74 2007 4.97 5.47 81,812.76 2008 5.47 3.42 72,686.78 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.39 4.92 0.00 2002 4.92 3.45 45,545.26 2003 3.45 4.28 117,550.11 2004 4.28 4.42 106,948.60 2005 4.42 4.04 104,559.88 Julius Baer International Stock Division (Class E)/(c)/..... 2001 12.32 11.52 0.00 2002 11.52 9.36 43,634.50 2003 9.36 11.81 106,128.64 2004 11.81 13.75 105,876.06 2005 13.75 15.99 129,756.72 2006 15.99 18.34 102,227.92 2007 18.34 19.94 100,988.36 2008 19.94 10.97 97,167.07 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.40 9.68 27,389.10 2003 9.68 12.07 101,179.91 2004 12.07 13.63 103,651.12 2005 13.63 14.55 105,505.48 2006 14.55 16.47 102,185.95 2007 16.47 15.82 101,304.19 2008 15.82 9.64 84,884.81 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.56 6.79 53,677.30 2004 6.79 7.27 49,505.32 2005 7.27 8.15 40,695.65 2006 8.15 7.92 43,978.73 2007 7.92 7.99 40,458.90 2008 7.99 4.80 37,312.34 Legg Mason Partners Aggressive Growth (Class E)/(e)/ A231... 2001 8.86 7.74 742.89 2002 7.74 5.29 35,295.70 2003 5.29 5.56 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.46 10.15 75,180.02 2007 10.15 9.43 74,100.02 2008 9.43 4.22 76,677.91 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.73 8.30 0.00 2002 8.30 6.53 21,527.40 2003 6.53 7.83 58,898.39 2004 7.83 8.60 71,228.93 2005 8.60 9.09 79,832.46 2006 9.09 9.50 76,700.37
88
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.20 $11.42 6,261.19 2002 11.42 12.40 312,736.82 2003 12.40 12.66 874,135.59 2004 12.66 12.98 1,032,562.73 2005 12.98 13.06 920,216.74 2006 13.06 13.39 848,528.30 2007 13.39 14.10 799,006.81 2008 14.10 14.71 593,066.93 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 23.03 22.55 0.00 2002 22.55 17.43 8,854.74 2003 17.43 23.44 14,865.07 2004 23.44 26.87 15,772.24 2005 26.87 28.31 15,889.83 2006 28.31 32.54 19,152.06 2007 32.54 35.87 26,665.14 2008 35.87 22.65 26,970.19 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.83 10.50 25,553.69 2003 10.50 12.37 135,998.74 2004 12.37 13.21 144,063.98 2005 13.21 13.24 145,272.09 2006 13.24 14.27 161,155.36 2007 14.27 15.02 160,667.78 2008 15.02 12.07 121,621.17 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division). 2001 10.79 10.52 0.00 2002 10.52 10.83 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.23 8.49 12,002.23 2003 8.49 11.65 47,269.92 2004 11.65 12.25 55,942.48 2005 12.25 13.11 46,250.06 2006 13.11 14.78 36,783.40 2007 14.78 16.21 28,401.51 2008 16.21 9.80 24,227.64 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.43 10.33 0.00 2002 10.33 8.66 172,378.33 2003 8.66 11.51 419,021.80 2004 11.51 13.16 327,734.49 2005 13.16 14.56 295,468.66 2006 14.56 15.78 290,033.92 2007 15.78 16.76 247,215.23 2008 16.76 10.53 220,927.02
89
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $38.32 $36.19 0.00 2002 36.19 27.70 119,578.50 2003 27.70 34.98 344,851.84 2004 34.98 38.10 429,636.65 2005 38.10 39.27 376,059.33 2006 39.27 44.67 350,967.63 2007 44.67 46.30 349,602.19 2008 46.30 28.69 320,956.17 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.02 8.37 685.38 2002 8.37 7.30 43,753.69 2003 7.30 9.51 106,300.23 2004 9.51 11.23 93,438.81 2005 11.23 12.91 118,584.13 2006 12.91 16.15 114,284.28 2007 16.15 18.07 101,274.88 2008 18.07 10.28 95,326.07 MFS(R) Total Return Division (Class E)/(i)/................. 2004 37.07 40.33 5,015.22 2005 40.33 40.92 12,188.95 2006 40.92 45.19 8,094.43 2007 45.19 46.42 9,651.68 2008 46.42 35.56 6,885.97 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.67 11.50 6,886.22 2002 11.50 9.73 250,318.17 2003 9.73 12.03 531,019.92 2004 12.03 13.21 500,901.37 2005 13.21 12.83 471,804.15 2006 12.83 14.93 394,769.18 2007 14.93 14.15 341,495.09 2008 14.15 9.27 295,292.49 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.39 8.62 0.00 2002 8.62 7.09 185,161.47 2003 7.09 9.60 490,202.46 2004 9.60 11.32 400,427.76 2005 11.32 12.62 340,743.12 2006 12.62 15.64 316,971.29 2007 15.64 17.07 271,023.80 2008 17.07 9.74 263,092.91 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.40 15.09 0.00 2002 15.09 13.44 61,842.64 2003 13.44 18.08 153,070.93 2004 18.08 21.90 192,494.69 2005 21.90 24.22 185,948.75 2006 24.22 26.59 180,858.46 2007 26.59 27.09 161,904.13 2008 27.09 14.06 149,029.06
90
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.96 $12.22 0.00 2002 12.22 10.11 25,723.07 2003 10.11 13.01 87,598.04 2004 13.01 14.91 88,437.03 2005 14.91 17.08 104,706.65 2006 17.08 19.63 108,321.55 2007 19.63 20.59 110,568.99 2008 20.59 12.09 96,957.57 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.25 10.44 893.80 2002 10.44 11.27 348,728.42 2003 11.27 11.61 785,206.99 2004 11.61 12.04 736,011.39 2005 12.04 12.15 770,230.72 2006 12.15 12.55 658,455.77 2007 12.55 13.33 632,285.69 2008 13.33 13.21 551,168.53 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.05 6.09 0.00 2002 6.09 2.97 26,937.79 2003 2.97 4.61 282,985.19 2004 4.61 4.35 254,320.32 2005 4.35 4.78 215,482.66 2006 4.78 4.96 212,426.40 2007 4.96 6.46 228,396.00 2008 6.46 3.53 163,805.22 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 12.04 11.99 0.00 2002 11.99 9.39 88,447.10 2003 9.39 13.53 283,477.35 2004 13.53 15.68 231,061.72 2005 15.68 16.16 188,559.84 2006 16.16 18.77 182,618.66 2007 18.77 18.21 157,487.90 2008 18.21 11.93 131,895.91 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.67 11.53 0.00 2002 11.53 8.73 31,319.69 2003 8.73 11.24 134,850.44 2004 11.24 12.18 140,086.68 2005 12.18 12.79 150,140.67 2006 12.79 14.26 135,896.81 2007 14.26 15.37 133,360.19 2008 15.37 8.80 127,217.51 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.64 8.26 703.88 2002 8.26 4.56 82,736.61 2003 4.56 6.15 157,205.97 2004 6.15 7.16 167,613.18 2005 7.16 8.10 198,655.45 2006 8.10 8.50 152,035.22 2007 8.50 9.86 177,985.78 2008 9.86 5.87 141,257.92
91
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $12.30 $12.11 0.00 2002 12.11 8.74 20,287.57 2003 8.74 12.13 69,711.26 2004 12.13 13.29 76,684.45 2005 13.29 14.53 89,028.74 2006 14.53 14.87 81,884.92 2007 14.87 16.09 71,559.81 2008 16.09 10.11 62,293.86 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.63 15.94 0.00 2002 15.94 17.20 63,409.50 2003 17.20 19.09 196,359.24 2004 19.09 20.05 189,299.59 2005 20.05 20.31 196,410.28 2006 20.31 21.01 179,284.01 2007 21.01 21.54 158,276.17 2008 21.54 18.04 110,058.56 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.53 14.82 0.00 2002 14.82 15.74 188,005.10 2003 15.74 15.77 313,395.25 2004 15.77 15.99 264,335.59 2005 15.99 16.03 242,161.56 2006 16.03 16.44 189,943.46 2007 16.44 16.89 166,280.80 2008 16.89 16.59 117,835.37
92 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.80 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division (Class 2)/(k)/................. 2006 $ 14.10 $ 14.75 11,078.73 2007 14.75 14.95 28,326.11 2008 14.95 13.29 11,990.83 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.61 13.27 0.00 2002 13.27 10.54 21,913.48 2003 10.54 15.87 33,168.46 2004 15.87 18.81 0.00 2005 18.81 23.12 50,476.12 2006 23.12 28.13 48,084.16 2007 28.13 33.50 48,905.54 2008 33.50 15.27 37,984.19 American Funds Growth Division (Class 2)/(c)/............... 2001 115.03 104.01 0.00 2002 104.01 77.05 11,908.66 2003 77.05 103.38 29,210.57 2004 103.38 114.05 0.00 2005 114.05 129.97 37,762.93 2006 129.97 140.49 33,428.47 2007 140.49 154.77 30,773.52 2008 154.77 85.03 26,302.96 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 80.70 77.36 0.00 2002 77.36 61.95 11,856.25 2003 61.95 80.45 33,120.08 2004 80.45 87.08 0.00 2005 87.08 90.39 36,847.22 2006 90.39 102.12 32,766.71 2007 102.12 105.19 29,642.17 2008 105.19 64.11 28,032.01 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 35.24 33.18 0.00 2002 33.18 23.21 5,538.93 2003 23.21 32.05 10,857.62 2004 32.05 35.50 12,059.65 2005 35.50 38.54 10,541.44 2006 38.54 40.33 6,842.26 2007 40.33 47.68 6,992.79 2008 47.68 25.39 5,777.75 BlackRock Bond Income Division (Class E)/(a)/............... 2002 39.52 41.59 18,136.56 2003 41.59 43.17 27,575.46 2004 43.17 44.22 27,352.41 2005 44.22 44.41 28,920.53 2006 44.41 45.48 27,734.40 2007 45.48 47.40 27,227.24 2008 47.40 44.89 20,471.57
93
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $38.17 $39.16 0.00 2002 39.16 39.56 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 34.97 34.03 216.77 2002 34.03 28.77 9,100.33 2003 28.77 34.02 21,987.52 2004 34.02 36.18 29,583.42 2005 36.18 36.59 23,569.26 2006 36.59 39.65 17,060.48 2007 39.65 41.16 15,523.04 2008 41.16 30.37 11,170.71 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 72.68 73.17 6,596.08 2008 73.17 45.09 3,982.82 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 65.61 61.14 182.54 2002 61.14 44.31 5,944.65 2003 44.31 56.59 12,254.04 2004 56.59 61.53 12,114.36 2005 61.53 62.52 9,781.28 2006 62.52 69.95 6,295.52 2007 69.95 73.29 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.90 1,314.47 2003 7.90 10.51 15,353.02 2004 10.51 11.69 28,767.25 2005 11.69 12.14 28,964.83 2006 12.14 14.21 39,442.04 2007 14.21 14.41 32,913.69 2008 14.41 9.19 16,109.00 BlackRock Money Market Division (Class E)/(f)/.............. 2003 20.89 20.73 0.00 2004 20.73 20.53 0.00 2005 20.53 20.71 0.00 2006 20.71 21.29 0.00 2007 21.29 21.94 0.00 2008 21.94 22.13 0.00 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.15 13.89 1,913.57 2002 13.89 10.71 69,276.42 2003 10.71 15.77 125,325.24 2004 15.77 17.84 131,251.05 2005 17.84 18.22 107,057.96 2006 18.22 20.87 83,495.52 2007 20.87 19.76 72,555.51 2008 19.76 11.93 58,330.67
94
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............ 2001 $26.45 $25.70 1,042.82 2002 25.70 21.06 8,348.55 2003 21.06 27.04 27,361.56 2004 27.04 29.78 43,083.43 2005 29.78 32.22 50,363.72 2006 32.22 36.21 57,658.41 2007 36.21 37.13 52,841.38 2008 37.13 22.08 49,989.04 FI Mid Cap Opportunities Division (Class E)/(c) (h)/... 2001 17.89 15.37 502.39 2002 15.37 10.69 5,714.40 2003 10.69 14.13 8,156.23 2004 14.13 16.24 21,466.02 2005 16.24 17.02 19,312.77 2006 17.02 18.68 15,874.21 2007 18.68 19.84 16,521.86 2008 19.84 8.69 13,140.83 FI Value Leaders Division (Class E)/(d)/............... 2002 21.93 18.00 332.24 2003 18.00 22.41 3,308.58 2004 22.41 24.99 3,475.82 2005 24.99 27.13 4,709.99 2006 27.13 29.79 4,285.98 2007 29.79 30.44 3,397.64 2008 30.44 18.22 3,213.20 Franklin Templeton Small Cap Growth Division (Class E)/(c)/....................................... 2001 9.16 8.77 0.00 2002 8.77 6.21 15,804.88 2003 6.21 8.83 40,793.11 2004 8.83 9.65 32,953.14 2005 9.65 9.90 26,405.22 2006 9.90 10.68 22,498.07 2007 10.68 10.96 19,778.24 2008 10.96 6.31 14,201.82 Harris Oakmark Focused Value Division (Class E)/(c)/... 2001 24.58 25.38 1,263.87 2002 25.38 22.69 27,595.16 2003 22.69 29.51 59,946.84 2004 29.51 31.82 72,274.83 2005 31.82 34.32 65,042.36 2006 34.32 37.85 62,213.57 2007 37.85 34.57 52,866.08 2008 34.57 18.31 44,421.14 Harris Oakmark International Division (Class E)/(d)/... 2002 10.57 8.79 8,347.86 2003 8.79 11.67 12,877.02 2004 11.67 13.83 17,894.61 2005 13.83 15.53 27,126.37 2006 15.53 19.67 45,874.36 2007 19.67 19.12 28,386.07 2008 19.12 11.11 19,273.62
95
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.99 $ 4.78 45,372.85 2006 4.78 4.82 39,376.17 2007 4.82 5.28 38,796.43 2008 5.28 3.29 26,036.44 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.36 4.89 0.00 2002 4.89 3.41 35,397.61 2003 3.41 4.21 39,728.83 2004 4.21 4.32 40,694.70 2005 4.32 3.95 40,675.99 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.76 10.98 1,298.28 2002 10.98 8.88 17,137.21 2003 8.88 11.16 28,017.90 2004 11.16 12.93 28,339.03 2005 12.93 14.96 25,342.92 2006 14.96 17.09 28,493.39 2007 17.09 18.50 29,010.54 2008 18.50 10.13 26,597.52 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.37 9.63 1,007.93 2003 9.63 11.95 20,956.54 2004 11.95 13.43 10,054.92 2005 13.43 14.28 9,683.75 2006 14.28 16.09 7,740.24 2007 16.09 15.38 10,364.86 2008 15.38 9.33 8,474.42 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.51 6.70 9,963.30 2004 6.70 7.15 6,085.33 2005 7.15 7.98 5,227.80 2006 7.98 7.72 5,135.36 2007 7.72 7.75 4,436.92 2008 7.75 4.64 2,745.18 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.72 0.00 2002 7.72 5.25 22,482.17 2003 5.25 5.51 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.17 9.80 108,987.74 2007 9.80 9.07 109,398.12 2008 9.07 4.04 110,782.18 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.64 8.20 0.00 2002 8.20 6.42 2,412.78 2003 6.42 7.67 69,949.34 2004 7.67 8.38 117,348.74 2005 8.38 8.82 108,896.99 2006 8.82 9.21 108,721.48
96
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/............................................ 2001 $11.06 $11.26 1,381.45 2002 11.26 12.17 101,636.24 2003 12.17 12.37 146,566.00 2004 12.37 12.63 160,937.89 2005 12.63 12.65 145,025.41 2006 12.65 12.91 152,282.73 2007 12.91 13.53 139,511.09 2008 13.53 14.05 99,282.20 Loomis Sayles Small Cap Division (Class E)/(c)/............. 2001 22.29 21.79 0.00 2002 21.79 16.76 1,484.27 2003 16.76 22.44 2,345.86 2004 22.44 25.61 2,256.23 2005 25.61 26.86 1,844.68 2006 26.86 30.74 2,132.31 2007 30.74 33.73 2,727.85 2008 33.73 21.20 2,402.54 Lord Abbett Bond Debenture Division (Class E)/(b)/.......... 2002 10.58 10.23 13,746.63 2003 10.23 12.00 39,415.43 2004 12.00 12.75 33,886.01 2005 12.75 12.73 31,329.92 2006 12.73 13.65 31,625.30 2007 13.65 14.31 31,131.93 2008 14.31 11.45 23,497.54 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)................................................. 2001 10.57 10.30 0.00 2002 10.30 10.58 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............ 2002 11.20 8.45 0.00 2003 8.45 11.53 22,282.93 2004 11.53 12.07 20,763.27 2005 12.07 12.86 20,416.74 2006 12.86 14.43 17,594.89 2007 14.43 15.76 14,744.86 2008 15.76 9.49 7,632.24 MetLife Mid Cap Stock Index Division (Class E)/(c)/......... 2001 10.38 10.26 0.00 2002 10.26 8.56 44,477.82 2003 8.56 11.33 67,406.81 2004 11.33 12.90 68,381.95 2005 12.90 14.21 58,401.15 2006 14.21 15.33 55,706.01 2007 15.33 16.21 54,535.88 2008 16.21 10.13 44,825.27
97
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $36.43 $34.34 671.77 2002 34.34 26.17 41,120.31 2003 26.17 32.89 79,268.86 2004 32.89 35.66 118,801.55 2005 35.66 36.60 89,671.46 2006 36.60 41.44 74,942.80 2007 41.44 42.76 71,195.33 2008 42.76 26.38 67,227.31 MFS(R) Research International Division (Class E)/(c)/....... 2001 9.00 8.34 0.00 2002 8.34 7.24 25,190.05 2003 7.24 9.39 33,498.87 2004 9.39 11.04 41,768.42 2005 11.04 12.63 27,894.46 2006 12.63 15.73 28,180.50 2007 15.73 17.52 40,426.07 2008 17.52 9.92 34,273.06 MFS(R) Total Return Division (Class E)/(i)/................. 2004 34.34 37.24 0.00 2005 37.24 37.62 1,263.35 2006 37.62 41.36 2,345.10 2007 41.36 42.29 2,946.81 2008 42.29 32.25 653.80 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.53 11.34 3,046.37 2002 11.34 9.55 81,665.64 2003 9.55 11.75 187,898.97 2004 11.75 12.85 191,141.96 2005 12.85 12.42 179,104.51 2006 12.42 14.39 131,825.95 2007 14.39 13.58 112,403.00 2008 13.58 8.85 102,276.68 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.28 8.50 1,841.72 2002 8.50 6.96 72,511.97 2003 6.96 9.38 112,355.06 2004 9.38 11.01 115,802.07 2005 11.01 12.22 84,285.99 2006 12.22 15.08 71,440.05 2007 15.08 16.38 60,548.48 2008 16.38 9.30 60,944.57 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.21 14.87 0.00 2002 14.87 13.19 21,689.33 2003 13.19 17.67 66,851.01 2004 17.67 21.31 98,462.11 2005 21.31 23.46 107,470.16 2006 23.46 25.64 90,273.43 2007 25.64 26.00 92,906.71 2008 26.00 13.43 85,426.08
98
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.71 $11.96 3,103.32 2002 11.96 9.85 10,581.89 2003 9.85 12.62 20,427.99 2004 12.62 14.39 20,725.47 2005 14.39 16.41 16,532.53 2006 16.41 18.78 13,384.48 2007 18.78 19.61 11,164.26 2008 19.61 11.46 7,183.80 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.23 10.40 1,386.44 2002 10.40 11.18 82,660.48 2003 11.18 11.46 166,141.39 2004 11.46 11.83 121,208.87 2005 11.83 11.89 132,290.87 2006 11.89 12.22 86,819.21 2007 12.22 12.92 85,529.56 2008 12.92 12.75 64,861.22 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.03 6.07 0.00 2002 6.07 2.94 14,254.00 2003 2.94 4.55 47,156.95 2004 4.55 4.28 45,287.82 2005 4.28 4.67 42,402.55 2006 4.67 4.83 36,122.67 2007 4.83 6.26 32,236.44 2008 6.26 3.41 19,879.06 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.89 11.82 717.97 2002 11.82 9.22 32,103.24 2003 9.22 13.22 57,338.41 2004 13.22 15.26 57,531.84 2005 15.26 15.65 63,815.41 2006 15.65 18.09 40,652.10 2007 18.09 17.47 36,665.05 2008 17.47 11.40 29,346.53 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.52 11.37 988.35 2002 11.37 8.56 30,756.22 2003 8.56 10.99 55,519.83 2004 10.99 11.85 52,958.89 2005 11.85 12.39 49,905.75 2006 12.39 13.74 46,920.80 2007 13.74 14.75 42,347.35 2008 14.75 8.41 32,130.33 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.62 8.22 1,378.37 2002 8.22 4.52 58,881.91 2003 4.52 6.07 89,716.97 2004 6.07 7.04 94,743.41 2005 7.04 7.92 106,030.37 2006 7.92 8.28 59,308.89 2007 8.28 9.56 85,597.20 2008 9.56 5.67 46,095.52
99
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $12.06 $11.85 0.00 2002 11.85 8.52 15,594.55 2003 8.52 11.77 26,823.96 2004 11.77 12.83 27,130.09 2005 12.83 13.97 26,757.08 2006 13.97 14.22 25,726.37 2007 14.22 15.32 23,752.75 2008 15.32 9.59 15,505.76 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 15.16 15.43 1,007.68 2002 15.43 16.58 5,941.77 2003 16.58 18.32 26,730.46 2004 18.32 19.15 31,916.01 2005 19.15 19.32 48,019.14 2006 19.32 19.89 45,738.69 2007 19.89 20.30 39,084.69 2008 20.30 16.92 18,210.54 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 14.10 14.35 0.00 2002 14.35 15.17 25,521.35 2003 15.17 15.13 41,839.55 2004 15.13 15.28 39,518.29 2005 15.28 15.24 38,078.20 2006 15.24 15.57 33,343.12 2007 15.57 15.92 25,692.15 2008 15.92 15.57 18,130.04
100 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 1.90 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.98 $ 14.61 8,302.42 2007 14.61 14.79 45,731.95 2008 14.79 13.13 13,981.78 American Funds Global Small Capitalization Division/(c)/.... 2001 13.57 13.22 0.00 2002 13.22 10.49 3,013.91 2003 10.49 15.78 24,019.52 2004 15.78 18.68 75,500.24 2005 18.68 22.95 75,518.87 2006 22.95 27.89 65,936.39 2007 27.89 33.18 69,803.28 2008 33.18 15.10 67,083.02 American Funds Growth Division/(c)/......................... 2001 113.04 102.16 0.00 2002 102.16 75.61 1,405.54 2003 75.61 101.34 18,951.53 2004 101.34 111.69 41,274.48 2005 111.69 127.15 35,235.78 2006 127.15 137.31 29,683.32 2007 137.31 151.12 28,363.02 2008 151.12 82.94 26,111.18 American Funds Growth-Income Division/(c)/.................. 2001 79.30 75.99 0.00 2002 75.99 60.79 738.38 2003 60.79 78.87 24,558.88 2004 78.87 85.28 46,623.82 2005 85.28 88.43 35,378.65 2006 88.43 99.81 32,205.65 2007 99.81 102.71 30,390.79 2008 102.71 62.53 26,080.28 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 34.78 32.73 0.00 2002 32.73 22.87 808.71 2003 22.87 31.55 5,530.73 2004 31.55 34.91 27,569.27 2005 34.91 37.87 25,733.02 2006 37.87 39.58 17,566.02 2007 39.58 46.75 16,376.38 2008 46.75 24.87 16,834.72 BlackRock Bond Income Division (Class E)/(a)/............... 2002 38.79 40.79 3,343.04 2003 40.79 42.30 12,029.75 2004 42.30 43.27 31,709.92 2005 43.27 43.42 30,252.66 2006 43.42 44.42 25,791.23 2007 44.42 46.25 20,574.99 2008 46.25 43.76 16,794.85
101
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $37.48 $38.44 0.00 2002 38.44 38.83 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 34.45 33.51 0.00 2002 33.51 28.30 189.63 2003 28.30 33.43 43,259.47 2004 33.43 35.52 61,426.46 2005 35.52 35.88 60,737.04 2006 35.88 38.84 27,167.96 2007 38.84 40.28 31,799.50 2008 40.28 29.69 22,471.82 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 70.96 71.39 10,183.43 2008 71.39 43.95 8,829.46 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 64.44 60.01 0.00 2002 60.01 43.45 971.49 2003 43.45 55.44 4,833.79 2004 55.44 60.22 13,651.94 2005 60.22 61.13 13,079.30 2006 61.13 68.33 11,830.71 2007 68.33 71.56 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.89 0.00 2003 7.89 10.49 11,432.11 2004 10.49 11.66 39,678.29 2005 11.66 12.09 36,886.96 2006 12.09 14.15 36,842.26 2007 14.15 14.33 41,901.90 2008 14.33 9.13 34,042.05 BlackRock Money Market Division (Class E)/(f)/.............. 2003 20.49 20.31 14,986.46 2004 20.31 20.09 6,733.03 2005 20.09 20.25 6,206.05 2006 20.25 20.80 116,864.92 2007 20.80 21.41 133,941.33 2008 21.41 21.57 152,559.23 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.14 13.87 0.00 2002 13.87 10.68 12,682.58 2003 10.68 15.72 91,986.55 2004 15.72 17.76 240,550.97 2005 17.76 18.12 173,335.54 2006 18.12 20.74 141,003.70 2007 20.74 19.62 127,084.88 2008 19.62 11.83 104,037.56
102
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.27 $25.51 0.00 2002 25.51 20.89 244.74 2003 20.89 26.80 7,277.40 2004 26.80 29.48 25,502.28 2005 29.48 31.86 28,292.41 2006 31.86 35.77 29,164.26 2007 35.77 36.65 29,560.06 2008 36.65 21.77 26,060.80 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 17.81 15.30 0.00 2002 15.30 10.63 3,208.29 2003 10.63 14.04 7,155.17 2004 14.04 16.11 80,222.93 2005 16.11 16.87 27,038.96 2006 16.87 18.49 22,095.35 2007 18.49 19.63 22,599.70 2008 19.63 8.59 24,930.34 FI Value Leaders Division (Class E)/(d)/.......... 2002 21.73 17.83 0.00 2003 17.83 22.17 1,175.26 2004 22.17 24.70 6,036.48 2005 24.70 26.79 10,879.80 2006 26.79 29.38 10,192.08 2007 29.38 29.99 10,652.42 2008 29.99 17.94 8,003.84 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.16 8.76 0.00 2002 8.76 6.20 334.60 2003 6.20 8.81 9,870.44 2004 8.81 9.61 21,119.63 2005 9.61 9.85 17,329.02 2006 9.85 10.62 14,849.70 2007 10.62 10.89 14,540.16 2008 10.89 6.26 16,140.35 Harris Oakmark Focused Value Division (Class E)/(c)/......................................... 2001 24.37 25.16 0.00 2002 25.16 22.47 4,547.75 2003 22.47 29.20 26,518.38 2004 29.20 31.45 51,174.27 2005 31.45 33.89 47,002.14 2006 33.89 37.34 42,284.04 2007 37.34 34.07 38,147.80 2008 34.07 18.02 32,394.51 Harris Oakmark International Division (Class E)/(d)/......................................... 2002 10.56 8.78 2,920.56 2003 8.78 11.64 7,171.53 2004 11.64 13.79 52,024.04 2005 13.79 15.46 56,065.91 2006 15.46 19.57 73,277.49 2007 19.57 19.01 65,916.50 2008 19.01 11.03 42,456.25
103
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.97 $ 4.76 31,624.41 2006 4.76 4.79 22,061.13 2007 4.79 5.24 9,107.69 2008 5.24 3.26 9,198.20 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.35 4.88 0.00 2002 4.88 3.40 1,383.77 2003 3.40 4.19 15,392.07 2004 4.19 4.30 22,107.36 2005 4.30 3.93 22,269.49 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.64 10.86 0.00 2002 10.86 8.78 1,771.31 2003 8.78 11.02 7,486.93 2004 11.02 12.76 13,045.37 2005 12.76 14.75 12,454.27 2006 14.75 16.82 20,085.13 2007 16.82 18.19 20,793.95 2008 18.19 9.96 22,987.03 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.36 9.61 0.00 2003 9.61 11.92 3,997.79 2004 11.92 13.39 22,734.48 2005 13.39 14.22 17,991.04 2006 14.22 16.01 23,011.11 2007 16.01 15.29 17,686.83 2008 15.29 9.26 15,006.86 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.50 6.69 9,828.64 2004 6.69 7.12 14,079.78 2005 7.12 7.95 17,725.36 2006 7.95 7.67 15,578.74 2007 7.67 7.70 10,782.29 2008 7.70 4.61 9,783.69 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.72 0.00 2002 7.72 5.25 201.87 2003 5.25 5.50 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.10 9.73 2,149.98 2007 9.73 8.99 2,511.02 2008 8.99 4.00 1,990.50 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.62 8.18 0.00 2002 8.18 6.40 924.89 2003 6.40 7.63 1,538.73 2004 7.63 8.33 3,515.44 2005 8.33 8.76 2,866.69 2006 8.76 9.14 2,844.02
104
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................. 2001 $11.03 $11.22 0.00 2002 11.22 12.12 15,993.09 2003 12.12 12.31 102,537.01 2004 12.31 12.55 332,741.42 2005 12.55 12.56 351,512.09 2006 12.56 12.80 299,065.59 2007 12.80 13.40 279,476.93 2008 13.40 13.91 176,960.32 Loomis Sayles Small Cap Division (Class E)/(c)/... 2001 22.13 21.62 0.00 2002 21.62 16.62 1,466.98 2003 16.62 22.22 6,563.89 2004 22.22 25.34 9,684.82 2005 25.34 26.55 10,412.49 2006 26.55 30.35 15,689.55 2007 30.35 33.27 11,368.47 2008 33.27 20.89 10,327.72 Lord Abbett Bond Debenture Division (Class E)/(b)/ 2002 10.53 10.17 1,415.92 2003 10.17 11.91 26,068.51 2004 11.91 12.65 64,145.58 2005 12.65 12.61 64,834.29 2006 12.61 13.51 55,060.04 2007 13.51 14.15 63,217.97 2008 14.15 11.31 45,725.58 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)....................................... 2001 10.53 10.25 0.00 2002 10.25 10.53 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.. 2002 11.20 8.44 0.00 2003 8.44 11.51 3,308.75 2004 11.51 12.03 6,104.99 2005 12.03 12.81 5,771.26 2006 12.81 14.36 6,166.00 2007 14.36 15.66 7,295.83 2008 15.66 9.42 7,339.58 MetLife Mid Cap Stock Index Division (Class E)/(c)/......................................... 2001 10.37 10.24 0.00 2002 10.24 8.54 4,534.88 2003 8.54 11.29 52,015.85 2004 11.29 12.84 88,555.01 2005 12.84 14.13 83,733.92 2006 14.13 15.23 81,561.45 2007 15.23 16.09 65,302.45 2008 16.09 10.05 63,984.53
105
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/....... 2001 $36.02 $33.94 0.00 2002 33.94 25.84 5,769.72 2003 25.84 32.45 52,164.34 2004 32.45 35.14 187,618.58 2005 35.14 36.03 188,827.97 2006 36.03 40.76 170,324.27 2007 40.76 42.01 159,758.97 2008 42.01 25.89 152,533.23 MFS(R) Research International Division (Class E)/(c)/......................................... 2001 8.99 8.33 0.00 2002 8.33 7.22 471.26 2003 7.22 9.36 15,286.66 2004 9.36 10.99 21,493.41 2005 10.99 12.57 20,177.00 2006 12.57 15.64 51,532.57 2007 15.64 17.40 56,117.46 2008 17.40 9.84 41,656.75 MFS(R) Total Return Division (Class E)/(i)/....... 2004 33.76 36.59 3,816.14 2005 36.59 36.93 15,082.43 2006 36.93 40.56 38,985.17 2007 40.56 41.43 55,843.58 2008 41.43 31.56 47,932.74 MFS(R) Value Division (Class E)/(c)/.............. 2001 11.49 11.31 0.00 2002 11.31 9.51 14,199.01 2003 9.51 11.69 47,343.51 2004 11.69 12.77 119,572.47 2005 12.77 12.34 109,224.41 2006 12.34 14.28 92,846.80 2007 14.28 13.45 74,177.43 2008 13.45 8.76 67,499.00 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/......................................... 2001 9.25 8.47 0.00 2002 8.47 6.93 7,162.93 2003 6.93 9.34 144,270.47 2004 9.34 10.94 212,515.85 2005 10.94 12.13 116,909.90 2006 12.13 14.96 111,174.05 2007 14.96 16.23 103,672.89 2008 16.23 9.21 111,642.29 Neuberger Berman Mid Cap Value Division (Class E)/(c)/......................................... 2001 15.17 14.83 0.00 2002 14.83 13.13 1,354.01 2003 13.13 17.58 13,934.84 2004 17.58 21.18 59,566.68 2005 21.18 23.29 68,756.49 2006 23.29 25.43 52,627.44 2007 25.43 25.76 54,595.36 2008 25.76 13.29 51,528.37
106
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/. 2001 $12.65 $11.90 0.00 2002 11.90 9.79 563.53 2003 9.79 12.53 7,699.28 2004 12.53 14.28 13,820.88 2005 14.28 16.27 12,974.62 2006 16.27 18.60 13,594.90 2007 18.60 19.40 13,438.30 2008 19.40 11.32 11,966.09 PIMCO Total Return Division (Class E)/(c)/........ 2001 10.22 10.39 0.00 2002 10.39 11.16 9,547.17 2003 11.16 11.43 91,741.16 2004 11.43 11.78 221,502.98 2005 11.78 11.83 228,104.58 2006 11.83 12.15 134,722.82 2007 12.15 12.83 148,495.59 2008 12.83 12.65 134,376.28 RCM Tecnology Division (Class E)/(c)/............. 2001 7.03 6.06 0.00 2002 6.06 2.94 0.00 2003 2.94 4.54 38,716.32 2004 4.54 4.26 131,230.36 2005 4.26 4.65 86,013.73 2006 4.65 4.81 73,827.22 2007 4.81 6.22 63,124.39 2008 6.22 3.38 52,775.10 Russell 2000(R) Index Division (Class E)/(c)/..... 2001 11.86 11.78 0.00 2002 11.78 9.18 3,089.33 2003 9.18 13.15 25,917.46 2004 13.15 15.16 50,459.09 2005 15.16 15.53 50,049.99 2006 15.53 17.94 49,117.28 2007 17.94 17.31 43,566.62 2008 17.31 11.28 41,467.67 T. Rowe Price Large Cap Growth Division (Class E)/(c)/......................................... 2001 11.49 11.33 0.00 2002 11.33 8.53 988.89 2003 8.53 10.93 7,368.15 2004 10.93 11.77 26,406.23 2005 11.77 12.30 24,290.61 2006 12.30 13.63 21,458.90 2007 13.63 14.61 29,530.51 2008 14.61 8.32 27,893.36 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/......................................... 2001 8.62 8.22 0.00 2002 8.22 4.51 5,956.41 2003 4.51 6.05 25,976.24 2004 6.05 7.01 48,313.85 2005 7.01 7.88 57,643.02 2006 7.88 8.23 52,037.86 2007 8.23 9.49 70,258.72 2008 9.49 5.62 55,757.62
107
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/......................................... 2001 $ 12.00 $ 11.79 0.00 2002 11.79 8.47 740.80 2003 8.47 11.69 6,820.69 2004 11.69 12.73 10,507.64 2005 12.73 13.84 10,450.91 2006 13.84 14.08 9,325.47 2007 14.08 15.15 13,575.06 2008 15.15 9.48 11,701.88 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/........... 2001 15.06 15.32 0.00 2002 15.32 16.44 2,032.45 2003 16.44 18.15 38,842.28 2004 18.15 18.96 84,855.05 2005 18.96 19.10 84,331.83 2006 19.10 19.65 74,108.61 2007 19.65 20.03 55,755.70 2008 20.03 16.68 49,032.00 Western Asset Management U.S Government Division (Class E)/(c)/.................................. 2001 14.00 14.25 0.00 2002 14.25 15.05 1,434.01 2003 15.05 14.99 61,521.19 2004 14.99 15.12 33,227.70 2005 15.12 15.07 29,759.10 2006 15.07 15.38 24,235.19 2007 15.38 15.71 27,578.09 2008 15.71 15.35 19,402.36 At 2.15 Separate Account Charge: American Funds Bond Division/(k)/................. 2006 13.85 14.47 29,754.86 2007 14.47 14.63 65,533.52 2008 14.63 12.98 61,633.18 American Funds Global Small Capitalization Division/(c)/................................... 2004 15.69 18.56 22,855.68 2005 18.56 22.77 65,511.64 2006 22.77 27.65 148,347.38 2007 27.65 32.86 210,517.72 2008 32.86 14.94 219,837.50 American Funds Growth Division/(c)/............... 2004 99.40 109.43 14,058.69 2005 109.43 124.46 31,533.74 2006 124.46 134.26 54,896.22 2007 134.26 147.62 72,479.89 2008 147.62 80.94 74,474.41 American Funds Growth-Income Division/(c)/........ 2004 77.35 83.56 19,344.03 2005 83.56 86.56 42,140.74 2006 86.56 97.60 63,265.18 2007 97.60 100.33 67,965.08 2008 100.33 61.02 60,995.53
108 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.00 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.85 $ 14.47 9,595.57 2007 14.47 14.63 927.95 2008 14.63 12.98 0.00 American Funds Global Small Capitalization Division/(c)/.... 2001 13.53 13.18 0.00 2002 13.18 10.44 1,924.46 2003 10.44 15.69 2,413.26 2004 15.69 18.56 4,253.14 2005 18.56 22.77 3,720.80 2006 22.77 27.65 3,462.82 2007 27.65 32.86 4,490.02 2008 32.86 14.94 3,722.91 American Funds Growth Division/(c)/......................... 2001 111.07 100.35 0.00 2002 100.35 74.19 775.60 2003 74.19 99.35 1,311.12 2004 99.35 109.38 1,952.69 2005 109.38 124.40 1,814.05 2006 124.40 134.20 1,100.43 2007 134.20 147.55 915.88 2008 147.55 80.90 903.53 American Funds Growth-Income Division/(c)/.................. 2001 77.93 74.64 0.00 2002 74.64 59.65 56.63 2003 59.65 77.32 453.38 2004 77.32 83.52 1,755.10 2005 83.52 86.51 2,396.81 2006 86.51 97.55 2,471.57 2007 97.55 100.28 1,805.14 2008 100.28 60.99 1,943.98 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 34.32 32.29 0.00 2002 32.29 22.53 0.00 2003 22.53 31.06 454.93 2004 31.06 34.33 609.77 2005 34.33 37.20 168.68 2006 37.20 38.85 280.97 2007 38.85 45.84 66.66 2008 45.84 24.36 500.21 BlackRock Bond Income Division (Class E)/(a)/............... 2002 38.06 40.00 845.31 2003 40.00 41.44 2,036.78 2004 41.44 42.35 2,439.73 2005 42.35 42.45 2,435.95 2006 42.45 43.39 2,336.62 2007 43.39 45.13 1,678.87 2008 45.13 42.65 1,431.65
109
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $36.81 $37.73 0.00 2002 37.73 38.10 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 33.93 32.99 0.00 2002 32.99 27.83 110.91 2003 27.83 32.85 2,511.68 2004 32.85 34.87 3,197.98 2005 34.87 35.19 3,169.34 2006 35.19 38.05 2,843.78 2007 38.05 39.43 2,156.45 2008 39.43 29.03 2,036.42 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 69.29 69.66 261.41 2008 69.66 42.84 432.02 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 63.28 58.91 0.00 2002 58.91 42.61 172.39 2003 42.61 54.32 439.64 2004 54.32 58.94 440.30 2005 58.94 59.77 438.56 2006 59.77 66.74 262.09 2007 66.74 69.88 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.89 0.00 2003 7.89 10.47 0.00 2004 10.47 11.63 3,355.84 2005 11.63 12.05 3,253.52 2006 12.05 14.08 10,312.76 2007 14.08 14.25 7,698.10 2008 14.25 9.07 7,520.97 BlackRock Money Market Division (Class E)/(f)/.............. 2003 20.09 19.90 0.00 2004 19.90 19.67 0.00 2005 19.67 19.81 0.00 2006 19.81 20.32 0.00 2007 20.32 20.90 2,104.88 2008 20.90 21.03 0.00 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.12 13.85 0.00 2002 13.85 10.66 6,524.30 2003 10.66 15.66 9,114.63 2004 15.66 17.68 10,966.08 2005 17.68 18.02 9,004.66 2006 18.02 20.60 4,338.64 2007 20.60 19.47 3,992.12 2008 19.47 11.73 3,499.68
110
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.10 $25.33 0.00 2002 25.33 20.72 2,606.09 2003 20.72 26.55 2,989.29 2004 26.55 29.18 3,062.57 2005 29.18 31.51 3,023.48 2006 31.51 35.34 83.25 2007 35.34 36.17 0.00 2008 36.17 21.46 519.73 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 17.73 15.22 0.00 2002 15.22 10.57 6,002.79 2003 10.57 13.94 6,760.48 2004 13.94 15.99 6,680.92 2005 15.99 16.73 6,442.97 2006 16.73 18.31 1,543.32 2007 18.31 19.42 963.28 2008 19.42 8.49 1,040.72 FI Value Leaders Division (Class E)/(d)/.......... 2002 21.54 17.65 0.00 2003 17.65 21.93 0.00 2004 21.93 24.42 0.00 2005 24.42 26.45 0.00 2006 26.45 28.98 489.13 2007 28.98 29.55 0.00 2008 29.55 17.66 0.00 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.16 8.76 0.00 2002 8.76 6.19 0.00 2003 6.19 8.78 1,775.24 2004 8.78 9.57 2,836.43 2005 9.57 9.81 222.62 2006 9.81 10.56 719.67 2007 10.56 10.81 239.96 2008 10.81 6.22 307.80 Harris Oakmark Focused Value Division (Class E)/(c)/.................................. 2001 24.17 24.94 0.00 2002 24.94 22.25 2,762.36 2003 22.25 28.89 4,464.34 2004 28.89 31.08 5,088.39 2005 31.08 33.46 4,099.48 2006 33.46 36.83 1,448.01 2007 36.83 33.57 861.56 2008 33.57 17.74 620.14 Harris Oakmark International Division (Class E)/(d)/.................................. 2002 10.56 8.77 0.00 2003 8.77 11.62 0.00 2004 11.62 13.74 2,210.94 2005 13.74 15.39 1,658.00 2006 15.39 19.47 5,010.11 2007 19.47 18.89 3,906.17 2008 18.89 10.95 2,890.02
111
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.95 $ 4.73 0.00 2006 4.73 4.76 1,264.20 2007 4.76 5.20 657.80 2008 5.20 3.23 655.29 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.35 4.87 0.00 2002 4.87 3.39 0.00 2003 3.39 4.18 0.00 2004 4.18 4.28 0.53 2005 4.28 3.91 0.00 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.52 10.75 0.00 2002 10.75 8.68 5,786.60 2003 8.68 10.88 6,601.98 2004 10.88 12.58 6,573.98 2005 12.58 14.53 7,616.03 2006 14.53 16.56 2,330.33 2007 16.56 17.89 2,107.18 2008 17.89 9.78 1,366.13 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.35 9.60 0.00 2003 9.60 11.89 0.00 2004 11.89 13.34 267.45 2005 13.34 14.16 266.14 2006 14.16 15.92 1,587.63 2007 15.92 15.19 323.41 2008 15.19 9.20 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.49 6.67 320.69 2004 6.67 7.10 284.39 2005 7.10 7.91 250.21 2006 7.91 7.63 2,061.90 2007 7.63 7.65 189.47 2008 7.65 4.57 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.71 0.00 2002 7.71 5.24 0.00 2003 5.24 5.49 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 9.04 9.66 302.93 2007 9.66 8.91 0.00 2008 8.91 3.97 0.00 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.60 8.16 0.00 2002 8.16 6.38 0.00 2003 6.38 7.60 0.00 2004 7.60 8.28 0.00 2005 8.28 8.70 0.00 2006 8.70 9.08 0.00
112
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................. 2001 $11.00 $11.19 0.00 2002 11.19 12.07 5,472.32 2003 12.07 12.24 16,394.16 2004 12.24 12.47 41,555.07 2005 12.47 12.47 54,822.25 2006 12.47 12.70 31,065.87 2007 12.70 13.28 22,432.43 2008 13.28 13.77 16,236.61 Loomis Sayles Small Cap Division (Class E)/(c)/... 2001 21.97 21.45 0.00 2002 21.45 16.48 0.00 2003 16.48 22.01 214.38 2004 22.01 25.07 214.24 2005 25.07 26.24 214.00 2006 26.24 29.97 214.00 2007 29.97 32.82 1,532.45 2008 32.82 20.59 1,167.90 Lord Abbett Bond Debenture Division (Class E)/(b)/ 2002 10.47 10.11 0.00 2003 10.11 11.83 1,134.38 2004 11.83 12.55 1,509.40 2005 12.55 12.50 1,755.64 2006 12.50 13.38 1,440.03 2007 13.38 14.00 7,115.18 2008 14.00 11.18 5,195.01 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)............................ 2001 10.48 10.20 0.00 2002 10.20 10.47 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.. 2002 11.19 8.43 0.00 2003 8.43 11.48 413.02 2004 11.48 11.99 412.75 2005 11.99 12.75 412.27 2006 12.75 14.28 1,899.08 2007 14.28 15.57 412.97 2008 15.57 9.35 412.27 MetLife Mid Cap Stock Index Division (Class E)/(c)/.................................. 2001 10.36 10.23 0.00 2002 10.23 8.52 992.19 2003 8.52 11.25 3,230.22 2004 11.25 12.78 6,267.43 2005 12.78 14.05 6,188.02 2006 14.05 15.13 3,740.18 2007 15.13 15.97 5,868.56 2008 15.97 9.96 7,153.62
113
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $35.62 $33.55 0.00 2002 33.55 25.51 1,060.52 2003 25.51 32.01 2,923.26 2004 32.01 34.63 13,535.30 2005 34.63 35.47 16,936.73 2006 35.47 40.08 6,983.96 2007 40.08 41.27 6,777.79 2008 41.27 25.41 8,534.13 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.99 8.33 0.00 2002 8.33 7.21 0.00 2003 7.21 9.34 0.00 2004 9.34 10.95 0.00 2005 10.95 12.51 1,850.40 2006 12.51 15.55 2,305.10 2007 15.55 17.28 1,960.95 2008 17.28 9.76 1,170.14 MFS(R) Total Return Division (Class E)/(i)/................. 2004 33.19 35.95 0.00 2005 35.95 36.24 1,335.09 2006 36.24 39.77 1,335.09 2007 39.77 40.58 1,165.26 2008 40.58 30.88 1,164.61 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.46 11.27 0.00 2002 11.27 9.47 2,408.09 2003 9.47 11.63 4,948.30 2004 11.63 12.69 6,244.20 2005 12.69 12.25 8,161.31 2006 12.25 14.16 6,599.62 2007 14.16 13.33 4,612.17 2008 13.33 8.67 3,059.27 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.23 8.45 0.00 2002 8.45 6.90 0.00 2003 6.90 9.29 4,323.55 2004 9.29 10.87 8,964.83 2005 10.87 12.05 12,782.49 2006 12.05 14.84 6,111.42 2007 14.84 16.08 8,973.59 2008 16.08 9.11 9,647.98 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.12 14.78 0.00 2002 14.78 13.08 177.81 2003 13.08 17.49 1,230.14 2004 17.49 21.05 1,765.76 2005 21.05 23.12 3,214.66 2006 23.12 25.22 3,831.25 2007 25.22 25.53 2,015.24 2008 25.53 13.16 1,886.20
114
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.59 $11.85 0.00 2002 11.85 9.74 0.00 2003 9.74 12.44 547.20 2004 12.44 14.17 479.01 2005 14.17 16.13 1,697.51 2006 16.13 18.42 3,598.41 2007 18.42 19.19 1,566.24 2008 19.19 11.19 841.34 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.22 10.38 0.00 2002 10.38 11.13 3,936.79 2003 11.13 11.40 11,880.53 2004 11.40 11.74 13,066.53 2005 11.74 11.77 13,723.33 2006 11.77 12.08 14,073.96 2007 12.08 12.74 7,295.03 2008 12.74 12.55 5,954.61 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.03 6.06 0.00 2002 6.06 2.93 0.00 2003 2.93 4.53 4,806.36 2004 4.53 4.24 0.00 2005 4.24 4.63 0.00 2006 4.63 4.78 967.60 2007 4.78 6.17 11,927.67 2008 6.17 3.36 12,980.75 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.83 11.74 0.00 2002 11.74 9.14 2,798.90 2003 9.14 13.08 5,896.70 2004 13.08 15.07 6,033.56 2005 15.07 15.42 4,282.04 2006 15.42 17.80 5,025.33 2007 17.80 17.15 4,341.77 2008 17.15 11.17 4,427.77 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.46 11.30 0.00 2002 11.30 8.49 5,921.78 2003 8.49 10.87 5,922.19 2004 10.87 11.70 5,976.83 2005 11.70 12.21 6,377.58 2006 12.21 13.52 13,757.83 2007 13.52 14.48 4,590.51 2008 14.48 8.24 4,549.59 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.61 8.21 0.00 2002 8.21 4.50 1,547.88 2003 4.50 6.03 1,406.52 2004 6.03 6.98 3,021.87 2005 6.98 7.84 5,052.18 2006 7.84 8.18 7,793.61 2007 8.18 9.43 9,208.14 2008 9.43 5.58 8,145.60
115
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 11.95 $ 11.73 0.00 2002 11.73 8.42 6,141.65 2003 8.42 11.61 7,404.75 2004 11.61 12.63 6,865.52 2005 12.63 13.72 6,132.62 2006 13.72 13.95 0.02 2007 13.95 14.99 0.02 2008 14.99 9.36 0.00 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.96 15.21 0.00 2002 15.21 16.31 985.57 2003 16.31 17.98 2,048.81 2004 17.98 18.77 2,763.31 2005 18.77 18.89 2,903.70 2006 18.89 19.42 2,839.65 2007 19.42 19.77 1,897.30 2008 19.77 16.45 1,445.70 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 13.91 14.15 0.00 2002 14.15 14.93 3,587.44 2003 14.93 14.86 12,134.34 2004 14.86 14.97 10,947.76 2005 14.97 14.91 9,359.71 2006 14.91 15.19 8,630.77 2007 15.19 15.51 2,940.96 2008 15.51 15.13 1,990.72 At 2.25 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 13.73 14.33 920.46 2007 14.33 14.47 761.09 2008 14.47 12.83 330.55 American Funds Global Small Capitalization Division/(c)/.... 2004 15.60 18.44 0.00 2005 18.44 22.60 0.00 2006 22.60 27.41 179.50 2007 27.41 32.54 287.37 2008 32.54 14.78 300.11 American Funds Growth Division/(c)/......................... 2004 97.44 107.17 37.63 2005 107.17 121.76 640.42 2006 121.76 131.22 702.00 2007 131.22 144.13 572.15 2008 144.13 78.95 554.82 American Funds Growth-Income Division/(c)/.................. 2004 75.83 81.83 65.02 2005 81.83 84.68 64.95 2006 84.68 95.39 284.87 2007 95.39 97.96 505.03 2008 97.96 59.52 482.45
116 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.05 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.79 $ 14.40 1,759.15 2007 14.40 14.55 4,011.12 2008 14.55 12.90 913.11 American Funds Global Small Capitalization Division/(c)/.... 2001 13.50 13.15 438.91 2002 13.15 10.41 996.94 2003 10.41 15.64 16,775.79 2004 15.64 18.50 30,426.34 2005 18.50 22.68 34,820.47 2006 22.68 27.53 34,101.06 2007 27.53 32.70 29,940.68 2008 32.70 14.86 25,691.36 American Funds Growth Division/(c)/......................... 2001 110.11 99.46 314.16 2002 99.46 73.50 444.84 2003 73.50 98.36 6,389.17 2004 98.36 108.24 14,117.57 2005 108.24 123.04 16,703.64 2006 123.04 132.67 15,225.06 2007 132.67 145.79 12,825.58 2008 145.79 79.90 11,603.20 American Funds Growth-Income Division/(c)/.................. 2001 77.25 73.98 0.00 2002 73.98 59.09 654.55 2003 59.09 76.55 9,674.26 2004 76.55 82.65 19,070.43 2005 82.65 85.57 19,559.27 2006 85.57 96.44 17,826.15 2007 96.44 99.09 16,481.01 2008 99.09 60.24 12,475.20 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 34.09 32.07 0.00 2002 32.07 22.37 0.00 2003 22.37 30.81 946.24 2004 30.81 34.05 2,528.84 2005 34.05 36.88 2,565.80 2006 36.88 38.49 2,212.90 2007 38.49 45.39 1,078.40 2008 45.39 24.11 2,045.11 BlackRock Bond Income Division (Class E)/(a)/............... 2002 37.70 39.61 384.90 2003 39.61 41.01 5,899.26 2004 41.01 41.90 10,100.19 2005 41.90 41.97 10,478.11 2006 41.97 42.88 9,289.85 2007 42.88 44.58 8,311.80 2008 44.58 42.11 6,185.73
117
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a) /(formerly SSR Income Class E)........................................... 2001 $36.48 $37.39 0.00 2002 37.39 37.74 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 33.68 32.74 0.00 2002 32.74 27.61 1,832.13 2003 27.61 32.57 6,200.87 2004 32.57 34.55 18,503.74 2005 34.55 34.85 15,215.56 2006 34.85 37.67 13,432.11 2007 37.67 39.00 7,882.89 2008 39.00 28.71 6,626.97 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 68.47 68.81 3,112.34 2008 68.81 42.30 3,108.24 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 62.71 58.37 0.00 2002 58.37 42.19 449.48 2003 42.19 53.76 3,140.54 2004 53.76 58.31 5,096.14 2005 58.31 59.10 4,091.70 2006 59.10 65.96 3,495.34 2007 65.96 69.05 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.88 0.00 2003 7.88 10.46 10,667.48 2004 10.46 11.61 21,585.44 2005 11.61 12.03 13,049.74 2006 12.03 14.05 17,639.68 2007 14.05 14.21 15,941.12 2008 14.21 9.04 13,875.88 BlackRock Money Market Division (Class E)/(f)/.............. 2003 19.89 19.70 0.00 2004 19.70 19.46 0.00 2005 19.46 19.59 0.00 2006 19.59 20.08 0.00 2007 20.08 20.64 0.00 2008 20.64 20.77 421.35 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.12 13.84 3,204.38 2002 13.84 10.64 18,251.78 2003 10.64 15.64 43,034.38 2004 15.64 17.64 71,032.85 2005 17.64 17.97 50,710.59 2006 17.97 20.54 43,703.23 2007 20.54 19.40 36,659.90 2008 19.40 11.68 30,468.17
118
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $26.01 $25.24 1,350.89 2002 25.24 20.63 2,271.32 2003 20.63 26.43 6,186.28 2004 26.43 29.04 13,120.19 2005 29.04 31.33 18,047.50 2006 31.33 35.12 18,323.79 2007 35.12 35.93 13,964.61 2008 35.93 21.31 13,326.93 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 17.69 15.19 1,346.02 2002 15.19 10.54 1,347.50 2003 10.54 13.89 6,960.03 2004 13.89 15.92 19,548.68 2005 15.92 16.65 15,728.68 2006 16.65 18.22 11,089.02 2007 18.22 19.31 8,936.39 2008 19.31 8.44 9,390.19 FI Value Leaders Division (Class E)/(d)/.......... 2002 21.44 17.57 214.85 2003 17.57 21.82 4,523.45 2004 21.82 24.27 4,576.80 2005 24.27 26.29 4,339.46 2006 26.29 28.79 3,677.65 2007 28.79 29.34 3,268.05 2008 29.34 17.52 3,234.18 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.16 8.75 0.00 2002 8.75 6.19 0.00 2003 6.19 8.77 7,350.39 2004 8.77 9.56 13,156.44 2005 9.56 9.78 12,017.98 2006 9.78 10.53 6,269.96 2007 10.53 10.78 10,007.88 2008 10.78 6.19 6,815.10 Harris Oakmark Focused Value Division (Class E)/(c)/......................................... 2001 24.07 24.83 815.64 2002 24.83 22.14 6,617.98 2003 22.14 28.74 21,287.58 2004 28.74 30.90 29,265.97 2005 30.90 33.25 20,727.49 2006 33.25 36.58 19,109.45 2007 36.58 33.33 13,357.82 2008 33.33 17.60 11,095.92 Harris Oakmark International Division (Class E)/(d)/......................................... 2002 10.55 8.76 0.00 2003 8.76 11.60 3,053.84 2004 11.60 13.72 21,258.69 2005 13.72 15.36 24,082.47 2006 15.36 19.42 26,720.08 2007 19.42 18.83 23,252.85 2008 18.83 10.91 17,369.31
119
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/....... 2005 $ 3.94 $ 4.72 16,459.10 2006 4.72 4.74 15,421.62 2007 4.74 5.18 14,780.85 2008 5.18 3.22 14,382.35 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division)..... 2001 5.34 4.86 0.00 2002 4.86 3.38 1,008.85 2003 3.38 4.17 2,937.16 2004 4.17 4.27 4,490.98 2005 4.27 3.90 5,560.76 Julius Baer International Stock Division (Class E)/(c)/......................................... 2001 11.47 10.69 5,122.10 2002 10.69 8.63 5,398.06 2003 8.63 10.81 11,454.97 2004 10.81 12.50 16,559.61 2005 12.50 14.42 17,596.42 2006 14.42 16.43 18,029.81 2007 16.43 17.74 17,420.66 2008 17.74 9.69 15,226.83 Lazard Mid Cap Division (Class E)/(d)/............ 2002 11.35 9.60 1,615.14 2003 9.60 11.88 5,819.75 2004 11.88 13.32 14,977.19 2005 13.32 14.13 15,148.88 2006 14.13 15.88 10,845.45 2007 15.88 15.15 9,939.87 2008 15.15 9.16 9,866.77 Legg Mason Partners Aggressive Growth (Class E)/(e)/......................................... 2003 5.49 6.66 6,543.28 2004 6.66 7.08 15,505.51 2005 7.08 7.89 18,967.44 2006 7.89 7.61 14,001.46 2007 7.61 7.63 4,348.02 2008 7.63 4.55 3,775.02 Legg Mason Partners Aggressive Growth (Class E)/(e)/......................................... 2001 8.85 7.71 1,784.57 2002 7.71 5.23 3,115.45 2003 5.23 5.49 0.00 Legg Mason Value Equity (Class E)/(c) (l)/........ 2006 9.01 9.62 6,914.22 2007 9.62 8.87 7,400.63 2008 8.87 3.95 6,477.10 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division). 2001 8.59 8.15 1,399.91 2002 8.15 6.37 1,397.20 2003 6.37 7.58 3,811.63 2004 7.58 8.26 12,754.47 2005 8.26 8.67 11,770.84 2006 8.67 9.05 11,558.87
120
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................. 2001 $10.99 $11.17 0.00 2002 11.17 12.04 7,972.73 2003 12.04 12.21 72,902.20 2004 12.21 12.43 158,947.43 2005 12.43 12.43 161,502.74 2006 12.43 12.65 131,133.81 2007 12.65 13.22 117,402.13 2008 13.22 13.70 84,972.46 Loomis Sayles Small Cap Division (Class E)/(c)/... 2001 21.89 21.37 267.00 2002 21.37 16.40 266.38 2003 16.40 21.90 1,344.68 2004 21.90 24.94 5,344.54 2005 24.94 26.09 6,094.25 2006 26.09 29.78 5,528.92 2007 29.78 32.59 6,356.66 2008 32.59 20.44 5,773.22 Lord Abbett Bond Debenture Division (Class E)/(b)/ 2002 10.44 10.08 0.00 2003 10.08 11.79 17,930.18 2004 11.79 12.51 32,383.49 2005 12.51 12.45 43,806.60 2006 12.45 13.32 35,902.95 2007 13.32 13.92 34,755.54 2008 13.92 11.11 26,292.07 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)....................................... 2001 10.46 10.17 0.00 2002 10.17 10.44 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.. 2002 11.19 8.42 60.77 2003 8.42 11.47 6,064.52 2004 11.47 11.97 7,458.88 2005 11.97 12.73 7,774.97 2006 12.73 14.25 8,133.40 2007 14.25 15.52 7,169.44 2008 15.52 9.32 6,872.83 MetLife Mid Cap Stock Index Division (Class E)/(c)/......................................... 2001 10.35 10.22 0.00 2002 10.22 8.51 1,132.56 2003 8.51 11.23 28,532.57 2004 11.23 12.75 38,041.21 2005 12.75 14.01 37,300.09 2006 14.01 15.08 33,019.99 2007 15.08 15.91 31,999.31 2008 15.91 9.92 30,798.99
121
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/....... 2001 $35.42 $33.35 0.00 2002 33.35 25.35 2,709.72 2003 25.35 31.79 30,217.02 2004 31.79 34.38 73,448.51 2005 34.38 35.19 69,827.10 2006 35.19 39.75 61,988.76 2007 39.75 40.91 54,276.91 2008 40.91 25.18 63,649.23 MFS(R) Research International Division (Class E)/(c)/......................................... 2001 8.99 8.32 0.00 2002 8.32 7.20 43.87 2003 7.20 9.32 1,979.38 2004 9.32 10.93 12,025.30 2005 10.93 12.48 12,077.86 2006 12.48 15.50 19,641.53 2007 15.50 17.22 16,991.12 2008 17.22 9.73 17,505.54 MFS(R) Total Return Division (Class E)/(i)/....... 2004 32.91 35.63 7,136.84 2005 35.63 35.91 15,395.59 2006 35.91 39.38 23,460.92 2007 39.38 40.16 18,778.62 2008 40.16 30.55 17,414.76 MFS(R) Value Division (Class E)/(c)/.............. 2001 11.45 11.25 5,441.82 2002 11.25 9.45 14,458.29 2003 9.45 11.60 43,426.10 2004 11.60 12.65 72,171.82 2005 12.65 12.20 62,274.15 2006 12.20 14.10 54,832.27 2007 14.10 13.27 40,729.74 2008 13.27 8.63 39,162.11 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/......................................... 2001 9.22 8.43 4,209.55 2002 8.43 6.88 4,025.57 2003 6.88 9.26 41,518.50 2004 9.26 10.84 61,137.96 2005 10.84 12.01 63,202.99 2006 12.01 14.78 56,268.52 2007 14.78 16.01 39,187.24 2008 16.01 9.07 47,299.31 Neuberger Berman Mid Cap Value Division (Class E)/(c)/......................................... 2001 15.10 14.76 2,173.70 2002 14.76 13.05 2,926.65 2003 13.05 17.44 13,645.77 2004 17.44 20.98 31,330.35 2005 20.98 23.04 41,729.59 2006 23.04 25.12 34,244.57 2007 25.12 25.41 30,551.39 2008 25.41 13.09 26,392.39
122
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/. 2001 $12.57 $11.82 0.00 2002 11.82 9.71 1,677.78 2003 9.71 12.40 6,218.44 2004 12.40 14.11 7,270.26 2005 14.11 16.05 8,032.88 2006 16.05 18.33 11,839.54 2007 18.33 19.09 12,911.41 2008 19.09 11.12 8,464.42 PIMCO Total Return Division (Class E)/(c)/........ 2001 10.22 10.38 3,329.02 2002 10.38 11.12 10,259.12 2003 11.12 11.38 42,041.49 2004 11.38 11.71 69,468.80 2005 11.71 11.74 69,472.37 2006 11.74 12.04 53,389.96 2007 12.04 12.70 46,714.62 2008 12.70 12.50 47,521.91 RCM Tecnology Division (Class E)/(c)/............. 2001 7.03 6.05 0.00 2002 6.05 2.93 567.47 2003 2.93 4.52 16,470.19 2004 4.52 4.24 25,235.36 2005 4.24 4.62 23,055.61 2006 4.62 4.76 23,879.75 2007 4.76 6.15 27,660.66 2008 6.15 3.34 20,768.29 Russell 2000(R) Index Division (Class E)/(c)/..... 2001 11.81 11.72 0.00 2002 11.72 9.12 281.75 2003 9.12 13.05 18,134.60 2004 13.05 15.02 22,943.99 2005 15.02 15.37 24,348.97 2006 15.37 17.73 20,302.64 2007 17.73 17.08 18,505.25 2008 17.08 11.11 16,846.57 T. Rowe Price Large Cap Growth Division (Class E)/(c)/......................................... 2001 11.45 11.28 1,014.49 2002 11.28 8.48 1,725.19 2003 8.48 10.85 9,688.32 2004 10.85 11.67 32,111.08 2005 11.67 12.17 35,475.58 2006 12.17 13.47 28,560.03 2007 13.47 14.41 22,443.34 2008 14.41 8.19 24,477.95 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/......................................... 2001 8.61 8.21 0.00 2002 8.21 4.50 136.38 2003 4.50 6.03 9,236.60 2004 6.03 6.97 26,237.17 2005 6.97 7.82 29,419.65 2006 7.82 8.15 26,524.56 2007 8.15 9.40 32,626.69 2008 9.40 5.56 20,964.65
123
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/......................................... 2001 $ 11.92 $ 11.70 0.00 2002 11.70 8.39 318.34 2003 8.39 11.57 10,808.52 2004 11.57 12.58 16,662.14 2005 12.58 13.66 24,267.01 2006 13.66 13.88 17,450.92 2007 13.88 14.91 11,153.55 2008 14.91 9.31 11,310.17 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/........... 2001 14.91 15.16 1,812.62 2002 15.16 16.24 2,977.42 2003 16.24 17.90 11,180.64 2004 17.90 18.67 27,480.68 2005 18.67 18.78 41,144.40 2006 18.78 19.30 30,220.02 2007 19.30 19.64 23,530.39 2008 19.64 16.33 14,046.58 Western Asset Management U.S Government Division (Class E)/(c)/.................................. 2001 13.86 14.10 0.00 2002 14.10 14.86 5,646.59 2003 14.86 14.79 26,001.20 2004 14.79 14.89 35,202.78 2005 14.89 14.82 34,141.09 2006 14.82 15.10 18,053.27 2007 15.10 15.40 24,949.51 2008 15.40 15.03 12,198.41 At 2.30 Separate Account Charge: American Funds Bond Division/(k)/................. 2006 13.67 14.26 36,187.80 2007 14.26 14.40 121,766.70 2008 14.40 12.75 61,754.00 American Funds Global Small Capitalization Division/(c)/................................... 2004 15.55 18.37 11,675.66 2005 18.37 22.51 67,533.92 2006 22.51 27.29 140,248.70 2007 27.29 32.39 222,178.57 2008 32.39 14.71 127,281.43 American Funds Growth Division/(c)/............... 2004 96.47 106.05 8,870.53 2005 106.05 120.43 26,258.30 2006 120.43 129.73 42,023.84 2007 129.73 142.42 51,522.91 2008 142.42 77.97 39,102.27 American Funds Growth-Income Division/(c)/........ 2004 75.08 80.98 12,705.18 2005 80.98 83.76 28,987.83 2006 83.76 94.30 43,032.23 2007 94.30 96.80 44,628.03 2008 96.80 58.78 39,682.91
124 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.15 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.67 $ 14.26 1,871.50 2007 14.26 14.40 9,055.63 2008 14.40 12.75 0.00 American Funds Global Small Capitalization Division/(c)/.... 2001 13.46 13.10 0.00 2002 13.10 10.36 240.07 2003 10.36 15.55 2,826.25 2004 15.55 18.37 8,233.81 2005 18.37 22.51 10,408.87 2006 22.51 27.29 10,006.16 2007 27.29 32.39 11,559.57 2008 32.39 14.71 7,460.49 American Funds Growth Division/(c)/......................... 2001 108.20 97.69 0.00 2002 97.69 72.12 296.99 2003 72.12 96.42 1,763.09 2004 96.42 106.00 6,382.60 2005 106.00 120.37 4,184.29 2006 120.37 129.66 4,691.87 2007 129.66 142.35 4,374.86 2008 142.35 77.93 2,860.94 American Funds Growth-Income Division/(c)/.................. 2001 75.91 72.66 0.00 2002 72.66 57.98 0.00 2003 57.98 75.04 1,645.67 2004 75.04 80.94 3,961.92 2005 80.94 83.72 5,156.55 2006 83.72 94.26 3,541.86 2007 94.26 96.75 4,096.76 2008 96.75 58.75 2,227.45 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 33.64 31.63 0.00 2002 31.63 22.04 0.00 2003 22.04 30.33 425.58 2004 30.33 33.48 850.72 2005 33.48 36.23 858.28 2006 36.23 37.78 1,109.56 2007 37.78 44.51 1,267.17 2008 44.51 23.62 1,918.13 BlackRock Bond Income Division (Class E)/(a)/............... 2002 37.00 38.84 35.75 2003 38.84 40.18 2,822.79 2004 40.18 41.01 3,346.62 2005 41.01 41.04 3,149.42 2006 41.04 41.88 1,292.51 2007 41.88 43.50 939.58 2008 43.50 41.05 883.90
125
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $35.82 $36.70 0.00 2002 36.70 37.04 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 33.17 32.24 0.00 2002 32.24 27.15 184.32 2003 27.15 32.00 495.06 2004 32.00 33.91 2,899.19 2005 33.91 34.17 2,785.83 2006 34.17 36.90 2,581.19 2007 36.90 38.18 1,116.38 2008 38.18 28.07 1,067.03 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 66.85 67.15 710.19 2008 67.15 41.23 569.44 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 61.58 57.30 0.00 2002 57.30 41.38 0.00 2003 41.38 52.67 434.96 2004 52.67 57.06 1,002.21 2005 57.06 57.78 922.91 2006 57.78 64.42 711.47 2007 64.42 67.42 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.88 24.24 2003 7.88 10.44 1,990.50 2004 10.44 11.58 4,304.63 2005 11.58 11.98 3,251.04 2006 11.98 13.98 4,326.66 2007 13.98 14.13 14,281.80 2008 14.13 8.98 6,371.10 BlackRock Money Market Division (Class E)/(f)/.............. 2003 19.50 19.30 0.00 2004 19.30 19.05 0.00 2005 19.05 19.15 0.00 2006 19.15 19.62 0.00 2007 19.62 20.15 0.00 2008 20.15 20.25 10,165.31 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.10 13.82 0.00 2002 13.82 10.62 2,143.21 2003 10.62 15.58 9,447.33 2004 15.58 17.56 27,095.80 2005 17.56 17.87 22,089.70 2006 17.87 20.40 18,411.53 2007 20.40 19.25 8,214.36 2008 19.25 11.59 6,361.99
126
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/....... 2001 $25.83 $25.06 0.00 2002 25.06 20.47 1,028.09 2003 20.47 26.19 576.86 2004 26.19 28.74 3,927.86 2005 28.74 30.99 5,199.63 2006 30.99 34.70 7,278.24 2007 34.70 35.46 4,993.46 2008 35.46 21.01 2,863.24 FI Mid Cap Opportunities Division (Class E)/(c) (h)/............................................ 2001 17.61 15.11 0.00 2002 15.11 10.48 1,692.97 2003 10.48 13.80 296.55 2004 13.80 15.80 3,813.48 2005 15.80 16.51 4,062.73 2006 16.51 18.04 4,623.65 2007 18.04 19.10 3,230.04 2008 19.10 8.34 2,290.27 FI Value Leaders Division (Class E)/(d)/.......... 2002 21.25 17.40 0.00 2003 17.40 21.59 0.00 2004 21.59 23.99 1,202.31 2005 23.99 25.96 1,145.45 2006 25.96 28.39 1,455.08 2007 28.39 28.91 1,063.31 2008 28.91 17.25 95.79 Franklin Templeton Small Cap Growth Division (Class E)/(c)/.................................. 2001 9.15 8.75 0.00 2002 8.75 6.18 0.00 2003 6.18 8.75 1,312.42 2004 8.75 9.52 1,147.74 2005 9.52 9.74 1,355.21 2006 9.74 10.47 2,171.96 2007 10.47 10.71 149.87 2008 10.71 6.14 159.57 Harris Oakmark Focused Value Division (Class E)/(c)/.................................. 2001 23.88 24.62 0.00 2002 24.62 21.93 1,132.57 2003 21.93 28.43 1,495.33 2004 28.43 30.54 12,861.04 2005 30.54 32.83 5,019.92 2006 32.83 36.08 3,241.62 2007 36.08 32.84 1,616.86 2008 32.84 17.33 1,172.66 Harris Oakmark International Division (Class E)/(d)/.................................. 2002 10.55 8.75 0.00 2003 8.75 11.58 1,287.18 2004 11.58 13.68 3,382.58 2005 13.68 15.30 5,903.70 2006 15.30 19.31 6,915.16 2007 19.31 18.71 14,457.36 2008 18.71 10.83 4,078.42
127
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/..... 2005 $ 3.92 $ 4.69 613.27 2006 4.69 4.71 2,641.14 2007 4.71 5.14 1,391.48 2008 5.14 3.19 1,328.84 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division)... 2001 5.34 4.86 0.00 2002 4.86 3.37 0.00 2003 3.37 4.15 630.84 2004 4.15 4.25 635.91 2005 4.25 3.88 650.49 Julius Baer International Stock Division (Class E)/(c)/................................ 2001 11.35 10.57 0.00 2002 10.57 8.52 2,244.21 2003 8.52 10.67 27.97 2004 10.67 12.33 617.87 2005 12.33 14.21 658.04 2006 14.21 16.18 3,385.08 2007 16.18 17.45 2,235.53 2008 17.45 9.52 1,358.95 Lazard Mid Cap Division (Class E)/(d)/.......... 2002 11.34 9.58 0.00 2003 9.58 11.85 493.67 2004 11.85 13.28 1,730.31 2005 13.28 14.07 2,180.30 2006 14.07 15.80 2,308.34 2007 15.80 15.05 1,850.60 2008 15.05 9.10 1,569.14 Legg Mason Partners Aggressive Growth (Class E)/(e)/................................ 2003 5.48 6.64 402.51 2004 6.64 7.06 194.20 2005 7.06 7.86 185.19 2006 7.86 7.56 206.43 2007 7.56 7.57 214.79 2008 7.57 4.52 211.20 Legg Mason Partners Aggressive Growth (Class E)/(e)/................................ 2001 8.85 7.70 0.00 2002 7.70 5.22 0.00 2003 5.22 5.48 0.00 Legg Mason Value Equity (Class E)/(c) (l)/...... 2006 8.94 9.54 1,202.39 2007 9.54 8.80 1,226.92 2008 8.80 3.91 447.74 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)..................................... 2001 8.57 8.13 0.00 2002 8.13 6.34 0.00 2003 6.34 7.54 207.67 2004 7.54 8.21 1,207.29 2005 8.21 8.61 1,358.85 2006 8.61 8.98 1,366.05
128
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................... 2001 $10.96 $11.14 0.00 2002 11.14 11.99 1,056.41 2003 11.99 12.15 6,167.36 2004 12.15 12.36 11,393.30 2005 12.36 12.34 9,533.73 2006 12.34 12.54 7,303.60 2007 12.54 13.10 9,632.61 2008 13.10 13.56 5,456.97 Loomis Sayles Small Cap Division (Class E)/(c)/............................. 2001 21.73 21.21 0.00 2002 21.21 16.26 0.00 2003 16.26 21.69 505.85 2004 21.69 24.67 676.53 2005 24.67 25.78 178.26 2006 25.78 29.40 1,029.23 2007 29.40 32.15 5,498.37 2008 32.15 20.14 252.44 Lord Abbett Bond Debenture Division (Class E)/(b)/............................. 2002 10.39 10.02 0.00 2003 10.02 11.71 859.65 2004 11.71 12.41 4,690.20 2005 12.41 12.34 5,496.81 2006 12.34 13.19 5,721.09 2007 13.19 13.77 5,300.95 2008 13.77 10.98 3,116.93 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division).................. 2001 10.41 10.12 0.00 2002 10.12 10.39 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/............................. 2002 11.18 8.41 0.00 2003 8.41 11.44 232.04 2004 11.44 11.94 619.11 2005 11.94 12.67 463.28 2006 12.67 14.17 1,825.21 2007 14.17 15.42 929.08 2008 15.42 9.25 926.48 MetLife Mid Cap Stock Index Division (Class E)/(c)/............................. 2001 10.34 10.20 0.00 2002 10.20 8.48 328.42 2003 8.48 11.19 8,534.44 2004 11.19 12.70 9,894.38 2005 12.70 13.94 8,547.95 2006 13.94 14.99 7,069.68 2007 14.99 15.79 7,671.38 2008 15.79 9.84 7,219.81
129
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/....... 2001 $35.02 $32.96 0.00 2002 32.96 25.03 128.39 2003 25.03 31.36 4,508.64 2004 31.36 33.88 9,215.95 2005 33.88 34.65 9,114.63 2006 34.65 39.09 8,751.17 2007 39.09 40.19 5,957.13 2008 40.19 24.71 5,008.81 MFS(R) Research International Division (Class E)/(c)/.................................. 2001 8.98 8.32 0.00 2002 8.32 7.19 0.00 2003 7.19 9.30 0.00 2004 9.30 10.89 1,890.90 2005 10.89 12.42 2,132.40 2006 12.42 15.41 4,003.04 2007 15.41 17.10 4,210.59 2008 17.10 9.65 9,843.48 MFS(R) Total Return Division (Class E)/(i)/....... 2004 32.35 35.01 882.32 2005 35.01 35.24 3,087.82 2006 35.24 38.61 4,528.37 2007 38.61 39.34 5,773.91 2008 39.34 29.90 4,461.81 MFS(R) Value Division (Class E)/(c)/.............. 2001 11.42 11.22 0.00 2002 11.22 9.41 452.22 2003 9.41 11.54 3,728.72 2004 11.54 12.57 12,975.29 2005 12.57 12.12 18,178.87 2006 12.12 13.99 11,545.93 2007 13.99 13.15 5,928.63 2008 13.15 8.54 5,130.02 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/.................................. 2001 9.19 8.41 0.00 2002 8.41 6.86 0.00 2003 6.86 9.22 4,989.68 2004 9.22 10.77 6,126.00 2005 10.77 11.92 6,323.60 2006 11.92 14.66 9,356.52 2007 14.66 15.86 9,687.70 2008 15.86 8.98 12,765.86 Neuberger Berman Mid Cap Value Division (Class E)/(c)/.................................. 2001 15.06 14.71 0.00 2002 14.71 13.00 15.10 2003 13.00 17.35 2,461.55 2004 17.35 20.85 6,286.78 2005 20.85 22.88 11,425.30 2006 22.88 24.92 10,992.12 2007 24.92 25.18 7,516.64 2008 25.18 12.96 5,753.49
130
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/................................ 2001 $12.51 $11.76 0.00 2002 11.76 9.65 510.64 2003 9.65 12.32 4,353.82 2004 12.32 14.00 2,880.34 2005 14.00 15.91 1,804.42 2006 15.91 18.15 2,621.75 2007 18.15 18.88 2,109.23 2008 18.88 10.99 94.62 PIMCO Total Return Division (Class E)/(c)/...... 2001 10.21 10.37 0.00 2002 10.37 11.10 5,560.30 2003 11.10 11.35 13,991.48 2004 11.35 11.67 19,241.45 2005 11.67 11.69 21,778.69 2006 11.69 11.97 15,981.58 2007 11.97 12.61 12,941.28 2008 12.61 12.40 10,789.64 RCM Tecnology Division (Class E)/(c)/........... 2001 7.02 6.05 0.00 2002 6.05 2.92 0.00 2003 2.92 4.51 2,525.77 2004 4.51 4.22 10,928.51 2005 4.22 4.59 15,970.17 2006 4.59 4.74 10,067.59 2007 4.74 6.11 3,492.25 2008 6.11 3.32 3,695.48 Russell 2000(R) Index Division (Class E)/(c)/... 2001 11.78 11.69 0.00 2002 11.69 9.08 0.00 2003 9.08 12.98 3,159.74 2004 12.98 14.93 8,039.99 2005 14.93 15.26 7,340.29 2006 15.26 17.58 6,784.95 2007 17.58 16.92 3,723.22 2008 16.92 11.00 3,510.11 T. Rowe Price Large Cap Growth Division (Class E)/(c)/................................ 2001 11.41 11.25 0.00 2002 11.25 8.44 0.00 2003 8.44 10.79 4,857.53 2004 10.79 11.59 7,296.27 2005 11.59 12.08 2,894.32 2006 12.08 13.36 3,096.27 2007 13.36 14.28 6,386.93 2008 14.28 8.11 1,575.09 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/................................ 2001 8.61 8.20 0.00 2002 8.20 4.49 0.00 2003 4.49 6.01 2,791.91 2004 6.01 6.94 4,347.21 2005 6.94 7.79 7,750.61 2006 7.79 8.11 12,151.86 2007 8.11 9.33 20,990.02 2008 9.33 5.51 13,390.29
131
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 11.87 $ 11.65 0.00 2002 11.65 8.34 2,647.73 2003 8.34 11.49 3,662.29 2004 11.49 12.48 7,272.47 2005 12.48 13.54 7,167.74 2006 13.54 13.74 7,577.63 2007 13.74 14.75 2,731.95 2008 14.75 9.20 5,374.35 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.81 15.05 0.00 2002 15.05 16.11 1,370.65 2003 16.11 17.74 4,368.70 2004 17.74 18.48 15,634.08 2005 18.48 18.58 27,090.19 2006 18.58 19.06 19,229.37 2007 19.06 19.38 7,765.58 2008 19.38 16.10 3,497.56 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 13.77 14.00 0.00 2002 14.00 14.74 3,214.41 2003 14.74 14.65 1,396.86 2004 14.65 14.74 3,657.61 2005 14.74 14.66 5,346.73 2006 14.66 14.92 4,542.12 2007 14.92 15.20 4,542.45 2008 15.20 14.81 3,729.57 At 2.40 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 13.54 14.12 269.62 2007 14.12 14.24 6,467.02 2008 14.24 12.61 4,729.76 American Funds Global Small Capitalization Division/(c)/.... 2004 15.47 18.25 4,536.96 2005 18.25 22.34 6,321.99 2006 22.34 27.06 11,627.03 2007 27.06 32.07 15,174.30 2008 32.07 14.55 12,056.33 American Funds Growth Division/(c)/......................... 2004 94.57 103.86 1,088.90 2005 103.86 117.82 2,232.58 2006 117.82 126.79 3,651.93 2007 126.79 139.05 5,257.43 2008 139.05 76.05 5,105.89 American Funds Growth-Income Division/(c)/.................. 2004 73.60 79.30 2,841.92 2005 79.30 81.94 4,981.05 2006 81.94 92.17 5,563.51 2007 92.17 94.51 5,912.75 2008 94.51 57.34 5,355.24
132 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.10 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................... 2006 $ 13.73 $ 14.33 0.00 2007 14.33 14.47 0.00 2008 14.47 12.83 0.00 American Funds Global Small Capitalization Division/(c)/.... 2001 13.48 13.13 0.00 2002 13.13 10.39 0.00 2003 10.39 15.60 0.00 2004 15.60 18.44 3,983.48 2005 18.44 22.60 1,531.76 2006 22.60 27.41 580.64 2007 27.41 32.54 2,094.91 2008 32.54 14.78 449.44 American Funds Growth Division/(c)/......................... 2001 109.20 98.62 0.00 2002 98.62 72.84 0.00 2003 72.84 97.44 0.00 2004 97.44 107.17 716.00 2005 107.17 121.76 366.58 2006 121.76 131.22 383.54 2007 131.22 144.13 181.86 2008 144.13 78.95 53.98 American Funds Growth-Income Division/(c)/.................. 2001 76.61 73.35 0.00 2002 73.35 58.56 0.00 2003 58.56 75.83 0.00 2004 75.83 81.83 2,731.57 2005 81.83 84.68 2,592.29 2006 84.68 95.39 2,650.19 2007 95.39 97.96 2,551.11 2008 97.96 59.52 2,823.48 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 33.87 31.85 0.00 2002 31.85 22.21 0.00 2003 22.21 30.57 0.00 2004 30.57 33.76 0.00 2005 33.76 36.55 0.00 2006 36.55 38.13 0.00 2007 38.13 44.95 0.00 2008 44.95 23.86 0.00 BlackRock Bond Income Division (Class E)/(a)/............... 2002 37.35 39.22 0.00 2003 39.22 40.59 0.00 2004 40.59 41.45 4,339.89 2005 41.45 41.50 3,421.54 2006 41.50 42.38 3,421.55 2007 42.38 44.03 3,422.82 2008 44.03 41.58 3,760.89
133
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $36.15 $ 37.04 0.00 2002 37.04 317.68 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 33.42 32.49 0.00 2002 32.49 27.38 0.00 2003 27.38 32.28 1,614.10 2004 32.28 34.23 22.49 2005 34.23 34.51 0.00 2006 34.51 37.28 0.00 2007 37.28 38.59 0.00 2008 38.59 28.38 0.00 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 67.66 67.97 153.18 2008 67.97 41.76 152.77 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 62.14 57.83 0.00 2002 57.83 41.78 0.00 2003 41.78 53.21 0.00 2004 53.21 57.68 0.00 2005 57.68 58.43 0.00 2006 58.43 65.19 0.00 2007 65.19 68.23 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.88 0.00 2003 7.88 10.45 0.00 2004 10.45 11.60 0.00 2005 11.60 12.01 0.00 2006 12.01 14.02 2,304.95 2007 14.02 14.17 0.00 2008 14.17 9.01 0.00 BlackRock Money Market Division (Class E)/(f)/.............. 2003 19.70 19.50 10,309.05 2004 19.50 19.25 6,499.08 2005 19.25 19.37 0.00 2006 19.37 19.85 0.00 2007 19.85 20.39 0.00 2008 20.39 20.51 0.00 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.11 13.83 0.00 2002 13.83 10.63 0.00 2003 10.63 15.61 0.00 2004 15.61 17.60 0.00 2005 17.60 17.92 800.60 2006 17.92 20.47 652.42 2007 20.47 19.32 677.49 2008 19.32 11.63 673.12
134
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............... 2001 $25.92 $25.15 0.00 2002 25.15 20.55 0.00 2003 20.55 26.31 0.00 2004 26.31 28.89 838.36 2005 28.89 31.16 242.71 2006 31.16 34.91 847.27 2007 34.91 35.69 96.69 2008 35.69 21.16 96.43 FI Mid Cap Opportunities Division (Class E)/(c) (h)/...... 2001 17.65 15.15 0.00 2002 15.15 10.51 0.00 2003 10.51 13.85 0.00 2004 13.85 15.86 0.00 2005 15.86 16.58 0.00 2006 16.58 18.13 0.00 2007 18.13 19.21 0.00 2008 19.21 8.39 692.22 FI Value Leaders Division (Class E)/(d)/.................. 2002 21.34 17.49 0.00 2003 17.49 21.70 0.00 2004 21.70 24.13 0.00 2005 24.13 26.12 0.00 2006 26.12 28.59 0.00 2007 28.59 29.13 0.00 2008 29.13 17.38 0.00 Franklin Templeton Small Cap Growth Division (Class E)/(c)/................................. 2001 9.16 8.75 0.00 2002 8.75 6.18 0.00 2003 6.18 8.76 0.00 2004 8.76 9.54 1,012.21 2005 9.54 9.76 154.87 2006 9.76 10.50 160.79 2007 10.50 10.74 161.35 2008 10.74 6.17 178.53 Harris Oakmark Focused Value Division (Class E)/(c)/...... 2001 23.97 24.73 0.00 2002 24.73 22.04 0.00 2003 22.04 28.58 0.00 2004 28.58 30.72 4,880.56 2005 30.72 33.04 2,649.24 2006 33.04 36.33 2,876.74 2007 36.33 33.09 2,670.70 2008 33.09 17.47 2,859.29 Harris Oakmark International Division (Class E)/(d)/...... 2002 10.55 8.76 0.00 2003 8.76 11.59 5.64 2004 11.59 13.70 1,324.92 2005 13.70 15.33 1,413.33 2006 15.33 19.37 1,460.31 2007 19.37 18.77 0.00 2008 18.77 10.87 0.00
135
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.93 $ 4.70 0.00 2006 4.70 4.72 0.00 2007 4.72 5.16 0.00 2008 5.16 3.20 0.00 Jennison Growth Division (Class E)/(c) (g) /(formerly Met/Putnam Voyager Division).............................. 2001 5.34 4.86 0.00 2002 4.86 3.38 0.00 2003 3.38 4.16 0.00 2004 4.16 4.26 0.00 2005 4.26 3.89 0.00 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.41 10.63 0.00 2002 10.63 8.57 0.00 2003 8.57 10.74 3.09 2004 10.74 12.41 2,251.97 2005 12.41 14.32 0.00 2006 14.32 16.30 0.00 2007 16.30 17.59 392.71 2008 17.59 9.61 2,297.01 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.35 9.59 0.00 2003 9.59 11.87 0.00 2004 11.87 13.30 1,453.21 2005 13.30 14.10 1,413.09 2006 14.10 15.84 1,338.61 2007 15.84 15.10 1,351.21 2008 15.10 9.13 1,760.51 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.48 6.65 0.00 2004 6.65 7.07 1,156.46 2005 7.07 7.87 0.00 2006 7.87 7.59 0.00 2007 7.59 7.60 0.00 2008 7.60 4.54 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.85 7.71 0.00 2002 7.71 5.23 0.00 2003 5.23 5.48 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 8.98 9.58 0.00 2007 9.58 8.84 0.00 2008 8.84 3.93 0.00 Legg Mason Value Equity (Class E)/(c) (l) /(formerly MFS(R) Investors Trust Division)................................. 2001 8.58 8.14 0.00 2002 8.14 6.35 0.00 2003 6.35 7.56 0.00 2004 7.56 8.24 0.00 2005 8.24 8.64 0.00 2006 8.64 9.01 0.00
136
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/................................................. 2001 $10.97 $11.15 0.00 2002 11.15 12.02 0.00 2003 12.02 12.18 4,456.90 2004 12.18 12.40 17,769.39 2005 12.40 12.38 12,342.43 2006 12.38 12.60 10,119.40 2007 12.60 13.16 7,172.78 2008 13.16 13.63 5,298.27 Loomis Sayles Small Cap Division (Class E)/(c)/........... 2001 21.81 21.29 0.00 2002 21.29 16.33 0.00 2003 16.33 21.80 0.00 2004 21.80 24.80 0.00 2005 24.80 25.94 0.00 2006 25.94 29.59 71.22 2007 29.59 32.37 484.67 2008 32.37 20.29 0.00 Lord Abbett Bond Debenture Division (Class E)/(b)/........ 2002 10.42 10.05 0.00 2003 10.05 11.75 0.00 2004 11.75 12.46 232.34 2005 12.46 12.39 249.05 2006 12.39 13.25 413.51 2007 13.25 13.85 634.75 2008 13.85 11.05 576.84 Lord Abbett Bond Debenture Division (Class E)/(b) /(formerly Loomis Sayles High Yield Bond Division)............................................... 2001 10.43 10.15 0.00 2002 10.15 15.12 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.......... 2002 11.18 8.41 0.00 2003 8.41 11.46 0.00 2004 11.46 11.96 0.00 2005 11.96 12.70 0.00 2006 12.70 14.21 0.00 2007 14.21 15.47 0.00 2008 15.47 9.28 0.00 MetLife Mid Cap Stock Index Division (Class E)/(c)/....... 2001 10.35 10.21 0.00 2002 10.21 8.50 0.00 2003 8.50 11.21 1,680.08 2004 11.21 12.72 2,445.94 2005 12.72 13.97 1,865.35 2006 13.97 15.03 936.27 2007 15.03 15.85 912.99 2008 15.85 9.88 889.13
137
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $35.22 $33.16 0.00 2002 33.16 25.19 0.00 2003 25.19 31.57 1,806.59 2004 31.57 34.12 5,179.98 2005 34.12 34.92 4,884.04 2006 34.92 39.42 2,727.04 2007 39.42 40.55 2,578.95 2008 40.55 24.94 3,143.15 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.99 8.33 0.00 2002 8.33 7.21 0.00 2003 7.21 9.33 3.56 2004 9.33 10.93 0.00 2005 10.93 12.47 0.00 2006 12.47 15.48 852.01 2007 15.48 17.19 0.00 2008 17.19 9.70 1,330.87 MFS(R) Total Return Division (Class E)/(i)/................. 2004 32.63 35.32 35.99 2005 35.32 35.57 109.42 2006 35.57 38.99 0.00 2007 38.99 39.75 0.00 2008 39.75 30.22 0.00 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.43 11.24 0.00 2002 11.24 9.43 0.00 2003 9.43 11.57 0.01 2004 11.57 12.61 5,382.22 2005 12.61 12.16 3,600.08 2006 12.16 14.04 548.12 2007 14.04 13.21 711.47 2008 13.21 8.59 3,088.72 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.20 8.42 0.00 2002 8.42 6.87 0.00 2003 6.87 9.24 3,189.32 2004 9.24 10.81 9,188.40 2005 10.81 11.96 8,970.87 2006 11.96 14.72 6,928.56 2007 14.72 15.93 6,816.87 2008 15.93 9.02 7,643.34 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.08 14.73 0.00 2002 14.73 13.03 0.00 2003 13.03 17.40 0.00 2004 17.40 20.92 1,740.56 2005 20.92 22.96 2,492.09 2006 22.96 25.02 330.38 2007 25.02 25.30 109.60 2008 25.30 13.03 0.00
138
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.54 $11.79 0.00 2002 11.79 9.68 0.00 2003 9.68 12.36 0.00 2004 12.36 14.06 0.00 2005 14.06 15.98 0.00 2006 15.98 18.24 0.00 2007 18.24 18.98 0.00 2008 18.98 11.06 0.00 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.21 10.38 0.00 2002 10.38 11.11 0.00 2003 11.11 11.37 0.00 2004 11.37 11.69 16,904.50 2005 11.69 11.72 10,819.18 2006 11.72 12.01 5,889.24 2007 12.01 12.66 12,817.39 2008 12.66 12.45 4,200.08 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.02 6.05 0.00 2002 6.05 2.93 0.00 2003 2.93 4.51 0.00 2004 4.51 4.23 55,505.31 2005 4.23 4.61 441.09 2006 4.61 4.75 0.00 2007 4.75 6.13 3,322.48 2008 6.13 3.33 0.00 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.80 11.71 0.00 2002 11.71 9.10 0.00 2003 9.10 13.02 724.48 2004 13.02 14.98 4,707.88 2005 14.98 15.31 4,486.20 2006 15.31 17.65 3,938.41 2007 17.65 17.00 3,733.40 2008 17.00 11.05 3,891.81 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.43 11.26 0.00 2002 11.26 8.46 0.00 2003 8.46 10.82 0.00 2004 10.82 11.63 0.00 2005 11.63 12.12 0.00 2006 12.12 13.41 0.00 2007 13.41 14.35 240.96 2008 14.35 8.15 240.30 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.61 8.20 0.00 2002 8.20 4.49 0.00 2003 4.49 6.02 0.00 2004 6.02 6.96 0.00 2005 6.96 7.80 0.00 2006 7.80 8.13 1,209.47 2007 8.13 9.36 9,234.82 2008 9.36 5.54 3,048.16
139
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 11.90 $ 11.68 0.00 2002 11.68 8.37 0.00 2003 8.37 11.53 0.00 2004 11.53 12.53 0.00 2005 12.53 13.60 0.00 2006 13.60 13.81 0.00 2007 13.81 14.83 0.00 2008 14.83 9.25 1,567.91 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.86 15.10 0.00 2002 15.10 16.18 0.00 2003 16.18 17.82 0.00 2004 17.82 18.58 154.95 2005 18.58 18.68 3,008.17 2006 18.68 19.18 3,832.95 2007 19.18 19.51 182.73 2008 19.51 16.22 136.88 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 13.81 14.05 0.00 2002 14.05 14.80 0.00 2003 14.80 14.72 0.00 2004 14.72 14.82 0.00 2005 14.82 14.74 0.00 2006 14.74 15.01 0.00 2007 15.01 15.30 0.00 2008 15.30 14.92 0.00 At 2.35 Separate Account Charge: American Funds Bond Division/(k)/........................... 2006 13.60 14.19 0.00 2007 14.19 14.32 0.00 2008 14.32 12.68 0.00 American Funds Global Small Capitalization Division/(c)/.... 2004 15.51 18.31 462.94 2005 18.31 22.42 4,532.06 2006 22.42 27.18 8,615.18 2007 27.18 32.23 7,786.42 2008 32.23 14.63 5,308.11 American Funds Growth Division/(c)/......................... 2004 95.52 104.95 0.00 2005 104.95 119.12 1,325.80 2006 119.12 128.25 2,338.09 2007 128.25 140.72 2,813.31 2008 140.72 77.00 1,369.59 American Funds Growth-Income Division/(c)/.................. 2004 74.33 80.14 87.74 2005 80.14 82.85 817.58 2006 82.85 93.23 976.49 2007 93.23 95.65 949.08 2008 95.65 58.06 944.98
140 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.20 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division (Class 2)/(k)/................. 2006 $ 13.60 $ 14.19 2,123.12 2007 14.19 14.32 2,380.35 2008 14.32 12.68 999.69 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.44 13.08 0.00 2002 13.08 10.34 6,017.75 2003 10.34 15.51 8,364.02 2004 15.51 18.31 0.00 2005 18.31 22.42 14,287.71 2006 22.42 27.18 13,354.79 2007 27.18 32.23 13,953.89 2008 32.23 14.63 11,825.74 American Funds Growth Division (Class 2)/(c)/............... 2001 107.26 96.82 0.00 2002 96.82 71.44 2,150.86 2003 71.44 95.47 4,971.32 2004 95.47 104.90 0.00 2005 104.90 119.06 5,197.63 2006 119.06 128.19 3,907.04 2007 128.19 140.66 4,040.66 2008 140.66 76.97 3,454.38 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 75.25 72.01 0.00 2002 72.01 57.44 3,220.38 2003 57.44 74.30 5,358.01 2004 74.30 80.10 0.00 2005 80.10 82.80 6,733.74 2006 82.80 93.18 5,902.55 2007 93.18 95.60 5,633.63 2008 95.60 58.03 5,033.34 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 33.42 31.42 0.00 2002 31.42 21.88 1,855.91 2003 21.88 30.10 2,253.24 2004 30.10 33.20 1,610.53 2005 33.20 35.91 1,275.09 2006 35.91 37.43 1,200.71 2007 37.43 44.07 1,343.98 2008 44.07 23.37 1,358.97 BlackRock Bond Income Division (Class E)/(a)/............... 2002 36.65 38.47 3,111.33 2003 38.47 39.77 6,381.98 2004 39.77 40.57 4,739.42 2005 40.57 40.58 3,844.39 2006 40.58 41.39 3,834.33 2007 41.39 42.97 2,508.67 2008 42.97 40.53 2,988.20
141
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $35.50 $36.36 0.00 2002 36.36 36.69 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 32.92 31.99 0.00 2002 31.99 26.93 2,010.35 2003 26.93 31.72 6,110.02 2004 31.72 33.60 9,242.23 2005 33.60 33.84 7,562.23 2006 33.84 36.53 4,814.42 2007 36.53 37.77 6,284.90 2008 37.77 27.75 3,575.93 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 66.06 66.33 2,418.29 2008 66.33 40.71 1,550.72 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 61.03 56.77 0.00 2002 56.77 40.98 1,479.10 2003 40.98 52.13 3,887.90 2004 52.13 56.45 2,986.47 2005 56.45 57.13 2,793.92 2006 57.13 63.67 2,571.59 2007 63.67 66.62 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.88 0.00 2003 7.88 10.44 2,991.68 2004 10.44 11.57 2,375.07 2005 11.57 11.96 2,491.95 2006 11.96 13.95 13,309.15 2007 13.95 14.09 14,568.90 2008 14.09 8.95 12,001.48 BlackRock Money Market Division (Class E)/(f)/.............. 2003 19.31 19.11 0.00 2004 19.11 18.84 0.00 2005 18.84 18.94 0.00 2006 18.94 19.39 0.00 2007 19.39 19.90 0.00 2008 19.90 19.99 0.00 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.09 13.81 0.00 2002 13.81 10.60 22,554.06 2003 10.60 15.55 42,084.70 2004 15.55 17.52 38,252.34 2005 17.52 17.82 34,201.05 2006 17.82 20.34 25,485.16 2007 20.34 19.18 24,373.18 2008 19.18 11.54 22,958.02
142
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/............... 2001 $25.75 $24.97 0.00 2002 24.97 20.38 3,703.42 2003 20.38 26.07 5,496.37 2004 26.07 28.60 4,415.95 2005 28.60 30.81 4,184.02 2006 30.81 34.49 4,121.65 2007 34.49 35.23 3,091.65 2008 35.23 20.86 1,217.06 FI Mid Cap Opportunities Division (Class E)/(c) (h)/...... 2001 17.57 15.08 0.00 2002 15.08 10.45 402.13 2003 10.45 13.75 1,344.02 2004 13.75 15.74 5,351.17 2005 15.74 16.43 6,944.69 2006 16.43 17.95 5,802.84 2007 17.95 19.00 5,686.38 2008 19.00 8.29 5,377.86 FI Value Leaders Division (Class E)/(d)/.................. 2002 21.15 17.32 0.00 2003 17.32 21.47 161.31 2004 21.47 23.85 107.46 2005 23.85 25.79 155.91 2006 25.79 28.20 502.38 2007 28.20 28.70 899.57 2008 28.70 17.11 823.33 Franklin Templeton Small Cap Growth Division (Class E)/(c)/................................. 2001 9.15 8.74 0.00 2002 8.74 6.17 0.00 2003 6.17 8.74 3,807.57 2004 8.74 9.50 2,792.68 2005 9.50 9.71 2,264.89 2006 9.71 10.44 2,225.35 2007 10.44 10.67 4,824.55 2008 10.67 6.12 5,029.95 Harris Oakmark Focused Value Division (Class E)/(c)/...... 2001 23.78 24.51 0.00 2002 24.51 21.82 8,486.56 2003 21.82 28.28 9,934.08 2004 28.28 30.37 10,655.30 2005 30.37 32.62 11,623.48 2006 32.62 35.84 7,019.33 2007 35.84 32.60 5,840.98 2008 32.60 17.19 2,287.55 Harris Oakmark International Division (Class E)/(d)/...... 2002 10.54 8.75 1,214.74 2003 8.75 11.56 3,729.27 2004 11.56 13.65 4,545.10 2005 13.65 15.27 5,027.55 2006 15.27 19.26 9,330.71 2007 19.26 18.65 8,520.04 2008 18.65 10.79 6,950.06
143
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.91 $ 4.68 6,326.30 2006 4.68 4.69 5,318.54 2007 4.69 5.12 3,451.85 2008 5.12 3.18 364.26 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.33 4.85 0.00 2002 4.85 3.37 5,281.47 2003 3.37 4.15 6,769.50 2004 4.15 4.24 6,901.45 2005 4.24 3.87 6,737.43 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.29 10.52 0.00 2002 10.52 8.48 4,166.94 2003 8.48 10.60 5,892.03 2004 10.60 12.24 5,831.75 2005 12.24 14.11 6,998.46 2006 14.11 16.05 6,823.83 2007 16.05 17.30 7,640.32 2008 17.30 9.44 6,466.56 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.34 9.58 0.00 2003 9.58 11.84 2,804.64 2004 11.84 13.26 2,127.48 2005 13.26 14.04 2,161.09 2006 14.04 15.76 615.42 2007 15.76 15.01 1,479.70 2008 15.01 9.06 734.31 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.47 6.63 8,195.17 2004 6.63 7.05 7,495.14 2005 7.05 7.84 6,267.96 2006 7.84 7.54 5,153.09 2007 7.54 7.55 3,099.99 2008 7.55 4.50 395.90 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.84 7.70 0.00 2002 7.70 5.22 7,371.34 2003 5.22 5.47 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 8.91 9.51 1,956.46 2007 9.51 8.76 1,347.02 2008 8.76 3.89 0.00 Legg Mason Value Equity (Class E)/(c) (l) /(formerly MFS(R) Investors Trust Division)................................. 2001 8.56 8.11 0.00 2002 8.11 6.33 0.00 2003 6.33 7.52 0.00 2004 7.52 8.19 2,025.85 2005 8.19 8.58 2,100.49 2006 8.58 8.95 2,138.79
144
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/................................. 2001 $10.94 $11.12 0.00 2002 11.12 11.97 17,151.54 2003 11.97 12.12 28,736.67 2004 12.12 12.32 35,371.12 2005 12.32 12.29 35,569.45 2006 12.29 12.49 37,573.50 2007 12.49 13.04 43,337.63 2008 13.04 13.49 30,487.80 Loomis Sayles Small Cap Division (Class E)/(c)/........... 2001 21.65 21.13 0.00 2002 21.13 16.19 508.53 2003 16.19 21.59 538.84 2004 21.59 24.54 475.57 2005 24.54 25.63 353.93 2006 25.63 29.22 272.81 2007 29.22 31.93 464.04 2008 31.93 19.99 234.09 Lord Abbett Bond Debenture Division (Class E)/(b)/........ 2002 10.36 10.00 6,533.47 2003 10.00 11.67 8,956.29 2004 11.67 12.36 7,789.76 2005 12.36 12.28 7,845.59 2006 12.28 13.12 8,409.75 2007 13.12 13.70 9,612.40 2008 13.70 10.92 8,504.41 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)............................................... 2001 10.39 10.10 0.00 2002 10.10 10.36 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.......... 2002 11.18 8.40 20.25 2003 8.40 11.43 191.63 2004 11.43 11.92 645.80 2005 11.92 12.65 706.69 2006 12.65 14.13 1,007.57 2007 14.13 15.37 1,653.95 2008 15.37 9.22 1,736.38 MetLife Mid Cap Stock Index Division (Class E)/(c)/....... 2001 10.34 10.20 0.00 2002 10.20 8.47 9,926.19 2003 8.47 11.17 16,315.81 2004 11.17 12.67 13,786.33 2005 12.67 13.90 12,756.91 2006 13.90 14.94 9,929.96 2007 14.94 15.73 9,791.05 2008 15.73 9.80 15,156.26
145
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $34.82 $32.77 0.00 2002 32.77 24.87 6,758.16 2003 24.87 31.14 15,955.01 2004 31.14 33.63 20,967.77 2005 33.63 34.38 26,625.93 2006 34.38 38.77 20,787.02 2007 38.77 39.84 20,126.01 2008 39.84 24.48 19,728.37 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.98 8.31 0.00 2002 8.31 7.18 3,596.07 2003 7.18 9.28 8,062.95 2004 9.28 10.87 7,188.80 2005 10.87 12.39 6,999.89 2006 12.39 15.37 11,802.81 2007 15.37 17.04 10,070.37 2008 17.04 9.61 9,851.45 MFS(R) Total Return Division (Class E)/(i)/................. 2004 32.08 34.70 28.24 2005 34.70 34.91 775.56 2006 34.91 38.23 924.44 2007 38.23 38.94 2,214.75 2008 38.94 29.57 1,530.69 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.40 11.20 0.00 2002 11.20 9.39 14,718.96 2003 9.39 11.51 24,514.92 2004 11.51 12.54 21,300.79 2005 12.54 12.07 16,456.08 2006 12.07 13.93 16,814.27 2007 13.93 13.09 15,922.67 2008 13.09 8.50 6,914.51 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.18 8.39 0.00 2002 8.39 6.84 13,188.48 2003 6.84 9.19 20,222.04 2004 9.19 10.74 11,997.31 2005 10.74 11.88 17,771.03 2006 11.88 14.60 10,125.99 2007 14.60 15.79 11,140.49 2008 15.79 8.93 11,411.14 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.04 14.69 0.00 2002 14.69 12.97 663.30 2003 12.97 17.31 5,687.88 2004 17.31 20.79 5,466.33 2005 20.79 22.79 7,226.74 2006 22.79 24.82 6,017.67 2007 24.82 25.07 4,776.07 2008 25.07 12.90 4,784.77
146
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.48 $11.73 0.00 2002 11.73 9.62 7,140.87 2003 9.62 12.28 8,734.24 2004 12.28 13.95 6,007.99 2005 13.95 15.84 5,967.34 2006 15.84 18.06 5,479.88 2007 18.06 18.78 4,959.54 2008 18.78 10.93 3,521.96 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.21 10.37 0.00 2002 10.37 11.09 12,766.34 2003 11.09 11.33 37,892.75 2004 11.33 11.65 24,908.18 2005 11.65 11.66 26,177.95 2006 11.66 11.94 23,791.41 2007 11.94 12.57 21,152.02 2008 12.57 12.35 15,934.59 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.02 6.05 0.00 2002 6.05 2.92 11,803.14 2003 2.92 4.50 14,996.40 2004 4.50 4.21 16,099.39 2005 4.21 4.58 15,790.77 2006 4.58 4.72 22,838.98 2007 4.72 6.09 47,468.52 2008 6.09 3.30 41,025.77 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.76 11.67 0.00 2002 11.67 9.06 4,782.86 2003 9.06 12.95 7,467.05 2004 12.95 14.88 5,583.21 2005 14.88 15.20 6,267.58 2006 15.20 17.51 4,443.15 2007 17.51 16.84 6,010.46 2008 16.84 10.94 6,532.92 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.40 11.23 0.00 2002 11.23 8.42 721.00 2003 8.42 10.76 7,788.87 2004 10.76 11.56 8,626.86 2005 11.56 12.04 9,561.01 2006 12.04 13.30 7,638.78 2007 13.30 14.22 7,383.94 2008 14.22 8.07 7,083.74 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.61 8.19 0.00 2002 8.19 4.48 7,050.36 2003 4.48 6.00 9,772.60 2004 6.00 6.93 9,534.74 2005 6.93 7.77 10,596.73 2006 7.77 8.08 9,077.24 2007 8.08 9.30 8,624.70 2008 9.30 5.49 7,604.48
147
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $11.84 $11.62 0.00 2002 11.62 8.32 490.73 2003 8.32 11.45 833.30 2004 11.45 12.43 924.10 2005 12.43 13.48 1,439.23 2006 13.48 13.67 4,421.55 2007 13.67 14.67 3,362.26 2008 14.67 9.15 3,141.10 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.76 15.00 0.00 2002 15.00 16.04 1,815.51 2003 16.04 17.66 1,795.85 2004 17.66 18.39 2,875.95 2005 18.39 18.47 4,725.75 2006 18.47 18.95 4,130.05 2007 18.95 19.26 4,290.27 2008 19.26 15.99 2,677.83 Western Asset Management U.S Government Division (Class E)/(c)/............................................ 2001 13.72 13.95 0.00 2002 13.95 14.68 8,190.62 2003 14.68 14.59 12,119.18 2004 14.59 14.67 10,341.75 2005 14.67 14.58 9,992.89 2006 14.58 14.83 11,123.81 2007 14.83 15.10 10,817.82 2008 15.10 14.71 9,445.01
148 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.25 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division/(k)/........................ 2006 $ 13.54 $ 14.12 0.00 2007 14.12 14.24 0.00 2008 14.24 12.61 0.00 American Funds Global Small Capitalization Division/(c)/. 2001 13.42 13.06 0.00 2002 13.06 10.32 0.00 2003 10.32 15.47 7,432.78 2004 15.47 18.25 1,724.22 2005 18.25 22.34 529.95 2006 22.34 27.06 225.68 2007 27.06 32.07 143.60 2008 32.07 14.55 16.15 American Funds Growth Division/(c)/...................... 2001 106.37 96.00 0.00 2002 96.00 70.80 0.00 2003 70.80 94.57 6,362.14 2004 94.57 103.86 308.48 2005 103.86 117.82 44.81 2006 117.82 126.79 0.00 2007 126.79 139.05 0.00 2008 139.05 76.05 0.00 American Funds Growth-Income Division/(c)/............... 2001 74.63 71.41 0.00 2002 71.41 56.92 0.00 2003 56.92 73.60 4,976.20 2004 73.60 79.30 207.31 2005 79.30 81.94 148.26 2006 81.94 92.17 446.02 2007 92.17 94.51 126.63 2008 94.51 57.34 96.65 BlackRock Aggressive Growth Division (Class E)/(c)/...... 2001 33.20 31.20 0.00 2002 31.20 21.72 0.00 2003 21.72 29.86 4,627.03 2004 29.86 32.93 176.92 2005 32.93 35.59 0.00 2006 35.59 37.08 0.00 2007 37.08 43.64 0.00 2008 43.64 23.13 0.00 BlackRock Bond Income Division (Class E)/(a)/............ 2002 36.31 38.09 0.00 2003 38.09 39.36 1,645.72 2004 39.36 40.13 673.24 2005 40.13 40.12 97.76 2006 40.12 40.91 0.00 2007 40.91 42.44 0.00 2008 42.44 40.01 0.00
149
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)................... 2001 $35.18 $ 36.02 0.00 2002 36.02 308.82 0.00 BlackRock Diversified Division (Class E)/(c)/..... 2001 32.68 31.74 0.00 2002 31.74 26.71 0.00 2003 26.71 31.45 5,411.12 2004 31.45 33.29 3,113.55 2005 33.29 33.51 824.18 2006 33.51 36.16 0.00 2007 36.16 37.36 0.00 2008 37.36 27.44 0.00 BlackRock Large Cap Core Division* (Class E)/(m)/. 2007 65.28 65.52 0.00 2008 65.52 40.19 0.00 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/...... 2001 60.48 56.25 0.00 2002 56.25 40.58 0.00 2003 40.58 51.60 2,441.30 2004 51.60 55.85 210.87 2005 55.85 56.49 0.00 2006 56.49 62.93 0.00 2007 62.93 65.83 0.00 BlackRock Large Cap Value Division (Class E)/(d)/. 2002 10.00 7.87 0.00 2003 7.87 10.43 5,264.49 2004 10.43 11.55 152.42 2005 11.55 11.94 0.00 2006 11.94 13.92 103.81 2007 13.92 14.05 103.61 2008 14.05 8.92 30.08 BlackRock Money Market Division (Class E)/(f)/.... 2003 19.12 18.91 23,443.30 2004 18.91 18.64 2,827.64 2005 18.64 18.73 1,086.98 2006 18.73 19.17 1,515.72 2007 19.17 19.66 852.12 2008 19.66 19.74 1,571.43 BlackRock Strategic Value Division (Class E)/(c)/. 2001 14.09 13.80 0.00 2002 13.80 10.59 0.00 2003 10.59 15.53 15,572.16 2004 15.53 17.48 39,937.50 2005 17.48 17.77 127.63 2006 17.77 20.27 0.00 2007 20.27 19.11 0.00 2008 19.11 11.49 0.00
150
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/.......... 2001 $25.66 $24.88 0.00 2002 24.88 20.30 0.00 2003 20.30 25.95 3,488.19 2004 25.95 28.45 9.60 2005 28.45 30.64 0.00 2006 30.64 34.28 0.00 2007 34.28 35.00 0.00 2008 35.00 20.71 0.00 FI Mid Cap Opportunities Division (Class E)/(c) (h)/. 2001 17.53 15.04 0.00 2002 15.04 10.42 0.00 2003 10.42 13.71 4,150.28 2004 13.71 15.68 530.39 2005 15.68 16.36 0.00 2006 16.36 17.87 0.00 2007 17.87 18.90 0.00 2008 18.90 8.24 0.00 FI Value Leaders Division (Class E)/(d)/............. 2002 21.06 17.23 0.00 2003 17.23 21.36 745.92 2004 21.36 23.71 42.53 2005 23.71 25.63 420.62 2006 25.63 28.01 166.40 2007 28.01 28.49 86.12 2008 28.49 16.98 0.00 Franklin Templeton Small Cap Growth Division (Class E)/(c)/..................................... 2001 9.15 8.74 0.00 2002 8.74 6.17 0.00 2003 6.17 8.72 4,773.04 2004 8.72 9.49 431.63 2005 9.49 9.69 0.00 2006 9.69 10.41 0.00 2007 10.41 10.64 0.00 2008 10.64 6.10 0.00 Harris Oakmark Focused Value Division (Class E)/(c)/. 2001 23.68 24.41 0.00 2002 24.41 21.72 0.00 2003 21.72 28.13 3,928.61 2004 28.13 30.19 406.11 2005 30.19 32.42 81.97 2006 32.42 35.59 0.00 2007 35.59 32.36 0.00 2008 32.36 17.06 0.00 Harris Oakmark International Division (Class E)/(d)/. 2002 10.54 8.74 0.00 2003 8.74 11.55 0.00 2004 11.55 13.63 0.00 2005 13.63 15.23 945.67 2006 15.23 19.21 1,047.95 2007 19.21 18.60 861.08 2008 18.60 10.76 44.65
151
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/............. 2005 $ 3.90 $ 4.66 0.00 2006 4.66 4.68 0.00 2007 4.68 5.10 0.00 2008 5.10 3.16 0.00 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division)................ 2001 5.33 4.85 0.00 2002 4.85 3.37 0.00 2003 3.37 4.14 589.27 2004 4.14 4.23 1.89 2005 4.23 3.86 0.00 Julius Baer International Stock Division (Class E)/(c)/. 2001 11.23 10.46 0.00 2002 10.46 8.43 0.00 2003 8.43 10.54 4,356.16 2004 10.54 12.16 27.68 2005 12.16 14.01 0.00 2006 14.01 15.92 0.00 2007 15.92 17.16 0.00 2008 17.16 9.36 0.00 Lazard Mid Cap Division (Class E)/(d)/.................. 2002 11.34 9.57 0.00 2003 9.57 11.83 1,883.92 2004 11.83 13.24 779.64 2005 13.24 14.01 0.00 2006 14.01 15.72 0.00 2007 15.72 14.96 0.00 2008 14.96 9.03 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/.... 2003 5.46 6.62 1,917.03 2004 6.62 7.03 264.38 2005 7.03 7.82 0.00 2006 7.82 7.52 0.00 2007 7.52 7.52 0.00 2008 7.52 4.48 0.00 Legg Mason Partners Aggressive Growth (Class E)/(e)/.... 2001 8.84 7.70 0.00 2002 7.70 5.21 0.00 2003 5.21 5.46 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.............. 2006 8.88 9.47 0.00 2007 9.47 8.72 0.00 2008 8.72 3.87 0.00 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)............ 2001 8.55 8.10 0.00 2002 8.10 6.32 0.00 2003 6.32 7.51 125.61 2004 7.51 8.17 12.67 2005 8.17 8.55 0.00 2006 8.55 8.92 0.00
152
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/.................................... 2001 $10.93 $11.10 0.00 2002 11.10 11.94 0.00 2003 11.94 12.09 18,272.11 2004 12.09 12.28 6,452.85 2005 12.28 12.25 10,388.33 2006 12.25 12.44 3,833.65 2007 12.44 12.98 4,058.90 2008 12.98 13.42 3,042.44 Loomis Sayles Small Cap Division (Class E)/(c)/..... 2001 21.58 21.05 0.00 2002 21.05 16.12 0.00 2003 16.12 21.48 67.95 2004 21.48 24.41 94.21 2005 24.41 25.49 24.26 2006 25.49 29.03 0.00 2007 29.03 31.71 0.00 2008 31.71 19.84 0.00 Lord Abbett Bond Debenture Division (Class E)/(b)/.. 2002 10.34 9.97 0.00 2003 9.97 11.63 6,993.21 2004 11.63 12.31 1,451.87 2005 12.31 12.23 872.32 2006 12.23 13.06 871.10 2007 13.06 13.63 680.85 2008 13.63 10.85 472.50 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division). 2001 10.37 10.08 0.00 2002 10.08 15.01 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/.... 2002 11.17 8.40 0.00 2003 8.40 11.42 0.00 2004 11.42 11.90 1,464.04 2005 11.90 12.62 0.00 2006 12.62 14.10 0.00 2007 14.10 15.33 0.00 2008 15.33 9.18 0.00 MetLife Mid Cap Stock Index Division (Class E)/(c)/. 2001 10.33 10.19 0.00 2002 10.19 8.46 0.00 2003 8.46 11.15 9,542.64 2004 11.15 12.64 1,548.24 2005 12.64 13.86 1,333.13 2006 13.86 14.89 402.01 2007 14.89 15.67 391.78 2008 15.67 9.75 475.29
153
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/............ 2001 $34.63 $32.58 0.00 2002 32.58 24.72 0.00 2003 24.72 30.93 11,621.20 2004 30.93 33.38 3,131.49 2005 33.38 34.11 4,354.67 2006 34.11 38.45 1,429.60 2007 38.45 39.49 1,397.43 2008 39.49 24.25 1,702.99 MFS(R) Research International Division (Class E)/(c)/.. 2001 8.98 8.32 0.00 2002 8.32 7.19 0.00 2003 7.19 9.29 289.80 2004 9.29 10.86 132.04 2005 10.86 12.38 0.00 2006 12.38 15.35 0.00 2007 15.35 17.01 0.00 2008 17.01 9.59 0.00 MFS(R) Total Return Division (Class E)/(i)/............ 2004 31.81 34.39 0.00 2005 34.39 34.59 0.00 2006 34.59 37.86 0.00 2007 37.86 38.54 0.00 2008 38.54 29.25 0.00 MFS(R) Value Division (Class E)/(c)/................... 2001 11.38 11.18 0.00 2002 11.18 9.37 0.00 2003 9.37 11.48 10,777.24 2004 11.48 12.50 623.01 2005 12.50 12.03 1,126.55 2006 12.03 13.87 599.39 2007 13.87 13.03 512.49 2008 13.03 8.46 0.00 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/... 2001 9.16 8.38 0.00 2002 8.38 6.83 0.00 2003 6.83 9.17 17,391.18 2004 9.17 10.71 2,078.05 2005 10.71 11.84 2,776.80 2006 11.84 14.54 869.87 2007 14.54 15.72 793.42 2008 15.72 8.88 1,059.17 Neuberger Berman Mid Cap Value Division (Class E)/(c)/. 2001 15.02 14.66 0.00 2002 14.66 12.95 0.00 2003 12.95 17.26 6,593.93 2004 17.26 20.72 519.11 2005 20.72 22.71 44.14 2006 22.71 24.72 0.00 2007 24.72 24.95 0.00 2008 24.95 12.83 0.00
154
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/...... 2001 $12.45 $11.70 0.00 2002 11.70 9.60 0.00 2003 9.60 12.23 6,892.40 2004 12.23 13.89 333.78 2005 13.89 15.77 0.00 2006 15.77 17.97 0.00 2007 17.97 18.68 0.00 2008 18.68 10.86 0.00 PIMCO Total Return Division (Class E)/(c)/............. 2001 10.21 10.36 0.00 2002 10.36 11.08 0.00 2003 11.08 11.32 10,508.38 2004 11.32 11.62 1,870.39 2005 11.62 11.63 2,675.31 2006 11.63 11.90 2,464.08 2007 11.90 12.53 2,075.26 2008 12.53 12.30 485.72 RCM Tecnology Division (Class E)/(c)/.................. 2001 7.02 6.04 0.00 2002 6.04 2.92 0.00 2003 2.92 4.49 31,466.68 2004 4.49 4.20 1,651.93 2005 4.20 4.57 0.00 2006 4.57 4.71 0.00 2007 4.71 6.07 0.00 2008 6.07 3.29 0.00 Russell 2000(R) Index Division (Class E)/(c)/.......... 2001 11.75 11.65 0.00 2002 11.65 9.05 0.00 2003 9.05 12.92 8,898.11 2004 12.92 14.84 537.77 2005 14.84 15.15 92.18 2006 15.15 17.44 0.00 2007 17.44 16.77 0.00 2008 16.77 10.89 0.00 T. Rowe Price Large Cap Growth Division (Class E)/(c)/. 2001 11.38 11.21 0.00 2002 11.21 8.41 0.00 2003 8.41 10.73 5,604.29 2004 10.73 11.52 699.03 2005 11.52 11.99 1,556.13 2006 11.99 13.25 1,171.93 2007 13.25 14.15 994.56 2008 14.15 8.03 515.64 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/... 2001 8.60 8.19 0.00 2002 8.19 4.48 0.00 2003 4.48 5.99 12,477.81 2004 5.99 6.92 1,182.51 2005 6.92 7.75 0.00 2006 7.75 8.06 0.00 2007 8.06 9.27 0.00 2008 9.27 5.47 0.00
155
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/... 2001 $ 11.82 $ 11.59 0.00 2002 11.59 8.30 0.00 2003 8.30 11.41 13,994.09 2004 11.41 12.39 607.24 2005 12.39 13.42 0.00 2006 13.42 13.61 0.00 2007 13.61 14.59 0.00 2008 14.59 9.09 0.00 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................ 2001 14.71 14.94 0.00 2002 14.94 15.98 0.00 2003 15.98 17.58 3,184.46 2004 17.58 18.30 1,318.55 2005 18.30 18.37 670.77 2006 18.37 18.83 0.00 2007 18.83 19.13 0.00 2008 19.13 15.87 0.00 Western Asset Management U.S Government Division (Class E)/(c)/......................................... 2001 13.67 13.90 0.00 2002 13.90 14.62 0.00 2003 14.62 14.52 9,746.59 2004 14.52 14.59 971.63 2005 14.59 14.50 0.00 2006 14.50 14.74 0.00 2007 14.74 15.00 0.00 2008 15.00 14.61 0.00 At 2.50 Separate Account Charge: American Funds Bond Division/(k)/........................ 2006 13.42 13.99 0.00 2007 13.99 14.09 0.00 2008 14.09 12.46 0.00 American Funds Global Small Capitalization Division/(c)/. 2004 15.38 18.13 0.00 2005 18.13 22.17 0.00 2006 22.17 26.82 114.70 2007 26.82 31.76 190.14 2008 31.76 14.39 236.85 American Funds Growth Division/(c)/...................... 2004 92.71 101.71 0.00 2005 101.71 115.27 0.00 2006 115.27 123.92 36.11 2007 123.92 135.77 53.87 2008 135.77 74.18 60.33 American Funds Growth-Income Division/(c)/............... 2004 72.15 77.66 0.00 2005 77.66 80.17 0.00 2006 80.17 90.08 66.47 2007 90.08 92.28 92.69 2008 92.28 55.93 98.58
156 GROUP I--PREFERENCE PLUS SELECT E SHARE AND AMERICAN FUNDS(R) CLASS 2 2.30 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Bond Division (Class 2)/(k)/................. 2006 $ 13.48 $ 14.05 2,260.99 2007 14.05 14.17 9,257.00 2008 14.17 12.53 7,101.80 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.39 13.03 0.00 2002 13.03 10.29 0.00 2003 10.29 15.42 0.00 2004 15.42 18.19 13,630.80 2005 18.19 22.25 19,596.91 2006 22.25 26.94 24,763.77 2007 26.94 31.92 28,149.24 2008 31.92 14.47 23,694.86 American Funds Growth Division (Class 2)/(c)/............... 2001 105.45 95.15 0.00 2002 95.15 70.14 0.00 2003 70.14 93.63 0.00 2004 93.63 102.78 11,491.63 2005 102.78 116.54 11,889.33 2006 116.54 125.35 12,469.33 2007 125.35 137.40 11,555.27 2008 137.40 75.11 10,853.89 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 73.98 70.77 0.00 2002 70.77 56.39 0.00 2003 56.39 72.87 0.00 2004 72.87 78.48 11,225.16 2005 78.48 81.05 10,819.00 2006 81.05 91.12 13,217.06 2007 91.12 93.39 13,454.75 2008 93.39 56.63 10,951.54 BlackRock Aggressive Growth Division (Class E)/(c)/......... 2001 32.98 30.99 0.00 2002 30.99 21.56 0.00 2003 21.56 29.63 0.00 2004 29.63 32.65 5,654.89 2005 32.65 35.28 6,672.87 2006 35.28 36.73 3,077.94 2007 36.73 43.21 2,537.74 2008 43.21 22.89 4,093.28 BlackRock Bond Income Division (Class E)/(a)/............... 2002 35.97 37.72 0.00 2003 37.72 38.96 0.00 2004 38.96 39.70 4,986.18 2005 39.70 39.67 5,151.32 2006 39.67 40.43 4,469.32 2007 40.43 41.92 2,774.84 2008 41.92 39.51 1,401.60
157
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Bond Income Division (Class E)/(a)/ (formerly SSR Income Class E)........................................... 2001 $34.86 $ 35.69 0.00 2002 35.69 305.92 0.00 BlackRock Diversified Division (Class E)/(c)/............... 2001 32.43 31.50 0.00 2002 31.50 26.49 0.00 2003 26.49 31.17 0.00 2004 31.17 32.99 14,472.06 2005 32.99 33.19 17,853.00 2006 33.19 35.79 14,006.47 2007 35.79 36.96 16,142.71 2008 36.96 27.14 16,098.19 BlackRock Large Cap Core Division* (Class E)/(m)/........... 2007 64.50 64.72 3,544.63 2008 64.72 39.68 3,420.61 BlackRock Large Cap Division (Class E) (formerly BlackRock Investment Trust)/(c)/.................................... 2001 59.93 55.73 0.00 2002 55.73 40.18 0.00 2003 40.18 51.07 0.00 2004 51.07 55.25 7,313.05 2005 55.25 55.86 6,248.30 2006 55.86 62.19 5,053.74 2007 62.19 65.05 0.00 BlackRock Large Cap Value Division (Class E)/(d)/........... 2002 10.00 7.87 0.00 2003 7.87 10.42 0.00 2004 10.42 11.54 26,348.91 2005 11.54 11.92 24,565.40 2006 11.92 13.89 25,010.96 2007 13.89 14.01 30,856.76 2008 14.01 8.89 28,536.21 BlackRock Money Market Division (Class E)/(f)/.............. 2003 18.93 18.72 82.45 2004 18.72 18.45 81.93 2005 18.45 18.52 81.33 2006 18.52 18.94 80.87 2007 18.94 19.42 80.25 2008 19.42 19.49 79.66 BlackRock Strategic Value Division (Class E)/(c)/........... 2001 14.08 13.79 0.00 2002 13.79 10.58 0.00 2003 10.58 15.50 0.00 2004 15.50 17.45 10,020.09 2005 17.45 17.72 42,291.40 2006 17.72 20.21 42,799.56 2007 20.21 19.04 40,437.15 2008 19.04 11.44 30,847.28
158
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Davis Venture Value Division (Class E)/(c)/..... 2001 $25.57 $24.79 0.00 2002 24.79 20.22 0.00 2003 20.22 25.83 0.00 2004 25.83 28.31 4,667.64 2005 28.31 30.47 5,414.13 2006 30.47 34.07 12,400.42 2007 34.07 34.77 12,614.06 2008 34.77 20.57 12,033.70 FI Mid Cap Opportunities Division (Class E)/(c) (h)/.......................................... 2001 17.49 15.00 0.00 2002 15.00 10.39 0.00 2003 10.39 13.66 0.00 2004 13.66 15.62 15,648.31 2005 15.62 16.29 15,342.07 2006 16.29 17.78 11,503.36 2007 17.78 18.80 8,808.99 2008 18.80 8.19 9,063.38 FI Value Leaders Division (Class E)/(d)/........ 2002 20.96 17.15 0.00 2003 17.15 21.24 0.00 2004 21.24 23.58 3,149.62 2005 23.58 25.47 2,204.25 2006 25.47 27.82 1,498.51 2007 27.82 28.28 839.18 2008 28.28 16.85 245.49 Franklin Templeton Small Cap Growth Division (Class E)/(c)/................................ 2001 9.15 8.74 0.00 2002 8.74 6.16 0.00 2003 6.16 8.71 0.00 2004 8.71 9.47 5,267.43 2005 9.47 9.67 5,222.81 2006 9.67 10.38 7,095.54 2007 10.38 10.60 12,101.08 2008 10.60 6.07 5,283.40 Harris Oakmark Focused Value Division (Class E)/(c)/....................................... 2001 23.58 24.30 0.00 2002 24.30 21.61 0.00 2003 21.61 27.98 0.00 2004 27.98 30.01 10,585.04 2005 30.01 32.21 12,752.37 2006 32.21 35.35 13,359.55 2007 35.35 32.13 12,058.79 2008 32.13 16.93 9,227.36 Harris Oakmark International Division (Class E)/(d)/....................................... 2002 10.54 8.74 0.00 2003 8.74 11.54 0.00 2004 11.54 13.61 1,149.03 2005 13.61 15.20 1,645.97 2006 15.20 19.16 6,411.51 2007 19.16 18.54 13,217.81 2008 18.54 10.72 9,951.27
159
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Jennison Growth Division (Class E)/(c) (g)/................. 2005 $ 3.89 $ 4.65 599.63 2006 4.65 4.66 18,445.35 2007 4.66 5.08 310.35 2008 5.08 3.15 309.75 Jennison Growth Division (Class E)/(c) (g)/ (formerly Met/Putnam Voyager Division).............................. 2001 5.33 4.84 0.00 2002 4.84 3.36 0.00 2003 3.36 4.13 0.00 2004 4.13 4.22 652.81 2005 4.22 3.85 638.13 Julius Baer International Stock Division (Class E)/(c)/..... 2001 11.17 10.41 0.00 2002 10.41 8.38 0.00 2003 8.38 10.47 0.00 2004 10.47 12.08 6,082.13 2005 12.08 13.90 5,258.45 2006 13.90 15.80 5,259.74 2007 15.80 17.01 3,521.03 2008 17.01 9.27 2,273.16 Lazard Mid Cap Division (Class E)/(d)/...................... 2002 11.33 9.57 0.00 2003 9.57 11.82 0.00 2004 11.82 13.21 6,752.57 2005 13.21 13.98 4,932.66 2006 13.98 15.68 7,214.70 2007 15.68 14.91 10,961.23 2008 14.91 9.00 5,828.73 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2003 5.46 6.62 0.00 2004 6.62 7.02 2,486.07 2005 7.02 7.80 3,875.29 2006 7.80 7.50 3,545.85 2007 7.50 7.50 3,572.46 2008 7.50 4.47 3,194.27 Legg Mason Partners Aggressive Growth (Class E)/(e)/........ 2001 8.84 7.70 0.00 2002 7.70 5.21 0.00 2003 5.21 5.46 0.00 Legg Mason Value Equity (Class E)/(c) (l)/.................. 2006 8.85 9.44 329.54 2007 9.44 8.68 784.70 2008 8.68 3.85 328.14 Legg Mason Value Equity (Class E)/(c) (l)/ (formerly MFS(R) Investors Trust Division)................................. 2001 8.54 8.09 0.00 2002 8.09 6.31 0.00 2003 6.31 7.49 0.00 2004 7.49 8.14 2,560.51 2005 8.14 8.53 649.63 2006 8.53 8.89 330.20
160
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Lehman Brothers(R) Aggregate Bond Index Division (Class E)/(c)/....................... 2001 $10.91 $11.08 0.00 2002 11.08 11.92 0.00 2003 11.92 12.05 0.00 2004 12.05 12.24 86,667.12 2005 12.24 12.21 121,422.56 2006 12.21 12.39 126,227.38 2007 12.39 12.92 118,169.13 2008 12.92 13.36 79,215.67 Loomis Sayles Small Cap Division (Class E)/(c)/. 2001 21.50 20.96 0.00 2002 20.96 16.05 0.00 2003 16.05 21.38 0.00 2004 21.38 24.28 179.83 2005 24.28 25.34 747.23 2006 25.34 28.85 2,780.35 2007 28.85 31.50 5,193.80 2008 31.50 19.70 3,570.26 Lord Abbett Bond Debenture Division (Class E)/(b)/....................................... 2002 10.31 9.94 0.00 2003 9.94 11.59 0.00 2004 11.59 12.26 6,995.83 2005 12.26 12.18 9,349.84 2006 12.18 12.99 10,749.06 2007 12.99 13.55 13,210.27 2008 13.55 10.79 10,001.41 Lord Abbett Bond Debenture Division (Class E)/(b)/ (formerly Loomis Sayles High Yield Bond Division)................................ 2001 10.34 10.05 0.00 2002 10.05 14.97 0.00 Met/AIM Small Cap Growth Division (Class E)/(d)/ 2002 11.17 8.39 0.00 2003 8.39 11.41 0.00 2004 11.41 11.88 5,429.33 2005 11.88 12.59 5,607.48 2006 12.59 14.06 5,493.64 2007 14.06 15.28 5,262.38 2008 15.28 9.15 5,258.44 MetLife Mid Cap Stock Index Division (Class E)/(c)/....................................... 2001 10.33 10.18 0.00 2002 10.18 8.45 0.00 2003 8.45 11.14 0.00 2004 11.14 12.61 18,576.62 2005 12.61 13.82 18,971.32 2006 13.82 14.84 20,242.27 2007 14.84 15.61 24,468.60 2008 15.61 9.71 21,241.31
161
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class E)/(c)/................. 2001 $34.43 $32.39 0.00 2002 32.39 24.56 0.00 2003 24.56 30.72 0.00 2004 30.72 33.14 51,659.02 2005 33.14 33.84 61,469.18 2006 33.84 38.13 61,955.55 2007 38.13 39.14 60,082.79 2008 39.14 24.03 66,198.66 MFS(R) Research International Division (Class E)/(c)/....... 2001 8.98 8.32 0.00 2002 8.32 7.18 0.00 2003 7.18 9.27 0.00 2004 9.27 10.84 2,973.62 2005 10.84 12.35 2,874.17 2006 12.35 15.30 6,712.41 2007 15.30 16.95 14,077.15 2008 16.95 9.55 10,381.44 MFS(R) Total Return Division (Class E)/(i)/................. 2004 31.54 34.09 166.11 2005 34.09 34.27 847.21 2006 34.27 37.49 504.29 2007 37.49 38.14 8,629.69 2008 38.14 28.94 6,112.80 MFS(R) Value Division (Class E)/(c)/........................ 2001 11.37 11.16 0.00 2002 11.16 9.35 0.00 2003 9.35 11.46 0.00 2004 11.46 12.46 34,994.12 2005 12.46 11.99 34,085.81 2006 11.99 13.82 38,903.26 2007 13.82 12.97 32,180.58 2008 12.97 8.41 30,478.50 Morgan Stanley EAFE(R) Index Division (Class E)/(c)/........ 2001 9.15 8.37 0.00 2002 8.37 6.81 0.00 2003 6.81 9.14 0.00 2004 9.14 10.67 37,651.95 2005 10.67 11.79 40,735.18 2006 11.79 14.48 43,810.10 2007 14.48 15.64 43,124.87 2008 15.64 8.84 34,166.97 Neuberger Berman Mid Cap Value Division (Class E)/(c)/...... 2001 15.00 14.64 0.00 2002 14.64 12.92 0.00 2003 12.92 17.22 0.00 2004 17.22 20.66 15,846.40 2005 20.66 22.63 25,255.67 2006 22.63 24.61 27,257.58 2007 24.61 24.84 28,604.87 2008 24.84 12.77 23,897.67
162
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Oppenheimer Global Equity Division (Class E)/(c)/........... 2001 $12.43 $11.67 0.00 2002 11.67 9.57 0.00 2003 9.57 12.19 0.00 2004 12.19 13.84 7,466.42 2005 13.84 15.70 8,390.67 2006 15.70 17.88 8,151.32 2007 17.88 18.58 9,601.04 2008 18.58 10.80 3,894.39 PIMCO Total Return Division (Class E)/(c)/.................. 2001 10.20 10.36 0.00 2002 10.36 11.07 0.00 2003 11.07 11.30 0.00 2004 11.30 11.60 36,703.08 2005 11.60 11.60 38,426.76 2006 11.60 11.87 36,286.35 2007 11.87 12.48 34,625.35 2008 12.48 12.26 30,494.01 RCM Tecnology Division (Class E)/(c)/....................... 2001 7.02 6.04 0.00 2002 6.04 2.92 0.00 2003 2.92 4.49 0.00 2004 4.49 4.20 43,636.13 2005 4.20 4.56 41,257.74 2006 4.56 4.69 20,737.14 2007 4.69 6.05 10,501.01 2008 6.05 3.28 12,493.01 Russell 2000(R) Index Division (Class E)/(c)/............... 2001 11.73 11.63 0.00 2002 11.63 9.03 0.00 2003 9.03 12.88 0.00 2004 12.88 14.79 15,388.66 2005 14.79 15.10 22,958.28 2006 15.10 17.37 18,641.35 2007 17.37 16.69 21,158.37 2008 16.69 10.83 18,970.10 T. Rowe Price Large Cap Growth Division (Class E)/(c)/...... 2001 11.37 11.19 0.00 2002 11.19 8.39 0.00 2003 8.39 10.71 0.00 2004 10.71 11.49 14,099.77 2005 11.49 11.95 15,396.07 2006 11.95 13.20 13,072.52 2007 13.20 14.09 10,313.66 2008 14.09 7.99 9,079.63 T. Rowe Price Mid Cap Growth Division (Class E)/(c)/........ 2001 8.60 8.19 0.00 2002 8.19 4.47 0.00 2003 4.47 5.98 0.00 2004 5.98 6.90 25,770.94 2005 6.90 7.73 26,728.47 2006 7.73 8.04 21,651.21 2007 8.04 9.24 30,980.43 2008 9.24 5.45 14,394.59
163
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ T. Rowe Price Small Cap Growth Division (Class E)/(c)/...... 2001 $ 11.79 $ 11.56 0.00 2002 11.56 8.27 0.00 2003 8.27 11.37 0.00 2004 11.37 12.34 14,579.41 2005 12.34 13.36 17,507.06 2006 13.36 13.54 17,429.19 2007 13.54 14.51 13,359.56 2008 14.51 9.04 6,127.32 Western Asset Management Strategic Bond Opportunities Division (Class E)/(c)/................................... 2001 14.66 14.89 0.00 2002 14.89 15.91 0.00 2003 15.91 17.50 0.00 2004 17.50 18.20 32,653.31 2005 18.20 18.27 34,359.82 2006 18.27 18.72 32,363.62 2007 18.72 19.00 31,801.74 2008 19.00 15.76 26,188.70 Western Asset Management U.S Government Division (Class E)/(c)/................................................... 2001 13.63 13.85 0.00 2002 13.85 14.56 0.00 2003 14.56 14.45 0.00 2004 14.45 14.52 7,489.64 2005 14.52 14.41 7,765.52 2006 14.41 14.65 8,118.00 2007 14.65 14.90 4,958.70 2008 14.90 14.50 2,210.16 At 2.55 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.36 13.92 5,946.69 2007 13.92 14.02 7,845.31 2008 14.02 12.39 4,754.23 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.33 18.07 15,247.27 2005 18.07 22.08 29,683.18 2006 22.08 26.71 44,812.05 2007 26.71 31.61 52,489.35 2008 31.61 14.32 47,184.56 American Funds Growth Division (Class 2)/(c)/............... 2004 91.79 100.65 7,212.98 2005 100.65 114.01 12,716.12 2006 114.01 122.51 16,853.27 2007 122.51 134.15 16,934.86 2008 134.15 73.26 14,663.23 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 71.43 76.85 7,041.60 2005 76.85 79.29 13,993.24 2006 79.29 89.06 19,606.13 2007 89.06 91.18 23,431.93 2008 91.18 55.23 16,761.80
164 -------- /(a)/ The assets of the State Street Research Income Division merged into this Division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of State Street Research Income Division. /(b)/ The assets of the Loomis Sayles High Yield Bond Division merged into the Lord Abbett Bond Debenture Division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of Loomis Sayles High Yield Bond Division. /(c)/ Inception date: August 3, 2001. /(d)/ Inception date: May 1, 2002. /(e)/ The assets of the Janus Growth Division merged into the Janus Aggressive Growth Division on April 28, 2003. Accumulation unit values prior to April 28, 2003 are those of the Janus Growth Division. /(f)/ Inception date: May 1, 2003 /(g)/ The assets in this investment division merged into the Jennison Growth Division prior to the opening of business on May 2, 2005. This investment division is no longer available under the Deferred Annuity. /(h)/ This division merged into the Janus Mid Cap Division prior to the opening of business on May 3, 2004 and was renamed FI Mid Cap Opportunities. The investment division with the name FI Mid Cap Opportunities on April 30, 2004 ceased to exist. The accumulation unit value history presented here is of the Janus Mid Cap Division. /(i)/ Inception date May 1, 2004. /(k)/ Inception date May 1, 2006. /(l)/ The assets of MFS Investors Trust Division were merged into the Legg Mason Value Equity Division prior to the opening of business on May 1, 2006. Accumulation unit values prior to May 1, 2006 are those of MFS Investors Trust Division. /(m)/ The assets of BlackRock Large Cap Division (formerly BlackRock Investment Trust Division) of the Metropolitan Fund were merged into the BlackRock Large Cap Core Division of the Met Investors Fund on April 30, 2007. Accumulation unit values prior to April 30, 2007 are those of the BlackRock Large Cap Division. * We are waiving a portion of the Sep Acct charge for the investment division investing in the BlackRock Large Cap Core Portfolio. Please see the Table of Expenses for more information. 165 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.50 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 7.00 135,856.26 American Funds Bond Division (Class 2)/(k)/................. 2006 14.49 15.19 9,855.83 2007 15.19 15.43 68,169.42 2008 15.43 13.76 16,239.77 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2001 13.75 13.42 0.00 2002 13.42 10.68 32,019.34 2003 10.68 16.14 85,398.57 2004 16.14 19.19 128,270.84 2005 19.19 23.66 149,896.21 2006 23.66 28.88 146,893.34 2007 28.88 34.49 141,939.77 2008 34.49 15.76 93,838.28 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.35 323,645.32 American Funds Growth Division (Class 2)/(c)/............... 2001 121.23 109.75 0.00 2002 109.75 81.55 16,230.12 2003 81.55 109.74 58,503.83 2004 109.74 121.43 69,240.32 2005 121.43 138.80 68,272.08 2006 138.80 150.48 63,238.49 2007 150.48 166.28 54,048.73 2008 166.28 91.63 42,147.59 American Funds Growth-Income Division/(c)/.................. 2001 85.05 81.63 0.00 2002 81.63 65.56 26,270.23 2003 65.56 85.41 68,725.41 2004 85.41 92.72 96,552.45 2005 92.72 96.53 87,866.03 2006 96.53 109.39 82,701.17 2007 109.39 113.01 69,156.14 2008 113.01 69.08 55,948.52 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.68 150,934.28 BlackRock Aggressive Growth Division (Class B).............. 2004 33.03 36.59 1,258.67 2005 36.59 39.81 5,095.42 2006 39.81 41.76 4,636.17 2007 41.76 49.46 9,056.66 2008 49.46 26.38 15,820.16 BlackRock Bond Income Division (Class B).................... 2004 42.41 43.90 8,121.98 2005 43.90 44.18 23,976.02 2006 44.18 45.33 46,603.87 2007 45.33 47.34 53,156.32 2008 47.34 44.92 45,632.45
166
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $34.70 $37.42 6,708.35 2005 37.42 37.90 16,192.39 2006 37.90 41.16 17,166.95 2007 41.16 42.83 25,949.67 2008 42.83 31.65 22,359.65 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 76.25 76.86 3,123.19 2008 76.86 47.46 2,638.81 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 58.27 64.26 660.74 2005 64.26 65.41 3,196.09 2006 65.41 73.35 3,446.55 2007 73.35 76.90 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.66 11.76 10,184.66 2005 11.76 12.23 20,457.74 2006 12.23 14.35 40,046.14 2007 14.35 14.58 86,981.14 2008 14.58 9.32 102,768.79 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.97 25.15 4,013.61 2005 25.15 26.45 5,817.98 2006 26.45 27.07 10,293.45 2007 27.07 31.58 25,712.55 2008 31.58 19.69 42,512.52 BlackRock Money Market Division (Class B)................... 2004 21.51 21.42 259.09 2005 21.42 21.66 1,104.62 2006 21.66 22.31 1,086.92 2007 22.31 23.04 2,669.52 2008 23.04 23.28 7,167.65 BlackRock Strategic Value Division (Class B)................ 2004 16.04 18.04 23,890.52 2005 18.04 18.47 71,096.64 2006 18.47 21.18 62,812.31 2007 21.18 20.10 67,280.87 2008 20.10 12.16 76,475.72 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.82 68,869.17 2005 12.82 14.31 153,352.09 2006 14.31 19.40 234,114.01 2007 19.40 16.24 216,454.32 2008 16.24 9.33 201,310.26 Davis Venture Value Division (Class B)...................... 2004 28.30 30.43 12,812.49 2005 30.43 32.98 54,854.72 2006 32.98 37.14 106,439.73 2007 37.14 38.18 115,511.86 2008 38.18 22.74 111,650.26 FI Large Cap Division (Class B)/(k)/........................ 2006 16.92 17.11 965.68 2007 17.11 17.48 2,704.42 2008 17.48 9.48 3,396.09
167
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.55 $ 16.36 5,537.49 2005 16.36 17.20 16,619.16 2006 17.20 18.90 25,812.90 2007 18.90 20.13 33,746.41 2008 20.13 8.83 34,423.59 FI Value Leaders Division (Class B)......................... 2004 22.76 25.65 3,147.34 2005 25.65 27.91 12,286.58 2006 27.91 30.70 20,249.35 2007 30.70 31.43 22,588.52 2008 31.43 18.85 21,280.45 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.78 9.71 5,973.74 2005 9.71 9.99 8,500.33 2006 9.99 10.80 16,024.40 2007 10.80 11.10 19,772.47 2008 11.10 6.41 28,758.13 Harris Oakmark Focused Value Division (Class B)............. 2004 29.79 32.30 7,707.84 2005 32.30 34.91 24,317.59 2006 34.91 38.58 39,127.30 2007 38.58 35.31 34,123.62 2008 35.31 18.74 24,441.89 Harris Oakmark International Division (Class B)............. 2004 12.00 13.92 15,034.47 2005 13.92 15.67 43,941.33 2006 15.67 19.89 116,979.16 2007 19.89 19.37 130,875.13 2008 19.37 11.28 86,493.10 Janus Forty Division (Class B)/(n)/......................... 2007 142.21 174.34 5,537.10 2008 174.34 99.61 19,075.41 Jennison Growth Division (Class B)/(g)/..................... 2005 4.04 4.86 14,933.88 2006 4.86 4.90 18,457.21 2007 4.90 5.38 21,745.00 2008 5.38 3.36 21,634.45 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.20 4.39 2,823.50 2005 4.39 4.00 2,901.14 Julius Baer International Stock Division (Class B).......... 2004 11.66 13.31 898.96 2005 13.31 15.42 10,412.08 2006 15.42 17.66 27,532.51 2007 17.66 19.15 41,376.10 2008 19.15 10.52 104,801.03 Lazard Mid Cap Division (Class B)........................... 2004 12.53 13.52 3,170.67 2005 13.52 14.39 5,764.34 2006 14.39 16.26 10,443.33 2007 16.26 15.58 19,091.61 2008 15.58 9.47 12,186.84
168
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.58 $ 7.15 783.37 2005 7.15 8.00 12,890.50 2006 8.00 7.74 20,501.16 2007 7.74 7.80 21,600.66 2008 7.80 4.68 19,814.40 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.28 9.95 11,253.48 2007 9.95 9.22 13,536.97 2008 9.22 4.12 7,865.35 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.65 8.47 0.00 2005 8.47 8.92 3,340.19 2006 8.92 9.32 3,968.10 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.34 12.69 75,066.78 2005 12.69 12.74 247,085.26 2006 12.74 13.02 334,610.26 2007 13.02 13.68 445,572.24 2008 13.68 14.24 274,872.64 Loomis Sayles Small Cap Division (Class B).................. 2004 23.18 26.25 1,486.70 2005 26.25 27.59 5,538.88 2006 27.59 31.63 15,151.07 2007 31.63 34.78 24,118.81 2008 34.78 21.91 26,557.99 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.82 16.85 8,869.63 2005 16.85 16.84 38,509.50 2006 16.84 18.11 82,258.11 2007 18.11 19.01 113,548.58 2008 19.01 15.24 91,664.15 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.33 12.13 1,186.65 2005 12.13 12.94 3,900.30 2006 12.94 14.56 10,755.47 2007 14.56 15.93 7,569.52 2008 15.93 9.61 6,032.97 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.98 22,497.30 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.59 28,307.85 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.02 28,465.63 Met/Templeton Growth Division (Class B)+A326/(o)/........... 2008 9.99 6.56 5,656.27 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.60 12.99 14,530.92 2005 12.99 14.33 35,277.12 2006 14.33 15.51 57,561.77 2007 15.51 16.43 71,762.73 2008 16.43 10.29 109,704.46
169
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $33.44 $36.21 38,878.99 2005 36.21 37.23 84,563.02 2006 37.23 42.25 116,766.00 2007 42.25 43.69 145,029.57 2008 43.69 27.00 167,564.75 MFS(R) Research International Division (Class B)............ 2004 9.71 11.14 2,483.65 2005 11.14 12.78 14,559.35 2006 12.78 15.94 68,131.53 2007 15.94 17.78 69,885.02 2008 17.78 10.09 101,977.71 MFS(R) Total Return Division (Class B)/(i)/................. 2004 36.14 39.27 3,841.22 2005 39.27 39.79 19,800.66 2006 39.79 43.88 18,561.86 2007 43.88 45.00 26,133.41 2008 45.00 34.42 19,043.01 MFS(R) Value Division (Class B)............................. 2004 12.06 13.01 32,051.72 2005 13.01 12.60 145,094.99 2006 12.60 14.63 171,514.26 2007 14.63 13.83 129,145.21 2008 13.83 9.03 75,249.03 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.51 11.05 35,817.84 2005 11.05 12.29 70,820.80 2006 12.29 15.19 105,898.99 2007 15.19 16.54 139,248.50 2008 16.54 9.42 174,743.98 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.45 21.51 17,264.02 2005 21.51 23.72 75,324.93 2006 23.72 25.99 131,190.77 2007 25.99 26.42 162,218.98 2008 26.42 13.66 146,521.98 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.91 8.58 1,109.96 2006 8.58 9.10 11,661.01 2007 9.10 10.24 17,741.03 2008 10.24 5.45 51,306.85 Oppenheimer Global Equity Division (Class B)................ 2004 12.66 14.59 4,876.59 2005 14.59 16.67 16,102.42 2006 16.67 19.11 24,727.56 2007 19.11 20.00 40,301.45 2008 20.00 11.71 44,205.40 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.96 11.06 13,284.03 2007 11.06 12.07 48,146.04 2008 12.07 11.07 230,752.72 PIMCO Total Return Division (Class B)....................... 2004 11.62 12.04 60,186.41 2005 12.04 12.13 164,114.54 2006 12.13 12.49 186,335.52 2007 12.49 13.23 207,441.47 2008 13.23 13.09 191,272.06
170
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.15 $ 4.32 6,953.90 2005 4.32 4.72 30,683.81 2006 4.72 4.90 26,551.62 2007 4.90 6.35 110,856.01 2008 6.35 3.47 150,885.29 Russell 2000(R) Index Division (Class B).................... 2004 13.39 15.32 10,365.69 2005 15.32 15.75 26,872.17 2006 15.75 18.24 45,549.73 2007 18.24 17.66 56,624.33 2008 17.66 11.54 53,606.05 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.69 11.40 27,555.86 2007 11.40 11.86 11,428.25 2008 11.86 7.83 12,363.97 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.50 11.14 22,575.33 2007 11.14 11.57 1,657.68 2008 11.57 8.54 5,133.32 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 11.10 12.02 12,504.37 2005 12.02 12.59 26,904.11 2006 12.59 14.00 35,578.28 2007 14.00 15.06 59,614.94 2008 15.06 8.60 69,218.90 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.25 7.08 9,681.38 2005 7.08 8.00 27,613.87 2006 8.00 8.37 73,879.63 2007 8.37 9.70 131,104.09 2008 9.70 5.75 137,409.38 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.29 13.09 3,764.64 2005 13.09 14.28 9,555.84 2006 14.28 14.58 23,238.89 2007 14.58 15.73 26,392.75 2008 15.73 9.87 23,113.55 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.48 19.57 13,950.16 2005 19.57 19.78 76,972.68 2006 19.78 20.42 126,437.95 2007 20.42 20.86 165,927.32 2008 20.86 17.42 124,004.86 Western Asset Management U.S Government Division (Class B).. 2004 15.27 15.62 26,011.02 2005 15.62 15.61 78,034.48 2006 15.61 15.98 118,737.56 2007 15.98 16.37 107,325.43 2008 16.37 16.04 85,709.84 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.14 15,856.40 2006 11.14 12.69 44,186.36 2007 12.69 12.91 79,266.94 2008 12.91 7.57 78,656.94
171
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.29 20,259.36 2006 10.29 10.83 54,698.83 2007 10.83 11.27 194,717.78 2008 11.27 9.50 332,064.42 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.51 52,342.64 2006 10.51 11.33 168,635.18 2007 11.33 11.69 395,220.51 2008 11.69 9.03 732,472.34 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.74 110,034.54 2006 10.74 11.83 499,348.99 2007 11.83 12.16 1,167,489.54 2008 12.16 8.55 1,323,860.24 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.96 65,033.37 2006 10.96 12.34 301,858.85 2007 12.34 12.62 817,285.72 2008 12.62 8.06 803,131.65 At 1.75 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.36 15.04 27,290.50 2007 15.04 15.27 115,031.70 2008 15.27 13.60 82,599.38 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2004 16.05 19.06 11,997.08 2005 19.06 23.48 31,614.64 2006 23.48 28.63 68,262.25 2007 28.63 34.16 115,956.39 2008 34.16 15.60 133,303.40 American Funds Growth Division (Class 2)/(c)/............... 2004 107.63 118.98 7,893.55 2005 118.98 135.85 22,647.91 2006 135.85 147.14 39,329.74 2007 147.14 162.43 48,154.21 2008 162.43 89.42 57,498.77 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 83.76 90.85 7,525.57 2005 90.85 94.48 18,899.21 2006 94.48 106.96 30,350.55 2007 106.96 110.40 43,158.87 2008 110.40 67.42 42,230.34
172 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.45 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 7.00 902,840.18 American Funds Bond Division (Class 2)/(k)/................. 2006 14.56 15.26 28,569.70 2007 15.26 15.52 149,814.19 2008 15.52 13.84 47,001.89 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.77 13.45 0.00 2002 13.45 10.71 0.00 2003 10.71 16.18 107,784.55 2004 16.18 19.25 281,007.79 2005 19.25 23.75 313,233.26 2006 23.75 29.00 270,716.25 2007 29.00 34.66 293,038.02 2008 34.66 15.85 229,143.49 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.35 951,986.85 American Funds Growth Division (Class 2)/(c)/............... 2001 122.35 110.79 0.00 2002 110.79 82.36 0.00 2003 82.36 110.90 46,696.36 2004 110.90 122.77 112,711.09 2005 122.77 140.39 113,022.31 2006 140.39 152.29 108,746.95 2007 152.29 168.36 99,935.58 2008 168.36 92.82 86,140.60 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 85.84 82.40 0.00 2002 82.40 66.22 0.00 2003 66.22 86.30 59,813.89 2004 86.30 93.74 130,811.15 2005 93.74 97.64 124,289.21 2006 97.64 110.70 117,188.16 2007 110.70 114.43 111,462.86 2008 114.43 69.98 96,246.95 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.68 1,040,343.40 BlackRock Aggressive Growth Division (Class B).............. 2004 33.29 36.90 9,171.65 2005 36.90 40.17 29,020.24 2006 40.17 42.15 45,298.95 2007 42.15 49.95 86,656.33 2008 49.95 26.66 110,017.34 BlackRock Bond Income Division (Class B).................... 2004 42.85 44.37 63,346.17 2005 44.37 44.68 168,613.16 2006 44.68 45.86 267,332.39 2007 45.86 47.92 346,047.09 2008 47.92 45.50 297,979.32
173
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $35.01 $37.76 48,978.29 2005 37.76 38.27 107,556.94 2006 38.27 41.59 161,168.36 2007 41.59 43.29 213,758.06 2008 43.29 32.01 225,676.47 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 77.17 77.81 63,747.92 2008 77.81 48.07 75,131.06 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 58.88 64.96 17,500.19 2005 64.96 66.15 26,981.97 2006 66.15 74.22 38,546.99 2007 74.22 77.82 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.68 11.77 140,182.82 2005 11.77 12.25 298,809.48 2006 12.25 14.38 674,818.56 2007 14.38 14.62 913,871.38 2008 14.62 9.35 920,284.41 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 23.08 25.28 19,084.11 2005 25.28 26.60 58,013.48 2006 26.60 27.24 73,887.06 2007 27.24 31.79 177,230.08 2008 31.79 19.83 186,843.17 BlackRock Money Market Division (Class B)................... 2004 21.74 21.65 29,117.65 2005 21.65 21.91 44,768.30 2006 21.91 22.57 49,073.26 2007 22.57 23.32 67,046.30 2008 23.32 23.58 226,643.43 BlackRock Strategic Value Division (Class B)................ 2004 16.08 18.08 208,151.38 2005 18.08 18.52 484,579.16 2006 18.52 21.25 638,919.35 2007 21.25 20.17 666,449.41 2008 20.17 12.21 606,782.37 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.82 390,438.35 2005 12.82 14.32 802,856.22 2006 14.32 19.42 1,419,794.34 2007 19.42 16.27 1,333,509.25 2008 16.27 9.35 1,306,547.14 Davis Venture Value Division (Class B)...................... 2004 28.43 30.59 83,443.97 2005 30.59 33.16 329,730.90 2006 33.16 37.37 611,137.26 2007 37.37 38.43 788,983.77 2008 38.43 22.90 852,417.84 FI Large Cap Division (Class B)/(k)/........................ 2006 17.00 17.20 12,761.12 2007 17.20 17.58 24,685.82 2008 17.58 9.53 48,066.87
174
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.60 $ 16.43 44,594.04 2005 16.43 17.27 129,617.44 2006 17.27 18.99 209,308.71 2007 18.99 20.24 309,830.20 2008 20.24 8.89 366,167.23 FI Value Leaders Division (Class B)......................... 2004 22.88 25.80 12,616.37 2005 25.80 28.08 78,749.95 2006 28.08 30.91 171,503.92 2007 30.91 31.66 192,765.82 2008 31.66 19.00 188,347.16 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.79 9.73 35,889.71 2005 9.73 10.01 67,082.71 2006 10.01 10.83 100,972.63 2007 10.83 11.13 147,707.44 2008 11.13 6.44 191,301.13 Harris Oakmark Focused Value Division (Class B)............. 2004 29.95 32.49 61,962.42 2005 32.49 35.13 219,124.92 2006 35.13 38.85 299,230.02 2007 38.85 35.57 304,687.83 2008 35.57 18.88 261,327.40 Harris Oakmark International Division (Class B)............. 2004 12.01 13.94 90,474.92 2005 13.94 15.70 363,737.05 2006 15.70 19.94 717,277.72 2007 19.94 19.43 898,238.20 2008 19.43 11.32 720,678.05 Janus Forty Division (Class B)/(n)/......................... 2007 144.01 176.60 23,410.63 2008 176.60 100.95 96,407.34 Jennison Growth Division (Class B)/(g)/..................... 2005 4.05 4.87 83,621.23 2006 4.87 4.92 158,043.25 2007 4.92 5.40 251,056.93 2008 5.40 3.38 250,285.03 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.21 4.40 23,883.88 2005 4.40 4.01 44,635.34 Julius Baer International Stock Division (Class B).......... 2004 11.74 13.41 31,071.51 2005 13.41 15.54 194,302.45 2006 15.54 17.80 244,655.17 2007 17.80 19.31 334,722.48 2008 19.31 10.61 492,190.98 Lazard Mid Cap Division (Class B)........................... 2004 12.54 13.54 52,137.74 2005 13.54 14.42 106,924.83 2006 14.42 16.30 137,961.47 2007 16.30 15.63 254,047.42 2008 15.63 9.50 236,912.44
175
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.59 $ 7.16 8,682.60 2005 7.16 8.02 40,889.72 2006 8.02 7.76 115,308.91 2007 7.76 7.82 133,936.45 2008 7.82 4.70 103,195.76 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.32 9.99 168,295.77 2007 9.99 9.26 212,296.75 2008 9.26 4.14 235,954.50 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.67 8.50 7,108.64 2005 8.50 8.95 54,221.16 2006 8.95 9.35 78,662.90 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.37 12.73 668,226.09 2005 12.73 12.78 1,896,429.33 2006 12.78 13.08 2,673,800.30 2007 13.08 13.75 3,352,747.46 2008 13.75 14.31 2,990,967.30 Loomis Sayles Small Cap Division (Class B).................. 2004 23.30 26.39 14,801.09 2005 26.39 27.75 55,997.97 2006 27.75 31.83 129,405.41 2007 31.83 35.02 205,151.24 2008 35.02 22.07 206,036.26 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.88 16.92 99,018.73 2005 16.92 16.92 302,636.36 2006 16.92 18.21 508,215.16 2007 18.21 19.12 705,153.05 2008 19.12 15.34 703,691.97 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.34 12.15 13,753.87 2005 12.15 12.97 63,998.93 2006 12.97 14.60 102,207.32 2007 14.60 15.98 115,997.43 2008 15.98 9.65 125,549.28 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.98 45,803.80 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.59 53,503.25 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.03 222,938.17 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.56 25,839.17 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.63 13.02 153,800.52 2005 13.02 14.37 379,788.64 2006 14.37 15.56 557,366.25 2007 15.56 16.49 750,891.70 2008 16.49 10.34 848,571.17
176
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $33.67 $36.47 338,133.17 2005 36.47 37.52 904,449.90 2006 37.52 42.60 1,185,840.81 2007 42.60 44.07 1,572,342.77 2008 44.07 27.25 1,892,748.62 MFS(R) Research International Division (Class B)............ 2004 9.73 11.16 34,584.24 2005 11.16 12.81 204,951.18 2006 12.81 15.98 379,159.42 2007 15.98 17.85 484,949.14 2008 17.85 10.13 815,884.26 MFS(R) Total Return Division (Class B)/(i)/................. 2004 36.45 39.62 17,149.94 2005 39.62 40.16 50,509.77 2006 40.16 44.31 71,124.70 2007 44.31 45.47 114,974.67 2008 45.47 34.80 86,913.95 MFS(R) Value Division (Class B)............................. 2004 12.10 13.05 259,038.50 2005 13.05 12.65 657,582.62 2006 12.65 14.69 765,542.34 2007 14.69 13.90 874,341.31 2008 13.90 9.08 916,499.08 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.53 11.08 281,853.78 2005 11.08 12.34 794,801.97 2006 12.34 15.26 1,046,351.38 2007 15.26 16.62 1,310,757.69 2008 16.62 9.46 1,666,972.69 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.50 21.58 159,176.32 2005 21.58 23.81 515,610.17 2006 23.81 26.09 752,463.93 2007 26.09 26.54 854,405.39 2008 26.54 13.73 879,279.15 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.93 8.60 24,431.42 2006 8.60 9.13 100,408.26 2007 9.13 10.28 184,491.43 2008 10.28 5.47 293,344.46 Oppenheimer Global Equity Division (Class B)................ 2004 12.70 14.65 22,843.94 2005 14.65 16.75 82,074.43 2006 16.75 19.20 163,143.97 2007 19.20 20.11 294,980.90 2008 20.11 11.78 312,580.44 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.97 11.08 86,341.31 2007 11.08 12.10 282,571.45 2008 12.10 11.10 1,244,765.81 PIMCO Total Return Division (Class B)....................... 2004 11.64 12.06 377,842.08 2005 12.06 12.16 1,189,276.56 2006 12.16 12.52 1,461,259.00 2007 12.52 13.28 1,969,499.12 2008 13.28 13.14 1,764,114.93
177
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.16 $ 4.33 57,701.30 2005 4.33 4.74 193,600.64 2006 4.74 4.92 253,079.50 2007 4.92 6.37 674,106.59 2008 6.37 3.49 732,129.14 Russell 2000(R) Index Division (Class B).................... 2004 13.43 15.37 95,167.37 2005 15.37 15.80 287,348.53 2006 15.80 18.31 433,608.13 2007 18.31 17.74 529,995.06 2008 17.74 11.60 562,830.61 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.70 11.40 8,217.16 2007 11.40 11.87 42,541.11 2008 11.87 7.84 42,485.62 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.51 11.15 9,207.88 2007 11.15 11.58 13,309.96 2008 11.58 8.55 68,745.12 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 11.13 12.06 93,880.57 2005 12.06 12.64 243,137.56 2006 12.64 14.06 323,962.49 2007 14.06 15.13 467,371.01 2008 15.13 8.64 557,457.51 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.26 7.10 115,308.81 2005 7.10 8.02 340,515.41 2006 8.02 8.39 477,070.23 2007 8.39 9.73 1,091,057.23 2008 9.73 5.78 1,123,184.77 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.33 13.14 31,368.21 2005 13.14 14.34 104,136.74 2006 14.34 14.65 184,047.44 2007 14.65 15.82 219,854.25 2008 15.82 9.92 312,410.92 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.56 19.67 107,910.05 2005 19.67 19.89 449,329.55 2006 19.89 20.55 761,939.96 2007 20.55 21.00 823,701.39 2008 21.00 17.55 667,121.79 Western Asset Management U.S Government Division (Class B).. 2004 15.34 15.70 148,473.17 2005 15.70 15.69 460,917.02 2006 15.69 16.07 622,263.47 2007 16.07 16.48 776,097.58 2008 16.48 16.16 679,558.91 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.14 64,461.86 2006 11.14 12.70 337,483.11 2007 12.70 12.93 618,837.35 2008 12.93 7.59 507,161.07
178
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------- MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.29 30,351.09 2006 10.29 10.84 190,487.84 2007 10.84 11.28 649,650.54 2008 11.28 9.52 1,348,550.66 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.51 390,314.31 2006 10.51 11.33 1,573,474.05 2007 11.33 11.71 3,547,905.91 2008 11.71 9.05 4,806,715.49 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.74 685,019.49 2006 10.74 11.84 3,888,509.84 2007 11.84 12.18 10,064,675.95 2008 12.18 8.56 12,353,978.93 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.97 350,604.48 2006 10.97 12.35 2,935,761.18 2007 12.35 12.64 7,696,826.74 2008 12.64 8.08 9,421,701.73 At 1.70 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.43 15.11 151,771.39 2007 15.11 15.35 809,310.13 2008 15.35 13.68 625,986.65 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2004 16.09 19.13 140,092.44 2005 19.13 23.57 422,435.60 2006 23.57 28.75 654,541.21 2007 28.75 34.32 950,653.20 2008 34.32 15.68 987,379.12 American Funds Growth Division (Class 2)/(c)/............... 2004 108.71 120.23 59,830.80 2005 120.23 137.35 192,657.05 2006 137.35 148.84 308,943.53 2007 148.84 164.39 382,632.01 2008 164.39 90.54 421,284.58 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 84.60 91.80 72,778.03 2005 91.80 95.52 188,347.32 2006 95.52 108.19 271,342.46 2007 108.19 111.72 342,131.86 2008 111.72 68.26 347,890.95
179 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.60 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 7.00 753,092.01 American Funds Bond Division (Class 2)/(k)/................. 2006 14.36 15.04 3,602.47 2007 15.04 15.27 26,795.36 2008 15.27 13.60 23,110.57 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.70 13.37 0.00 2002 13.37 10.63 50,260.05 2003 10.63 16.05 33,583.22 2004 16.05 19.06 128,537.65 2005 19.06 23.48 142,590.73 2006 23.48 28.63 152,181.41 2007 28.63 34.16 150,471.52 2008 34.16 15.60 106,380.52 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.35 408,432.40 American Funds Growth Division (Class 2)/(c)/............... 2001 119.13 107.80 0.00 2002 107.80 80.02 10,214.32 2003 80.02 107.58 39,810.16 2004 107.58 118.92 64,053.28 2005 118.92 135.79 63,053.30 2006 135.79 147.07 56,753.68 2007 147.07 162.35 49,908.02 2008 162.35 89.38 40,843.02 American Funds Growth-Income Division (Class 2)+A135/(c)/... 2001 83.58 80.18 0.00 2002 80.18 64.34 4,959.21 2003 64.34 83.72 44,066.19 2004 83.72 90.80 74,849.64 2005 90.80 94.43 74,211.75 2006 94.43 106.91 69,152.27 2007 106.91 110.34 62,927.94 2008 110.34 67.38 41,806.81 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.67 162,969.89 BlackRock Aggressive Growth Division (Class B).............. 2004 32.50 35.99 6,125.69 2005 35.99 39.11 12,498.66 2006 39.11 40.99 27,200.77 2007 40.99 48.49 46,260.80 2008 48.49 25.84 47,455.28 BlackRock Bond Income Division (Class B).................... 2004 41.54 42.98 28,685.98 2005 42.98 43.21 115,911.30 2006 43.21 44.28 132,658.95 2007 44.28 46.20 152,713.37 2008 46.20 43.80 121,533.78
180
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $34.09 $36.73 15,453.64 2005 36.73 37.17 31,003.98 2006 37.17 40.33 54,612.97 2007 40.33 41.91 70,784.11 2008 41.91 30.95 67,594.06 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 74.46 75.00 27,459.54 2008 75.00 46.27 27,554.00 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 57.07 62.89 4,157.45 2005 62.89 63.95 11,867.31 2006 63.95 71.64 17,905.19 2007 71.64 75.09 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.64 11.73 72,889.51 2005 11.73 12.18 129,930.61 2006 12.18 14.28 277,371.16 2007 14.28 14.50 358,059.25 2008 14.50 9.25 334,167.45 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.75 24.90 10,780.74 2005 24.90 26.16 17,048.36 2006 26.16 26.75 34,554.54 2007 26.75 31.17 81,821.28 2008 31.17 19.42 93,148.81 BlackRock Money Market Division (Class B)................... 2004 21.07 20.97 0.00 2005 20.97 21.18 0.00 2006 21.18 21.80 0.00 2007 21.80 22.48 0.00 2008 22.48 22.70 3,914.49 BlackRock Strategic Value Division (Class B)................ 2004 15.98 17.96 74,073.36 2005 17.96 18.37 223,532.64 2006 18.37 21.05 290,437.96 2007 21.05 19.95 310,676.51 2008 19.95 12.06 257,490.00 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.81 143,462.81 2005 12.81 14.28 424,019.39 2006 14.28 19.34 666,439.10 2007 19.34 16.18 575,314.01 2008 16.18 9.28 519,452.59 Davis Venture Value Division (Class B)...................... 2004 28.03 30.13 44,855.88 2005 30.13 32.61 170,894.10 2006 32.61 36.69 272,806.88 2007 36.69 37.68 318,122.75 2008 37.68 22.42 301,314.15 FI Large Cap Division (Class B)/(k)/........................ 2006 16.76 16.93 2,350.63 2007 16.93 17.28 2,857.92 2008 17.28 9.36 4,291.66
181
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.44 $ 16.24 13,577.22 2005 16.24 17.04 54,056.40 2006 17.04 18.71 83,604.41 2007 18.71 19.91 114,242.92 2008 19.91 8.73 128,226.38 FI Value Leaders Division (Class B)......................... 2004 22.51 25.35 6,139.92 2005 25.35 27.56 40,725.01 2006 27.56 30.28 82,477.81 2007 30.28 30.97 80,323.98 2008 30.97 18.56 72,214.81 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.75 9.68 11,076.07 2005 9.68 9.94 35,691.52 2006 9.94 10.74 63,089.12 2007 10.74 11.02 55,752.90 2008 11.02 6.36 53,582.75 Harris Oakmark Focused Value Division (Class B)............. 2004 29.46 31.93 48,425.47 2005 31.93 34.47 114,332.89 2006 34.47 38.06 131,110.14 2007 38.06 34.80 132,411.56 2008 34.80 18.44 114,642.03 Harris Oakmark International Division (Class B)............. 2004 11.97 13.87 40,003.30 2005 13.87 15.60 283,467.88 2006 15.60 19.78 463,970.38 2007 19.78 19.25 541,008.28 2008 19.25 11.20 361,181.38 Janus Forty Division (Class B)/(n)/......................... 2007 138.68 169.90 11,589.91 2008 169.90 96.98 34,978.31 Jennison Growth Division (Class B)/(g)/..................... 2005 4.02 4.83 13,165.94 2006 4.83 4.87 42,372.95 2007 4.87 5.34 51,264.06 2008 5.34 3.33 46,164.93 Jennison Growth Division (Class B)/(g)/..................... 2004 4.19 4.37 3,071.60 2005 4.37 3.98 4,272.14 Julius Baer International Stock Division (Class B).......... 2004 11.51 13.13 22,878.39 2005 13.13 15.20 68,105.57 2006 15.20 17.39 110,048.90 2007 17.39 18.83 140,734.04 2008 18.83 10.33 151,926.99 Lazard Mid Cap Division (Class B)........................... 2004 12.49 13.47 7,419.28 2005 13.47 14.33 15,908.90 2006 14.33 16.17 36,753.72 2007 16.17 15.48 58,469.53 2008 15.48 9.40 51,359.95
182
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.56 $ 7.12 2,214.52 2005 7.12 7.96 32,539.17 2006 7.96 7.70 49,547.29 2007 7.70 7.74 42,082.05 2008 7.74 4.64 33,750.54 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.22 9.87 22,557.32 2007 9.87 9.14 40,093.92 2008 9.14 4.08 49,200.25 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.61 8.42 1,275.31 2005 8.42 8.86 8,313.82 2006 8.86 9.26 8,924.96 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.27 12.61 334,407.74 2005 12.61 12.64 1,057,217.01 2006 12.64 12.92 1,509,924.45 2007 12.92 13.56 1,683,746.74 2008 13.56 14.10 1,231,419.73 Loomis Sayles Small Cap Division (Class B).................. 2004 22.95 25.97 7,873.17 2005 25.97 27.27 28,495.45 2006 27.27 31.23 54,344.96 2007 31.23 34.31 74,909.50 2008 34.31 21.59 73,443.09 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.69 16.70 41,437.91 2005 16.70 16.68 131,610.71 2006 16.68 17.92 208,982.46 2007 17.92 18.79 261,726.72 2008 18.79 15.05 238,895.76 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.30 12.09 4,211.35 2005 12.09 12.89 22,178.17 2006 12.89 14.48 33,138.58 2007 14.48 15.83 46,321.83 2008 15.83 9.54 58,875.23 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.97 23,738.90 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.59 7,220.50 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.02 62,019.61 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.56 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.56 12.93 62,507.21 2005 12.93 14.26 164,022.42 2006 14.26 15.41 250,427.67 2007 15.41 16.30 335,857.52 2008 16.30 10.21 417,015.62
183
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $32.97 $35.68 156,814.22 2005 35.68 36.65 508,917.52 2006 36.65 41.55 657,793.69 2007 41.55 42.92 786,082.23 2008 42.92 26.50 817,168.30 MFS(R) Research International Division (Class B)............ 2004 9.68 11.10 9,587.47 2005 11.10 12.72 52,928.34 2006 12.72 15.84 142,466.77 2007 15.84 17.66 332,197.88 2008 17.66 10.02 297,195.00 MFS(R) Total Return Division (Class B)/(i)/................. 2004 35.53 38.58 2,372.87 2005 38.58 39.05 24,860.40 2006 39.05 43.02 30,424.70 2007 43.02 44.08 41,943.27 2008 44.08 33.68 50,483.60 MFS(R) Value Division (Class B)............................. 2004 12.00 12.93 108,290.64 2005 12.93 12.51 300,285.56 2006 12.51 14.51 294,966.04 2007 14.51 13.71 345,129.39 2008 13.71 8.94 330,646.25 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.45 10.98 126,152.13 2005 10.98 12.21 339,025.45 2006 12.21 15.07 462,728.80 2007 15.07 16.39 668,772.94 2008 16.39 9.32 681,524.58 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.35 21.38 65,404.67 2005 21.38 23.55 264,533.71 2006 23.55 25.78 358,701.49 2007 25.78 26.18 407,834.48 2008 26.18 13.53 341,977.21 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.88 8.54 13,129.16 2006 8.54 9.05 40,015.91 2007 9.05 10.17 79,747.56 2008 10.17 5.41 112,799.60 Oppenheimer Global Equity Division (Class B)................ 2004 12.57 14.48 9,526.43 2005 14.48 16.53 41,647.66 2006 16.53 18.92 80,340.10 2007 18.92 19.79 93,672.46 2008 19.79 11.57 133,559.11 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.92 11.02 46,025.77 2007 11.02 12.01 108,646.03 2008 12.01 11.01 385,644.35 PIMCO Total Return Division (Class B)....................... 2004 11.59 11.99 175,654.13 2005 11.99 12.07 553,686.34 2006 12.07 12.41 649,425.03 2007 12.41 13.14 695,493.02 2008 13.14 12.98 630,863.83
184
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.14 $ 4.30 54,690.49 2005 4.30 4.70 116,180.49 2006 4.70 4.87 135,078.24 2007 4.87 6.31 407,620.95 2008 6.31 3.45 306,232.72 Russell 2000(R) Index Division (Class B).................... 2004 13.32 15.23 43,993.41 2005 15.23 15.63 125,097.16 2006 15.63 18.09 195,532.47 2007 18.09 17.50 215,892.55 2008 17.50 11.42 255,521.17 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.69 11.38 2,415.26 2007 11.38 11.83 31,370.29 2008 11.83 7.80 28,383.39 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.50 11.13 7,199.49 2007 11.13 11.54 18,132.34 2008 11.54 8.51 15,571.41 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 11.04 11.95 37,785.95 2005 11.95 12.50 105,911.34 2006 12.50 13.89 144,424.76 2007 13.89 14.92 188,545.73 2008 14.92 8.51 173,797.48 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.23 7.06 37,130.45 2005 7.06 7.96 124,056.64 2006 7.96 8.32 194,513.98 2007 8.32 9.63 348,582.99 2008 9.63 5.71 286,541.36 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.20 12.99 11,525.19 2005 12.99 14.15 87,611.08 2006 14.15 14.44 117,645.04 2007 14.44 15.56 75,889.16 2008 15.56 9.75 83,913.67 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.30 19.38 41,564.54 2005 19.38 19.56 221,755.12 2006 19.56 20.18 319,978.60 2007 20.18 20.59 312,486.45 2008 20.59 17.18 246,104.98 Western Asset Management U.S Government Division (Class B).. 2004 15.13 15.47 82,723.50 2005 15.47 15.43 242,323.34 2006 15.43 15.78 293,388.48 2007 15.78 16.16 355,994.79 2008 16.16 15.82 294,414.86 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.13 29,348.44 2006 11.13 12.67 92,202.40 2007 12.67 12.88 152,406.40 2008 12.88 7.54 151,235.14
185
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.28 34,049.10 2006 10.28 10.82 219,274.10 2007 10.82 11.24 542,410.67 2008 11.24 9.47 837,770.87 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.50 167,681.07 2006 10.50 11.31 803,741.14 2007 11.31 11.66 1,798,990.05 2008 11.66 9.00 2,169,751.21 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.73 384,317.09 2006 10.73 11.81 1,882,802.48 2007 11.81 12.13 3,987,132.98 2008 12.13 8.52 4,568,457.55 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.95 299,456.61 2006 10.95 12.31 1,441,069.15 2007 12.31 12.58 3,442,051.17 2008 12.58 8.03 3,852,526.33 At 1.85 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.23 14.89 104,580.49 2007 14.89 15.11 296,130.88 2008 15.11 13.44 264,484.04 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.96 18.93 68,677.50 2005 18.93 23.30 237,611.10 2006 23.30 28.38 407,554.60 2007 28.38 33.83 454,460.12 2008 33.83 15.43 381,495.88 American Funds Growth Division (Class 2)/(c)/............... 2004 105.51 116.52 31,410.78 2005 116.52 132.91 109,541.48 2006 132.91 143.81 161,281.14 2007 143.81 158.59 181,913.28 2008 158.59 87.22 162,427.62 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 82.11 88.97 32,405.93 2005 88.97 92.43 95,865.42 2006 92.43 104.54 129,393.14 2007 104.54 107.79 148,871.59 2008 107.79 65.76 135,977.45
186 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.70 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.99 793,338.10 American Funds Bond Division (Class 2)/(k)/................. 2006 14.23 14.89 110,668.18 2007 14.89 15.11 252,107.71 2008 15.11 13.44 158,993.33 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.66 13.32 0.00 2002 13.32 10.59 32,229.47 2003 10.59 15.96 171,695.10 2004 15.96 18.93 369,097.08 2005 18.93 23.30 429,939.53 2006 23.30 28.38 467,603.88 2007 28.38 33.83 501,389.85 2008 33.83 15.43 399,490.96 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.34 866,564.61 American Funds Growth Division (Class 2)/(c)/............... 2001 117.06 105.89 0.00 2002 105.89 78.52 21,502.34 2003 78.52 105.46 124,946.44 2004 105.46 116.46 226,287.64 2005 116.46 132.85 227,880.56 2006 132.85 143.74 219,738.44 2007 143.74 158.52 200,783.72 2008 158.52 87.18 165,466.58 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 82.13 78.76 0.00 2002 78.76 63.13 26,184.96 2003 63.13 82.07 152,150.41 2004 82.07 88.92 272,765.78 2005 88.92 92.39 271,138.47 2006 92.39 104.49 255,679.74 2007 104.49 107.74 235,028.44 2008 107.74 65.72 184,407.55 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.66 770,785.94 BlackRock Aggressive Growth Division (Class B).............. 2004 31.99 35.39 14,507.99 2005 35.39 38.43 33,286.34 2006 38.43 40.23 43,705.22 2007 40.23 47.55 70,980.26 2008 47.55 25.31 82,539.30 BlackRock Bond Income Division (Class B).................... 2004 40.69 42.07 99,262.50 2005 42.07 42.25 244,663.60 2006 42.25 43.26 285,288.76 2007 43.26 45.09 293,830.30 2008 45.09 42.70 232,467.50
187
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $33.49 $36.06 80,214.35 2005 36.06 36.45 170,523.14 2006 36.45 39.51 198,591.75 2007 39.51 41.02 213,746.69 2008 41.02 30.26 193,973.87 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 72.70 73.18 39,294.08 2008 73.18 45.10 36,769.51 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 55.89 61.55 16,467.79 2005 61.55 62.52 29,159.47 2006 62.52 69.98 31,632.37 2007 69.98 73.32 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.62 11.70 97,499.59 2005 11.70 12.14 281,289.27 2006 12.14 14.22 785,867.66 2007 14.22 14.41 891,656.41 2008 14.41 9.19 829,917.35 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.54 24.65 17,058.19 2005 24.65 25.87 55,172.58 2006 25.87 26.42 80,102.03 2007 26.42 30.76 133,618.69 2008 30.76 19.14 189,943.84 BlackRock Money Market Division (Class B)................... 2004 20.64 20.53 33,612.06 2005 20.53 20.72 96,921.47 2006 20.72 21.29 121,116.76 2007 21.29 21.94 140,229.63 2008 21.94 22.13 236,478.05 BlackRock Strategic Value Division (Class B)................ 2004 15.92 17.88 319,423.19 2005 17.88 18.26 519,681.12 2006 18.26 20.91 565,296.57 2007 20.91 19.80 532,334.89 2008 19.80 11.96 434,107.53 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.80 500,548.88 2005 12.80 14.26 1,035,388.32 2006 14.26 19.29 1,703,076.70 2007 19.29 16.12 1,354,919.10 2008 16.12 9.24 1,100,900.47 Davis Venture Value Division (Class B)...................... 2004 27.76 29.82 141,982.73 2005 29.82 32.25 388,337.72 2006 32.25 36.25 584,897.58 2007 36.25 37.18 642,957.77 2008 37.18 22.11 617,269.34 FI Large Cap Division (Class B)/(k)/........................ 2006 16.60 16.76 8,101.86 2007 16.76 17.09 22,822.86 2008 17.09 9.24 21,354.23
188
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.34 $ 16.11 87,053.78 2005 16.11 16.89 144,414.87 2006 16.89 18.53 233,166.60 2007 18.53 19.69 278,142.29 2008 19.69 8.63 263,433.41 FI Value Leaders Division (Class B)......................... 2004 22.26 25.06 19,437.68 2005 25.06 27.21 93,322.20 2006 27.21 29.87 170,569.65 2007 29.87 30.52 169,574.77 2008 30.52 18.27 146,370.87 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.73 9.64 57,281.24 2005 9.64 9.90 154,552.24 2006 9.90 10.68 155,088.49 2007 10.68 10.95 148,632.91 2008 10.95 6.32 136,278.75 Harris Oakmark Focused Value Division (Class B)............. 2004 29.14 31.56 117,721.46 2005 31.56 34.04 298,396.49 2006 34.04 37.54 324,215.96 2007 37.54 34.29 314,103.91 2008 34.29 18.16 246,922.94 Harris Oakmark International Division (Class B)............. 2004 11.94 13.83 151,127.30 2005 13.83 15.53 405,603.51 2006 15.53 19.68 897,052.85 2007 19.68 19.13 955,712.37 2008 19.13 11.12 716,024.87 Janus Forty Division (Class B)/(n)/......................... 2007 135.24 165.57 28,994.67 2008 165.57 94.41 111,088.82 Jennison Growth Division (Class B)/(g)/..................... 2005 4.00 4.80 61,967.11 2006 4.80 4.84 142,425.77 2007 4.84 5.30 225,098.62 2008 5.30 3.30 211,021.60 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.17 4.35 17,007.14 2005 4.35 3.96 24,141.97 Julius Baer International Stock Division (Class B).......... 2004 11.36 12.95 66,514.52 2005 12.95 14.98 189,007.22 2006 14.98 17.12 286,646.95 2007 17.12 18.52 345,202.32 2008 18.52 10.15 337,447.42 Lazard Mid Cap Division (Class B)........................... 2004 12.46 13.43 36,281.76 2005 13.43 14.27 72,907.38 2006 14.27 16.09 140,197.13 2007 16.09 15.39 199,724.02 2008 15.39 9.33 143,593.02
189
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.54 $ 7.09 37,453.78 2005 7.09 7.92 107,721.48 2006 7.92 7.65 181,140.34 2007 7.65 7.69 159,531.06 2008 7.69 4.61 147,199.47 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.15 9.80 85,499.93 2007 9.80 9.06 112,238.01 2008 9.06 4.04 129,264.47 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.57 8.38 12,559.46 2005 8.38 8.80 26,386.07 2006 8.80 9.19 44,385.13 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.20 12.54 912,875.40 2005 12.54 12.55 2,487,168.01 2006 12.55 12.81 3,484,985.75 2007 12.81 13.44 3,999,451.60 2008 13.44 13.95 2,966,370.88 Loomis Sayles Small Cap Division (Class B).................. 2004 22.72 25.69 12,143.39 2005 25.69 26.95 40,829.47 2006 26.95 30.84 130,657.92 2007 30.84 33.84 199,591.20 2008 33.84 21.27 173,286.62 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.57 16.56 124,851.59 2005 16.56 16.52 328,720.38 2006 16.52 17.73 549,861.12 2007 17.73 18.57 683,372.92 2008 18.57 14.86 521,594.46 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.27 12.05 26,294.95 2005 12.05 12.83 50,215.73 2006 12.83 14.41 82,523.50 2007 14.41 15.73 94,017.36 2008 15.73 9.47 80,145.63 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.96 65,467.64 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.58 29,274.68 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.01 144,929.43 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.55 25,230.25 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.52 12.87 208,061.30 2005 12.87 14.18 554,103.04 2006 14.18 15.31 720,723.19 2007 15.31 16.18 815,160.84 2008 16.18 10.12 870,940.54
190
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $32.51 $35.16 454,627.96 2005 35.16 36.08 1,199,871.15 2006 36.08 40.86 1,603,848.66 2007 40.86 42.17 1,777,768.44 2008 42.17 26.01 1,911,644.92 MFS(R) Research International Division (Class B)............ 2004 9.65 11.06 50,747.07 2005 11.06 12.66 136,987.82 2006 12.66 15.75 459,100.86 2007 15.75 17.54 602,200.33 2008 17.54 9.94 760,261.43 MFS(R) Total Return Division (Class B)/(i)/................. 2004 34.93 37.91 57,702.72 2005 37.91 38.33 124,020.75 2006 38.33 42.19 132,486.50 2007 42.19 43.18 145,281.71 2008 43.18 32.96 120,025.00 MFS(R) Value Division (Class B)............................. 2004 11.93 12.85 374,626.53 2005 12.85 12.43 724,619.90 2006 12.43 14.40 756,964.22 2007 14.40 13.58 757,560.42 2008 13.58 8.85 618,064.49 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.40 10.91 332,349.68 2005 10.91 12.12 858,238.92 2006 12.12 14.95 1,194,424.94 2007 14.95 16.24 1,350,230.97 2008 16.24 9.23 1,590,004.75 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.25 21.25 245,824.45 2005 21.25 23.39 630,927.75 2006 23.39 25.57 853,094.21 2007 25.57 25.94 925,152.39 2008 25.94 13.39 828,055.72 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.84 8.50 40,222.67 2006 8.50 8.99 137,636.89 2007 8.99 10.10 329,952.88 2008 10.10 5.37 350,373.23 Oppenheimer Global Equity Division (Class B)................ 2004 12.48 14.36 27,956.80 2005 14.36 16.38 117,941.26 2006 16.38 18.74 248,855.43 2007 18.74 19.57 343,124.58 2008 19.57 11.44 269,245.86 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.89 10.98 98,620.86 2007 10.98 11.96 347,789.82 2008 11.96 10.94 1,120,866.37 PIMCO Total Return Division (Class B)....................... 2004 11.55 11.95 498,836.31 2005 11.95 12.01 1,136,842.07 2006 12.01 12.34 1,359,793.00 2007 12.34 13.05 1,553,384.52 2008 13.05 12.88 1,547,779.69
191
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.12 $ 4.29 73,802.78 2005 4.29 4.68 148,140.40 2006 4.68 4.84 259,282.93 2007 4.84 6.27 762,703.26 2008 6.27 3.42 706,859.86 Russell 2000(R) Index Division (Class B).................... 2004 13.25 15.14 141,755.55 2005 15.14 15.52 350,011.64 2006 15.52 17.94 523,741.24 2007 17.94 17.34 570,083.25 2008 17.34 11.30 559,869.69 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.68 11.37 26,769.64 2007 11.37 11.80 59,479.13 2008 11.80 7.78 34,105.98 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.49 11.11 22,946.50 2007 11.11 11.52 30,912.00 2008 11.52 8.48 45,979.46 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.98 11.87 110,295.64 2005 11.87 12.41 294,698.78 2006 12.41 13.78 410,605.16 2007 13.78 14.78 636,200.16 2008 14.78 8.43 539,130.67 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.21 7.03 107,430.42 2005 7.03 7.92 343,464.54 2006 7.92 8.27 506,529.21 2007 8.27 9.56 876,740.66 2008 9.56 5.66 1,025,221.21 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.11 12.89 69,587.07 2005 12.89 14.03 124,476.65 2006 14.03 14.29 172,403.57 2007 14.29 15.39 162,352.58 2008 15.39 9.63 169,587.64 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.13 19.18 172,124.52 2005 19.18 19.34 576,153.07 2006 19.34 19.93 721,556.34 2007 19.93 20.32 728,579.12 2008 20.32 16.94 512,516.99 Western Asset Management U.S Government Division (Class B).. 2004 14.98 15.31 179,014.21 2005 15.31 15.26 589,407.46 2006 15.26 15.59 712,004.15 2007 15.59 15.95 715,332.75 2008 15.95 15.59 521,318.83 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.12 28,913.27 2006 11.12 12.65 196,169.63 2007 12.65 12.84 356,079.47 2008 12.84 7.52 347,402.50
192
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.27 265,930.71 2006 10.27 10.80 432,526.78 2007 10.80 11.21 688,541.23 2008 11.21 9.43 877,797.87 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.49 455,839.07 2006 10.49 11.29 1,597,413.69 2007 11.29 11.63 2,891,813.57 2008 11.63 8.96 3,704,385.94 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.72 1,208,419.42 2006 10.72 11.79 3,901,804.14 2007 11.79 12.09 7,491,319.15 2008 12.09 8.48 8,298,987.60 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.95 600,426.63 2006 10.95 12.29 2,916,170.94 2007 12.29 12.55 6,445,914.14 2008 12.55 8.00 7,010,215.91 At 1.95 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.10 14.75 357,999.08 2007 14.75 14.95 823,793.83 2008 14.95 13.29 516,021.08 American Funds Global Small Capitalization Division (Class 2)/(c)/................................................... 2004 15.87 18.81 154,178.34 2005 18.81 23.12 388,885.90 2006 23.12 28.13 690,957.63 2007 28.13 33.50 932,881.79 2008 33.50 15.27 856,429.19 American Funds Growth Division (Class 2)/(c)/............... 2004 103.43 114.11 97,615.02 2005 114.11 130.03 234,076.91 2006 130.03 140.56 338,346.73 2007 140.56 154.85 382,373.62 2008 154.85 85.07 383,696.41 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 80.49 87.13 102,191.11 2005 87.13 90.43 253,909.56 2006 90.43 102.17 351,895.32 2007 102.17 105.24 383,293.04 2008 105.24 64.14 326,500.85
193 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.85 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.............................................. 2008 $ 10.00 $ 6.98 87,557.69 American Funds Bond Division (Class 2)/(k)/............ 2006 14.04 14.68 285.76 2007 14.68 14.87 2,966.80 2008 14.87 13.21 5,323.72 American Funds Global Small Capitalization Division (Class 2)/(c)/....................................... 2001 13.59 13.25 0.00 2002 13.25 10.51 0.00 2003 10.51 15.82 16,276.78 2004 15.82 18.75 35,175.14 2005 18.75 23.04 41,539.10 2006 23.04 28.01 76,385.21 2007 28.01 33.34 66,717.75 2008 33.34 15.18 60,337.00 American Funds Growth Allocation Division (Class C)/(o)/.............................................. 2008 9.99 6.34 147,345.36 American Funds Growth Division (Class 2)/(c)/.......... 2001 114.03 103.08 0.00 2002 103.08 76.33 0.00 2003 76.33 102.36 9,687.49 2004 102.36 112.86 20,523.05 2005 112.86 128.55 19,557.50 2006 128.55 138.89 18,383.62 2007 138.89 152.93 16,417.04 2008 152.93 83.98 14,835.46 American Funds Growth-Income Division (Class 2)/(c)/... 2001 80.00 76.67 0.00 2002 76.67 61.37 595.67 2003 61.37 79.66 16,673.18 2004 79.66 86.18 28,078.77 2005 86.18 89.40 20,444.99 2006 89.40 100.96 18,095.73 2007 100.96 103.94 16,950.80 2008 103.94 63.31 13,873.69 American Funds Moderate Allocation Division (Class C)/(o)/....................................... 2008 10.01 7.66 52,675.94 BlackRock Aggressive Growth Division (Class B)......... 2004 31.23 34.52 1,936.92 2005 34.52 37.42 2,919.02 2006 37.42 39.12 6,593.98 2007 39.12 46.17 15,811.45 2008 46.17 24.54 14,508.19 BlackRock Bond Income Division (Class B)............... 2004 39.44 40.74 12,203.33 2005 40.74 40.86 25,429.41 2006 40.86 41.77 41,165.96 2007 41.77 43.47 54,499.65 2008 43.47 41.11 39,516.18
194
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $32.60 $35.07 10,496.05 2005 35.07 35.40 18,982.49 2006 35.40 38.32 20,874.02 2007 38.32 39.72 56,594.43 2008 39.72 29.26 56,291.54 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 70.14 70.53 7,084.23 2008 70.53 43.40 19,177.91 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 54.17 59.59 1,881.76 2005 59.59 60.45 3,756.59 2006 60.45 67.55 6,856.82 2007 67.55 70.74 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.59 11.65 7,999.04 2005 11.65 12.07 24,302.59 2006 12.07 14.12 75,219.82 2007 14.12 14.29 130,341.51 2008 14.29 9.10 107,190.43 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.22 24.27 9,423.14 2005 24.27 25.44 4,568.51 2006 25.44 25.94 8,075.47 2007 25.94 30.16 38,186.68 2008 30.16 18.74 37,676.48 BlackRock Money Market Division (Class B)................... 2004 20.01 19.88 20,934.55 2005 19.88 20.03 8,434.82 2006 20.03 20.56 9,432.79 2007 20.56 21.15 10,237.43 2008 21.15 21.30 35,755.34 BlackRock Strategic Value Division (Class B)................ 2004 15.83 17.76 40,690.20 2005 17.76 18.12 81,971.87 2006 18.12 20.71 103,214.52 2007 20.71 19.58 100,523.59 2008 19.58 11.81 86,090.41 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.79 46,331.32 2005 12.79 14.23 123,861.73 2006 14.23 19.22 225,365.42 2007 19.22 16.03 213,683.63 2008 16.03 9.18 192,656.00 Davis Venture Value Division (Class B)...................... 2004 27.37 29.37 31,161.37 2005 29.37 31.71 60,892.62 2006 31.71 35.59 102,139.81 2007 35.59 36.46 131,826.19 2008 36.46 21.64 122,233.24 FI Large Cap Division (Class B)/(k)/........................ 2006 16.36 16.50 912.12 2007 16.50 16.80 1,642.68 2008 16.80 9.07 42,086.33
195
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.19 $ 15.92 8,203.79 2005 15.92 16.67 14,255.47 2006 16.67 18.26 16,262.91 2007 18.26 19.38 28,232.01 2008 19.38 8.47 38,181.84 FI Value Leaders Division (Class B)......................... 2004 21.89 24.62 3,119.82 2005 24.62 26.70 17,700.78 2006 26.70 29.26 29,405.15 2007 29.26 29.86 36,516.85 2008 29.86 17.85 19,286.63 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.69 9.59 2,837.37 2005 9.59 9.83 4,382.34 2006 9.83 10.59 10,108.02 2007 10.59 10.84 13,924.63 2008 10.84 6.24 40,879.03 Harris Oakmark Focused Value Division (Class B)............. 2004 28.66 31.01 10,938.90 2005 31.01 33.40 39,037.45 2006 33.40 36.78 53,222.82 2007 36.78 33.55 53,625.69 2008 33.55 17.74 38,133.17 Harris Oakmark International Division (Class B)............. 2004 11.89 13.76 21,852.43 2005 13.76 15.44 51,829.46 2006 15.44 19.53 114,085.91 2007 19.53 18.95 145,783.34 2008 18.95 11.00 133,439.40 Janus Forty Division (Class B)/(n)/......................... 2007 130.24 159.29 2,823.16 2008 159.29 90.69 15,989.43 Jennison Growth Division (Class B)/(g)/..................... 2005 3.97 4.76 2,883.67 2006 4.76 4.79 9,227.62 2007 4.79 5.24 25,032.72 2008 5.24 3.26 118,653.55 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.15 4.31 166.62 2005 4.31 3.93 166.45 Julius Baer International Stock Division (Class B).......... 2004 11.14 12.69 2,465.13 2005 12.69 14.65 10,628.57 2006 14.65 16.72 23,054.77 2007 16.72 18.06 44,197.05 2008 18.06 9.88 79,005.37 Lazard Mid Cap Division (Class B)........................... 2004 12.41 13.37 1,884.05 2005 13.37 14.18 8,881.48 2006 14.18 15.96 11,450.66 2007 15.96 15.24 29,761.50 2008 15.24 9.23 18,296.07
196
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.51 $ 7.05 1,971.14 2005 7.05 7.86 7,035.25 2006 7.86 7.58 18,287.94 2007 7.58 7.61 18,448.84 2008 7.61 4.55 21,058.19 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.06 9.68 23,737.63 2007 9.68 8.94 35,679.58 2008 8.94 3.98 20,365.71 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.51 8.31 881.90 2005 8.31 8.72 3,593.59 2006 8.72 9.10 12,123.92 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.10 12.42 112,089.24 2005 12.42 12.42 259,575.03 2006 12.42 12.66 298,677.10 2007 12.66 13.25 386,972.91 2008 13.25 13.74 275,501.13 Loomis Sayles Small Cap Division (Class B).................. 2004 22.38 25.29 2,706.09 2005 25.29 26.48 8,531.22 2006 26.48 30.26 18,511.16 2007 30.26 33.16 32,070.75 2008 33.16 20.81 32,360.95 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.38 16.34 8,309.78 2005 16.34 16.28 22,220.05 2006 16.28 17.45 46,666.36 2007 17.45 18.25 77,204.80 2008 18.25 14.58 70,769.72 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.23 12.00 1,548.23 2005 12.00 12.75 6,758.71 2006 12.75 14.29 11,749.55 2007 14.29 15.58 11,000.38 2008 15.58 9.37 13,182.43 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.96 14,695.76 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.57 2,792.31 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.01 27,757.88 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.54 602.30 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.45 12.79 36,438.48 2005 12.79 14.06 79,289.13 2006 14.06 15.16 93,502.64 2007 15.16 16.00 132,264.26 2008 16.00 9.99 125,998.49
197
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $31.84 $34.39 66,514.00 2005 34.39 35.24 137,284.94 2006 35.24 39.85 143,558.08 2007 39.85 41.07 171,795.93 2008 41.07 25.29 169,992.47 MFS(R) Research International Division (Class B)............ 2004 9.60 10.99 9,588.22 2005 10.99 12.56 31,239.40 2006 12.56 15.61 55,909.20 2007 15.61 17.36 100,997.39 2008 17.36 9.82 106,004.96 MFS(R) Total Return Division (Class B)/(i)/................. 2004 34.05 36.91 2,362.83 2005 36.91 37.27 21,930.33 2006 37.27 40.96 12,278.96 2007 40.96 41.86 22,416.46 2008 41.86 31.91 26,643.32 MFS(R) Value Division (Class B)............................. 2004 11.83 12.73 24,712.03 2005 12.73 12.29 94,008.85 2006 12.29 14.22 131,465.63 2007 14.22 13.40 148,236.20 2008 13.40 8.72 102,395.94 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.33 10.81 50,755.18 2005 10.81 11.99 109,187.10 2006 11.99 14.77 108,247.58 2007 14.77 16.02 163,313.93 2008 16.02 9.09 172,688.21 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.10 21.06 21,081.97 2005 21.06 23.14 86,924.58 2006 23.14 25.26 128,208.60 2007 25.26 25.58 160,955.45 2008 25.58 13.19 161,514.70 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.79 8.44 7,145.14 2006 8.44 8.91 11,798.94 2007 8.91 10.00 41,752.68 2008 10.00 5.30 72,395.10 Oppenheimer Global Equity Division (Class B)................ 2004 12.34 14.20 6,130.20 2005 14.20 16.16 11,094.06 2006 16.16 18.46 20,708.84 2007 18.46 19.26 39,616.94 2008 19.26 11.24 58,993.08 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.84 10.92 8,750.65 2007 10.92 11.87 42,316.60 2008 11.87 10.85 158,096.40 PIMCO Total Return Division (Class B)....................... 2004 11.49 11.88 44,470.27 2005 11.88 11.92 118,147.15 2006 11.92 12.23 148,988.71 2007 12.23 12.92 187,733.26 2008 12.92 12.73 138,733.24
198
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.10 $ 4.26 41,703.19 2005 4.26 4.64 7,809.11 2006 4.64 4.80 10,707.73 2007 4.80 6.20 68,532.97 2008 6.20 3.38 130,577.36 Russell 2000(R) Index Division (Class B).................... 2004 13.14 15.00 24,091.71 2005 15.00 15.36 54,386.94 2006 15.36 17.73 77,172.79 2007 17.73 17.10 97,412.29 2008 17.10 11.13 79,333.26 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.67 11.35 78.81 2007 11.35 11.76 16,119.87 2008 11.76 7.74 3,343.40 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.48 11.09 50.25 2007 11.09 11.48 1,993.28 2008 11.48 8.44 1,263.77 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.89 11.77 11,706.79 2005 11.77 12.28 31,767.70 2006 12.28 13.61 39,997.07 2007 13.61 14.58 52,982.35 2008 14.58 8.30 59,491.81 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.18 6.99 5,792.84 2005 6.99 7.86 30,236.23 2006 7.86 8.20 57,433.72 2007 8.20 9.47 117,074.17 2008 9.47 5.60 133,990.47 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.98 12.74 4,888.49 2005 12.74 13.85 14,095.69 2006 13.85 14.09 14,021.46 2007 14.09 15.14 15,498.32 2008 15.14 9.46 19,507.95 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.87 18.89 10,385.34 2005 18.89 19.02 75,416.95 2006 19.02 19.57 102,265.24 2007 19.57 19.92 116,242.92 2008 19.92 16.58 132,925.11 Western Asset Management U.S Government Division (Class B).. 2004 14.77 15.08 30,454.36 2005 15.08 15.01 83,256.83 2006 15.01 15.31 97,864.20 2007 15.31 15.63 118,123.87 2008 15.63 15.27 84,695.57
199
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 $ 9.99 $ 11.11 225.18 2006 11.11 12.62 6,219.56 2007 12.62 12.79 28,330.13 2008 12.79 7.47 52,024.45 MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 9.99 10.26 3,874.57 2006 10.26 10.77 18,659.38 2007 10.77 11.16 164,718.99 2008 11.16 9.38 249,320.59 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.48 70,714.08 2006 10.48 11.26 187,956.39 2007 11.26 11.58 769,427.45 2008 11.58 8.91 718,875.03 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.71 85,846.97 2006 10.71 11.76 463,035.46 2007 11.76 12.05 763,832.68 2008 12.05 8.44 916,612.54 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.94 122,891.77 2006 10.94 12.26 419,480.40 2007 12.26 12.50 1,035,764.98 2008 12.50 7.96 944,219.59 At 2.10 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.91 14.54 22,784.06 2007 14.54 14.71 108,865.66 2008 14.71 13.06 136,815.91 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.73 18.62 29,197.21 2005 18.62 22.86 65,064.34 2006 22.86 27.77 111,854.84 2007 27.77 33.02 155,236.14 2008 33.02 15.02 151,446.97 American Funds Growth Division (Class 2)/(c)/............... 2004 100.39 110.58 13,152.20 2005 110.58 125.83 29,151.88 2006 125.83 135.81 46,224.23 2007 135.81 149.39 59,508.91 2008 149.39 81.95 53,584.06 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 78.13 84.44 10,297.47 2005 84.44 87.51 29,267.22 2006 87.51 98.72 48,176.05 2007 98.72 101.54 59,832.77 2008 101.54 61.79 52,677.64
200 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.95 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.98 4,429.96 American Funds Bond Division (Class 2)/(k)/................. 2006 13.91 14.54 609.09 2007 14.54 14.71 8,556.70 2008 14.71 13.06 5,627.05 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.55 13.20 0.00 2002 13.20 10.46 6,770.73 2003 10.46 15.73 19,818.67 2004 15.73 18.62 27,055.05 2005 18.62 22.86 27,764.62 2006 22.86 27.77 33,806.46 2007 27.77 33.02 31,194.78 2008 33.02 15.02 25,007.49 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.33 6,318.23 American Funds Growth Division (Class 2)/(c)/............... 2001 112.05 101.25 0.00 2002 101.25 74.90 2,729.99 2003 74.90 100.34 9,349.78 2004 100.34 110.53 14,562.37 2005 110.53 125.77 15,316.45 2006 125.77 135.74 16,484.29 2007 135.74 149.32 14,638.88 2008 149.32 81.91 11,738.22 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 78.61 75.31 0.00 2002 75.31 60.22 3,960.17 2003 60.22 78.09 20,009.43 2004 78.09 84.39 24,296.87 2005 84.39 87.47 24,577.59 2006 87.47 98.68 23,058.63 2007 98.68 101.49 17,968.87 2008 101.49 61.76 14,155.02 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.65 0.00 BlackRock Aggressive Growth Division (Class B).............. 2004 30.73 33.95 0.00 2005 33.95 36.77 0.00 2006 36.77 38.39 1,194.30 2007 38.39 45.27 600.98 2008 45.27 24.04 502.35 BlackRock Bond Income Division (Class B).................... 2004 38.63 39.88 528.75 2005 39.88 39.95 2,908.64 2006 39.95 40.81 2,700.98 2007 40.81 42.42 2,773.60 2008 42.42 40.08 2,000.10
201
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $32.03 $34.43 1,286.48 2005 34.43 34.72 1,417.92 2006 34.72 37.54 1,304.25 2007 37.54 38.88 1,555.27 2008 38.88 28.61 42.92 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 68.49 68.82 603.94 2008 68.82 42.31 89.12 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 53.05 58.32 0.00 2005 58.32 59.10 64.81 2006 59.10 65.98 534.50 2007 65.98 69.07 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.57 11.62 0.00 2005 11.62 12.03 3,132.73 2006 12.03 14.05 4,271.56 2007 14.05 14.21 6,612.88 2008 14.21 9.04 11,462.13 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.01 24.03 1,115.87 2005 24.03 25.16 1,111.80 2006 25.16 25.63 1,227.84 2007 25.63 29.77 1,040.52 2008 29.77 18.48 5,591.12 BlackRock Money Market Division (Class B)................... 2004 19.60 19.46 0.00 2005 19.46 19.59 0.00 2006 19.59 20.09 0.00 2007 20.09 20.64 0.00 2008 20.64 20.77 0.00 BlackRock Strategic Value Division (Class B)................ 2004 15.77 17.68 3,999.70 2005 17.68 18.02 6,163.03 2006 18.02 20.57 7,949.48 2007 20.57 19.43 7,339.58 2008 19.43 11.71 3,270.29 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.78 7,319.82 2005 12.78 14.20 19,686.55 2006 14.20 19.16 42,276.42 2007 19.16 15.97 35,776.12 2008 15.97 9.13 23,251.06 Davis Venture Value Division (Class B)...................... 2004 27.11 29.07 345.72 2005 29.07 31.36 4,729.71 2006 31.36 35.16 5,991.31 2007 35.16 35.98 6,083.12 2008 35.98 21.34 7,539.75 FI Large Cap Division (Class B)/(k)/........................ 2006 16.20 16.33 0.00 2007 16.33 16.61 0.00 2008 16.61 8.96 2,435.38
202
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.08 $ 15.80 1,081.56 2005 15.80 16.52 2,267.62 2006 16.52 18.08 3,620.59 2007 18.08 19.17 4,459.56 2008 19.17 8.37 4,482.61 FI Value Leaders Division (Class B)......................... 2004 21.65 24.34 233.65 2005 24.34 26.36 4,359.90 2006 26.36 28.87 3,387.51 2007 28.87 29.42 2,211.88 2008 29.42 17.57 2,028.32 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.66 9.56 0.00 2005 9.56 9.78 252.79 2006 9.78 10.53 1,890.28 2007 10.53 10.77 2,360.96 2008 10.77 6.20 2,353.50 Harris Oakmark Focused Value Division (Class B)............. 2004 28.35 30.65 953.24 2005 30.65 32.98 4,369.76 2006 32.98 36.28 2,625.73 2007 36.28 33.06 2,781.48 2008 33.06 17.46 2,983.91 Harris Oakmark International Division (Class B)............. 2004 11.86 13.72 949.47 2005 13.72 15.37 4,360.22 2006 15.37 19.42 5,990.28 2007 19.42 18.83 8,376.67 2008 18.83 10.92 7,073.66 Janus Forty Division (Class B)/(n)/......................... 2007 127.01 155.23 236.72 2008 155.23 88.29 1,814.95 Jennison Growth Division (Class B)/(g)/..................... 2005 3.95 4.73 3,161.78 2006 4.73 4.76 3,155.78 2007 4.76 5.20 2,392.99 2008 5.20 3.23 2,375.26 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.13 4.29 931.60 2005 4.29 3.91 930.56 Julius Baer International Stock Division (Class B).......... 2004 11.00 12.52 47.63 2005 12.52 14.44 2,963.92 2006 14.44 16.46 4,110.21 2007 16.46 17.76 3,157.70 2008 17.76 9.71 3,597.07 Lazard Mid Cap Division (Class B)........................... 2004 12.38 13.32 744.36 2005 13.32 14.12 379.82 2006 14.12 15.88 464.48 2007 15.88 15.15 865.71 2008 15.15 9.16 860.08
203
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (formerly Janus Aggressive Growth) (Class B).............................. 2004 $ 6.48 $ 7.02 363.43 2005 7.02 7.82 2,208.93 2006 7.82 7.54 4,667.37 2007 7.54 7.56 3,706.47 2008 7.56 4.52 4,179.79 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.00 9.61 1,368.60 2007 9.61 8.87 1,363.74 2008 8.87 3.94 1,353.32 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.48 8.26 0.00 2005 8.26 8.66 511.00 2006 8.66 9.03 1,368.70 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.03 12.35 31,888.21 2005 12.35 12.33 58,362.22 2006 12.33 12.56 52,710.37 2007 12.56 13.13 40,676.85 2008 13.13 13.60 29,784.71 Loomis Sayles Small Cap Division (Class B).................. 2004 22.16 25.02 957.25 2005 25.02 26.17 1,914.50 2006 26.17 29.88 2,596.92 2007 29.88 32.71 3,184.36 2008 32.71 20.51 3,544.72 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.26 16.20 993.97 2005 16.20 16.13 2,941.48 2006 16.13 17.26 6,019.69 2007 17.26 18.04 11,446.78 2008 18.04 14.40 9,528.47 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.20 11.96 1,999.50 2005 11.96 12.70 4,087.05 2006 12.70 14.22 4,077.01 2007 14.22 15.49 4,352.05 2008 15.49 9.30 3,606.96 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.95 5,044.98 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.57 5,743.52 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.00 30,135.30 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.54 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.41 12.73 3,071.40 2005 12.73 13.98 4,379.18 2006 13.98 15.06 7,809.23 2007 15.06 15.88 6,602.43 2008 15.88 9.91 9,320.16
204
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $31.39 $33.89 13,176.55 2005 33.89 34.69 20,802.11 2006 34.69 39.19 20,974.70 2007 39.19 40.35 16,593.18 2008 40.35 24.82 17,180.84 MFS(R) Research International Division (Class B)............ 2004 9.57 10.95 476.58 2005 10.95 12.50 1,637.50 2006 12.50 15.52 6,763.82 2007 15.52 17.24 7,505.32 2008 17.24 9.74 7,214.85 MFS(R) Total Return Division (Class B)/(i)/................. 2004 33.48 36.27 646.66 2005 36.27 36.58 1,203.01 2006 36.58 40.16 1,029.13 2007 40.16 41.00 5,429.37 2008 41.00 31.22 1,821.85 MFS(R) Value Division (Class B)............................. 2004 11.77 12.65 1,123.06 2005 12.65 12.21 4,829.93 2006 12.21 14.11 1,157.60 2007 14.11 13.28 1,196.70 2008 13.28 8.63 5,035.86 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.27 10.75 9,314.05 2005 10.75 11.90 13,763.63 2006 11.90 14.65 13,998.00 2007 14.65 15.87 10,212.27 2008 15.87 8.99 14,373.62 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.00 20.93 2,574.08 2005 20.93 22.97 7,229.51 2006 22.97 25.05 9,441.32 2007 25.05 25.35 13,857.09 2008 25.35 13.05 12,288.68 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.76 8.40 1,552.74 2006 8.40 8.86 5,249.29 2007 8.86 9.93 5,294.21 2008 9.93 5.26 5,611.30 Oppenheimer Global Equity Division (Class B)................ 2004 12.25 14.09 2,591.07 2005 14.09 16.02 4,150.28 2006 16.02 18.28 8,339.32 2007 18.28 19.05 12,075.92 2008 19.05 11.10 11,275.36 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.81 10.88 0.00 2007 10.88 11.82 3,051.90 2008 11.82 10.79 25,371.95 PIMCO Total Return Division (Class B)....................... 2004 11.46 11.83 4,757.70 2005 11.83 11.86 14,606.50 2006 11.86 12.16 13,969.05 2007 12.16 12.83 10,920.01 2008 12.83 12.63 9,043.02
205
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.09 $ 4.24 213.88 2005 4.24 4.62 212.24 2006 4.62 4.77 3,322.25 2007 4.77 6.16 2,641.39 2008 6.16 3.35 11,033.06 Russell 2000(R) Index Division (Class B).................... 2004 13.07 14.91 2,868.80 2005 14.91 15.25 3,573.72 2006 15.25 17.58 8,011.43 2007 17.58 16.95 6,460.23 2008 16.95 11.02 3,706.08 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.67 11.33 670.77 2007 11.33 11.74 0.00 2008 11.74 7.71 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.47 11.08 2,714.30 2007 11.08 11.45 1,284.07 2008 11.45 8.41 1,764.89 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.83 11.69 356.94 2005 11.69 12.19 1,171.46 2006 12.19 13.50 1,416.31 2007 13.50 14.45 5,088.09 2008 14.45 8.22 3,195.72 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.16 6.96 559.85 2005 6.96 7.83 4,916.77 2006 7.83 8.15 5,805.41 2007 8.15 9.40 7,527.42 2008 9.40 5.55 7,808.99 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.90 12.64 602.29 2005 12.64 13.72 1,137.94 2006 13.72 13.95 1,361.63 2007 13.95 14.98 1,650.75 2008 14.98 9.35 1,576.50 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.70 18.70 2,689.93 2005 18.70 18.81 8,012.26 2006 18.81 19.34 7,032.64 2007 19.34 19.66 5,110.05 2008 19.66 16.35 4,492.72 Western Asset Management U.S Government Division (Class B).. 2004 14.63 14.92 2,108.37 2005 14.92 14.84 6,283.23 2006 14.84 15.13 4,472.45 2007 15.13 15.43 4,227.20 2008 15.43 15.05 8,972.78 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.10 0.00 2006 11.10 12.60 0.00 2007 12.60 12.76 4,030.40 2008 12.76 7.45 9,154.41
206
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.26 0.00 2006 10.26 10.75 2,074.04 2007 10.75 11.13 28,990.88 2008 11.13 9.34 12,902.22 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.47 7,354.91 2006 10.47 11.24 14,148.53 2007 11.24 11.55 63,148.46 2008 11.55 8.88 57,396.15 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.70 46,491.36 2006 10.70 11.74 69,819.26 2007 11.74 12.01 97,717.86 2008 12.01 8.41 121,265.95 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.93 11,458.42 2006 10.93 12.24 63,979.50 2007 12.24 12.47 91,710.88 2008 12.47 7.93 135,900.90 At 2.20 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.79 14.40 0.00 2007 14.40 14.55 3,535.61 2008 14.55 12.90 3,513.81 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.64 18.50 1,548.37 2005 18.50 22.68 3,303.35 2006 22.68 27.53 9,878.37 2007 27.53 32.70 14,621.74 2008 32.70 14.86 12,731.69 American Funds Growth Division (Class 2)/(c)/............... 2004 98.41 108.29 1,538.99 2005 108.29 123.10 2,730.25 2006 123.10 132.73 4,551.06 2007 132.73 145.86 5,997.42 2008 145.86 79.94 5,837.37 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 76.59 82.69 1,555.89 2005 82.69 85.61 3,032.38 2006 85.61 96.49 4,108.55 2007 96.49 99.14 4,891.86 2008 99.14 60.27 4,698.06
207 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.90 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.98 6,600.20 American Funds Bond Division (Class 2)/(k)/................. 2006 13.98 14.61 8,302.42 2007 14.61 14.79 45,731.95 2008 14.79 13.13 13,981.78 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.57 13.22 0.00 2002 13.22 10.49 3,013.91 2003 10.49 15.78 24,019.52 2004 15.78 18.68 75,500.24 2005 18.68 22.95 75,518.87 2006 22.95 27.89 65,936.39 2007 27.89 33.18 69,803.28 2008 33.18 15.10 67,083.02 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.33 182,777.63 American Funds Growth Division (Class 2)/(c)/............... 2001 113.04 102.16 0.00 2002 102.16 75.61 1,405.54 2003 75.61 101.34 18,951.53 2004 101.34 111.69 41,274.48 2005 111.69 127.15 35,235.78 2006 127.15 137.31 29,683.32 2007 137.31 151.12 28,363.02 2008 151.12 82.94 26,111.18 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 79.30 75.99 0.00 2002 75.99 60.79 738.38 2003 60.79 78.87 24,558.88 2004 78.87 85.28 46,623.82 2005 85.28 88.43 35,378.65 2006 88.43 99.81 32,205.65 2007 99.81 102.71 30,390.79 2008 102.71 62.53 26,080.28 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.65 111,165.03 BlackRock Aggressive Growth Division (Class B).............. 2004 30.98 34.23 2,563.08 2005 34.23 37.09 4,192.86 2006 37.09 38.75 5,261.53 2007 38.75 45.71 16,192.31 2008 45.71 24.29 22,100.15 BlackRock Bond Income Division (Class B).................... 2004 39.04 40.31 8,496.88 2005 40.31 40.40 23,822.60 2006 40.40 41.28 34,782.13 2007 41.28 42.94 35,871.15 2008 42.94 40.59 30,498.36
208
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $32.31 $34.75 13,155.22 2005 34.75 35.06 27,231.71 2006 35.06 37.93 29,430.26 2007 37.93 39.30 28,777.50 2008 39.30 28.93 23,742.95 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 69.31 69.67 4,375.89 2008 69.67 42.85 4,554.85 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 53.61 58.96 1,909.74 2005 58.96 59.77 2,660.67 2006 59.77 66.76 3,705.30 2007 66.76 69.90 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.58 11.63 22,322.20 2005 11.63 12.05 41,594.87 2006 12.05 14.09 116,327.23 2007 14.09 14.25 113,845.08 2008 14.25 9.07 101,252.36 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.11 24.15 4,428.47 2005 24.15 25.30 10,411.55 2006 25.30 25.79 17,725.63 2007 25.79 29.96 37,008.49 2008 29.96 18.61 33,890.44 BlackRock Money Market Division (Class B)................... 2004 19.80 19.67 1,072.38 2005 19.67 19.81 7,603.00 2006 19.81 20.32 8,198.05 2007 20.32 20.90 29,253.00 2008 20.90 21.04 75,487.96 BlackRock Strategic Value Division (Class B)................ 2004 15.80 17.72 55,979.61 2005 17.72 18.07 98,736.12 2006 18.07 20.64 112,796.68 2007 20.64 19.50 117,425.03 2008 19.50 11.76 90,956.16 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.79 60,311.53 2005 12.79 14.21 159,522.75 2006 14.21 19.19 298,819.21 2007 19.19 16.00 241,237.34 2008 16.00 9.15 172,633.24 Davis Venture Value Division (Class B)...................... 2004 27.24 29.22 18,162.55 2005 29.22 31.54 52,269.42 2006 31.54 35.38 78,511.61 2007 35.38 36.22 88,607.34 2008 36.22 21.49 88,036.78 FI Large Cap Division (Class B)/(k)/........................ 2006 16.28 16.41 1,576.80 2007 16.41 16.70 2,500.39 2008 16.70 9.02 6,693.18
209
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.13 $ 15.86 6,514.49 2005 15.86 16.60 27,484.79 2006 16.60 18.17 69,751.33 2007 18.17 19.27 50,530.18 2008 19.27 8.42 33,157.54 FI Value Leaders Division (Class B)......................... 2004 21.77 24.48 5,620.49 2005 24.48 26.53 24,352.49 2006 26.53 29.06 50,585.56 2007 29.06 29.64 36,435.84 2008 29.64 17.71 26,656.72 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.67 9.57 6,866.00 2005 9.57 9.81 14,892.87 2006 9.81 10.56 23,574.14 2007 10.56 10.80 21,790.22 2008 10.80 6.22 18,210.43 Harris Oakmark Focused Value Division (Class B)............. 2004 28.50 30.83 18,953.73 2005 30.83 33.19 44,310.59 2006 33.19 36.53 34,293.35 2007 36.53 33.30 31,383.57 2008 33.30 17.60 25,701.67 Harris Oakmark International Division (Class B)............. 2004 11.88 13.74 19,839.38 2005 13.74 15.40 46,534.14 2006 15.40 19.48 125,310.90 2007 19.48 18.89 131,198.43 2008 18.89 10.96 109,517.92 Janus Forty Division (Class B)/(n)/......................... 2007 128.61 157.25 5,990.05 2008 157.25 89.48 17,307.68 Jennison Growth Division (Class B)/(g)/..................... 2005 3.96 4.75 17,649.05 2006 4.75 4.77 34,473.50 2007 4.77 5.22 82,167.38 2008 5.22 3.25 105,862.53 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.14 4.30 8,461.18 2005 4.30 3.92 15,706.71 Julius Baer International Stock Division (Class B).......... 2004 11.07 12.60 7,892.03 2005 12.60 14.54 22,696.08 2006 14.54 16.59 51,532.87 2007 16.59 17.91 51,160.26 2008 17.91 9.80 68,310.84 Lazard Mid Cap Division (Class B)........................... 2004 12.40 13.34 8,860.83 2005 13.34 14.15 13,904.65 2006 14.15 15.92 35,006.86 2007 15.92 15.20 33,045.39 2008 15.20 9.20 28,317.62
210
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.49 $ 7.04 2,152.57 2005 7.04 7.84 11,420.66 2006 7.84 7.56 43,155.36 2007 7.56 7.59 36,319.74 2008 7.59 4.53 29,690.85 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.03 9.65 33,449.10 2007 9.65 8.90 39,023.81 2008 8.90 3.96 31,015.26 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.49 8.28 6,409.53 2005 8.28 8.69 14,609.30 2006 8.69 9.06 17,892.23 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.07 12.38 187,078.15 2005 12.38 12.38 551,933.01 2006 12.38 12.61 804,630.02 2007 12.61 13.19 907,802.70 2008 13.19 13.67 608,233.65 Loomis Sayles Small Cap Division (Class B).................. 2004 22.27 25.15 1,928.19 2005 25.15 26.33 7,199.13 2006 26.33 30.07 49,397.54 2007 30.07 32.93 26,653.48 2008 32.93 20.66 28,044.08 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.32 16.27 30,495.71 2005 16.27 16.20 73,264.68 2006 16.20 17.35 104,800.64 2007 17.35 18.14 89,876.49 2008 18.14 14.49 81,655.65 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.21 11.98 3,867.30 2005 11.98 12.72 15,395.42 2006 12.72 14.26 20,736.20 2007 14.26 15.54 22,873.56 2008 15.54 9.34 16,307.95 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.95 7,631.00 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.57 2,867.51 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.00 15,870.20 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.54 1,355.19 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.43 12.76 56,261.03 2005 12.76 14.02 124,981.68 2006 14.02 15.11 225,611.34 2007 15.11 15.94 195,960.85 2008 15.94 9.95 191,507.40
211
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $31.61 $34.14 113,413.87 2005 34.14 34.97 305,157.46 2006 34.97 39.52 411,168.43 2007 39.52 40.70 460,945.12 2008 40.70 25.05 457,667.81 MFS(R) Research International Division (Class B)............ 2004 9.59 10.97 15,145.00 2005 10.97 12.53 25,743.00 2006 12.53 15.57 104,895.91 2007 15.57 17.30 140,472.71 2008 17.30 9.78 157,821.30 MFS(R) Total Return Division (Class B)/(i)/................. 2004 33.76 36.59 3,816.14 2005 36.59 36.93 15,082.43 2006 36.93 40.56 38,985.17 2007 40.56 41.43 55,843.58 2008 41.43 31.56 47,932.74 MFS(R) Value Division (Class B)............................. 2004 11.80 12.69 89,526.94 2005 12.69 12.25 140,906.69 2006 12.25 14.16 147,417.10 2007 14.16 13.34 150,943.32 2008 13.34 8.67 128,254.05 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.30 10.78 93,488.74 2005 10.78 11.95 227,873.64 2006 11.95 14.71 313,985.53 2007 14.71 15.95 354,580.62 2008 15.95 9.04 403,025.28 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.05 20.99 36,734.21 2005 20.99 23.05 91,597.80 2006 23.05 25.16 115,220.08 2007 25.16 25.47 126,896.17 2008 25.47 13.12 117,733.06 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.78 8.42 11,045.82 2006 8.42 8.89 31,118.38 2007 8.89 9.97 72,516.09 2008 9.97 5.28 75,252.58 Oppenheimer Global Equity Division (Class B)................ 2004 12.30 14.14 7,687.26 2005 14.14 16.09 18,561.69 2006 16.09 18.37 46,604.61 2007 18.37 19.16 59,841.56 2008 19.16 11.17 66,571.17 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.83 10.90 12,083.89 2007 10.90 11.84 25,724.68 2008 11.84 10.82 156,654.00 PIMCO Total Return Division (Class B)....................... 2004 11.47 11.85 91,450.71 2005 11.85 11.89 211,423.65 2006 11.89 12.20 283,358.24 2007 12.20 12.87 340,174.83 2008 12.87 12.68 262,254.44
212
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.10 $ 4.25 20,294.24 2005 4.25 4.63 22,047.22 2006 4.63 4.79 34,273.48 2007 4.79 6.18 110,778.13 2008 6.18 3.37 123,776.39 Russell 2000(R) Index Division (Class B).................... 2004 13.10 14.95 29,954.58 2005 14.95 15.30 65,152.20 2006 15.30 17.65 105,614.62 2007 17.65 17.03 121,059.07 2008 17.03 11.08 115,926.73 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.67 11.34 2.69 2007 11.34 11.75 3,536.75 2008 11.75 7.73 8,399.08 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.48 11.09 71.66 2007 11.09 11.46 3,546.22 2008 11.46 8.43 5,086.56 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.86 11.73 39,975.81 2005 11.73 12.24 61,086.27 2006 12.24 13.56 74,688.89 2007 13.56 14.52 89,830.48 2008 14.52 8.26 75,873.73 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.17 6.97 26,082.30 2005 6.97 7.85 47,602.89 2006 7.85 8.17 105,812.07 2007 8.17 9.43 358,391.38 2008 9.43 5.57 339,296.29 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.94 12.69 10,681.68 2005 12.69 13.78 23,051.77 2006 13.78 14.02 28,507.52 2007 14.02 15.06 88,427.03 2008 15.06 9.41 97,497.74 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.79 18.79 14,023.91 2005 18.79 18.91 62,081.03 2006 18.91 19.45 96,822.65 2007 19.45 19.79 93,146.89 2008 19.79 16.46 65,540.93 Western Asset Management U.S Government Division (Class B).. 2004 14.70 15.00 56,301.68 2005 15.00 14.92 105,648.46 2006 14.92 15.22 127,007.24 2007 15.22 15.53 114,044.86 2008 15.53 15.16 80,758.16 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.11 24,202.61 2006 11.11 12.61 43,445.90 2007 12.61 12.77 73,267.32 2008 12.77 7.46 32,656.72
213
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.26 10,574.32 2006 10.26 10.76 20,750.77 2007 10.76 11.15 153,582.42 2008 11.15 9.36 174,009.37 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.48 26,727.72 2006 10.48 11.25 186,306.38 2007 11.25 11.57 373,767.70 2008 11.57 8.90 454,564.49 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.71 172,472.23 2006 10.71 11.75 435,700.96 2007 11.75 12.03 984,962.91 2008 12.03 8.42 1,142,923.75 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.93 161,123.95 2006 10.93 12.25 552,712.91 2007 12.25 12.48 1,196,141.30 2008 12.48 7.95 1,449,190.54 At 2.15 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.85 14.47 29,754.86 2007 14.47 14.63 65,533.52 2008 14.63 12.98 61,633.18 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.69 18.56 22,855.68 2005 18.56 22.77 65,511.64 2006 22.77 27.65 148,347.38 2007 27.65 32.86 210,517.72 2008 32.86 14.94 219,837.50 American Funds Growth Division (Class 2)/(c)/............... 2004 99.40 109.43 14,058.69 2005 109.43 124.46 31,533.74 2006 124.46 134.26 54,896.22 2007 134.26 147.62 72,479.89 2008 147.62 80.94 74,474.41 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 77.35 83.56 19,344.03 2005 83.56 86.56 42,140.74 2006 86.56 97.60 63,265.18 2007 97.60 100.33 67,965.08 2008 100.33 61.02 60,995.53
214 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 2.15 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.97 0.00 American Funds Bond Division (Class 2)/(k)/................. 2006 13.67 14.26 1,871.50 2007 14.26 14.40 9,055.63 2008 14.40 12.75 0.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.46 13.10 0.00 2002 13.10 10.36 240.07 2003 10.36 15.55 2,826.25 2004 15.55 18.37 8,233.81 2005 18.37 22.51 10,408.87 2006 22.51 27.29 10,006.16 2007 27.29 32.39 11,559.57 2008 32.39 14.71 7,460.49 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.32 4,448.73 American Funds Growth Division (Class 2)/(c)/............... 2001 108.20 97.69 0.00 2002 97.69 72.12 296.99 2003 72.12 96.42 1,763.09 2004 96.42 106.00 6,382.60 2005 106.00 120.37 4,184.29 2006 120.37 129.66 4,691.87 2007 129.66 142.35 4,374.86 2008 142.35 77.93 2,860.94 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 75.91 72.66 0.00 2002 72.66 57.98 0.00 2003 57.98 75.04 1,645.67 2004 75.04 80.94 3,961.92 2005 80.94 83.72 5,156.55 2006 83.72 94.26 3,541.86 2007 94.26 96.75 4,096.76 2008 96.75 58.75 2,227.45 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.64 0.00 BlackRock Aggressive Growth Division (Class B).............. 2004 29.76 32.83 0.00 2005 32.83 35.49 0.00 2006 35.49 36.98 0.00 2007 36.98 43.52 76.67 2008 43.52 23.06 133.12 BlackRock Bond Income Division (Class B).................... 2004 37.07 38.21 2,768.23 2005 38.21 38.21 1,917.22 2006 38.21 38.94 2,114.21 2007 38.94 40.41 2,311.88 2008 40.41 38.09 2,079.75
215
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $30.90 $33.18 0.00 2005 33.18 33.39 0.00 2006 33.39 36.03 0.00 2007 36.03 37.24 601.14 2008 37.24 27.35 596.84 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 65.30 65.53 422.54 2008 65.53 40.20 394.51 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 50.88 55.87 31.72 2005 55.87 56.49 31.52 2006 56.49 31.33 62.95 2007 31.33 65.85 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.53 11.56 0.00 2005 11.56 11.94 0.00 2006 11.94 13.92 4,445.25 2007 13.92 14.05 4,685.58 2008 14.05 8.92 4,444.82 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.59 23.54 0.00 2005 23.54 24.60 0.00 2006 24.60 25.01 0.00 2007 25.01 28.99 724.68 2008 28.99 17.96 782.39 BlackRock Money Market Division (Class B)................... 2004 18.81 18.65 0.00 2005 18.65 18.73 0.00 2006 18.73 19.17 0.00 2007 19.17 19.66 0.00 2008 19.66 19.74 592.07 BlackRock Strategic Value Division (Class B)................ 2004 15.65 17.52 4,359.43 2005 17.52 17.82 12,692.69 2006 17.82 20.31 7,473.56 2007 20.31 19.14 5,884.16 2008 19.14 11.51 3,872.47 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.76 6,313.11 2005 12.76 14.15 15,657.67 2006 14.15 19.06 14,390.26 2007 19.06 15.85 15,054.80 2008 15.85 9.05 9,491.92 Davis Venture Value Division (Class B)...................... 2004 26.60 28.49 629.82 2005 28.49 30.67 3,898.38 2006 30.67 34.32 4,076.30 2007 34.32 35.04 3,126.24 2008 35.04 20.74 2,324.40 FI Large Cap Division (Class B)/(k)/........................ 2006 15.89 16.00 0.00 2007 16.00 16.24 0.00 2008 16.24 8.74 0.00
216
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 13.88 $ 15.55 2,350.77 2005 15.55 16.24 5,857.29 2006 16.24 17.73 9,926.05 2007 17.73 18.76 6,203.77 2008 18.76 8.18 3,796.56 FI Value Leaders Division (Class B)......................... 2004 21.18 23.78 753.43 2005 23.78 25.70 2,653.54 2006 25.70 28.09 2,870.31 2007 28.09 28.57 1,557.81 2008 28.57 17.02 1,647.52 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.61 9.49 2,009.35 2005 9.49 9.69 2,072.58 2006 9.69 10.41 4,732.51 2007 10.41 10.63 4,682.46 2008 10.63 6.10 3,410.58 Harris Oakmark Focused Value Division (Class B)............. 2004 27.73 29.94 1,714.93 2005 29.94 32.15 6,004.94 2006 32.15 35.30 7,618.24 2007 35.30 32.10 5,771.27 2008 32.10 16.92 5,514.14 Harris Oakmark International Division (Class B)............. 2004 11.80 13.63 2,368.65 2005 13.63 15.24 2,653.09 2006 15.24 19.22 9,277.08 2007 19.22 18.60 10,095.38 2008 18.60 10.76 8,915.70 Janus Forty Division (Class B)/(n)/......................... 2007 120.78 147.43 234.65 2008 147.43 83.68 1,121.71 Jennison Growth Division (Class B)/(g)/..................... 2005 3.91 4.68 1,088.48 2006 4.68 4.70 1,293.36 2007 4.70 5.12 6,035.81 2008 5.12 3.18 0.00 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.10 4.25 1,445.15 2005 4.25 3.87 1,462.74 Julius Baer International Stock Division (Class B).......... 2004 10.72 12.18 1,185.09 2005 12.18 14.02 6,521.01 2006 14.02 15.95 6,632.18 2007 15.95 17.18 7,330.52 2008 17.18 9.37 4,167.26 Lazard Mid Cap Division (Class B)........................... 2004 12.32 13.24 288.66 2005 13.24 14.00 466.97 2006 14.00 15.72 3,759.00 2007 15.72 14.96 320.43 2008 14.96 9.03 355.46
217
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.44 $ 6.97 897.70 2005 6.97 7.75 668.32 2006 7.75 7.45 1,660.30 2007 7.45 7.46 697.13 2008 7.46 4.45 0.00 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.87 9.46 0.00 2007 9.46 8.71 0.00 2008 8.71 3.87 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.40 8.16 0.00 2005 8.16 8.54 5,906.22 2006 8.54 8.91 5,906.22 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 11.90 12.19 7,253.18 2005 12.19 12.16 8,368.75 2006 12.16 12.35 5,145.51 2007 12.35 12.89 5,902.09 2008 12.89 13.33 5,617.96 Loomis Sayles Small Cap Division (Class B).................. 2004 21.72 24.49 0.00 2005 24.49 25.57 22.83 2006 25.57 29.13 4,380.90 2007 29.13 31.82 3,455.47 2008 31.82 19.91 2,353.46 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.02 15.92 892.85 2005 15.92 15.82 1,493.79 2006 15.82 16.90 7,224.03 2007 16.90 17.62 9,642.63 2008 17.62 14.03 8,507.62 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.14 11.88 2,324.91 2005 11.88 12.59 1,686.31 2006 12.59 14.07 1,188.29 2007 14.07 15.29 1,154.10 2008 15.29 9.17 1,234.86 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.94 0.00 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.56 0.00 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/................................... 2008 9.99 6.99 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.53 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.32 12.61 1,546.17 2005 12.61 13.83 1,808.87 2006 13.83 14.87 1,780.50 2007 14.87 15.64 1,864.19 2008 15.64 9.74 4,056.11
218
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $30.52 $32.91 3,799.27 2005 32.91 33.62 7,968.09 2006 33.62 37.91 5,152.94 2007 37.91 38.94 3,816.74 2008 38.94 23.91 3,839.97 MFS(R) Research International Division (Class B)............ 2004 9.51 10.86 3,570.06 2005 10.86 12.38 3,564.79 2006 12.38 15.34 10,387.44 2007 15.34 17.01 14,044.91 2008 17.01 9.59 8,504.57 MFS(R) Total Return Division (Class B)/(i)/................. 2004 32.35 35.01 882.32 2005 35.01 35.24 3,087.82 2006 35.24 38.61 4,528.37 2007 38.61 39.34 5,773.91 2008 39.34 29.90 4,461.81 MFS(R) Value Division (Class B)............................. 2004 11.64 12.50 3,329.01 2005 12.50 12.03 3,250.72 2006 12.03 13.88 7,418.87 2007 13.88 13.03 7,428.35 2008 13.03 8.46 5,328.48 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.17 10.62 3,153.72 2005 10.62 11.73 5,763.70 2006 11.73 14.41 6,628.52 2007 14.41 15.59 10,001.53 2008 15.59 8.81 9,724.14 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.81 20.67 756.21 2005 20.67 22.65 3,021.80 2006 22.65 24.65 6,181.13 2007 24.65 24.89 8,442.22 2008 24.89 12.79 6,512.16 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.70 8.31 0.00 2006 8.31 8.76 0.00 2007 8.76 9.80 247.88 2008 9.80 5.18 613.84 Oppenheimer Global Equity Division (Class B)................ 2004 12.08 13.87 423.49 2005 13.87 15.74 422.96 2006 15.74 17.93 3,112.03 2007 17.93 18.64 3,673.72 2008 18.64 10.84 4,441.44 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.75 10.80 0.00 2007 10.80 11.71 5,069.28 2008 11.71 10.67 22,376.85 PIMCO Total Return Division (Class B)....................... 2004 11.38 11.74 7,647.29 2005 11.74 11.75 11,741.69 2006 11.75 12.02 11,482.64 2007 12.02 12.65 10,848.00 2008 12.65 12.43 7,441.22
219
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.06 $ 4.21 0.00 2005 4.21 4.58 0.00 2006 4.58 4.72 410.94 2007 4.72 6.07 411.12 2008 6.07 3.30 1,692.98 Russell 2000(R) Index Division (Class B).................... 2004 12.92 14.72 982.17 2005 14.72 15.03 1,835.32 2006 15.03 17.30 5,663.46 2007 17.30 16.64 5,932.50 2008 16.64 10.80 6,290.14 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.65 11.30 535.12 2007 11.30 11.68 701.26 2008 11.68 7.66 603.34 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.46 11.05 0.00 2007 11.05 11.40 0.00 2008 11.40 8.36 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.71 11.55 3,366.81 2005 11.55 12.02 3,614.98 2006 12.02 13.28 2,019.19 2007 13.28 14.19 2,956.12 2008 14.19 8.05 1,172.77 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.12 6.91 5,362.07 2005 6.91 7.75 5,262.26 2006 7.75 8.05 3,714.93 2007 8.05 9.27 21,759.71 2008 9.27 5.46 14,447.13 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.73 12.44 1,004.51 2005 12.44 13.48 9,411.02 2006 13.48 13.68 11,389.90 2007 13.68 14.66 15,229.88 2008 14.66 9.13 11,823.27 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.37 18.32 17,504.30 2005 18.32 18.39 12,141.99 2006 18.39 18.87 4,495.73 2007 18.87 19.15 9,436.63 2008 19.15 15.89 6,559.08 Western Asset Management U.S Government Division (Class B).. 2004 14.35 14.62 2,319.32 2005 14.62 14.51 1,648.13 2006 14.51 14.76 1,399.34 2007 14.76 15.03 6,413.77 2008 15.03 14.63 3,913.44 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.09 0.00 2006 11.09 12.55 0.00 2007 12.55 12.69 0.00 2008 12.69 7.39 0.00
220
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.24 0.00 2006 10.24 10.72 0.00 2007 10.72 11.07 20,186.61 2008 11.07 9.28 0.00 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.46 0.00 2006 10.46 11.20 20,804.20 2007 11.20 11.49 19,354.68 2008 11.49 8.82 19,521.36 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.69 24,549.58 2006 10.69 11.70 26,232.94 2007 11.70 11.95 36,428.33 2008 11.95 8.34 13,858.43 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.91 0.00 2006 10.91 12.20 0.00 2007 12.20 12.40 64,118.47 2008 12.40 7.87 14,303.82 At 2.40 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.54 14.12 269.62 2007 14.12 14.24 6,467.02 2008 14.24 12.61 4,729.76 American Funds Global Small Capitalization Division (Class 2)/(c)/................................... 2004 15.47 18.25 4,536.96 2005 18.25 22.34 6,321.99 2006 22.34 27.06 11,627.03 2007 27.06 32.07 15,174.30 2008 32.07 14.55 12,056.33 American Funds Growth Division (Class 2)/(c)/............... 2004 94.57 103.86 1,088.90 2005 103.86 117.82 2,232.58 2006 117.82 126.79 3,651.93 2007 126.79 139.05 5,257.43 2008 139.05 76.05 5,105.89 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 73.60 79.30 2,841.92 2005 79.30 81.94 4,981.05 2006 81.94 92.17 5,563.51 2007 92.17 94.51 5,912.75 2008 94.51 57.34 5,355.24
221 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 2.05 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.98 14,029.64 American Funds Bond Division (Class 2)/(k)/................. 2006 13.79 14.40 1,759.15 2007 14.40 14.55 4,011.12 2008 14.55 12.90 913.11 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.50 13.15 438.91 2002 13.15 10.41 996.94 2003 10.41 15.64 16,775.79 2004 15.64 18.50 30,426.34 2005 18.50 22.68 34,820.47 2006 22.68 27.53 34,101.06 2007 27.53 32.70 29,940.68 2008 32.70 14.86 25,691.36 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.33 19,717.64 American Funds Growth Division (Class 2)/(c)/............... 2001 110.11 99.46 314.16 2002 99.46 73.50 444.84 2003 73.50 98.36 6,389.17 2004 98.36 108.24 14,117.57 2005 108.24 123.04 16,703.64 2006 123.04 132.67 15,225.06 2007 132.67 145.79 12,825.58 2008 145.79 79.90 11,603.20 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 77.25 73.98 0.00 2002 73.98 59.09 654.55 2003 59.09 76.55 9,674.26 2004 76.55 82.65 19,070.43 2005 82.65 85.57 19,559.27 2006 85.57 96.44 17,826.15 2007 96.44 99.09 16,481.01 2008 99.09 60.24 12,475.20 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.65 1,527.43 BlackRock Aggressive Growth Division (Class B).............. 2004 30.24 33.39 1,392.47 2005 33.39 36.12 5,283.30 2006 36.12 37.68 6,102.10 2007 37.68 44.38 11,820.15 2008 44.38 23.55 8,846.97 BlackRock Bond Income Division (Class B).................... 2004 37.84 39.04 7,792.97 2005 39.04 39.07 30,493.05 2006 39.07 39.86 38,480.29 2007 39.86 41.40 37,796.82 2008 41.40 39.07 32,343.22
222
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $31.46 $33.80 8,678.74 2005 33.80 34.05 17,006.57 2006 34.05 36.78 20,188.90 2007 36.78 38.05 22,985.61 2008 38.05 27.97 23,938.10 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 66.88 67.16 3,245.20 2008 67.16 41.24 2,922.85 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 51.95 57.08 754.26 2005 57.08 57.78 1,948.68 2006 57.78 64.45 1,677.84 2007 64.45 67.44 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.55 11.59 12,305.61 2005 11.59 11.98 34,390.13 2006 11.98 13.99 116,748.29 2007 13.99 14.13 127,218.25 2008 14.13 8.98 94,871.52 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.80 23.78 5,189.12 2005 23.78 24.88 9,718.86 2006 24.88 25.32 9,715.62 2007 25.32 29.38 33,049.85 2008 29.38 18.22 54,030.08 BlackRock Money Market Division (Class B)................... 2004 19.20 19.05 0.00 2005 19.05 19.16 0.00 2006 19.16 19.62 0.00 2007 19.62 20.15 0.00 2008 20.15 20.25 1,661.58 BlackRock Strategic Value Division (Class B)................ 2004 15.71 17.60 22,485.39 2005 17.60 17.92 39,961.36 2006 17.92 20.44 53,557.14 2007 20.44 19.29 49,847.86 2008 19.29 11.61 35,599.46 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.78 36,292.62 2005 12.78 14.19 119,237.10 2006 14.19 19.14 247,308.97 2007 19.14 15.94 135,261.17 2008 15.94 9.11 138,007.74 Davis Venture Value Division (Class B)...................... 2004 26.85 28.78 5,625.69 2005 28.78 31.01 36,415.93 2006 31.01 34.74 50,184.70 2007 34.74 35.51 46,774.57 2008 35.51 21.04 44,008.56 FI Large Cap Division (Class B)/(k)/........................ 2006 16.04 16.16 4,346.30 2007 16.16 16.42 5,380.96 2008 16.42 8.85 5,091.40
223
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 13.98 $ 15.67 7,685.86 2005 15.67 16.38 28,226.20 2006 16.38 17.90 48,169.29 2007 17.90 18.96 66,933.00 2008 18.96 8.28 38,766.73 FI Value Leaders Division (Class B)......................... 2004 21.42 24.05 0.00 2005 24.05 26.03 15,277.09 2006 26.03 28.47 15,355.84 2007 28.47 28.99 11,503.27 2008 28.99 17.29 10,096.11 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.64 9.52 9,214.36 2005 9.52 9.74 12,457.12 2006 9.74 10.47 25,775.67 2007 10.47 10.70 30,620.85 2008 10.70 6.15 28,538.04 Harris Oakmark Focused Value Division (Class B)............. 2004 28.04 30.29 9,739.96 2005 30.29 32.56 30,910.94 2006 32.56 35.79 37,088.49 2007 35.79 32.58 32,971.77 2008 32.58 17.19 29,369.66 Harris Oakmark International Division (Class B)............. 2004 11.83 13.67 8,502.62 2005 13.67 15.31 49,213.15 2006 15.31 19.32 129,629.72 2007 19.32 18.72 132,824.18 2008 18.72 10.84 84,566.73 Janus Forty Division (Class B)/(n)/......................... 2007 123.86 151.28 3,525.90 2008 151.28 85.96 11,944.70 Jennison Growth Division (Class B)/(g)/..................... 2005 3.93 4.71 22,374.77 2006 4.71 4.73 40,782.90 2007 4.73 5.16 48,908.77 2008 5.16 3.20 74,908.97 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.11 4.27 0.00 2005 4.27 3.89 5,910.02 Julius Baer International Stock Division (Class B).......... 2004 10.86 12.35 5,512.51 2005 12.35 14.23 21,842.17 2006 14.23 16.20 75,832.81 2007 16.20 17.47 72,104.37 2008 17.47 9.54 41,479.19 Lazard Mid Cap Division (Class B)........................... 2004 12.35 13.28 1,554.45 2005 13.28 14.06 5,043.25 2006 14.06 15.80 13,929.55 2007 15.80 15.06 24,592.05 2008 15.06 9.10 22,649.02
224
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.46 $ 6.99 2,082.05 2005 6.99 7.78 4,809.33 2006 7.78 7.49 12,750.56 2007 7.49 7.51 7,661.24 2008 7.51 4.48 8,381.54 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.93 9.54 7,274.31 2007 9.54 8.79 6,547.82 2008 8.79 3.90 6,269.41 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.44 8.21 4,465.59 2005 8.21 8.60 6,506.72 2006 8.60 8.97 6,470.32 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 11.97 12.27 109,181.83 2005 12.27 12.24 352,065.05 2006 12.24 12.45 427,787.91 2007 12.45 13.01 502,174.89 2008 13.01 13.47 351,947.89 Loomis Sayles Small Cap Division (Class B).................. 2004 21.94 24.75 3,975.53 2005 24.75 25.87 9,845.11 2006 25.87 29.50 25,306.15 2007 29.50 32.26 25,262.83 2008 32.26 20.21 18,461.24 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.14 16.06 14,480.98 2005 16.06 15.97 40,166.81 2006 15.97 17.08 57,628.37 2007 17.08 17.83 55,855.10 2008 17.83 14.21 45,769.48 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.17 11.92 2,841.34 2005 11.92 12.64 32,396.74 2006 12.64 14.14 44,344.76 2007 14.14 15.39 50,034.94 2008 15.39 9.24 48,195.68 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.95 559.71 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.57 328.37 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.00 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.53 528.71 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.36 12.67 25,139.84 2005 12.67 13.91 66,915.42 2006 13.91 14.97 84,983.73 2007 14.97 15.76 102,820.52 2008 15.76 9.82 105,502.20
225
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $30.96 $33.40 48,821.94 2005 33.40 34.16 158,429.74 2006 34.16 38.55 189,563.24 2007 38.55 39.64 222,180.98 2008 39.64 24.36 230,378.45 MFS(R) Research International Division (Class B)............ 2004 9.54 10.91 5,125.90 2005 10.91 12.44 34,818.55 2006 12.44 15.43 100,571.37 2007 15.43 17.12 130,882.39 2008 17.12 9.67 123,796.66 MFS(R) Total Return Division (Class B)/(i)/................. 2004 32.91 35.63 7,136.84 2005 35.63 35.91 15,395.59 2006 35.91 39.38 23,460.92 2007 39.38 40.16 18,778.62 2008 40.16 30.55 17,414.76 MFS(R) Value Division (Class B)............................. 2004 11.70 12.58 33,650.64 2005 12.58 12.12 52,694.28 2006 12.12 13.99 57,628.19 2007 13.99 13.15 58,647.41 2008 13.15 8.54 43,104.91 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.22 10.68 42,088.86 2005 10.68 11.82 115,824.71 2006 11.82 14.53 162,768.82 2007 14.53 15.73 196,764.63 2008 15.73 8.90 175,260.60 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.91 20.80 18,280.94 2005 20.80 22.81 69,809.03 2006 22.81 24.85 69,581.39 2007 24.85 25.12 88,731.70 2008 25.12 12.92 63,605.26 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.73 8.36 2,919.63 2006 8.36 8.81 12,230.30 2007 8.81 9.86 73,603.77 2008 9.86 5.22 77,482.94 Oppenheimer Global Equity Division (Class B)................ 2004 12.17 13.98 2,963.55 2005 13.98 15.88 19,528.45 2006 15.88 18.10 29,244.05 2007 18.10 18.85 43,874.41 2008 18.85 10.97 32,247.64 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.78 10.84 5,469.12 2007 10.84 11.76 5,311.56 2008 11.76 10.73 57,322.14 PIMCO Total Return Division (Class B)....................... 2004 11.42 11.79 45,456.03 2005 11.79 11.81 135,902.74 2006 11.81 12.09 163,532.19 2007 12.09 12.74 161,242.07 2008 12.74 12.53 147,962.62
226
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.08 $ 4.23 11,832.40 2005 4.23 4.60 45,030.73 2006 4.60 4.75 49,216.48 2007 4.75 6.12 156,069.56 2008 6.12 3.33 187,829.69 Russell 2000(R) Index Division (Class B).................... 2004 12.99 14.81 15,022.63 2005 14.81 15.14 45,530.68 2006 15.14 17.44 85,433.02 2007 17.44 16.79 73,253.04 2008 16.79 10.91 89,176.91 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.66 11.32 1,116.62 2007 11.32 11.71 9,251.51 2008 11.71 7.69 2,497.92 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.47 11.07 368.82 2007 11.07 11.43 1,204.83 2008 11.43 8.39 1,549.97 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.77 11.62 13,151.70 2005 11.62 12.11 59,451.27 2006 12.11 13.39 93,429.50 2007 13.39 14.32 215,593.48 2008 14.32 8.13 140,747.99 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.14 6.93 11,805.24 2005 6.93 7.79 57,596.89 2006 7.79 8.10 75,112.72 2007 8.10 9.34 248,347.21 2008 9.34 5.51 170,002.88 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.81 12.54 3,787.84 2005 12.54 13.60 8,539.46 2006 13.60 13.81 15,342.43 2007 13.81 14.82 42,107.58 2008 14.82 9.24 28,887.50 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.53 18.51 9,507.96 2005 18.51 18.60 40,716.61 2006 18.60 19.10 53,069.44 2007 19.10 19.41 49,253.62 2008 19.41 16.12 36,526.06 Western Asset Management U.S Government Division (Class B).. 2004 14.49 14.77 22,509.91 2005 14.77 14.68 65,572.52 2006 14.68 14.94 74,818.85 2007 14.94 15.23 76,127.14 2008 15.23 14.84 63,395.69 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.10 2,419.58 2006 11.10 12.58 2,482.72 2007 12.58 12.72 32,004.58 2008 12.72 7.42 17,861.44
227
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.25 10,277.76 2006 10.25 10.73 2,064.38 2007 10.73 11.10 66,392.49 2008 11.10 9.31 115,194.20 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.47 25,198.90 2006 10.47 11.22 161,099.95 2007 11.22 11.52 171,220.90 2008 11.52 8.85 149,368.41 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.70 44,284.85 2006 10.70 11.72 338,111.07 2007 11.72 11.98 642,114.86 2008 11.98 8.38 641,171.78 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.92 82,413.41 2006 10.92 12.22 323,055.48 2007 12.22 12.43 819,427.57 2008 12.43 7.90 855,327.88 At 2.30 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.67 14.26 36,187.80 2007 14.26 14.40 121,766.70 2008 14.40 12.75 61,754.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.55 18.37 11,675.66 2005 18.37 22.51 67,533.92 2006 22.51 27.29 140,248.70 2007 27.29 32.39 222,178.57 2008 32.39 14.71 127,281.43 American Funds Growth Division (Class 2)/(c)/............... 2004 96.47 106.05 8,870.53 2005 106.05 120.43 26,258.30 2006 120.43 129.73 42,023.84 2007 129.73 142.42 51,522.91 2008 142.42 77.97 39,102.27 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 75.08 80.98 12,705.18 2005 80.98 83.76 28,987.83 2006 83.76 94.30 43,032.23 2007 94.30 96.80 44,628.03 2008 96.80 58.78 39,682.91
228 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.65 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.99 16,156.05 American Funds Bond Division (Class 2)/(k)/................. 2006 14.30 14.97 11,049.75 2007 14.97 15.19 20,204.36 2008 15.19 13.52 4,521.35 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.68 13.35 0.00 2002 13.35 10.61 5,433.81 2003 10.61 16.00 21,510.49 2004 16.00 19.00 47,884.39 2005 19.00 23.39 47,538.52 2006 23.39 28.50 55,052.75 2007 28.50 33.99 61,494.55 2008 33.99 15.51 37,206.10 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.34 51,998.84 American Funds Growth Division (Class 2)/(c)/............... 2001 118.09 106.84 0.00 2002 106.84 79.27 4,653.65 2003 79.27 106.52 13,948.66 2004 106.52 117.68 17,556.29 2005 117.68 134.31 18,899.19 2006 134.31 145.40 18,346.30 2007 145.40 160.42 15,964.61 2008 160.42 88.27 11,078.19 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 82.85 79.47 0.00 2002 79.47 63.73 6,550.73 2003 63.73 82.89 22,621.15 2004 82.89 89.86 31,348.41 2005 89.86 93.41 23,724.36 2006 93.41 105.69 19,735.20 2007 105.69 109.03 15,766.98 2008 109.03 66.55 11,621.18 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.67 78,668.60 BlackRock Aggressive Growth Division (Class B).............. 2004 32.24 35.69 45.05 2005 35.69 38.77 238.65 2006 38.77 40.60 347.15 2007 40.60 48.02 1,326.04 2008 48.02 25.58 592.83 BlackRock Bond Income Division (Class B).................... 2004 41.11 42.52 11,211.29 2005 42.52 42.73 14,994.74 2006 42.73 43.77 17,626.76 2007 43.77 45.64 18,194.79 2008 45.64 43.25 12,301.03
229
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $33.79 $36.39 2,669.97 2005 36.39 36.81 4,448.29 2006 36.81 39.92 4,329.04 2007 39.92 41.47 4,824.05 2008 41.47 30.60 5,129.19 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 73.57 74.08 5,284.27 2008 74.08 45.68 5,026.92 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 56.48 62.22 3,112.55 2005 62.22 63.23 4,861.53 2006 63.23 70.81 5,383.30 2007 70.81 74.20 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.63 11.71 1,728.59 2005 11.71 12.16 5,434.38 2006 12.16 14.25 14,987.05 2007 14.25 14.45 29,327.64 2008 14.45 9.22 21,666.18 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.64 24.77 462.28 2005 24.77 26.01 1,423.51 2006 26.01 26.58 1,904.45 2007 26.58 30.97 4,756.65 2008 30.97 19.28 7,942.87 BlackRock Money Market Division (Class B)................... 2004 20.86 20.75 104,013.73 2005 20.75 20.95 324,513.79 2006 20.95 21.54 251,151.04 2007 21.54 22.21 356,429.90 2008 22.21 22.41 494,217.18 BlackRock Strategic Value Division (Class B)................ 2004 15.95 17.92 11,753.30 2005 17.92 18.32 21,628.30 2006 18.32 20.98 20,997.41 2007 20.98 19.87 20,421.61 2008 19.87 12.01 16,063.34 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.81 64,876.69 2005 12.81 14.27 80,823.38 2006 14.27 19.32 97,334.09 2007 19.32 16.15 70,377.64 2008 16.15 9.26 58,487.23 Davis Venture Value Division (Class B)...................... 2004 27.89 29.97 6,468.34 2005 29.97 32.43 17,463.16 2006 32.43 36.47 20,737.71 2007 36.47 37.43 20,719.41 2008 37.43 22.26 18,021.90 FI Large Cap Division (Class B)/(k)/........................ 2006 16.68 16.84 6,455.51 2007 16.84 17.18 6,583.29 2008 17.18 9.30 5,931.87
230
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.39 $ 16.17 1,644.30 2005 16.17 16.97 5,360.57 2006 16.97 18.62 14,154.65 2007 18.62 19.80 12,863.26 2008 19.80 8.68 10,660.15 FI Value Leaders Division (Class B)......................... 2004 22.38 25.21 371.96 2005 25.21 27.38 4,289.70 2006 27.38 30.08 9,274.23 2007 30.08 30.75 8,203.99 2008 30.75 18.41 7,620.90 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.74 9.66 1,105.28 2005 9.66 9.92 3,414.63 2006 9.92 10.71 5,237.83 2007 10.71 10.99 3,256.39 2008 10.99 6.34 3,427.58 Harris Oakmark Focused Value Division (Class B)............. 2004 29.30 31.74 6,059.03 2005 31.74 34.26 10,284.09 2006 34.26 37.80 10,919.67 2007 37.80 34.55 9,045.19 2008 34.55 18.30 6,989.10 Harris Oakmark International Division (Class B)............. 2004 11.95 13.85 7,541.78 2005 13.85 15.57 14,013.75 2006 15.57 19.73 158,503.25 2007 19.73 19.19 33,144.02 2008 19.19 11.16 22,039.10 Janus Forty Division (Class B)/(n)/......................... 2007 136.95 167.72 1,772.13 2008 167.72 95.68 8,411.41 Jennison Growth Division (Class B)/(g)/..................... 2005 4.01 4.81 8,946.99 2006 4.81 4.86 6,029.35 2007 4.86 5.32 8,827.72 2008 5.32 3.32 7,882.98 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.18 4.36 0.00 2005 4.36 3.97 4,519.29 Julius Baer International Stock Division (Class B).......... 2004 11.44 13.04 4,087.34 2005 13.04 15.09 10,887.21 2006 15.09 17.25 64,053.22 2007 17.25 18.68 21,488.93 2008 18.68 10.24 37,588.13 Lazard Mid Cap Division (Class B)........................... 2004 12.48 13.45 1,004.90 2005 13.45 14.30 2,031.80 2006 14.30 16.13 1,841.64 2007 16.13 15.44 3,277.99 2008 15.44 9.37 3,155.11
231
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.55 $ 7.10 717.63 2005 7.10 7.94 2,248.76 2006 7.94 7.67 2,745.72 2007 7.67 7.72 2,239.73 2008 7.72 4.62 3,403.68 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.19 9.83 608.35 2007 9.83 9.10 873.76 2008 9.10 4.06 622.09 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.59 8.40 0.00 2005 8.40 8.83 0.00 2006 8.83 9.22 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.23 12.58 92,544.61 2005 12.58 12.60 181,365.97 2006 12.60 12.87 186,339.30 2007 12.87 13.50 199,174.29 2008 13.50 14.02 144,680.37 Loomis Sayles Small Cap Division (Class B).................. 2004 22.83 25.83 210.62 2005 25.83 27.11 2,490.63 2006 27.11 31.04 5,005.48 2007 31.04 34.08 5,744.10 2008 34.08 21.43 5,297.59 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.63 16.63 9,960.03 2005 16.63 16.60 20,983.88 2006 16.60 17.82 32,633.12 2007 17.82 18.68 35,876.34 2008 18.68 14.95 27,954.76 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.29 12.07 3,525.98 2005 12.07 12.86 708.70 2006 12.86 14.44 1,143.31 2007 14.44 15.78 1,011.07 2008 15.78 9.51 510.46 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.97 2,814.50 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.58 642.17 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.02 867.94 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.55 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.54 12.90 8,190.75 2005 12.90 14.22 20,046.68 2006 14.22 15.36 22,907.88 2007 15.36 16.24 33,285.28 2008 16.24 10.16 33,299.10
232
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $32.74 $35.42 44,091.65 2005 35.42 36.37 59,871.73 2006 36.37 41.20 62,239.34 2007 41.20 42.54 111,947.04 2008 42.54 26.25 105,372.64 MFS(R) Research International Division (Class B)............ 2004 9.66 11.08 1,039.50 2005 11.08 12.69 8,054.13 2006 12.69 15.80 172,511.87 2007 15.80 17.60 23,109.56 2008 17.60 9.98 21,656.53 MFS(R) Total Return Division (Class B)/(i)/................. 2004 35.23 38.24 4,251.94 2005 38.24 38.69 7,910.43 2006 38.69 42.60 6,982.51 2007 42.60 43.63 7,881.47 2008 43.63 33.32 7,731.63 MFS(R) Value Division (Class B)............................. 2004 11.96 12.89 10,020.95 2005 12.89 12.47 19,981.09 2006 12.47 14.46 23,281.72 2007 14.46 13.65 18,523.30 2008 13.65 8.90 11,013.51 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.43 10.95 22,629.26 2005 10.95 12.16 36,330.89 2006 12.16 15.01 94,413.27 2007 15.01 16.32 47,786.63 2008 16.32 9.27 50,768.87 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.30 21.32 12,681.85 2005 21.32 23.47 30,464.03 2006 23.47 25.67 25,980.67 2007 25.67 26.06 38,147.45 2008 26.06 13.46 28,329.95 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.86 8.52 2,379.05 2006 8.52 9.02 4,179.92 2007 9.02 10.14 5,388.55 2008 10.14 5.39 7,861.72 Oppenheimer Global Equity Division (Class B)................ 2004 12.52 14.42 627.40 2005 14.42 16.45 13,096.47 2006 16.45 18.83 13,133.45 2007 18.83 19.68 14,215.52 2008 19.68 11.50 10,509.76 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.91 11.00 19,189.87 2007 11.00 11.98 26,163.63 2008 11.98 10.97 91,603.08 PIMCO Total Return Division (Class B)....................... 2004 11.57 11.97 75,764.44 2005 11.97 12.04 124,281.92 2006 12.04 12.38 112,961.77 2007 12.38 13.10 97,628.56 2008 13.10 12.93 79,653.79
233
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.13 $ 4.29 3,524.62 2005 4.29 4.69 13,740.54 2006 4.69 4.86 9,597.81 2007 4.86 6.29 39,985.44 2008 6.29 3.43 17,963.24 Russell 2000(R) Index Division (Class B).................... 2004 13.28 15.18 9,859.86 2005 15.18 15.58 18,345.93 2006 15.58 18.02 14,354.90 2007 18.02 17.42 16,365.06 2008 17.42 11.36 21,728.68 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.68 11.38 7,083.60 2007 11.38 11.82 2,192.61 2008 11.82 7.79 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.49 11.12 9,073.32 2007 11.12 11.53 8,857.10 2008 11.53 8.50 3,949.15 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 11.01 11.91 18,675.83 2005 11.91 12.46 24,525.87 2006 12.46 13.83 14,585.86 2007 13.83 14.85 17,001.87 2008 14.85 8.47 10,362.31 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.22 7.04 16,291.17 2005 7.04 7.94 26,125.77 2006 7.94 8.29 28,679.60 2007 8.29 9.60 27,213.69 2008 9.60 5.69 22,959.63 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.16 12.94 3,454.17 2005 12.94 14.09 5,424.51 2006 14.09 14.37 6,328.13 2007 14.37 15.48 4,990.63 2008 15.48 9.69 3,420.02 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.21 19.28 12,615.56 2005 19.28 19.45 34,252.48 2006 19.45 20.05 37,010.35 2007 20.05 20.46 37,040.76 2008 20.46 17.06 23,747.46 Western Asset Management U.S Government Division (Class B).. 2004 15.05 15.39 47,113.92 2005 15.39 15.35 38,050.25 2006 15.35 15.69 43,062.40 2007 15.69 16.05 38,784.70 2008 16.05 15.70 39,493.67 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.13 0.00 2006 11.13 12.66 8,556.47 2007 12.66 12.86 19,507.66 2008 12.86 7.53 10,898.69
234
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.28 48,694.26 2006 10.28 10.81 44,100.05 2007 10.81 11.22 101,147.89 2008 11.22 9.45 130,786.84 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/................................................... 2005 9.99 10.50 26,136.99 2006 10.50 11.30 136,761.89 2007 11.30 11.65 318,773.46 2008 11.65 8.98 343,585.58 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.73 41,876.81 2006 10.73 11.80 117,192.72 2007 11.80 12.11 420,449.94 2008 12.11 8.50 498,152.76 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.95 1,384.24 2006 10.95 12.30 149,531.62 2007 12.30 12.57 307,589.33 2008 12.57 8.02 417,724.16 At 1.90 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.17 14.82 8,654.37 2007 14.82 15.03 64,679.57 2008 15.03 13.36 27,408.60 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.91 18.87 4,289.64 2005 18.87 23.21 27,075.11 2006 23.21 28.26 58,485.92 2007 28.26 33.66 41,391.23 2008 33.66 15.35 26,114.42 American Funds Growth Division (Class 2)/(c)/............... 2004 104.47 115.31 3,649.80 2005 115.31 131.46 8,989.65 2006 131.46 142.18 11,261.16 2007 142.18 156.71 11,033.18 2008 156.71 86.14 10,264.18 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 81.30 88.04 5,115.63 2005 88.04 91.43 12,031.87 2006 91.43 103.35 13,277.30 2007 103.35 106.51 14,919.20 2008 106.51 64.94 12,346.01
235 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 2.10 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.97 47,614.07 American Funds Bond Division (Class 2)/(k)/................. 2006 13.73 14.33 0.00 2007 14.33 14.47 0.00 2008 14.47 12.83 0.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.48 13.13 0.00 2002 13.13 10.39 0.00 2003 10.39 15.60 0.00 2004 15.60 18.44 3,983.48 2005 18.44 22.60 1,531.76 2006 22.60 27.41 580.64 2007 27.41 32.54 2,094.91 2008 32.54 14.78 449.44 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.32 264,309.74 American Funds Growth Division (Class 2)/(c)/............... 2001 109.20 98.62 0.00 2002 98.62 72.84 0.00 2003 72.84 97.44 0.00 2004 97.44 107.17 716.00 2005 107.17 121.76 366.58 2006 121.76 131.22 383.54 2007 131.22 144.13 181.86 2008 144.13 78.95 53.98 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 76.61 73.35 0.00 2002 73.35 58.56 0.00 2003 58.56 75.83 0.00 2004 75.83 81.83 2,731.57 2005 81.83 84.68 2,592.29 2006 84.68 95.39 2,650.19 2007 95.39 97.96 2,551.11 2008 97.96 59.52 2,823.48 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.64 7,374.84 BlackRock Aggressive Growth Division (Class B).............. 2004 30.00 33.11 0.00 2005 33.11 35.80 906.63 2006 35.80 37.33 1,717.70 2007 37.33 43.95 2,152.46 2008 43.95 23.30 524.83 BlackRock Bond Income Division (Class B).................... 2004 37.45 38.62 0.00 2005 38.62 38.64 1,707.29 2006 38.64 39.40 3,968.47 2007 39.40 40.90 5,770.34 2008 40.90 38.58 2,016.02
236
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $31.18 $33.49 37.90 2005 33.49 33.72 115.93 2006 33.72 36.40 0.00 2007 36.40 37.64 0.00 2008 37.64 27.66 0.00 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 66.08 66.34 0.00 2008 66.34 40.72 0.00 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 51.41 56.47 1,206.19 2005 56.47 57.13 1,641.74 2006 57.13 63.69 2,575.06 2007 63.69 66.64 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.54 11.57 73.77 2005 11.57 11.96 10,342.95 2006 11.96 13.95 16,937.92 2007 13.95 14.09 21,653.73 2008 14.09 8.95 6,253.12 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.70 23.66 0.00 2005 23.66 24.74 0.00 2006 24.74 25.17 0.00 2007 25.17 29.18 558.79 2008 29.18 18.09 447.79 BlackRock Money Market Division (Class B)................... 2004 19.00 18.85 0.00 2005 18.85 18.94 0.00 2006 18.94 19.39 0.00 2007 19.39 19.90 0.00 2008 19.90 20.00 0.00 BlackRock Strategic Value Division (Class B)................ 2004 15.68 17.56 0.00 2005 17.56 17.87 2,783.89 2006 17.87 20.38 6,882.97 2007 20.38 19.21 9,337.25 2008 19.21 11.56 2,431.13 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.77 3,857.04 2005 12.77 14.17 4,683.16 2006 14.17 19.09 12,290.30 2007 19.09 15.88 5,299.69 2008 15.88 9.07 4,943.29 Davis Venture Value Division (Class B)...................... 2004 26.73 28.63 29.67 2005 28.63 30.84 89.81 2006 30.84 34.53 1,027.06 2007 34.53 35.28 1,028.45 2008 35.28 20.89 1,465.55 FI Large Cap Division (Class B)/(k)/........................ 2006 15.97 16.08 0.00 2007 16.08 16.33 0.00 2008 16.33 8.80 0.00
237
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 13.93 $ 15.61 0.00 2005 15.61 16.31 0.00 2006 16.31 17.82 0.00 2007 17.82 18.86 0.00 2008 18.86 8.23 0.00 FI Value Leaders Division (Class B)......................... 2004 21.30 23.91 35.71 2005 23.91 25.86 107.77 2006 25.86 28.28 0.00 2007 28.28 28.78 0.00 2008 28.78 17.16 0.00 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.62 9.50 0.00 2005 9.50 9.71 0.00 2006 9.71 10.44 0.00 2007 10.44 10.66 0.00 2008 10.66 6.12 0.00 Harris Oakmark Focused Value Division (Class B)............. 2004 27.88 30.12 19.81 2005 30.12 32.36 614.35 2006 32.36 35.54 0.00 2007 35.54 32.34 0.00 2008 32.34 17.05 0.00 Harris Oakmark International Division (Class B)............. 2004 11.82 13.65 713.03 2005 13.65 15.27 1,221.19 2006 15.27 19.27 1,221.28 2007 19.27 18.66 71.72 2008 18.66 10.80 43.46 Janus Forty Division (Class B)/(n)/......................... 2007 122.31 149.34 136.53 2008 149.34 84.81 488.38 Jennison Growth Division (Class B)/(g)/..................... 2005 3.92 4.69 0.00 2006 4.69 4.71 0.00 2007 4.71 5.14 2,202.07 2008 5.14 3.19 0.00 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.10 4.26 0.00 2005 4.26 3.88 0.00 Julius Baer International Stock Division (Class B).......... 2004 10.79 12.26 139.27 2005 12.26 14.12 138.95 2006 14.12 16.08 135.73 2007 16.08 17.32 126.94 2008 17.32 9.46 0.00 Lazard Mid Cap Division (Class B)........................... 2004 12.33 13.26 0.00 2005 13.26 14.03 0.00 2006 14.03 15.76 0.00 2007 15.76 15.01 0.00 2008 15.01 9.07 0.00
238
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.45 $ 6.98 0.00 2005 6.98 7.77 314.00 2006 7.77 7.47 0.00 2007 7.47 7.48 0.00 2008 7.48 4.46 0.00 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.90 9.50 0.00 2007 9.50 8.75 0.00 2008 8.75 3.89 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.42 8.19 0.00 2005 8.19 8.57 0.00 2006 8.57 8.94 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 11.94 12.23 0.00 2005 12.23 12.20 17,152.87 2006 12.20 12.40 18,820.15 2007 12.40 12.95 18,095.98 2008 12.95 13.40 7,005.81 Loomis Sayles Small Cap Division (Class B).................. 2004 21.83 24.62 0.00 2005 24.62 25.72 0.00 2006 25.72 29.32 0.00 2007 29.32 32.04 357.19 2008 32.04 20.06 0.00 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.08 15.99 194.15 2005 15.99 15.89 1,569.35 2006 15.89 16.99 1,824.97 2007 16.99 17.72 1,760.56 2008 17.72 14.12 1,333.71 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.16 11.90 0.00 2005 11.90 12.62 0.00 2006 12.62 14.11 0.00 2007 14.11 15.34 0.00 2008 15.34 9.20 0.00 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.94 0.00 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.56 0.00 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 6.99 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.53 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.34 12.64 0.00 2005 12.64 13.87 3,578.62 2006 13.87 14.92 3,793.38 2007 14.92 15.70 3,549.77 2008 15.70 9.78 1,646.82
239
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $30.74 $33.15 2,033.50 2005 33.15 33.89 17,800.73 2006 33.89 38.23 19,841.03 2007 38.23 39.29 16,756.46 2008 39.29 24.13 9,656.16 MFS(R) Research International Division (Class B)............ 2004 9.52 10.89 0.00 2005 10.89 12.41 0.00 2006 12.41 15.38 1,083.08 2007 15.38 17.06 662.47 2008 17.06 9.63 740.42 MFS(R) Total Return Division (Class B)/(i)/................. 2004 32.63 35.32 35.99 2005 35.32 35.57 109.42 2006 35.57 38.99 0.00 2007 38.99 39.75 0.00 2008 39.75 30.22 0.00 MFS(R) Value Division (Class B)............................. 2004 11.67 12.54 67.76 2005 12.54 12.08 1,589.42 2006 12.08 13.94 0.00 2007 13.94 13.09 0.00 2008 13.09 8.50 0.00 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.20 10.65 0.00 2005 10.65 11.78 12,256.93 2006 11.78 14.47 11,577.16 2007 14.47 15.66 10,251.52 2008 15.66 8.86 5,404.37 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.86 20.73 644.70 2005 20.73 22.73 3,617.66 2006 22.73 24.75 7,218.03 2007 24.75 25.00 8,151.86 2008 25.00 12.86 5,546.49 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.71 8.33 0.00 2006 8.33 8.78 0.00 2007 8.78 9.83 1,159.87 2008 9.83 5.20 0.00 Oppenheimer Global Equity Division (Class B)................ 2004 12.12 13.92 0.00 2005 13.92 15.81 0.00 2006 15.81 18.02 1,863.07 2007 18.02 18.74 2,569.65 2008 18.74 10.91 2,298.79 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.76 10.82 0.00 2007 10.82 11.73 7,416.23 2008 11.73 10.70 12,387.87 PIMCO Total Return Division (Class B)....................... 2004 11.40 11.76 256.18 2005 11.76 11.78 5,554.35 2006 11.78 12.05 4,132.44 2007 12.05 12.70 11,696.20 2008 12.70 12.48 6,012.42
240
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.07 $ 4.22 0.00 2005 4.22 4.59 0.00 2006 4.59 4.73 0.00 2007 4.73 6.10 0.00 2008 6.10 3.31 0.00 Russell 2000(R) Index Division (Class B).................... 2004 12.96 14.77 0.00 2005 14.77 15.08 3,116.67 2006 15.08 17.37 3,428.33 2007 17.37 16.72 3,277.20 2008 16.72 10.85 1,471.65 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.66 11.31 0.00 2007 11.31 11.70 0.00 2008 11.70 7.68 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.47 11.06 0.00 2007 11.06 11.41 0.00 2008 11.41 8.37 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.74 11.59 433.80 2005 11.59 12.06 432.81 2006 12.06 13.34 422.78 2007 13.34 14.25 1,894.16 2008 14.25 8.09 2,481.73 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.13 6.92 0.00 2005 6.92 7.77 0.00 2006 7.77 8.08 0.00 2007 8.08 9.30 1,236.93 2008 9.30 5.49 2,797.70 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.77 12.49 0.00 2005 12.49 13.54 0.00 2006 13.54 13.74 708.83 2007 13.74 14.74 622.70 2008 14.74 9.19 0.00 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.45 18.41 68.17 2005 18.41 18.50 2,314.70 2006 18.50 18.99 3,439.33 2007 18.99 19.28 3,399.31 2008 19.28 16.00 1,287.58 Western Asset Management U.S Government Division (Class B).. 2004 14.42 14.70 2,762.32 2005 14.70 14.59 3,891.01 2006 14.59 14.85 8,170.01 2007 14.85 15.13 9,341.34 2008 15.13 14.73 3,470.67 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.09 2,742.80 2006 11.09 12.57 0.00 2007 12.57 12.70 0.00 2008 12.70 7.41 0.00
241
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.25 0.00 2006 10.25 10.73 0.00 2007 10.73 11.09 0.00 2008 11.09 9.29 0.00 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.46 0.00 2006 10.46 11.21 0.00 2007 11.21 11.51 0.00 2008 11.51 8.83 0.00 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.69 0.00 2006 10.69 11.71 0.00 2007 11.71 11.97 5,702.56 2008 11.97 8.36 9,014.94 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.92 0.00 2006 10.92 12.21 122,649.10 2007 12.21 12.42 285,013.93 2008 12.42 7.89 219,933.07 At 2.35 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.60 14.19 0.00 2007 14.19 14.32 0.00 2008 14.32 12.68 0.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.51 18.31 462.94 2005 18.31 22.42 4,532.06 2006 22.42 27.18 8,615.18 2007 27.18 32.23 7,786.42 2008 32.23 14.63 5,308.11 American Funds Growth Division (Class 2)/(c)/............... 2004 95.52 104.95 0.00 2005 104.95 119.12 1,325.80 2006 119.12 128.25 2,338.09 2007 128.25 140.72 2,813.31 2008 140.72 77.00 1,369.59 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 74.33 80.14 87.74 2005 80.14 82.85 817.58 2006 82.85 93.23 976.49 2007 93.23 95.65 949.08 2008 95.65 58.06 944.98
242 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 2.00 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.98 0.00 American Funds Bond Division (Class 2)/(k)/................. 2006 13.85 14.47 9,595.57 2007 14.47 14.63 927.95 2008 14.63 12.98 0.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.53 13.18 0.00 2002 13.18 10.44 1,924.46 2003 10.44 15.69 2,413.26 2004 15.69 18.56 4,253.14 2005 18.56 22.77 3,720.80 2006 22.77 27.65 3,462.82 2007 27.65 32.86 4,490.02 2008 32.86 14.94 3,722.91 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.33 0.00 American Funds Growth Division (Class 2)/(c)/............... 2001 111.07 100.35 0.00 2002 100.35 74.19 775.60 2003 74.19 99.35 1,311.12 2004 99.35 109.38 1,952.69 2005 109.38 124.40 1,814.05 2006 124.40 134.20 1,100.43 2007 134.20 147.55 915.88 2008 147.55 80.90 903.53 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 77.93 74.64 0.00 2002 74.64 59.65 56.63 2003 59.65 77.32 453.38 2004 77.32 83.52 1,755.10 2005 83.52 86.51 2,396.81 2006 86.51 97.55 2,471.57 2007 97.55 100.28 1,805.14 2008 100.28 60.99 1,943.98 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.65 0.00 BlackRock Aggressive Growth Division (Class B).............. 2004 30.49 33.66 0.00 2005 33.66 36.44 0.00 2006 36.44 38.03 0.00 2007 38.03 44.82 0.00 2008 44.82 23.79 0.00 BlackRock Bond Income Division (Class B).................... 2004 38.24 39.46 754.00 2005 39.46 39.51 1,489.48 2006 39.51 40.33 0.00 2007 40.33 41.91 155.30 2008 41.91 39.57 109.52
243
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $31.74 $34.11 0.00 2005 34.11 34.38 78.47 2006 34.38 37.16 434.95 2007 37.16 38.46 435.27 2008 38.46 28.29 433.95 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 67.68 67.98 210.53 2008 67.98 41.77 208.85 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 52.50 57.70 0.00 2005 57.70 58.44 0.00 2006 58.44 65.21 211.12 2007 65.21 68.25 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.56 11.60 0.00 2005 11.60 12.01 0.00 2006 12.01 14.02 0.00 2007 14.02 14.17 175.04 2008 14.17 9.01 0.00 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.90 23.91 0.00 2005 23.91 25.02 0.00 2006 25.02 25.47 0.00 2007 25.47 29.57 0.00 2008 29.57 18.35 116.68 BlackRock Money Market Division (Class B)................... 2004 19.40 19.25 9,129.91 2005 19.25 19.37 3,185.85 2006 19.37 19.85 4,587.01 2007 19.85 20.39 1,410.41 2008 20.39 20.51 1,619.94 BlackRock Strategic Value Division (Class B)................ 2004 15.74 17.64 0.00 2005 17.64 17.97 2,780.30 2006 17.97 20.51 2,164.21 2007 20.51 19.36 1,656.74 2008 19.36 11.66 1,653.87 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.78 1,252.41 2005 12.78 14.19 4,036.10 2006 14.19 19.14 3,967.93 2007 19.14 15.94 2,373.04 2008 15.94 9.11 2,447.36 Davis Venture Value Division (Class B)...................... 2004 26.98 28.92 0.00 2005 28.92 31.19 24.37 2006 31.19 34.95 130.86 2007 34.95 35.74 363.84 2008 35.74 21.19 315.19 FI Large Cap Division (Class B)/(k)/........................ 2006 16.12 16.25 0.00 2007 16.25 16.51 0.00 2008 16.51 8.91 0.00
244
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.03 $ 15.73 0.00 2005 15.73 16.45 0.00 2006 16.45 17.99 0.00 2007 17.99 19.06 328.77 2008 19.06 8.32 424.10 FI Value Leaders Division (Class B)......................... 2004 21.54 24.20 0.00 2005 24.20 26.19 0.00 2006 26.19 28.67 0.00 2007 28.67 29.21 0.00 2008 29.21 17.43 0.00 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.65 9.54 0.00 2005 9.54 9.76 0.00 2006 9.76 10.50 0.00 2007 10.50 10.73 0.00 2008 10.73 6.17 0.00 Harris Oakmark Focused Value Division (Class B)............. 2004 28.19 30.47 0.00 2005 30.47 32.77 516.30 2006 32.77 36.03 486.09 2007 36.03 32.82 259.96 2008 32.82 17.32 258.47 Harris Oakmark International Division (Class B)............. 2004 11.85 13.70 210.15 2005 13.70 15.34 209.68 2006 15.34 19.37 592.27 2007 19.37 18.78 723.18 2008 18.78 10.88 708.83 Janus Forty Division (Class B)/(n)/......................... 2007 125.42 153.24 683.80 2008 153.24 87.12 1,220.21 Jennison Growth Division (Class B)/(g)/..................... 2005 3.94 4.72 0.00 2006 4.72 4.74 0.00 2007 4.74 5.18 0.00 2008 5.18 3.22 0.00 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.12 4.28 0.00 2005 4.28 3.90 0.00 Julius Baer International Stock Division (Class B).......... 2004 10.93 12.43 0.00 2005 12.43 14.33 0.00 2006 14.33 16.33 0.00 2007 16.33 17.62 0.00 2008 17.62 9.62 0.00 Lazard Mid Cap Division (Class B)........................... 2004 12.37 13.30 0.00 2005 13.30 14.09 0.00 2006 14.09 15.84 0.00 2007 15.84 15.10 0.00 2008 15.10 9.13 0.00
245
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.47 $ 7.01 0.00 2005 7.01 7.80 0.00 2006 7.80 7.52 0.00 2007 7.52 7.53 0.00 2008 7.53 4.50 0.00 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.96 9.57 0.00 2007 9.57 8.83 0.00 2008 8.83 3.92 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.46 8.23 0.00 2005 8.23 8.63 0.00 2006 8.63 9.00 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.00 12.31 3,542.00 2005 12.31 12.29 15,667.64 2006 12.29 12.50 12,450.27 2007 12.50 13.07 7,336.83 2008 13.07 13.53 5,187.05 Loomis Sayles Small Cap Division (Class B).................. 2004 22.05 24.88 0.00 2005 24.88 26.02 0.00 2006 26.02 29.69 0.00 2007 29.69 32.48 0.00 2008 32.48 20.36 0.00 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.20 16.13 0.00 2005 16.13 16.05 2,036.19 2006 16.05 17.17 2,293.36 2007 17.17 17.93 1,833.31 2008 17.93 14.30 1,776.20 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.19 11.94 0.00 2005 11.94 12.67 0.00 2006 12.67 14.18 0.00 2007 14.18 15.44 0.00 2008 15.44 9.27 0.00 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.95 0.00 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.57 0.00 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 7.00 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.54 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.38 12.70 220.68 2005 12.70 13.95 1,550.66 2006 13.95 15.01 2,166.87 2007 15.01 15.82 2,262.33 2008 15.82 9.86 2,084.08
246
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $31.17 $33.64 932.51 2005 33.64 34.42 4,653.75 2006 34.42 38.87 4,052.46 2007 38.87 39.99 3,035.45 2008 39.99 24.59 2,910.98 MFS(R) Research International Division (Class B)............ 2004 9.55 10.93 0.00 2005 10.93 12.47 0.00 2006 12.47 15.47 0.00 2007 15.47 17.18 0.00 2008 17.18 9.70 0.00 MFS(R) Total Return Division (Class B)/(i)/................. 2004 33.19 35.95 0.00 2005 35.95 36.24 1,335.09 2006 36.24 39.77 1,335.09 2007 39.77 40.58 1,165.26 2008 40.58 30.88 1,164.61 MFS(R) Value Division (Class B)............................. 2004 11.74 12.62 948.46 2005 12.62 12.16 2,385.88 2006 12.16 14.05 494.83 2007 14.05 13.22 0.00 2008 13.22 8.59 0.00 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.25 10.71 519.78 2005 10.71 11.86 2,555.02 2006 11.86 14.59 2,012.62 2007 14.59 15.80 1,546.11 2008 15.80 8.95 1,505.84 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.95 20.86 0.00 2005 20.86 22.89 2,335.47 2006 22.89 24.95 2,757.29 2007 24.95 25.23 2,301.50 2008 25.23 12.99 2,282.94 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.74 8.38 0.00 2006 8.38 8.84 317.75 2007 8.84 9.90 0.00 2008 9.90 5.24 0.00 Oppenheimer Global Equity Division (Class B)................ 2004 12.21 14.03 0.00 2005 14.03 15.95 47.74 2006 15.95 18.19 498.93 2007 18.19 18.95 254.82 2008 18.95 11.04 254.05 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.79 10.86 798.68 2007 10.86 11.79 12,557.21 2008 11.79 10.76 9,089.55 PIMCO Total Return Division (Class B)....................... 2004 11.44 11.81 440.45 2005 11.81 11.84 8,179.04 2006 11.84 12.13 7,447.36 2007 12.13 12.78 4,933.48 2008 12.78 12.58 5,952.41
247
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.08 $ 4.24 0.00 2005 4.24 4.61 0.00 2006 4.61 4.76 0.00 2007 4.76 6.14 0.00 2008 6.14 3.34 0.00 Russell 2000(R) Index Division (Class B).................... 2004 13.03 14.86 96.62 2005 14.86 15.19 94.04 2006 15.19 17.51 342.50 2007 17.51 16.87 428.25 2008 16.87 10.97 324.41 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.66 11.33 0.00 2007 11.33 11.72 0.00 2008 11.72 7.70 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.47 11.07 0.00 2007 11.07 11.44 0.00 2008 11.44 8.40 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.80 11.66 0.00 2005 11.66 12.15 0.00 2006 12.15 13.45 0.00 2007 13.45 14.38 0.00 2008 14.38 8.17 0.00 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.15 6.95 0.00 2005 6.95 7.81 0.00 2006 7.81 8.12 0.00 2007 8.12 9.37 0.00 2008 9.37 5.53 0.00 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.85 12.59 0.00 2005 12.59 13.66 0.00 2006 13.66 13.88 0.00 2007 13.88 14.90 0.00 2008 14.90 9.30 0.00 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.62 18.60 0.00 2005 18.60 18.70 2,194.07 2006 18.70 19.22 322.63 2007 19.22 19.53 329.08 2008 19.53 16.23 257.63 Western Asset Management U.S Government Division (Class B).. 2004 14.56 14.85 0.00 2005 14.85 14.76 0.00 2006 14.76 15.03 822.64 2007 15.03 15.33 1,240.53 2008 15.33 14.94 1,100.25 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.10 0.00 2006 11.10 12.59 0.00 2007 12.59 12.74 2,994.77 2008 12.74 7.43 2,993.70
248
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.25 0.00 2006 10.25 10.74 0.00 2007 10.74 11.12 0.00 2008 11.12 9.33 2,060.25 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.47 0.00 2006 10.47 11.23 0.00 2007 11.23 11.54 10,049.87 2008 11.54 8.86 8,977.60 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.70 0.00 2006 10.70 11.73 0.00 2007 11.73 12.00 6,813.56 2008 12.00 8.39 9,625.59 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.93 0.00 2006 10.93 12.23 9,597.98 2007 12.23 12.45 7,247.66 2008 12.45 7.92 496.93 At 2.25 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.73 14.33 920.46 2007 14.33 14.47 761.09 2008 14.47 12.83 330.55 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.60 18.44 0.00 2005 18.44 22.60 0.00 2006 22.60 27.41 179.50 2007 27.41 32.54 287.37 2008 32.54 14.78 300.11 American Funds Growth Division (Class 2)/(c)/............... 2004 97.44 107.17 37.63 2005 107.17 121.76 640.42 2006 121.76 131.22 702.00 2007 131.22 144.13 572.15 2008 144.13 78.95 554.82 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 75.83 81.83 65.02 2005 81.83 84.68 64.95 2006 84.68 95.39 284.87 2007 95.39 97.96 505.03 2008 97.96 59.52 482.45
249 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 2.25 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.97 0.00 American Funds Bond Division (Class 2)/(k)/................. 2006 13.54 14.12 0.00 2007 14.12 14.24 0.00 2008 14.24 12.61 0.00 American Funds Global Small Capitalization Division(Class 2)/(c)/.................................... 2001 13.42 13.06 0.00 2002 13.06 10.32 0.00 2003 10.32 15.47 7,432.78 2004 15.47 18.25 1,724.22 2005 18.25 22.34 529.95 2006 22.34 27.06 225.68 2007 27.06 32.07 143.60 2008 32.07 14.55 16.15 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.32 0.00 American Funds Growth Division(Class 2)/(c)/................ 2001 106.37 96.00 0.00 2002 96.00 70.80 0.00 2003 70.80 94.57 6,362.14 2004 94.57 103.86 308.48 2005 103.86 117.82 44.81 2006 117.82 126.79 0.00 2007 126.79 139.05 0.00 2008 139.05 76.05 0.00 American Funds Growth-Income Division (Class 2)/(c)/........ 2001 74.63 71.41 0.00 2002 71.41 56.92 0.00 2003 56.92 73.60 4,976.20 2004 73.60 79.30 207.31 2005 79.30 81.94 148.26 2006 81.94 92.17 446.02 2007 92.17 94.51 126.63 2008 94.51 57.34 96.65 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.64 0.00 BlackRock Aggressive Growth Division (Class B).............. 2004 29.29 32.29 0.00 2005 32.29 34.87 0.00 2006 34.87 36.30 0.00 2007 36.30 42.67 57.96 2008 42.67 22.59 81.70 BlackRock Bond Income Division (Class B).................... 2004 36.31 37.40 0.00 2005 37.40 37.36 0.00 2006 37.36 38.04 0.00 2007 38.04 39.43 0.00 2008 39.43 37.14 0.00
250
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $30.36 $32.57 0.00 2005 32.57 32.75 0.00 2006 32.75 35.30 0.00 2007 35.30 36.45 0.00 2008 36.45 26.74 0.00 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 63.76 63.94 0.00 2008 63.94 39.19 0.00 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 49.83 54.68 0.00 2005 54.68 55.24 0.00 2006 55.24 61.48 0.00 2007 61.48 64.30 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.51 11.52 0.00 2005 11.52 11.90 0.00 2006 11.90 13.86 0.00 2007 13.86 13.97 0.00 2008 13.97 8.86 0.00 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 21.39 23.30 607.12 2005 23.30 24.33 0.00 2006 24.33 24.71 0.00 2007 24.71 28.61 86.46 2008 28.61 17.71 102.45 BlackRock Money Market Division (Class B)................... 2004 18.42 18.25 283.74 2005 18.25 18.32 0.00 2006 18.32 18.73 0.00 2007 18.73 19.19 1,231.32 2008 19.19 19.25 967.35 BlackRock Strategic Value Division (Class B)................ 2004 15.59 17.44 0.00 2005 17.44 17.72 0.00 2006 17.72 20.18 74.10 2007 20.18 19.00 74.17 2008 19.00 11.41 73.88 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.76 0.00 2005 12.76 14.13 0.00 2006 14.13 19.01 388.07 2007 19.01 15.80 388.21 2008 15.80 9.01 332.89 Davis Venture Value Division (Class B)...................... 2004 26.35 28.20 0.00 2005 28.20 30.33 0.00 2006 30.33 33.90 0.00 2007 33.90 34.58 0.00 2008 34.58 20.45 0.00 FI Large Cap Division (Class B)/(k)/........................ 2006 15.74 15.83 0.00 2007 15.83 16.05 0.00 2008 16.05 8.64 0.00
251
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 13.78 $ 15.43 0.00 2005 15.43 16.09 0.00 2006 16.09 17.55 0.00 2007 17.55 18.55 0.00 2008 18.55 8.08 0.00 FI Value Leaders Division (Class B)......................... 2004 20.95 23.50 0.00 2005 23.50 25.38 0.00 2006 25.38 27.71 0.00 2007 27.71 28.15 0.00 2008 28.15 16.76 0.00 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.58 9.45 0.00 2005 9.45 9.65 0.00 2006 9.65 10.35 0.00 2007 10.35 10.55 0.00 2008 10.55 6.05 0.00 Harris Oakmark Focused Value Division (Class B)............. 2004 27.43 29.59 0.00 2005 29.59 31.75 0.00 2006 31.75 34.82 86.12 2007 34.82 31.63 86.20 2008 31.63 16.66 85.86 Harris Oakmark International Division (Class B)............. 2004 11.77 13.59 0.00 2005 13.59 15.18 0.00 2006 15.18 19.12 0.00 2007 19.12 18.49 0.00 2008 18.49 10.68 0.00 Janus Forty Division (Class B)/(n)/......................... 2007 117.79 143.67 17.49 2008 143.67 81.47 21.69 Jennison Growth Division (Class B)/(g)/..................... 2005 3.89 4.65 0.00 2006 4.65 4.66 0.00 2007 4.66 5.08 0.00 2008 5.08 3.15 0.00 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.08 4.23 0.00 2005 4.23 3.85 0.00 Julius Baer International Stock Division (Class B).......... 2004 10.58 12.01 0.00 2005 12.01 13.82 0.00 2006 13.82 15.70 0.00 2007 15.70 16.90 0.00 2008 16.90 9.21 0.00 Lazard Mid Cap Division (Class B)........................... 2004 12.29 13.19 0.00 2005 13.19 13.94 0.00 2006 13.94 15.63 0.00 2007 15.63 14.87 0.00 2008 14.87 8.97 0.00
252
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.42 $ 6.94 0.00 2005 6.94 7.71 0.00 2006 7.71 7.41 0.00 2007 7.41 7.40 0.00 2008 7.40 4.41 0.00 Legg Mason Value Equity (Class B)/(l)/...................... 2006 8.81 9.39 0.00 2007 9.39 8.64 0.00 2008 8.64 3.83 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.36 8.12 0.00 2005 8.12 8.49 0.00 2006 8.49 8.85 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 11.84 12.12 1,283.14 2005 12.12 12.07 1,330.12 2006 12.07 12.25 2,296.73 2007 12.25 12.78 475.08 2008 12.78 13.20 384.94 Loomis Sayles Small Cap Division (Class B).................. 2004 21.50 24.23 0.00 2005 24.23 25.27 0.00 2006 25.27 28.77 0.00 2007 28.77 31.39 77.22 2008 31.39 19.62 94.01 Lord Abbett Bond Debenture Division (Class B)............... 2004 14.90 15.78 0.00 2005 15.78 15.66 0.00 2006 15.66 16.72 0.00 2007 16.72 17.41 0.00 2008 17.41 13.86 0.00 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.11 11.84 0.00 2005 11.84 12.54 0.00 2006 12.54 14.00 0.00 2007 14.00 15.20 158.66 2008 15.20 9.10 200.03 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.93 533.81 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.56 0.00 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/............................................ 2008 9.99 6.99 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.53 0.00 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.28 12.56 0.00 2005 12.56 13.76 223.42 2006 13.76 14.77 317.65 2007 14.77 15.53 47.27 2008 15.53 9.66 69.51
253
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $30.10 $32.43 163.69 2005 32.43 33.10 955.25 2006 33.10 37.28 1,267.67 2007 37.28 38.26 173.58 2008 38.26 23.47 253.02 MFS(R) Research International Division (Class B)............ 2004 9.48 10.82 0.00 2005 10.82 12.32 0.00 2006 12.32 15.25 0.00 2007 15.25 16.89 0.00 2008 16.89 9.51 0.00 MFS(R) Total Return Division (Class B)/(i)/................. 2004 31.81 34.39 0.00 2005 34.39 34.59 0.00 2006 34.59 37.86 0.00 2007 37.86 38.54 0.00 2008 38.54 29.25 0.00 MFS(R) Value Division (Class B)............................. 2004 11.58 12.42 0.00 2005 12.42 11.95 0.00 2006 11.95 13.77 0.00 2007 13.77 12.92 0.00 2008 12.92 8.37 0.00 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.12 10.55 0.00 2005 10.55 11.65 721.69 2006 11.65 14.29 838.39 2007 14.29 15.44 249.80 2008 15.44 8.72 364.67 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 17.71 20.54 0.00 2005 20.54 22.48 0.00 2006 22.48 24.45 184.65 2007 24.45 24.66 184.82 2008 24.66 12.66 184.10 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.66 8.27 0.00 2006 8.27 8.71 0.00 2007 8.71 9.73 0.00 2008 9.73 5.14 0.00 Oppenheimer Global Equity Division (Class B)................ 2004 11.99 13.76 0.00 2005 13.76 15.60 0.00 2006 15.60 17.75 0.00 2007 17.75 18.44 0.00 2008 18.44 10.72 0.00 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.71 10.76 0.00 2007 10.76 11.65 0.00 2008 11.65 10.61 0.00
254
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ PIMCO Total Return Division (Class B)....................... 2004 $11.35 $11.69 0.00 2005 11.69 11.69 0.00 2006 11.69 11.95 0.00 2007 11.95 12.57 0.00 2008 12.57 12.34 0.00 RCM Technology Division (Class B)........................... 2004 4.05 4.19 0.00 2005 4.19 4.55 0.00 2006 4.55 4.69 0.00 2007 4.69 6.03 0.00 2008 6.03 3.27 0.00 Russell 2000(R) Index Division (Class B).................... 2004 12.85 14.63 0.00 2005 14.63 14.92 138.96 2006 14.92 17.16 136.11 2007 17.16 16.49 0.00 2008 16.49 10.69 0.00 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.65 11.29 0.00 2007 11.29 11.66 0.00 2008 11.66 7.64 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.46 11.04 0.00 2007 11.04 11.37 0.00 2008 11.37 8.33 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.65 11.48 0.00 2005 11.48 11.94 0.00 2006 11.94 13.17 0.00 2007 13.17 14.06 0.00 2008 14.06 7.97 0.00 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.10 6.88 0.00 2005 6.88 7.71 0.00 2006 7.71 8.01 0.00 2007 8.01 9.21 265.21 2008 9.21 5.42 344.24 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 11.64 12.34 0.00 2005 12.34 13.36 0.00 2006 13.36 13.54 0.00 2007 13.54 14.50 0.00 2008 14.50 9.03 0.00 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 17.20 18.14 0.00 2005 18.14 18.19 0.00 2006 18.19 18.64 80.44 2007 18.64 18.90 80.52 2008 18.90 15.67 80.20 Western Asset Management U.S Government Division (Class B).. 2004 14.22 14.48 0.00 2005 14.48 14.35 0.00 2006 14.35 14.58 0.00 2007 14.58 14.83 0.00 2008 14.83 14.42 0.00
255
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 $ 9.99 $ 11.08 0.00 2006 11.08 12.53 0.00 2007 12.53 12.65 0.00 2008 12.65 7.37 0.00 MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 9.99 10.24 0.00 2006 10.24 10.70 0.00 2007 10.70 11.04 0.00 2008 11.04 9.24 0.00 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.45 10,357.79 2006 10.45 11.18 9,265.11 2007 11.18 11.46 9,268.63 2008 11.46 8.78 9,265.11 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.68 0.00 2006 10.68 11.68 0.00 2007 11.68 11.92 0.00 2008 11.92 8.31 0.00 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.91 0.00 2006 10.91 12.18 23,530.70 2007 12.18 12.37 24,768.93 2008 12.37 7.84 0.00 At 2.50 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 13.42 13.99 0.00 2007 13.99 14.09 0.00 2008 14.09 12.46 0.00 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.38 18.13 0.00 2005 18.13 22.17 0.00 2006 22.17 26.82 114.70 2007 26.82 31.76 190.14 2008 31.76 14.39 236.85 American Funds Growth Division(Class 2)/(c)/................ 2004 92.71 101.71 0.00 2005 101.71 115.27 0.00 2006 115.27 123.92 36.11 2007 123.92 135.77 53.87 2008 135.77 74.18 60.33 American Funds Growth-Income Division(Class 2)/(c)/......... 2004 72.15 77.66 0.00 2005 77.66 80.17 0.00 2006 80.17 90.08 66.47 2007 90.08 92.28 92.69 2008 92.28 55.93 98.58
256 PREFERENCE PLUS SELECT DEFERRED ANNUITIES GROUP II 1.75 SEPARATE ACCOUNT CHARGE
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ American Funds Balanced Allocation Division (Class C)/(o)/.. 2008 $ 10.00 $ 6.99 73,933.97 American Funds Bond Division (Class 2)/(k)/................. 2006 14.17 14.82 366.37 2007 14.82 15.03 7,044.56 2008 15.03 13.36 1,550.22 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2001 13.64 13.30 0.00 2002 13.30 10.56 6,440.52 2003 10.56 15.91 26,264.88 2004 15.91 18.87 32,210.40 2005 18.87 23.21 34,001.23 2006 23.21 28.26 37,575.75 2007 28.26 33.66 36,898.97 2008 33.66 15.35 30,590.88 American Funds Growth Allocation Division (Class C)/(o)/.... 2008 9.99 6.34 65,717.49 American Funds Growth Division (Class 2)/(c)/............... 2001 116.04 104.94 0.00 2002 104.94 77.78 6,100.79 2003 77.78 104.42 15,014.89 2004 104.42 115.25 20,010.20 2005 115.25 131.40 21,095.03 2006 131.40 142.11 14,704.81 2007 142.11 156.63 14,216.90 2008 156.63 86.10 13,079.93 American Funds Growth-Income Division (Class 2)/(c)/+A78+A339.......................................... 2001 81.41 78.06 0.00 2002 78.06 62.54 7,458.73 2003 62.54 81.26 22,882.90 2004 81.26 88.00 19,915.47 2005 88.00 91.38 18,399.97 2006 91.38 103.30 16,270.03 2007 103.30 106.46 15,894.19 2008 106.46 64.91 12,181.32 American Funds Moderate Allocation Division (Class C)/(o)/.. 2008 10.01 7.66 7,151.54 BlackRock Aggressive Growth Division (Class B).............. 2004 31.73 35.10 22.87 2005 35.10 38.09 20.44 2006 38.09 39.85 0.00 2007 39.85 47.08 0.00 2008 47.08 25.05 0.00 BlackRock Bond Income Division (Class B).................... 2004 40.27 41.62 0.00 2005 41.62 41.78 0.00 2006 41.78 42.76 0.00 2007 42.76 44.54 0.00 2008 44.54 42.16 0.00
257
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ BlackRock Diversified Division (Class B).................... 2004 $33.19 $35.73 597.48 2005 35.73 36.10 533.89 2006 36.10 39.11 0.00 2007 39.11 40.59 0.00 2008 40.59 29.92 0.00 BlackRock Large Cap Core Division* (Class B)/(m)/........... 2007 71.84 72.29 0.00 2008 72.29 44.53 0.00 BlackRock Large Cap Division (formerly BlackRock Investment Trust) (Class B).......................................... 2004 55.31 60.89 0.00 2005 60.89 61.82 0.00 2006 61.82 69.16 0.00 2007 69.16 72.45 0.00 BlackRock Large Cap Value Division (Class B)................ 2004 10.61 11.68 0.00 2005 11.68 12.12 0.00 2006 12.12 14.18 0.00 2007 14.18 14.37 0.00 2008 14.37 9.16 0.00 BlackRock Legacy Large Cap Growth Division (Class B)/(i)/... 2004 22.43 24.52 594.47 2005 24.52 25.72 8.05 2006 25.72 54.54 26.26 2007 54.54 30.56 2,897.89 2008 30.56 19.01 4,436.61 BlackRock Money Market Division (Class B)................... 2004 20.43 20.31 0.00 2005 20.31 20.48 0.00 2006 20.48 21.05 0.00 2007 21.05 21.68 0.00 2008 21.68 21.85 0.00 BlackRock Strategic Value Division (Class B)................ 2004 15.89 17.84 0.00 2005 17.84 18.21 0.00 2006 18.21 20.84 0.00 2007 20.84 19.72 0.00 2008 19.72 11.91 0.00 Clarion Global Real Estate Division (Class B)/(i)/.......... 2004 9.99 12.80 12,631.57 2005 12.80 14.25 20,958.59 2006 14.25 19.27 32,445.59 2007 19.27 16.09 21,639.74 2008 16.09 9.22 16,664.71 Davis Venture Value Division (Class B)...................... 2004 27.63 29.67 0.00 2005 29.67 32.07 30.21 2006 32.07 44.60 36.03 2007 44.60 36.94 0.00 2008 36.94 21.95 432.80 FI Large Cap Division (Class B)/(k)/........................ 2006 16.52 16.67 0.00 2007 16.67 16.99 0.00 2008 16.99 9.19 0.00
258
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ FI Mid Cap Opportunities Division (Class B)................. 2004 $ 14.29 $ 16.05 0.00 2005 16.05 16.82 0.00 2006 16.82 18.44 0.00 2007 18.44 19.59 0.00 2008 19.59 8.57 0.00 FI Value Leaders Division (Class B)......................... 2004 22.14 24.91 0.00 2005 24.91 27.04 0.00 2006 27.04 29.67 0.00 2007 29.67 30.30 0.00 2008 30.30 18.13 0.00 Franklin Templeton Small Cap Growth Division (Class B)...... 2004 8.71 9.63 0.00 2005 9.63 9.87 0.00 2006 9.87 10.65 0.00 2007 10.65 10.91 0.00 2008 10.91 6.29 554.05 Harris Oakmark Focused Value Division (Class B)............. 2004 28.98 31.37 0.00 2005 31.37 33.82 28.78 2006 33.82 43.02 37.28 2007 43.02 34.04 0.00 2008 34.04 18.02 0.00 Harris Oakmark International Division (Class B)............. 2004 11.92 13.81 0.00 2005 13.81 15.50 0.00 2006 15.50 19.63 0.00 2007 19.63 19.07 0.00 2008 19.07 11.08 0.00 Janus Forty Division (Class B)/(n)/......................... 2007 133.55 163.45 326.64 2008 163.45 93.15 2,011.44 Jennison Growth Division (Class B)/(g)/..................... 2005 3.99 4.79 0.00 2006 4.79 4.82 0.00 2007 4.82 5.28 0.00 2008 5.28 3.29 0.00 Jennison Growth Division (formerly Met/Putnam Voyager Division) (Class B)/(g)/.................................. 2004 4.16 4.33 0.00 2005 4.33 3.95 0.00 Julius Baer International Stock Division (Class B).......... 2004 11.29 12.87 0.00 2005 12.87 14.87 0.00 2006 14.87 16.98 0.00 2007 16.98 18.37 0.00 2008 18.37 10.06 232.69 Lazard Mid Cap Division (Class B)........................... 2004 12.45 13.41 0.00 2005 13.41 14.24 0.00 2006 14.24 16.05 40.31 2007 16.05 15.34 0.00 2008 15.34 9.30 0.00
259
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ Legg Mason Partners Aggressive Growth (Class B)............. 2004 $ 6.53 $ 7.08 0.00 2005 7.08 7.90 0.00 2006 7.90 7.63 0.00 2007 7.63 7.66 0.00 2008 7.66 4.59 0.00 Legg Mason Value Equity (Class B)/(l)/...................... 2006 9.12 9.76 0.00 2007 9.76 9.02 0.00 2008 9.02 4.02 0.00 Legg Mason Value Equity (formerly MFS(R) Investors Trust Division) (Class B)/(l)/.................................. 2004 7.55 8.35 0.00 2005 8.35 8.77 0.00 2006 8.77 9.16 0.00 Lehman Brothers(R) Aggregate Bond Index Division (Class B).. 2004 12.17 12.50 58.64 2005 12.50 12.51 855.95 2006 12.51 12.76 1,339.25 2007 12.76 13.38 861.50 2008 13.38 13.88 562.59 Loomis Sayles Small Cap Division (Class B).................. 2004 22.61 25.56 0.00 2005 25.56 26.79 0.00 2006 26.79 30.65 0.00 2007 30.65 33.61 0.00 2008 33.61 21.12 0.00 Lord Abbett Bond Debenture Division (Class B)............... 2004 15.51 16.48 92.03 2005 16.48 16.44 201.19 2006 16.44 17.63 183.25 2007 17.63 18.46 0.00 2008 18.46 14.76 627.99 Met/AIM Small Cap Growth Division (Class B)................. 2004 11.26 12.03 0.00 2005 12.03 12.80 0.00 2006 12.80 14.37 0.00 2007 14.37 15.68 0.00 2008 15.68 9.44 368.96 Met/Franklin Income Division (Class B)/(o)/................. 2008 9.99 7.96 0.00 Met/Franklin Mutual Shares Division (Class B)/(o)/.......... 2008 9.99 6.58 0.00 Met/Franklin Templeton Founding Strategy Division (Class B)/(o)/................................................... 2008 9.99 7.01 0.00 Met/Templeton Growth Division (Class B)/(o)/................ 2008 9.99 6.55 457.88 MetLife Mid Cap Stock Index Division (Class B).............. 2004 11.49 12.84 0.00 2005 12.84 14.14 176.38 2006 14.14 15.26 257.83 2007 15.26 16.12 182.82 2008 16.12 10.08 209.30
260
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Stock Index Division (Class B)...................... 2004 $32.28 $34.90 0.00 2005 34.90 35.80 761.21 2006 35.80 40.52 886.76 2007 40.52 41.80 769.18 2008 41.80 25.77 905.98 MFS(R) Research International Division (Class B)............ 2004 9.63 11.03 0.00 2005 11.03 12.63 78.00 2006 12.63 15.70 188.05 2007 15.70 17.48 0.00 2008 17.48 9.90 0.00 MFS(R) Total Return Division (Class B)/(i)/................. 2004 34.63 37.57 720.93 2005 37.57 37.98 2,111.55 2006 37.98 41.77 3,022.66 2007 41.77 42.73 6,662.41 2008 42.73 32.61 10,151.25 MFS(R) Value Division (Class B)............................. 2004 11.90 12.81 0.00 2005 12.81 12.38 0.00 2006 12.38 14.34 0.00 2007 14.34 13.52 0.00 2008 13.52 8.81 0.00 Morgan Stanley EAFE(R) Index Division (Class B)............. 2004 9.38 10.88 151.41 2005 10.88 12.08 784.62 2006 12.08 14.89 669.32 2007 14.89 16.17 531.12 2008 16.17 9.18 665.73 Neuberger Berman Mid Cap Value Division (Class B)........... 2004 18.20 21.19 0.00 2005 21.19 23.30 0.00 2006 23.30 25.46 0.00 2007 25.46 25.82 0.00 2008 25.82 13.32 0.00 Oppenheimer Capital Appreciation Division (Class B)/(j)/.... 2005 7.83 8.48 0.00 2006 8.48 8.97 1,330.91 2007 8.97 10.07 13,084.61 2008 10.07 5.35 10,767.80 Oppenheimer Global Equity Division (Class B)................ 2004 12.43 14.31 0.00 2005 14.31 16.31 0.00 2006 16.31 18.65 0.00 2007 18.65 19.47 0.00 2008 19.47 11.37 0.00 PIMCO Inflation Protected Bond Division (Class B)/(k)/...... 2006 10.88 10.96 0.00 2007 10.96 11.93 249.82 2008 11.93 10.91 12,891.35 PIMCO Total Return Division (Class B)....................... 2004 11.53 11.92 0.00 2005 11.92 11.98 0.00 2006 11.98 12.31 0.00 2007 12.31 13.01 0.00 2008 13.01 12.83 829.01
261
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ RCM Technology Division (Class B)........................... 2004 $ 4.12 $ 4.28 0.00 2005 4.28 4.67 12,268.89 2006 4.67 4.83 12,506.14 2007 4.83 6.24 12,278.46 2008 6.24 3.41 12,268.89 Russell 2000(R) Index Division (Class B).................... 2004 13.21 15.09 0.00 2005 15.09 15.47 159.60 2006 15.47 17.87 291.07 2007 17.87 17.26 168.48 2008 17.26 11.25 507.15 SSgA Growth ETF Division (Class B)/(k)/..................... 2006 10.68 11.36 0.00 2007 11.36 11.79 641.07 2008 11.79 7.76 0.00 SSgA Growth and Income ETF Division (Class B)/(k)/.......... 2006 10.49 11.11 0.00 2007 11.11 11.50 0.00 2008 11.50 8.47 0.00 T. Rowe Price Large Cap Growth Division (Class B)........... 2004 10.95 11.84 0.00 2005 11.84 12.37 0.00 2006 12.37 13.72 0.00 2007 13.72 14.72 0.00 2008 14.72 8.38 0.00 T. Rowe Price Mid Cap Growth Division (Class B)............. 2004 6.20 7.02 0.00 2005 7.02 7.90 0.00 2006 7.90 8.24 0.00 2007 8.24 9.53 0.00 2008 9.53 5.64 0.00 T. Rowe Price Small Cap Growth Division (Class B)........... 2004 12.07 12.84 0.00 2005 12.84 13.97 0.00 2006 13.97 14.22 0.00 2007 14.22 15.31 0.00 2008 15.31 9.58 0.00 Western Asset Management Strategic Bond Opportunities Division (Class B)........................................ 2004 18.04 19.08 0.00 2005 19.08 19.23 366.89 2006 19.23 19.81 397.25 2007 19.81 20.19 316.42 2008 20.19 16.82 902.52 Western Asset Management U.S Government Division (Class B).. 2004 14.91 15.23 239.72 2005 15.23 15.18 933.66 2006 15.18 15.50 916.62 2007 15.50 15.84 398.04 2008 15.84 15.48 1,438.15 MetLife Aggressive Allocation Division (Class B)/(j)/....... 2005 9.99 11.12 0.00 2006 11.12 12.64 0.00 2007 12.64 12.82 0.14 2008 12.82 7.50 0.00
262
BEGINNING OF NUMBER OF YEAR END OF YEAR ACCUMULATION ACCUMULATION ACCUMULATION UNITS END OF INVESTMENT DIVISION YEAR UNIT VALUE UNIT VALUE YEAR ------------------- ---- ------------ ------------ ------------ MetLife Conservative Allocation Division (Class B)/(j)/..... 2005 $ 9.99 $ 10.27 0.00 2006 10.27 10.79 4,443.93 2007 10.79 11.19 7,507.03 2008 11.19 9.41 14,440.75 MetLife Conservative to Moderate Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.49 0.00 2006 10.49 11.28 68,841.14 2007 11.28 11.61 11,197.95 2008 11.61 8.95 44,438.12 MetLife Moderate Allocation Division (Class B)/(j)/......... 2005 9.99 10.72 2,546.27 2006 10.72 11.78 22,134.36 2007 11.78 12.08 127,479.50 2008 12.08 8.47 91,170.91 MetLife Moderate to Aggressive Allocation Division (Class B)/(j)/............................................ 2005 9.99 10.94 0.00 2006 10.94 12.28 46,956.99 2007 12.28 12.53 113,725.91 2008 12.53 7.99 73,977.92 At 2.00 Separate Account Charge: American Funds Bond Division (Class 2)/(k)/................. 2006 14.04 14.68 0.00 2007 14.68 14.87 0.00 2008 14.87 13.21 1,130.12 American Funds Global Small Capitalization Division (Class 2)/(c)/............................................ 2004 15.82 18.75 0.00 2005 18.75 23.04 42.87 2006 23.04 28.01 58.25 2007 28.01 33.34 0.00 2008 33.34 15.18 0.00 American Funds Growth Division (Class 2)/(c)/............... 2004 102.41 112.92 0.00 2005 112.92 128.61 30.26 2006 128.61 138.96 46.32 2007 138.96 153.01 0.00 2008 153.01 84.02 0.00 American Funds Growth-Income Division (Class 2)/(c)/........ 2004 79.70 86.22 0.00 2005 86.22 89.45 32.66 2006 89.45 101.01 47.81 2007 101.01 103.99 0.00 2008 103.99 63.35 156.59
-------- /(a) /The assets of State Street Research Income Division were merged into this investment division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of State Street Research Income Division. /(b)/ The assets of Loomis Sayles High Yield Bond Division were merged into this investment division on April 29, 2002. Accumulation unit values prior to April 29, 2002 are those of Loomis Sayles High Yield Bond Division. /(c)/ Inception date: August 3, 2001. /(d)/ Inception date: May 1, 2002. 263 /(e)/ The assets of the Janus Growth Division were merged into the Janus Aggressive Growth Division on April 28, 2003. Accumulation unit values prior to April 28, 2003 are those of Janus Growth Division. /(f)/ Inception date: May 1, 2003. /(g)/ The assets of the Met/Putnam Voyager Division were merged into this division prior to the opening of business on May 2, 2005. Accumulation unit values prior to May 2, 2005 are those of the Met/Putnam Voyager Division. /(h)/ The division with the name FI Mid Cap Opportunities was merged into the Janus Mid Cap Division prior to the opening of business on May 3, 2004, and was renamed FI Mid Cap Opportunities. The investment division with the name FI Mid Cap Opportunities on April 30, 2004 ceased to exist. The accumulation unit values history prior to May 1, 2004 is that of the Janus Mid Cap Division. /(i)/ Inception date: May 1, 2004. /(j)/ Inception date: May 1, 2005. /(k)/ Inception date: May 1, 2006. /(l)/ The assets of MFS Investors Trust Division were merged into the Legg Mason Value Equity Division prior to the opening of business on May 1, 2006. Accumulation unit values prior to May 1, 2006 are those of MFS Investors Trust Division. /(m)/ The assets of BlackRock Large Cap Division (formerly BlackRock Investment Trust Division) of the Metropolitan Fund were merged into the BlackRock Large Cap Core Division of the Met Investors Fund on April 30, 2007. Accumulation unit values prior to April 30, 2007 are those of the BlackRock Large Cap Division. /(n) /Inception date: April 30, 2007. /(o)/ Inception date: April 28, 2008. * We are waiving a portion of the Separate Account charge for the investment division investing in the BlackRock Large Cap Core Portfolio. Please see the Table of Expenses for more information. 264 ANNUAL REPORT DECEMBER 31, 2008 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Contract Owners of Metropolitan Life Separate Account E and the Board of Directors of Metropolitan Life Insurance Company: We have audited the accompanying statements of assets and liabilities of Metropolitan Life Separate Account E (the "Separate Account") of Metropolitan Life Insurance Company (the "Company") comprising each of the individual Investment Divisions listed in Appendix A as of December 31, 2008, the related statements of operations for each of the periods presented in the year then ended, and the statements of changes in net assets for each of the periods presented in the two years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the Investment Divisions constituting the Separate Account of the Company as of December 31, 2008, the results of their operations for each of the periods presented in the year then ended, and the changes in their net assets for each of the periods presented in the two years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, FL March 31, 2009 APPENDIX A MSF BlackRock Diversified Investment Division MSF BlackRock Aggressive Growth Investment Division MSF MetLife Stock Index Investment Division MSF Julius Baer International Stock Investment Division MSF FI Mid Cap Opportunities Investment Division MSF T. Rowe Price Small Cap Growth Investment Division MSF Oppenheimer Global Equity Investment Division MSF MFS Value Investment Division MSF Neuberger Berman Mid Cap Value Investment Division MSF T. Rowe Price Large Cap Growth Investment Division MSF Lehman Brothers Aggregate Bond Index Investment Division MSF Morgan Stanley EAFE Index Investment Division MSF Russell 2000 Index Investment Division MSF Jennison Growth Investment Division MSF BlackRock Strategic Value Investment Division MSF MetLife Mid Cap Stock Index Investment Division MSF Franklin Templeton Small Cap Growth Investment Division MSF BlackRock Large Cap Value Investment Division MSF BlackRock Bond Income Investment Division MSF BlackRock Money Market Investment Division MSF Davis Venture Value Investment Division MSF Loomis Sayles Small Cap Investment Division MSF Harris Oakmark Focused Value Investment Division MSF Western Asset Management Strategic Bond Opportunities Investment Division MSF Western Asset Management U.S. Government Investment Division MSF FI Value Leaders Investment Division MSF MFS Total Return Investment Division MSF BlackRock Legacy Large Cap Growth Investment Division MSF MetLife Conservative Allocation Investment Division MSF MetLife Conservative to Moderate Allocation Investment Division MSF MetLife Moderate Allocation Investment Division MSF MetLife Moderate to Aggressive Allocation Investment Division MSF MetLife Aggressive Allocation Investment Division MSF FI Large Cap Investment Division Fidelity VIP Money Market Investment Division Fidelity VIP Equity-Income Investment Division Fidelity VIP Growth Investment Division Fidelity VIP Investment Grade Bond Investment Division Calvert Social Balanced Investment Division Calvert Social Mid Cap Growth Investment Division MIST Lord Abbett Bond Debenture Investment Division MIST MFS Research International Investment Division MIST T. Rowe Price Mid Cap Growth Investment Division MIST PIMCO Total Return Investment Division MIST RCM Technology Investment Division MIST Lazard Mid Cap Investment Division MIST Met/AIM Small Cap Growth Investment Division MIST Harris Oakmark International Investment Division MIST Oppenheimer Capital Appreciation Investment Division MIST Legg Mason Partners Aggressive Growth Investment Division MIST Third Avenue Small Cap Value Investment Division MIST Clarion Global Real Estate Investment Division MIST Legg Mason Value Equity Investment Division MIST SSgA Growth ETF Investment Division MIST SSgA Growth and Income ETF Investment Division MIST PIMCO Inflation Protected Bond Investment Division MIST Janus Forty Investment Division MIST BlackRock Large Cap Core Investment Division Variable B Investment Division Variable C Investment Division MIST American Funds Balanced Allocation Investment Division MIST American Funds Growth Allocation Investment Division MIST American Funds Moderate Allocation Investment Division MIST Met/Templeton Growth Investment Division MIST Met/Franklin Income Investment Division MIST Met/Franklin Mutual Shares Investment Division MIST Met/Franklin Templeton Founding Strategy Investment Division American Funds Growth Investment Division American Funds Growth-Income Investment Division American Funds Global Small Capitalization Investment Division American Funds Bond Investment Division METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2008 MSF BLACKROCK MSF BLACKROCK MSF METLIFE STOCK MSF JULIUS BAER DIVERSIFIED AGGRESSIVE GROWTH INDEX INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 719,505,429 $ 344,652,538 $ 1,968,763,192 $ 168,220,428 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- 219 -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 719,505,429 344,652,757 1,968,763,192 168,220,428 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- 287 -- -- Due to Metropolitan Life Insurance Company 1,088 1,599 1,502 1,512 ------------------- ------------------- ------------------- ------------------- Total Liabilities 1,088 1,886 1,502 1,512 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 719,504,341 $ 344,650,871 $ 1,968,761,690 $ 168,218,916 =================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units $ 713,987,022 $ 344,361,801 $ 1,954,212,854 $ 167,959,495 Net assets from contracts in payout 5,517,319 289,070 14,548,836 259,421 ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 719,504,341 $ 344,650,871 $ 1,968,761,690 $ 168,218,916 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 1 MSF NEUBERGER MSF FI MID CAP MSF T. ROWE PRICE MSF OPPENHEIMER BERMAN MID CAP MSF T. ROWE PRICE OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY MSF MFS VALUE VALUE LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,905,268 $ 136,697,805 $ 137,023,864 $ 215,869,154 $ 280,524,425 $ 131,352,473 -- 287 -- -- -- -- -- -- -- -- -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 254,905,268 136,698,092 137,023,864 215,869,154 280,524,425 131,352,473 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 1,822 1,902 1,560 1,696 1,422 1,606 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 1,822 1,902 1,560 1,696 1,422 1,606 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,903,446 $ 136,696,190 $ 137,022,304 $ 215,867,458 $ 280,523,003 $ 131,350,867 =================== =================== =================== =================== =================== =================== $ 254,467,741 $ 136,501,041 $ 136,937,895 $ 213,342,591 $ 280,334,846 $ 128,149,305 435,705 195,149 84,409 2,524,867 188,157 3,201,562 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,903,446 $ 136,696,190 $ 137,022,304 $ 215,867,458 $ 280,523,003 $ 131,350,867 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 2 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF LEHMAN BROTHERS AGGREGATE MSF MORGAN STANLEY MSF RUSSELL 2000 MSF JENNISON BOND INDEX EAFE INDEX INDEX GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 759,755,215 $ 308,390,976 $ 182,882,674 $ 23,642,653 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 759,755,215 308,390,976 182,882,674 23,642,653 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 1,354 2,155 2,072 1,379 ------------------- ------------------- ------------------- ------------------- Total Liabilities 1,354 2,155 2,072 1,379 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 759,753,861 $ 308,388,821 $ 182,880,602 $ 23,641,274 =================== =================== =================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 757,702,477 $ 308,150,781 $ 182,715,962 $ 23,633,034 Net assets from contracts in payout 2,051,384 238,040 164,640 8,240 ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 759,753,861 $ 308,388,821 $ 182,880,602 $ 23,641,274 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 3 MSF FRANKLIN MSF BLACKROCK MSF METLIFE TEMPLETON SMALL CAP MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK STRATEGIC VALUE MID CAP STOCK INDEX GROWTH LARGE CAP VALUE BOND INCOME MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,884,699 $ 231,340,931 $ 27,325,305 $ 139,486,479 $ 398,661,239 $ 66,589,774 -- -- -- -- -- -- -- -- -- -- -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 254,884,699 231,340,931 27,325,305 139,486,479 398,661,239 66,589,774 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 2,031 1,683 2,170 1,936 1,457 1,145 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 2,031 1,683 2,170 1,936 1,457 1,145 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,882,668 $ 231,339,248 $ 27,323,135 $ 139,484,543 $ 398,659,782 $ 66,588,629 =================== =================== =================== =================== =================== =================== $ 254,818,572 $ 231,139,386 $ 27,279,163 $ 139,447,626 $ 397,682,471 $ 66,588,629 64,096 199,862 43,972 36,917 977,311 -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 254,882,668 $ 231,339,248 $ 27,323,135 $ 139,484,543 $ 398,659,782 $ 66,588,629 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 4 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF WESTERN ASSET MSF HARRIS MANAGEMENT MSF DAVIS VENTURE MSF LOOMIS SAYLES OAKMARK FOCUSED STRATEGIC BOND VALUE SMALL CAP VALUE OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 337,855,946 $ 87,082,317 $ 153,232,980 $ 198,914,713 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 337,855,946 87,082,317 153,232,980 198,914,713 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 1,785 1,952 1,791 1,864 ------------------- ------------------- ------------------- ------------------- Total Liabilities 1,785 1,952 1,791 1,864 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 337,854,161 $ 87,080,365 $ 153,231,189 $ 198,912,849 =================== =================== =================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 337,446,404 $ 86,915,470 $ 153,185,271 $ 198,807,784 Net assets from contracts in payout 407,757 164,895 45,918 105,065 ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 337,854,161 $ 87,080,365 $ 153,231,189 $ 198,912,849 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 5 MSF WESTERN ASSET MSF BLACKROCK MSF METLIFE MSF METLIFE MANAGEMENT MSF FI VALUE MSF MFS TOTAL LEGACY LARGE CAP CONSERVATIVE CONSERVATIVE TO U.S. GOVERNMENT LEADERS RETURN GROWTH ALLOCATION MODERATE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 189,118,116 $ 52,448,466 $ 92,085,896 $ 52,573,233 $ 165,880,716 $ 506,345,374 -- -- -- -- -- -- -- 156 -- -- -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 189,118,116 52,448,622 92,085,896 52,573,233 165,880,716 506,345,374 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 1,770 1,736 1,022 1,245 1,062 1,028 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 1,770 1,736 1,022 1,245 1,062 1,028 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 189,116,346 $ 52,446,886 $ 92,084,874 $ 52,571,988 $ 165,879,654 $ 506,344,346 =================== =================== =================== =================== =================== =================== $ 188,999,088 $ 52,423,622 $ 91,994,567 $ 52,545,219 $ 165,879,619 $ 506,013,089 117,258 23,264 90,307 26,769 35 331,257 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 189,116,346 $ 52,446,886 $ 92,084,874 $ 52,571,988 $ 165,879,654 $ 506,344,346 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 6 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MSF METLIFE MSF METLIFE MODERATE TO MSF METLIFE MODERATE ALLOCATION AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION MSF FI LARGE CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------- --------------------- ------------------- ASSETS: Investments at fair value $ 1,210,837,752 $ 974,542,332 $ 54,042,897 $ 5,660,708 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- --------------------- --------------------- ------------------- Total Assets 1,210,837,752 974,542,332 54,042,897 5,660,708 ------------------- --------------------- --------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 907 919 1,131 809 ------------------- --------------------- --------------------- ------------------- Total Liabilities 907 919 1,131 809 ------------------- --------------------- --------------------- ------------------- NET ASSETS $ 1,210,836,845 $ 974,541,413 $ 54,041,766 $ 5,659,899 =================== ===================== ===================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 1,210,212,099 $ 971,933,929 $ 52,809,047 $ 5,659,899 Net assets from contracts in payout 624,746 2,607,484 1,232,719 -- ------------------- --------------------- --------------------- ------------------- Total Net Assets $ 1,210,836,845 $ 974,541,413 $ 54,041,766 $ 5,659,899 =================== ===================== ===================== ===================
The accompanying notes are an integral part of these financial statements. 7 FIDELITY VIP FIDELITY VIP MONEY FIDELITY VIP INVESTMENT GRADE CALVERT SOCIAL CALVERT SOCIAL MARKET EQUITY-INCOME FIDELITY VIP GROWTH BOND BALANCED MID CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 14,823,293 $ 57,286,750 $ 65,868,929 $ 17,363,023 $ 39,626,374 $ 7,315,075 -- -- -- -- -- -- -- 3 7 -- -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 14,823,293 57,286,753 65,868,936 17,363,023 39,626,374 7,315,075 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 13 -- -- 1 624 66 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 13 -- -- 1 624 66 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 14,823,280 $ 57,286,753 $ 65,868,936 $ 17,363,022 $ 39,625,750 $ 7,315,009 =================== =================== =================== =================== =================== =================== $ 14,823,280 $ 57,286,753 $ 65,868,936 $ 17,363,022 $ 39,625,750 $ 7,315,009 -- -- -- -- -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 14,823,280 $ 57,286,753 $ 65,868,936 $ 17,363,022 $ 39,625,750 $ 7,315,009 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 8 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST LORD ABBETT MIST MFS RESEARCH MIST T. ROWE PRICE MIST PIMCO TOTAL BOND DEBENTURE INTERNATIONAL MID CAP GROWTH RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 173,953,713 $ 169,988,355 $ 116,816,618 $ 481,435,223 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 173,953,713 169,988,355 116,816,618 481,435,223 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 1,775 1,690 1,753 1,492 ------------------- ------------------- ------------------- ------------------- Total Liabilities 1,775 1,690 1,753 1,492 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 173,951,938 $ 169,986,665 $ 116,814,865 $ 481,433,731 =================== =================== =================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 173,796,839 $ 169,933,571 $ 116,761,148 $ 481,159,353 Net assets from contracts in payout 155,099 53,094 53,717 274,378 ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 173,951,938 $ 169,986,665 $ 116,814,865 $ 481,433,731 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 9 MIST HARRIS MIST LEGG MASON MIST RCM MIST LAZARD MIST MET/AIM OAKMARK MIST OPPENHEIMER PARTNERS AGGRESSIVE TECHNOLOGY MID CAP SMALL CAP GROWTH INTERNATIONAL CAPITAL APPRECIATION GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- $ 52,973,484 $ 36,152,911 $ 19,718,856 $ 167,005,190 $ 19,599,325 $ 15,531,861 -- -- -- -- -- -- -- -- -- -- -- -- ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- 52,973,484 36,152,911 19,718,856 167,005,190 19,599,325 15,531,861 ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- -- -- -- -- -- -- 1,888 1,856 2,092 1,686 1,428 1,469 ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- 1,888 1,856 2,092 1,686 1,428 1,469 ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- $ 52,971,596 $ 36,151,055 $ 19,716,764 $ 167,003,504 $ 19,597,897 $ 15,530,392 =================== =================== =================== =================== ==================== =================== $ 52,965,789 $ 36,121,798 $ 19,716,343 $ 166,948,830 $ 19,596,084 $ 15,528,150 5,807 29,257 421 54,674 1,813 2,242 ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- $ 52,971,596 $ 36,151,055 $ 19,716,764 $ 167,003,504 $ 19,597,897 $ 15,530,392 =================== =================== =================== =================== ==================== ===================
The accompanying notes are an integral part of these financial statements. 10 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST THIRD AVENUE MIST CLARION GLOBAL MIST LEGG MASON MIST SSGA GROWTH SMALL CAP VALUE REAL ESTATE VALUE EQUITY ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 5,140,822 $ 153,314,432 $ 14,232,931 $ 6,835,860 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 5,140,822 153,314,432 14,232,931 6,835,860 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 377 1,413 1,558 1,278 ------------------- ------------------- ------------------- ------------------- Total Liabilities 377 1,413 1,558 1,278 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 5,140,445 $ 153,313,019 $ 14,231,373 $ 6,834,582 =================== =================== =================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 5,140,445 $ 153,231,167 $ 14,228,972 $ 6,834,582 Net assets from contracts in payout -- 81,852 2,401 -- ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 5,140,445 $ 153,313,019 $ 14,231,373 $ 6,834,582 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 11 MIST PIMCO MIST SSGA GROWTH INFLATION PROTECTED MIST BLACKROCK AND INCOME ETF BOND MIST JANUS FORTY LARGE CAP CORE VARIABLE B VARIABLE C INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,768,518 $ 184,376,932 $ 139,406,933 $ 589,512,738 $ 14,787,959 $ 1,191,323 -- -- -- -- -- -- -- -- -- -- -- 18 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 8,768,518 184,376,932 139,406,933 589,512,738 14,787,959 1,191,341 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 1,067 1,197 1,238 1,969 33 1 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 1,067 1,197 1,238 1,969 33 1 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,767,451 $ 184,375,735 $ 139,405,695 $ 589,510,769 $ 14,787,926 $ 1,191,340 =================== =================== =================== =================== =================== =================== $ 8,767,451 $ 184,284,351 $ 139,397,786 $ 585,878,899 $ 14,419,000 $ 1,191,340 -- 91,384 7,909 3,631,870 368,926 -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,767,451 $ 184,375,735 $ 139,405,695 $ 589,510,769 $ 14,787,926 $ 1,191,340 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 12 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 MIST AMERICAN MIST AMERICAN MIST AMERICAN FUNDS BALANCED FUNDS GROWTH FUNDS MODERATE MIST MET/TEMPLETON ALLOCATION ALLOCATION ALLOCATION GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value $ 63,742,012 $ 99,007,477 $ 116,912,607 $ 2,168,441 Other receivables -- -- -- -- Due from Metropolitan Life Insurance Company -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets 63,742,012 99,007,477 116,912,607 2,168,441 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Other payables -- -- -- -- Due to Metropolitan Life Insurance Company 926 778 756 584 ------------------- ------------------- ------------------- ------------------- Total Liabilities 926 778 756 584 ------------------- ------------------- ------------------- ------------------- NET ASSETS $ 63,741,086 $ 99,006,699 $ 116,911,851 $ 2,167,857 =================== =================== =================== =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 63,732,012 $ 98,998,409 $ 116,911,851 $ 2,167,857 Net assets from contracts in payout 9,074 8,290 -- -- ------------------- ------------------- ------------------- ------------------- Total Net Assets $ 63,741,086 $ 99,006,699 $ 116,911,851 $ 2,167,857 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 13 MIST MET/FRANKLIN AMERICAN FUNDS MIST MET/FRANKLIN MIST MET/FRANKLIN TEMPLETON FOUNDING AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL INCOME MUTUAL SHARES STRATEGY GROWTH GROWTH-INCOME CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,487,795 $ 4,603,107 $ 19,767,715 $ 745,810,114 $ 506,871,758 $ 312,336,430 -- -- -- -- -- -- -- -- -- 6 -- -- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 8,487,795 4,603,107 19,767,715 745,810,120 506,871,758 312,336,430 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- -- -- -- -- -- 803 687 767 1,492 1,769 2,064 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 803 687 767 1,492 1,769 2,064 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,486,992 $ 4,602,420 $ 19,766,948 $ 745,808,628 $ 506,869,989 $ 312,334,366 =================== =================== =================== =================== =================== =================== $ 8,486,992 $ 4,602,420 $ 19,766,948 $ 745,503,582 $ 506,667,199 $ 312,223,823 -- -- -- 305,046 202,790 110,543 ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ 8,486,992 $ 4,602,420 $ 19,766,948 $ 745,808,628 $ 506,869,989 $ 312,334,366 =================== =================== =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 14 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2008 AMERICAN FUNDS BOND INVESTMENT DIVISION ------------------- ASSETS: Investments at fair value $ 126,246,128 Other receivables -- Due from Metropolitan Life Insurance Company -- ------------------- Total Assets 126,246,128 ------------------- LIABILITIES: Other payables -- Due to Metropolitan Life Insurance Company 1,591 ------------------- Total Liabilities 1,591 ------------------- NET ASSETS $ 126,244,537 =================== CONTRACT OWNER'S EQUITY Net assets from accumulation units $ 125,965,099 Net assets from contracts in payout 279,438 ------------------- Total Net Assets $ 126,244,537 ===================
The accompanying notes are an integral part of these financial statements. 15 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008 MSF BLACKROCK MSF BLACKROCK MSF METLIFE STOCK MSF JULIUS BAER DIVERSIFIED AGGRESSIVE GROWTH INDEX INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- ---------------------- -------------------- INVESTMENT INCOME: Dividends $ 27,018,369 $ -- $ 51,500,668 $ 7,448,696 ---------------------- ---------------------- ---------------------- -------------------- EXPENSES: Mortality and expense risk charges 9,990,738 5,679,708 28,209,867 2,530,568 Administrative charges 1,934,314 1,124,822 5,686,906 525,038 ---------------------- ---------------------- ---------------------- -------------------- Total expenses 11,925,052 6,804,530 33,896,773 3,055,606 ---------------------- ---------------------- ---------------------- -------------------- Net investment income (loss) . 15,093,317 (6,804,530) 17,603,895 4,393,090 ---------------------- ---------------------- ---------------------- -------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 10,620,443 -- 115,182,656 29,538,566 Realized gains (losses) on sale of investments (16,558,882) 5,954,871 (10,758,603) (886,827) ---------------------- ---------------------- ---------------------- -------------------- Net realized gains (losses) (5,938,439) 5,954,871 104,424,053 28,651,739 ---------------------- ---------------------- ---------------------- -------------------- Change in unrealized gains (losses) on investments (287,815,793) (306,582,797) (1,329,511,835) (171,494,955) ---------------------- ---------------------- ---------------------- -------------------- Net realized and unrealized gains (losses) on investments (293,754,232) (300,627,926) (1,225,087,782) (142,843,216) ---------------------- ---------------------- ---------------------- -------------------- Net increase (decrease) in net assets resulting from operations $ (278,660,915) $ (307,432,456) $ (1,207,483,887) $ (138,450,126) ====================== ====================== ====================== ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 17 MSF NEUBERGER MSF FI MID CAP MSF T. ROWE PRICE MSF OPPENHEIMER BERMAN MID CAP MSF T. ROWE PRICE OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY MSF MFS VALUE VALUE LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- $ 1,790,311 $ -- $ 4,214,154 $ 5,386,703 $ 3,155,724 $915,588 --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- 4,693,738 1,950,592 2,061,385 3,135,585 4,767,535 2,080,861 945,685 397,878 426,165 655,703 1,009,668 423,344 --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- 5,639,423 2,348,470 2,487,550 3,791,288 5,777,203 2,504,205 --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- (3,849,112) (2,348,470) 1,726,604 1,595,415 (2,621,479) (1,588,617) --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- -- 37,901,589 7,583,669 66,077,544 5,561,514 11,191,091 (11,078,849) 1,687,795 207,176 (52,583,794) (8,728,012) 1,095,906 --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- (11,078,849) 39,589,384 7,790,845 13,493,750 (3,166,498) 12,286,997 --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- (311,831,109) (119,226,170) (110,012,034) (136,212,289) (253,817,998) (111,120,466) --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- (322,909,958) (79,636,786) (102,221,189) (122,718,539) (256,984,496) (98,833,469) --------------------- --------------------- --------------------- --------------------- ---------------------- ------------------- $ (326,759,070) $ (81,985,256) $ (100,494,585) $ (121,123,124) $ (259,605,975) $ (100,422,086) ===================== ===================== ===================== ===================== ====================== ===================
The accompanying notes are an integral part of these financial statements. 18 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF LEHMAN BROTHERS AGGREGATE MSF MORGAN STANLEY MSF RUSSELL 2000 MSF JENNISON BOND INDEX EAFE INDEX INDEX GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ---------------------- ---------------------- -------------------- INVESTMENT INCOME: Dividends $ 39,809,989 $ 11,590,326 $ 2,804,071 $ 771,181 ------------------- ---------------------- ---------------------- -------------------- EXPENSES: Mortality and expense risk charges 9,652,038 4,430,182 2,551,572 353,872 Administrative charges 2,064,201 941,637 533,480 72,294 ------------------- ---------------------- ---------------------- -------------------- Total expenses 11,716,239 5,371,819 3,085,052 426,166 ------------------- ---------------------- ---------------------- -------------------- Net investment income (loss) . 28,093,750 6,218,507 (280,981) 345,015 ------------------- ---------------------- ---------------------- -------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 16,975,278 12,237,216 2,781,644 Realized gains (losses) on sale of investments 1,849,939 6,342,547 (4,186,063) (918,511) ------------------- ---------------------- ---------------------- -------------------- Net realized gains (losses) 1,849,939 23,317,825 8,051,153 1,863,133 ------------------- ---------------------- ---------------------- -------------------- Change in unrealized gains (losses) on investments 4,218,222 (246,513,229) (103,961,893) (16,802,485) ------------------- ---------------------- ---------------------- -------------------- Net realized and unrealized gains (losses) on investments 6,068,161 (223,195,404) (95,910,740) (14,939,352) ------------------- ---------------------- ---------------------- -------------------- Net increase (decrease) in net assets resulting from operations $ 34,161,911 $ (216,976,897) $ (96,191,721) $ (14,594,337) =================== ====================== ====================== ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 19 MSF FRANKLIN MSF BLACKROCK MSF METLIFE TEMPLETON SMALL CAP MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK STRATEGIC VALUE MID CAP STOCK INDEX GROWTH LARGE CAP VALUE BOND INCOME MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- $ 1,618,807 $ 4,087,062 $ -- $ 1,103,197 $ 24,088,191 $ 1,336,821 --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- 4,046,687 3,319,815 408,667 1,954,164 4,957,805 660,999 845,522 702,923 87,026 427,823 1,029,922 130,332 --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- 4,892,209 4,022,738 495,693 2,381,987 5,987,727 791,331 --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- (3,273,402) 64,324 (495,693) (1,278,790) 18,100,464 545,490 --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- 38,408,944 29,914,462 3,996,634 3,028,129 -- -- (27,068,109) (2,636,748) (2,146,790) (4,568,986) (3,943,949) -- --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- 11,340,835 27,277,714 1,849,844 (1,540,857) (3,943,949) --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- (183,469,412) (158,842,520) (21,285,688) (74,651,878) (37,593,526) -- --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- (172,128,577) (131,564,806) (19,435,844) (76,192,735) (41,537,475) -- --------------------- --------------------- --------------------- ---------------------- ---------------------- ------------------- $ (175,401,979) $ (131,500,482) $ (19,931,537) $ (77,471,525) $ (23,437,011) $ 545,490 ===================== ===================== ===================== ====================== ====================== ===================
The accompanying notes are an integral part of these financial statements. 20 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF WESTERN ASSET MSF HARRIS MANAGEMENT MSF DAVIS VENTURE MSF LOOMIS SAYLES OAKMARK FOCUSED STRATEGIC BOND VALUE SMALL CAP VALUE OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- --------------------- ------------------- INVESTMENT INCOME: Dividends $ 5,540,163 $ -- $ 569,427 $ 10,427,758 ---------------------- ---------------------- --------------------- ------------------- EXPENSES: Mortality and expense risk charges 5,011,666 1,235,937 2,641,484 2,789,113 Administrative charges 1,098,371 266,543 559,987 658,444 ---------------------- ---------------------- --------------------- ------------------- Total expenses 6,110,037 1,502,480 3,201,471 3,447,557 ---------------------- ---------------------- --------------------- ------------------- Net investment income (loss) . (569,874) (1,502,480) (2,632,044) 6,980,201 ---------------------- ---------------------- --------------------- ------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 2,678,826 19,326,180 30,079,740 1,609,895 Realized gains (losses) on sale of investments 1,640,660 (6,188,727) (21,516,510) (7,267,684) ---------------------- ---------------------- --------------------- ------------------- Net realized gains (losses) 4,319,486 13,137,453 8,563,230 (5,657,789) ---------------------- ---------------------- --------------------- ------------------- Change in unrealized gains (losses) on investments (231,226,504) (62,154,742) (147,799,720) (46,018,322) ---------------------- ---------------------- --------------------- ------------------- Net realized and unrealized gains (losses) on investments (226,907,018) (49,017,289) (139,236,490) (51,676,111) ---------------------- ---------------------- --------------------- ------------------- Net increase (decrease) in net assets resulting from operations $ (227,476,892) $ (50,519,769) $ (141,868,534) $ (44,695,910) ====================== ====================== ===================== ===================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 21 MSF WESTERN MSF BLACKROCK MSF METLIFE MSF METLIFE ASSET MANAGEMENT MSF FI VALUE MSF MFS TOTAL LEGACY LARGE CAP CONSERVATIVE CONSERVATIVE TO U.S. GOVERNMENT LEADERS RETURN GROWTH ALLOCATION MODERATE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- $ 8,760,641 $ 1,277,760 $ 4,173,113 $ 119,226 $ 1,517,398 $ 5,707,345 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 2,287,821 809,148 1,143,384 659,426 1,778,530 5,756,840 501,135 178,347 250,200 140,745 395,768 1,291,836 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 2,788,956 987,495 1,393,584 800,171 2,174,298 7,048,676 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 5,971,685 290,265 2,779,529 (680,945) (656,900) (1,341,331) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- -- 8,061,678 9,384,954 -- 1,336,303 5,952,859 (819,931) (5,190,297) (4,122,629) (670,672) (1,989,311) (4,147,809) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (819,931) 2,871,381 5,262,325 (670,672) (653,008) 1,805,050 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (9,157,472) (39,737,354) (37,985,168) (25,252,337) (26,911,119) (135,592,725) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (9,977,403) (36,865,973) (32,722,843) (25,923,009) (27,564,127) (133,787,675) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- $ (4,005,718) $ (36,575,708) $ (29,943,314) $ (26,603,954) $ (28,221,027) $ (135,129,006) ===================== ===================== ===================== ===================== ===================== ====================
The accompanying notes are an integral part of these financial statements. 22 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MSF METLIFE MSF METLIFE MODERATE TO MSF METLIFE MODERATE ALLOCATION AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION MSF FI LARGE CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ----------------------- ----------------------- -------------------- INVESTMENT INCOME: Dividends $ 10,446,088 $ 6,763,637 $ 404,948 $ -- -------------------- ----------------------- ----------------------- -------------------- EXPENSES: Mortality and expense risk charges 14,169,702 12,117,556 728,064 65,013 Administrative charges 3,221,046 2,745,922 168,902 14,333 -------------------- ----------------------- ----------------------- -------------------- Total expenses 17,390,748 14,863,478 896,966 79,346 -------------------- ----------------------- ----------------------- -------------------- Net investment income (loss) (6,944,660) (8,099,841) (492,018) (79,346) -------------------- ----------------------- ----------------------- -------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 16,703,877 18,062,072 2,063,244 -- Realized gains (losses) on sale of investments (7,178,153) (8,626,491) (2,535,486) (422,031) -------------------- ----------------------- ----------------------- -------------------- Net realized gains (losses) 9,525,724 9,435,581 (472,242) (422,031) -------------------- ----------------------- ----------------------- -------------------- Change in unrealized gains (losses) on investments (459,107,249) (488,346,641) (34,425,691) (3,050,418) -------------------- ----------------------- ----------------------- -------------------- Net realized and unrealized gains (losses) on investments (449,581,525) (478,911,060) (34,897,933) (3,472,449) -------------------- ----------------------- ----------------------- -------------------- Net increase (decrease) in net assets resulting from operations $ (456,526,185) $ (487,010,901) $ (35,389,951) $ (3,551,795) ==================== ======================= ======================= ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 23 FIDELITY VIP FIDELITY VIP MONEY FIDELITY VIP INVESTMENT GRADE CALVERT SOCIAL CALVERT SOCIAL MARKET EQUITY-INCOME FIDELITY VIP GROWTH BOND BALANCED MID CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- $ 476,603 $ 2,129,862 $ 849,577 $ 838,805 $ 1,323,064 $ -- ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- 119,158 688,428 829,189 145,233 514,857 78,075 32,060 162,538 194,141 38,947 98,266 20,922 ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- 151,218 850,966 1,023,330 184,180 613,123 98,997 ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- 325,385 1,278,896 (173,753) 654,625 709,941 (98,997) ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- -- 98,851 -- 16,287 739,130 71,879 -- (3,150,137) (1,666,048) (226,613) (864,803) 137,442 ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- -- (3,051,286) (1,666,048) (210,326) (125,673) 209,321 ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- -- (45,260,016) (61,901,896) (1,252,833) (19,774,020) (4,605,855) ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- -- (48,311,302) (63,567,944) (1,463,159) (19,899,693) (4,396,534) ------------------- ---------------------- ---------------------- ---------------------- -------------------- -------------------- $ 325,385 $ (47,032,406) $ (63,741,697) $ (808,534) $ (19,189,752) $ (4,495,531) =================== ====================== ====================== ====================== ==================== ====================
The accompanying notes are an integral part of these financial statements. 24 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST LORD ABBETT MIST MFS RESEARCH MIST T. ROWE PRICE MIST PIMCO TOTAL BOND DEBENTURE INTERNATIONAL MID CAP GROWTH RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends $ 9,549,645 $ 3,794,193 $ 34,818 $ 19,697,044 ---------------------- ---------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges 2,406,692 2,279,297 1,758,111 5,557,903 Administrative charges 518,876 493,740 373,804 1,211,971 ---------------------- ---------------------- -------------------- -------------------- Total expenses 2,925,568 2,773,037 2,131,915 6,769,874 ---------------------- ---------------------- -------------------- -------------------- Net investment income (loss) 6,624,077 1,021,156 (2,097,097) 12,927,170 ---------------------- ---------------------- -------------------- -------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 3,402,995 20,792,461 19,219,639 12,454,035 Realized gains (losses) on sale of investments (5,171,820) (10,709,339) (4,202,691) (966,377) ---------------------- ---------------------- -------------------- -------------------- Net realized gains (losses) (1,768,825) 10,083,122 15,016,948 11,487,658 ---------------------- ---------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments (51,664,533) (134,576,886) (91,290,543) (31,136,212) ---------------------- ---------------------- -------------------- -------------------- Net realized and unrealized gains (losses) on investments (53,433,358) (124,493,764) (76,273,595) (19,648,554) ---------------------- ---------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations $ (46,809,281) $ (123,472,608) $ (78,370,692) $ (6,721,384) ====================== ====================== ==================== ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 25 MIST HARRIS MIST LEGG MIST RCM MIST LAZARD MID MIST MET/AIM OAKMARK MIST OPPENHEIMER MASON PARTNERS TECHNOLOGY CAP SMALL CAP GROWTH INTERNATIONAL CAPITAL APPRECIATION AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- $ 11,522,149 $ 542,619 $ -- $ 4,338,583 $ 957,085 $ 1,631 -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- 922,802 577,127 303,981 2,716,255 303,117 237,758 194,037 125,169 64,909 594,454 64,883 49,506 -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- 1,116,839 702,296 368,890 3,310,709 368,000 287,264 -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- 10,405,310 (159,677) (368,890) 1,027,874 589,085 (285,633) -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- 24,250,593 4,182,174 2,565,478 44,083,954 7,574,969 184,416 (12,556,603) (5,872,170) (1,261,796) (25,719,969) (2,109,855) (1,593,479) -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- 11,693,990 (1,689,996) 1,303,682 18,363,985 5,465,114 (1,409,063) -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- (69,324,906) (22,366,432) (13,977,407) (150,086,242) (21,467,507) (8,851,362) -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- (57,630,916) (24,056,428) (12,673,725) (131,722,257) (16,002,393) (10,260,425) -------------------- ---------------------- --------------------- --------------------- ---------------------- -------------------- $ (47,225,606) $ (24,216,105) $ (13,042,615) $ (130,694,383) $ (15,413,308) $ (10,546,058) ==================== ====================== ===================== ===================== ====================== ====================
The accompanying notes are an integral part of these financial statements. 26 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST THIRD AVENUE MIST CLARION GLOBAL MIST LEGG MASON MIST SSGA GROWTH SMALL CAP VALUE REAL ESTATE VALUE EQUITY ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends $ 43,813 $ 3,892,248 $ 31,064 $ 145,069 ---------------------- --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges 55,093 2,476,280 243,454 104,631 Administrative charges 14,932 538,345 51,357 22,690 ---------------------- --------------------- --------------------- -------------------- Total expenses 70,025 3,014,625 294,811 127,321 ---------------------- --------------------- --------------------- -------------------- Net investment income (loss) (26,212) 877,623 (263,747) 17,748 ---------------------- --------------------- --------------------- -------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 400,695 22,702,185 994,313 209,116 Realized gains (losses) on sale of investments (182,577) (18,120,212) (2,135,384) (990,603) ---------------------- --------------------- --------------------- -------------------- Net realized gains (losses) 218,118 4,581,973 (1,141,071) (781,487) ---------------------- --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments (2,248,427) (118,403,745) (15,608,813) (3,117,487) ---------------------- --------------------- --------------------- -------------------- Net realized and unrealized gains (losses) on investments (2,030,309) (113,821,772) (16,749,884) (3,898,974) ---------------------- --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations $ (2,056,521) $ (112,944,149) $ (17,013,631) $ (3,881,226) ====================== ===================== ===================== ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 27 MIST PIMCO MIST SSGA GROWTH INFLATION PROTECTED MIST BLACKROCK AND INCOME ETF BOND MIST JANUS FORTY LARGE CAP CORE VARIABLE B VARIABLE C INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- $ 109,437 $ 5,854,935 $ 6,531,461 $ 5,958,649 $ 155,183 $ 12,822 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 75,008 1,824,970 1,492,091 8,124,593 196,021 5,701 16,139 394,774 319,606 1,706,770 -- -- --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 91,147 2,219,744 1,811,697 9,831,363 196,021 5,701 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 18,290 3,635,191 4,719,764 (3,872,714) (40,838) 7,121 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- 131,513 320,536 2,834,948 39,534,457 1,013,703 83,754 (268,529) (4,288,676) (5,851,116) (35,311,954) (1,125,232) (73,333) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (137,016) (3,968,140) (3,016,168) 4,222,503 (111,529) 10,421 --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (2,073,544) (24,763,988) (89,296,980) (388,077,399) (9,765,246) (789,938) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- (2,210,560) (28,732,128) (92,313,148) (383,854,896) (9,876,775) (779,517) --------------------- --------------------- --------------------- --------------------- --------------------- -------------------- $ (2,192,270) $ (25,096,937) $ (87,593,384) $ (387,727,610) $ (9,917,613) $ (772,396) ===================== ===================== ===================== ===================== ===================== ====================
The accompanying notes are an integral part of these financial statements. 28 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 MIST AMERICAN MIST AMERICAN MIST AMERICAN FUNDS BALANCED FUNDS GROWTH FUNDS MODERATE MIST MET/TEMPLETON ALLOCATION ALLOCATION ALLOCATION GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (A) DIVISION (A) DIVISION (A) DIVISION (A) ---------------------- --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends $ 2,304,273 $ 4,270,046 $ 4,181,122 $ 10,214 ---------------------- --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges 245,102 438,549 427,600 7,085 Administrative charges 53,725 97,640 99,046 1,614 ---------------------- --------------------- --------------------- --------------------- Total expenses 298,827 536,189 526,646 8,699 ---------------------- --------------------- --------------------- --------------------- Net investment income (loss) 2,005,446 3,733,857 3,654,476 1,515 ---------------------- --------------------- --------------------- --------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 3,594 1,805 3,738 -- Realized gains (losses) on sale of investments (358,964) (122,267) (641,768) (15,247) ---------------------- --------------------- --------------------- --------------------- Net realized gains (losses) (355,370) (120,462) (638,030) (15,247) ---------------------- --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments (15,004,519) (33,400,127) (19,899,584) (414,664) ---------------------- --------------------- --------------------- --------------------- Net realized and unrealized gains (losses) on investments (15,359,889) (33,520,589) (20,537,614) (429,911) ---------------------- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations $ (13,354,443) $ (29,786,732) $ (16,883,138) $ (428,396) ====================== ===================== ===================== ====================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 29 MIST MET/FRANKLIN MIST MET/FRANKLIN MIST MET/FRANKLIN TEMPLETON FOUNDING AMERICAN FUNDS INCOME MUTUAL SHARES STRATEGY AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL INVESTMENT INVESTMENT INVESTMENT GROWTH GROWTH-INCOME CAPITALIZATION DIVISION (A) DIVISION (A) DIVISION (A) INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- $ 198,175 $ 133,573 $ 360,930 $ 8,975,866 $ 12,171,191 $ -- -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- 31,776 16,937 81,105 13,531,776 8,860,379 6,554,948 7,128 3,810 18,171 2,560,241 1,678,026 1,231,688 -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- 38,904 20,747 99,276 16,092,017 10,538,405 7,786,636 -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- 159,271 112,826 261,654 (7,116,151) 1,632,786 (7,786,636) -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- -- -- -- 125,268,695 48,212,765 74,424,271 (70,887) (88,815) (491,774) (5,200,771) (4,557,224) (15,163,370) -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- (70,887) (88,815) (491,774) 120,067,924 43,655,541 59,260,901 -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- (1,092,658) (1,009,260) (3,971,896) (709,244,939) (378,490,687) (424,560,153) -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- (1,163,545) (1,098,075) (4,463,670) (589,177,015) (334,835,146) (365,299,252) -------------------- -------------------- --------------------- ---------------------- ---------------------- -------------------- $ (1,004,274) $ (985,249) $ (4,202,016) $ (596,293,166) $ (333,202,360) $ (373,085,888) ==================== ==================== ===================== ====================== ====================== ====================
The accompanying notes are an integral part of these financial statements. 30 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31, 2008 AMERICAN FUNDS BOND INVESTMENT DIVISION ---------------------- INVESTMENT INCOME: Dividends $ 7,955,225 ---------------------- EXPENSES: Mortality and expense risk charges 2,004,966 Administrative charges 374,723 ---------------------- Total expenses 2,379,689 ---------------------- Net investment income (loss) 5,575,536 ---------------------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 401,502 Realized gains (losses) on sale of investments (4,434,590) ---------------------- Net realized gains (losses) (4,033,088) ---------------------- Change in unrealized gains (losses) on investments (18,645,250) ---------------------- Net realized and unrealized gains (losses) on investments (22,678,338) ---------------------- Net increase (decrease) in net assets resulting from operations $ (17,102,802) ======================
(a) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 31 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF BLACKROCK DIVERSIFIED MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ---------------------------------- 2008 2007 2008 2007 ---------------- ------------------ ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 15,093,317 $ 16,065,357 $ (6,804,530) $ (8,385,967) Net realized gains (losses) (5,938,439) 1,268,342 5,954,871 (12,628,626) Change in unrealized gains (losses) on investments (287,815,793) 38,016,540 (306,582,797) 138,463,003 ---------------- ------------------ ---------------- ----------------- Net increase (decrease) in net assets resulting from operations (278,660,915) 55,350,239 (307,432,456) 117,448,410 ---------------- ------------------ ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 24,704,198 34,492,312 17,604,963 18,380,390 Net transfers (including fixed account) (88,624,056) (64,493,300) (15,626,557) (19,707,441) Contract charges (247,978) (197,218) (126,350) (63,737) Transfers for contract benefits and terminations (108,043,331) (138,486,147) (51,440,348) (71,882,619) ---------------- ------------------ ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions (172,211,167) (168,684,353) (49,588,292) (73,273,407) ---------------- ------------------ ---------------- ----------------- Net increase (decrease) in net assets (450,872,082) (113,334,114) (357,020,748) 44,175,003 NET ASSETS: Beginning of period 1,170,376,423 1,283,710,537 701,671,619 657,496,616 ---------------- ------------------ ---------------- ----------------- End of Period $ 719,504,341 $ 1,170,376,423 $ 344,650,871 $ 701,671,619 ================ ================== ================ =================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 33 MSF METLIFE STOCK INDEX MSF JULIUS BAER INTERNATIONAL STOCK MSF FI MID CAP OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- -------------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- $ 17,603,895 $ (9,187,992) $ 4,393,090 $ (763,697) $ (3,849,112) $ (7,428,116) 104,424,053 143,574,138 28,651,739 32,254,914 (11,078,849) 4,502,884 (1,329,511,835) (1,489,352) (171,494,955) (5,978,087) (311,831,109) 49,089,439 ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- (1,207,483,887) 132,896,794 (138,450,126) 25,513,130 (326,759,070) 46,164,207 ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- 149,382,855 218,891,625 13,237,983 16,493,302 23,375,440 31,368,010 (34,246,583) (94,831,231) 3,139,416 975,048 (23,722,006) (37,971,819) (2,373,862) (1,407,086) (212,040) (110,022) (173,747) (98,524) (265,918,103) (338,425,280) (19,997,672) (26,933,596) (47,253,012) (72,069,102) ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- (153,155,693) (215,771,972) (3,832,313) (9,575,268) (47,773,325) (78,771,435) ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- (1,360,639,580) (82,875,178) (142,282,439) 15,937,862 (374,532,395) (32,607,228) 3,329,401,270 3,412,276,448 310,501,355 294,563,493 629,435,841 662,043,069 ------------------ ------------------ ---------------- --------------------- ---------------- ---------------- $ 1,968,761,690 $ 3,329,401,270 $ 168,218,916 $ 310,501,355 $ 254,903,446 $ 629,435,841 ================== ================== ================ ===================== ================ ================
The accompanying notes are an integral part of these financial statements. 34 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF T. ROWE PRICE SMALL CAP GROWTH MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- --------------------------------- 2008 2007 2008 2007 ---------------- -------------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (2,348,470) $ (2,997,386) $ 1,726,604 $ (491,281) Net realized gains (losses) 39,589,384 16,625,280 7,790,845 12,387,285 Change in unrealized gains (losses) on investments (119,226,170) 6,111,024 (110,012,034) 820,107 ---------------- -------------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations (81,985,256) 19,738,918 (100,494,585) 12,716,111 ---------------- -------------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 10,068,797 12,737,806 12,848,181 17,320,537 Net transfers (including fixed account) (6,804,195) (16,854,175) (16,076,796) (361,809) Contract charges (115,685) (62,090) (174,941) (98,152) Transfers for contract benefits and terminations (16,610,254) (25,351,633) (17,226,558) (22,876,530) ---------------- -------------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions (13,461,337) (29,530,092) (20,630,114) (6,015,954) ---------------- -------------------- ---------------- ---------------- Net increase (decrease) in net assets (95,446,593) (9,791,174) (121,124,699) 6,700,157 NET ASSETS: Beginning of period 232,142,783 241,933,957 258,147,003 251,446,846 ---------------- -------------------- ---------------- ---------------- End of Period $ 136,696,190 $ 232,142,783 $ 137,022,304 $ 258,147,003 ================ ==================== ================ ================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 35 MSF MFS VALUE MSF NEUBERGER BERMAN MID CAP VALUE MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ------------------------------------- ------------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- -------------- ---------------- -------------------- ---------------- -------------------- $ 1,595,415 $ (2,564,069) $ (2,621,479) $ (5,332,759) $ (1,588,617) $ (2,261,620) 13,493,750 28,665,779 (3,166,498) 39,308,463 12,286,997 8,469,711 (136,212,289) (46,344,683) (253,817,998) (24,173,672) (111,120,466) 11,263,963 ---------------- -------------- ---------------- -------------------- ---------------- -------------------- (121,123,124) (20,242,973) (259,605,975) 9,802,032 (100,422,086) 17,472,054 ---------------- -------------- ---------------- -------------------- ---------------- -------------------- 14,141,395 27,554,369 29,444,351 53,972,583 13,277,073 22,701,745 (34,011,958) (19,751,620) (45,505,737) (6,120,832) (14,766,706) 10,058,513 (368,139) (237,026) (655,333) (406,236) (247,368) (138,333) (26,358,402) (35,997,224) (35,806,410) (48,279,009) (16,431,009) (20,815,134) ---------------- -------------- ---------------- -------------------- ---------------- -------------------- (46,597,104) (28,431,501) (52,523,129) (833,494) (18,168,010) 11,806,791 ---------------- -------------- ---------------- -------------------- ---------------- -------------------- (167,720,228) (48,674,474) (312,129,104) 8,968,538 (118,590,096) 29,278,845 383,587,686 432,262,160 592,652,107 583,683,569 249,940,963 220,662,118 ---------------- -------------- ---------------- -------------------- ---------------- -------------------- $ 215,867,458 $ 383,587,686 $ 280,523,003 $ 592,652,107 $ 131,350,867 $ 249,940,963 ================ ================== ================ ==================== ================ ====================
The accompanying notes are an integral part of these financial statements. 36 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF LEHMAN BROTHERS AGGREGATE BOND INDEX MSF MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------- --------------------------------- 2008 2007 2008 2007 ---------------- -------------------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 28,093,750 $ 27,362,699 $ 6,218,507 $ 2,607,791 Net realized gains (losses) 1,849,939 (404,477) 23,317,825 27,272,800 Change in unrealized gains (losses) on investments 4,218,222 20,257,126 (246,513,229) 9,221,141 ---------------- -------------------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations 34,161,911 47,215,348 (216,976,897) 39,101,732 ---------------- -------------------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 81,547,758 116,092,922 39,371,294 55,950,828 Net transfers (including fixed account) (212,460,336) (3,505,979) 19,649,741 13,656,333 Contract charges (1,639,802) (854,973) (728,158) (414,241) Transfers for contract benefits and terminations (78,347,983) (71,998,691) (31,892,326) (33,634,789) ---------------- -------------------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions (210,900,363) 39,733,279 26,400,551 35,558,131 ---------------- -------------------------- ---------------- ---------------- Net increase (decrease) in net assets (176,738,452) 86,948,627 (190,576,346) 74,659,863 NET ASSETS: Beginning of period 936,492,313 849,543,686 498,965,167 424,305,304 ---------------- -------------------------- ---------------- ---------------- End of Period $ 759,753,861 $ 936,492,313 $ 308,388,821 $ 498,965,167 ================ ========================== ================ ================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 37 MSF RUSSELL 2000 INDEX MSF JENNISON GROWTH MSF BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- --------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ---------------- --------------- ----------------- ---------------- ---------------- $ (280,981) $ (1,446,422) $ 345,015 $ (361,921) $ (3,273,402) $ (6,106,252) 8,051,153 41,165,557 1,863,133 3,465,841 11,340,835 74,178,804 (103,961,893) (48,379,022) (16,802,485) 584,283 (183,469,412) (93,057,997) ---------------- ---------------- --------------- ----------------- ---------------- ---------------- (96,191,721) (8,659,887) (14,594,337) 3,688,203 (175,401,979) (24,985,445) ---------------- ---------------- --------------- ----------------- ---------------- ---------------- 18,435,587 29,589,065 2,030,431 2,393,131 18,351,008 31,811,011 (16,672,694) (16,516,508) (497,604) (1,938,137) (55,251,752) (37,823,921) (322,584) (197,386) (41,242) (18,053) (470,307) (298,964) (19,764,389) (26,251,384) (3,107,521) (3,477,236) (33,968,285) (47,816,109) ---------------- ---------------- --------------- ----------------- ---------------- ---------------- (18,324,080) (13,376,213) (1,615,936) (3,040,295) (71,339,336) (54,127,983) ---------------- ---------------- --------------- ----------------- ---------------- ---------------- (114,515,801) (22,036,100) (16,210,273) 647,908 (246,741,315) (79,113,428) 297,396,403 319,432,503 39,851,547 39,203,639 501,623,983 580,737,411 ---------------- ---------------- --------------- ----------------- ---------------- ---------------- $ 182,880,602 $ 297,396,403 $ 23,641,274 $ 39,851,547 $ 254,882,668 $ 501,623,983 ================ ================ =============== ================= ================ ================
The accompanying notes are an integral part of these financial statements. 38 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF METLIFE MID CAP STOCK INDEX MSF FRANKLIN TEMPLETON SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ------------------- ---------------------- 2008 2007 2008 2007 ---------------- ----------------- --------------- ---------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 64,324 $ (2,399,831) $ (495,693) $ (691,372) Net realized gains (losses) 27,277,714 25,969,992 1,849,844 5,569,080 Change in unrealized gains (losses) on investments (158,842,520) (3,036,301) (21,285,688) (3,224,364) ---------------- ----------------- --------------- ---------------------- Net increase (decrease) in net assets resulting from operations (131,500,482) 20,533,860 (19,931,537) 1,653,344 ---------------- ----------------- --------------- ---------------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 26,059,854 36,022,381 3,125,912 4,698,335 Net transfers (including fixed account) (8,049,268) 5,298,018 (2,681,386) (1,335,069) Contract charges (457,080) (251,883) (56,454) (36,985) Transfers for contract benefits and terminations (24,968,694) (27,293,304) (3,104,229) (4,643,900) ---------------- ----------------- --------------- ---------------------- Net increase (decrease) in net assets resulting from contract transactions (7,415,188) 13,775,212 (2,716,157) (1,317,619) ---------------- ----------------- --------------- ---------------------- Net increase (decrease) in net assets (138,915,670) 34,309,072 (22,647,694) 335,725 NET ASSETS: Beginning of period 370,254,918 335,945,846 49,970,829 49,635,104 ---------------- ----------------- --------------- ---------------------- End of Period $ 231,339,248 $ 370,254,918 $ 27,323,135 $ 49,970,829 ================ ================= =============== ======================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 39 MSF BLACKROCK LARGE CAP VALUE MSF BLACKROCK BOND INCOME MSF BLACKROCK MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- --------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ---------------- ---------------- ---------------- --------------- ----------------- $ (1,278,790) $ (1,158,735) $ 18,100,464 $ 9,330,646 $ 545,490 $ 1,240,721 (1,540,857) 14,560,354 (3,943,949) 316,835 -- -- (74,651,878) (10,520,877) (37,593,526) 13,745,787 -- -- ---------------- ---------------- ---------------- ---------------- --------------- ----------------- (77,471,525) 2,880,742 (23,437,011) 23,393,268 545,490 1,240,721 ---------------- ---------------- ---------------- ---------------- --------------- ----------------- 18,981,250 37,894,427 23,499,633 30,024,041 13,046,919 7,979,964 (15,489,005) 18,731,715 (52,081,296) (480,978) 23,963,759 9,181,845 (388,450) (231,298) (469,327) (252,069) (185,403) (74,151) (12,285,767) (12,584,935) (48,651,239) (49,521,709) (11,026,713) (7,953,205) ---------------- ---------------- ---------------- ---------------- --------------- ----------------- (9,181,972) 43,809,909 (77,702,229) (20,230,715) 25,798,562 9,134,453 ---------------- ---------------- ---------------- ---------------- --------------- ----------------- (86,653,497) 46,690,651 (101,139,240) 3,162,553 26,344,052 10,375,174 226,138,040 179,447,389 499,799,022 496,636,469 40,244,577 29,869,403 ---------------- ---------------- ---------------- ---------------- --------------- ----------------- $ 139,484,543 $ 226,138,040 $ 398,659,782 $ 499,799,022 $ 66,588,629 $ 40,244,577 ================ ================ ================ ================ =============== =================
The accompanying notes are an integral part of these financial statements. 40 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF DAVIS VENTURE VALUE MSF LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- -------------------------------- 2008 2007 2008 2007 ---------------- ---------------- --------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (569,874) $ (3,658,051) $ (1,502,480) $ (1,587,012) Net realized gains (losses) 4,319,486 13,529,472 13,137,453 16,524,548 Change in unrealized gains (losses) on investments (231,226,504) 5,503,204 (62,154,742) (4,729,355) ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations (227,476,892) 15,374,625 (50,519,769) 10,208,181 ---------------- ---------------- --------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 42,071,562 65,094,903 10,287,011 14,598,757 Net transfers (including fixed account) (10,280,401) 27,571,230 (4,889,572) 22,095,701 Contract charges (893,254) (499,823) (230,932) (108,462) Transfers for contract benefits and terminations (34,101,223) (38,127,120) (7,877,048) (7,592,169) ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions (3,203,316) 54,039,190 (2,710,541) 28,993,827 ---------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets (230,680,208) 69,413,815 (53,230,310) 39,202,008 NET ASSETS: Beginning of period 568,534,369 499,120,554 140,310,675 101,108,667 ---------------- ---------------- --------------- ---------------- End of Period $ 337,854,161 $ 568,534,369 $ 87,080,365 $ 140,310,675 ================ ================ =============== ================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 41 MSF WESTERN ASSET MANAGEMENT MSF WESTERN ASSET MANAGEMENT MSF HARRIS OAKMARK FOCUSED VALUE STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- --------------------------------- ----------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ $ (2,632,044) $ (3,325,568) $ 6,980,201 $ 3,641,983 $ 5,971,685 $ 2,549,785 8,563,230 65,624,422 (5,657,789) 518,285 (819,931) (52,907) (147,799,720) (92,557,316) (46,018,322) 3,005,180 (9,157,472) 3,365,489 ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ (141,868,534) (30,258,462) (44,695,910) 7,165,448 (4,005,718) 5,862,367 ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ 12,574,688 24,230,605 15,099,587 28,710,601 15,467,794 21,400,555 (38,094,970) (34,302,290) (47,971,334) 3,019,494 (22,859,916) 6,575,430 (333,316) (234,647) (500,339) (270,312) (377,747) (199,786) (22,284,498) (34,850,717) (21,551,659) (21,904,854) (17,737,642) (17,299,476) ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ (48,138,096) (45,157,049) (54,923,745) 9,554,929 (25,507,511) 10,476,723 ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ (190,006,630) (75,415,511) (99,619,655) 16,720,377 (29,513,229) 16,339,090 343,237,819 418,653,330 298,532,504 281,812,127 218,629,575 202,290,485 ---------------- ------------------ ---------------- ---------------- ---------------- ------------------ $ 153,231,189 $ 343,237,819 $ 198,912,849 $ 298,532,504 $ 189,116,346 $ 218,629,575 ================ ================== ================ ================ ================ ==================
The accompanying notes are an integral part of these financial statements. 42 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF FI VALUE LEADERS MSF MFS TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- ------------------------------ 2008 2007 2008 2007 --------------- --------------- --------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 290,265 $ (623,886) $ 2,779,529 $ 1,005,876 Net realized gains (losses) 2,871,381 12,430,708 5,262,325 6,491,858 Change in unrealized gains (losses) on investments (39,737,354) (9,357,778) (37,985,168) (4,331,514) --------------- --------------- --------------- -------------- Net increase (decrease) in net assets resulting from operations (36,575,708) 2,449,044 (29,943,314) 3,166,220 --------------- --------------- --------------- -------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 5,196,456 11,256,138 8,378,399 14,117,632 Net transfers (including fixed account) (10,124,537) (8,558,454) (11,747,735) 16,438,537 Contract charges (158,711) (101,501) (125,933) (66,006) Transfers for contract benefits and terminations (5,173,997) (5,783,360) (12,082,869) (14,010,581) --------------- --------------- --------------- -------------- Net increase (decrease) in net assets resulting from contract transactions (10,260,789) (3,187,177) (15,578,138) 16,479,582 --------------- --------------- --------------- -------------- Net increase (decrease) in net assets (46,836,497) (738,133) (45,521,452) 19,645,802 NET ASSETS: Beginning of period 99,283,383 100,021,516 137,606,326 117,960,524 --------------- --------------- --------------- -------------- End of Period $ 52,446,886 $ 99,283,383 $ 92,084,874 $ 137,606,326 =============== =============== =============== ==============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 43 MSF METLIFE MSF BLACKROCK LEGACY LARGE CAP GROWTH MSF METLIFE CONSERVATIVE ALLOCATION CONSERVATIVE TO MODERATE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------- ------------------------ -------------------------------------- -------------------------------------- 2008 2007 2008 2007 2008 2007 --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- $ (680,945) $ (399,948) $ (656,900) $ (1,061,879) $ (1,341,331) $ (4,659,633) (670,672) 1,538,667 (653,008) 965,067 1,805,050 1,602,284 (25,252,337) 2,970,884 (26,911,119) 3,629,986 (135,592,725) 12,421,508 --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- (26,603,954) 4,109,603 (28,221,027) 3,533,174 (135,129,006) 9,364,159 --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- 9,937,303 6,406,504 37,196,841 28,995,189 128,333,557 149,527,563 21,122,408 21,296,807 54,103,485 49,841,700 73,794,760 130,511,391 (141,242) (36,246) (458,059) (114,345) (1,662,525) (477,730) (3,751,687) (1,891,131) (14,295,878) (6,478,951) (39,499,877) (20,763,150) --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- 27,166,782 25,775,934 76,546,389 72,243,593 160,965,915 258,798,074 --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- 562,828 29,885,537 48,325,362 75,776,767 25,836,909 268,162,233 52,009,160 22,123,623 117,554,292 41,777,525 480,507,437 212,345,204 --------------- ------------------------ ---------------- --------------------- ---------------- ----------------- $ 52,571,988 $ 52,009,160 $ 165,879,654 $ 117,554,292 $ 506,344,346 $ 480,507,437 =============== ======================== ================ ===================== ================ =================
The accompanying notes are an integral part of these financial statements. 44 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF METLIFE MSF METLIFE MODERATE ALLOCATION MODERATE TO AGGRESSIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------ 2008 2007 2008 2007 ------------------ ------------------ ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (6,944,660) $ (11,313,159) $ (8,099,841) $ (9,797,793) Net realized gains (losses) 9,525,724 1,849,234 9,435,581 2,102,401 Change in unrealized gains (losses) on investments (459,107,249) 22,083,653 (488,346,641) 8,665,318 ------------------ ------------------ ---------------- --------------- Net increase (decrease) in net assets resulting from operations (456,526,185) 12,619,728 (487,010,901) 969,926 ------------------ ------------------ ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 361,325,978 461,716,037 331,653,787 476,251,298 Net transfers (including fixed account) 140,505,258 326,048,153 75,077,331 254,492,847 Contract charges (5,380,587) (1,539,452) (5,703,525) (1,529,410) Transfers for contract benefits and terminations (72,125,708) (40,016,196) (45,344,739) (25,732,472) ------------------ ------------------ ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions 424,324,941 746,208,542 355,682,854 703,482,263 ------------------ ------------------ ---------------- --------------- Net increase (decrease) in net assets (32,201,244) 758,828,270 (131,328,047) 704,452,189 NET ASSETS: Beginning of period 1,243,038,089 484,209,819 1,105,869,460 401,417,271 ------------------ ------------------ ---------------- --------------- End of Period $ 1,210,836,845 $ 1,243,038,089 $ 974,541,413 $ 1,105,869,460 ================== ================== ================ ===================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 45 MSF METLIFE AGGRESSIVE ALLOCATION MSF FI LARGE CAP FIDELITY VIP MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- -------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 --------------- ---------------- ------------- ------------ --------------- ------------ $ (492,018) $ (810,266) $ (79,346) $ (61,888) $ 325,385 $ 552,205 (472,242) 1,588,548 (422,031) 395,196 -- -- (34,425,691) (689,990) (3,050,418) (283,973) -- -- --------------- ---------------- ------------- ------------ --------------- ------------ (35,389,951) 88,292 (3,551,795) 49,335 325,385 552,205 --------------- ---------------- ------------- ------------ --------------- ------------ 17,148,110 27,945,493 1,545,503 1,983,618 5,171,349 4,184,569 (5,381,218) 14,979,959 1,918,722 1,405,648 482,877 2,068,392 (195,743) (87,418) (9,750) (4,026) -- -- (4,825,585) (3,432,067) (259,893) (247,620) (6,842,344) (2,299,314) --------------- ---------------- ------------- ------------ --------------- ------------ 6,745,564 39,405,967 3,194,582 3,137,620 (1,188,118) 3,953,647 --------------- ---------------- ------------- ------------ --------------- ------------ (28,644,387) 39,494,259 (357,213) 3,186,955 (862,733) 4,505,852 82,686,153 43,191,894 6,017,112 2,830,157 15,686,013 11,180,161 --------------- ---------------- ------------- ------------ --------------- ------------ $ 54,041,766 $ 82,686,153 $ 5,659,899 $ 6,017,112 $ 14,823,280 $ 15,686,013 =============== ================ ============= ============ =============== ============
The accompanying notes are an integral part of these financial statements. 46 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 FIDELITY VIP EQUITY-INCOME FIDELITY VIP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- -------------------------------- 2008 2007 2008 2007 --------------- ---------------- --------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 1,278,896 $ 1,046,382 $ (173,753) $ (163,160) Net realized gains (losses) (3,051,286) 11,907,756 (1,666,048) (1,450,619) Change in unrealized gains (losses) on investments (45,260,016) (11,883,023) (61,901,896) 32,118,226 --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations (47,032,406) 1,071,115 (63,741,697) 30,504,447 --------------- ---------------- --------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 4,098,015 6,313,998 5,078,607 6,213,300 Net transfers (including fixed account) (7,893,736) (3,383,132) (4,836,817) (3,516,281) Contract charges (4,158) (2,473) (5,790) (3,264) Transfers for contract benefits and terminations (12,354,578) (15,733,391) (15,920,623) (15,773,382) --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions (16,154,457) (12,804,998) (15,684,623) (13,079,627) --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets (63,186,863) (11,733,883) (79,426,320) 17,424,820 NET ASSETS: Beginning of period 120,473,616 132,207,499 145,295,256 127,870,436 --------------- ---------------- --------------- ---------------- End of Period $ 57,286,753 $ 120,473,616 $ 65,868,936 $ 145,295,256 =============== ================ =============== ================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 47 FIDELITY VIP INVESTMENT GRADE BOND CALVERT SOCIAL BALANCED CALVERT SOCIAL MID CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- -------------------------------- --------------------------------- 2008 2007 2008 2007 2008 2007 --------------- ----------------- --------------- ----------------- -------------- ------------------ $ 654,625 $ 598,208 $ 709,941 $ 788,459 $ (98,997) $ (118,491) (210,326) (195,328) (125,673) 3,631,755 209,321 502,588 (1,252,833) 269,086 (19,774,020) (3,428,909) (4,605,855) 694,117 --------------- ----------------- --------------- ----------------- -------------- ------------------ (808,534) 671,966 (19,189,752) 991,305 (4,495,531) 1,078,214 --------------- ----------------- --------------- ----------------- -------------- ------------------ 1,425,519 2,169,532 4,397,353 5,149,832 995,743 1,129,029 (1,120,254) 1,761,065 (3,439,822) (1,959,599) (464,588) (172,737) (1,850) (901) (9,478) (4,869) (1,897) (956) (3,015,146) (3,161,109) (4,311,562) (5,063,221) (1,010,202) (1,701,983) --------------- ----------------- --------------- ----------------- -------------- ------------------ (2,711,731) 768,587 (3,363,509) (1,877,857) (480,944) (746,647) --------------- ----------------- --------------- ----------------- -------------- ------------------ (3,520,265) 1,440,553 (22,553,261) (886,552) (4,976,475) 331,567 20,883,287 19,442,734 62,179,011 63,065,563 12,291,484 11,959,917 --------------- ----------------- --------------- ----------------- -------------- ------------------ $ 17,363,022 $ 20,883,287 $ 39,625,750 $ 62,179,011 $ 7,315,009 $ 12,291,484 =============== ================= =============== ================= ============== ==================
The accompanying notes are an integral part of these financial statements. 48 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST LORD ABBETT BOND DEBENTURE MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- 2008 2007 2008 2007 ---------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 6,624,077 $ 9,148,394 $ 1,021,156 $ (11,903) Net realized gains (losses) (1,768,825) 3,190,944 10,083,122 31,869,601 Change in net unrealized gains (losses) on investments (51,664,533) (686,059) (134,576,886) (13,386,442) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations (46,809,281) 11,653,279 (123,472,608) 18,471,256 ---------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 14,897,180 25,910,027 25,234,016 21,537,076 Net transfers (including fixed account) (25,903,425) 23,575,253 77,754,240 31,543,550 Contract charges (369,669) (194,314) (388,580) (153,465) Transfers for contract benefits and terminations (18,743,525) (20,893,544) (16,091,620) (11,678,263) ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from capital transactions (30,119,439) 28,397,422 86,508,056 41,248,898 ---------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets (76,928,720) 40,050,701 (36,964,552) 59,720,154 NET ASSETS: Beginning of period 250,880,658 210,829,957 206,951,217 147,231,063 ---------------- ----------------- ---------------- ----------------- End of period $ 173,951,938 $ 250,880,658 $ 169,986,665 $ 206,951,217 ================ ================= ================ =================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 49 MIST T. ROWE PRICE MID CAP GROWTH MIST PIMCO TOTAL RETURN MIST RCM TECHNOLOGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ --------------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ------------------- ---------------- ---------------- --------------- ---------------- $ (2,097,097) $ (1,788,325) $ 12,927,170 $ 9,144,952 $ 10,405,310 $ (837,550) 15,016,948 12,178,140 11,487,658 1,288,205 11,693,990 5,327,861 (91,290,543) 8,019,597 (31,136,212) 17,341,489 (69,324,906) 11,395,210 ---------------- ------------------- ---------------- ---------------- --------------- ---------------- (78,370,692) 18,409,412 (6,721,384) 27,774,646 (47,225,606) 15,885,521 ---------------- ------------------- ---------------- ---------------- --------------- ---------------- 16,188,261 16,682,150 46,531,152 37,666,246 7,165,246 5,651,466 (2,749,720) 50,271,696 (835,353) 23,826,828 (10,252,475) 42,844,704 (282,748) (115,826) (865,178) (358,856) (143,210) (49,813) (10,979,968) (11,087,494) (45,534,684) (38,060,773) (6,314,641) (5,825,384) ---------------- ------------------- ---------------- ---------------- --------------- ---------------- 2,175,825 55,750,526 (704,063) 23,073,445 (9,545,080) 42,620,973 ---------------- ------------------- ---------------- ---------------- --------------- ---------------- (76,194,867) 74,159,938 (7,425,447) 50,848,091 (56,770,686) 58,506,494 193,009,732 118,849,794 488,859,178 438,011,087 109,742,282 51,235,788 ---------------- ------------------- ---------------- ---------------- --------------- ---------------- $ 116,814,865 $ 193,009,732 $ 481,433,731 $ 488,859,178 $ 52,971,596 $ 109,742,282 ================ =================== ================ ================ =============== ================
The accompanying notes are an integral part of these financial statements. 50 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST LAZARD MID CAP MIST MET/AIM SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- --------------- --------------- 2008 2007 2008 2007 --------------- --------------- --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (159,677) $ (721,656) $ (368,890) $ (412,459) Net realized gains (losses) (1,689,996) 6,328,624 1,303,682 1,693,769 Change in net unrealized gains (losses) on investments (22,366,432) (10,867,276) (13,977,407) 1,033,409 --------------- --------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (24,216,105) (5,260,308) (13,042,615) 2,314,719 --------------- --------------- --------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 3,679,314 10,349,741 2,097,548 3,471,663 Net transfers (including fixed account) (10,769,913) 16,611,588 (1,042,539) 3,891,707 Contract charges (105,540) (67,121) (52,169) (28,460) Transfers for contract benefits and terminations (3,639,958) (5,423,509) (1,822,394) (2,041,432) --------------- --------------- --------------- --------------- Net increase (decrease) in net assets resulting from capital transactions (10,836,097) 21,470,699 (819,554) 5,293,478 --------------- --------------- --------------- --------------- Net increase (decrease) in net assets (35,052,202) 16,210,391 (13,862,169) 7,608,197 NET ASSETS: Beginning of period 71,203,257 54,992,866 33,578,933 25,970,736 --------------- --------------- --------------- --------------- End of period $ 36,151,055 $ 71,203,257 $ 19,716,764 $ 33,578,933 =============== =============== =============== ===============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 51 MIST HARRIS OAKMARK INTERNATIONAL MIST OPPENHEIMER CAPITAL APPRECIATION MIST LEGG MASON PARTNERS AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------------------------- --------------------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ------------------- --------------- -------------------- --------------- ------------------------- $ 1,027,874 $ (1,972,075) $ 589,085 $ (246,562) $ (285,633) $ (357,794) 18,363,985 51,059,188 5,465,114 1,257,595 (1,409,063) 3,721,188 (150,086,242) (60,237,702) (21,467,507) 765,329 (8,851,362) (2,932,855) ---------------- ------------------- --------------- -------------------- --------------- ------------------------- (130,694,383) (11,150,589) (15,413,308) 1,776,362 (10,546,058) 430,539 ---------------- ------------------- --------------- -------------------- --------------- ------------------------- 18,727,670 53,021,208 4,947,027 4,328,193 1,655,761 2,546,882 (66,985,279) 7,757,092 2,884,069 11,491,711 (1,908,648) (4,288,505) (528,826) (366,595) (59,769) (21,343) (32,138) (20,581) (18,466,945) (26,091,782) (1,838,981) (1,269,835) (2,072,152) (2,284,387) ---------------- ------------------- --------------- -------------------- --------------- ------------------------- (67,253,380) 34,319,923 5,932,346 14,528,726 (2,357,177) (4,046,591) ---------------- ------------------- --------------- -------------------- --------------- ------------------------- (197,947,763) 23,169,334 (9,480,962) 16,305,088 (12,903,235) (3,616,052) 364,951,267 341,781,933 29,078,859 12,773,771 28,433,627 32,049,679 ---------------- ------------------- --------------- -------------------- --------------- ------------------------- $ 167,003,504 $ 364,951,267 $ 19,597,897 $ 29,078,859 $ 15,530,392 $ 28,433,627 ================ =================== =============== ==================== =============== =========================
The accompanying notes are an integral part of these financial statements. 52 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST THIRD AVENUE SMALL CAP VALUE MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ---------------- ---------------------------------- 2008 2007 2008 2007 -------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (26,212) $ (15,655) $ 877,623 $ (1,335,789) Net realized gains (losses) 218,118 422,644 4,581,973 55,323,936 Change in net unrealized gains (losses) on investments (2,248,427) (750,746) (118,403,745) (118,107,390) -------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations (2,056,521) (343,757) (112,944,149) (64,119,243) -------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 1,567,519 2,139,108 17,586,427 49,142,054 Net transfers (including fixed account) (728,237) 103,227 (23,516,824) (51,930,785) Contract charges (12,458) (7,188) (480,511) (323,450) Transfers for contract benefits and terminations (188,065) (178,231) (17,017,274) (25,326,696) -------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from capital transactions 638,759 2,056,916 (23,428,182) (28,438,877) -------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets (1,417,762) 1,713,159 (136,372,331) (92,558,120) NET ASSETS: Beginning of period 6,558,207 4,845,048 289,685,350 382,243,470 -------------- ---------------- ---------------- ----------------- End of period $ 5,140,445 $ 6,558,207 $ 153,313,019 $ 289,685,350 ============== ================ ================ =================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 53 MIST LEGG MASON VALUE EQUITY MIST SSGA GROWTH ETF MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- -------------------------------- ---------------------------------- 2008 2007 2008 2007 2008 2007 --------------- ----------------- -------------- ----------------- -------------- ------------------- $ (263,747) $ (465,531) $ 17,748 $ (97,814) $ 18,290 $ (56,745) (1,141,071) 586,474 (781,487) 459,096 (137,016) 205,403 (15,608,813) (2,491,612) (3,117,487) (182,242) (2,073,544) (44,450) --------------- ----------------- -------------- ----------------- -------------- ------------------- (17,013,631) (2,370,669) (3,881,226) 179,040 (2,192,270) 104,208 --------------- ----------------- -------------- ----------------- -------------- ------------------- 1,663,185 2,901,470 934,339 1,764,431 1,700,934 589,417 244,342 (1,181,490) (2,216,753) 7,249,580 4,499,417 1,742,162 (36,722) (27,047) (19,268) (8,024) (10,892) (4,020) (1,947,635) (2,610,329) (562,120) (298,018) (432,037) (212,118) --------------- ----------------- -------------- ----------------- -------------- ------------------- (76,830) (917,396) (1,863,802) 8,707,969 5,757,422 2,115,441 --------------- ----------------- -------------- ----------------- -------------- ------------------- (17,090,461) (3,288,065) (5,745,028) 8,887,009 3,565,152 2,219,649 31,321,834 34,609,899 12,579,610 3,692,601 5,202,299 2,982,650 --------------- ----------------- -------------- ----------------- -------------- ------------------- $ 14,231,373 $ 31,321,834 $ 6,834,582 $ 12,579,610 $ 8,767,451 $ 5,202,299 =============== ================= ============== ================= ============== ===================
The accompanying notes are an integral part of these financial statements. 54 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST PIMCO INFLATION PROTECTED BOND MIST JANUS FORTY INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ----------------- -------------------------------- 2008 2007 2008 2007(a) ---------------- ----------------- ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 3,635,191 $ 90,291 $ 4,719,764 $ (119,143) Net realized gains (losses) (3,968,140) 104,897 (3,016,168) 52,778 Change in net unrealized gains (losses) on investments (24,763,988) 2,068,740 (89,296,980) 2,096,211 ---------------- ----------------- ---------------- --------------- Net increase (decrease) in net assets resulting from operations (25,096,937) 2,263,928 (87,593,384) 2,029,846 ---------------- ----------------- ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 31,685,042 6,010,072 34,749,493 3,387,129 Net transfers (including fixed account) 148,648,965 21,883,320 151,241,251 45,615,571 Contract charges (287,963) (24,928) (247,240) (11,996) Transfers for contract benefits and terminations (12,536,689) (1,853,211) (9,256,481) (508,494) ---------------- ----------------- ---------------- --------------- Net increase (decrease) in net assets resulting from capital transactions 167,509,355 26,015,253 176,487,023 48,482,210 ---------------- ----------------- ---------------- --------------- Net increase (decrease) in net assets 142,412,418 28,279,181 88,893,639 50,512,056 NET ASSETS: Beginning of period 41,963,317 13,684,136 50,512,056 -- ---------------- ----------------- ---------------- --------------- End of period $ 184,375,735 $ 41,963,317 $ 139,405,695 $ 50,512,056 ================ ================= ================ ===============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 55 MIST BLACKROCK LARGE CAP CORE VARIABLE B VARIABLE C INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- --------------------------------- -------------------------------- 2008 2007(a) 2008 2007 2008 2007 ---------------- ------------------ --------------- ----------------- -------------- ----------------- $ (3,872,714) $ (9,155,867) $ (40,838) $ 202,018 $ 7,121 $ 26,269 4,222,503 859,655 (111,529) (596,216) 10,421 514,899 (388,077,399) 11,649,148 (9,765,246) 2,121,375 (789,938) (407,879) ---------------- ------------------ --------------- ----------------- -------------- ----------------- (387,727,610) 3,352,936 (9,917,613) 1,727,177 (772,396) 133,289 ---------------- ------------------ --------------- ----------------- -------------- ----------------- 24,192,864 19,373,709 13,944 18,364 7,765 7,542 (59,319,532) 1,161,274,973 (312,772) (605,844) (16,729) -- (141,355) (121,743) -- -- (3) -- (84,967,697) (86,405,776) (3,069,126) (5,141,649) (260,895) (162,239) ---------------- ------------------ --------------- ----------------- -------------- ----------------- (120,235,720) 1,094,121,163 (3,367,954) (5,729,129) (269,862) (154,697) ---------------- ------------------ --------------- ----------------- -------------- ----------------- (507,963,330) 1,097,474,099 (13,285,567) (4,001,952) (1,042,258) (21,408) 1,097,474,099 -- 28,073,493 32,075,445 2,233,598 2,255,006 ---------------- ------------------ --------------- ----------------- -------------- ----------------- $ 589,510,769 $ 1,097,474,099 $ 14,787,926 $ 28,073,493 $ 1,191,340 $ 2,233,598 ================ ================== =============== ================= ============== =================
The accompanying notes are an integral part of these financial statements. 56 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST MIST MIST MIST AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS MET/TEMPLETON BALANCED ALLOCATION GROWTH ALLOCATION MODERATE ALLOCATION GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- ---------------------- -------------------- 2008(b) 2008(b) 2008(b) 2008(b) ---------------------- ---------------------- ---------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 2,005,446 $ 3,733,857 $ 3,654,476 $ 1,515 Net realized gains (losses) (355,370) (120,462) (638,030) (15,247) Change in net unrealized gains (losses) on investments (15,004,519) (33,400,127) (19,899,584) (414,664) ---------------------- ---------------------- ---------------------- -------------------- Net increase (decrease) in net assets resulting from operations (13,354,443) (29,786,732) (16,883,138) (428,396) ---------------------- ---------------------- ---------------------- -------------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 20,399,671 44,728,651 55,277,073 1,419,225 Net transfers (including fixed account) 57,701,640 85,395,049 81,208,138 1,195,992 Contract charges (48,734) (167,615) (83,463) (615) Transfers for contract benefits and terminations (957,048) (1,162,654) (2,606,759) (18,349) ---------------------- ---------------------- ---------------------- -------------------- Net increase (decrease) in net assets resulting from capital transactions 77,095,529 128,793,431 133,794,989 2,596,253 ---------------------- ---------------------- ---------------------- -------------------- Net increase (decrease) in net assets 63,741,086 99,006,699 116,911,851 2,167,857 NET ASSETS: Beginning of period -- -- -- -- ---------------------- ---------------------- ---------------------- -------------------- End of period $ 63,741,086 $ 99,006,699 $ 116,911,851 $ 2,167,857 ====================== ====================== ====================== ====================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 57 MIST MET/FRANKLIN MIST MET/FRANKLIN MIST MET/FRANKLIN TEMPLETON INCOME MUTUAL SHARES FOUNDING STRATEGY AMERICAN FUNDS GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- ---------------------- ----------------------------------- 2008(b) 2008(b) 2008(b) 2008 2007 ---------------------- ---------------------- ---------------------- ---------------- ------------------ $ 159,271 $ 112,826 $ 261,654 $ (7,116,151) $ (8,363,917) (70,887) (88,815) (491,774) 120,067,924 110,648,389 (1,092,658) (1,009,260) (3,971,896) (709,244,939) 19,967,396 ---------------------- ---------------------- ---------------------- ---------------- ------------------ (1,004,274) (985,249) (4,202,016) (596,293,166) 122,251,868 ---------------------- ---------------------- ---------------------- ---------------- ------------------ 3,156,930 1,617,727 6,348,315 96,162,669 134,836,516 6,495,653 4,035,016 17,837,792 (13,106,689) 43,118,590 (2,542) (2,626) (27,546) (1,949,415) (1,086,508) (158,775) (62,448) (189,597) (78,643,259) (90,455,120) ---------------------- ---------------------- ---------------------- ---------------- ------------------ 9,491,266 5,587,669 23,968,964 2,463,306 86,413,478 ---------------------- ---------------------- ---------------------- ---------------- ------------------ 8,486,992 4,602,420 19,766,948 (593,829,860) 208,665,346 -- -- -- 1,339,638,488 1,130,973,142 ---------------------- ---------------------- ---------------------- ---------------- ------------------ $ 8,486,992 $ 4,602,420 $ 19,766,948 $ 745,808,628 $ 1,339,638,488 ====================== ====================== ====================== ================ ==================
The accompanying notes are an integral part of these financial statements. 58 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 AMERICAN FUNDS GROWTH-INCOME AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- --------------------------------------------- 2008 2007 2008 2007 ---------------- ---------------- ---------------- ---------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 1,632,786 $ 781,367 $ (7,786,636) $ 9,669,296 Net realized gains (losses) 43,655,541 43,381,433 59,260,901 75,232,113 Change in net unrealized gains (losses) on investments (378,490,687) (15,278,624) (424,560,153) 11,944,938 ---------------- ---------------- ---------------- ---------------------------- Net increase (decrease) in net assets resulting from operations (333,202,360) 28,884,176 (373,085,888) 96,846,347 ---------------- ---------------- ---------------- ---------------------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners 50,078,692 85,617,553 46,769,230 66,364,141 Net transfers (including fixed account) (51,145,220) 30,496,560 (49,975,080) 109,813,093 Contract charges (1,165,979) (679,011) (938,640) (532,280) Transfers for contract benefits and terminations (59,045,300) (68,668,111) (39,194,424) (44,986,297) ---------------- ---------------- ---------------- ---------------------------- Net increase (decrease) in net assets resulting from capital transactions (61,277,807) 46,766,991 (43,338,914) 130,658,657 ---------------- ---------------- ---------------- ---------------------------- Net increase (decrease) in net assets (394,480,167) 75,651,167 (416,424,802) 227,505,004 NET ASSETS: Beginning of period 901,350,156 825,698,989 728,759,168 501,254,164 ---------------- ---------------- ---------------- ---------------------------- End of period $ 506,869,989 $ 901,350,156 $ 312,334,366 $ 728,759,168 ================ ================ ================ ============================
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. The accompanying notes are an integral part of these financial statements. 59 AMERICAN FUNDS BOND INVESTMENT DIVISION --------------------------------- 2008 2007 ---------------- ---------------- $ 5,575,536 $ 9,998,163 (4,033,088) 883,331 (18,645,250) (8,588,996) ---------------- ---------------- (17,102,802) 2,292,498 ---------------- ---------------- 16,082,255 40,924,014 (39,970,690) 89,559,631 (285,165) (129,859) (12,106,920) (9,239,302) ---------------- ---------------- (36,280,520) 121,114,484 ---------------- ---------------- (53,383,322) 123,406,982 179,627,859 56,220,877 ---------------- ---------------- $ 126,244,537 $ 179,627,859 ================ ================
The accompanying notes are an integral part of these financial statements. 60 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION Metropolitan Life Separate Account E (the "Separate Account"), a separate account of Metropolitan Life Insurance Company (the "Company"), was established by the Company's Board of Directors on September 27, 1983 to support operations of the Company with respect to certain variable annuity contracts (the "Contracts"). The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York Department of Insurance. The Separate Account is divided into Investment Divisions, each of which is treated as an individual accounting entity for financial reporting purposes. Each Investment Division invests in shares of the corresponding portfolio, series, or fund (with the same name) of registered investment management companies (the "Trusts"), which are presented below: Metropolitan Series Fund, Inc. ("MSF")* Fidelity Variable Insurance Products ("Fidelity VIP") Calvert Variable Series, Inc. ("Calvert") Met Investors Series Trust ("MIST")* American Funds Insurance Series ("American Funds") * See Note 3 for discussion of additional information on related party transactions. The assets of each of the Investment Divisions of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Contracts is not chargeable with liabilities arising out of any other business the Company may conduct. Purchase payments, less any applicable charges, applied to the Separate Account are invested in one or more Investment Divisions in accordance with the selection made by the contract owner. The following Investment Divisions were available for investment as of December 31, 2008: MSF BlackRock Diversified Investment Division* MSF BlackRock Aggressive Growth Investment Division* MSF MetLife Stock Index Investment Division* MSF Julius Baer International Stock Investment Division* MSF FI Mid Cap Opportunities Investment Division* MSF T. Rowe Price Small Cap Growth Investment Division* MSF Oppenheimer Global Equity Investment Division* MSF MFS Value Investment Division* MSF Neuberger Berman Mid Cap Value Investment Division* MSF T. Rowe Price Large Cap Growth Investment Division* MSF Lehman Brothers Aggregate Bond Index Investment Division* MSF Morgan Stanley EAFE Index Investment Division* MSF Russell 2000 Index Investment Division* MSF Jennison Growth Investment Division* MSF BlackRock Strategic Value Investment Division* MSF MetLife Mid Cap Stock Index Investment Division* MSF Franklin Templeton Small Cap Growth Investment Division* MSF BlackRock Large Cap Value Investment Division* MSF BlackRock Bond Income Investment Division* MSF BlackRock Money Market Investment Division* MSF Davis Venture Value Investment Division* MSF Loomis Sayles Small Cap Investment Division* MSF Harris Oakmark Focused Value Investment Division* MSF Western Asset Management Strategic Bond Opportunities Investment Division* MSF Western Asset Management U.S. Government Investment Division* MSF FI Value Leaders Investment Division* MSF MFS Total Return Investment Division* MSF BlackRock Legacy Large Cap Growth Investment Division* MSF MetLife Conservative Allocation Investment Division* MSF MetLife Conservative to Moderate Allocation Investment Division* MSF MetLife Moderate Allocation Investment Division* MSF MetLife Moderate to Aggressive Allocation Investment Division* MSF MetLife Aggressive Allocation Investment Division* MSF FI Large Cap Investment Division* Fidelity VIP Money Market Investment Division Fidelity VIP Equity-Income Investment Division Fidelity VIP Growth Investment Division Fidelity VIP Investment Grade Bond Investment Division Calvert Social Balanced Investment Division Calvert Social Mid Cap Growth Investment Division MIST Lord Abbett Bond Debenture Investment Division* MIST MFS Research International Investment Division* MIST T. Rowe Price Mid Cap Growth Investment Division* MIST PIMCO Total Return Investment Division* 61 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 1. ORGANIZATION -- (Continued) MIST RCM Technology Investment Division* MIST Lazard Mid Cap Investment Division* MIST Met/AIM Small Cap Growth Investment Division* MIST Harris Oakmark International Investment Division* MIST Oppenheimer Capital Appreciation Investment Division* MIST Legg Mason Partners Aggressive Growth Investment Division* MIST Third Avenue Small Cap Value Investment Division MIST Clarion Global Real Estate Investment Division* MIST Legg Mason Value Equity Investment Division* MIST SSgA Growth ETF Investment Division* MIST SSgA Growth and Income ETF Investment Division* MIST PIMCO Inflation Protected Bond Investment Division* MIST Janus Forty Investment Division* MIST BlackRock Large Cap Core Investment Division* Variable B Investment Division (a) Variable C Investment Division (a) Variable D Investment Division** MIST American Funds Balanced Allocation Investment Division (b)* MIST American Funds Growth Allocation Investment Division (b)* MIST American Funds Moderate Allocation Investment Division (b)* MIST Met/Templeton Growth Investment Division (b)* MIST Met/Franklin Income Investment Division (b)* MIST Met/Franklin Mutual Shares Investment Division (b)* MIST Met/Franklin Templeton Founding Strategy Investment Division (b)* American Funds Growth Investment Division American Funds Growth-Income Investment Division American Funds Global Small Capitalization Investment Division American Funds Bond Investment Division (a) Variable B Investment Division and Variable C Investment Division only invest in the BlackRock Large Cap Core Portfolio. (b) This Investment Division began operations during the year ended December 31, 2008. * This Investment Division invests in two or more share classes within the underlying portfolio, series, or fund of the Trusts that may assess 12b-1 fees. ** This Investment Division had no net assets as of December 31, 2008. The following Investment Division ceased operations during the year ended December 31, 2008: Fidelity VIP Overseas Investment Division The operations of the Investment Divisions were affected by the following changes that occurred during the year ended December 31, 2008: NAME CHANGES: OLD NAME FI International Stock Portfolio Harris Oakmark Large Cap Value Portfolio Neuberger Berman Real Estate Portfolio Cyclical Growth ETF Portfolio Cyclical Growth and Income ETF Portfolio NEW NAME Julius Baer International Stock Portfolio MFS Value Portfolio Clarion Global Real Estate Portfolio SSgA Growth ETF Portfolio SSgA Growth and Income ETF Portfolio 62 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 1. ORGANIZATION -- (CONCLUDED) Substitution: OLD NAME Fidelity VIP Overseas Portfolio NEW NAME MFS Research International Portfolio This report is prepared for the general information of the contract owners and is not an offer of units of the Separate Account or shares of the Separate Account's underlying investments. It should not be used in connection with any offer except in conjunction with the prospectus for the Separate Account products offered by the Company and the prospectus of the underlying portfolio, series, or fund which collectively contain all the pertinent information, including additional information on charges and expenses. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to variable annuity separate accounts registered as unit investment trusts. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. SECURITY VALUATION The Investment Divisions' investment in shares of the portfolio, series or fund of the Trusts is valued at fair value based on the closing net asset value or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Investment Divisions. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Contracts. Accordingly, no charge is being made to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Contracts. ANNUITY PAYOUTS Net assets allocated to Contracts in the payout period are computed according to industry standard mortality tables. The assumed investment return is 4.0 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Separate Account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. PURCHASE PAYMENTS Purchase payments received from contract owners by the Company are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus, and are reported as contract transactions on the statements of changes in net assets of the applicable Investment Divisions. 63 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) NET TRANSFERS Funds transferred by the contract owner into or out of the Investment Divisions within the Separate Account or into and out of the fixed account (an investment option in the Company's general account) are recorded on a net basis as net transfers in the statements of changes in net assets of the applicable Investment Divisions. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Separate Account has categorized its assets based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. SFAS 157 defines the input levels as follows: Level 1 Unadjusted quoted prices in active markets for identical assets. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets. Effective January 1, 2008, the Separate Account adopted SFAS 157 and applied the provisions of the statement prospectively to assets measured at fair value. The adoption of SFAS 157 had no impact on the fair value of items measured at fair value. Each Investment Division invests in shares of open-end mutual funds which calculate a daily net asset value based on the value of the underlying securities in its portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily net asset values as reported by the Trusts at the close of each business day. On that basis, the fair value measurements of all shares held by the Separate Account are reported as Level 1. Effective January 1, 2007, the Company adopted FASB Interpretation ("FIN") No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN INTERPRETATION OF FASB STATEMENT NO. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. The adoption of FIN 48 had no impact on the financial statements of each of the Investment Divisions. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In December 2007, the FASB issued SFAS No. 160, NONCONTROLLING INTERESTS IN CONSOLIDATED FINANCIAL STATEMENTS -- AN AMENDMENT OF ACCOUNTING RESEARCH BULLETIN NO. 51 ("SFAS 160"). SFAS 160 defines and establishes accounting and reporting standards for noncontrolling interests in a subsidiary. The pronouncement is effective for fiscal years beginning on or after December 15, 2008. The Separate Account believes the adoption of SFAS 160 will have no material impact on the financial statements of each of the Investment Divisions. 64 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charges are asset-based charges and assessed through a daily reduction in unit values, which are recorded as expenses in the accompanying statements of operations of the applicable Investment Divisions: MORTALITY AND EXPENSE RISK -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is where expenses incurred in issuing and administering the Contracts will exceed the amounts realized from the administrative charges assessed against the Contracts. In addition, the charge compensates the Company for the risk that the investor may live longer than estimated and the Company would be obligated to pay more in income payments than anticipated. ADMINISTRATIVE -- The Company has responsibility for the administration of the Contracts and the Separate Account. Generally, the administrative charge is related to the maintenance, including distribution, of each contract and the Separate Account. OPTIONAL DEATH BENEFIT RIDER -- For an additional charge, the total death benefit payable may be increased based on the earnings in the Contracts. EARNINGS PRESERVATION BENEFIT -- For an additional charge, the Company will provide this additional death benefit. The table below represents the range of effective annual rates for each respective charge for the year ended December 31, 2008: Mortality & Expense Risk 0.50% - 1.95% ------------- Administrative 0.20% - 0.75% ------------- Optional Death Benefit Rider 0.10% - 0.35% ------------- Earnings Preservation Benefit 0.25% =============
The above referenced charges may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular contract. A contract administrative charge which ranges from $15 to $30 is assessed on an annual basis for Contracts with a value of less than $50,000. In addition, most Contracts impose a surrender charge which ranges from 0% to 9% if the contract is partially or fully surrendered within the specified surrender charge period. For those contract owners who choose optional living benefit riders, these charges range from 0.50% to 0.85% of the account value and are charged at each contract anniversary date. These charges are assessed through the redemption of units and are recorded as contract charges in the accompanying statements of changes in net assets of the applicable Investment Divisions. Certain investments in the various portfolios, series or funds of the MIST and MSF Trusts hold shares which are managed by Met Investors Advisory, LLC and MetLife Advisers, LLC, respectively. Both act in the capacity of investment advisor and are indirect affiliates of the Company. 65 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. STATEMENTS OF INVESTMENTS FOR THE YEAR ENDED AS OF DECEMBER 31, 2008 DECEMBER 31, 2008 ------------------------- ---------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ----------- ------------- ------------- -------------- MSF BlackRock Diversified Investment Division 54,617,928 907,609,273 45,087,013 191,584,079 MSF BlackRock Aggressive Growth Investment Division 22,069,314 490,040,072 28,616,380 85,008,825 MSF MetLife Stock Index Investment Division 90,104,943 2,773,315,903 373,666,668 394,035,200 MSF Julius Baer International Stock Investment Division 21,675,036 252,462,758 64,836,503 34,736,511 MSF FI Mid Cap Opportunities Investment Division 27,148,363 551,464,098 27,999,049 79,620,798 MSF T.Rowe Price Small Cap Growth Investment Division 15,211,188 188,061,407 53,716,410 31,624,141 MSF Oppenheimer Global Equity Investment Division 13,859,613 190,946,769 23,990,058 35,309,014 MSF MFS Value Investment Division 23,336,662 303,676,535 422,602,198 401,525,577 MSF Neuberger Berman Mid Cap Value Investment Division 25,645,694 485,031,631 41,223,336 90,805,990 MSF T.Rowe Price Large Cap Growth Investment Division 14,544,598 187,740,027 31,234,408 39,799,387 MSF Lehman Brothers Aggregate Bond Index Investment Division 69,120,592 735,271,920 87,581,047 270,387,251 MSF Morgan Stanley EAFE Index Investment Division 33,242,398 404,771,217 97,565,734 47,970,284 MSF Russell 2000 Index Investment Division 20,712,934 264,358,861 37,540,411 43,907,260 MSF Jennison Growth Investment Division 3,035,109 34,777,134 10,629,672 9,118,484 MSF BlackRock Strategic Value Investment Division 30,257,143 473,776,766 50,297,906 86,500,688 MSF MetLife Mid Cap Stock Index Investment Division 26,846,917 343,519,939 73,776,346 51,212,219 MSF Franklin Templeton Small Cap Growth Investment Division 4,870,291 47,401,727 9,183,968 8,398,306 MSF BlackRock Large Cap Value Investment Division 16,187,709 205,720,849 26,179,692 33,611,465 MSF BlackRock Bond Income Investment Division 3,908,438 421,442,715 43,427,845 103,029,140 MSF BlackRock Money Market Investment Division 665,897 66,589,774 43,053,217 16,708,901 MSF Davis Venture Value Investment Division 15,623,592 464,195,811 57,869,676 58,963,087 MSF Loomis Sayles Small Cap Investment Division 654,814 144,723,673 40,599,608 25,485,644 MSF Harris Oakmark Focused Value Investment Division 1,463,351 324,244,718 40,381,441 61,071,027 MSF Western Asset Management Strategic Bond Opportunities Investment Division 19,322,104 240,936,003 23,651,523 69,984,449 MSF Western Asset Management U.S. Government Investment Division 15,914,707 193,694,797 26,620,980 46,156,172 MSF FI Value Leaders Investment Division 494,312 92,274,847 16,488,161 18,396,619 MSF MFS Total Return Investment Division 860,284 123,267,740 23,829,672 27,243,128 MSF BlackRock Legacy Large Cap Growth Investment Division 3,160,634 73,525,174 40,630,729 14,144,435 MSF MetLife Conservative Allocation Investment Division 17,708,772 187,936,534 113,458,233 36,232,161 MSF MetLife Conservative to Moderate Allocation Investment Division 57,183,023 621,137,481 208,097,968 42,520,312 MSF MetLife Moderate Allocation Investment Division 144,627,796 1,622,856,884 479,458,462 45,374,051 MSF MetLife Moderate to Aggressive Allocation Investment Division 123,804,297 1,430,781,892 405,984,101 40,338,642 MSF MetLife Aggressive Allocation Investment Division 7,415,874 86,226,241 22,794,112 14,476,932 MSF FI Large Cap Investment Division 705,907 8,808,567 5,155,248 2,047,914 Fidelity VIP Money Market Investment Division 14,823,280 14,823,280 9,682,602 10,545,336 Fidelity VIP Equity-Income Investment Division 4,346,491 99,074,180 2,863,971 17,640,683 Fidelity VIP Growth Investment Division 2,799,360 110,989,916 2,819,342 18,677,724 Fidelity VIP Investment Grade Bond Investment Division 1,466,472 18,733,373 2,169,562 4,210,381 Calvert Social Balanced Investment Division 31,751,873 60,031,315 3,869,488 5,783,602 Calvert Social Mid Cap Growth Investment Division 385,207 9,215,751 759,417 1,267,414 MIST Lord Abbett Bond Debenture Investment Division 17,956,747 218,249,398 29,006,792 49,098,656 MIST MFS Research International Investment Division 23,052,818 300,420,419 136,896,946 28,574,770 MIST T. Rowe Price Mid Cap Growth Investment Division 22,340,825 187,449,209 54,497,629 35,198,504 MIST PIMCO Total Return Investment Division 41,793,545 486,365,745 125,798,557 101,121,088 MIST RCM Technology Investment Division 22,409,365 105,186,043 65,698,216 40,586,730 MIST Lazard Mid Cap Investment Division 5,239,743 67,716,137 10,818,769 17,631,702 MIST Met/AIM Small Cap Growth Investment Division 2,387,042 31,618,602 8,174,938 6,797,117 MIST Harris Oakmark International Investment Division 19,691,069 327,340,069 61,278,066 83,418,905
66 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. STATEMENTS OF INVESTMENTS -- (CONTINUED) FOR THE YEAR ENDED AS OF DECEMBER 31, 2008 DECEMBER 31, 2008 ------------------------ ---------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ---------- ------------- ------------- -------------- MIST Oppenheimer Capital Appreciation Investment Division 5,032,577 39,606,434 19,700,302 5,603,253 MIST Legg Masson Partners Aggressive Growth Investment Division 3,427,326 26,640,754 3,190,925 5,648,781 MIST Third Avenue Small Cap Value Investment Division 501,543 7,803,982 2,205,786 1,192,361 MIST Clarion Global Real Estate Investment Division 20,796,228 310,983,799 51,035,334 50,883,101 MIST Legg Masson Value Equity Investment Division 3,108,430 30,408,247 5,946,599 5,292,395 MIST SSgA Growth ETF Investment Division 877,515 9,956,136 6,502,946 8,139,317 MIST SSgA Growth and Income ETF Investment Division 1,036,467 10,753,782 8,469,569 2,561,921 MIST PIMCO Inflation Protected Bond Investment Division 18,813,729 207,080,301 218,891,357 47,425,877 MIST Janus Forty Investment Division 3,193,231 226,607,703 208,769,119 24,727,106 MIST BlackRock Large Cap Core Investment Division 88,457,126 965,940,990 57,111,837 141,685,139 Variable B Investment Division 2,217,085 24,257,801 1,456,015 3,851,068 Variable C Investment Division 178,608 1,957,310 105,147 284,113 MIST American Funds Balanced Allocation Investment Division (a) 9,346,337 78,746,531 81,113,022 2,007,527 MIST American Funds Growth Allocation Investment Division (a) 16,124,995 132,407,605 133,400,837 870,967 MIST American Funds Moderate Allocation Investment Division (a) 15,630,028 136,812,192 143,227,822 5,773,863 MIST Met/Templeton Growth Investment Division (a) 328,551 2,583,105 2,723,099 124,748 MIST Met/Franklin Income Investment Division (a) 1,078,500 9,580,452 10,183,632 532,292 MIST Met/Franklin Mutual Shares Investment Division (a) 711,452 5,612,367 6,099,113 397,932 MIST Met/Franklin Templeton Founding Strategy Investment Division (a) 2,836,114 23,739,611 26,869,498 2,638,114 American Funds Growth Investment Division 22,416,897 1,173,128,636 232,376,665 111,760,237 American Funds Growth - Income Investment Division 21,023,300 740,126,811 88,105,607 99,537,072 American Funds Global Small Capitalization Investment Division 28,316,994 612,279,968 131,845,435 108,545,588 American Funds Bond Investment Division 13,473,441 152,350,276 20,882,376 51,185,694
(a) For the period April 28, 2008 to December 31, 2008. 67 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF BLACKROCK DIVERSIFIED MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------- ---------------------------------- 2008 2007 2008 2007 ------------- -------------- ------------- -------------------- Units beginning of year 32,591,838 37,524,987 17,334,970 19,462,810 Units issued and transferred from other funding options 1,570,068 2,028,793 2,309,757 1,899,154 Units redeemed and transferred to other funding options (7,288,010) (6,961,942) (3,874,623) (4,026,994) ------------- -------------- ------------- -------------------- Units end of year 26,873,896 32,591,838 15,770,104 17,334,970 ============= ============== ============= ====================
MSF T. ROWE PRICE SMALL CAP GROWTH MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- -------------------------------- 2008 2007 2008 2007 ------------- ----------------------- ------------- ------------------ Units beginning of year 14,098,367 15,920,124 12,316,636 12,575,044 Units issued and transferred from other funding options 2,479,685 1,915,838 1,899,108 2,561,031 Units redeemed and transferred to other funding options (3,382,144) (3,737,595) (3,093,641) (2,819,439) ------------- ----------------------- ------------- ------------------ Units end of year 13,195,908 14,098,367 11,122,103 12,316,636 ============= ======================= ============= ==================
MSF LEHMAN BROTHERS AGGREGATE BOND INDEX MSF MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- -------------------------------- 2008 2007 2008 2007 -------------- -------------- ------------- ------------------ Units beginning of year 66,587,191 63,513,866 29,199,070 27,068,654 Units issued and transferred from other funding options 11,337,645 16,275,832 9,431,489 8,563,431 Units redeemed and transferred to other funding options (26,142,197) (13,202,507) (6,974,572) (6,433,015) -------------- -------------- ------------- ------------------ Units end of year 51,782,639 66,587,191 31,655,987 29,199,070 ============== ============== ============= ==================
MSF FRANKLIN TEMPLETON MSF METLIFE MID CAP STOCK INDEX SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- --------------------------------- 2008 2007 2008 2007 ------------- -------------------- ------------------- ------------- Units beginning of year 21,967,595 21,158,755 4,412,289 4,513,538 Units issued and transferred from other funding options 7,017,189 5,855,629 1,018,324 1,308,087 Units redeemed and transferred to other funding options (7,134,822) (5,046,789) (1,265,852) (1,409,336) ------------- -------------------- ------------------- ------------- Units end of year 21,849,962 21,967,595 4,164,761 4,412,289 ============= ==================== =================== =============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. 69 MSF METLIFE STOCK INDEX MSF JULIUS BAER INTERNATIONAL STOCK MSF FI MID CAP OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- -------------------------------------- ------------------------------- 2008 2007 2008 2007 2008 2007 -------------- -------------- ------------- ------------------------ ------------- ----------------- 74,008,454 78,739,098 14,317,870 14,686,869 29,442,363 33,093,245 13,292,097 11,437,841 3,248,960 3,053,936 4,661,771 3,515,845 (16,798,601) (16,168,485) (3,363,030) (3,422,935) (7,072,057) (7,166,727) -------------- -------------- ------------- ------------------------ ------------- ----------------- 70,501,950 74,008,454 14,203,800 14,317,870 27,032,077 29,442,363 ============== ============== ============= ======================== ============= =================
MSF MFS VALUE MSF NEUBERGER BERMAN MID CAP VALUE MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------ ------------------------------------- ------------------------------------- 2008 2007 2008 2007 2008 2007 ---------------- ------------- ------------- ----------------------- ------------- ----------------------- 26,877,885 28,712,177 21,798,028 21,851,504 16,111,584 15,304,972 28,540,796 4,447,517 4,225,513 5,323,061 3,256,264 4,485,821 (32,339,327) (6,281,809) (6,133,180) (5,376,537) (4,590,105) (3,679,209) ---------------- ------------- ------------- ----------------------- ------------- ----------------------- 23,079,354 26,877,885 19,890,361 21,798,028 14,777,743 16,111,584 ================ ============= ============= ======================= ============= =======================
MSF RUSSELL 2000 INDEX MSF JENNISON GROWTH MSF BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- --------------------------- -------------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------- ------------- ------------- ------------- ------------------ 16,225,570 16,898,875 7,214,781 7,806,353 24,340,161 26,813,221 3,592,749 3,730,066 2,358,802 1,879,643 2,536,977 3,331,355 (4,589,199) (4,403,371) (2,738,140) (2,471,215) (6,514,456) (5,804,415) ------------- ------------- ------------- ------------- ------------- ------------------ 15,229,120 16,225,570 6,835,443 7,214,781 20,362,682 24,340,161 ============= ============= ============= ============= ============= ==================
MSF BLACKROCK LARGE CAP VALUE MSF BLACKROCK BOND INCOME MSF BLACKROCK MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- ---------------------------- ----------------------------- 2008 2007 2008 2007 2008 2007 ------------- ------------------ ------------- -------------- ------------- --------------- 15,330,139 12,384,350 14,060,432 15,090,608 1,760,491 1,356,596 4,115,564 7,436,184 1,741,698 2,184,760 2,316,615 3,231,801 (4,688,694) (4,490,395) (4,163,033) (3,214,936) (1,226,869) (2,827,906) ------------- ------------------ ------------- -------------- ------------- --------------- 14,757,009 15,330,139 11,639,097 14,060,432 2,850,237 1,760,491 ============= ================== ============= ============== ============= ===============
70 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MSF DAVIS VENTURE VALUE MSF LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- ------------------------------ 2008 2007 2008 2007 ------------- ------------- ------------- ---------------- Units beginning of year 14,389,463 13,009,427 3,903,502 3,097,546 Units issued and transferred from other funding options 3,292,968 3,872,272 1,343,637 1,743,664 Units redeemed and transferred to other funding options (3,364,798) (2,492,236) (1,409,854) (937,708) ------------- ------------- ------------- ---------------- Units end of year 14,317,633 14,389,463 3,837,285 3,903,502 ============= ============= ============= ================
MSF FI VALUE LEADERS MSF MFS TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- --------------------------- 2008 2007 2008 2007 ------------ ------------ ------------- ------------- Units beginning of year 3,074,825 3,178,325 4,423,374 3,947,313 Units issued and transferred from other funding options 558,627 885,843 878,398 2,124,715 Units redeemed and transferred to other funding options (933,238) (989,343) (1,525,625) (1,648,654) ------------ ------------ ------------- ------------- Units end of year 2,700,214 3,074,825 3,776,147 4,423,374 ============ ============ ============= =============
MSF METLIFE MODERATE TO MSF METLIFE MODERATE ALLOCATION AGGRESSIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------- 2008 2007 2008 2007 -------------- ------------------- -------------- ------------- Units beginning of year 101,678,257 40,790,100 87,197,888 32,440,518 Units issued and transferred from other funding options 58,400,383 68,491,394 48,526,982 60,993,434 Units redeemed and transferred to other funding options (19,526,363) (7,603,237) (15,800,869) (6,236,064) -------------- ------------------- -------------- ------------- Units end of year 140,552,277 101,678,257 119,924,001 87,197,888 ============== =================== ============== =============
FIDELITY VIP EQUITY-INCOME FIDELITY VIP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- ------------------------- 2008 2007 2008 2007 ------------ ---------------- ------------ ------------ Units beginning of year 2,280,472 2,516,843 2,815,092 3,115,761 Units issued and transferred from other funding options 149,353 203,145 217,136 248,119 Units redeemed and transferred to other funding options (520,848) (439,516) (593,655) (548,788) ------------ ---------------- ------------ ------------ Units end of year 1,908,977 2,280,472 2,438,573 2,815,092 ============ ================ ============ ============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. 71 MSF WESTERN ASSET MANAGEMENT MSF WESTERN ASSET MSF HARRIS OAKMARK FOCUSED VALUE STRATEGIC BOND OPPORTUNITIES MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ------------------------------- ---------------------------------- 2008 2007 2008 2007 2008 2007 ------------- --------------------- ------------- ----------------- -------------------- ------------- 9,230,377 10,325,748 13,871,667 13,411,635 12,931,474 12,285,154 1,173,786 1,508,297 1,878,681 3,944,551 2,737,586 3,655,065 (2,663,049) (2,603,668) (4,715,101) (3,484,519) (4,293,783) (3,008,745) ------------- --------------------- ------------- ----------------- -------------------- ------------- 7,741,114 9,230,377 11,035,247 13,871,667 11,375,277 12,931,474 ============= ===================== ============= ================= ==================== =============
MSF BLACKROCK LEGACY MSF METLIFE CONSERVATIVE TO LARGE CAP GROWTH MSF METLIFE CONSERVATIVE ALLOCATION MODERATE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- -------------------------------------- ------------------------------ 2008 2007 2008 2007 2008 2007 ------------------- ------------ ------------- ------------------------ -------------- --------------- 2,051,563 1,062,045 10,371,872 3,839,929 40,868,924 18,680,783 2,604,014 1,803,770 13,680,062 9,812,634 26,817,721 27,398,440 (1,462,476) (814,252) (6,732,851) (3,280,691) (12,034,622) (5,210,299) ------------------- ------------ ------------- ------------------------ -------------- --------------- 3,193,101 2,051,563 17,319,083 10,371,872 55,652,023 40,868,924 =================== ============ ============= ======================== ============== ===============
MSF METLIFE AGGRESSIVE ALLOCATION MSF FI LARGE CAP FIDELITY VIP MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------- ---------------------------------------- 2008 2007 2008 2007 2008 2007 ------------- ---------------------- ---------------------- ----------- ----------- ---------------- 6,357,316 3,386,241 336,491 161,937 933,116 692,783 2,837,150 5,153,864 447,117 357,810 820,715 709,939 (2,137,471) (2,182,789) (200,010) (183,256) (889,768) (469,606) ------------- ---------------------- ---------------------- ----------- ----------- ---------------- 7,056,995 6,357,316 583,598 336,491 864,063 933,116 ============= ====================== ====================== =========== =========== ================
FIDELITY VIP INVESTMENT GRADE BOND CALVERT SOCIAL BALANCED CALVERT SOCIAL MID CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ---------------------- ------------ -------------------------------- 2008 2007 2008 2007 2008 2007 ----------- ------------------------- ---------------------- ------------ ---------- --------------------- 841,730 809,998 2,076,677 2,131,161 395,084 419,490 115,424 255,582 241,535 242,560 50,976 64,306 (226,932) (223,850) (360,113) (297,044) (68,130) (88,712) ----------- ------------------------- ---------------------- ------------ ---------- --------------------- 730,222 841,730 1,958,099 2,076,677 377,930 395,084 =========== ========================= ====================== ============ ========== =====================
72 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST LORD ABBETT BOND DEBENTURE MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- 2008 2007 2008 2007 ------------- -------------------- ------------- -------------------- Units beginning of year 14,655,505 13,210,287 11,282,779 8,960,338 Units issued and transferred from other funding options 2,578,677 5,584,210 9,440,974 6,831,762 Units redeemed and transferred to other funding options (4,741,533) (4,138,992) (4,523,716) (4,509,321) ------------- -------------------- ------------- -------------------- Units end of year 12,492,649 14,655,505 16,200,037 11,282,779 ============= ==================== ============= ====================
MIST LAZARD MID CAP MIST MET/AIM SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- -------------------------------- 2008 2007 2008 2007 ------------- ------------- ------------ ------------------- Units beginning of year 4,506,764 3,342,852 2,078,620 1,763,663 Units issued and transferred from other funding options 914,591 3,858,453 660,028 1,074,623 Units redeemed and transferred to other funding options (1,667,018) (2,694,541) (719,875) (759,666) ------------- ------------- ------------ ------------------- Units end of year 3,754,337 4,506,764 2,018,773 2,078,620 ============= ============= ============ ===================
MIST THIRD AVENUE SMALL CAP VALUE MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------------------- 2008 2007 2008 2007 ----------- ------------------------ ------------- -------------------- Units beginning of year 372,086 263,473 17,742,339 19,640,662 Units issued and transferred from other funding options 171,322 167,104 4,117,105 7,389,239 Units redeemed and transferred to other funding options (122,897) (58,491) (5,532,628) (9,287,562) ----------- ------------------------ ------------- -------------------- Units end of year 420,511 372,086 16,326,816 17,742,339 =========== ======================== ============= ====================
MIST PIMCO INFLATION PROTECTED BOND MIST JANUS FORTY INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- ----------------------- 2008 2007 2008 2007 (a) ------------- ------------- ------------ ---------- Units beginning of year 3,447,591 1,228,621 277,193 -- Units issued and transferred from other funding options 21,376,141 3,473,734 1,467,296 315,406 Units redeemed and transferred to other funding options (8,361,267) (1,254,764) (412,716) (38,213) ------------- ------------- ------------ ---------- Units end of year 16,462,465 3,447,591 1,331,773 277,193 ============= ============= ============ ==========
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. 73 MIST T. ROWE PRICE MID CAP GROWTH MIST PIMCO TOTAL RETURN MIST RCM TECHNOLOGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------------- ---------------------------- 2008 2007 2008 2007 2008 2007 ------------- ---------------------- -------------- ------------- -------------- ------------- 19,400,128 13,821,848 36,359,366 34,594,371 15,828,573 9,455,156 7,623,987 10,477,347 13,053,983 9,056,677 8,905,954 11,593,727 (7,267,237) (4,899,067) (13,330,282) (7,291,682) (10,671,821) (5,220,310) ------------- ---------------------- -------------- ------------- -------------- ------------- 19,756,878 19,400,128 36,083,067 36,359,366 14,062,706 15,828,573 ============= ====================== ============== ============= ============== =============
MIST OPPENHEIMER MIST LEGG MASON PARTNERS MIST HARRIS OAKMARK INTERNATIONAL CAPITAL APPRECIATION AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ----------------------------------- ---------------------------------- 2008 2007 2008 2007 2008 2007 ------------- ---------------------- ---------------------- ------------ -------------------- ------------- 18,591,597 16,996,340 2,700,894 1,339,707 3,543,970 4,041,330 2,823,899 8,930,126 1,859,039 1,844,509 814,073 771,652 (6,843,654) (7,334,869) (1,113,758) (483,322) (1,143,983) (1,269,012) ------------- ---------------------- ---------------------- ------------ -------------------- ------------- 14,571,842 18,591,597 3,446,175 2,700,894 3,214,060 3,543,970 ============= ====================== ====================== ============ ==================== =============
MIST LEGG MASON VALUE EQUITY MIST SSGA GROWTH ETF MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- ----------------------------------- ---------------------------------- 2008 2007 2008 2007 2008 2007 ------------- ----------------- ---------------------- ------------ ------------ --------------------- 3,317,525 3,401,505 1,055,765 322,952 447,213 266,996 1,091,490 834,740 687,413 1,277,923 904,088 382,080 (1,046,774) (918,720) (877,334) (545,110) (332,855) (201,863) ------------- ----------------- ---------------------- ------------ ------------ --------------------- 3,362,241 3,317,525 865,844 1,055,765 1,018,446 447,213 ============= ================= ====================== ============ ============ =====================
MIST BLACKROCK LARGE CAP CORE VARIABLE B VARIABLE C INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- ---------------------- ------------------------------------ 2008 2007 (a) 2008 2007 2008 2007 ------------- ------------------ ---------------------- ----------- ------------- ---------- 25,948,608 -- 167,124 202,085 11,081 11,969 1,401,574 29,704,228 5,794 198,288 52 11,620 (5,030,748) (3,755,620) (30,897) (233,249) (1,824) (12,508) ------------- ------------------ ---------------------- ----------- ------------- ---------- 22,319,434 25,948,608 142,021 167,124 9,309 11,081 ============= ================== ====================== =========== ============= ==========
74 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 MIST MIST MIST MIST AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS MET/TEMPLETON BALANCED ALLOCATION GROWTH ALLOCATION MODERATE ALLOCATION GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- ---------------------- ---------------------- 2008 (b) 2008 (b) 2008 (b) 2008 (b) ---------------------- ---------------------- ---------------------- ---------------------- Units beginning of year -- -- -- -- Units issued and transferred from other funding options 9,842,135 16,499,825 17,024,075 358,964 Units redeemed and transferred to other funding options (754,414) (938,717) (1,822,218) (29,196) ---------------------- ---------------------- ---------------------- ---------------------- Units end of year 9,087,721 15,561,108 15,201,857 329,768 ====================== ====================== ====================== ======================
AMERICAN FUNDS AMERICAN FUNDS GROWTH-INCOME GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- ------------------------------- 2008 2007 2008 2007 ------------- ----------------- ----------------- ------------- Units beginning of year 7,633,730 7,224,552 20,755,088 17,064,435 Units issued and transferred from other funding options 1,243,960 1,704,021 5,550,856 9,127,468 Units redeemed and transferred to other funding options (1,835,019) (1,294,843) (6,868,998) (5,436,815) ------------- ----------------- ----------------- ------------- Units end of year 7,042,671 7,633,730 19,436,946 20,755,088 ============= ================= ================= =============
(a) For the period April 30, 2007 to December 31, 2007. (b) For the period April 28, 2008 to December 31, 2008. 75 MIST MIST MIST MET/FRANKLIN MET/FRANKLIN MET/FRANKLIN TEMPLETON INCOME MUTUAL FOUNDING STRATEGY AMERICAN FUNDS GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ---------------------- ---------------------- --------------------------- 2008 (b) 2008 (b) 2008 (b) 2008 2007 ---------------------- ---------------------- ---------------------- ------------- ------------- -- -- -- 7,732,180 7,208,741 1,206,547 816,893 3,381,640 1,808,157 1,796,074 (144,504) (120,026) (572,940) (1,736,454) (1,272,635) ---------------------- ---------------------- ---------------------- ------------- ------------- 1,062,043 696,867 2,808,700 7,803,883 7,732,180 ====================== ====================== ====================== ============= =============
AMERICAN FUNDS BOND INVESTMENT DIVISION --------------------------- 2008 2007 ------------- ------------- 11,482,973 3,656,960 2,881,266 12,266,710 (5,330,692) (4,440,697) ------------- ------------- 9,033,547 11,482,973 ============= =============
76 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS The following table is a summary of unit values and units outstanding for the Contracts, net investment income ratios, and expense ratios, excluding expenses for the underlying portfolio, series, or fund for each of the five years in the period ended December 31, 2008: AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ------------- ------------- ------------- ---------------- ------------------- MSF BlackRock Diversified 2008 26,873,896 10.30 - 38.07 719,504,341 2.84 0.95 - 2.30 (26.68) - (25.50) Investment Division 2007 32,591,838 13.83 - 51.10 1,170,376,423 2.58 0.95 - 2.30 3.20 - 4.90 2006 37,524,987 13.19 - 48.72 1,283,710,537 2.46 0.95 - 2.30 7.76 - 9.49 2005 43,701,026 12.04 - 44.49 1,364,024,142 1.59 0.95 - 2.30 0.48 - 2.09 2004 49,414,541 11.80 - 43.58 1,509,148,475 1.89 0.95 - 2.30 5.75 - 8.00 MSF BlackRock Aggressive 2008 15,770,104 8.20 - 32.04 344,650,871 -- 0.95 - 2.30 (47.08) - (46.24) Growth Investment Division 2007 17,334,970 17.53 - 59.59 701,671,619 -- 0.95 - 2.30 17.49 - 19.44 2006 19,462,810 14.68 - 49.89 657,496,616 -- 0.95 - 2.30 4.04 - 5.72 2005 22,315,188 13.88 - 47.19 713,800,758 -- 0.95 - 2.30 7.94 - 9.67 2004 25,212,280 12.66 - 43.03 735,674,081 -- 0.95 - 2.30 9.86 - 11.94 MSF MetLife Stock Index 2008 70,501,950 8.29 - 32.55 1,968,761,690 1.90 0.50 - 2.30 (38.69) - (37.51) Investment Division 2007 74,008,454 13.38 - 52.14 3,329,401,270 1.00 0.50 - 2.30 2.58 - 4.55 2006 78,739,098 12.91 - 49.92 3,412,276,448 1.96 0.50 - 2.30 (2.44) - 14.72 2005 84,618,319 11.56 - 43.55 3,217,216,070 1.56 0.95 - 2.30 2.02 - 4.01 2004 85,759,354 11.11 - 41.93 3,155,883,032 0.83 0.50 - 2.30 7.71 - 9.78 MSF Julius Baer International 2008 14,203,800 9.13 - 13.15 168,218,916 3.04 0.95 - 2.30 (45.51) - (44.65) Stock Investment Division 2007 14,317,870 16.68 - 23.76 310,501,355 1.01 0.95 - 2.30 7.55 - 9.29 2006 14,686,869 15.35 - 21.74 294,563,493 1.40 0.95 - 2.30 13.58 - 15.41 2005 13,964,525 13.72 - 18.84 246,270,129 0.58 0.95 - 1.25 14.93 - 16.95 2004 13,332,626 11.94 - 16.11 203,820,632 1.28 0.95 - 2.30 13.55 - 17.11 MSF FI Mid Cap Opportunities 2008 27,032,077 6.27 - 9.95 254,903,446 0.38 0.50 - 2.30 (56.45) - (55.57) Investment Division 2007 29,442,363 14.24 - 22.13 629,435,841 0.12 0.65 - 2.30 5.64 - 7.63 2006 33,093,245 13.33 - 20.62 662,043,069 0.01 0.65 - 2.30 9.00 - 11.13 2005 37,066,246 12.04 - 18.61 672,025,922 -- 0.65 - 2.30 4.27 - 6.21 2004 41,657,278 11.44 - 17.57 715,717,082 0.49 0.65 - 2.30 12.01 - 16.38 MSF T. Rowe Price Small Cap 2008 13,195,908 8.98 - 11.11 136,696,190 -- 0.50 - 2.30 (37.77) - (36.61) Growth Investment Division 2007 14,098,367 14.43 - 17.54 232,142,783 -- 0.50 - 2.30 7.03 - 9.15 2006 15,920,124 13.48 - 16.09 241,933,957 -- 0.50 - 2.30 1.28 - 12.45 2005 16,882,027 13.31 - 15.24 250,349,096 -- 0.65 - 2.30 0.65 - 10.22 2004 17,980,002 12.30 - 13.86 243,468,250 -- 0.65 - 2.30 5.98 - 10.41 MSF Oppenheimer Global 2008 11,122,103 9.53 - 12.89 137,022,304 2.09 0.65 - 2.30 (41.92) - (40.75) Equity Investment Division 2007 12,316,636 16.24 - 21.82 258,147,003 1.06 0.95 - 2.30 3.83 - 5.49 2006 12,575,044 15.47 - 20.69 251,446,846 2.50 0.95 - 2.30 13.71 - 15.53 2005 12,088,855 14.88 - 17.91 210,571,508 0.54 0.95 - 2.30 13.36 - 15.13 2004 11,372,844 12.93 - 15.56 172,750,812 1.57 0.95 - 2.30 11.68 - 15.47 MSF MFS Value 2008 23,079,354 7.75 - 10.00 215,867,458 1.81 0.50 - 2.30 (30.75) - (29.89) Investment Division 2007 26,877,885 11.83 - 15.16 383,587,686 0.70 0.50 - 2.30 (6.22) - (4.51) 2006 28,712,177 12.48 - 15.88 432,262,160 0.69 0.50 - 2.30 15.16 - 17.35 2005 31,545,152 11.58 - 13.45 408,151,596 0.64 0.60 - 2.30 (3.87) - (1.98) 2004 29,629,917 11.85 - 13.75 395,114,883 0.46 0.60 - 2.30 7.27 - 10.72
77 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MSF Neuberger Berman Mid Cap 2008 19,890,361 7.50 - 15.13 280,523,003 0.70 0.50 - 2.30 (48.68) - (47.74) Value Investment Division 2007 21,798,028 14.47 - 28.95 592,652,107 0.44 0.50 - 2.30 0.83 - 2.67 2006 21,851,504 14.20 - 28.20 583,683,569 0.41 0.50 - 2.30 8.67 - 10.64 2005 21,232,326 12.86 - 25.48 517,299,339 0.24 0.50 - 2.30 9.39 - 11.20 2004 16,214,942 14.37 - 22.61 358,032,635 0.22 0.95 - 2.30 11.76 - 21.78 MSF T. Rowe Price Large Cap 2008 14,777,743 7.93 - 9.53 131,350,867 0.47 0.50 - 2.30 (43.33) - (42.26) Growth Investment Division 2007 16,111,584 13.96 - 16.51 249,940,963 0.35 0.50 - 2.30 6.66 - 8.60 2006 15,304,972 12.95 - 14.90 220,662,118 0.27 0.95 - 2.30 10.30 - 15.81 2005 15,057,106 11.90 - 13.29 194,650,515 0.50 0.95 - 2.30 2.31 - 5.61 2004 14,178,974 11.45 - 12.58 174,634,867 0.19 0.95 - 2.30 7.30 - 10.18 MSF Lehman Brothers 2008 51,782,639 11.80 - 15.77 759,753,861 4.54 0.50 - 2.30 3.22 - 5.30 Aggregate Bond Index 2007 66,587,191 11.31 - 15.00 936,492,313 4.39 0.50 - 2.30 4.22 - 6.18 Investment Division 2006 63,513,866 10.74 - 14.13 849,543,686 4.21 0.50 - 2.30 1.48 - 3.45 2005 58,769,971 10.42 - 13.68 768,286,065 3.67 0.50 - 2.30 (0.48) - 1.39 2004 46,560,646 11.21 - 13.50 607,563,120 2.63 0.50 - 2.30 0.17 - 3.46 MSF Morgan Stanley EAFE Index 2008 31,655,987 8.69 - 12.27 308,388,821 2.79 0.50 - 2.30 (43.52) - (42.46) Investment Division 2007 29,199,070 15.38 - 21.38 498,965,167 1.87 0.50 - 2.30 7.99 - 9.97 2006 27,068,654 14.24 - 19.48 424,305,304 1.62 0.50 - 2.30 22.65 - 24.81 2005 24,828,115 11.61 - 15.64 314,544,224 1.52 0.50 - 2.30 10.33 - 12.43 2004 21,202,631 10.52 - 13.94 241,576,840 0.73 0.50 - 2.30 14.75 - 18.74 MSF Russell 2000 Index 2007 15,229,120 10.64 - 12.78 182,880,602 1.15 0.50 - 2.30 (35.19) - (33.93) Investment Division 2007 16,225,570 16.25 - 19.36 297,396,403 0.85 0.50 - 2.30 (3.95) - (2.15) 2006 16,898,875 16.66 - 19.79 319,432,503 0.75 0.50 - 2.30 14.88 - 17.20 2005 15,924,763 14.26 - 16.92 259,430,466 0.71 0.50 - 2.30 1.97 - 3.80 2004 15,279,970 13.77 - 16.30 242,131,144 0.47 0.50 - 2.30 13.80 - 16.85 MSF Jennison Growth 2008 6,835,443 3.14 - 8.69 23,641,274 2.33 0.95 - 2.30 (38.02) - (37.02) Investment Division 2007 7,214,781 5.07 - 13.79 39,851,547 0.35 0.95 - 2.30 8.84 - 10.62 (Commenced 5/1/2005) 2006 7,806,353 4.65 - 12.47 39,203,639 -- 0.65 - 2.30 0.20 - 2.09 2005 7,462,775 4.64 - 12.25 37,114,974 -- 0.65 - 2.30 9.94 - 11.90 MSF BlackRock Strategic Value 2008 20,362,682 9.21 - 13.25 254,882,668 0.42 0.50 - 2.30 (39.96) - (38.86) Investment Division 2007 24,340,161 15.09 - 21.67 501,623,983 0.22 0.50 - 2.30 (5.89) - (4.17) 2006 26,813,221 15.78 - 22.61 580,737,411 0.24 0.50 - 2.30 13.79 - 15.98 2005 28,603,886 13.65 - 19.26 538,301,526 -- 0.65 - 2.30 1.57 - 3.51 2004 29,576,684 13.23 - 18.67 542,389,566 -- 0.65 - 2.30 11.83 - 14.57 MSF MetLife Mid Cap Stock 2008 21,849,962 9.08 - 11.21 231,339,248 1.30 0.50 - 2.30 (37.83) - (36.70) Index Investment Division 2007 21,967,595 14.45 - 18.38 370,254,918 0.66 0.50 - 2.30 5.06 - 7.08 2006 21,158,755 13.61 - 16.55 335,945,846 1.09 0.50 - 2.30 7.32 - 13.52 2005 19,346,717 13.72 - 15.07 283,308,837 0.61 0.65 - 2.30 6.82 - 11.38 2004 16,857,835 12.53 - 13.53 223,266,641 0.52 0.60 - 2.30 11.33 - 15.05 MSF Franklin Templeton 2008 4,164,761 6.04 - 7.63 27,323,135 -- 0.50 - 2.30 (42.68) - (41.60) Small Cap Growth 2007 4,412,289 10.52 - 13.09 49,970,829 -- 0.50 - 2.30 1.93 - 3.79 Investment Division 2006 4,513,538 10.33 - 12.64 49,635,104 -- 0.60 - 2.30 1.88 - 9.11 2005 4,244,927 9.63 - 11.60 43,057,929 -- 0.60 - 2.30 2.03 - 9.46 2004 3,958,098 9.44 - 11.19 38,943,339 -- 0.60 - 2.30 8.68 - 23.51
78 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MSF BlackRock Large Cap Value 2008 14,757,009 8.84 - 9.97 139,484,543 0.61 0.50 - 2.30 (36.59) - (35.43) Investment Division 2007 15,330,139 13.85 - 15.43 226,138,040 0.83 0.50 - 2.30 0.77 - 2.61 2006 12,384,350 13.60 - 15.04 179,447,389 0.86 0.50 - 2.30 16.41 - 18.54 2005 5,368,892 11.74 - 12.53 66,157,275 0.81 0.95 - 2.30 3.18 - 5.01 2004 4,308,811 11.18 - 11.97 50,981,319 -- 0.95 - 2.30 1.54 - 12.29 MSF BlackRock Bond Income 2008 11,639,097 12.00 - 57.90 398,659,782 5.19 0.50 - 2.30 (5.86) - (4.05) Investment Division 2007 14,060,432 12.54 - 60.40 499,799,022 3.18 0.50 - 2.30 3.60 - 5.60 2006 15,090,608 11.91 - 57.26 496,636,469 5.68 0.50 - 2.30 1.78 - 3.74 2005 16,263,054 11.51 - 54.04 499,970,297 3.88 0.65 - 2.30 (0.16) - 1.73 2004 16,511,060 11.35 - 53.22 479,529,727 4.02 0.60 - 2.30 (6.04) - 3.77 MSF BlackRock Money Market 2008 2,850,237 19.01 - 25.45 66,588,629 2.52 0.95 - 2.30 0.26 - 1.89 Investment Division 2007 1,760,491 19.19 - 25.08 40,244,577 4.85 0.95 - 2.30 2.43 - 4.04 2006 1,356,596 18.95 - 24.22 29,869,403 4.59 0.95 - 2.30 2.26 - 3.83 2005 1,240,999 18.53 - 23.43 26,441,007 2.48 0.95 - 2.30 0.34 - 12.20 2004 1,089,932 18.26 - 23.09 22,990,726 0.86 0.95 - 2.30 (1.46) - 0.05 MSF Davis Venture Value 2008 14,317,633 8.24 - 26.21 337,854,161 1.17 0.50 - 2.30 (40.90) - (39.74) Investment Division 2007 14,389,463 13.80 - 43.56 568,534,369 0.65 0.50 - 2.30 1.96 - 3.90 2006 13,009,427 13.39 - 41.95 499,120,554 0.69 0.50 - 2.30 11.71 - 13.84 2005 9,616,873 11.80 - 36.05 327,836,546 0.55 0.65 - 2.30 7.52 - 9.60 2004 6,061,573 12.62 - 32.99 191,013,088 0.49 0.65 - 2.30 6.99 - 11.58 MSF Loomis Sayles Small Cap 2008 3,837,285 9.57 - 25.38 87,080,365 -- 0.50 - 2.30 (37.52) - (36.38) Investment Division 2007 3,903,502 15.16 - 39.88 140,310,675 0.03 0.50 - 2.30 9.07 - 11.07 2006 3,097,546 13.75 - 35.91 101,108,667 -- 0.50 - 2.30 13.76 - 15.82 2005 1,880,156 11.90 - 30.17 53,640,656 -- 0.95 - 2.30 4.28 - 5.97 2004 1,424,451 12.66 - 28.47 38,635,528 -- 0.95 - 2.30 12.61 - 15.30 MSF Harris Oakmark Focused 2008 7,741,114 6.58 - 21.92 153,231,189 0.23 0.50 - 2.30 (47.36) - (46.40) Value Investment Division 2007 9,230,377 12.31 - 40.90 343,237,819 0.47 0.50 - 2.30 (9.20) - (7.54) 2006 10,325,748 13.34 - 44.24 418,653,330 0.22 0.50 - 2.30 9.63 - 11.61 2005 11,283,242 11.97 - 39.14 413,672,421 0.02 0.95 - 2.30 7.22 - 9.06 2004 9,659,217 10.99 - 35.89 327,616,615 0.03 0.60 - 2.30 7.27 - 9.90 MSF Western Asset Management 2008 11,035,247 9.63 - 20.08 198,912,849 4.03 0.50 - 2.30 (17.16) - (15.56) Strategic Bond Opportunities 2007 13,871,667 11.50 - 23.81 298,532,504 2.59 0.50 - 2.30 1.33 - 3.36 Investment Division 2006 13,411,635 11.23 - 23.07 281,812,127 4.83 0.50 - 2.30 2.46 - 4.38 2005 11,262,819 10.79 - 21.59 228,960,440 2.72 0.95 - 2.30 0.23 - 1.89 2004 7,027,888 18.05 - 21.19 141,477,434 2.86 0.95 - 2.30 2.39 - 6.12 MSF Western Asset Management 2008 11,375,277 10.72 - 18.49 189,116,346 4.17 0.50 - 2.30 (2.80) - (1.03) U.S. Government 2007 12,931,474 10.92 - 18.68 218,629,575 2.53 0.50 - 2.30 1.66 - 3.51 Investment Division 2006 12,285,154 10.63 - 18.04 202,290,485 3.09 0.50 - 2.30 1.53 - 3.38 2005 10,976,124 10.30 - 17.46 176,329,793 1.22 0.50 - 2.30 (0.89) - 0.92 2004 7,714,000 14.41 - 17.30 124,306,910 1.09 0.50 - 2.30 0.46 - 2.49 MSF FI Value Leaders 2008 2,700,214 8.41 - 22.06 52,446,886 1.69 0.50 - 2.30 (40.49) - (39.40) Investment Division 2007 3,074,825 13.99 - 36.41 99,283,383 0.73 0.50 - 2.30 1.56 - 3.42 2006 3,178,325 13.63 - 35.20 100,021,516 0.81 0.50 - 2.30 9.13 - 11.10 2005 1,911,983 12.53 - 30.30 54,642,394 0.98 0.95 - 2.30 5.45 - 9.66 2004 856,897 11.43 - 27.67 22,597,417 1.05 0.95 - 2.30 9.66 - 14.30
79 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- ------------- ------------- ------------- ---------------- ------------------- MSF MFS Total Return 2008 3,776,147 9.72 - 42.76 92,084,874 3.55 0.50 - 2.30 (24.12) - (22.74) Investment Division 2007 4,423,374 12.67 - 55.35 137,606,326 1.94 0.50 - 2.30 1.74 - 3.60 2006 3,947,313 12.31 - 53.42 117,960,524 3.32 0.50 - 2.30 9.40 - 11.38 2005 3,604,722 11.12 - 47.08 98,990,430 1.80 0.60 - 2.30 0.51 - 2.24 2004 2,312,843 10.94 - 46.05 71,298,072 0.03 0.60 - 2.30 6.22 - 10.33 MSF BlackRock Legacy 2008 3,193,101 8.74 - 22.70 52,571,988 0.20 0.50 - 2.30 (38.14) - (37.01) Large Cap Growth 2007 2,051,563 13.98 - 33.08 52,009,160 0.01 0.95 - 2.30 15.73 - 17.59 Investment Division 2006 1,062,045 11.95 - 28.26 22,123,623 -- 0.95 - 2.30 1.51 - 3.57 2005 640,982 11.67 - 27.51 13,090,953 0.15 0.95 - 2.30 4.35 - 6.06 2004 1,424,451 11.06 - 26.07 5,610,216 -- 0.95 - 2.30 (4.31) - 9.68 MSF MetLife Conservative 2008 17,319,083 9.23 - 9.86 165,879,654 0.94 0.50 - 2.30 (16.34) - (14.82) Allocation Investment Division 2007 10,371,872 11.03 - 11.58 117,554,292 -- 0.50 - 2.30 3.16 - 5.04 (Commenced 5/1/2005) 2006 3,839,929 10.70 - 11.02 41,777,525 2.77 0.50 - 2.30 4.47 - 6.36 2005 1,232,690 10.24 - 10.35 12,700,366 0.57 0.95 - 2.30 2.32 - 3.35 MSF MetLife Conservative to 2008 55,652,023 8.77 - 9.37 506,344,346 1.08 0.50 - 2.30 (23.38) - (21.99) Moderate Allocation 2007 40,868,924 11.45 - 12.01 480,507,437 -- 0.50 - 2.30 2.42 - 4.29 Investment Division 2006 18,680,783 11.18 - 11.52 212,345,204 2.17 0.50 - 2.30 6.94 - 8.88 (Commenced 5/1/2005) 2005 4,525,054 10.45 - 10.58 47,629,824 0.68 0.95 - 2.30 4.35 - 5.44 MSF MetLife Moderate 2008 140,552,277 8.30 - 8.87 1,210,836,845 0.80 0.50 - 2.30 (30.26) - (28.99) Allocation Investment Division 2007 101,678,257 11.91 - 12.49 1,243,038,089 0.03 0.50 - 2.30 1.96 - 3.82 (Commenced 5/1/2005) 2006 40,790,100 11.68 - 12.03 484,209,819 1.42 0.50 - 2.30 9.30 - 11.28 2005 8,136,943 10.68 - 10.80 87,493,424 0.73 0.95 - 2.30 6.40 - 7.38 MSF MetLife Moderate to 2008 119,924,001 7.83 - 8.37 974,541,413 0.60 0.50 - 2.30 (36.60) - (35.44) Aggressive Allocation 2007 87,197,888 12.36 - 12.97 1,105,869,460 0.04 0.50 - 2.30 1.48 - 3.33 Investment Division 2006 32,440,518 12.18 - 12.55 401,417,271 0.96 0.50 - 2.30 11.63 - 13.65 (Commenced 5/1/2005) 2005 5,478,129 10.91 - 11.02 60,142,308 0.68 0.95 - 2.30 9.03 - 9.29 MSF MetLife Aggressive 2008 7,056,995 7.36 - 7.86 54,041,766 0.57 0.50 - 2.30 (41.81) - (40.75) Allocation Investment Division 2007 6,357,316 12.64 - 13.27 82,686,153 0.11 0.50 - 2.30 0.91 - 2.75 (Commenced 5/1/2005) 2006 3,386,241 12.53 - 12.91 43,191,894 0.83 0.50 - 2.30 13.04 - 15.08 2005 659,010 11.08 - 11.20 7,348,718 0.65 0.95 - 2.30 9.78 - 10.72 MSF FI Large Cap 2008 583,598 8.86 - 10.73 5,659,899 -- 0.50 - 2.05 (46.07) - (45.22) Investment Division 2007 336,491 16.43 - 19.14 6,017,112 0.01 0.95 - 2.05 1.61 - 2.96 (Commenced 5/1/2006) 2006 161,937 15.92 - 18.31 2,830,157 -- 0.95 - 2.20 3.62 - 5.00 Fidelity VIP Money Market 2008 864,063 17.15 14,823,280 3.01 0.95 2.05 Investment Division 2007 933,116 16.80 15,686,013 5.07 0.95 4.12 2006 692,783 16.14 11,180,161 4.94 0.95 3.90 2005 398,745 15.53 6,200,922 3.16 0.95 2.05 2004 508,676 15.22 7,739,157 1.12 0.95 0.20 Fidelity VIP Equity-Income 2008 1,908,977 30.01 57,286,753 2.34 0.95 (43.19) Investment Division 2007 2,280,472 52.83 120,473,616 1.76 0.95 0.57 2006 2,516,843 52.53 132,207,499 3.39 0.95 19.07 2005 2,814,629 44.12 124,173,091 1.64 0.95 4.84 2004 3,181,549 42.08 133,865,570 1.52 0.95 9.02
80 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. FINANCIAL HIGHLIGHTS -- (CONTINUED) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- Fidelity VIP Growth 2008 2,438,573 27.01 65,868,936 0.78 0.95 (47.67) Investment Division 2007 2,815,092 51.61 145,295,256 0.83 0.95 25.76 2006 3,115,761 41.04 127,870,436 0.41 0.95 5.85 2005 3,645,885 38.77 141,359,911 0.50 0.95 4.82 2004 4,247,099 36.99 157,101,539 0.26 0.95 8.19 Fidelity VIP Investment Grade 2008 730,222 23.78 17,363,022 4.32 0.95 (4.16) Bond Investment Division 2007 841,730 24.81 20,883,287 3.91 0.95 3.36 2006 809,998 24.00 19,442,734 4.10 0.95 3.37 2005 896,213 23.22 20,803,805 3.69 0.95 1.27 2004 942,267 22.93 21,620,889 4.15 0.95 0.88 Calvert Social Balanced 2008 1,958,099 15.95 - 20.92 39,625,750 2.49 0.50 - 1.55 (32.38) - (31.67) Investment Division 2007 2,076,677 23.59 - 30.84 62,179,011 2.41 0.50 - 1.55 1.17 - 2.24 2006 2,131,161 23.31 - 30.39 63,065,563 2.32 0.50 - 1.55 7.10 - 8.23 2005 2,181,124 21.77 - 28.29 60,311,328 1.79 0.50 - 1.55 4.05 - 5.13 2004 2,197,291 20.92 - 27.11 58,294,718 1.72 0.50 - 1.55 0.28 - 7.70 Calvert Social Mid Cap Growth 2008 377,930 19.35 7,315,009 -- 0.95 (37.78) Investment Division 2007 395,084 31.11 12,291,484 -- 0.95 9.12 2006 419,490 28.51 11,959,917 -- 0.95 5.87 2005 466,889 26.93 12,565,055 -- 0.95 (0.52) 2004 506,064 27.07 13,688,933 -- 0.95 8.28 MIST Lord Abbett Bond 2008 12,492,649 9.89 - 17.31 173,951,938 4.30 0.50 - 2.30 (20.46) - (19.01) Debenture Investment Division 2007 14,655,505 12.30 - 21.37 250,880,658 5.19 0.50 - 2.30 4.11 - 6.02 2006 13,210,287 11.69 - 20.16 210,829,957 6.45 0.50 - 2.30 6.70 - 8.65 2005 11,143,052 10.79 - 17.43 159,818,940 4.90 0.65 - 2.30 (0.83) - 3.23 2004 9,177,096 12.27 - 21.73 125,736,304 3.67 0.65 - 2.30 3.58 - 7.68 MIST MFS Research International 2008 16,200,037 9.48 - 19.76 169,986,665 1.75 0.50 - 2.30 (44.34) - (42.65) Investment Division 2007 11,282,779 16.84 - 19.49 206,951,217 1.32 0.50 - 2.30 10.70 - 12.72 2006 8,960,338 15.21 - 17.32 147,231,063 1.54 0.50 - 2.30 23.65 - 29.56 2005 4,118,785 12.30 - 13.77 54,271,700 0.56 0.95 - 2.30 12.23 - 15.67 2004 2,756,605 10.81 - 11.91 31,718,709 -- 0.95 - 2.30 (14.39) - 18.63 MIST T. Rowe Price Mid Cap 2008 19,756,878 5.41 - 9.65 116,814,865 0.02 0.50 - 2.30 (41.12) - (40.05) Growth Investment Division 2007 19,400,128 9.18 - 16.14 193,009,732 0.10 0.50 - 2.30 14.93 - 17.05 2006 13,821,848 7.99 - 13.82 118,849,794 -- 0.50 - 2.30 3.73 - 5.64 2005 11,533,257 7.70 - 13.09 94,663,044 -- 0.50 - 2.30 11.89 - 13.73 2004 8,669,095 6.87 - 11.51 63,001,217 -- 0.95 - 2.30 11.63 - 17.14 MIST PIMCO Total Return 2008 36,083,067 11.49 - 14.17 481,433,731 3.85 0.50 - 2.30 (1.88) - (0.01) Investment Division 2007 36,359,366 11.59 - 14.18 488,859,178 3.35 0.50 - 2.30 5.11 - 7.15 2006 34,594,371 10.91 - 13.25 438,011,087 2.71 0.50 - 2.30 2.13 - 4.13 2005 33,143,919 10.57 - 12.74 406,268,866 0.02 0.50 - 2.30 (0.05) - 1.76 2004 24,585,923 11.61 - 12.52 298,386,525 7.25 0.50 - 2.30 0.83 - 4.42 MIST RCM Technology 2008 14,062,706 3.27 - 8.73 52,971,596 13.66 0.50 - 2.30 (45.76) - (44.73) Investment Division 2007 15,828,573 6.02 - 8.14 109,742,282 -- 0.50 - 2.30 25.82 - 30.86 2006 9,455,156 4.68 - 6.24 51,235,788 -- 0.50 - 2.30 2.83 - 4.82 2005 9,833,932 4.55 - 5.97 51,898,685 -- 0.95 - 2.30 8.57 - 10.35 2004 11,146,560 4.19 - 5.41 54,272,225 -- 0.95 - 2.30 (6.49) - 15.20
81 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (Continued) 6. FINANCIAL HIGHLIGHTS -- (Continued) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------- -------------------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- ----------------- ----------- ------------- ---------------- ------------------- MIST Lazard Mid Cap 2008 3,754,337 7.71 - 10.18 36,151,055 1.00 0.50 - 2.30 (39.71) - (38.61) Investment Division 2007 4,506,764 12.66 - 16.48 71,203,257 0.42 0.60 - 2.30 (4.93) - (3.30) 2006 3,342,852 13.18 - 16.84 54,992,866 0.36 0.95 - 2.30 12.05 - 13.87 2005 2,877,414 11.76 - 14.81 41,868,418 0.21 0.95 - 2.30 5.63 - 7.40 2004 2,505,486 10.95 - 13.82 34,153,806 -- 0.95 - 2.30 7.34 - 13.37 MIST Met/AIM Small Cap 2008 2,018,773 8.69 - 10.34 19,716,764 -- 0.50 - 2.30 (40.13) - (39.03) Growth Investment Division 2007 2,078,620 14.54 - 16.96 33,578,933 -- 0.50 - 2.30 8.53 - 10.51 2006 1,763,663 13.18 - 15.26 25,970,736 -- 0.60 - 2.30 11.55 - 13.48 2005 1,475,123 11.68 - 13.45 19,296,323 -- 0.60 - 2.30 5.85 - 7.60 2004 1,153,716 10.86 - 12.50 142,129,409 -- 0.60 - 2.30 4.15 - 8.60 MIST Harris Oakmark 2008 14,571,842 9.41 - 12.13 167,003,504 1.70 0.50 - 2.30 (42.23) - (41.11) International 2007 18,591,597 16.12 - 20.62 364,951,267 0.83 0.50 - 2.30 (3.38) - (1.50) Investment Division 2006 16,996,340 16.51 - 20.96 341,781,933 2.25 0.50 - 2.30 25.93 - 28.37 2005 9,989,980 12.90 - 16.11 158,028,315 0.05 0.95 - 2.30 11.65 - 13.40 2004 4,686,847 11.70 - 14.23 65,755,444 0.01 0.95 - 2.30 12.68 - 19.58 MIST Oppenheimer Capital 2008 3,446,175 5.12 - 7.08 19,597,897 3.52 0.50 - 2.30 (47.17) - (46.21) Appreciation 2007 2,700,894 9.70 - 13.22 29,078,859 0.01 0.50 - 2.30 11.68 - 13.72 Investment Division 2006 1,339,707 8.74 - 11.66 12,773,771 0.12 0.95 - 2.20 5.28 - 6.80 2005 448,382 8.36 - 10.93 4,043,647 0.02 0.95 - 2.05 3.23 - 3.55 2004 42 8.34 - 8.44 357 0.74 1.15 - 1.45 4.89 - 5.24 MIST Legg Mason Partners 2008 3,214,060 4.40 - 7.43 15,530,392 0.01 0.95 - 2.30 (40.44) - (39.53) Aggressive Growth 2007 3,543,970 7.38 - 12.29 28,433,627 0.12 0.95 - 2.30 (0.07) - 1.63 Investment Division 2006 4,041,330 7.39 - 12.09 32,049,679 -- 0.95 - 2.30 (3.91) - (2.50) 2005 3,428,990 7.69 - 12.41 28,090,437 -- 0.95 - 2.30 10.93 - 12.78 2004 2,835,847 6.93 - 11.00 20,717,976 -- 0.95 - 2.30 6.11 - 10.53 MIST Third Avennue Small Cap 2008 420,511 11.92 - 12.78 5,140,445 0.72 0.50 - 1.55 (30.91) - (30.17) Value Investment Division 2007 372,086 17.25 - 18.31 6,558,207 0.92 0.50 - 1.55 (4.52) - (3.51) 2006 263,473 18.07 - 18.97 4,845,048 0.40 0.50 - 1.55 11.39 - 12.57 2005 138,389 16.22 - 16.46 2,276,433 -- 1.15 - 1.55 13.74 - 14.15 2004 27,952 14.26 - 14.42 403,590 0.43 1.15 - 1.55 24.54 - 25.07 MIST Clarion Global Real Estate 2008 16,326,816 1.60 - 9.78 153,313,019 1.70 0.50 - 2.30 (43.01) - (41.94) Investment Division 2007 17,742,339 2.76 - 16.85 289,685,350 0.99 0.50 - 2.30 (16.95) - (15.35) 2006 19,640,662 3.27 - 19.92 382,243,470 0.93 0.50 - 2.30 34.50 - 37.01 2005 11,156,645 2.39 - 14.51 159,988,876 -- 0.95 - 2.30 10.69 - 12.61 2004 4,508,731 12.76 - 12.89 57,896,986 3.20 0.95 - 2.30 27.56 - 28.90 MIST Legg Mason Value Equity 2008 3,362,241 3.82 - 4.46 14,231,373 0.14 0.95 - 2.30 (55.65) - (54.86) Investment Division 2007 3,317,525 8.61 - 9.88 31,321,834 -- 0.95 - 2.30 (8.06) - (6.61) (Commenced 5/1/2006) 2006 3,401,505 9.36 - 10.58 34,609,899 0.08 0.95 - 2.30 10.59 - 12.34 MIST SSgA Growth ETF 2008 865,844 7.63 - 8.09 6,834,582 1.48 0.50 - 2.30 (34.50) - (33.30) Investment Division 2007 1,055,765 11.65 - 12.13 12,579,610 -- 0.50 - 2.30 3.20 - 5.09 (Commenced 5/1/2006) 2006 322,952 11.30 - 11.50 3,692,601 1.65 0.95 - 2.20 11.38 - 12.93 MIST SSgA Growth and Income 2008 1,018,446 8.32 - 8.83 8,767,451 1.56 0.50 - 2.30 (26.77) - (25.43) ETF Investment Division 2007 447,213 11.37 - 11.84 5,202,299 -- 0.50 - 2.30 2.99 - 4.87 (Commenced 5/1/2006) 2006 266,996 11.05 - 11.23 2,982,650 2.24 0.95 - 2.20 9.30 - 10.72
82 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (Continued) 6. FINANCIAL HIGHLIGHTS -- (Continued) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- --------------- ------------- ------------- ---------------- ------------------- MIST PIMCO Inflation Protected 2008 16,462,465 10.58 - 11.78 184,375,735 3.63 0.50 - 2.30 (9.01) - (7.23) Bond Investment Division 2007 3,447,591 11.63 - 12.70 41,963,317 1.70 0.65 - 2.30 8.27 - 10.36 (Commenced 5/1/2006) 2006 1,228,621 10.74 - 11.51 13,684,136 -- 0.65 - 2.30 (1.89) - 0.00 MIST Janus Forty Investment Division 2008 1,331,773 80.39 - 175.43 139,405,695 4.92 0.50 - 2.30 (43.32) - (42.29) (Commenced 4/30/2007) 2007 277,193 141.84 - 304.58 50,512,056 -- 0.50 - 2.30 27.14 - 29.47 MIST BlackRock Large Cap Core Investment Division 2008 22,319,434 9.08 - 61.28 589,510,769 0.70 0.50 - 2.30 (38.74) - (37.62) (Commenced 4/30/2007) 2007 25,948,608 14.57 - 95.85 1,097,474,099 -- 0.60 - 2.30 3.94 - 5.74 Variable B Investment Division 2008 142,021 30.10 - 111.12 14,787,926 0.71 1.00 (37.74) - (37.59) 2007 167,124 48.23 - 178.48 28,073,493 1.59 1.00 5.57 - 6.09 2006 202,085 45.46 - 169.07 32,075,445 1.35 1.00 13.22 2005 256,179 39.84 - 149.63 34,430,948 1.11 1.00 2.64 - 4.24 2004 280,320 38.22 - 145.78 35,610,341 0.76 1.00 7.09 - 9.21 Variable C Investment Division 2008 9,309 111.12 - 139.06 1,191,340 0.73 1.00 (37.74) - (37.12) 2007 11,081 178.48 - 221.14 2,233,598 1.54 1.00 5.57 - 6.63 2006 11,969 169.07 - 207.39 2,255,006 1.36 1.00 13.61 2005 16,427 149.63 - 181.74 2,530,897 1.22 1.00 2.64 - 3.66 2004 16,427 145.78 - 175.32 2,571,598 0.45 1.00 9.21 - 10.31 MIST American Funds Balanced Allocation Investment Division (Commenced 4/28/2008) 2008 9,087,721 6.97 - 7.06 63,741,086 6.96 0.50 - 2.30 (30.31) - (29.41) MIST American Funds Growth Allocation Investment Division (Commenced 4/28/2008) 2008 15,561,108 6.32 - 6.40 99,006,699 7.24 0.50 - 2.30 (36.79) - (35.97) MIST American Funds Moderate Allocation Investment Division (Commenced 4/28/2008) 2008 15,201,857 7.64 - 7.74 116,911,851 6.90 0.50 - 2.30 (23.62) - (22.63) MIST Met/Templeton Growth Investment Division (Commenced 4/28/2008) 2008 329,768 6.54 - 6.61 2,167,857 1.01 0.50 - 2.30 (34.60) - (33.90) MIST Met/Franklin Income Investment Division (Commenced 4/28/2008) 2008 1,062,043 7.94 - 8.01 8,486,992 4.42 0.95 - 2.30 (20.62) - (19.88) MIST Met/Franklin Mutual Shares Investment Division (Commenced 4/28/2008) 2008 696,867 6.57 - 6.64 4,602,420 5.65 0.50 - 2.30 (34.29) - (33.59) MIST Met/Franklin Templeton Founding Strategy Investment Division (Commenced 4/28/2008) 2008 2,808,700 7.01 - 7.06 19,766,948 3.23 0.95 - 2.30 (29.93) - (29.44)
83 METROPOLITAN LIFE SEPARATE ACCOUNT E OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (Concluded) 6. FINANCIAL HIGHLIGHTS -- (Concluded) AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------- -------------------------------------------------- UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- --------------- ------------- ------------- ---------------- ------------------- American Funds Growth 2008 7,803,883 8.50 - 114.72 745,808,628 0.81 0.50 - 2.30 (45.39) - (44.33) Investment Division 2007 7,732,180 15.36 - 206.31 1,339,638,488 0.81 0.50 - 2.30 9.50 - 11.62 2006 7,208,741 13.81 - 185.02 1,130,973,142 0.85 0.50 - 2.55 5.17 - 11.04 2005 5,817,927 12.65 - 165.46 843,004,006 0.74 0.60 - 2.30 8.32 - 15.21 2004 4,245,543 100.66 - 143.62 542,082,661 0.20 0.85 - 2.30 3.61 - 11.54 American Funds Growth-Income 2008 7,042,671 8.27 - 86.49 506,869,989 1.67 0.50 - 2.30 (39.42) - (38.25) Investment Division 2007 7,633,730 13.47 - 140.21 901,350,156 1.55 0.50 - 2.30 2.38 - 4.25 2006 7,224,552 12.99 - 134.49 825,698,989 1.64 0.50 - 2.55 9.93 - 16.07 2005 6,416,996 11.36 - 115.07 648,646,801 1.42 0.60 - 2.30 (1.34) - 4.93 2004 5,181,523 76.86 - 109.66 506,094,791 1.02 0.85 - 2.30 4.85 - 9.44 American Funds Global Small 2008 19,436,946 9.59 - 17.36 312,334,366 -- 0.50 - 2.30 (54.70) - (53.82) Capitalization 2007 20,755,088 20.82 - 37.63 728,759,168 2.98 0.50 - 2.30 18.36 - 20.64 Investment Division 2006 17,064,435 17.31 - 31.23 501,254,164 0.46 0.50 - 2.55 20.10 - 23.25 2005 12,642,767 14.09 - 25.17 304,247,953 0.88 0.60 - 2.30 21.12 - 24.46 2004 8,037,895 18.07 - 20.25 156,789,112 -- 0.85 - 2.30 11.42 - 35.71 American Funds Bond 2008 9,033,547 12.39 - 15.47 126,244,537 5.09 0.50 - 2.30 (11.64) - (9.94) Investment Division 2007 11,482,973 14.02 - 17.18 179,627,859 8.58 0.50 - 2.30 0.71 - 2.66 (Commenced 5/1/2006 ) 2006 3,656,960 13.92 - 16.74 56,220,877 0.65 0.50 - 2.55 3.55 - 6.42 ==== ========== =============== ============= ============= ================ ===================
(1) The Company sells a number of variable annuity products which have unique combinations of features and fees that are charged against the contract owner's account balance. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the Investment Divisions from the underlying portfolio, series, or fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Investment Division is affected by the timing of the declaration of dividends by the underlying portfolio, series, or fund in which the Investment Division invests. (3) These amounts represent the annualized contract expenses of each of the applicable Investment Divisions, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying portfolio, series, or fund have been excluded. (4) These amounts represent the total return for the period indicated, including changes in the value of the underlying portfolio, series, or fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on minimum and maximum returns within each product grouping of the applicable Investment Divisions. 84 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Metropolitan Life Insurance Company: We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2008. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Metropolitan Life Insurance Company and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, the Company changed its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008, and changed its method of accounting for deferred acquisition costs and for income taxes as required by accounting guidance adopted on January 1, 2007. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP New York, New York April 3, 2009 F-1 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2008 AND 2007 (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
2008 2007 -------- -------- ASSETS Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $135,428 and $148,865, respectively)............................................ $122,229 $152,266 Equity securities available-for-sale, at estimated fair value (cost: $2,931 and $3,897, respectively)............ 2,298 4,167 Trading securities, at estimated fair value (cost: $281 and $456, respectively)...................................... 277 457 Mortgage and consumer loans, net............................ 42,105 39,180 Policy loans................................................ 7,881 7,677 Real estate and real estate joint ventures held-for- investment............................................... 6,255 5,484 Real estate held-for-sale................................... 1 39 Other limited partnership interests......................... 4,732 4,945 Short-term investments...................................... 7,598 603 Other invested assets....................................... 9,916 4,375 -------- -------- Total investments........................................ 203,292 219,193 Cash and cash equivalents..................................... 10,279 1,927 Accrued investment income..................................... 2,079 2,451 Premiums and other receivables................................ 28,290 24,077 Deferred policy acquisition costs and value of business acquired.................................................... 10,871 8,628 Current income tax recoverable................................ 75 -- Deferred income tax assets.................................... 2,557 -- Other assets.................................................. 4,517 6,361 Assets of subsidiaries held-for-sale.......................... -- 22,037 Separate account assets....................................... 72,259 89,703 -------- -------- Total assets............................................. $334,219 $374,377 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES: Future policy benefits...................................... $ 98,183 $ 93,752 Policyholder account balances............................... 93,308 81,003 Other policyholder funds.................................... 5,483 5,535 Policyholder dividends payable.............................. 1,023 991 Policyholder dividend obligation............................ -- 789 Short-term debt............................................. 414 357 Long-term debt.............................................. 2,722 2,687 Current income tax payable.................................. -- 359 Deferred income tax liability............................... -- 985 Payables for collateral under securities loaned and other transactions............................................. 18,649 28,952 Other liabilities........................................... 29,433 28,005 Liabilities of subsidiaries held-for-sale................... -- 19,958 Separate account liabilities................................ 72,259 89,703 -------- -------- Total liabilities........................................ 321,474 353,076 -------- -------- CONTINGENCIES, COMMITMENTS AND GUARANTEES (NOTE 13) STOCKHOLDER'S EQUITY: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding at both December 31, 2008 and 2007............................. 5 5 Additional paid-in capital.................................... 14,437 14,426 Retained earnings............................................. 7,298 5,529 Accumulated other comprehensive income (loss)................. (8,995) 1,341 -------- -------- Total stockholder's equity............................... 12,745 21,301 -------- -------- Total liabilities and stockholder's equity............... $334,219 $374,377 ======== ========
See accompanying notes to the consolidated financial statements. F-2 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
2008 2007 2006 ------- ------- ------- REVENUES Premiums............................................... $18,444 $16,435 $15,936 Universal life and investment-type product policy fees................................................. 2,285 2,246 2,183 Net investment income.................................. 11,122 12,582 11,518 Other revenues......................................... 1,882 934 833 Net investment gains (losses).......................... 3,472 (287) (834) ------- ------- ------- Total revenues....................................... 37,205 31,910 29,636 ------- ------- ------- EXPENSES Policyholder benefits and claims....................... 20,699 18,275 17,647 Interest credited to policyholder account balances..... 3,181 3,515 2,993 Policyholder dividends................................. 1,716 1,687 1,671 Other expenses......................................... 6,582 5,127 5,096 ------- ------- ------- Total expenses....................................... 32,178 28,604 27,407 ------- ------- ------- Income from continuing operations before provision for income tax........................................... 5,027 3,306 2,229 Provision for income tax............................... 1,651 1,054 557 ------- ------- ------- Income from continuing operations...................... 3,376 2,252 1,672 Income (loss) from discontinued operations, net of income tax........................................... (289) 180 254 ------- ------- ------- Net income............................................. $ 3,087 $ 2,432 $ 1,926 ======= ======= =======
See accompanying notes to the consolidated financial statements. F-3 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) --------------------------------------- NET FOREIGN DEFINED ADDITIONAL UNREALIZED CURRENCY BENEFIT COMMON PAID-IN RETAINED INVESTMENT TRANSLATION PLANS STOCK CAPITAL EARNINGS GAINS (LOSSES) ADJUSTMENTS ADJUSTMENT TOTAL ------ ---------- -------- -------------- ----------- ---------- -------- Balance at January 1, 2006.............. $ 5 $ 13,808 $ 2,749 $ 1,809 $ 137 $ (41) $ 18,467 Treasury stock transactions, net -- by subsidiary............................ 12 12 Capital contributions from MetLife, Inc. (Notes 2 and 15)...................... 489 489 Excess tax benefits related to stock- based compensation.................... 34 34 Dividends on common stock............... (863) (863) Comprehensive income: Net income............................ 1,926 1,926 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax....................... (20) (20) Unrealized investment gains (losses), net of related offsets and income tax................... (93) (93) Foreign currency translation adjustments, net of income tax... 7 7 Additional minimum pension liability adjustment, net of income tax....................... (18) (18) -------- Other comprehensive income (loss).. (124) -------- Comprehensive income.................. 1,802 -------- Adoption of SFAS 158, net of income tax................................ (749) (749) --- -------- ------- -------- ----- -------- -------- Balance at December 31, 2006............ 5 14,343 3,812 1,696 144 (808) 19,192 Cumulative effect of changes in accounting principles, net of income tax (Note 1).......................... (215) (215) --- -------- ------- -------- ----- -------- -------- Balance at January 1, 2007.............. 5 14,343 3,597 1,696 144 (808) 18,977 Treasury stock transactions, net -- by subsidiary............................ 10 10 Capital contributions from MetLife, Inc. (Notes 2 and 15)...................... 7 7 Excess proceeds received on sale of interests in affiliate (Note 15)...... 30 30 Excess tax benefits related to stock- based compensation.................... 36 36 Dividends on common stock............... (500) (500) Comprehensive income: Net income............................ 2,432 2,432 Other comprehensive income: Unrealized gains (losses) on derivative instruments, net of income tax....................... (15) (15) Unrealized investment gains (losses), net of related offsets and income tax................... (339) (339) Foreign currency translation adjustments, net of income tax... 139 139 Defined benefit plans adjustment, net of income tax................ 524 524 -------- Other comprehensive income......... 309 -------- Comprehensive income.................. 2,741 --- -------- ------- -------- ----- -------- -------- Balance at December 31, 2007............ 5 14,426 5,529 1,342 283 (284) 21,301 Treasury stock transactions, net -- by subsidiary............................ (11) (11) Capital contributions from MetLife, Inc. (Note 15)............................. 13 13 Excess tax benefits related to stock- based compensation.................... 9 9 Dividend of interests in subsidiary (Note 2).............................. (1,318) (1,318) Comprehensive loss: Net income............................ 3,087 3,087 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax....................... 272 272 Unrealized investment gains (losses), net of related offsets and income tax................... (9,315) (9,315) Foreign currency translation adjustments, net of income tax... (140) (140) Defined benefit plans adjustment, net of income tax................ (1,153) (1,153) -------- Other comprehensive income (loss).. (10,336) -------- Comprehensive loss.................... (7,249) --- -------- ------- -------- ----- -------- -------- Balance at December 31, 2008............ $5 $14,437 $ 7,298 $ (7,701) $ 143 $ (1,437) $ 12,745 === ======== ======= ======== ===== ======== ========
See accompanying notes to the consolidated financial statements. F-4 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
2008 2007 2006 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income............................................ $ 3,087 $ 2,432 $ 1,926 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expenses.............. 258 368 308 Amortization of premiums and accretion of discounts associated with investments, net................. (660) (592) (467) (Gains) losses from sales of investments and businesses, net.................................. (2,868) 420 687 Undistributed equity earnings of real estate joint ventures and other limited partnership interests........................................ 524 (433) (376) Interest credited to policyholder account balances.. 3,289 3,777 3,247 Universal life and investment-type product policy fees............................................. (2,285) (2,246) (2,183) Change in accrued investment income................. 316 (201) (295) Change in premiums and other receivables............ (1,734) 228 (3,565) Change in deferred policy acquisition costs, net.... (100) (598) (672) Change in insurance-related liabilities............. 5,117 4,022 3,743 Change in trading securities........................ 74 188 (196) Change in income tax payable........................ 630 715 144 Change in other assets.............................. 2,828 (232) 772 Change in other liabilities......................... 1,827 (1,309) 1,109 Other, net.......................................... 161 51 (37) -------- -------- -------- Net cash provided by operating activities............. 10,464 6,590 4,145 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Sales, maturities and repayments of: Fixed maturity securities........................ 68,089 73,576 73,351 Equity securities................................ 2,140 1,265 858 Mortgage and consumer loans...................... 5,238 8,085 7,632 Real estate and real estate joint ventures....... 159 503 847 Other limited partnership interests.............. 404 764 1,253 Purchases of: Fixed maturity securities........................ (56,251) (73,375) (90,163) Equity securities................................ (1,094) (2,204) (731) Mortgage and consumer loans...................... (8,819) (11,891) (10,535) Real estate and real estate joint ventures....... (1,071) (1,369) (1,069) Other limited partnership interests.............. (1,163) (1,459) (1,551) Net change in short-term investments................ (6,967) 582 (362) Purchases of subsidiaries........................... -- -- (193) (Payments) proceeds from sales of businesses........ (4) 25 48 Dividend of subsidiary.............................. (270) -- -- Excess proceeds received on sale of interests in affiliate........................................ -- 30 -- Net change in other invested assets................. (1,831) (1,587) (1,084) Net change in policy loans.......................... (193) (149) (176) Net change in property, equipment and leasehold improvements..................................... (171) (88) (109) Other, net.......................................... -- 22 (4) -------- -------- -------- Net cash used in investing activities................. $ (1,804) $ (7,270) $(21,988) -------- -------- --------
See accompanying notes to the consolidated financial statements. F-5 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 (IN MILLIONS)
2008 2007 2006 -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Policyholder account balances: Deposits.......................................... $ 58,338 $ 39,125 $ 37,411 Withdrawals....................................... (48,818) (34,135) (31,366) Net change in short-term debt........................ 57 (476) 380 Long-term debt issued................................ 27 1,705 8 Long-term debt repaid................................ (21) (894) (112) Collateral financing arrangements issued............. -- -- 850 Shares subject to mandatory redemption............... -- (131) -- Debt issuance costs.................................. -- (8) (13) Net change in payables for collateral under securities loaned and other transactions.......... (10,303) (3,167) 11,110 Capital contribution from MetLife, Inc. ............. -- 7 93 Dividends on common stock............................ -- (500) (863) Other, net........................................... 8 30 13 -------- -------- -------- Net cash (used in) provided by financing activities.... (712) 1,556 17,511 -------- -------- -------- Change in cash and cash equivalents.................... 7,948 876 (332) Cash and cash equivalents, beginning of year........... 2,331 1,455 1,787 -------- -------- -------- CASH AND CASH EQUIVALENTS, END OF YEAR................. $ 10,279 $ 2,331 $ 1,455 ======== ======== ======== Cash and cash equivalents, subsidiaries held-for-sale, beginning of year.................................... $ 404 $ 164 $ 129 ======== ======== ======== CASH AND CASH EQUIVALENTS, SUBSIDIARIES HELD-FOR-SALE, END OF YEAR.......................................... $ -- $ 404 $ 164 ======== ======== ======== Cash and cash equivalents, from continuing operations, beginning of year.................................... $ 1,927 $ 1,291 $ 1,658 ======== ======== ======== CASH AND CASH EQUIVALENTS, FROM CONTINUING OPERATIONS, END OF YEAR.......................................... $ 10,279 $ 1,927 $ 1,291 ======== ======== ======== Supplemental disclosures of cash flow information: Net cash paid during the year for: Interest.......................................... $ 268 $ 332 $ 256 ======== ======== ======== Income tax........................................ $ 494 $ 1,010 $ 197 ======== ======== ======== Non-cash transactions during the year: Dividend of subsidiary: Assets disposed................................. $ 22,135 $ -- $ -- Less: liabilities disposed...................... (20,689) -- -- -------- -------- -------- Net assets disposed............................. 1,446 -- -- Add: cash disposed.............................. 270 -- -- Less: dividend of interests in subsidiary....... (1,318) -- -- -------- -------- -------- Loss on dividend of interests in subsidiary..... $ 398 $ -- $ -- ======== ======== ======== Fixed maturity securities received in connection with insurance contract commutation............. $ 115 $ -- $ -- ======== ======== ======== Capital contribution from MetLife, Inc. .......... $ 13 $ -- $ -- ======== ======== ======== Real estate acquired in satisfaction of debt...... $ -- $ -- $ 6 ======== ======== ======== Contribution of other intangible assets, net of deferred income tax............................. $ -- $ -- $ 377 ======== ======== ======== Excess of net assets over purchase price for subsidiary...................................... $ -- $ -- $ 19 ======== ======== ======== Issuance of secured demand note collateral agreement....................................... $ 25 $ -- $ -- ======== ======== ========
See accompanying notes to the consolidated financial statements. F-6 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS Metropolitan Life Insurance Company and its subsidiaries (collectively, "MLIC" or the "Company") is a leading provider of individual insurance, employee benefits and financial services with operations throughout the United States. The Company offers life insurance and annuities to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. The Company is organized into two operating segments: Institutional and Individual, as well as Corporate & Other. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of Metropolitan Life Insurance Company and its subsidiaries as well as partnerships and joint ventures in which the Company has control. Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item. See Note 9. Intercompany accounts and transactions have been eliminated. In addition, the Company has invested in certain structured transactions that are variable interest entities ("VIEs") under Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46(r), Consolidation of Variable Interest Entities -- An Interpretation of Accounting Research Bulletin No. 51 ("FIN 46(r)"). These structured transactions include asset-backed securitizations, trust preferred securities, joint ventures, limited partnerships and limited liability companies. The Company is required to consolidate those VIEs for which it is deemed to be the primary beneficiary. The Company reconsiders whether it is the primary beneficiary for investments designated as VIEs on a quarterly basis. The Company uses the equity method of accounting for investments in equity securities in which it has more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint venture's or partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint venture's or the partnership's operations. Minority interest related to consolidated entities included in other liabilities was $83 million and $162 million at December 31, 2008 and 2007, respectively. There was also minority interest of $1.5 billion included in liabilities of subsidiaries held-for-sale at December 31, 2007. Certain amounts in the prior year periods' consolidated financial statements have been reclassified to conform with the 2008 presentation. See Note 18 for reclassifications related to discontinued operations. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements. The most critical estimates include those used in determining: (i) the estimated fair value of investments in the absence of quoted market values; (ii) investment impairments; F-7 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (iii) the recognition of income on certain investment entities; (iv) the application of the consolidation rules to certain investments; (v) the existence and estimated fair value of embedded derivatives requiring bifurcation; (vi) the estimated fair value of and accounting for derivatives; (vii) the capitalization and amortization of deferred policy acquisition costs ("DAC") and the establishment and amortization of value of business acquired ("VOBA"); (viii) the liability for future policyholder benefits; (ix) accounting for income taxes and the valuation of deferred tax assets; (x) accounting for reinsurance transactions; (xi) accounting for employee benefit plans; and (xii) the liability for litigation and regulatory matters. A description of such critical estimates is incorporated within the discussion of the related accounting policies which follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's businesses and operations. Actual results could differ from these estimates. Fair Value As described below, certain assets and liabilities are measured at estimated fair value on the Company's consolidated balance sheets. In addition, the footnotes to the consolidated financial statements include disclosures of estimated fair values. Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In many cases, the exit price and the transaction (or entry) price will be the same at initial recognition. However, in certain cases, the transaction price may not represent fair value. Under SFAS 157, fair value of a liability is based on the amount that would be paid to transfer a liability to a third party with the same credit standing. SFAS 157 requires that fair value be a market-based measurement in which the fair value is determined based on a hypothetical transaction at the measurement date, considered from the perspective of a market participant. When quoted prices are not used to determine fair value, SFAS 157 requires consideration of three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The approaches are not new, but SFAS 157 requires that entities determine the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs. SFAS 157 prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Company has categorized its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. SFAS 157 defines the input levels as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. F-8 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities other than quoted prices in Level 1; quoted prices in markets that are not active; or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of estimated fair value requires significant management judgment or estimation. The measurement and disclosures under SFAS 157 in the accompanying consolidated financial statements and footnotes exclude certain items such as nonfinancial assets and nonfinancial liabilities initially measured at estimated fair value in a business combination, reporting units measured at estimated fair value in the first step of a goodwill impairment test and indefinite-lived intangible assets measured at estimated fair value for impairment assessment. The effective date for these items was deferred to January 1, 2009. Prior to adoption of SFAS 157, estimated fair value was determined based solely upon the perspective of the reporting entity. Therefore, methodologies used to determine the estimated fair value of certain financial instruments prior to January 1, 2008, while being deemed appropriate under existing accounting guidance, may not have produced an exit value as defined in SFAS 157. Investments The Company's principal investments are in fixed maturity and equity securities, trading securities, mortgage and consumer loans, policy loans, real estate, real estate joint ventures and other limited partnership interests, short-term investments, and other invested assets. The accounting policies related to each are as follows: Fixed Maturity and Equity Securities. The Company's fixed maturity and equity securities are classified as available-for-sale, except for trading securities, and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss), net of policyholder related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales of securities are determined on a specific identification basis. Interest income on fixed maturity securities is recorded when earned using an effective yield method giving effect to amortization of premiums and accretion of discounts. Dividends on equity securities are recorded when declared. These dividends and interest income are recorded in net investment income. Included within fixed maturity securities are loan-backed securities including mortgage-backed and asset-backed securities. Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and asset-backed securities are estimated by management using inputs obtained from third party specialists, including broker-dealers, and based on management's knowledge of the current market. For credit-sensitive mortgage-backed and asset-backed securities and certain prepayment- sensitive securities, the effective yield is recalculated on a prospective basis. F-9 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) For all other mortgage-backed and asset-backed securities, the effective yield is recalculated on a retrospective basis. The cost or amortized cost of fixed maturity and equity securities is adjusted for impairments in value deemed to be other-than-temporary in the period in which the determination is made. These impairments are included within net investment gains (losses) and the cost basis of the fixed maturity and equity securities is reduced accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value. The Company's review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%; (ii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for less than six months; and (iii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for six months or greater. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company's evaluation of recoverability of all contractual cash flows, as well as the Company's ability and intent to hold the security, including holding the security until the earlier of a recovery in value, or until maturity. In contrast, for certain equity securities, greater weight and consideration are given by the Company to a decline in market value and the likelihood such market value decline will recover. See also Note 3. Additionally, management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the market value has been below cost or amortized cost; (ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; (vi) the Company's ability and intent to hold the security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost or amortized cost (See also Note 3); (vii) unfavorable changes in forecasted cash flows on mortgage-backed and asset-backed securities; and (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies. In periods subsequent to the recognition of an other-than-temporary impairment on a debt security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted into net investment income over the remaining term of the debt security in a prospective manner based on the amount and timing of estimated future cash flows. The Company purchases and receives beneficial interests in special purpose entities ("SPEs"), which enhance the Company's total return on its investment portfolio principally by providing equity-based returns on debt securities. These investments are generally made through structured notes and similar instruments (collectively, "Structured Investment Transactions"). The Company has not guaranteed the performance, liquidity or obligations of the SPEs and its exposure to loss is limited to its carrying value of the beneficial interests in the SPEs. The Company does not consolidate such SPEs as it has determined it is not the primary beneficiary. These Structured Investment Transactions are included in fixed maturity securities and their F-10 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) income is generally recognized using the retrospective interest method. Impairments of these investments are included in net investment gains (losses). Trading Securities. The Company's trading securities portfolio, principally consisting of fixed maturity and equity securities, supports investment strategies that involve the active and frequent purchase and sale of securities and the execution of short sale agreements, and supports asset and liability matching strategies for certain insurance products. Trading securities and short sale agreement liabilities are recorded at estimated fair value with subsequent changes in estimated fair value recognized in net investment income. Related dividends and investment income are also included in net investment income. Securities Lending. Securities loaned transactions, whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. The Company monitors the estimated fair value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company's securities loaned transactions are with large brokerage firms and commercial banks. Income and expenses associated with securities loaned transactions are reported as investment income and investment expense, respectively, within net investment income. Mortgage and Consumer Loans. Mortgage and consumer loans held-for- investment are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts, and prepayment fees are reported in net investment income. Loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Based on the facts and circumstances of the individual loans being impaired, valuation allowances are established for the excess carrying value of the loan over either: (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's estimated fair value. The Company also establishes allowances for loan losses when a loss contingency exists for pools of loans with similar characteristics, such as mortgage loans based on similar property types or loan to value risk factors. A loss contingency exists when the likelihood that a future event will occur is probable based on past events. Interest income earned on impaired loans is accrued on the principal amount of the loan based on the loan's contractual interest rate. However, interest ceases to be accrued for loans on which interest is generally more than 60 days past due and/or when the collection of interest is not considered probable. Cash receipts on such impaired loans are recorded as a reduction of the recorded investment. Gains and losses from the sale of loans and changes in valuation allowances are reported in net investment gains (losses). Certain mortgage loans previously designated as held-for-investment have been designated as held-for-sale to reflect a change in the Company's intention as it relates to holding such loans. At the time of transfer, such loans are recorded at the lower of amortized cost or estimated fair value less expected disposition costs determined on an individual loan basis. Amortized cost is determined in the same manner as mortgage loans held-for-investment described above. The amount by which amortized cost exceeds estimated fair value less expected disposition costs is accounted for as a valuation allowance. Changes in such valuation allowance are recognized in net investment gains (losses). Policy Loans. Policy loans are stated at unpaid principal balances. Interest income on such loans is recorded as earned using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy's anniversary date. F-11 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Real Estate. Real estate held-for-investment, including related improvements, is stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company classifies a property as held-for-sale if it commits to a plan to sell a property within one year and actively markets the property in its current condition for a price that is reasonable in comparison to its estimated fair value. The Company classifies the results of operations and the gain or loss on sale of a property that either has been disposed of or classified as held-for-sale as discontinued operations, if the ongoing operations of the property will be eliminated from the ongoing operations of the Company and if the Company will not have any significant continuing involvement in the operations of the property after the sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs. Real estate is not depreciated while it is classified as held-for-sale. The Company periodically reviews its properties held-for-investment for impairment and tests properties for recoverability whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable and the carrying value of the property exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, with the impairment loss included in net investment gains (losses). Impairment losses are based upon the estimated fair value of real estate, which is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks. Real estate acquired upon foreclosure of commercial and agricultural mortgage loans is recorded at the lower of estimated fair value or the carrying value of the mortgage loan at the date of foreclosure. Real Estate Joint Ventures and Other Limited Partnership Interests. The Company uses the equity method of accounting for investments in real estate joint ventures and other limited partnership interests consisting of leveraged buy-out funds, hedge funds and other private equity funds in which it has more than a minor equity interest or more than a minor influence over the joint ventures or partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint ventures or the partnership's operations. The Company reports the distributions from real estate joint ventures and other limited partnership interests accounted for under the cost method and equity in earnings from real estate joint ventures and other limited partnership interests accounted for under the equity method in net investment income. In addition to the investees performing regular evaluations for the impairment of underlying investments, the Company routinely evaluates its investments in real estate joint ventures and other limited partnerships for impairments. The Company considers its cost method investments for other-than-temporary impairment when the carrying value of real estate joint ventures and other limited partnership interests exceeds the net asset value. The Company takes into consideration the severity and duration of this excess when deciding if the cost method investment is other-than-temporarily impaired. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. When an other-than- temporary impairment is deemed to have occurred, the Company records a realized capital loss within net investment gains (losses) to record the investment at its estimated fair value. Short-term Investments. Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition and are stated at amortized cost, which approximates estimated fair value, or stated at estimated fair value, if available. Short-term investments also include investments in affiliated money market pools. Other Invested Assets. Other invested assets consist principally of freestanding derivatives with positive estimated fair values, leveraged leases, loans to affiliates, tax credit partnerships, funds withheld at interest and joint venture investments. F-12 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Freestanding derivatives with positive estimated fair values are more fully described in the derivatives accounting policy which follows. Leveraged leases are recorded net of non-recourse debt. The Company participates in lease transactions which are diversified by industry, asset type and geographic area. The Company recognizes income on the leveraged leases by applying the leveraged lease's estimated rate of return to the net investment in the lease. The Company regularly reviews residual values and impairs them to expected values as needed. Loans to affiliates consist of loans to the Company's affiliates, some of which are regulated, to meet their capital requirements. Such loans are carried at amortized cost. Tax credit partnerships are established for the purpose of investing in low-income housing and other social causes, where the primary return on investment is in the form of tax credits and are also accounted for on the equity method. Joint venture investments represent the Company's investments in entities that engage in insurance underwriting activities and are accounted for on the equity method. The Company reports the equity in earnings of joint venture investments and tax credit partnerships in net investment income. Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company records a funds withheld receivable rather than the underlying investments. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio and records it in net investment income. Estimates and Uncertainties. The Company's investments are exposed to four primary sources of risk: credit, interest rate, liquidity risk, and market valuation. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments, and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements. When available, the estimated fair value of the Company's fixed maturity and equity securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The assumptions and inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated duration and management's assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management's judgments about financial instruments. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and observable yields and spreads in the market. F-13 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities. Certain mortgages have been designated as held-for-sale which are recorded at the lower of amortized cost or estimated fair value less expected disposition costs determined on an individual loan basis. For these loans, estimated fair value is determined using independent broker quotations or, when the loan is in foreclosure or otherwise determined to be collateral dependent, the estimated fair value of the underlying collateral estimated using internal models. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. The determination of the amount of allowances and impairments, as applicable, is described previously by investment type. The determination of such allowances and impairments is highly subjective and is based upon the Company's periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. Management updates its evaluations regularly and reflects changes in allowances and impairments in operations as such evaluations are revised. The recognition of income on certain investments (e.g., loan-backed securities, including mortgage-backed and asset-backed securities, certain structured investment transactions, trading securities, etc.) is dependent upon market conditions, which could result in prepayments and changes in amounts to be earned. The accounting rules under FIN 46(r) for the determination of when an entity is a VIE and when to consolidate a VIE are complex. The determination of the VIE's primary beneficiary requires an evaluation of the contractual rights and obligations associated with each party involved in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. FIN 46(r) defines the primary beneficiary as the entity that will absorb a majority of a VIE's expected losses, receive a majority of a VIE's expected residual returns if no single entity absorbs a majority of expected losses, or both. When determining the primary beneficiary for structured investment products such as asset-backed securitizations and collateralized debt obligations, the Company uses historical default probabilities based on the credit rating of each issuer and other inputs including maturity dates, industry classifications and geographic location. Using computational algorithms, the analysis simulates default scenarios resulting in a range of expected losses and the probability associated with each occurrence. For other investment structures such as trust preferred securities, joint ventures, limited partnerships and limited liability companies, the Company gains an understanding of the design of the VIE and generally uses a qualitative approach to determine if it is the primary beneficiary. This approach includes an analysis of all contractual rights and obligations held by all parties including profit and loss allocations, repayment or residual value guarantees, put and call options and other derivative instruments. If the primary beneficiary of a VIE can not be identified using this qualitative approach, the Company calculates the expected losses and expected residual returns of the VIE using a probability-weighted cash flow model. The use of different methodologies, assumptions and F-14 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) inputs in the determination of the primary beneficiary could have a material effect on the amounts presented within the consolidated financial statements. Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage the risk associated with variability in cash flows or changes in estimated fair values related to the Company's financial instruments. The Company also uses derivative instruments to hedge its currency exposure associated with net investments in certain foreign operations. To a lesser extent, the Company uses credit derivatives, such as credit default swaps, to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance contracts that have embedded derivatives. Freestanding derivatives are carried on the Company's consolidated balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value as determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models. The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such instruments. Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity as well as the use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter derivatives after taking into account the effects of netting agreements and collateral arrangements. Credit risk is monitored and consideration of any potential credit adjustment is based on a net exposure by counterparty. This is due to the existence of netting agreements and collateral arrangements which effectively serve to mitigate credit risk. The Company values its derivative positions using the standard swap curve which includes a credit risk adjustment. This credit risk adjustment is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The need for such additional credit risk adjustments is monitored by the Company. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The evaluation of the requirement to make an additional credit risk adjustments is performed by the Company each reporting period. F-15 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported in net investment gains (losses) except for those in net investment income for economic hedges of equity method investments in joint ventures, or for all derivatives held in relation to the trading portfolios. The fluctuations in estimated fair value of derivatives which have not been designated for hedge accounting can result in significant volatility in net income. To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either: (i) a hedge of the estimated fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value hedge"); (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"); or (iii) a hedge of a net investment in a foreign operation. In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The accounting for derivatives is complex and interpretations of the primary accounting standards continue to evolve in practice. Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under these accounting standards. If it was determined that hedge accounting designations were not appropriately applied, reported net income could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the appropriate accounting treatment may result in a differing impact on the consolidated financial statements of the Company from that previously reported. Under a fair value hedge, changes in the estimated fair value of the hedging derivative, including amounts measured as ineffectiveness, and changes in the estimated fair value of the hedged item related to the designated risk being hedged, are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of income within interest income or interest expense to match the location of the hedged item. However, balances that are not scheduled to settle until maturity are included in the estimated fair value of derivatives. Under a cash flow hedge, changes in the estimated fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of stockholder's equity, and the deferred gains or losses on the derivative are reclassified into the consolidated statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of income within interest income or interest expense to match the location of the hedged item. However, balances that are not scheduled to settle until maturity are included in the estimated fair value of derivatives. In a hedge of a net investment in a foreign operation, changes in the estimated fair value of the hedging derivative that are measured as effective are reported within other comprehensive income (loss) consistent with the translation adjustment for the hedged net investment in the foreign operation. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). F-16 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; (iv) a hedged firm commitment no longer meets the definition of a firm commitment; or (v) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the consolidated balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the consolidated statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur by the end of the specified time period or the hedged item no longer meets the definition of a firm commitment, the derivative continues to be carried on the consolidated balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). Any asset or liability associated with a recognized firm commitment is derecognized from the consolidated balance sheet, and recorded currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income (loss) pursuant to the cash flow hedge of a forecasted transaction are recognized immediately in net investment gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the consolidated balance sheet, with changes in its estimated fair value recognized in the current period as net investment gains (losses). The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. If the instrument would not be accounted for in its entirety at estimated fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried on the consolidated balance sheet at estimated fair value with the host contract and changes in their estimated fair value are reported currently in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses). Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) if that contract contains an embedded derivative that requires bifurcation. There is a risk that embedded derivatives requiring bifurcation may not be identified and reported at estimated fair value in the consolidated financial statements and that their related changes in estimated fair value could materially affect reported net income. F-17 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using either the straight-line or sum-of-the-years- digits method over the estimated useful lives of the assets, as appropriate. The estimated life for company occupied real estate property is generally 40 years. Estimated lives generally range from five to ten years for leasehold improvements and three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1.4 billion and $1.2 billion at December 31, 2008 and 2007, respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $720 million and $609 million at December 31, 2008 and 2007, respectively. Related depreciation and amortization expense was $111 million, $105 million and $97 million for the years ended December 31, 2008, 2007 and 2006, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $1.2 billion and $1.1 billion at December 31, 2008 and 2007, respectively. Accumulated amortization of capitalized software was $862 million and $742 million at December 31, 2008 and 2007, respectively. Related amortization expense was $117 million, $97 million and $90 million for the years ended December 31, 2008, 2007 and 2006, respectively. Deferred Policy Acquisition Costs and Value of Business Acquired The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that vary with and relate to the production of new business are deferred as DAC. Such costs consist principally of commissions and agency and policy issuance expenses. VOBA is an intangible asset that reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the business in-force at the acquisition date. VOBA is based on actuarially determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns and other factors. Actual experience on the purchased business may vary from these projections. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated in the financial statements for reporting purposes. DAC and VOBA on life insurance or investment-type contracts are amortized in proportion to gross premiums, gross margins or gross profits, depending on the type of contract as described below. The Company amortizes DAC and VOBA related to non-participating and non- dividend-paying traditional contracts (term insurance, non-participating whole life insurance, non-medical health insurance, and traditional group life insurance) over the entire premium paying period in proportion to the present value of actual historic and expected future gross premiums. The present value of expected premiums is based upon the premium requirement of each policy and assumptions for mortality, morbidity, persistency, and investment returns at policy issuance, or policy acquisition, as it relates to VOBA, that include provisions for adverse deviation and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected F-18 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. The Company amortizes DAC and VOBA related to participating, dividend- paying traditional contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties, and certain economic variables, such as inflation. For participating contracts (dividend paying traditional contracts within the closed block) future gross margins are also dependent upon changes in the policyholder dividend obligation. Of these factors, the Company anticipates that investment returns, expenses, persistency, and other factor changes and policyholder dividend scales are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re- estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Total DAC and VOBA amortization during a particular period may increase or decrease depending upon the relative size of the amortization change resulting from the adjustment to DAC and VOBA for the update of actual gross margins and the re-estimation of expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances. The Company amortizes DAC and VOBA related to fixed and variable universal life contracts and fixed and variable deferred annuity contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used, and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, and persistency are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Total DAC and VOBA amortization during a particular period may increase or decrease depending upon the relative size of the amortization change resulting from the adjustment to DAC and VOBA for the update of actual gross profits and the re-estimation of expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period which can result in significant fluctuations F-19 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these changes and only changes the assumption when its long-term expectation changes. The Company also reviews periodically other long-term assumptions underlying the projections of estimated gross margins and profits. These include investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Prior to 2007, DAC related to any internally replaced contract was generally expensed at the date of replacement. As described more fully in "Adoption of New Accounting Pronouncements," effective January 1, 2007, the Company adopted Statement of Position ("SOP") 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts ("SOP 05-1"). Under SOP 05-1, an internal replacement is defined as a modification in product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If the modification substantially changes the contract, the DAC is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Sales Inducements The Company has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in interest credited to policyholder account balances. Each year the Company reviews the deferred sales inducements to determine the recoverability of these balances. Value of Distribution Agreements and Customer Relationships Acquired Value of distribution agreements ("VODA") is reported in other assets and represents the present value of future profits associated with the expected future business derived from the distribution agreements. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past acquisitions are amortized over useful life ranging from 10 to 30 years and such amortization is included in other expenses. Each year the Company reviews VODA and VOCRA to determine the recoverability of these balances. F-20 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Goodwill Goodwill, which is included in other assets, is the excess of cost over the estimated fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter. Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the "reporting unit" level. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit's goodwill exceeds its estimated fair value, there is an indication of impairment and the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business acquisition. The excess of the carrying value of goodwill over the implied fair value of goodwill is recognized as an impairment and recorded as a charge against net income. In performing its goodwill impairment tests, when management believes meaningful comparable market data are available, the estimated fair values of the reporting units are determined using a market multiple approach. When relevant comparables are not available, the Company uses a discounted cash flow model. For reporting units which are particularly sensitive to market assumptions, such as the annuities and variable & universal life reporting units within the Individual segment, the Company may corroborate its estimated fair values by using additional valuation methodologies. The key inputs, judgments and assumptions necessary in determining estimated fair value include current book value (with and without accumulated other comprehensive income), the level of economic capital required to support the mix of business, long term growth rates, comparative market multiples, the level of interest rates, credit spreads, equity market levels and the discount rate management believes appropriate to the risk associated with the respective reporting unit. Estimates of fair value are inherently uncertain and represent only management's reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair value of the Company's reporting units could result in goodwill impairments in future periods. Management continues to evaluate current market conditions that may affect the estimated fair value of the Company's reporting units to assess whether any goodwill impairment exists. Continued deteriorating or adverse market conditions for certain reporting units may have an impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. See Note 6 for further consideration of goodwill impairment testing during 2008. Liability for Future Policy Benefits and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, traditional annuities and non- medical health insurance. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying F-21 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. Utilizing these assumptions, liabilities are established on a block of business basis. Future policy benefit liabilities for participating traditional life insurance policies are equal to the aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non- forfeiture interest rate, ranging from 3% to 7%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends. Future policy benefits for non-participating traditional life insurance policies are equal to the aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 2% to 7%. Participating business represented approximately 8% and 9% of the Company's life insurance in-force, and 17% and 16% of the number of life insurance policies in-force, at December 31, 2008 and 2007, respectively. Participating policies represented approximately 32% and 33%, 36% and 36%, and 34% and 33% of gross and net life insurance premiums for the years ended December 31, 2008, 2007 and 2006, respectively. The percentages indicated are calculated excluding the business of the reinsurance segment. Future policy benefit liabilities for individual and group traditional fixed annuities after annuitization are equal to the present value of expected future payments. Interest rate assumptions used in establishing such liabilities range from 2% to 11%. Future policy benefit liabilities for non-medical health insurance are calculated using the net level premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 3% to 8%. Liabilities for unpaid claims and claim expenses are included in future policyholder benefits and represent the amount estimated for claims that have been reported but not settled and claims incurred but not reported. Liabilities for unpaid claims are estimated based upon the Company's historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. The Company establishes future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts and secondary and paid-up guarantees relating to certain life policies as follows: - Guaranteed minimum death benefit ("GMDB") liabilities are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the GMDB liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility are consistent with F-22 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the historical experience of the Standard & Poor's ("S&P") 500 Index. The benefit assumptions used in calculating the liabilities are based on the average benefits payable over a range of scenarios. - Guaranteed minimum income benefit ("GMIB") liabilities are determined by estimating the expected value of the income benefits in excess of the projected account balance at any future date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for estimating the GMIB liabilities are consistent with those used for estimating the GMDB liabilities. In addition, the calculation of guaranteed annuitization benefit liabilities incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. Certain GMIBs have settlement features that result in a portion of that guarantee being accounted for as an embedded derivative and are recorded in policyholder account balances as described below. Liabilities for universal and variable life secondary guarantees and paid- up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balances, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility for variable products are consistent with historical S&P experience. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company establishes policyholder account balances for guaranteed minimum benefit riders relating to certain variable annuity products as follows: - Guaranteed minimum withdrawal benefit riders ("GMWB") guarantee the contractholder a return of their purchase payment via partial withdrawals, even if the account value is reduced to zero, provided that the contractholder's cumulative withdrawals in a contract year do not exceed a certain limit. The initial guaranteed withdrawal amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMWB is an embedded derivative, which is measured at estimated fair value separately from the host variable annuity product. - Guaranteed minimum accumulation benefit riders ("GMAB") provide the contractholder, after a specified period of time determined at the time of issuance of the variable annuity contract, with a minimum accumulation of their purchase payments even if the account value is reduced to zero. The initial guaranteed accumulation amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMAB is an embedded derivative, which is measured at estimated fair value separately from the host variable annuity product. For GMWB, GMAB and certain GMIB, the initial benefit base is increased by additional purchase payments made within a certain time period and decreases by benefits paid and/or withdrawal amounts. After a specified period of time, the benefit base may also increase as a result of an optional reset as defined in the contract. At the inception, the GMWB, GMAB and certain GMIB are accounted for as embedded derivatives with changes in estimated fair value reported in net investment gains (losses). The Company attributes to the embedded derivative a portion of the expected future rider fees to be collected from the policyholder equal to the present value of expected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. F-23 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable risk free rates. Beginning in 2008, the valuation of these embedded derivatives now includes an adjustment for the Company's own credit and risk margins for non-capital market inputs. The Company's own credit adjustment is determined taking into consideration publicly available information relating to the Company's debt as well as its claims paying ability. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, changes in the Company's own credit standing; and variations in actuarial assumptions regarding policyholder behavior, and risk margins related to non- capital market inputs may result in significant fluctuations in the estimated fair value of the riders that could materially affect net income. The Company periodically reviews its estimates of actuarial liabilities for future policy benefits and compares them with its actual experience. Differences between actual experience and the assumptions used in pricing these policies, guarantees and riders and in the establishment of the related liabilities result in variances in profit and could result in losses. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. Policyholder account balances relate to investment-type contracts, universal life-type policies and certain guaranteed minimum benefit riders. Investment-type contracts principally include traditional individual fixed annuities in the accumulation phase and, non-variable group annuity contracts. Policyholder account balances for these contracts are equal to: (i) policy account values, which consist of an accumulation of gross premium payments; (ii) credited interest, ranging from 1% to 17%, less expenses, mortality charges, and withdrawals; and (iii) fair value adjustments relating to business combinations. Other Policyholder Funds Other policyholder funds include policy and contract claims, unearned revenue liabilities, premiums received in advance, policyholder dividends due and unpaid, and policyholder dividends left on deposit. The liability for policy and contract claims generally relates to incurred but not reported death, disability, long-term care and dental claims, as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from actuarial analyses of historical patterns of claims and claims development for each line of business. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits and margins, similar to DAC. Such amortization is recorded in universal life and investment-type product policy fees. F-24 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premium received in advance and applies the cash received to premiums when due. Also included in other policyholder funds are policyholder dividends due and unpaid on participating policies and policyholder dividends left on deposit. Such liabilities are presented at amounts contractually due to policyholders. Recognition of Insurance Revenue and Related Benefits Premiums related to traditional life and annuity policies with life contingencies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided against such revenues to recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of amounts assessed against policyholder account balances for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged to operations include interest credited and benefit claims incurred in excess of related policyholder account balances. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. The portion of fees allocated to embedded derivatives described previously is recognized within net investment gains (losses) as part of the estimated fair value of embedded derivative. Other Revenues Other revenues include, in addition to items described elsewhere herein, advisory fees, broker-dealer commissions and fees, and administrative service fees. Such fees and commissions are recognized in the period in which services are performed. Other revenues also include changes in account value relating to corporate-owned life insurance ("COLI"). Under certain COLI contracts, if the Company reports certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject to market value adjustment, which could result in a reduction of the account value. Policyholder Dividends Policyholder dividends are approved annually by Metropolitan Life Insurance Company and its insurance subsidiaries' boards of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the appropriate level of statutory surplus to be retained by the insurance subsidiaries. Income Taxes The Company joins with MetLife, Inc. and its includable life insurance and non-life insurance subsidiaries in filing a consolidated U.S. federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Company participates in a tax sharing agreement with MetLife, Inc. Under the agreement, current income tax expense (benefit) is computed on a separate return basis and provides that members shall make payments (receive reimbursement) to (from) MetLife, Inc. to the extent that their incomes (losses and other credits) contribute to (reduce) the consolidated income tax expense. The consolidating companies F-25 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) are reimbursed for net operating losses or other tax attributes they have generated when utilized in the consolidated return. The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established as well as the amount of such allowances. When making such determination, consideration is given to, among other things, the following: (i) future taxable income exclusive of reversing temporary differences and carryforwards; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. The Company may be required to change its provision for income taxes in certain circumstances. Examples of such circumstances include when the ultimate deductibility of certain items is challenged by taxing authorities (See also Note 12) or when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations, could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. As described more fully in "Adoption of New Accounting Pronouncements," the Company adopted FIN No. 48, Accounting for Uncertainty in Income Taxes -- An Interpretation of FASB Statement No. 109 ("FIN 48") effective January 1, 2007. Under FIN 48, the Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by third parties. For each of its reinsurance agreements, the Company determines if the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. F-26 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC and recognized as a component of other expenses on a basis consistent with the way the acquisition costs on the underlying reinsured contracts would be recognized. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums and ceded (assumed) future policy benefit liabilities are established. For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums and are reflected as a component of premiums and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts paid (received) in excess of (which do not exceed) the related insurance liabilities ceded (assumed) are recognized immediately as a loss. Any gains on such retroactive agreements are deferred and recorded in other liabilities. The gains are amortized primarily using the recovery method. The assumptions used to account for both long and short-duration reinsurance agreements are consistent with those used for the underlying contracts. Ceded policyholder and contract related liabilities, other than those currently due, are reported gross on the balance sheet. Amounts currently recoverable under reinsurance agreements are included in premiums and other receivables and amounts currently payable are included in other liabilities. Such assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within other assets. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed previously. Employee Benefit Plans The Company sponsors and administers various qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees and sales representatives who meet specified eligibility requirements of the sponsor and its participating affiliates. A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. F-27 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually based upon the average annual rate of interest on 30-year Treasury securities, for each account balance. At December 31, 2008, virtually all the obligations are calculated using the traditional formula. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired participants. Participants that were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company, may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement medical benefits. Participants hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. SFAS No. 87, Employers' Accounting for Pensions ("SFAS 87"), as amended, established the accounting for pension plan obligations. Under SFAS 87, the projected pension benefit obligation ("PBO") is defined as the actuarially calculated present value of vested and non-vested pension benefits accrued based on future salary levels. The accumulated pension benefit obligation ("ABO") is the actuarial present value of vested and non-vested pension benefits accrued based on current salary levels. Obligations, both PBO and ABO, of the defined benefit pension plans are determined using a variety of actuarial assumptions, from which actual results may vary, as described below. SFAS No. 106, Employers' Accounting for Postretirement Benefits Other than Pensions, as amended, established the accounting for expected postretirement plan benefit obligations ("EPBO") which represents the actuarial present value of all other postretirement benefits expected to be paid after retirement to employees and their dependents. Unlike for pensions, the EPBO is not recorded in the financial statements but is used in measuring the periodic expense. The accumulated postretirement plan benefit obligations ("APBO") represents the actuarial present value of future other postretirement benefits attributed to employee services rendered through a particular date and is the valuation basis upon which liabilities are established. The APBO is determined using a variety of actuarial assumptions, from which actual results may vary, as described below. Prior to December 31, 2006, the funded status of the pension and other postretirement plans, which is the difference between the estimated fair value of plan assets and the PBO for pension plans and the APBO for other postretirement plans (collectively, the "Benefit Obligations"), was offset by the unrecognized actuarial gains or losses, prior service cost and transition obligations to determine prepaid or accrued benefit cost, as applicable. The net amount was recorded as a prepaid or accrued benefit cost, as applicable. Further, for pension plans, if the ABO exceeded the estimated fair value of the plan assets, that excess was recorded as an additional minimum pension liability with a corresponding intangible asset. Recognition of the intangible asset was limited to the amount of any unrecognized prior service cost. Any additional minimum pension liability in excess of the allowable intangible asset was charged, net of income tax, to accumulated other comprehensive income. As described more fully in "Adoption of New Accounting Pronouncements," effective December 31, 2006, the Company adopted SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans -- an amendment of FASB Statements No. 87, 88, 106, and SFAS No. 132(r) ("SFAS 158"). Effective with the adoption of SFAS 158 on December 31, 2006, the Company recognizes the funded status of the Benefit Obligations for each of its plans on the consolidated balance sheet. The actuarial gains or losses, prior service costs and credits, and the remaining net transition asset or obligation that had not yet been included in net periodic benefit costs at December 31, 2006 are now charged, net of income tax, to accumulated other comprehensive income. Additionally, these changes eliminated the additional minimum pension liability provisions of SFAS 87. F-28 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Net periodic benefit cost is determined using management estimates and actuarial assumptions to derive service cost, interest cost, and expected return on plan assets for a particular year. Net periodic benefit cost also includes the applicable amortization of any prior service cost (credit) arising from the increase (decrease) in prior years' benefit costs due to plan amendments or initiation of new plans. These costs are amortized into net periodic benefit cost over the expected service years of employees whose benefits are affected by such plan amendments. Actual experience related to plan assets and/or the benefit obligations may differ from that originally assumed when determining net periodic benefit cost for a particular period, resulting in gains or losses. To the extent such aggregate gains or losses exceed 10 percent of the greater of the benefit obligations or the market-related asset value of the plans, they are amortized into net periodic benefit cost over the expected service years of employees expected to receive benefits under the plans. The obligations and expenses associated with these plans require an extensive use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases, healthcare cost trend rates, as well as assumptions regarding participant demographics such as rate and age of retirements, withdrawal rates and mortality. Management, in consultation with its external consulting actuarial firm, determines these assumptions based upon a variety of factors such as historical performance of the plan and its assets, currently available market and industry data, and expected benefit payout streams. The assumptions used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in participant demographics. These differences may have a significant effect on the Company's consolidated financial statements and liquidity. The Company also sponsors defined contribution savings and investment plans ("SIP") for substantially all employees under which a portion of participant contributions are matched. Applicable matching contributions are made each payroll period. Accordingly, the Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as earned to the SIP trust, no liability for matching contributions is recognized in the consolidated balance sheets. Stock-Based Compensation Stock-based compensation recognized in the Company's consolidated results of operations is allocated from MetLife, Inc. The accounting policies described below represent those that MetLife, Inc. applies in determining such allocated expenses. Effective January 1, 2006, MetLife, Inc. adopted, using the modified prospective transition method, SFAS No. 123 (revised 2004), Share-Based Payment ("SFAS 123(r)"). In accordance with this guidance the cost of all stock-based transactions is measured at fair value and recognized over the period during which a grantee is required to provide goods or services in exchange for the award. Although the terms of MetLife, Inc.'s stock-based plans do not accelerate vesting upon retirement, or the attainment of retirement eligibility, the requisite service period subsequent to attaining such eligibility is considered nonsubstantive. Accordingly, MetLife, Inc. recognizes compensation expense related to stock-based awards over the shorter of the requisite service period or the period to attainment of retirement eligibility. Prior to January 1, 2006, MetLife, Inc. recognized stock-based compensation over the vesting period of the grant or award, including grants or awards to retirement-eligible employees. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense when recognizing expense over the requisite service period. Prior to January 1, 2006, MetLife, Inc. recognized the corresponding reduction of stock compensation in the period in which the forfeitures occurred. Stock-based awards granted after December 31, 2002 but prior to January 1, 2006 were accounted for on a prospective basis using the fair value accounting method prescribed by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), as amended by SFAS No. 148, Accounting for Stock-Based Compensation -- Transition and Disclosure. The fair value method prescribed by SFAS 123 required compensation expense to be measured based on the fair value of the equity instrument at the grant or award date. Stock-based compensation was recognized over the vesting period of the grant or award, including grants or awards to retirement-eligible employees. F-29 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Foreign Currency Balance sheet accounts of foreign operations are translated at the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing during the year. The local currencies of foreign operations generally are the functional currencies unless the local economy is highly inflationary. Translation adjustments are charged or credited directly to other comprehensive income (loss). Gains and losses from foreign currency transactions are reported as net investment gains (losses) in the period in which they occur. Discontinued Operations The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected in the Company's consolidated financial statements. It is possible that an adverse outcome in certain of the Company's litigation and regulatory investigations, or the use of different assumptions in the determination of amounts recorded, could have a material effect upon the Company's consolidated net income or cash flows in particular quarterly or annual periods. Separate Accounts Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Assets within the Company's separate accounts primarily include: mutual funds, fixed maturity and equity securities, mortgage loans, derivatives, hedge funds, other limited partnership interests, short-term investments, and cash and cash equivalents. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: (i) such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; (iii) investments are directed by the contractholder; and (iv) all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets meeting such criteria at their fair value which is based on the estimated fair values of the underlying assets comprising the portfolios of an individual separate account. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the consolidated statements of income. Separate accounts not meeting the above criteria are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. F-30 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Fair Value Effective January 1, 2008, the Company adopted SFAS 157 which defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements and applied the provisions of the statement prospectively to assets and liabilities measured at fair value. The adoption of SFAS 157 changed the valuation of certain freestanding derivatives by moving from a mid to bid pricing convention as it relates to certain volatility inputs as well as the addition of liquidity adjustments and adjustments for risks inherent in a particular input or valuation technique. The adoption of SFAS 157 also changed the valuation of the Company's embedded derivatives, most significantly the valuation of embedded derivatives associated with certain riders on variable annuity contracts. The change in valuation of embedded derivatives associated with riders on annuity contracts resulted from the incorporation of risk margins associated with non capital market inputs and the inclusion of the Company's own credit standing in their valuation. At January 1, 2008, the impact of adopting SFAS 157 on assets and liabilities measured at estimated fair value was $13 million ($8 million, net of income tax) and was recognized as a change in estimate in the accompanying consolidated statement of income where it was presented in the respective income statement caption to which the item measured at estimated fair value is presented. There were no significant changes in estimated fair value of items measured at fair value and reflected in accumulated other comprehensive income (loss). The addition of risk margins and the Company's own credit spread in the valuation of embedded derivatives associated with annuity contracts may result in significant volatility in the Company's consolidated net income in future periods. Note 19 presents the estimated fair value of all assets and liabilities required to be measured at estimated fair value as well as the expanded fair value disclosures required by SFAS 157. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to recognize related unrealized gains and losses in earnings. The fair value option is applied on an instrument-by-instrument basis upon adoption of the standard, upon the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election is an irrevocable election. Effective January 1, 2008, the Company did not elect the fair value option for any instruments. Effective January 1, 2008, the Company adopted FASB Staff Position ("FSP") No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 ("FSP 157- 1"). FSP 157-1 amends SFAS 157 to provide a scope out exception for lease classification and measurement under SFAS No. 13, Accounting for Leases. The Company also adopted FSP No. FAS 157-2, Effective Date of FASB Statement No. 157 which delays the effective date of SFAS 157 for certain nonfinancial assets and liabilities that are recorded at fair value on a nonrecurring basis. The effective date is delayed until January 1, 2009 and impacts balance sheet items including nonfinancial assets and liabilities in a business combination and the impairment testing of goodwill and long-lived assets. Effective September 30, 2008, the Company adopted FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active ("FSP 157-3"). FSP 157-3 provides guidance on how a company's internal cash flow and discount rate assumptions should be considered in the measurement of fair value when relevant market data does not exist, how observable market information in an inactive market affects fair value measurement and how the use of market quotes should be considered when assessing the relevance of observable and unobservable data available to measure fair value. The adoption of FSP 157-3 did not have a material impact on the Company's consolidated financial statements. F-31 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Investments Effective December 31, 2008, the Company adopted FSP No. FAS 140-4 and FIN 46(r)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities ("FSP 140-4 and FIN 46(r)-8"). FSP 140-4 and FIN 46(r)-8 requires additional qualitative and quantitative disclosures about a transferors' continuing involvement in transferred financial assets and involvement in VIEs. The exact nature of the additional required VIE disclosures vary and depend on whether or not the VIE is a qualifying special-purpose entity ("QSPE"). For VIEs that are QSPEs, the additional disclosures are only required for a non-transferor sponsor holding a variable interest or a non-transferor servicer holding a significant variable interest. For VIEs that are not QSPEs, the additional disclosures are only required if the Company is the primary beneficiary, and if not the primary beneficiary, only if the Company holds a significant variable interest or is the sponsor. The Company provided all of the material required disclosures in its consolidated financial statements. Effective December 31, 2008, the Company adopted FSP No. EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 ("FSP EITF 99-20- 1"). FSP EITF 99-20-1 amends the guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to more closely align the guidance to determine whether an other-than-temporary impairment has occurred for a beneficial interest in a securitized financial asset with the guidance in SFAS 115, Accounting for Certain Investments in Debt and Equity Securities for debt securities classified as available-for-sale or held-to-maturity. The adoption of FSP EITF 99-20-1 did not have an impact on the Company's consolidated financial statements. Derivative Financial Instruments Effective December 31, 2008, the Company adopted FSP No. FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees -- An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1 and FIN 45-4"). FSP 133-1 and FIN 45-4 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133") to require certain enhanced disclosures by sellers of credit derivatives by requiring additional information about the potential adverse effects of changes in their credit risk, financial performance, and cash flows. It also amends FIN No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others -- An Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. The Company provided all of the material required disclosures in its consolidated financial statements. Effective January 1, 2008, the Company adopted SFAS 133 Implementation Issue No. E-23, Clarification of the Application of the Shortcut Method ("Issue E-23"). Issue E-23 amended SFAS 133 by permitting interest rate swaps to have a non-zero fair value at inception when applying the shortcut method of assessing hedge effectiveness, as long as the difference between the transaction price (zero) and the fair value (exit price), as defined by SFAS 157, is solely attributable to a bid-ask spread. In addition, entities are not precluded from applying the shortcut method of assessing hedge effectiveness in a hedging relationship of interest rate risk involving an interest bearing asset or liability in situations where the hedged item is not recognized for accounting purposes until settlement date as long as the period between trade date and settlement date of the hedged item is consistent with generally established conventions in the marketplace. The adoption of Issue E-23 did not have an impact on the Company's consolidated financial statements. F-32 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Effective January 1, 2006, the Company adopted prospectively SFAS No. 155, Accounting for Certain Hybrid Instruments ("SFAS 155"). SFAS 155 amends SFAS 133 and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS 140"). SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole, eliminating the need to bifurcate the derivative from its host, if the holder elects to account for the whole instrument on a fair value basis. In addition, among other changes, SFAS 155: (i) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (ii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (iii) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (iv) amends SFAS 140 to eliminate the prohibition on a QSPE from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial interest. The adoption of SFAS 155 did not have a material impact on the Company's consolidated financial statements. Effective October 1, 2006, the Company adopted SFAS 133 Implementation Issue No. B40, Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets ("Issue B40"). Issue B40 clarifies that a securitized interest in prepayable financial assets is not subject to the conditions in paragraph 13(b) of SFAS 133, if it meets both of the following criteria: (i) the right to accelerate the settlement if the securitized interest cannot be controlled by the investor; and (ii) the securitized interest itself does not contain an embedded derivative (including an interest rate-related derivative) for which bifurcation would be required other than an embedded derivative that results solely from the embedded call options in the underlying financial assets. The adoption of Issue B40 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted prospectively SFAS 133 Implementation Issue No. B38, Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option ("Issue B38") and SFAS 133 Implementation Issue No. B39, Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor ("Issue B39"). Issue B38 clarifies that the potential settlement of a debtor's obligation to a creditor occurring upon exercise of a put or call option meets the net settlement criteria of SFAS 133. Issue B39 clarifies that an embedded call option, in which the underlying is an interest rate or interest rate index, that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower) and the investor will recover substantially all of its initial net investment. The adoption of Issues B38 and B39 did not have a material impact on the Company's consolidated financial statements. Income Taxes Effective January 1, 2007, the Company adopted FIN 48. FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. F-33 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) As a result of the implementation of FIN 48, the Company recognized an $18 million increase in the liability for unrecognized tax benefits and a $16 million decrease in the interest liability for unrecognized tax benefits, as well as a $17 million increase in the liability for unrecognized tax benefits and a $5 million increase in the interest liability for unrecognized tax benefits which are included in liabilities of subsidiaries held-for-sale. The corresponding reduction to the January 1, 2007 balance of retained earnings was $13 million, net of $11 million of minority interest included in liabilities of subsidiaries held-for-sale. See also Note 12. Insurance Contracts Effective January 1, 2007, the Company adopted SOP 05-1 which provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long- Duration Contracts and for Realized Gains and Losses from the Sale of Investments. SOP 05-1 defines an internal replacement and is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. In addition, in February 2007, the American Institute of Certified Public Accountants issued related Technical Practice Aids ("TPAs") to provide further clarification of SOP 05-1. The TPAs became effective concurrently with the adoption of SOP 05-1. As a result of the adoption of SOP 05-1 and the related TPAs, if an internal replacement modification substantially changes a contract, then the DAC is written off immediately through income and any new deferrable costs associated with the new replacement are deferred. If a contract modification does not substantially change the contract, the DAC amortization on the original contract will continue and any acquisition costs associated with the related modification are immediately expensed. The adoption of SOP 05-1 and the related TPAs resulted in a reduction to DAC and VOBA on January 1, 2007 and an acceleration of the amortization period relating primarily to the Company's group life and health insurance contracts that contain certain rate reset provisions. Prior to the adoption of SOP 05-1, DAC on such contracts was amortized over the expected renewable life of the contract. Upon adoption of SOP 05-1, DAC on such contracts is to be amortized over the rate reset period. The impact at January 1, 2007 was a cumulative effect adjustment of $202 million, net of income tax of $116 million, which was recorded as a reduction to retained earnings. Defined Benefit and Other Postretirement Plans Effective December 31, 2006, MetLife, Inc. adopted SFAS 158. The pronouncement revises financial reporting standards for defined benefit pension and other postretirement benefit plans by requiring the: (i) recognition in the statement of financial position of the funded status of defined benefit plans measured as the difference between the estimated fair value of plan assets and the benefit obligation, which is the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement benefit plans; (ii) recognition as an adjustment to accumulated other comprehensive income (loss), net of income tax, those amounts of actuarial gains and losses, prior service costs and credits, and net asset or obligation at transition that have not yet been included in net periodic benefit costs at the end of the year of adoption; (iii) recognition of subsequent changes in funded status as a component of other comprehensive income; (iv) measurement of benefit plan assets and obligations at the date of the statement of financial position; and (v) disclosure of additional information about the effects on the employer's statement of financial position. F-34 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The adoption of SFAS 158 resulted in a reduction of $749 million, net of income tax, to accumulated other comprehensive income, which is included as a component of total consolidated stockholder's equity. As the Company's measurement date for its pension and other postretirement benefit plans is already December 31 there was no impact of adoption due to changes in measurement date. See also "Summary of Significant Accounting Policies and Critical Accounting Estimates" and Note 14. Stock Compensation Plans As described previously, effective January 1, 2006, MetLife, Inc. adopted SFAS 123(r) including supplemental application guidance issued by the U.S. Securities and Exchange Commission in Staff Accounting Bulletin ("SAB") No. 107, Share-Based Payment using the modified prospective transition method. In accordance with the modified prospective transition method, results for prior periods have not been restated. SFAS 123(r) requires that the cost of all stock- based transactions be measured at fair value and recognized over the period during which a grantee is required to provide goods or services in exchange for the award. MetLife, Inc. had previously adopted the fair value method of accounting for stock-based awards as prescribed by SFAS 123 on a prospective basis effective January 1, 2003. MetLife, Inc. did not modify the substantive terms of any existing awards prior to adoption of SFAS 123(r). Under the modified prospective transition method, compensation expense recognized during the year ended December 31, 2006 includes: (a) compensation expense for all stock-based awards granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation expense for all stock- based awards granted beginning January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(r). The adoption of SFAS 123(r) did not have a significant impact on the Company's financial position or results of operations as all stock-based awards accounted for under the intrinsic value method prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees had vested prior to the adoption date and the Company, in conjunction with MetLife, Inc. had adopted the fair value recognition provisions of SFAS 123 on January 1, 2003. SFAS 123 allowed forfeitures of stock-based awards to be recognized as a reduction of compensation expense in the period in which the forfeiture occurred. Upon adoption of SFAS 123(r), MetLife, Inc. changed its policy and now incorporates an estimate of future forfeitures into the determination of compensation expense when recognizing expense over the requisite service period. The impact of this change in accounting policy was not significant to the Company's financial position or results of operations as of the date of adoption. Additionally, for awards granted after adoption, MetLife, Inc. changed its policy from recognizing expense for stock-based awards over the requisite service period to recognizing such expense over the shorter of the requisite service period or the period to attainment of retirement-eligibility. Prior to the adoption of SFAS 123(r), the Company presented tax benefits of deductions resulting from the exercise of stock options within operating cash flows in the consolidated statements of cash flows. SFAS 123(r) requires tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options be classified and reported as a financing cash inflow upon adoption of SFAS 123(r). Other Pronouncements Effective January 1, 2008, the Company adopted FSP No. FIN 39-1, Amendment of FASB Interpretation No. 39 ("FSP 39-1"). FSP 39-1 amends FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts ("FIN 39"), to permit a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement that F-35 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) have been offset in accordance with FIN 39. FSP 39-1 also amends FIN 39 for certain terminology modifications. Upon adoption of FSP 39-1, the Company did not change its accounting policy of not offsetting fair value amounts recognized for derivative instruments under master netting arrangements. The adoption of FSP 39-1 did not have an impact on the Company's consolidated financial statements. Effective January 1, 2008, the Company adopted Emerging Issues Task Force ("EITF") Issue No. 07-6, Accounting for the Sale of Real Estate When the Agreement Includes a Buy-Sell Clause ("EITF 07-6") prospectively. EITF 07-6 addresses whether the existence of a buy-sell arrangement would preclude partial sales treatment when real estate is sold to a jointly owned entity. EITF 07-6 concludes that the existence of a buy-sell clause does not necessarily preclude partial sale treatment under current guidance. The adoption of EITF 07-6 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2007, the Company adopted FSP No. FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction ("FSP 13-2"). FSP 13-2 amends SFAS No. 13, Accounting for Leases, to require that a lessor review the projected timing of income tax cash flows generated by a leveraged lease annually or more frequently if events or circumstances indicate that a change in timing has occurred or is projected to occur. In addition, FSP 13-2 requires that the change in the net investment balance resulting from the recalculation be recognized as a gain or loss from continuing operations in the same line item in which leveraged lease income is recognized in the year in which the assumption is changed. The adoption of FSP 13-2 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2007, the Company adopted SFAS No. 156, Accounting for Servicing of Financial Assets -- an amendment of FASB Statement No. 140 ("SFAS 156"). Among other requirements, SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations. The adoption of SFAS 156 did not have an impact on the Company's consolidated financial statements. Effective November 15, 2006, the Company adopted SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108"). SAB 108 provides guidance on how prior year misstatements should be considered when quantifying misstatements in current year financial statements for purposes of assessing materiality. SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when relevant quantitative and qualitative factors are considered, is material. SAB 108 permits companies to initially apply its provisions by either restating prior financial statements or recording a cumulative effect adjustment to the carrying values of assets and liabilities as of January 1, 2006 with an offsetting adjustment to retained earnings for errors that were previously deemed immaterial but are material under the guidance in SAB 108. The adoption of SAB 108 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted prospectively EITF Issue No. 05-7, Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related Issues ("EITF 05-7"). EITF 05-7 provides guidance on whether a modification of conversion options embedded in debt results in an extinguishment of that debt. In certain situations, companies may change the terms of an embedded conversion option as part of a debt modification. The EITF concluded that the change in the fair value of an embedded conversion option upon modification should be included in the analysis of EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt Instruments, to determine whether a modification or extinguishment has occurred and that a change in the fair value of a conversion option should be recognized upon the modification as a discount (or premium) associated with the debt, and an increase (or decrease) in additional paid-in capital. The adoption of EITF 05-7 did not have a material impact on the Company's consolidated financial statements. F-36 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Effective January 1, 2006, the Company adopted EITF Issue No. 05-8, Income Tax Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature ("EITF 05-8"). EITF 05-8 concludes that: (i) the issuance of convertible debt with a beneficial conversion feature results in a basis difference that should be accounted for as a temporary difference; and (ii) the establishment of the deferred tax liability for the basis difference should result in an adjustment to additional paid-in capital. EITF 05-8 was applied retrospectively for all instruments with a beneficial conversion feature accounted for in accordance with EITF Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments. The adoption of EITF 05-8 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"). SFAS 154 requires retrospective application to prior periods' financial statements for a voluntary change in accounting principle unless it is deemed impracticable. It also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non- financial assets be accounted for as a change in accounting estimate rather than a change in accounting principle. The adoption of SFAS 154 did not have a material impact on the Company's consolidated financial statements. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Business Combinations In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations -- A Replacement of FASB Statement No. 141 ("SFAS 141(r)") and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements -- An Amendment of ARB No. 51 ("SFAS 160"). In April 2009, the FASB also issued FSP 141(r)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies ("FSP 141(r)-1"). Under these pronouncements: - All business combinations (whether full, partial or "step" acquisitions) result in all assets and liabilities of an acquired business being recorded at fair value, with limited exceptions. - Acquisition costs are generally expensed as incurred; restructuring costs associated with a business combination are generally expensed as incurred subsequent to the acquisition date. - The fair value of the purchase price, including the issuance of equity securities, is determined on the acquisition date. - Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if the acquisition- date fair value can be reasonably determined. If the fair value is not estimable, an asset or liability is recorded if existence or incurrence at the acquisition date is probable and its amount is reasonably estimable. - Certain acquired contingent liabilities are recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies. - Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. - Noncontrolling interests (formerly known as "minority interests") are valued at fair value at the acquisition date and are presented as equity rather than liabilities. - When control is attained on previously noncontrolling interests, the previously held equity interests are remeasured at fair value and a gain or loss is recognized. - Purchases or sales of equity interests that do not result in a change in control are accounted for as equity transactions. F-37 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - When control is lost in a partial disposition, realized gains or losses are recorded on equity ownership sold and the remaining ownership interest is remeasured and holding gains or losses are recognized. The pronouncements are effective for fiscal years beginning on or after December 15, 2008 and apply prospectively to business combinations after that date. Presentation and disclosure requirements related to noncontrolling interests must be retrospectively applied. The Company will apply the guidance in SFAS 141(r), and FSP 141(r)-1 prospectively on its accounting for future acquisitions and does not expect the adoption of SFAS 160 to have a material impact on the Company's consolidated financial statements. In November 2008, the FASB ratified the consensus on EITF Issue No. 08-6, Equity Method Investment Accounting Considerations ("EITF 08-6"). EITF 08-6 addresses a number of issues associated with the impact that SFAS 141(r) and SFAS 160 might have on the accounting for equity method investments, including how an equity method investment should initially be measured, how it should be tested for impairment, and how changes in classification from equity method to cost method should be treated. EITF 08-6 is effective prospectively for fiscal years beginning on or after December 15, 2008. The Company does not expect the adoption of EITF 08-6 to have a material impact on the Company's consolidated financial statements. In November 2008, the FASB ratified the consensus on EITF Issue No. 08-7, Accounting for Defensive Intangible Assets ("EITF 08-7"). EITF 08-7 requires that an acquired defensive intangible asset (i.e., an asset an entity does not intend to actively use, but rather, intends to prevent others from using) be accounted for as a separate unit of accounting at time of acquisition, not combined with the acquirer's existing intangible assets. In addition, the EITF concludes that a defensive intangible asset may not be considered immediately abandoned following its acquisition or have indefinite life. The Company will apply the guidance of EITF 08-7 prospectively to its intangible assets acquired after fiscal years beginning on or after December 15, 2008. In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). This change is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(r) and other GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The requirement for determining useful lives and related disclosures will be applied prospectively to intangible assets acquired as of, and subsequent to, the effective date. Derivative Financial Instruments In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities -- An Amendment of FASB Statement No. 133 ("SFAS 161"). SFAS 161 requires enhanced qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company will provide all of the material required disclosures in the appropriate future interim and annual periods. Other Pronouncements In December 2008, the FASB issued FSP No. FAS 132(r)-1, Employers' Disclosures about Postretirement Benefit Plan Assets ("FSP 132(r)-1"). FSP 132(r)-1 amends SFAS No. 132(r), Employers' Disclosures about Pensions and Other Postretirement Benefits to enhance the transparency surrounding the types of assets and associated risks in an employer's defined benefit pension or other postretirement plan. The FSP requires an employer to disclose information about the valuation of plan assets similar to that required under SFAS 157. FSP 132(r)-1 is effective for fiscal years ending after December 15, 2009. The Company will provide all of the material required disclosures in the appropriate future annual period. F-38 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) In September 2008, the FASB ratified the consensus on EITF Issue No. 08-5, Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement ("EITF 08-5"). EITF 08-5 concludes that an issuer of a liability with a third-party credit enhancement should not include the effect of the credit enhancement in the fair value measurement of the liability. In addition, EITF 08-5 requires disclosures about the existence of any third-party credit enhancement related to liabilities that are measured at fair value. EITF 08-5 is effective in the first reporting period beginning after December 15, 2008 and will be applied prospectively, with the effect of initial application included in the change in fair value of the liability in the period of adoption. The Company does not expect the adoption of EITF 08-5 to have a material impact on the Company's consolidated financial statements. In February 2008, the FASB issued FSP No. FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions ("FSP 140- 3"). FSP 140-3 provides guidance for evaluating whether to account for a transfer of a financial asset and repurchase financing as a single transaction or as two separate transactions. FSP 140-3 is effective prospectively for financial statements issued for fiscal years beginning after November 15, 2008. The Company does not expect the adoption of FSP 140-3 to have a material impact on its consolidated financial statements. 2. ACQUISITIONS AND DISPOSITIONS DISPOSITION OF REINSURANCE GROUP OF AMERICA, INCORPORATED On September 12, 2008, MetLife, Inc. completed a tax-free split-off of its majority-owned subsidiary, Reinsurance Group of America, Incorporated ("RGA"). In connection with this transaction, General American Life Insurance Company ("GALIC") dividended to Metropolitan Life Insurance Company and Metropolitan Life Insurance Company dividended to MetLife, Inc. substantially all of its interests in RGA at a value of $1,318 million. The net book value of RGA at the time of the dividend was $1,716 million. The loss recognized in connection with the dividend was $398 million. Metropolitan Life Insurance Company, through its investment in GALIC, retained 3,000,000 shares of RGA Class A common stock. These shares are marketable equity securities which do not constitute significant continuing involvement in the operations of RGA; accordingly, they have been classified within equity securities in the consolidated financial statements of the Company at a cost basis of $157 million which is equivalent to the net book value of the shares. The carrying value will be adjusted to fair value at each subsequent reporting date. The Company has agreed to dispose of the remaining shares of RGA within the next five years. In connection with the Company's agreement to dispose of the remaining shares, the Company also recognized, in its provision for income tax on continuing operations, a deferred tax liability of $16 million which represents the difference between the book and taxable basis of the remaining investment in RGA. The impact of the disposition of the Company's investment in RGA is reflected in the Company's consolidated financial statements as discontinued operations. The disposition of RGA results in the elimination of the Company's Reinsurance segment. The Reinsurance segment was comprised of the results of RGA, which at disposition became discontinued operations of Corporate & Other, and the interest on economic capital, which has been reclassified to the continuing operations of Corporate & Other. See Note 18 for reclassifications related to discontinued operations and Note 17 for segment information. OTHER ACQUISITIONS AND DISPOSITIONS See Note 15 for information on the contribution from MetLife, Inc. in the form of intangible assets related to VOCRA from a 2008 acquisition by MetLife, Inc. On October 20, 2006, MetLife, Inc. sold its subsidiary, Citicorp Life Insurance Company and its subsidiary, First Citicorp Life Insurance Company (collectively, "CLIC") to the Company for $135 million in cash consideration. The net assets of CLIC acquired by the Company were $154 million. The excess of the net assets of CLIC received over the purchase price resulted in an increase of $19 million in additional paid-in capital. In connection F-39 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) with the sale and merger of CLIC with and into Metropolitan Life Insurance Company, MetLife, Inc. contributed $17 million to the Company. See Note 15. On September 30, 2006, the Company acquired MetLife Retirement Services LLC (formerly, CitiStreet Retirement Services LLC), and its subsidiaries from an affiliate, Metropolitan Tower Life Insurance Company ("MTL") for approximately $58 million in cash consideration settled in the fourth quarter of 2006. The assets acquired are principally comprised of $52 million related to the VOCRA. Further information on VOCRA is described in Note 7. On July 1, 2005, MetLife, Inc. completed the acquisition of The Travelers Insurance Company, excluding certain assets, most significantly, Primerica, from Citigroup Inc. ("Citigroup"), and substantially all of Citigroup's international insurance business (collectively, "Travelers"). On September 30, 2006, the Company received a capital contribution, as described in Note 15, from MetLife, Inc. of $377 million in the form of intangible assets related to the VODA of $389 million, net of deferred income tax of $12 million, for which the Company receives the benefit. The VODA originated through MetLife, Inc.'s acquisition of Travelers and was transferred at its amortized cost basis. Further information on VODA is described in Note 7. See Note 18 for information on the disposition of SSRM Holdings, Inc ("SSRM"). 3. INVESTMENTS FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company's fixed maturity and equity securities, and the percentage that each sector represents by the respective total holdings at:
DECEMBER 31, 2008 ------------------------------------------------- COST OR GROSS UNREALIZED AMORTIZED ---------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ------ ------- ---------- ----- (IN MILLIONS) U.S. corporate securities........... $ 49,334 $ 770 $ 6,352 $ 43,752 35.8% Residential mortgage-backed securities........................ 25,659 539 3,145 23,053 18.9 Foreign corporate securities........ 23,898 435 4,109 20,224 16.5 U.S. Treasury/agency securities..... 12,884 3,052 -- 15,936 13.0 Commercial mortgage-backed securities........................ 11,502 11 2,436 9,077 7.4 Asset-backed securities............. 8,490 14 2,193 6,311 5.2 Foreign government securities....... 2,436 464 125 2,775 2.3 State and political subdivision securities........................ 1,225 31 155 1,101 0.9 Other fixed maturity securities..... -- -- -- -- -- -------- ------ ------- -------- ----- Total fixed maturity securities (1), (2)....................... $135,428 $5,316 $18,515 $122,229 100.0% ======== ====== ======= ======== ===== Common stock........................ $ 1,358 $ 29 $ 96 $ 1,291 56.2% Non-redeemable preferred stock (1).. 1,573 1 567 1,007 43.8 -------- ------ ------- -------- ----- Total equity securities........... $ 2,931 $ 30 $ 663 $ 2,298 100.0% ======== ====== ======= ======== =====
F-40 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2007 ------------------------------------------------ GROSS COST OR UNREALIZED AMORTIZED --------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ------ ------ ---------- ----- (IN MILLIONS) U.S. corporate securities............ $ 50,087 $1,488 $1,195 $ 50,380 33.1% Residential mortgage-backed securities......................... 35,773 444 237 35,980 23.6 Foreign corporate securities......... 24,663 1,414 454 25,623 16.8 U.S. Treasury/agency securities...... 14,271 1,296 1 15,566 10.2 Commercial mortgage-backed securities......................... 12,481 204 100 12,585 8.3 Asset-backed securities.............. 7,034 32 309 6,757 4.5 Foreign government securities........ 3,855 850 18 4,687 3.1 State and political subdivision securities......................... 467 13 9 471 0.3 Other fixed maturity securities...... 234 12 29 217 0.1 -------- ------ ------ -------- ----- Total fixed maturity securities (1), (2)........................ $148,865 $5,753 $2,352 $152,266 100.0% ======== ====== ====== ======== ===== Common stock......................... $ 1,988 $ 540 $ 93 $ 2,435 58.4% Non-redeemable preferred stock (1)... 1,909 33 210 1,732 41.6 -------- ------ ------ -------- ----- Total equity securities............ $ 3,897 $ 573 $ 303 $ 4,167 100.0% ======== ====== ====== ======== =====
-------- (1) The Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has a punitive interest rate step-up feature as it believes in most instances this feature will compel the issuer to redeem the security at the specified call date. Perpetual securities that do not have a punitive interest rate step-up feature are classified as non-redeemable preferred stock. Many of such securities have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as "perpetual hybrid securities." Perpetual hybrid securities classified as non-redeemable preferred stock held by the Company at December 31, 2008 and 2007 had an estimated fair value of $885 million and $1,412 million, respectively. In addition, the Company held $122 million and $320 million at estimated fair value, respectively, at December 31, 2008 and 2007 of other perpetual hybrid securities, primarily U.S. financial institutions, also included in non-redeemable preferred stock. Perpetual hybrid securities held by the Company and included within fixed maturity securities (primarily within foreign corporate securities) at December 31, 2008 and 2007 had an estimated fair value of $1,426 million and $2,769 million, respectively. In addition, the Company held $7 million and $20 million at estimated fair value, respectively, at December 31, 2008 and 2007 of other perpetual hybrid securities, primarily U.S. financial institutions, included in fixed maturity securities. (2) At December 31, 2008 and 2007 the Company also held $1,495 million and $2,557 million at estimated fair value, respectively, of redeemable preferred stock which have stated maturity dates which are included within fixed maturity securities. These securities are primarily issued by U.S. financial institutions, have cumulative interest deferral features and are commonly referred to as "capital securities" within U.S. corporate securities. The Company held foreign currency derivatives with notional amounts of $7.3 billion and $7.8 billion to hedge the exchange rate risk associated with foreign denominated fixed maturity securities at December 31, 2008 and 2007, respectively. Below Investment Grade or Non Rated Fixed Maturity Securities. The Company held fixed maturity securities at estimated fair values that were below investment grade or not rated by an independent rating agency F-41 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) that totaled $8.4 billion and $11.6 billion at December 31, 2008 and 2007, respectively. These securities had net unrealized gains (losses) of ($3,275) million and $94 million at December 31, 2008 and 2007, respectively. Non-Income Producing Fixed Maturity Securities. Non-income producing fixed maturity securities at estimated fair value were $59 million and $12 million at December 31, 2008 and 2007, respectively. Net unrealized gains (losses) associated with non-income producing fixed maturity securities were ($17) million and $11 million at December 31, 2008 and 2007, respectively. Fixed Maturity Securities Credit Enhanced by Financial Guarantee Insurers. At December 31, 2008, $2,438 million of the estimated fair value of the Company's fixed maturity securities were credit enhanced by financial guarantee insurers of which $1,463 million, $515 million, $426 million and $34 million are included within U.S. corporate securities, asset-backed securities, state and political subdivision securities, and residential mortgage-backed securities, respectively, and 11% and 74% were guaranteed by financial guarantee insurers who were Aa and Baa rated, respectively. Approximately, 68% of the asset-backed securities that are credit enhanced by financial guarantee insurers are asset-backed securities which are backed by sub-prime mortgage loans. Concentrations of Credit Risk (Fixed Maturity Securities). The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings. The Company is not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company's stockholder's equity, other than securities of the U.S. government and certain U.S. government agencies. At December 31, 2008 and 2007, the Company's holdings in U.S. Treasury and agency fixed maturity securities at estimated fair value were $15.9 billion and $15.6 billion, respectively. As shown in the sector table above, at December 31, 2008, the Company's three largest exposures in its fixed maturity security portfolio were U.S. corporate fixed maturity securities (35.8%), residential mortgage- backed securities (18.9%), and foreign corporate securities (16.5%); and at December 31, 2007, were U.S. corporate fixed maturity securities (33.1%), residential mortgage-backed securities (23.6%), and foreign corporate securities (16.8%). Concentrations of Credit Risk (Fixed Maturity Securities) -- U.S. and Foreign Corporate Securities. At December 31, 2008 and 2007, the Company's holdings in U.S. corporate and foreign corporate fixed maturity securities at estimated fair value were $64.0 billion and $76.0 billion, respectively. The Company maintains a diversified portfolio of corporate securities across industries and issuers. The portfolio does not have exposure to any single issuer in excess of 1% of total invested assets. The exposure to the largest single issuer of corporate fixed maturity securities held at December 31, 2008 and 2007 was $992 million and $830 million, respectively. At December 31, 2008 and 2007, the Company's combined holdings in the ten issuers to which it had the greatest exposure totaled $6.2 billion and $5.5 billion, respectively, the total of these ten issuers being less than 3% of the F-42 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Company's total invested assets at such dates. The table below shows the major industry types that comprise the corporate fixed maturity holdings at:
DECEMBER 31, --------------------------------------- 2008 2007 ------------------ ------------------ ESTIMATED % OF ESTIMATED % OF FAIR VALUE TOTAL FAIR VALUE TOTAL ---------- ----- ---------- ----- (IN MILLIONS) Foreign (1)................................. $20,224 31.6% $25,623 33.7% Industrial.................................. 10,240 16.0 11,782 15.5 Finance..................................... 9,660 15.1 13,034 17.2 Consumer.................................... 9,120 14.3 10,779 14.2 Utility..................................... 8,798 13.8 9,123 12.0 Communications.............................. 3,810 5.9 5,121 6.7 Other....................................... 2,124 3.3 541 0.7 ------- ----- ------- ----- Total..................................... $63,976 100.0% $76,003 100.0% ======= ===== ======= =====
-------- (1) Includes U.S. dollar-denominated debt obligations of foreign obligors, and other fixed maturity foreign investments. Concentrations of Credit Risk (Fixed Maturity Securities) -- Residential Mortgage-Backed Securities. The Company's residential mortgage-backed securities consist of the following holdings at:
DECEMBER 31, --------------------------------------- 2008 2007 ------------------ ------------------ ESTIMATED % OF ESTIMATED % OF FAIR VALUE TOTAL FAIR VALUE TOTAL ---------- ----- ---------- ----- (IN MILLIONS) Residential mortgage-backed securities: Collateralized mortgage obligations....... $17,343 75.2% $24,187 67.2% Pass-through securities................... 5,710 24.8 11,793 32.8 ------- ----- ------- ----- Total residential mortgage-backed securities................................ $23,053 100.0% $35,980 100.0% ======= ===== ======= =====
Collateralized mortgage obligations are a type of mortgage-backed security that creates separate pools or tranches of pass-through cash flows for different classes of bondholders with varying maturities. Pass-through mortgage-backed securities are a type of asset-backed security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for fee, remits or passes these payments through to the holders of the pass-through securities. At December 31, 2008, the exposures in the Company's residential mortgage- backed securities portfolio consist of agency, prime, and alternative residential mortgage loans ("Alt-A") securities of 66%, 24%, and 10% of the total holdings, respectively. At December 31, 2008 and 2007, $21.3 billion and $35.8 billion, respectively, or 93% and 99% respectively of the residential mortgage-backed securities were rated Aaa/AAA by Moody's Investors Service ("Moody's"), S&P, or Fitch Ratings ("Fitch"). The majority of the agency residential mortgage-backed securities are guaranteed or otherwise supported by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Government National Mortgage Association. Prime residential mortgage lending includes the origination of residential mortgage loans to the most credit-worthy customers with high quality credit profiles. Alt-A residential mortgage loans are a classification of mortgage loans where the risk profile of the F-43 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) borrower falls between prime and sub-prime. At December 31, 2008 and 2007, the Company's Alt-A residential mortgage-backed securities exposure was $2.3 billion and $4.2 billion, respectively, with an unrealized loss of $1,315 million and $91 million, respectively. At December 31, 2008 and 2007, $1.5 billion and $4.2 billion, respectively, or 64% and 100%, respectively, of the Company's Alt-A residential mortgage-backed securities were rated Aa/AA or better by Moody's, S&P or Fitch. In December 2008, certain Alt-A residential mortgage-backed securities experienced ratings downgrades from investment grade to below investment grade, contributing to the decrease year over year cited above in those securities rated Aa/AA or better. At December 31, 2008 the Company's Alt-A holdings are distributed as follows: 24% 2007 vintage year, 26% 2006 vintage year; and 50% in the 2005 and prior vintage years. In January 2009, Moody's revised its loss projections for Alt-A residential mortgage-backed securities, and the Company anticipates that Moody's will be downgrading virtually all 2006 and 2007 vintage year Alt-A securities to below investment grade, which will increase the percentage of the Company's Alt-A residential mortgage-backed securities portfolio that will be rated below investment grade. Vintage year refers to the year of origination and not to the year of purchase. Concentrations of Credit Risk (Fixed Maturity Securities) -- Commercial Mortgage-Backed Securities. At December 31, 2008 and 2007, the Company's holdings in commercial mortgage-backed securities was $9.1 billion and $12.6 billion, respectively, at estimated fair value. At December 31, 2008 and 2007, $8.5 billion and $11.1 billion, respectively, of the estimated fair value, or 94% and 88%, respectively, of the commercial mortgage-backed securities were rated Aaa/AAA by Moody's, S&P, or Fitch. At December 31, 2008, the rating distribution of the Company's commercial mortgage-backed securities holdings was as follows: 94% Aaa, 4% Aa, 1% A, and 1% Baa. At December 31, 2008, 83% of the holdings are in the 2005 and prior vintage years. At December 31, 2008, the Company had no exposure to CMBX securities and its holdings of commercial real estate collateralized debt obligations securities was $46 million at estimated fair value. Concentrations of Credit Risk (Fixed Maturity Securities) -- Asset-Backed Securities. At December 31, 2008 and 2007, the Company's holdings in asset- backed securities was $6.3 billion and $6.8 billion, respectively, at estimated fair value. The Company's asset-backed securities are diversified both by sector and by issuer. At December 31, 2008 and 2007, $4.8 billion and $3.8 billion, respectively, or 76% and 56%, respectively, of total asset-backed securities were rated Aaa/AAA by Moody's, S&P or Fitch. At December 31, 2008, the largest exposures in the Company's asset-backed securities portfolio were credit card receivables, residential mortgage-backed securities backed by sub-prime mortgage loans, automobile receivables and student loan receivables of 47%, 12%, 11% and 10% of the total holdings, respectively. Sub-prime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles. At December 31, 2008 and 2007, the Company had exposure to fixed maturity securities backed by sub-prime mortgage loans with estimated fair values of $0.7 billion and $1.2 billion, respectively, and unrealized losses of $457 million and $119 million, respectively. At December 31, 2008, 49% of the asset-backed securities backed by sub-prime mortgage loans have been guaranteed by financial guarantee insurers, of which 21% and 34% were guaranteed by financial guarantee insurers who were Aa and Baa rated, respectively. Concentrations of Credit Risk (Equity Securities). The Company is not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company's stockholder's equity in its equity securities holdings. F-44 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), are as follows:
DECEMBER 31, ----------------------------------------------- 2008 2007 ---------------------- ---------------------- AMORTIZED ESTIMATED AMORTIZED ESTIMATED COST FAIR VALUE COST FAIR VALUE --------- ---------- --------- ---------- (IN MILLIONS) Due in one year or less................. $ 3,491 $ 3,500 $ 2,629 $ 2,726 Due after one year through five years... 21,495 19,741 26,725 27,473 Due after five years through ten years.. 27,411 24,402 24,349 24,739 Due after ten years..................... 37,380 36,145 39,874 42,006 -------- -------- -------- -------- Subtotal.............................. 89,777 83,788 93,577 96,944 Mortgage-backed and asset-backed securities............................ 45,651 38,441 55,288 55,322 -------- -------- -------- -------- Total fixed maturity securities....... $135,428 $122,229 $148,865 $152,266 ======== ======== ======== ========
Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity. Actual maturities may differ from contractual maturities due to the exercise of prepayment options. NET UNREALIZED INVESTMENT GAINS (LOSSES) The components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss), are as follows:
YEARS ENDED DECEMBER 31, ---------------------------- 2008 2007 2006 -------- ------- ------- (IN MILLIONS) Fixed maturity securities........................ $(13,199) $ 3,885 $ 4,685 Equity securities................................ (633) 251 483 Derivatives...................................... 14 (358) (238) Minority interest................................ -- (150) (159) Other............................................ 56 (22) -- -------- ------- ------- Subtotal....................................... (13,762) 3,606 4,771 -------- ------- ------- Amounts allocated from: Insurance liability loss recognition........... (1) (366) (806) DAC and VOBA................................... 2,000 (420) (239) Policyholder dividend obligation............... -- (789) (1,062) -------- ------- ------- Subtotal.................................... 1,999 (1,575) (2,107) -------- ------- ------- Deferred income tax.............................. 4,062 (689) (968) -------- ------- ------- Subtotal....................................... 6,061 (2,264) (3,075) -------- ------- ------- Net unrealized investment gains (losses)......... $ (7,701) $ 1,342 $ 1,696 ======== ======= =======
F-45 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The changes in net unrealized investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, ------------------------------ 2008 2007 2006 -------- -------- -------- (IN MILLIONS) Balance, at January 1,..................... $ 1,342 $ 1,696 $1,809 Unrealized investment gains (losses) during the year................................. (17,455) (1,165) (966) Unrealized investment losses of subsidiary at the date of dividend of interests..... 87 -- -- Unrealized investment gains (losses) relating to: Insurance liability gain (loss) recognition........................... 365 440 453 DAC and VOBA............................. 2,438 (181) (91) DAC and VOBA of subsidiary at date of dividend of interests................. (18) -- -- Policyholder dividend obligation......... 789 273 430 Deferred income tax...................... 4,797 279 61 Deferred income tax of subsidiary at date of dividend of interests.............. (46) -- -- --- ---- ------- ------ Balance, at December 31,................... $ (7,701) $ 1,342 $1,696 === ==== ======= ====== Change in net unrealized investment gains (losses)................................. $ (9,043) $ (354) $ (113) === ==== ======= ======
F-46 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the estimated fair value and gross unrealized loss of the Company's fixed maturity (aggregated by sector) and equity securities in an unrealized loss position, aggregated by length of time that the securities have been in a continuous unrealized loss position at:
DECEMBER 31, 2008 ------------------------------------------------------------------------------------- EQUAL TO OR GREATER THAN LESS THAN 12 MONTHS 12 MONTHS TOTAL --------------------------- --------------------------- --------------------------- ESTIMATED GROSS ESTIMATED GROSS ESTIMATED GROSS FAIR VALUE UNREALIZED LOSS FAIR VALUE UNREALIZED LOSS FAIR VALUE UNREALIZED LOSS ---------- --------------- ---------- --------------- ---------- --------------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities........ $20,927 $2,988 $11,002 $3,364 $31,929 $ 6,352 Residential mortgage-backed securities..................... 6,833 1,958 2,561 1,187 9,394 3,145 Foreign corporate securities..... 10,899 2,370 4,421 1,739 15,320 4,109 U.S. Treasury/agency securities.. 34 -- -- -- 34 -- Commercial mortgage-backed securities..................... 6,828 1,250 2,112 1,186 8,940 2,436 Asset-backed securities.......... 3,708 717 2,418 1,476 6,126 2,193 Foreign government securities.... 555 86 128 39 683 125 State and political subdivision securities..................... 586 117 106 38 692 155 Other fixed maturity securities.. -- -- -- -- -- -- ------- ------ ------- ------ ------- ------- Total fixed maturity securities.................. $50,370 $9,486 $22,748 $9,029 $73,118 $18,515 ======= ====== ======= ====== ======= ======= Equity securities................ $ 505 $ 199 $ 694 $ 464 $ 1,199 $ 663 ======= ====== ======= ====== ======= ======= Total number of securities in an unrealized loss position....... 4,556 2,038 ======= =======
DECEMBER 31, 2007 ------------------------------------------------------------------------------------- EQUAL TO OR GREATER THAN LESS THAN 12 MONTHS 12 MONTHS TOTAL --------------------------- --------------------------- --------------------------- ESTIMATED GROSS ESTIMATED GROSS ESTIMATED GROSS FAIR VALUE UNREALIZED LOSS FAIR VALUE UNREALIZED LOSS FAIR VALUE UNREALIZED LOSS ---------- --------------- ---------- --------------- ---------- --------------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities........ $16,906 $ 834 $ 5,621 $361 $22,527 $1,195 Residential mortgage-backed securities..................... 9,116 174 3,730 63 12,846 237 Foreign corporate securities..... 6,594 286 3,119 168 9,713 454 U.S. Treasury/agency securities.. 124 1 279 -- 403 1 Commercial mortgage-backed securities..................... 1,613 54 2,200 46 3,813 100 Asset-backed securities.......... 4,584 242 740 67 5,324 309 Foreign government securities.... 357 13 136 5 493 18 State and political subdivision securities..................... 128 6 66 3 194 9 Other fixed maturity securities.. 74 29 -- -- 74 29 ------- ------ ------- ---- ------- ------ Total fixed maturity securities.................. $39,496 $1,639 $15,891 $713 $55,387 $2,352 ======= ====== ======= ==== ======= ====== Equity securities................ $ 1,778 $ 264 $ 281 $ 39 $ 2,059 $ 303 ======= ====== ======= ==== ======= ====== Total number of securities in an unrealized loss position....... 2,767 2,468 ======= =======
F-47 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) AGING OF GROSS UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized loss and number of securities for fixed maturity and equity securities, where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:
DECEMBER 31, 2008 -------------------------------------------------------------- COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSS SECURITIES ------------------- ------------------- ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------- --------- ------- --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) FIXED MATURITY SECURITIES: Less than six months.................. $22,435 $31,160 $1,677 $11,043 1,894 1,902 Six months or greater but less than nine months......................... 9,681 1,325 941 676 656 97 Nine months or greater but less than twelve months....................... 10,482 2,119 1,185 1,165 507 122 Twelve months or greater.............. 14,076 355 1,598 230 915 37 ------- ------- ------ ------- Total............................... $56,674 $34,959 $5,401 $13,114 ======= ======= ====== ======= EQUITY SECURITIES: Less than six months.................. $ 329 $ 757 $ 49 $ 336 229 410 Six months or greater but less than nine months......................... 15 301 2 146 5 22 Nine months or greater but less than twelve months....................... 2 340 -- 125 1 14 Twelve months or greater.............. 118 -- 5 -- 11 -- ------- ------- ------ ------- Total............................... $ 464 $ 1,398 $ 56 $ 607 ======= ======= ====== =======
F-48 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2007 ------------------------------------------------------------ COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSS SECURITIES ------------------ ------------------ ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------ --------- ------ --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) FIXED MATURITY SECURITIES: Less than six months................... $26,208 $819 $ 760 $232 1,865 80 Six months or greater but less than nine months.......................... 8,522 6 397 1 573 3 Nine months or greater but less than twelve months........................ 5,925 -- 344 -- 432 -- Twelve months or greater............... 16,249 10 614 4 1,236 6 ------- ---- ------ ---- Total................................ $56,904 $835 $2,115 $237 ======= ==== ====== ==== EQUITY SECURITIES: Less than six months................... $ 1,121 $296 $ 96 $ 97 963 394 Six months or greater but less than nine months.......................... 324 -- 37 -- 144 -- Nine months or greater but less than twelve months........................ 353 -- 44 -- 58 1 Twelve months or greater............... 268 -- 29 -- 74 -- ------- ---- ------ ---- Total................................ $ 2,066 $296 $ 206 $ 97 ======= ==== ====== ====
As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its investment holdings in accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. One of the criteria which the Company considers in its other-than-temporary impairment analysis is its intent and ability to hold securities for a period of time sufficient to allow for the recovery of their value to an amount equal to or greater than cost or amortized cost. The Company's intent and ability to hold securities considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security and that security is not expected to recover prior to the expected time of sale, the security will be deemed other-than- temporarily impaired in the period that the sale decision was made and an other- than-temporary impairment loss will be recognized. At December 31, 2008 and 2007, $5.4 billion and $2.1 billion, respectively, of unrealized losses related to fixed maturity securities with an unrealized loss position of less than 20% of cost or amortized cost, which represented 10% and 4%, respectively, of the cost or amortized cost of such securities. At December 31, 2008 and 2007, $56 million and $206 million, respectively, of unrealized losses related to equity securities with an unrealized loss position of less than 20% of cost, which represented 12% and 10%, respectively, of the cost of such securities. At December 31, 2008, $13.1 billion and $607 million of unrealized losses related to fixed maturity securities and equity securities, respectively, with an unrealized loss position of 20% or more of cost or amortized cost, which represented 38% and 43% of the cost or amortized cost of such fixed maturity securities and equity securities, respectively. Of such unrealized losses of $13.1 billion and $607 million, $11.0 billion and $336 million related to fixed maturity securities and equity securities, respectively, that were in an unrealized loss position for a period of less than six months. At December 31, 2007, $237 million and $97 million of unrealized losses related to fixed F-49 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) maturity securities and equity securities, respectively, with an unrealized loss position of 20% or more of cost or amortized cost, which represented 28% and 33% of the cost or amortized cost of such fixed maturity securities and equity securities, respectively. Of such unrealized losses of $237 million and $97 million, $232 million and $97 million related to fixed maturity securities and equity securities, respectively, that were in an unrealized loss position for a period of less than six months. The Company held 440 fixed maturity securities and 28 equity securities, each with a gross unrealized loss at December 31, 2008 of greater than $10 million. These 440 fixed maturity securities represented 46% or $8.6 billion in the aggregate, of the gross unrealized loss on fixed maturity securities. These 28 equity securities represented 73% or $484 million in the aggregate, of the gross unrealized loss on equity securities. The Company held 13 fixed maturity securities and three equity securities, each with a gross unrealized loss at December 31, 2007 of greater than $10 million. These 13 fixed maturity securities represented 8% or $180 million in the aggregate, of the gross unrealized loss on fixed maturity securities. These three equity securities represented 15% or $44 million in the aggregate, of the gross unrealized loss on equity securities. The fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million increased $8.8 billion during the year ended December 31, 2008. These securities were included in the regular evaluation of whether such securities are other-than-temporarily impaired. Based upon the Company's current evaluation of these securities in accordance with its impairment policy, the cause of the decline being primarily attributable to a rise in market yields caused principally by an extensive widening of credit spreads which resulted from a lack of market liquidity and a short-term market dislocation versus a long-term deterioration in credit quality, and the Company's current intent and ability to hold the fixed maturity and equity securities with unrealized losses for a period of time sufficient for them to recover, the Company has concluded that these securities are not other-than- temporarily impaired. In the Company's impairment review process, the duration of, and severity of, an unrealized loss position, such as unrealized losses of 20% or more for equity securities, which was $607 million and $97 million at December 31, 2008 and 2007, respectively, is given greater weight and consideration, than for fixed maturity securities. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company's evaluation of recoverability of all contractual cash flows, as well as the Company's ability and intent to hold the security, including holding the security until the earlier of a recovery in value, or until maturity. In contrast, for an equity security, greater weight and consideration is given by the Company to a decline in market value and the likelihood such market value decline will recover. Equity securities with an unrealized loss of 20% or more for six months or greater was $271 million at December 31, 2008, of which $269 million of the unrealized losses, or 99%, are for investment grade non-redeemable preferred securities. Of the $269 million of unrealized losses for investment grade non- redeemable preferred securities, $264 million of the unrealized losses, or 98%, was comprised of unrealized losses on investment grade financial services industry non-redeemable preferred securities, of which 86% are rated A or higher. Equity securities with an unrealized loss of 20% or more for less than six months was $336 million at December 31, 2008 of which $278 million of the unrealized losses, or 83%, are for non-redeemable preferred securities, of which $274 million, of the unrealized losses, or 99% are for investment grade non- redeemable preferred securities. All of the $274 million of unrealized losses for investment grade non-redeemable preferred securities are for financial services industry non-redeemable preferred securities, of which 87% are rated A or higher. There were no equity securities with an unrealized loss of 20% or more for twelve months or greater. In connection with the equity securities impairment review process during 2008, the Company evaluated its holdings in non-redeemable preferred securities, particularly those of financial services industry companies. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred securities with a severe or an extended unrealized F-50 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) loss. With respect to common stock holdings, the Company considered the duration and severity of the securities in an unrealized loss position of 20% or more; and the duration of securities in an unrealized loss position of 20% or less with in an extended unrealized loss position (i.e., 12 months or more). At December 31, 2008, there are $607 million of equity securities with an unrealized loss of 20% or more, of which $547 million of the unrealized losses, or 90%, were for non-redeemable preferred securities. Through December 31, 2008, $543 million of the unrealized losses of 20% or more, or 99%, of the non- redeemable preferred securities were investment grade securities, of which, $538 million of the unrealized losses of 20% or more, or 99%, are investment grade financial services industry non-redeemable preferred securities; and all non- redeemable preferred securities with unrealized losses of 20% or more, regardless of rating, have not deferred any dividend payments. Also, the Company believes the unrealized loss position is not necessarily predictive of the ultimate performance of these securities, and with respect to fixed maturity securities, it has the ability and intent to hold until the earlier of the recovery in value, or until maturity, and with respect to equity securities, it has the ability and intent to hold until the recovery in value. Future other-than-temporary impairments will depend primarily on economic fundamentals, issuer performance, changes in collateral valuation, changes in interest rates, and changes in credit spreads. If economic fundamentals and other of the above factors continue to deteriorate, additional other-than- temporary impairments may be incurred in upcoming quarters. At December 31, 2008 and 2007, the Company's gross unrealized losses related to its fixed maturity and equity securities of $19.2 billion and $2.7 billion, respectively, were concentrated, calculated as a percentage of gross unrealized loss, as follows:
DECEMBER 31, ------------- 2008 2007 ---- ---- SECTOR: U.S. corporate securities.................................. 33% 45% Foreign corporate securities............................... 21 17 Residential mortgage-backed securities..................... 16 9 Commercial mortgage-backed securities...................... 13 4 Asset-backed securities.................................... 11 12 Other...................................................... 6 13 --- --- Total................................................... 100% 100% === === INDUSTRY: Mortgage-backed............................................ 29% 13% Finance.................................................... 24 34 Consumer................................................... 12 3 Asset-backed............................................... 11 12 Utility.................................................... 10 9 Communication.............................................. 5 1 Industrial................................................. 4 20 Other...................................................... 5 8 --- --- Total................................................... 100% 100% === ===
F-51 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET INVESTMENT GAINS (LOSSES) The components of net investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) Fixed maturity securities......................... $(1,062) $(284) $(575) Equity securities................................. (90) 133 67 Mortgage and consumer loans....................... (88) 4 (16) Real estate and real estate joint ventures........ (18) 45 38 Other limited partnership interests............... (131) 35 2 Freestanding derivatives.......................... 3,257 (526) (470) Embedded derivatives.............................. 1,744 15 5 Other............................................. (140) 291 115 ------- ----- ----- Net investment gains (losses)................... $ 3,472 $(287) $(834) ======= ===== =====
See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to internal asset transfers included in other in the table above. See also Note 8 for discussion of affiliated net investment gains (losses) included in embedded derivatives in the table above. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) are as follows:
FIXED MATURITY SECURITIES EQUITY SECURITIES TOTAL -------------------------- -------------------------- -------------------------- 2008 2007 2006 2008 2007 2006 2008 2007 2006 -------- -------- -------- -------- -------- -------- -------- -------- -------- (IN MILLIONS) Proceeds.................... $42,785 $52,377 $55,090 $1,888 $760 $565 $44,673 $53,137 $55,655 ======== ======== ======== ======== ======== ======== ======== ======== ======== Gross investment gains...... 631 343 250 412 176 107 1,043 519 357 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross investment losses..... (911) (589) (812) (218) (27) (18) (1,129) (616) (830) -------- -------- -------- -------- -------- -------- -------- -------- -------- Writedowns.................. Credit-related......... (668) (38) (13) (38) -- -- (706) (38) (13) Other than credit- related (1).......... (114) -- -- (246) (16) (22) (360) (16) (22) -------- -------- -------- -------- -------- -------- -------- -------- -------- Total writedowns....... (782) (38) (13) (284) (16) (22) (1,066) (54) (35) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net investment gains (losses)............... $(1,062) $ (284) $ (575) $ (90) $133 $ 67 $(1,152) $ (151) $ (508) ======== ======== ======== ======== ======== ======== ======== ======== ========
-------- (1) Other-than credit-related writedowns include items such as equity securities where the primary reason for the writedown was the severity and/or the duration of an unrealized loss position and fixed maturity securities where an interest-rate related writedown was taken. The Company periodically disposes of fixed maturity and equity securities at a loss. Generally, such losses are insignificant in amount or in relation to the cost basis of the investment, are attributable to declines in fair value occurring in the period of the disposition or are as a result of management's decision to sell securities based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives. Losses from fixed maturity and equity securities deemed other-than- temporarily impaired, included within net investment gains (losses), were $1,066 million, $54 million and $35 million for the years ended December 31, 2008, 2007 and 2006, respectively. The substantial increase in 2008 over 2007 was driven by writedowns totaling F-52 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $579 million of financial services industry securities holdings, comprised of $361 million of fixed maturity securities and $218 million of equity securities. Overall, of the $782 million of fixed maturity security writedowns in 2008, $361 million were on financial services industry services holdings; $180 million were on communication and consumer industries holdings; $61 million on asset- backed (substantially all are backed by or exposed to sub-prime mortgage loans); and $180 million in fixed maturity security holdings that the Company either lacked the intent to hold, or due to extensive credit spread widening, the Company was uncertain of its intent to hold these fixed maturity securities for a period of time sufficient to allow for recovery of the market value decline. Included within the $284 million of writedowns on equity securities in 2008 are $218 million related to the financial services industry holdings, (of which, $38 million related to the financial services industry non-redeemable preferred securities) and $66 million across several industries including consumer, communications, industrial and utility. NET INVESTMENT INCOME The components of net investment income are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) Fixed maturity securities........................ $ 8,830 $ 9,671 $ 9,115 Equity securities................................ 174 169 42 Trading securities............................... (21) 6 32 Mortgage and consumer loans...................... 2,387 2,376 2,272 Policy loans..................................... 475 460 441 Real estate and real estate joint ventures....... 508 813 741 Other limited partnership interests.............. (92) 1,141 705 Cash, cash equivalents and short-term investments.................................... 134 144 196 Joint venture investments........................ (1) (6) (8) Other............................................ 202 182 202 ------- ------- ------- Total investment income........................ 12,596 14,956 13,738 Less: Investment expenses........................ 1,474 2,374 2,220 ------- ------- ------- Net investment income.......................... $11,122 $12,582 $11,518 ======= ======= =======
Net investment income from other limited partnership interests, including hedge funds, represents distributions from other limited partnership interests accounted for under the cost method and equity in earnings from other limited partnership interests accounted for under the equity method. Overall for 2008, the net amount recognized by the Company was a loss of $92 million resulting principally from losses on equity method investments. Such earnings and losses recognized for other limited partnership interests are impacted by volatility in the equity and credit markets. Net investment income from trading securities includes interest and dividends earned on trading securities in addition to the net realized and unrealized gains (losses) recognized on trading securities and the short sale agreements liabilities. In 2008, unrealized losses recognized on trading securities, due to the volatility in the equity and credit markets, were in excess of interest and dividends earned. For the years ended December 31, 2008, 2007 and 2006, affiliated net investment income included in the table above, was $29 million, $21 million and $20 million, respectively, related to fixed maturity securities; and less than $1 million, $12 million and less than $1 million, respectively, related to equity securities. For the years ended F-53 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) December 31, 2008 and 2007, there was no affiliated investment income related to mortgage loans. For the year ended December 31, 2006, affiliated investment income related to mortgage loans was $112 million, which included the prepayment fees discussed below. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income related to short-term investments included in the table above. For the years ended December 31, 2008, 2007 and 2006, affiliated administrative service charges were $67 million, $66 million and $52 million, respectively, which reduced investment expense in the table above. In the fourth quarter of 2006, MTL sold its Peter Cooper Village and Stuyvesant Town properties for $5.4 billion. Upon the closing of the transaction, MTL repaid the mortgage of $770 million, including accrued interest, held by the Company on these properties and paid a prepayment fee of $68 million which was recognized as affiliated investment income related to mortgage loans included in the table above. SECURITIES LENDING The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments are loaned to third parties, primarily major brokerage firms and commercial banks. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. Securities with a cost or amortized cost of $13.4 billion and $26.9 billion and an estimated fair value of $14.7 billion and $27.9 billion were on loan under the program at December 31, 2008 and 2007, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $15.1 billion and $28.7 billion at December 31, 2008 and 2007, respectively. Of this $15.1 billion of cash collateral at December 31, 2008, $3.5 billion was on open terms, meaning that the related loaned security could be returned to the Company on the next business day requiring return of cash collateral, and $9.4 billion and $2.2 billion, respectively, were due within 30 days and 60 days. Of the $3.4 billion of estimated fair value of the securities related to the cash collateral on open at December 31, 2008, $3.0 billion were U.S. Treasury and agency securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan are primarily U.S. Treasury and agency securities, and very liquid residential mortgage-backed securities. The estimated fair value of the reinvestment portfolio acquired with the cash collateral was $13.1 billion at December 31, 2008, and consisted principally of fixed maturity securities (including residential mortgage-backed, asset-backed, U.S. corporate and foreign corporate securities). Security collateral of $95 million on deposit from counterparties in connection with the securities lending transactions at December 31, 2008 may not be sold or repledged and is not reflected in the consolidated financial statements. There was no security collateral on deposit from counterparties in connection with the securities lending transactions at December 31, 2007. ASSETS ON DEPOSIT, HELD IN TRUST AND PLEDGED AS COLLATERAL The Company had investment assets on deposit with regulatory agencies with an estimated fair value of $1.2 billion and $1.7 billion at December 31, 2008 and 2007, respectively, consisting primarily of fixed maturity and equity securities. The Company also held in trust cash and securities, primarily fixed maturity and equity securities with an estimated fair value of $45 million and $74 million at December 31, 2008 and 2007, respectively, to satisfy collateral requirements. The Company has pledged fixed maturity securities in support of its funding agreements with the Federal Home Loan Bank of New York ("FHLB of NY") of $17.8 billion and $4.8 billion at December 31, 2008 and 2007, respectively. The Company has also pledged certain agricultural real estate mortgage loans in connection with funding agreements with the Federal Agricultural Mortgage Corporation with a carrying value of $2.9 billion at F-54 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) both December 31, 2008 and 2007. The nature of these Federal Home Loan Bank and Federal Agricultural Mortgage Corporation arrangements are described in Note 7. Certain of the Company's invested assets are pledged as collateral for various derivative transactions as described in Note 4. Certain of the Company's trading securities are pledged to secure liabilities associated with short sale agreements in the trading securities portfolio as described in the following section. TRADING SECURITIES The Company has a trading securities portfolio to support investment strategies that involve the active and frequent purchase and sale of securities, the execution of short sale agreements and asset and liability matching strategies for certain insurance products. Trading securities and short sale agreement liabilities are recorded at estimated fair value with subsequent changes in estimated fair value recognized in net investment income. At December 31, 2008 and 2007, trading securities at estimated fair value were $277 million and $457 million, respectively, and liabilities associated with the short sale agreements in the trading securities portfolio, which were included in other liabilities, were $57 million and $107 million, respectively. The Company had pledged $346 million and $407 million of its assets, at estimated fair value, primarily consisting of trading securities, as collateral to secure the liabilities associated with the short sale agreements in the trading securities portfolio at December 31, 2008 and 2007, respectively. Interest and dividends earned on trading securities in addition to the net realized and unrealized gains (losses) recognized on the trading securities and the related short sale agreement liabilities included within net investment income totaled ($21) million, $6 million and $32 million for the years ended December 31, 2008, 2007 and 2006, respectively. Included within unrealized gains (losses) on such trading securities and short sale agreement liabilities are changes in estimated fair value of ($17) million, ($4) million and $3 million for the years ended December 31, 2008, 2007 and 2006, respectively. MORTGAGE AND CONSUMER LOANS Mortgage and consumer loans are categorized as follows:
DECEMBER 31, ------------------------------------- 2008 2007 ----------------- ----------------- AMOUNT PERCENT AMOUNT PERCENT ------- ------- ------- ------- (IN MILLIONS) Commercial mortgage loans................... $31,492 74.3% $30,313 77.0% Agricultural mortgage loans................. 10,826 25.7 8,985 22.8 Consumer loans.............................. 12 -- 63 0.2 ------- ----- ------- ----- Total..................................... 42,330 100.0% 39,361 100.0% ===== ===== Less: Valuation allowances.................. 244 181 ------- ------- Total mortgage and consumer loans held- for-investment......................... 42,086 39,180 Mortgage loans held-for-sale................ 19 -- ------- ------- Mortgage and consumer loans, net.......... $42,105 $39,180 ======= =======
At December 31, 2008, mortgage loans held-for-sale include $19 million of commercial and agricultural mortgage loans held-for-sale which are carried at the lower of amortized cost or estimated fair value. At December 31, 2007, there were no mortgage loans held-for-sale. F-55 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company diversifies its mortgage loans by both geographic region and property type to reduce risk of concentration. Mortgage loans are collateralized by properties primarily located in the United States. At December 31, 2008, 20%, 7% and 7% of the value of the Company's mortgage and consumer loans were located in California, Texas and Florida, respectively. Generally, the Company, as the lender, only loans up to 75% of the purchase price of the underlying real estate. As shown in the table above, commercial mortgage loans at December 31, 2008 and 2007 were $31,492 million and $30,313 million, respectively, or 74% and 77%, respectively, of total mortgage and consumer loans prior to valuation allowances. Net of valuation allowances commercial mortgage loans were $31,308 million and $30,158 million, respectively, at December 31, 2008 and 2007 and their diversity across geographic regions and property types is shown below at:
DECEMBER 31, DECEMBER 31, 2008 2007 ---------------- ---------------- CARRYING % OF CARRYING % OF VALUE TOTAL VALUE TOTAL -------- ----- -------- ----- (IN MILLIONS) REGION Pacific...................................... $ 7,586 24.3% $ 7,334 24.3% South Atlantic............................... 6,984 22.3 6,586 21.8 Middle Atlantic.............................. 5,173 16.5 4,336 14.4 International................................ 3,247 10.4 3,495 11.6 West South Central........................... 2,739 8.7 2,578 8.5 East North Central........................... 2,381 7.6 2,640 8.8 New England.................................. 1,095 3.5 1,022 3.4 Mountain..................................... 920 2.9 873 2.9 West North Central........................... 664 2.1 893 3.0 East South Central........................... 313 1.0 315 1.0 Other........................................ 206 0.7 86 0.3 ------- ----- ------- ----- Total...................................... $31,308 100.0% $30,158 100.0% ======= ===== ======= ===== PROPERTY TYPE Office....................................... $13,532 43.2% $13,612 45.1% Retail....................................... 7,011 22.4 6,537 21.7 Apartments................................... 3,305 10.6 3,476 11.5 Hotel........................................ 2,530 8.1 2,614 8.7 Industrial................................... 2,644 8.4 2,354 7.8 Other........................................ 2,286 7.3 1,565 5.2 ------- ----- ------- ----- Total...................................... $31,308 100.0% $30,158 100.0% ======= ===== ======= =====
Certain of the Company's real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgages were $372 million and $373 million at December 31, 2008 and 2007, respectively. F-56 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding loan valuation allowances for mortgage and consumer loans held-for-investment is as follows:
YEARS ENDED DECEMBER 31, ------------------- 2008 2007 2006 ----- ---- ---- (IN MILLIONS) Balance at January 1,................................. $ 181 $160 $149 Additions............................................. 174 70 28 Deductions............................................ (111) (49) (17) ----- ---- ---- Balance at December 31,............................... $ 244 $181 $160 ===== ==== ====
A portion of the Company's mortgage and consumer loans held-for-investment was impaired and consisted of the following:
DECEMBER 31, ------------- 2008 2007 ---- ---- (IN MILLIONS) Impaired loans with valuation allowances................... $232 $552 Impaired loans without valuation allowances................ 15 8 ---- ---- Subtotal................................................. 247 560 Less: Valuation allowances on impaired loans............... 45 67 ---- ---- Impaired loans........................................... $202 $493 ==== ====
The average investment in impaired loans was $315 million, $399 million and $145 million for the years ended December 31, 2008, 2007 and 2006, respectively. Interest income on impaired loans was $10 million, $35 million and $1 million for the years ended December 31, 2008, 2007 and 2006, respectively. The investment in restructured loans was $1 million and $2 million at December 31, 2008 and 2007, respectively. Interest income recognized on restructured loans was $1 million or less for each of the years ended December 31, 2008, 2007 and 2006. Gross interest income that would have been recorded in accordance with the original terms of such loans also amounted to $1 million or less for each of the years ended December 31, 2008, 2007 and 2006. Mortgage and consumer loans with scheduled payments of 90 days or more past due on which interest is still accruing, had an amortized cost of $2 million and $1 million at December 31, 2008 and 2007, respectively. Mortgage and consumer loans on which interest is no longer accrued had an amortized cost of $10 million and $18 million at December 31, 2008 and 2007, respectively. Mortgage and consumer loans in foreclosure had an amortized cost of $23 million and $6 million at December 31, 2008 and 2007, respectively. F-57 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) REAL ESTATE HOLDINGS Real estate holdings consisted of the following:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) Real estate.............................................. $ 4,650 $ 4,384 Accumulated depreciation................................. (1,354) (1,195) ------- ------- Net real estate.......................................... 3,296 3,189 Real estate joint ventures............................... 2,959 2,295 ------- ------- Real estate and real estate joint ventures............. 6,255 5,484 Real estate held-for sale................................ 1 39 ------- ------- Total real estate holdings............................. $ 6,256 $ 5,523 ======= =======
Related depreciation expense on real estate was $120 million, $112 million and $107 million for the years ended December 31, 2008, 2007 and 2006, respectively. These amounts include less than $1 million, $2 million and $4 million of depreciation expense related to discontinued operations for the years ended December 31, 2008, 2007 and 2006, respectively. There were no impairments recognized on real estate held-for-sale for the year ended December 31, 2008 and 2007. Impairment losses recognized on real estate held-for-sale were $8 million for the year ended December 31, 2006. The carrying value of non-income producing real estate was $27 million and $8 million at December 31, 2008 and 2007, respectively. The Company did not own real estate acquired in satisfaction of debt at December 31, 2008 and 2007. The Company diversifies its real estate holdings by both geographic region and property type to reduce risk of concentration. The Company's real estate holdings are primarily located in the United States, and at December 31, 2008, 20%, 14%, 11% and 10% were located in California, Florida, New York and Texas, respectively. Property type diversification is shown in the table below. Real estate holdings were categorized as follows:
DECEMBER 31, ----------------------------------- 2008 2007 ---------------- ---------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- (IN MILLIONS) Office........................................ $2,602 42% $2,627 48% Apartments.................................... 1,495 24 1,058 19 Real estate investment funds.................. 936 15 835 15 Industrial.................................... 483 8 443 8 Retail........................................ 453 7 423 8 Hotel......................................... 170 3 59 1 Land.......................................... 62 1 47 1 Agriculture................................... 9 -- 9 -- Other......................................... 46 -- 22 -- ------ --- ------ --- Total real estate holdings.................. $6,256 100% $5,523 100% ====== === ====== ===
F-58 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OTHER LIMITED PARTNERSHIP INTERESTS The carrying value of other limited partnership interests (which primarily represent ownership interests in pooled investment funds that principally make private equity investments in companies in the United States and overseas) was $4.7 billion and $4.9 billion at December 31, 2008 and 2007, respectively. Included within other limited partnership interests at December 31, 2008 and 2007 are $943 million and $1,189 million, respectively, of hedge funds. For the years ended December 31, 2008, 2007 and 2006, net investment income (loss) from other limited partnership interests was ($92) million, $1,141 million and $705 million and included ($218) million, $71 million and $67 million, respectively of hedge funds. Net investment income (loss) from other limited partnership interests, including hedge funds, decreased by $1,233 million for the year ended 2008, due to volatility in the equity and credit markets. OTHER INVESTED ASSETS The following table presents the carrying value of the Company's other invested assets at:
DECEMBER 31, ----------------------------------- 2008 2007 ---------------- ---------------- CARRYING % OF CARRYING % OF VALUE TOTAL VALUE TOTAL -------- ----- -------- ----- (IN MILLIONS) Freestanding derivatives with positive fair values...................................... $6,646 67.0% $1,875 42.9% Leveraged leases, net of non-recourse debt.... 1,704 17.2 1,637 37.4 Loans to affiliates........................... 795 8.0 612 14.0 Tax credit partnerships....................... 476 4.8 -- -- Funds withheld................................ 44 0.5 57 1.3 Joint venture investment...................... 31 0.3 6 0.1 Other......................................... 220 2.2 188 4.3 ------ ----- ------ ----- Total......................................... $9,916 100.0% $4,375 100.0% ====== ===== ====== =====
See Note 4 regarding freestanding derivatives with positive estimated fair values. Loans to affiliates consist of loans to the Company's affiliates, some of which are regulated, to meet their capital requirements. The estimated fair values are determined by discounting expected future cash flows using capital market interest rates currently available for instruments with similar terms issued to companies of comparable credit quality of the respective affiliates. The joint venture investment is accounted for on the equity method and represents the Company's investment in an insurance underwriting joint venture in China. Tax credit partnerships are established for the purpose of investing in low-income housing and other social causes, where the primary return on investment is in the form of tax credits, and are accounted for under the equity method. Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. F-59 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Leveraged Leases Investment in leveraged leases, included in other invested assets, consisted of the following:
DECEMBER 31, ---------------- 2008 2007 ------ ------- (IN MILLIONS) Rental receivables, net.................................. $1,478 $ 1,483 Estimated residual values................................ 1,217 1,185 ------ ------- Subtotal............................................... 2,695 2,668 Unearned income.......................................... (991) (1,031) ------ ------- Investment in leveraged leases......................... $1,704 $ 1,637 ====== =======
The Company's deferred income tax liability related to leveraged leases was $962 million and $798 million at December 31, 2008 and 2007, respectively. The rental receivables set forth above are generally due in periodic installments. The payment periods range from one to 15 years, but in certain circumstances are as long as 30 years. The components of net income from investment in leveraged leases are as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Income from investment in leveraged leases (included in net investment income)........................... $ 95 $ 48 $ 55 Less: Income tax expense on leveraged leases.......... (33) (17) (18) ---- ---- ---- Net income from investment in leveraged leases........ $ 62 $ 31 $ 37 ==== ==== ====
VARIABLE INTEREST ENTITIES The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated in the Company's financial statements at December 31, 2008. Generally, creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company.
DECEMBER 31, 2008 --------------------- TOTAL TOTAL LIABILI- ASSETS TIES --------- --------- (IN MILLIONS) Real estate joint ventures (1).................. $ 26 $ 15 Other limited partnership interests (2)......... 20 3 Other invested assets (3)....................... 10 3 --------- --------- Total........................................... $56 $21 ========= =========
-------- (1) Real estate joint ventures include partnerships and other ventures which engage in the acquisition, development, management and disposal of real estate investments. Upon consolidation, the assets and liabilities are reflected at the VIE's carrying amounts. The assets consist of $20 million of real estate and real estate joint ventures held-for- investment, $5 million of cash and cash equivalents and $1 million of other assets. The liabilities of $15 million are included within other liabilities. (2) Other limited partnership interests include partnerships established for the purpose of investing in public and private debt and equity securities. Upon consolidation, the assets and liabilities are reflected at the VIE's F-60 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) carrying amounts. The assets of $20 million are included within other limited partnership interests while the liabilities of $3 million are included within other liabilities. (3) Other invested assets include tax-credit partnerships and other investments established for the purpose of investing in low-income housing and other social causes, where the primary return on investment is in the form of tax credits. Upon consolidation, the assets and liabilities are reflected at the VIE's carrying amounts. The assets of $10 million are included within other invested assets. The liabilities consist of $2 million of long-term debt and $1 million of other liabilities. The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds significant variable interests but is not the primary beneficiary and which have not been consolidated at December 31, 2008:
DECEMBER 31, 2008 ------------------------ MAXIMUM CARRYING EXPOSURE AMOUNT (1) TO LOSS (2) ---------- ----------- (IN MILLIONS) Fixed maturity securities available-for-sale:(3) Foreign corporate securities......................... $ 362 $ 362 U.S. Treasury/agency securities...................... 251 251 Other limited partnership interests.................... 2,538 2,965 Other invested assets.................................. 310 108 ------ ------ Total.................................................. $3,461 $3,686 ====== ======
-------- (1) See Note 1 for further discussion of the Company's significant accounting policies with regards to the carrying amounts of these investments. (2) The maximum exposure to loss relating to the fixed maturity securities available-for-sale is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. For certain of its investments in other invested assets, the Company's return is in the form of tax credits which are guaranteed by a creditworthy third party. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by amounts guaranteed by third parties. (3) These assets are reflected at fair value within fixed maturity securities available-for-sale. As described in Note 13, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended December 31, 2008, 2007 and 2006. RELATED PARTY INVESTMENT TRANSACTIONS At December 31, 2008 and 2007, the Company held $229 million and $162 million, respectively, of total invested assets in the Metropolitan Money Market Pool, an affiliated partnership. These amounts are included in short-term investments. Net investment income from these invested assets was $4 million, $12 million and $10 million for the years ended December 31, 2008, 2007 and 2006, respectively. The MetLife Intermediate Income Pool (the "MIIP") was formed as a New York general partnership consisting solely of U.S. domestic insurance companies owned directly or indirectly by MetLife, Inc. and is managed by Metropolitan Life Insurance Company. Each partner's investment in the MIIP represents such partner's pro rata ownership interest in the pool. The affiliated companies' ownership interests in the pooled money market securities F-61 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) held by the MIIP was $29 million and $101 million at December 31, 2008 and 2007, respectively. Net investment income allocated to affiliates from the MIIP was $3 million, $7 million, and $8 million for the years ended December 31, 2008, 2007 and 2006, respectively. In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Assets transferred to and from affiliates, inclusive of amounts related to reinsurance agreements, are as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Estimated fair value of assets transferred to affiliates......................................... $230 $142 $ 97 Amortized cost of assets transferred to affiliates... $220 $145 $ 99 Net investment gains (losses) recognized on transfers.......................................... $ 10 $ (3) $ (2) Estimated fair value of assets transferred from affiliates......................................... $ 57 $778 $307
4. DERIVATIVE FINANCIAL INSTRUMENTS TYPES OF DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the notional amount and current market or estimated fair value of derivative financial instruments, excluding embedded derivatives, held at:
DECEMBER 31, 2008 DECEMBER 31, 2007 ------------------------------- ------------------------------- CURRENT MARKET CURRENT MARKET OR FAIR VALUE OR FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Interest rate swaps......... $ 20,043 $3,188 $1,090 $ 48,445 $ 415 $ 614 Interest rate floors........ 32,855 1,082 -- 32,855 420 -- Interest rate caps.......... 21,130 10 -- 34,784 44 -- Financial futures........... 3,630 2 58 6,131 35 34 Foreign currency swaps...... 14,180 1,245 1,066 16,022 639 1,603 Foreign currency forwards... 1,467 47 21 1,799 41 11 Options..................... 2,365 939 35 1,423 123 -- Financial forwards.......... 2,087 -- 90 4,769 63 1 Credit default swaps........ 4,466 133 60 5,529 52 29 Synthetic GICs.............. 4,260 -- -- 3,670 -- -- Other....................... 250 -- 101 250 43 -- -------- ------ ------ -------- ------ ------ Total..................... $106,733 $6,646 $2,521 $155,677 $1,875 $2,292 ======== ====== ====== ======== ====== ======
F-62 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the notional amount of derivative financial instruments by maturity at December 31, 2008:
REMAINING LIFE ---------------------------------------------------------------- AFTER AFTER ONE YEAR FIVE YEARS ONE YEAR OR THROUGH THROUGH AFTER LESS FIVE YEARS TEN YEARS TEN YEARS TOTAL ----------- -------------- ---------- --------- -------- (IN MILLIONS) Interest rate swaps.......... $ 774 $ 8,444 $ 6,950 $3,875 $ 20,043 Interest rate floors......... 12,743 325 19,787 -- 32,855 Interest rate caps........... 580 20,550 -- -- 21,130 Financial futures............ 3,630 -- -- -- 3,630 Foreign currency swaps....... 2,130 5,438 5,204 1,408 14,180 Foreign currency forwards.... 1,467 -- -- -- 1,467 Options...................... -- 324 1,967 74 2,365 Financial forwards........... -- -- -- 2,087 2,087 Credit default swaps......... 143 2,791 1,532 -- 4,466 Synthetic GICs............... 4,260 -- -- -- 4,260 Other........................ -- -- 250 -- 250 ------- ------- ------- ------ -------- Total...................... $25,727 $37,872 $35,690 $7,444 $106,733 ======= ======= ======= ====== ========
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. The Company commenced the use of inflation swaps during the second quarter of 2008. Inflation swaps are used as an economic hedge to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are included in interest rate swaps in the preceding table. The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. In a basis swap, both legs of the swap are floating with each based on a different index. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each due date. Basis swaps are included in interest rate swaps in the preceding table. Interest rate caps and floors are used by the Company primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In exchange-traded interest rate (Treasury and swap) and equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate and equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in F-63 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) value of securities the Company owns or anticipates acquiring, and to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance. The value of interest rate futures is substantially impacted by changes in interest rates and they can be used to modify or hedge existing interest rate risk. Exchange-traded equity futures are used primarily to hedge liabilities embedded in certain variable annuity products offered by the Company. Foreign currency derivatives, including foreign currency swaps, foreign currency forwards and currency option contracts, are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. The Company also uses foreign currency forwards and swaps to hedge the foreign currency risk associated with certain of its net investments in foreign operations. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at the specified future date. The Company enters into currency option contracts that give it the right, but not the obligation, to sell the foreign currency amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on differentials in the foreign exchange rate and the strike price. Currency option contracts are included in options in the preceding table. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities, as well as to sell, or monetize, embedded call options in its fixed rate liabilities. A swaption is an option to enter into a swap with an effective date equal to the exercise date of the embedded call and a maturity date equal to the maturity date of the underlying liability. The Company receives a premium for entering into the swaption. Swaptions are included in options in the preceding table. The Company enters into financial forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. Equity variance swaps are included in financial forwards in the preceding table. Swap spread locks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spread locks are forward transactions between two parties whose underlying reference index is a forward starting interest rate swap where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. Swap spread locks are included in financial forwards in the preceding table. Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified intervals, to pay a premium to insure credit risk. If a credit event, as defined by the contract, occurs, generally the contract will require the swap to be settled gross by the delivery of par F-64 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) quantities of the referenced investment equal to the specified swap notional in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury or Agency security. The Company also enters into certain credit default swaps held in relation to trading portfolios. A synthetic guaranteed interest contract ("GIC") is a contract that simulates the performance of a traditional GIC through the use of financial instruments. Under a synthetic GIC, the policyholder owns the underlying assets. The Company guarantees a rate return on those assets for a premium. Total rate of return swaps ("TRRs") are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and LIBOR, calculated by reference to an agreed notional principal amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. TRRs can be used as hedges or to synthetically create investments and are included in the other classification in the preceding table. HEDGING The following table presents the notional amount and the estimated fair value of derivatives by type of hedge designation at:
DECEMBER 31, 2008 DECEMBER 31, 2007 ------------------------------- ------------------------------- FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Fair value.................. $ 9,357 $1,737 $ 539 $ 9,301 $ 630 $ 94 Cash flow................... 2,541 365 137 3,084 23 311 Foreign operations.......... 164 1 1 488 -- 111 Non-qualifying.............. 94,671 4,543 1,844 142,804 1,222 1,776 -------- ------ ------ -------- ------ ------ Total..................... $106,733 $6,646 $2,521 $155,677 $1,875 $2,292 ======== ====== ====== ======== ====== ======
The following table presents the settlement payments recorded in income for the:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Qualifying hedges: Net investment income............................... $ 21 $ 24 $ 48 Interest credited to policyholder account balances.. 99 (28) (26) Non-qualifying hedges: Net investment income............................... (1) (5) -- Net investment gains (losses)....................... (38) 196 225 ---- ---- ---- Total............................................ $ 81 $187 $247 ==== ==== ====
F-65 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) FAIR VALUE HEDGES The Company designates and accounts for the following as fair value hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert fixed rate investments to floating rate investments; (ii) interest rate swaps to convert fixed rate liabilities to floating rate liabilities; and (iii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments and liabilities. The Company recognized net investment gains (losses) representing the ineffective portion of all fair value hedges as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ----- ----- (IN MILLIONS) Changes in the fair value of derivatives............ $ 336 $ 319 $ 278 Changes in the fair value of the items hedged....... (337) (308) (278) ----- ----- ----- Net ineffectiveness of fair value hedging activities........................................ $ (1) $ 11 $ -- ===== ===== =====
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. There were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge. CASH FLOW HEDGES The Company designates and accounts for the following as cash flow hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert floating rate investments to fixed rate investments; (ii) interest rate swaps to convert floating rate liabilities to fixed rate liabilities; and (iii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities. For the years ended December 31, 2008, 2007, and 2006, the Company did not recognize any net investment gains (losses) which represented the ineffective portion of all cash flow hedges. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or in the additional time period permitted by SFAS 133. The net amounts reclassified into net investment losses for the years ended December 31, 2008, 2007 and 2006 related to such discontinued cash flow hedges were $12 million, $3 million and $3 million, respectively. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments for the years ended December 31, 2008, 2007, and 2006. The following table presents the components of other comprehensive income (loss), before income tax, related to cash flow hedges:
YEARS ENDED DECEMBER 31, ------------------------- 2008 2007 2006 ----- ----- ----- (IN MILLIONS) Other comprehensive income (loss) balance at January 1,................................................ $(262) $(238) $(207) Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges....................................... 483 (185) (30) Amounts reclassified to net investment gains (losses).......................................... (93) 150 (15) Amounts reclassified to net investment income....... 9 12 15 Amortization of transition adjustment............... -- (1) (1) ----- ----- ----- Other comprehensive income (loss) balance at December 31,...................................... $ 137 $(262) $(238) ===== ===== =====
F-66 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2008, $36 million of the deferred net loss on derivatives accumulated in other comprehensive income (loss) is expected to be reclassified to earnings during the year ending December 31, 2009. HEDGES OF NET INVESTMENTS IN FOREIGN OPERATIONS The Company uses forward exchange contracts, foreign currency swaps, options and non-derivative financial instruments to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company measures ineffectiveness on the forward exchange contracts based upon the change in forward rates. There was no ineffectiveness recorded for the years ended December 31, 2008, 2007 and 2006. The Company's consolidated statements of stockholder's equity for the years ended December 31, 2008, 2007 and 2006 include gains (losses) of $157 million, ($144) million and ($7) million, respectively, related to foreign currency contracts and non-derivative financial instruments used to hedge its net investments in foreign operations. At December 31, 2008 and 2007, the cumulative foreign currency translation loss recorded in accumulated other comprehensive income (loss) related to these hedges was $78 million and $235 million, respectively. When net investments in foreign operations are sold or substantially liquidated, the amounts in accumulated other comprehensive income (loss) are reclassified to the consolidated statements of income, while a pro rata portion will be reclassified upon partial sale of the net investments in foreign operations. NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING The Company enters into the following derivatives that do not qualify for hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest rate swaps, purchased caps and floors, and interest rate futures to economically hedge its exposure to interest rates; (ii) foreign currency forwards, swaps and option contracts to economically hedge its exposure to adverse movements in exchange rates; (iii) credit default swaps to economically hedge exposure to adverse movements in credit; (iv) equity futures, interest rate futures and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (v) swap spread locks to economically hedge invested assets against the risk of changes in credit spreads; (vi) financial forwards to buy and sell securities to economically hedge its exposure to interest rates; (vii) synthetic guaranteed interest contracts; (viii) credit default swaps and total rate of return swaps to synthetically create investments; (ix) basis swaps to better match the cash flows of assets and related liabilities; (x) credit default swaps held in relation to trading portfolios; (xi) swaptions to hedge interest rate risk; and (xii) inflation swaps to reduce risk generated from inflation-indexed liabilities. The following table presents changes in estimated fair value related to derivatives that do not qualify for hedge accounting:
YEARS ENDED DECEMBER 31, -------------------------- 2008 2007 2006 ------ ----- ----- (IN MILLIONS) Net investment gains (losses), excluding embedded derivatives...................................... $3,470 $(738) $(702) Net investment income (loss) (1)................... 54 20 -- ------ ----- ----- Total............................................ $3,524 $(718) $(702) ====== ===== =====
-------- (1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures that do not qualify for hedge accounting and changes in estimated fair value related to derivatives held in relation to trading portfolios. EMBEDDED DERIVATIVES The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts principally include: variable annuities with guaranteed minimum F-67 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) withdrawal, guaranteed minimum accumulation and certain guaranteed minimum income riders; affiliated ceded reinsurance contracts related to guaranteed minimum withdrawal, guaranteed minimum accumulation and certain guaranteed minimum income riders; funds withheld on ceded reinsurance; and guaranteed interest contracts with equity or bond indexed crediting rates. The following table presents the estimated fair value of the Company's embedded derivatives at:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) Net embedded derivatives within asset host contracts: Ceded guaranteed minimum benefit riders................ $ 797 $ 34 Call options in equity securities...................... (72) (15) ------- ------- Net embedded derivatives within asset host contracts......................................... $ 725 $ 19 ======= ======= Net embedded derivatives within liability host contracts: Direct guaranteed minimum benefit riders............... $ 298 $ 9 Funds withheld on ceded reinsurance.................... (1,203) -- Other.................................................. (83) 52 ------- ------- Net embedded derivatives within liability host contracts......................................... $ (988) $ 61 ======= =======
The following table presents changes in the estimated fair value related to embedded derivatives:
YEARS ENDED DECEMBER 31, ------------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) Net investment gains (losses) (1)............... $ 1,744 $ 15 $ 5
-------- (1) Effective January 1, 2008, upon adoption of SFAS 157, the valuation of the Company's guaranteed minimum benefit riders includes an adjustment for the Company's own credit. Included in net investment gains (losses) for the year ended December 31, 2008 are gains of $442 million in connection with this adjustment. CREDIT RISK The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company's derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to credit support annexes. The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. See Note 19 for a description of the impact of credit risk on the valuation of derivative instruments. F-68 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. At December 31, 2008 and 2007, the Company was obligated to return cash collateral under its control of $3,564 million and $233 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents or in short-term investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. At December 31, 2008 and 2007, the Company had also accepted collateral consisting of various securities with a fair market value of $824 million and $98 million, respectively, which are held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but at December 31, 2008, none of the collateral had been sold or repledged. At December 31, 2008 and 2007, the Company provided securities collateral for various arrangements in connection with derivative instruments of $220 million and $162 million, respectively, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. In addition, the Company has exchange-traded futures, which require the pledging of collateral. At December 31, 2008 and 2007, the Company pledged securities collateral for exchange-traded futures of $0 and $33 million, respectively, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. At December 31, 2008 and 2007, the Company provided cash collateral for exchange-traded futures of $77 million and $0, respectively, which is included in premiums and other receivables. In connection with synthetically created investment transactions and credit default swaps held in relation to the trading portfolio, the Company writes credit default swaps for which it receives a premium to insure credit risk. If a credit event, as defined by the contract, occurs generally the contract will require the Company to pay the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $1,558 million at December 31, 2008. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At December 31, 2008, the Company would have paid $35 million to terminate all of these contracts. The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table below. As a result, the maximum amount of potential future recoveries available to offset the $1,558 million from the table below was $8 million at December 31, 2008. F-69 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2008:
DECEMBER 31, 2008 ------------------------------------------------- MAXIMUM AMOUNT OF WEIGHTED FAIR VALUE OF FUTURE PAYMENTS AVERAGE RATING AGENCY DESIGNATION OF REFERENCED CREDIT DEFAULT UNDER CREDIT YEARS TO CREDIT OBLIGATIONS (1) SWAPS DEFAULT SWAPS (2) MATURITY (3) --------------------------------------- -------------- ----------------- ------------ (IN MILLIONS) Aaa/Aa/A Single name credit default swaps (corporate)....................... $ 1 $ 116 5.0 Credit default swaps referencing indices........................... (30) 1,112 4.1 ---- ------ Subtotal.......................... (29) 1,228 4.2 ---- ------ Baa Single name credit default swaps (corporate)....................... 1 100 2.3 Credit default swaps referencing indices........................... (5) 215 4.1 ---- ------ Subtotal.......................... (4) 315 3.5 ---- ------ Ba Single name credit default swaps (corporate)....................... -- 5 5.0 Credit default swaps referencing indices........................... -- -- -- ---- ------ Subtotal.......................... -- 5 5.0 ---- ------ B Single name credit default swaps (corporate)....................... -- -- -- Credit default swaps referencing indices........................... (2) 10 5.0 ---- ------ Subtotal.......................... (2) 10 5.0 ---- ------ Caa and lower Single name credit default swaps (corporate)....................... -- -- -- Credit default swaps referencing indices........................... -- -- -- ---- ------ Subtotal.......................... -- -- -- ---- ------ In or near default Single name credit default swaps (corporate)....................... -- -- -- Credit default swaps referencing indices........................... -- -- -- ---- ------ Subtotal.......................... -- -- -- ---- ------ $(35) $1,558 4.1 ==== ======
-------- (1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's, S&P, and Fitch. If no rating is available from a rating agency, then the MLIC rating is used. (2) Assumes the value of the referenced credit obligations is zero. (3) The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. F-70 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 5. DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED Information regarding DAC and VOBA is as follows:
DAC VOBA TOTAL ------- ------ ------- (IN MILLIONS) Balance at January 1, 2006........................ $ 8,403 $ 220 $ 8,623 Capitalizations................................. 936 -- 936 ------- ------ ------- Subtotal..................................... 9,339 220 9,559 ------- ------ ------- Less: Amortization related to: Net investment gains (losses)................ (138) (2) (140) Other expenses............................... 757 (34) 723 ------- ------ ------- Total amortization......................... 619 (36) 583 ------- ------ ------- Less: Unrealized investment gains (losses)...... 105 (14) 91 Less: Other..................................... 17 (23) (6) ------- ------ ------- Balance at December 31, 2006...................... 8,598 293 8,891 Effect of SOP 05-1 adoption..................... (195) (123) (318) Capitalizations................................. 886 -- 886 ------- ------ ------- Subtotal..................................... 9,289 170 9,459 ------- ------ ------- Less: Amortization related to: Net investment gains (losses)................ (114) (1) (115) Other expenses............................... 735 23 758 ------- ------ ------- Total amortization......................... 621 22 643 ------- ------ ------- Less: Unrealized investment gains (losses)...... 110 71 181 Less: Other..................................... 7 -- 7 ------- ------ ------- Balance at December 31, 2007...................... 8,551 77 8,628 Capitalizations................................. 901 -- 901 ------- ------ ------- Subtotal................................... 9,452 77 9,529 ------- ------ ------- Less: Amortization related to: Net investment gains (losses)................ 157 (4) 153 Other expenses............................... 909 19 928 ------- ------ ------- Total amortization......................... 1,066 15 1,081 ------- ------ ------- Less: Unrealized investment gains (losses)...... (2,274) (146) (2,420) Less: Other..................................... (2) (1) (3) ------- ------ ------- Balance at December 31, 2008...................... $10,662 $ 209 $10,871 ======= ====== =======
The estimated future amortization expense allocated to other expenses for the next five years for VOBA is $19 million in 2009, $11 million in 2010, $11 million in 2011, $10 million in 2012, and $10 million in 2013. Amortization of VOBA and DAC is attributed to both investment gains and losses and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized F-71 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) investment gains and losses provide information regarding the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. Information regarding DAC and VOBA by segment and reporting unit is as follows:
DAC VOBA TOTAL ---------------- --------------------- ---------------- DECEMBER 31, ----------------------------------------------------------- 2008 2007 2008 2007 2008 2007 ------- ------ --------- --------- ------- ------ (IN MILLIONS) Institutional: Group life................... $ 68 $ 74 $ 8 $ 8 $ 76 $ 82 Retirement & savings......... 31 32 -- -- 31 32 Non-medical health & other... 898 793 -- -- 898 793 ------- ------ --------- --------- ------- ------ Subtotal.................. 997 899 8 8 1,005 907 ------- ------ --------- --------- ------- ------ Individual: Traditional life............. 5,380 3,789 102 (11) 5,482 3,778 Variable & universal life.... 2,095 2,131 65 49 2,160 2,180 Annuities.................... 2,188 1,730 31 27 2,219 1,757 ------- ------ --------- --------- ------- ------ Subtotal.................. 9,663 7,650 198 65 9,861 7,715 ------- ------ --------- --------- ------- ------ Corporate & Other.............. 2 2 3 4 5 6 ------- ------ --------- --------- ------- ------ Total.......................... $10,662 $8,551 $209 $ 77 $10,871 $8,628 ======= ====== ========= ========= ======= ======
6. GOODWILL Goodwill, which is included in other assets, is the excess of cost over the estimated fair value of net assets acquired. Information regarding goodwill is as follows:
DECEMBER 31, -------------- 2008 2007 ---- ---- (IN MILLIONS) Balance at beginning of the period......................... $108 $106 Acquisitions............................................... 3 2 ---- ---- Balance at the end of the period........................... $111 $108 ==== ====
F-72 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding goodwill by segment and reporting unit is as follows:
DECEMBER 31, --------------- 2008 2007 ---- ---- (IN MILLIONS) Institutional: Group life................................................ $ 3 $ 3 Retirement & savings...................................... 2 2 Non-medical health & other................................ 65 62 ---- ---- Subtotal............................................... 70 67 ---- ---- Individual: Traditional life.......................................... 24 24 Variable & universal life................................. 3 3 Annuities................................................. 10 10 ---- ---- Subtotal............................................... 37 37 ---- ---- Corporate & Other........................................... 4 4 ---- ---- Total....................................................... $111 $108 ==== ====
As described in more detail in Note 1, the Company performed its annual goodwill impairment tests during the third quarter of 2008 based upon data as of June 30, 2008. Such tests indicated that goodwill was not impaired as of September 30, 2008. Current economic conditions, the sustained low level of equity markets and lower operating earnings projections, particularly for the Individual segment, required management of the Company to consider the impact of these events on the recoverability of its assets, in particular its goodwill. Management concluded it was appropriate to perform an interim goodwill impairment test at December 31, 2008. Based upon the tests performed management concluded no impairment of goodwill had occurred for any of the Company's reporting units at December 31, 2008. Management continues to evaluate current market conditions that may affect the estimated fair value of the Company's reporting units to assess whether any goodwill impairment exists. Continued deteriorating or adverse market conditions for certain reporting units may have an impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. F-73 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 7. INSURANCE INSURANCE LIABILITIES Insurance liabilities are as follows:
OTHER FUTURE POLICY POLICYHOLDER POLICYHOLDER BENEFITS ACCOUNT BALANCES FUNDS ----------------- ----------------- --------------- DECEMBER 31, ------------------------------------------------------- 2008 2007 2008 2007 2008 2007 ------- ------- ------- ------- ------ ------ (IN MILLIONS) Institutional Group life.................. $ 3,345 $ 3,326 $12,975 $13,207 $2,527 $2,359 Retirement & savings........ 28,485 26,119 49,276 38,749 59 213 Non-medical health & other.. 11,436 10,430 501 501 595 595 Individual Traditional life............ 52,011 51,457 -- -- 1,381 1,431 Variable & universal life... 293 229 6,260 6,121 780 791 Annuities................... 2,041 1,817 21,761 20,056 17 14 Other....................... 1 -- 2,482 2,368 -- 1 Corporate & Other (1)......... 571 374 53 1 124 131 ------- ------- ------- ------- ------ ------ Total....................... $98,183 $93,752 $93,308 $81,003 $5,483 $5,535 ======= ======= ======= ======= ====== ======
-------- (1) Corporate & Other includes intersegment eliminations. Affiliated insurance liabilities included in the table above include reinsurance assumed and ceded. Affiliated future policy benefits, included in the table above, were $395 million and $406 million at December 31, 2008 and 2007, respectively. Affiliated policyholder account balances, included in the table above, were $606 million and $613 million at December 31, 2008 and 2007, respectively. Affiliated other policyholder funds, included in the table above, were ($205) million and ($251) million at December 31, 2008 and 2007, respectively. VALUE OF DISTRIBUTION AGREEMENTS AND CUSTOMER RELATIONSHIPS ACQUIRED Information regarding the VODA and VOCRA, which are reported in other assets, is as follows:
YEARS ENDED DECEMBER 31, -------------------------- 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Balance at January 1,................................ $431 $439 $ -- Acquisitions......................................... 9 -- 441 Amortization......................................... (13) (8) (2) ---- ---- ---- Balance at December 31,.............................. $427 $431 $439 ==== ==== ====
The estimated future amortization expense allocated to other expenses for the next five years for VODA and VOCRA is $15 million in 2009, $19 million in 2010, $22 million in 2011, $25 million in 2012 and $27 million in 2013. See Note 2 for a description of acquisitions and dispositions. The value of the identifiable intangibles included in the table above reflects the estimated fair value of the Citigroup/Travelers distribution agreement and customer relationships acquired at the original acquisition date and will be amortized in relation to the expected economic benefits of the agreement. The weighted average F-74 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) amortization period of the intangible assets is 16 years. If actual experience under the distribution agreements or with customer relationships differs from expectations, the amortization of these intangibles will be adjusted to reflect actual experience. The use of discount rates was necessary to establish the fair value of the other identifiable intangible assets. In selecting the appropriate discount rates, management considered its weighted average cost of capital as well as the weighted average cost of capital required by market participants. A discount rate of 11.5% was used to value these intangible assets. SALES INDUCEMENTS Information regarding deferred sales inducements, which are reported in other assets, is as follows:
YEARS ENDED DECEMBER 31, -------------------------- 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Balance at January 1,................................ $132 $121 $ 95 Capitalization....................................... 40 29 31 Amortization......................................... (28) (18) (5) ---- ---- ---- Balance at December 31,.............................. $144 $132 $121 ==== ==== ====
SEPARATE ACCOUNTS Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $48.2 billion and $71.4 billion at December 31, 2008 and 2007, respectively, for which the policyholder assumes all investment risk, and separate accounts with a minimum return or account value for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $24.1 billion and $18.3 billion at December 31, 2008 and 2007, respectively. The latter category consisted primarily of Met Managed GICs and participating close-out contracts. The average interest rate credited on these contracts was 4.40% and 4.73% at December 31, 2008 and 2007, respectively. Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges) are reflected in the Company's revenues as universal life and investment-type product policy fees and totaled $1.3 billion, $1.3 billion and $1.2 billion for the years ended December 31, 2008, 2007 and 2006, respectively. The Company's proportional interest in separate accounts is included in the consolidated balance sheets as follows:
DECEMBER 31, -------------- 2008 2007 ---- ---- (IN MILLIONS) Fixed maturity securities................................... $ 5 $ 6 Equity securities........................................... $16 $35 Cash and cash equivalents................................... $ -- $ 1
For the years ended December 31, 2008, 2007 and 2006, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. OBLIGATIONS UNDER GUARANTEED INTEREST CONTRACT PROGRAM The Company issues fixed and floating rate obligations under its GIC program which are denominated in either U.S. dollars or foreign currencies. During the years ended December 31, 2008, 2007 and 2006, the Company issued F-75 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $5.7 billion, $4.6 billion and $5.2 billion, respectively, and repaid $7.6 billion, $3.7 billion and $1.5 billion, respectively, of GICs under this program. At December 31, 2008 and 2007, GICs outstanding, which are included in policyholder account balances, were $17.3 billion and $19.1 billion, respectively. During the years ended December 31, 2008, 2007 and 2006, interest credited on the contracts, which are included in interest credited to policyholder account balances, was $840 million, $917 million and $672 million, respectively. OBLIGATIONS UNDER FUNDING AGREEMENTS Metropolitan Life Insurance Company is a member of the FHLB of NY and holds $830 million and $339 million of common stock of the FHLB of NY at December 31, 2008 and 2007, respectively, which is included in equity securities. MLIC has also entered into funding agreements with the FHLB of NY whereby MLIC has issued such funding agreements in exchange for cash and for which the FHLB of NY has been granted a lien on certain MLIC assets, including residential mortgage- backed securities to collateralize MLIC's obligations under the funding agreements. MLIC maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by MLIC, the FHLB of NY's recovery on the collateral is limited to the amount of MLIC's liability to the FHLB of NY. The amount of the Company's liability for funding agreements with the FHLB of NY was $15.2 billion and $4.6 billion at December 31, 2008 and 2007, respectively, which is included in policyholder account balances. The advances on these agreements are collateralized by mortgage-backed securities with estimated fair values of $17.8 billion and $4.8 billion at December 31, 2008 and 2007, respectively. Metropolitan Life Insurance Company has issued funding agreements to certain trusts that have issued securities guaranteed as to payment of interest and principal by the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the United States. The obligations under these funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of the Company's liability for funding agreements issued to such trusts was $2.5 billion at both December 31, 2008 and 2007, which is included in policyholder account balances. The obligations under these funding agreements are collateralized by designated agricultural real estate mortgage loans with estimated fair values of $2.9 billion at both December 31, 2008 and 2007. Approximately $3.0 billion of the obligations outstanding at MLIC at December 31, 2008 are subject to a temporary contingent increase in MLIC's borrowing capacity which is scheduled to expire at December 31, 2009. The Company does not expect to have any difficulties in meeting the contingencies associated with the increased capacity. F-76 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) LIABILITIES FOR UNPAID CLAIMS AND CLAIM EXPENSES Information regarding the liabilities for unpaid claims and claim expenses relating to group accident and non-medical health policies and contracts, which are reported in future policy benefits and other policyholder funds, is as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) Balance at January 1,............................. $ 5,174 $ 4,500 $ 4,191 Less: Reinsurance recoverables.................. (265) (268) (295) ------- ------- ------- Net balance at January 1,......................... 4,909 4,232 3,896 ------- ------- ------- Incurred related to: Current year.................................... 4,063 3,743 2,997 Prior years..................................... (86) (104) (28) ------- ------- ------- 3,977 3,639 2,969 ------- ------- ------- Paid related to: Current year.................................... (2,481) (2,077) (1,814) Prior years..................................... (1,002) (885) (819) ------- ------- ------- (3,483) (2,962) (2,633) ------- ------- ------- Net balance at December 31,....................... 5,403 4,909 4,232 Add: Reinsurance recoverables................... 266 265 268 ------- ------- ------- Balance at December 31,........................... $ 5,669 $ 5,174 $ 4,500 ======= ======= =======
During 2008, 2007 and 2006, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment expenses associated with prior years decreased by $86 million, $104 million and $28 million, respectively, due to improved loss ratios for non-medical health claim liabilities and improved claim management. GUARANTEES The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than total deposits made to the contract less any partial withdrawals ("return of net deposits"); and (ii) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial withdrawals plus a minimum return ("anniversary contract value" or "minimum return"). The Company also issues annuity contracts that apply a lower rate of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize ("two tier annuities"). These guarantees include benefits that are payable in the event of death or at annuitization. The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. F-77 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts is as follows:
DECEMBER 31, --------------------------------------------------------------- 2008 2007 ------------------------------ ------------------------------ IN THE AT IN THE AT EVENT OF DEATH ANNUITIZATION EVENT OF DEATH ANNUITIZATION -------------- ------------- -------------- ------------- (IN MILLIONS) ANNUITY CONTRACTS (1) RETURN OF NET DEPOSITS Separate account value............. $ 3,177 N/A $ 3,937 N/A Net amount at risk (2)............. $ 706 (3) N/A $ 7 (3) N/A Average attained age of contractholders................. 60 years N/A 60 years N/A ANNIVERSARY CONTRACT VALUE OR MINIMUM RETURN Separate account value............. $ 28,448 $ 5,693 $ 36,404 $ 6,524 Net amount at risk (2)............. $ 6,081 (3) $ 2,399 (4) $ 399 (3) $ 86 (4) Average attained age of contractholders................. 62 years 58 years 62 years 57 years TWO TIER ANNUITIES General account value.............. N/A $ 283 N/A $ 286 Net amount at risk (2)............. N/A $ 50 (5) N/A $ 51 (5) Average attained age of contractholders................. N/A 60 years N/A 60 years
DECEMBER 31, ------------------------------------------------- 2008 2007 ----------------------- ----------------------- SECONDARY PAID-UP SECONDARY PAID-UP GUARANTEES GUARANTEES GUARANTEES GUARANTEES ---------- ---------- ---------- ---------- (IN MILLIONS) UNIVERSAL AND VARIABLE LIFE CONTRACTS (1) Account value (general and separate account)................................. $ 4,908 $ 1,349 $ 6,550 $ 1,403 Net amount at risk (2)..................... $ 102,690 (3)$ 12,485 (3)$ 103,219 (3)$ 13,482 (3) Average attained age of policyholders...... 49 years 55 years 47 years 54 years
-------- (1) The Company's annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) The net amount at risk is based on the direct amount at risk (excluding reinsurance). (3) The net amount at risk for guarantees of amounts in the event of death is defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (4) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. (5) The net amount at risk for two tier annuities is based on the excess of the upper tier, adjusted for a profit margin, less the lower tier. F-78 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life contracts is as follows:
UNIVERSAL AND VARIABLE ANNUITY CONTRACTS LIFE CONTRACTS -------------------------- ----------------------- GUARANTEED GUARANTEED PAID DEATH ANNUITIZATION SECONDARY UP BENEFITS BENEFITS GUARANTEES GUARANTEES TOTAL ---------- ------------- ---------- ---------- ----- (IN MILLIONS) Balance at January 1, 2006...... $ 8 $ 7 $ 8 $10 $ 33 Incurred guaranteed benefits.... 1 -- 1 (1) 1 Paid guaranteed benefits........ (3) -- -- -- (3) --- --- --- --- ---- Balance at December 31, 2006.... 6 7 9 9 31 Incurred guaranteed benefits.... 4 8 4 3 19 Paid guaranteed benefits........ (2) -- -- -- (2) --- --- --- --- ---- Balance at December 31, 2007.... 8 15 13 12 48 Incurred guaranteed benefits.... 27 48 14 1 90 Paid guaranteed benefits........ (6) -- -- -- (6) --- --- --- --- ---- Balance at December 31, 2008.... $29 $63 $27 $13 $132 === === === === ====
Excluded from the table above are guaranteed death and annuitization benefit liabilities on the Company's annuity contracts of $66 million, $24 million and $21 million at December 31, 2008, 2007 and 2006, respectively, which were reinsured 100% to an affiliate and had corresponding recoverables from affiliated reinsurers related to such guarantee liabilities. Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) Mutual Fund Groupings Equity................................................ $12,973 $23,494 Balanced.............................................. 5,342 5,312 Bond.................................................. 2,837 3,430 Money Market.......................................... 419 350 Specialty............................................. 219 402 ------- ------- Total.............................................. $21,790 $32,988 ======= =======
8. REINSURANCE The Company's Individual segment life insurance operations participate in reinsurance activities in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. The Company has historically reinsured the mortality risk on new individual life insurance policies primarily on an excess of retention basis or a quota share basis. Until 2005, the Company reinsured up to 90% of the mortality risk for all new individual life insurance policies that it wrote through its various franchises. This practice was initiated by the different franchises for different products starting at various points in time between 1992 and 2000. During 2005, the Company changed its retention practices for certain individual life insurance policies. Amounts reinsured in prior years remain reinsured under the original reinsurance; however, under the new retention guidelines, the Company F-79 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) reinsures up to 90% of the mortality risk in excess of $1 million for most new individual life insurance policies that it writes through its various franchises and for certain individual life policies the retention limits remained unchanged. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the Company's retention limits. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. In addition, the Company reinsures a significant portion of the mortality risk on its individual universal life policies issued since 1983. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specific characteristics. The Company's Individual segment also reinsures 90% of the new production of fixed annuities from several affiliates. The Company's Individual segment also reinsures 100% of the living and death benefit riders issued associated with its variable annuities issued since 2004 to an affiliated reinsurer and certain portions of the living and death benefit riders associated with its variable annuities issued prior to 2004 to affiliated and non-affiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on rider fees collected from policyholders and receives reimbursements for benefits paid or accrued in excess of account values, subject to certain limitations. The Company enters into similar agreements for new or in-force business depending on market conditions. The Institutional segment generally retains most of its risks and does not significantly utilize reinsurance. The Company may, on certain client arrangements, cede particular risks to reinsurers. In addition to reinsuring mortality risk as described previously, the Company reinsures other risks, as well as specific coverages. The Company routinely reinsures certain classes of risks in order to limit its exposure to particular travel, avocation and lifestyle hazards. The Company has exposure to catastrophes, which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance arrangements to provide greater diversification of risk and minimize exposure to larger risks. The Company reinsures its business through a diversified group of reinsurers. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance balances recoverable could become uncollectible. Cessions under reinsurance arrangements do not discharge the Company's obligations as the primary insurer. F-80 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The amounts in the consolidated statements of income are presented net of reinsurance ceded. Information regarding the effect of reinsurance is as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS) PREMIUMS: Direct premiums................................ $19,246 $17,411 $16,958 Reinsurance assumed............................ 1,334 951 694 Reinsurance ceded.............................. (2,136) (1,927) (1,716) ------- ------- ------- Net premiums................................ $18,444 $16,435 $15,936 ======= ======= ======= UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES: Direct universal life and investment-type product policy fees......................... $ 2,741 $ 2,589 $ 2,460 Reinsurance assumed............................ 7 2 1 Reinsurance ceded.............................. (463) (345) (278) ------- ------- ------- Net universal life and investment-type product policy fees....................... $ 2,285 $ 2,246 $ 2,183 ======= ======= ======= POLICYHOLDER BENEFITS AND CLAIMS: Direct policyholder benefits and claims........ $21,863 $19,454 $18,795 Reinsurance assumed............................ 1,018 530 645 Reinsurance ceded.............................. (2,182) (1,709) (1,793) ------- ------- ------- Net policyholder benefits and claims........ $20,699 $18,275 $17,647 ======= ======= =======
Information regarding ceded reinsurance recoverable balances, included in premiums and other receivables is as follows:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) UNAFFILIATED RECOVERABLES: Future policy benefit recoverables...................... $ 2,817 $ 1,808 Deposit recoverables.................................... 2,069 2,516 Claim recoverables...................................... 201 197 All other recoverables.................................. 290 27 ------- ------- Total................................................. $ 5,377 $ 4,548 ======= ======= AFFILIATED RECOVERABLES: Closed block recoverables............................... $15,862 $16,011 Future policy benefit recoverables...................... 2,847 1,866 Claim recoverables...................................... 156 6 All other recoverables.................................. 478 51 ------- ------- Total................................................. $19,343 $17,934 ======= =======
Reinsurance recoverable balances are stated net of allowances for uncollectible balances, which are immaterial. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with reinsurers. F-81 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company also monitors ratings and evaluates the financial strength of the Company's reinsurers by analyzing their financial statements. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. Included in the unaffiliated reinsurance recoverables are $1.2 billion at both December 31, 2008 and 2007, related to reinsurance of long-term GICs, structured settlement lump sum contracts and $0.6 billion and $1.1 billion at December 31, 2008 and 2007, respectively, related to the reinsurance of investment-type contracts held by small market defined benefit contribution plans. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. At December 31, 2008, the Company has $1,811 million of unaffiliated reinsurance recoverable balances secured by funds held in trust as collateral, $353 million of unaffiliated reinsurance recoverable balances secured by funds withheld accounts and $284 million of unaffiliated reinsurance recoverable balances secured through irrevocable letters of credit issued by various financial institutions. All of the affiliated reinsurance recoverable balances except for $1,198 million of reserves and $8 million of other receivables are secured by funds withheld accounts, funds held in trust as collateral or irrevocable letters of credit issued by various financial institutions. The Company's five largest unaffiliated reinsurers account for $3,699 million, or 69%, of its total unaffiliated reinsurance recoverable balance of $5,377 million at December 31, 2008. Of these reinsurance recoverable balances, $1,736 million were secured by funds held in trust as collateral, $226 million were secured through irrevocable letters of credit issued by various financial institutions and $212 million of reinsurance recoverable balances were secured by funds withheld accounts. Reinsurance balances payable to unaffiliated reinsurers, included in other liabilities, were $1,509 million and $323 million at December 31, 2008 and 2007, respectively. Reinsurance balances payable to affiliated reinsurers, included in liabilities, were $21.0 billion and $20.1 billion at December 31, 2008 and 2007, respectively. The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including Exeter Reassurance Company, Ltd., Texas Life Insurance Company ("TLIC"), First MetLife Investors Insurance Company, MetLife Insurance Company of Connecticut, MetLife Investors USA Insurance Company, MetLife Investors Insurance Company, MetLife Reinsurance Company of Charleston ("MRC"), MetLife Reinsurance Company of Vermont, and MTL, all of which are related parties. The table below includes amounts related to transactions between these related parties and RGA through September 12, 2008, the date of the Company's dividend of interests in RGA. F-82 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table reflects related party reinsurance information:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Assumed premiums..................................... $ 28 $ 52 $ 42 Assumed fees, included in universal life and investment-type product policy fees................ $ 7 $ 2 $ 1 Interest earned on assumed reinsurance, included in other revenues..................................... $ (5) $ (4) $ (3) Assumed benefits, included in policyholder benefits and claims......................................... $ 99 $ 54 $ 86 Assumed benefits, included in interest credited on policyholder account balances...................... $ 22 $ 18 $ 11 Assumed acquisition costs, included in other expenses........................................... $128 $144 $322 Ceded premiums....................................... $ 46 $113 $116 Ceded fees, included in universal life and investment-type product policy fees................ $178 $112 $ 64 Income from deposit contracts, included in other revenues (1)....................................... $923 $ -- $ -- Ceded benefits, included in policyholder benefits and claims............................................. $133 $ 80 $ 69 Ceded benefits, included in interest credited to policyholder account balances...................... $ 70 $ 65 $ 49 Ceded benefits, included in policyholder dividends... $ 20 $ 29 $ 27 Interest costs on ceded reinsurance, included in other expenses (1)................................. $831 $ 5 $ (2)
-------- (1) In December 2007, the Company ceded a portion of its closed block liabilities on a coinsurance with funds withheld basis to MRC, an affiliate. In connection with this cession, the Company recognized $835 million of interest earned on the deposit included within premiums and other receivables, as well as certain administrative fees, at December 31, 2008. The Company also recognized $911 million of interest expense associated with the funds withheld included in other expenses for the year ended December 31, 2008. The Company has ceded risks to another affiliate related to guaranteed minimum benefit riders written by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are included within net investment gains (losses). The embedded derivatives ceded are included within premiums and other receivables and were assets of $797 million and $34 million at December 31, 2008 and 2007, respectively. For the years ended December 31, 2008, 2007 and 2006, net investment gains (losses) included $763 million, $42 million and ($18) million, respectively, in changes in estimated fair value of such embedded derivatives. Certain contractual features of the closed block agreement with MRC create an embedded derivative, which is separately accounted for at fair value on the Company's consolidated balance sheet. The embedded derivative related to the funds withheld associated with this reinsurance agreement is included within other liabilities and reduced the funds withheld balance by $1,203 million at December 31, 2008. The change in estimated fair value of the embedded derivative, included in net investment gains (losses), was $1,203 million for the year ended December 31, 2008. On December 1, 2006, TLIC, an affiliate of the Company, recaptured business previously ceded under a 2002 reinsurance treaty with the Company. The agreement required the Company to assume, on a co-insurance basis, certain structured settlement business from TLIC. On January 5, 2007, the Company transferred cash in the amount of $989 million, which represented $984 million for the fair value of the returned future policy benefits plus $5 million in interest. For the year ended December 31, 2006, as a result of this transaction, the Company recognized an expense of $184 million. F-83 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 9. CLOSED BLOCK On April 7, 2000, (the "Demutualization Date"), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance (the "Superintendent") approving Metropolitan Life Insurance Company's plan of reorganization, as amended (the "Plan"). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the effective date of the demutualization (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block is greater than the expected cumulative earnings of the closed block, the Company will pay the excess of the actual cumulative earnings of the closed block over the expected cumulative earnings to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block is less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings. Recent experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized losses, has resulted in a reduction of the policyholder dividend obligation to zero during the year F-84 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ended December 31, 2008. The reduction of the policyholder dividend obligation to zero and the Company's decision to revise the expected policyholder dividend scales, which are based upon statutory results, has resulted in reduction to both actual and expected cumulative earnings of the closed block. This change in the timing of the expected cumulative earnings of the closed block combined with a policyholder dividend obligation of zero has resulted in a reduction in the DAC associated with closed block, which resides outside of the closed block, and a corresponding decrease in the Company's net income of $127 million, net of income tax, for the year ended December 31, 2008. Amortization of the closed block DAC will be based upon actual cumulative earnings rather than expected cumulative earnings of the closed block until such time as the actual cumulative earnings of the closed block exceed the expected cumulative earnings, at which time the policyholder dividend obligation will be reestablished. Actual cumulative earnings less than expected cumulative earnings will result in future reductions to DAC and net income of the Company and increase sensitivity of the Company's net income to movements in closed block results. See also Note 5 for further information regarding DAC. F-85 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the closed block liabilities and assets designated to the closed block is as follows:
DECEMBER 31, ----------------- 2008 2007 ------- ------- (IN MILLIONS) CLOSED BLOCK LIABILITIES Future policy benefits.................................. $43,520 $43,362 Other policyholder funds................................ 315 323 Policyholder dividends payable.......................... 711 709 Policyholder dividend obligation........................ -- 789 Payables for collateral under securities loaned and other transactions.................................... 2,852 5,610 Other liabilities....................................... 254 290 ------- ------- Total closed block liabilities........................ 47,652 51,083 ------- ------- ASSETS DESIGNATED TO THE CLOSED BLOCK Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $27,947 and $29,631, respectively)............................. 26,205 30,481 Equity securities available-for-sale, at estimated fair value (cost: $280 and $1,555, respectively)... 210 1,875 Mortgage loans on real estate......................... 7,243 7,472 Policy loans.......................................... 4,426 4,290 Real estate and real estate joint ventures held-for- investment......................................... 381 297 Short-term investments................................ 52 14 Other invested assets................................. 952 829 ------- ------- Total investments.................................. 39,469 45,258 Cash and cash equivalents............................... 262 333 Accrued investment income............................... 484 485 Deferred income tax assets.............................. 1,632 640 Premiums and other receivables.......................... 98 151 ------- ------- Total assets designated to the closed block........ 41,945 46,867 ------- ------- Excess of closed block liabilities over assets designated to the closed block........................ 5,707 4,216 ------- ------- Amounts included in accumulated other comprehensive income (loss): Unrealized investment gains (losses), net of income tax of ($633) and $424, respectively............... (1,174) 751 Unrealized gains (losses) on derivative instruments, net of income tax of ($8) and ($19), respectively.. (15) (33) Allocated $284, net of income tax, to policyholder dividend obligation at December 31, 2007........... -- (505) ------- ------- Total amounts included in accumulated other comprehensive income (loss)........................... (1,189) 213 ------- ------- Maximum future earnings to be recognized from closed block assets and liabilities.......................... $ 4,518 $ 4,429 ======= =======
F-86 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the closed block policyholder dividend obligation is as follows:
YEARS ENDED DECEMBER 31, ----------------------------- 2008 2007 2006 ----- ------ ------ (IN MILLIONS) Balance at January 1,............................... $ 789 $1,063 $1,607 Impact on revenues, net of expenses and income tax.. -- -- (114) Change in unrealized investment and derivative gains (losses).......................................... (789) (274) (430) ----- ------ ------ Balance at December 31,............................. $ -- $ 789 $1,063 ===== ====== ======
Information regarding the closed block revenues and expenses is as follows:
YEARS ENDED DECEMBER 31, ------------------------------ 2008 2007 2006 ------ ------ ------ (IN MILLIONS) REVENUES Premiums............................................ $2,787 $2,870 $2,959 Net investment income and other revenues............ 2,248 2,350 2,355 Net investment gains (losses)....................... (84) 28 (130) ------ ------ ------ Total revenues................................... 4,951 5,248 5,184 ------ ------ ------ EXPENSES Policyholder benefits and claims.................... 3,393 3,457 3,474 Policyholder dividends.............................. 1,498 1,492 1,479 Change in policyholder dividend obligation.......... -- -- (114) Other expenses...................................... 217 231 247 ------ ------ ------ Total expenses................................... 5,108 5,180 5,086 ------ ------ ------ Revenues, net of expenses before income tax........... (157) 68 98 Income tax............................................ (68) 21 34 ------ ------ ------ Revenues, net of expenses and income tax from continuing operations............................... (89) 47 64 Revenues, net of expenses and income tax from discontinued operations............................. -- -- 1 ------ ------ ------ Revenues, net of expenses, income taxes and discontinued operations............................. $ (89) $ 47 $ 65 ====== ====== ======
The change in the maximum future earnings of the closed block is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ------ ------ ------ (IN MILLIONS) Balance at December 31,............................. $4,518 $4,429 $4,480 Less: Cumulative effect of a change in accounting principle, net of income tax................... -- (4) -- Balance at January 1,............................... 4,429 4,480 4,545 ------ ------ ------ Change during year.................................. $ 89 $ (47) $ (65) ====== ====== ======
Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes, and other additive state or local taxes, as well as investment management expenses relating to the F-87 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) closed block as provided in the Plan. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block. 10. LONG-TERM AND SHORT-TERM DEBT Long-term and short-term debt outstanding is as follows:
INTEREST RATES ----------------------- DECEMBER 31, WEIGHTED --------------- RANGE AVERAGE MATURITY 2008 2007 ------------ -------- --------- ------ ------ (IN MILLIONS) Surplus notes -- affiliated.... 3.89%-7.38% 5.66% 2009-2037 $1,394 $1,394 Surplus notes.................. 7.63%-7.88% 7.86% 2015-2025 698 697 Capital notes -- affiliated.... 7.13% 7.13% 2032-2033 500 500 Other notes with varying interest rates............... 4.45%-12.00% 7.95% 2009-2016 66 45 Secured demand note -- affiliated........... 0.50% 0.50% 2011 25 -- Capital lease obligations...... 39 51 ------ ------ Total long-term debt........... 2,722 2,687 Total short-term debt.......... 414 357 ------ ------ Total........................ $3,136 $3,044 ====== ======
The aggregate maturities of long-term debt at December 31, 2008 for the next five years are $710 million in 2009, $66 million in 2010, $25 million in 2011, $1 million in 2012, less than $1 million in 2013 and $1,920 million thereafter. Capital lease obligations are collateralized and rank highest in priority, followed by unsecured senior debt which consists of other notes with varying interest rates. Payments of interest and principal on the Company's surplus notes, which are subordinate to all other obligations, may be made only with the prior approval of the insurance department of the state of domicile. Long-term debt, credit facilities and letters of credit of MetLife, Inc. and its subsidiaries contain various covenants. The Company has certain administrative, reporting, legal and financial covenants in several of these arrangements. The Company was in compliance with all covenants at December 31, 2008 and 2007. SURPLUS NOTES -- AFFILIATED In December 2007, the Company repaid the $800 million surplus note issued in December 2005 with an interest rate of 5.00% to MetLife, Inc. and then issued to MetLife, Inc. a $700 million surplus note with an interest rate of LIBOR plus 1.15%. In December 2007, the Company issued a $694 million surplus note to MetLife Capital Trust IV, an affiliate, with an interest rate of 7.38%. SECURED DEMAND NOTE -- AFFILIATED Effective September 30, 2008, the Company entered into a secured demand note collateral agreement with an affiliate pursuant to which the affiliate pledged securities to the Company to collateralize its obligation to lend $25 million to the Company. The Company has not exercised its right to sell or repledge the collateral. F-88 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SHORT-TERM DEBT Short-term debt was $414 million and $357 million at December 31, 2008 and 2007, respectively, which consisted entirely of commercial paper. During the years ended December 31, 2008, 2007 and 2006, the weighted average interest rate of short-term debt was 2.4%, 5.1% and 5.1%, respectively. During the years ended December 31, 2008, 2007 and 2006, the average daily balance of short-term debt was $421 million, $927 million and $768 million, respectively, and was outstanding for an average of 25 days, 25 days and 53 days, respectively. INTEREST EXPENSE Interest expense related to the Company's indebtedness included in other expenses was $192 million, $190 million and $184 million for the years ended December 31, 2008, 2007 and 2006, respectively, and does not include interest expense on shares subject to mandatory redemption. See Note 11. These amounts include $120 million, $78 million and $76 million of interest expense related to affiliated debt for the years ended December 31, 2008, 2007 and 2006, respectively. CREDIT AND COMMITTED FACILITIES AND LETTERS OF CREDIT Credit Facility. MetLife Funding, Inc., a subsidiary of the Company, maintains a committed and unsecured credit facility of $2.9 billion at December 31, 2008. When drawn upon, this facility bears interest at varying rates in accordance with the agreement as specified below. This facility can be used for general corporate purposes and, at December 31, 2008, the facility also served as a back-up line of credit for the Company's commercial paper program. This agreement contains various administrative, reporting, legal and financial covenants, including a covenant requiring MetLife, Inc. to maintain a specified minimum consolidated net worth. Management has no reason to believe that its lending counterparties are unable to fulfill their respective contractual obligations. Total fees associated with this credit facility were $17 million, of which $11 million related to deferred amendment fees, for the year ended December 31, 2008. Information on this credit facility at December 31, 2008 is as follows:
LETTER OF CREDIT UNUSED BORROWER(S) EXPIRATION CAPACITY ISSUANCES DRAWDOWNS COMMITMENTS ----------- ------------ -------- --------- --------- ----------- (IN MILLIONS) MetLife, Inc. and MetLife Funding, Inc. ............................... June 2012 (1) $2,850 $2,313 $ -- $537 ------ ------ ---- ---- Total............................... $2,850 $2,313 $-- $537 ====== ====== ==== ====
-------- (1) In December 2008, MetLife, Inc. and MetLife Funding, Inc. entered into an amended and restated $2.85 billion credit agreement with various financial institutions. The agreement amended and restated the $3.0 billion credit agreement entered into in June 2007. Proceeds are available to be used for general corporate purposes, to support their commercial paper programs and for the issuance of letters of credit. All borrowings under the credit agreement must be repaid by June 2012, except that letters of credit outstanding upon termination may remain outstanding until June 2013. The borrowers and the lenders under this facility may agree to extend the term of all or part of the facility to no later than June 2014, except that letters of credit outstanding upon termination may remain outstanding until June 2015. Fees for this agreement include a 0.25% facility fee, 0.075% fronting fee, a letter of credit fee between 1% and 5% based on certain market rates and a 0.05% utilization fee, as applicable, and may vary based on MetLife, Inc.'s senior unsecured ratings. MetLife, Inc. and MetLife Funding, Inc. incurred amendment costs of $11 million related to the $2,850 million amended and restated credit agreement, which have been capitalized and included in other assets. These costs will be amortized over the term of the agreement. MetLife, Inc. did not have any deferred financing costs associated with the original June 2007 credit agreement. F-89 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Committed Facility. Missouri Reinsurance (Barbados), Inc., a subsidiary of the Company, maintains a committed facility of $500 million at December 31, 2008. When drawn upon, this facility bears interest at varying rates in accordance with the agreement as specified below. The facility is used for collateral for certain of the Company's reinsurance reserves. This facility contains various administrative, reporting, legal and financial covenants. Management has no reason to believe that its lending counterparties are unable to fulfill their respective contractual obligations. Total fees associated with this committed facility were $4 million for the year ended December 31, 2008. Information on the committed facility at December 31, 2008 is as follows:
LETTER OF CREDIT UNUSED MATURITY ACCOUNT PARTY/BORROWER(S) EXPIRATION CAPACITY DRAWDOWNS ISSUANCES COMMITMENTS (YEARS) ------------------------- ------------ -------- --------- --------- ----------- -------- (IN MILLIONS) Exeter Reassurance Company Ltd., MetLife, Inc., & Missouri Reinsurance (Barbados), Inc. ......... June 2016 (1) $500 $-- $490 $10 7 ---- --- ---- --- Total..................... $500 $-- $490 $10 ==== === ==== ===
-------- (1) Letters of credit and replacements or renewals thereof issued under this facility of $280 million, $10 million and $200 million are set to expire no later than December 2015, March 2016 and June 2016, respectively. Letters of Credit. At December 31, 2008, the Company had outstanding $2.8 billion in letters of credit from various financial institutions, of which $490 million and $2.3 billion were part of committed and credit facilities, respectively. As commitments associated with letters of credit and financing arrangements may expire unused, these amounts do not necessarily reflect the Company's actual future cash funding requirements. 11. SHARES SUBJECT TO MANDATORY REDEMPTION AND COMPANY-OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY TRUSTS GenAmerica Capital I. In June 1997, GenAmerica Corporation ("GenAmerica") issued $125 million of 8.525% capital securities through a wholly-owned subsidiary trust, GenAmerica Capital I. In October 2007, GenAmerica redeemed these securities which were due to mature on June 30, 2027. As a result of this redemption, the Company recognized additional interest expense of $10 million. Interest expense on these instruments is included in other expenses and was $20 million and $11 million for the years ended December 31, 2007 and 2006, respectively. F-90 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 12. INCOME TAX The provision for income tax from continuing operations is as follows:
YEARS ENDED DECEMBER 31, ---------------------------- 2008 2007 2006 ------ ------ ---- (IN MILLIONS) Current: Federal............................................ $ (58) $1,067 $492 State and local.................................... 2 22 5 Foreign............................................ 17 9 8 ------ ------ ---- Subtotal........................................... (39) 1,098 505 ------ ------ ---- Deferred: Federal............................................ 1,689 (53) 43 State and local.................................... -- 18 19 Foreign............................................ 1 (9) (10) ------ ------ ---- Subtotal........................................... 1,690 (44) 52 ------ ------ ---- Provision for income tax............................. $1,651 $1,054 $557 ====== ====== ====
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations is as follows:
YEARS ENDED DECEMBER 31, ----------------------------- 2008 2007 2006 ------ ------ ----- (IN MILLIONS) Tax provision at U.S. statutory rate................ $1,759 $1,157 $ 780 Tax effect of: Tax-exempt investment income...................... (116) (160) (167) State and local income tax........................ 1 33 19 Prior year tax.................................... 52 38 (26) Foreign tax rate differential and change in valuation allowance............................ (14) (18) (21) Other, net........................................ (31) 4 (28) ------ ------ ----- Provision for income tax............................ $1,651 $1,054 $ 557 ====== ====== =====
F-91 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following:
DECEMBER 31, --------------- 2008 2007 ------ ------ (IN MILLIONS) Deferred income tax assets: Policyholder liabilities and receivables................ $3,312 $3,005 Net operating loss carryforwards........................ 24 47 Employee benefits....................................... 616 120 Tax credit carryforwards................................ 298 -- Net unrealized investment losses........................ 4,062 -- Litigation-related and government mandated.............. 264 45 Other................................................... 111 202 ------ ------ 8,687 3,419 Less: Valuation allowance................................. 14 8 ------ ------ 8,673 3,411 ------ ------ Deferred income tax liabilities: Investments, including derivatives...................... 3,918 1,493 DAC..................................................... 2,167 2,207 Net unrealized investment gains......................... -- 689 Other................................................... 31 7 ------ ------ 6,116 4,396 ------ ------ Net deferred income tax asset/(liability)................. $2,557 $ (985) ====== ======
Domestic net operating loss carryforwards amount to $29 million at December 31, 2008 and will expire beginning in 2024. Foreign net operating loss carryforwards amount to $51 million at December 31, 2008 and were generated in various foreign countries with expiration periods of five years to indefinite expiration. Tax credit carryforwards amount to $298 million at December 31, 2008. The Company has recorded a valuation allowance related to tax benefits of certain foreign net operating loss carryforwards. The valuation allowance reflects management's assessment, based on available information, that it is more likely than not that the deferred income tax asset for certain foreign net operating loss carryforwards will be not realized. The tax benefit will be recognized when management believes that it is more likely than not that these deferred income tax assets are realizable. In 2008, the Company recorded an increase to the deferred tax valuation allowance of $6 million related to certain foreign net operating loss carryforwards. The Company has not established a valuation allowance against the deferred tax asset of $4,062 million recognized in connection with unrealized losses at December 31, 2008. A valuation allowance was not considered necessary based upon the Company's intent and ability to hold such securities until their recovery or maturity and the existence of tax-planning strategies that include sources of future taxable income against which such losses could be offset. The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the Internal Revenue Service ("IRS") and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction. With a few exceptions, the Company is no F-92 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2000. In 2005, the IRS commenced an examination of the Company's U.S. income tax returns for 2000 through 2002 that is anticipated to be completed in 2009. As a result of the implementation of FIN 48 on January 1, 2007, the Company recognized a $18 million increase in the liability for unrecognized tax benefits and a $16 million decrease in the interest liability for unrecognized tax benefits, as well as a $17 million increase in the liability for unrecognized tax benefits and a $5 million increase in the interest liability for unrecognized tax benefits which are included in liabilities of subsidiaries held-for-sale. The corresponding reduction to the January 1, 2007 balance of retained earnings was $13 million, net of $11 million of minority interest included in liabilities of subsidiaries held-for-sale. The Company's total amount of unrecognized tax benefits upon adoption of FIN 48 was $797 million. The Company reclassified, at adoption, $568 million of current income tax payables to the liability for unrecognized tax benefits included within other liabilities. The Company also reclassified, at adoption, $211 million of deferred income tax liabilities, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility, to the liability for unrecognized tax benefits. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The total amount of unrecognized tax benefits at January 1, 2007 that would affect the effective tax rate, if recognized, was $586 million. The Company also had $198 million of accrued interest, included within other liabilities, as of January 1, 2007. The Company classifies interest accrued related to unrecognized tax benefits in interest expense, while penalties are included within income tax expense. At December 31, 2007, the Company's total amount of unrecognized tax benefits was $655 million and the total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, was $475 million. The total amount of unrecognized tax benefits decreased by $142 million from the date of adoption primarily due to settlements reached with the IRS with respect to certain significant issues involving demutualization, post-sale purchase price adjustments and reinsurance offset by additions for tax positions of the current year. As a result of the settlements, items within the liability for unrecognized tax benefits, in the amount of $171 million, were reclassified to current and deferred income taxes, as applicable, and a payment of $156 million was made in December of 2007, with $6 million to be paid in 2009 and the remaining $9 million to be paid in future years. At December 31, 2008, the Company's total amount of unrecognized tax benefits was $593 million and the total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, is $485 million. The total amount of unrecognized tax benefits decreased by $62 million from December 31, 2007 primarily due to settlements reached with the IRS with respect to certain significant issues involving demutualization, leasing and tax credits offset by additions for tax positions of the current year. As a result of the settlements, items within the liability for unrecognized tax benefits, in the amount of $135 million, were reclassified to current and deferred income taxes, as applicable. Of the $135 million reclassified to current and deferred income taxes, $2 million was paid in 2008 and $133 million will be paid in 2009. The Company's liability for unrecognized tax benefits will change in the next 12 months pending the outcome of remaining issues associated with the current IRS audit including tax-exempt income and tax credits. Management is working to resolve the remaining audit items directly with IRS auditors as well as through available accelerated IRS resolution programs and may protest any unresolved issues through the IRS appeals process and, possibly, litigation, the timing and extent of which is uncertain. At this time, a reasonable estimate of the range of a payment or change in the liability is between $40 million and $50 million; however, the Company continues to believe that the ultimate resolution of the issues will not result in a material effect on its consolidated financial statements, although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period. F-93 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2008 and December 31, 2007, is as follows:
DECEMBER 31, ------------- 2008 2007 ----- ----- (IN MILLIONS) Balance as of beginning of the period...................... $ 655 $ 797 Additions for tax positions of prior years................. 4 32 Reductions for tax positions of prior years................ (33) (51) Additions for tax positions of current year................ 120 52 Reductions for tax positions of current year............... (12) -- Settlements with tax authorities........................... (135) (171) Lapses of statutes of limitations.......................... (6) (4) ----- ----- Balance as of end of the period............................ $ 593 $ 655 ===== =====
During the year ended December 31, 2007, the Company recognized $72 million in interest expense associated with the liability for unrecognized tax benefits. At December 31, 2007, the Company had $197 million of accrued interest associated with the liability for unrecognized tax benefits. The $1 million increase, from the date of adoption, in accrued interest associated with the liability for unrecognized tax benefits resulted from an increase of $72 million of interest expense and a $73 million decrease primarily resulting from the aforementioned IRS settlements. During 2007, the $73 million resulting from IRS settlements was reclassified to current income tax payable and will be paid in 2009. During the year ended December 31, 2008, the Company recognized $33 million in interest expense associated with the liability for unrecognized tax benefits. At December 31, 2008, the Company had $156 million of accrued interest associated with the liability for unrecognized tax benefits. The $41 million decrease from December 31, 2007 in accrued interest associated with the liability for unrecognized tax benefits resulted from an increase of $33 million of interest expense and a $74 million decrease primarily resulting from the aforementioned IRS settlements. Of the $74 million decrease, $73 million has been reclassified to current income tax payable and the remaining $1 million reduced interest expense. Of the $73 million reclassified to current income tax payable, $4 million was paid in 2008 and the remainder of $69 million will be paid in 2009. On September 25, 2007, the IRS issued Revenue Ruling 2007-61, which announced its intention to issue regulations with respect to certain computational aspects of the Dividends Received Deduction ("DRD") on separate account assets held in connection with variable annuity contracts. Revenue Ruling 2007-61 suspended a revenue ruling issued in August 2007 that would have changed accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2008 and 2007, the Company recognized an income tax benefit of $104 million and $113 million, respectively, related to the separate account DRD. F-94 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 13. CONTINGENCIES, COMMITMENTS AND GUARANTEES CONTINGENCIES LITIGATION The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrate to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Thus, unless stated below, the specific monetary relief sought is not noted. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be inherently impossible to ascertain with any degree of certainty. Inherent uncertainties can include how fact finders will view individually and in their totality documentary evidence, the credibility and effectiveness of witnesses' testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and contingencies to be reflected in the Company's consolidated financial statements. In 2007, the Company received $39 million upon the resolution of an indemnification claim associated with the 2000 acquisition of GALIC, and the Company reduced legal liabilities by $31 million after the settlement of certain cases. The review includes senior legal and financial personnel. Unless stated below, estimates of possible losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below; in 2007 the Company increased legal liabilities for pending sales practices, employment, and intellectual property litigation matters against the Company. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at December 31, 2008. Demutualization Actions Several lawsuits were brought in 2000 challenging the fairness of the Plan and the adequacy and accuracy of Metropolitan Life Insurance Company's disclosure to policyholders regarding the Plan. The actions discussed below name as defendants some or all of Metropolitan Life Insurance Company, MetLife, Inc., and individual directors. Metropolitan Life Insurance Company, MetLife, Inc., and the individual directors believe they have meritorious defenses to the plaintiffs' claims and are contesting vigorously all of the plaintiffs' claims in these actions. Fiala, et al. v. Metropolitan Life Ins. Co., et al. (Sup. Ct., N.Y. County, filed March 17, 2000). The plaintiffs in the consolidated state court class action seek compensatory relief and punitive damages against Metropolitan Life Insurance Company, MetLife, Inc., and individual directors. The court has certified a litigation class of present and former policyholders on plaintiffs' claim that defendants violated section 7312 of the New York Insurance Law. Pursuant to the court's order, plaintiffs have given notice to the class of the pendency of this action. Defendants' motion for summary judgment is pending. F-95 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) In re MetLife Demutualization Litig. (E.D.N.Y., filed April 18, 2000). In this class action against Metropolitan Life Insurance Company and MetLife, Inc., plaintiffs served a second consolidated amended complaint in 2004. Plaintiffs assert violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the Plan, claiming that the Policyholder Information Booklets failed to disclose certain material facts and contained certain material misstatements. They seek rescission and compensatory damages. By orders dated July 19, 2005 and August 29, 2006, the federal trial court certified a litigation class of present and former policyholders. The court has directed the manner and form of notice to the class, but plaintiffs have not yet distributed the notice. Metropolitan Life Insurance Company and MetLife, Inc. have moved for summary judgment, and plaintiffs have moved for partial summary judgment. The court heard oral argument on the parties' motions for summary judgment on September 19, 2008. Asbestos-Related Claims Metropolitan Life Insurance Company is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life Insurance Company has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos- containing products nor has Metropolitan Life Insurance Company issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos- containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life Insurance Company's employees during the period from the 1920's through approximately the 1950's and allege that Metropolitan Life Insurance Company learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life Insurance Company believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury, and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life Insurance Company. Metropolitan Life Insurance Company employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling individual or groups of claims or lawsuits under appropriate circumstances. Claims asserted against Metropolitan Life Insurance Company have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life Insurance Company's defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life Insurance Company owed no duty to the plaintiffs -- it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs did not rely on any actions of Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company's conduct was not the cause of the plaintiffs' injuries; (iv) plaintiffs' exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the course of the litigation, certain trial courts have granted motions dismissing claims against Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company's motions to dismiss. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials. The approximate total number of asbestos personal injury claims pending against Metropolitan Life Insurance Company as of the dates indicated, the approximate number of new claims during the years ended on those dates and F-96 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the approximate total settlement payments made to resolve asbestos personal injury claims at or during those years are set forth in the following table:
DECEMBER 31, --------------------------- 2008 2007 2006 ------- ------- ------- (IN MILLIONS, EXCEPT NUMBER OF CLAIMS) Asbestos personal injury claims at year end...... 74,027 79,717 87,070 Number of new claims during the year............. 5,063 7,161 7,870 Settlement payments during the year (1).......... $ 99.0 $ 28.2 $ 35.5
-------- (1) Settlement payments represent payments made by Metropolitan Life Insurance Company during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life Insurance Company's attorneys' fees and expenses and do not reflect amounts received from insurance carriers. In 2005, Metropolitan Life Insurance Company received approximately 18,500 new claims, ending the year with a total of approximately 100,250 claims, and paid approximately $74.3 million for settlements reached in 2005 and prior years. In 2004, Metropolitan Life Insurance Company received approximately 23,900 new claims, ending the year with a total of approximately 108,000 claims, and paid approximately $85.5 million for settlements reached in 2004 and prior years. In 2003, Metropolitan Life Insurance Company received approximately 58,750 new claims, ending the year with a total of approximately 111,700 claims, and paid approximately $84.2 million for settlements reached in 2003 and prior years. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year. The ability of Metropolitan Life Insurance Company to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict with any certainty the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life Insurance Company when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts. The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company's judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company's total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on the Company's financial position. During 1998, Metropolitan Life Insurance Company paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance policies for asbestos-related claims provided for recovery of losses up to $1.5 billion in excess of a $400 million self-insured retention. The Company's initial option to commute the excess insurance policies for asbestos- related claims would have arisen at the end of 2008. On September 29, 2008, Metropolitan Life Insurance Company entered into agreements commuting the excess insurance policies as of September 30, 2008. As a result of the commutation of the policies, Metropolitan Life Insurance Company received cash and securities totaling $632 million. Of this total, Metropolitan Life Insurance Company received $115 million in fixed maturity securities on September 26, 2008, $200 million in cash on F-97 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) October 29, 2008, and $317 million in cash on January 29, 2009. Metropolitan Life Insurance Company recognized a loss on commutation of the policies in the amount of $35.3 million during 2008. In the years prior to commutation, the excess insurance policies for asbestos-related claims were subject to annual and per claim sublimits. Amounts exceeding the sublimits during 2007, 2006 and 2005 were approximately $16 million, $8 million and $0, respectively. Amounts were recoverable under the policies annually with respect to claims paid during the prior calendar year. Each asbestos-related policy contained an experience fund and a reference fund that provided for payments to Metropolitan Life Insurance Company at the commutation date if the reference fund was greater than zero at commutation or pro rata reductions from time to time in the loss reimbursements to Metropolitan Life Insurance Company if the cumulative return on the reference fund was less than the return specified in the experience fund. The return in the reference fund was tied to performance of the S&P 500 Index and the Lehman Brothers Aggregate Bond Index. A claim with respect to the prior year was made under the excess insurance policies in each year from 2003 through 2008 for the amounts paid with respect to asbestos litigation in excess of the retention. The foregone loss reimbursements were approximately $62.2 million with respect to claims for the period of 2002 through 2007. Because the policies were commuted as of September 30, 2008, there will be no claims under the policies or forgone loss reimbursements with respect to payments made in 2008 and thereafter. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life Insurance Company's recorded asbestos liability is based on its estimation of the following elements, as informed by the facts presently known to it, its understanding of current law, and its past experiences: (i) the probable and reasonably estimable liability for asbestos claims already asserted against Metropolitan Life Insurance Company, including claims settled but not yet paid; (ii) the probable and reasonably estimable liability for asbestos claims not yet asserted against Metropolitan Life Insurance Company, but which Metropolitan Life Insurance Company believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life Insurance Company's analysis of the adequacy of its recorded liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to defend claims. Metropolitan Life Insurance Company reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants, and the jurisdictions in which claims are pending. As previously disclosed, in 2002 Metropolitan Life Insurance Company increased its recorded liability for asbestos-related claims by $402 million from approximately $820 million to $1,225 million. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through December 31, 2008. Regulatory Matters The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the SEC; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority seeking a broad range of information. The issues involved in information requests and regulatory matters vary widely. Certain regulators have requested information and documents regarding contingent commission payments to brokers, the Company's awareness of any "sham" bids for business, bids and quotes that the Company submitted to potential customers, incentive agreements entered into with brokers, or compensation paid to intermediaries. Regulators also have requested information relating to market timing and late F-98 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) trading of mutual funds and variable insurance products and, generally, the marketing of products. The Company has received a subpoena from the Office of the U.S. Attorney for the Southern District of California asking for documents regarding the insurance broker Universal Life Resources. The Company has been cooperating fully with these inquiries. Regulatory authorities in a small number of states have had investigations or inquiries relating to sales of individual life insurance policies or annuities or other products by Metropolitan Life Insurance Company; New England Mutual Life Insurance Company, New England Life Insurance Company and New England Securities Corporation (collectively "New England"); and GALIC. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief. The Company may continue to resolve investigations in a similar manner. In June 2008, the Environmental Protection Agency issued a Notice of Violation ("NOV") regarding the operations of the Homer City Generating Station, an electrical generation facility. The NOV alleges, among other things, that the electrical generation facility is being operated in violation of certain federal and state Clean Air Act requirements. Homer City OL6 LLC, an entity owned by Metropolitan Life Insurance Company, is a passive investor with a minority interest in the electrical generation facility, which is solely operated by the lessee, EME Homer City Generation L.P. ("EME Homer"). Homer City OL6 LLC and EME Homer are among the respondents identified in the NOV. EME Homer has been notified of its obligation to indemnify Homer City OL6 LLC and Metropolitan Life Insurance Company for any claims resulting from the NOV and has expressly acknowledged its obligation to indemnify Homer City OL6 LLC. Other Litigation Jacynthe Evoy-Larouche v. Metropolitan Life Ins. Co. (Que. Super. Ct., filed March 1998). This putative class action lawsuit involving sales practices claims was filed against Metropolitan Life Insurance Company in Canada. Plaintiff alleged misrepresentations regarding dividends and future payments for life insurance policies and seeks unspecified damages. Pursuant to a judgment dated March 11, 2009, this lawsuit was dismissed. The American Dental Association, et al. v. MetLife Inc., et al. (S.D. Fla., filed May 19, 2003). The American Dental Association and three individual providers have sued MetLife, Inc., Metropolitan Life Insurance Company and other non-affiliated insurance companies in a putative class action lawsuit. The plaintiffs purport to represent a nationwide class of in-network providers who allege that their claims are being wrongfully reduced by downcoding, bundling, and the improper use and programming of software. The complaint alleges federal racketeering and various state law theories of liability. On February 10, 2009, the district court granted the Company's motion to dismiss plaintiffs' second amended complaint, dismissing all of plaintiffs' claims except for breach of contract claims. Plaintiffs had been provided with an opportunity to re-plead the dismissed claims by February 26, 2009. Since plaintiffs never amended these claims, they were dismissed with prejudice on March 2, 2009. By order dated March 20, 2009, the court declined to retain jurisdiction over the remaining breach of contract claims and dismissed the lawsuit. In Re Ins. Brokerage Antitrust Litig. (D. N.J., filed February 24, 2005). In this multi-district class action proceeding, plaintiffs' complaint alleged that MetLife, Inc., Metropolitan Life Insurance Company, several non- affiliated insurance companies and several insurance brokers violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), the Employee Retirement Income Security Act of 1974 ("ERISA"), and antitrust laws and committed other misconduct in the context of providing insurance to employee benefit plans and to persons who participate in such employee benefit plans. In August and September 2007 and January 2008, the court issued orders granting defendants' motions to dismiss with prejudice the federal antitrust, the RICO, and the ERISA claims. In February 2008, the court dismissed the remaining state law claims on jurisdictional grounds. Plaintiffs' appeal from the orders dismissing their RICO and federal antitrust claims is pending with the U.S. Court of Appeals for the Third Circuit. A putative class action alleging that MetLife, Inc. and other non-affiliated defendants violated F-99 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) state laws was transferred to the District of New Jersey but was not consolidated with other related actions. Plaintiffs' motion to remand this action to state court in Florida is pending. Metropolitan Life Insurance Company v. Park Avenue Securities, et. al. (FINRA Arbitration, filed May 2006). Metropolitan Life Insurance Company commenced an action against Park Avenue Securities LLC., a registered investment adviser and broker-dealer that is an indirect wholly-owned subsidiary of The Guardian Life Insurance Company of America, alleging misappropriation of confidential and proprietary information and use of prohibited methods to solicit Metropolitan Life Insurance Company customers and recruit Metropolitan Life Insurance Company financial services representatives. On February 12, 2009, a FINRA arbitration panel awarded Metropolitan Life Insurance Company $21 million in damages, including punitive damages and attorneys' fees. Park Avenue Securities may appeal the award. Thomas, et al. v. Metropolitan Life Ins. Co., et al. (W.D. Okla., filed January 31, 2007). A putative class action complaint was filed against Metropolitan Life Insurance Company and MetLife Securities, Inc. Plaintiffs assert legal theories of violations of the federal securities laws and violations of state laws with respect to the sale of certain proprietary products by the Company's agency distribution group. Plaintiffs seek rescission, compensatory damages, interest, punitive damages and attorneys' fees and expenses. In January and May 2008, the court issued orders granting the defendants' motion to dismiss in part, dismissing all of plaintiffs' claims except for claims under the Investment Advisers Act. Defendants' motion to dismiss claims under the Investment Advisers Act was denied. The Company will vigorously defend against the remaining claims in this matter. Sales Practices Claims. Over the past several years, Metropolitan Life Insurance Company, New England and GALIC have faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys' fees. At December 31, 2008, there were approximately 125 sales practices litigation matters pending against the Company. The Company continues to vigorously defend against the claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices claims against Metropolitan Life Insurance Company, New England, GALIC, MetLife Securities, Inc. and Walnut Street Securities. Summary Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses, except as noted previously in connection with specific matters. In some of the matters referred to previously, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. F-100 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) INSOLVENCY ASSESSMENTS Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments are as follows:
DECEMBER 31, -------------- 2008 2007 ---- ---- (IN MILLIONS) Other Assets: Premium tax offset for future undiscounted assessments..... $37 $24 Premium tax offsets currently available for paid assessments............................................. 5 5 --- --- $42 $29 === === Other Liabilities: Insolvency assessments..................................... $57 $41 === ===
Assessments levied against the Company were $2 million, less than $1 million and $1 million for the years ended December 31, 2008, 2007 and 2006, respectively. 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:
GROSS RENTAL SUBLEASE RENTAL INCOME INCOME PAYMENTS ------ -------- -------- (IN MILLIONS) 2009............................................... $390 $12 $ 189 2010............................................... $347 $ 8 $ 190 2011............................................... $270 $ 8 $ 168 2012............................................... $209 $ 8 $ 143 2013............................................... $170 $ 8 $ 129 Thereafter......................................... $534 $33 $1,061
During the fourth quarter of 2008, MetLife, Inc. moved certain of its operations in New York from Long Island City to New York City. As a result of this movement of operations and current market conditions, which precluded the immediate and complete sublet of all unused space in both Long Island City and New York City, the Company incurred a lease impairment charge of $38 million which is included within other expenses in Corporate & Other. The impairment charge was determined based upon the present value of the gross rental payments less sublease income discounted at a risk-adjusted rate over the remaining lease terms which range from 15-20 years. The F-101 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Company has made assumptions with respect to the timing and amount of future sublease income in the determination of this impairment charge. Additional impairment charges could be incurred should market conditions deteriorate further or last for a period significantly longer than anticipated. 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 $2.9 billion and $2.8 billion at December 31, 2008 and 2007, 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 $2.2 billion and $3.3 billion at December 31, 2008 and 2007, respectively. 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 $611 million and $667 million at December 31, 2008 and 2007, respectively. 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 counterparties 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 $1.1 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. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees or commitments. 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. During the year ended December 31, 2008, the Company recorded $7 million of additional liabilities for guarantees related to certain investment transactions. The term for these guarantees and their associated liabilities varies, with a maximum of 18 years. The maximum potential amount of future payments the Company could be required to pay under these guarantees is $202 million. During the year ended December 31, 2008, the Company reduced $3 million of previously recorded liabilities related to these investment transactions. The Company's F-102 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) recorded liability was $4 million at December 31, 2008 for indemnities, guarantees and commitments. The Company had no liability for indemnities, guarantees and commitments at December 31, 2007. In connection with synthetically created investment transactions, the Company writes credit default swap obligations that generally require payment of principal outstanding due in exchange for the referenced credit obligation. If a credit event, as defined by the contract, occurs the Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $1,558 million at December 31, 2008. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. As of December 31, 2008, the Company would have paid $35 million to terminate all of these contracts. See Note 4 for further disclosures related to credit default swap obligations. 14. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Company sponsors and administers various qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering employees and sales representatives who meet specified eligibility requirements of the sponsor and its participating affiliates. Participating affiliates are allocated a proportionate share of net expense related to the plans as well as contributions made to the plans. Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually, based upon the average annual rate of interest on 30-year U.S. Treasury securities, for each account balance. At December 31, 2008, the majority of active participants are accruing benefits under the cash balance formula; however, approximately 95% of the Company's obligations result from benefits calculated with the traditional formula. The non-qualified pension plans provide supplemental benefits, in excess of amounts permitted by governmental agencies, to certain executive level employees. The Company's proportionate share of net pension expense related to its sponsored pension plans was $49 million for the year ended December 31, 2008. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. The other postretirement plans cover eligible employees of the sponsor and its participating affiliates who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company or its participating affiliates, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement medical benefits. Participating affiliates are allocated a proportionate share of net expense and contributions related to the postemployment and other postretirement plans. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. The Company's proportionate share of net other postretirement expense related to its sponsored other postretirement plans was ($8) million for the year ended December 31, 2008. As described more fully in Note 1, effective December 31, 2006, MetLife, Inc. adopted SFAS 158. The adoption of SFAS 158 required the recognition of the funded status of defined benefit pension and other postretirement benefit plans and eliminated the additional minimum pension liability provision of SFAS 87. The Company's additional minimum pension liability was $78 million, and the intangible asset was $12 million, at December 31, 2005. The excess of the additional minimum pension liability over the intangible asset of $66 million, $41 million net of income tax, was recorded as a reduction of accumulated other comprehensive income. At December 31, 2006, immediately prior to adopting SFAS 158, the Company's additional minimum pension liability was $92 million. The additional minimum pension liability of $59 million, net of income tax of $33 million, was F-103 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) recorded as a reduction of accumulated other comprehensive income. The change in the additional minimum pension liability of $18 million, net of income tax, was reflected as a component of comprehensive income for the year ended December 31, 2006. Upon adoption of SFAS 158, the Company eliminated the additional minimum pension liability and recognized as an adjustment to accumulated other comprehensive income (loss), net of income tax, those amounts of actuarial gains and losses, prior service costs and credits, and the remaining net transition asset or obligation that had not yet been included in net periodic benefit cost at the date of adoption. The following table summarizes the adjustments to the December 31, 2006 consolidated balance sheet as a result of recognizing the funded status of the defined benefit plans:
DECEMBER 31, 2006 ------------------------------------------------- ADDITIONAL MINIMUM PRE PENSION ADOPTION OF POST SFAS 158 LIABILITY SFAS 158 SFAS 158 BALANCE SHEET CAPTION ADJUSTMENTS ADJUSTMENT ADJUSTMENT ADJUSTMENTS ----------------------------------------------- ----------- ---------- ----------- ----------- (IN MILLIONS) Other assets: Prepaid pension benefit cost..... $1,878 $ -- $ (999) $ 879 Other assets: Intangible asset................. $ 12 (12) -- $ -- Other liabilities: Accrued pension benefit cost......................................... $ (474) (14) (66) $ (554) Other liabilities: Accrued other postretirement benefit plan cost............................ $ (688) -- (96) $ (784) ---- ------- Subtotal..................................... (26) (1,161) Net liability of subsidiary held-for-sale...... -- (17) ---- ------- Accumulated other comprehensive income (loss), before income tax: Defined benefit plans.......................... $ (66) (26) (1,178) $(1,270) Minority interest.............................. -- 8 Deferred income tax............................ 8 421 ---- ------- Accumulated other comprehensive income (loss), net of income tax: Defined benefit plans.......................... $ (41) $(18) $ (749) $ (808) ==== =======
A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. F-104 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OBLIGATIONS, FUNDED STATUS AND NET PERIODIC BENEFIT COSTS
DECEMBER 31, --------------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS --------------- --------------- 2008 2007 2008 2007 ------ ------ ------ ------ (IN MILLIONS) Change in benefit obligation: Benefit obligation at beginning of year............ $5,668 $5,854 $1,581 $2,043 Service cost..................................... 159 158 20 26 Interest cost.................................... 375 348 101 102 Plan participants' contributions................. -- -- 31 31 Net actuarial (gains) losses..................... 139 (383) 19 (464) Change in benefits............................... 1 39 -- -- Prescription drug subsidy........................ -- -- 10 13 Benefits paid.................................... (349) (348) (146) (170) ------ ------ ------ ------ Benefit obligation at end of year.................. 5,993 5,668 1,616 1,581 ------ ------ ------ ------ Change in plan assets: Fair value of plan assets at beginning of year..... 6,467 6,228 1,181 1,169 Actual return on plan assets..................... (943) 539 (149) 58 Employer contribution............................ 341 48 1 1 Benefits paid.................................... (349) (348) (23) (47) ------ ------ ------ ------ Fair value of plan assets at end of year......... 5,516 6,467 1,010 1,181 ------ ------ ------ ------ Funded status at end of year..................... $ (477) $ 799 $ (606) $ (400) ====== ====== ====== ====== Amounts recognized in the consolidated balance sheet consist of: Other assets..................................... $ 208 $1,382 $ -- $ -- Other liabilities................................ (685) (583) (606) (400) ------ ------ ------ ------ Net amount recognized............................ $ (477) $ 799 $ (606) $ (400) ====== ====== ====== ====== Accumulated other comprehensive (income) loss: Net actuarial (gains) losses..................... $2,196 $ 633 $ 146 $ (112) Prior service cost (credit)...................... 44 63 (157) (194) ------ ------ ------ ------ Accumulated other comprehensive (income) loss.... $2,240 $ 696 $ (11) $ (306) ====== ====== ====== ======
F-105 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The aggregate projected benefit obligation and aggregate fair value of plan assets for the pension plans were as follows:
DECEMBER 31, ------------------------------------------------- NON-QUALIFIED QUALIFIED PLAN PLAN TOTAL --------------- ------------- --------------- 2008 2007 2008 2007 2008 2007 ------ ------ ----- ----- ------ ------ (IN MILLIONS) Aggregate fair value of plan assets (principally Company contracts)....... $5,516 $6,467 $ -- $ -- $5,516 $6,467 Aggregate projected benefit obligation.. 5,308 5,085 685 583 5,993 5,668 ------ ------ ----- ----- ------ ------ Over (under) funded..................... $ 208 $1,382 $(685) $(583) $ (477) $ 799 ====== ====== ===== ===== ====== ======
The accumulated benefit obligation for all defined benefit pension plans was $5,583 million and $5,256 million at December 31, 2008 and 2007, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:
DECEMBER 31, -------------- 2008 2007 ---- ---- (IN MILLIONS) Projected benefit obligation................................ $685 $583 Accumulated benefit obligation.............................. $577 $508 Fair value of plan assets................................... $ -- $ --
Information for pension and other postretirement benefit plans with a projected benefit obligation in excess of plan assets is as follows:
DECEMBER 31, --------------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS --------------- --------------- 2008 2007 2008 2007 ------ ------ ------ ------ (IN MILLIONS) Projected benefit obligation................. $685 $583 $1,616 $1,581 Fair value of plan assets.................... $ -- $ -- $1,010 $1,181
F-106 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:
YEARS ENDED DECEMBER 31, --------------------------------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS ------------------------ ------------------------ 2008 2007 2006 2008 2007 2006 ------ ------ ------ ------ ------ ------ (IN MILLIONS) NET PERIODIC BENEFIT COST Service cost............................ $ 159 $ 158 $ 155 $ 20 $ 26 $ 35 Interest cost........................... 375 348 328 101 102 116 Expected return on plan assets.......... (517) (501) (447) (88) (87) (80) Amortization of net actuarial (gains) losses............................... 24 68 131 -- -- 21 Amortization of prior service cost (credit)............................. 15 17 7 (36) (36) (37) ------ ------ ------ ------ ------ ------ Net periodic benefit cost............ 56 90 $ 174 (3) 5 $ 55 ====== ====== Net periodic benefit cost of subsidiary held-for-sale........... -- 4 -- 1 ------ ------ ------ ------ 56 94 (3) 6 ------ ------ ------ ------ OTHER CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS) Net actuarial (gains) losses............ 1,563 (424) 258 (440) Prior service cost (credit)............. (19) 40 37 -- Amortization of net actuarial (gains) losses............................... (24) (68) -- -- Amortization of prior service cost (credit)............................. (15) (17) 36 36 -- --- ----- ---- ----- Total recognized in other comprehensive income (loss)........ 1,505 (469) 331 (404) -- --- ----- ---- ----- Total recognized in net periodic benefit cost and other comprehensive income (loss)........ $1,561 $(375) $328 $(398) ====== ====== ====== ======
The estimated net actuarial losses and prior service cost for the pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next year are $198 million and $9 million, respectively. The estimated net actuarial losses and prior service credit for the defined benefit other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next year are $10 million and ($36) million, respectively. In 2004, the Company adopted the guidance in FSP No. 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, to account for future subsidies to be received under the Prescription Drug Act. The Company began receiving these subsidies during F-107 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 2006. A summary of the reduction to the APBO and related reduction to the components of net periodic other postretirement benefit plan cost is as follows:
DECEMBER 31, ------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Cumulative reduction in benefit obligation: Balance, beginning of year........................... $299 $328 $298 Service cost......................................... 5 7 6 Interest cost........................................ 20 19 19 Net actuarial gains (losses)......................... 3 (42) 15 Prescription drug subsidy............................ (10) (13) (10) ---- ---- ---- Balance, end of year.............................. $317 $299 $328 ==== ==== ====
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Reduction in net periodic benefit cost: Service cost.......................................... $ 5 $ 7 $ 6 Interest cost......................................... 20 19 19 Amortization of net actuarial gains (losses).......... -- 5 30 --- --- --- Total reduction in net periodic benefit cost....... $25 $31 $55 === === ===
The Company received subsidies of $12 million and $10 million for the years ended December 31, 2008 and 2007, respectively. ASSUMPTIONS Assumptions used in determining benefit obligations were as follows:
DECEMBER 31, ------------------------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS ------------------- --------------------- 2008 2007 2008 2007 --------- ------- -------- -------- Weighted average discount rate....... 6.60% 6.65% 6.62% 6.65% Rate of compensation increase........ 3.5%-7.5% 4.0%-8% N/A N/A
Assumptions used in determining net periodic benefit cost were as follows:
DECEMBER 31, --------------------------------------------------------- OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------------- --------------------------- 2008 2007 2006 2008 2007 2006 ------- ------- ------- ------- ------- ------- Weighted average discount rate........................ 6.65% 6.00% 5.80% 6.65% 6.00% 5.79% Weighted average expected rate of return on plan assets.... 8.25% 8.25% 8.25% 7.33% 7.48% 7.42% Rate of compensation increase.................... 3.5%-8% 4.0%-8% 4.0%-8% N/A N/A N/A
F-108 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The discount rate is determined annually based on the yield, measured on a yield to worst basis, of a hypothetical portfolio constructed of high quality debt instruments available on the valuation date, which would provide the necessary future cash flows to pay the aggregate projected benefit obligation when due. The expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long- term historical returns of the plan assets by sector, adjusted for the Company's long-term expectations on the performance of the markets. While the precise expected return derived using this approach will fluctuate from year to year, the Company's policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. The weighted average expected return on plan assets for use in that plan's valuation in 2009 is currently anticipated to be 8.25% for pension benefits and postretirement medical benefits and 6.25% for postretirement life benefits. The assumed healthcare cost trend rates used in measuring the APBO and net periodic benefit cost were as follows:
DECEMBER 31, --------------------------------------------------------------- 2008 2007 ------------------------------ ------------------------------ Pre-Medicare eligible claims.. 8.8% down to 5.8% in 2018 and 8.5% down to 5% in 2014 and gradually decreasing until remaining constant thereafter 2079 reaching the ultimate rate of 4.1% Medicare eligible claims...... 8.8% down to 5.8% in 2018 and 10.5% down to 5% in 2018 and gradually decreasing until remaining constant thereafter 2079 reaching the ultimate rate of 4.1%
Assumed healthcare cost trend rates may have a significant effect on the amounts reported for healthcare plans. A one-percentage point change in assumed healthcare cost trend rates would have the following effects:
ONE PERCENT ONE PERCENT INCREASE DECREASE ----------- ----------- (IN MILLIONS) Effect on total of service and interest cost components......................................... $ 6 $ (6) Effect of accumulated postretirement benefit obligation......................................... $76 $(86)
PLAN ASSETS The Company has issued group annuity and life insurance contracts supporting approximately 99% of all pension and other postretirement benefit plans assets. The account values of the group annuity and life insurance contracts issued by the Company and held as assets of the pension and other postretirement benefit plans were $6,451 million and $7,565 million at December 31, 2008 and 2007, respectively. The majority of such account values are held in separate accounts established by the Company. Total revenue from these contracts recognized in the consolidated statements of income was $42 million, $47 million and $48 million for the years ended December 31, 2008, 2007 and 2006, respectively, and includes policy charges, net investment income from investments backing the contracts and administrative fees. Total investment income (loss), including realized and unrealized gains and losses, credited to the account balances were ($1,090) million, $603 million and $818 million for the years ended December 31, 2008, 2007 and 2006, respectively. The terms of these contracts are consistent in all material respects with those the Company offers to unaffiliated parties that are similarly situated. F-109 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The weighted-average allocations of pension plan and other postretirement benefit plan assets were as follows:
DECEMBER 31, --------------------------- OTHER POSTRETIRE- PENSION MENT BENEFITS BENEFITS ----------- ------------- 2008 2007 2008 2007 ---- ---- ---- ---- ASSET CATEGORY Equity securities.................................. 28% 38% 27% 37% Fixed maturity securities.......................... 51 44 71 58 Other (Real Estate and Alternative Investments).... 21 18 2 5 --- --- --- --- Total............................................ 100% 100% 100% 100% === === === ===
The weighted-average target allocations of pension plan and other postretirement benefit plan assets for 2009 are as follows:
PENSION OTHER ------- ------- ASSET CATEGORY Equity securities..................................... 25%-45% 30%-45% Fixed maturity securities............................. 35%-55% 55%-85% Other (Real Estate and Alternative Investments)....... 5%-32% 0%-10%
Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through adequate asset diversification. Adjustments are made to target allocations based on an assessment of the impact of economic factors and market conditions. CASH FLOWS It is the Company's practice to make contributions to the qualified pension plans to comply with minimum funding requirements of ERISA. In accordance with such practice, no contributions were required for the years ended December 31, 2008 or 2007. No contributions will be required for 2009. The Company made discretionary contributions of $286 million to the qualified pension plans during the year ended December 31, 2008 and did not make discretionary contributions for the year ended December 31, 2007. The Company expects to make additional discretionary contributions of $143 million in 2009. Benefit payments due under the non-qualified pension plans are funded from the Company's general assets as they become due under the provision of the plans. These payments totaled $41 million and $48 million for the years ended December 31, 2008 and 2007, respectively. These payments are expected to be at approximately the same level in 2009. Other postretirement benefits represent a non-vested, non-guaranteed obligation of the Company and current regulations do not require specific funding levels for these benefits. While the Company has partially funded such plans in advance, it has been the Company's practice to primarily use their general assets, net of participant's contributions, to pay postretirement medical claims as they come due in lieu of utilizing plan assets. Total payments equaled $146 million and $170 million for the years ended December 31, 2008 and 2007, respectively. The Company expects to make contributions of $118 million, net of participant's contributions, toward the other postretirement plan obligations in 2009. As noted previously, the Company expects to receive subsidies under the Prescription Drug Act to partially offset such payments. F-110 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Gross benefit payments for the next ten years, which reflect expected future service where appropriate, and gross subsidies to be received under the Prescription Drug Act are expected to be as follows:
OTHER POSTRETIREMENT BENEFITS --------------------------- PRESCRIPTION PENSION DRUG BENEFITS GROSS SUBSIDIES NET -------- ----- ------------ ---- (IN MILLIONS) 2009......................................... $ 379 $133 $ (15) $118 2010......................................... $ 393 $138 $ (16) $122 2011......................................... $ 402 $144 $ (16) $128 2012......................................... $ 418 $148 $ (17) $131 2013......................................... $ 431 $152 $ (18) $134 2014-2018.................................... $2,368 $836 $(107) $729
SAVINGS AND INVESTMENT PLANS The Company sponsors savings and investment plans for substantially all employees under which a portion of employee contributions are matched. The Company contributed $63 million, $66 million and $71 million for the years ended December 31, 2008, 2007 and 2006, respectively. 15. EQUITY CAPITAL CONTRIBUTIONS During the year ended December 31, 2008, MetLife, Inc. contributed and paid $4 million in the form of line of credit fees on the Company's behalf. During the year ended December, 31, 2008, in connection with an acquisition by MetLife, Inc., MetLife, Inc. contributed $9 million to the Company in the form of intangible assets and the associated deferred income tax liability, for which the Company receives the benefit. See Note 7. On December 12, 2007, MetLife, Inc. contributed $7 million to the Company in connection with the Company's issuance of a surplus note to MetLife Capital Trust IV. See Note 10. On October 20, 2006, MetLife, Inc. contributed $17 million to the Company in connection with the sale and merger of CLIC. See Note 2. On September 30, 2006, MetLife, Inc. contributed $377 million to the Company in the form of intangible assets. See Note 2. On May 1, 2006, GALIC, an indirect insurance subsidiary of the Company, sold its wholly-owned insurance subsidiary, Paragon Life Insurance Company ("Paragon"), to its ultimate parent, MetLife, Inc. Immediately following the sale, MetLife, Inc. merged Paragon, an affiliate of the Company, with and into the Company. In connection with the transaction, MetLife, Inc. contributed $76 million to the Company. EXCESS PROCEEDS RECEIVED ON SALE OF INTERESTS IN AFFILIATES On November 1, 2007, the Company sold its interests in MetLife Mexico, S.A. and MetLife Pensiones, S.A., both affiliates, to MetLife International Holdings, Inc. ("MIHI"), also an affiliate, at their approximate aggregate fair value of $34 million. The Company's carrying value of the interests at the time of sale was $4 million. The excess cash consideration received from MIHI over the Company's carrying value resulted in an increase of $30 million in additional paid-in capital. F-111 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) STOCK-BASED COMPENSATION PLANS Overview As described more fully in Note 1, effective January 1, 2006, in conjunction with MetLife, Inc., the Company adopted SFAS 123(r), using the modified prospective transition method. The adoption of SFAS 123(r) did not have a significant impact on the Company's financial position or results of operations. The stock-based compensation expense recognized by the Company is related to awards under incentive plans of MetLife, Inc., as described herein. Description of Plans The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the "Stock Incentive Plan"), authorized the granting of awards in the form of options to buy shares of MetLife, Inc.'s common stock ("Stock Options") that either qualify as incentive Stock Options under Section 422A of the Internal Revenue Code or are non-qualified. Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan, as amended (the "2005 Stock Plan"), awards granted may be in the form of Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, Performance Shares or Performance Share Units, Cash-Based Awards, and Stock-Based Awards (each as defined in the 2005 Stock Plan). The Stock Incentive Plan, 2005 Stock Plan, and the Long-Term Performance Compensation Plan ("LTPCP"), as described below, are hereinafter collectively referred to as the "Incentive Plans." The aggregate number of shares of MetLife, Inc. common stock reserved for issuance under the 2005 Stock Plan and the LTPCP is 68,000,000, plus those shares available but not utilized under the Stock Incentive Plan and those shares utilized under the Stock Incentive Plan that are recovered due to forfeiture of Stock Options. Additional shares of MetLife, Inc. common stock carried forward from the Stock Incentive Plan and available for issuance under the 2005 Stock Plan were 12,584,119 at December 31, 2008. Each share issued under the 2005 Stock Plan in connection with a Stock Option or Stock Appreciation Right reduces the number of shares remaining for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than Stock Options or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. At December 31, 2008, the aggregate number of shares of MetLife, Inc. common stock remaining available for issuance pursuant to the 2005 Stock Plan was 55,654,550. Stock Option exercises and other stock-based awards to employees settled in shares are satisfied through the issuance of shares held in treasury by MetLife, Inc. The Company does not issue any of its own shares in satisfaction of stock- based compensation awards to employees. MetLife, Inc. allocated 89%, 88% and 90% of stock-based compensation to the Company for the years ended December 31, 2008, 2007 and 2006, respectively. This allocation represents substantially all stock-based compensation recognized in the Company's consolidated results of operations. Accordingly, the discussion herein addresses MetLife, Inc.'s practices for recognizing expense for awards under the Incentive Plans. Underlying awards are expressed in their entirety with related expense amounts representing the resulting allocation to the Company. Compensation expense related to awards under the Incentive Plans is recognized based on the number of awards expected to vest, which represents the awards granted less expected forfeitures over the life of the award, as estimated at the date of grant. Unless a material deviation from the assumed rate is observed during the term in which the awards are expensed, any adjustment necessary to reflect differences in actual experience is recognized in the period the award becomes payable or exercisable. Compensation expense of $108 million, $128 million and $130 million, and income tax benefits of $38 million, $45 million and $46 million, related to the Incentive Plans was allocated to the Company for the years ended December 31, 2008, 2007 and 2006, respectively. Compensation expense is principally related to the issuance of Stock Options, Performance Shares and LTPCP arrangements. F-112 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Stock Options All Stock Options granted had an exercise price equal to the closing price of MetLife, Inc.'s common stock as reported on the New York Stock Exchange on the date of grant, and have a maximum term of ten years. Certain Stock Options granted under the Stock Incentive Plan and the 2005 Stock Plan have or will become exercisable over a three year period commencing with the date of grant, while other Stock Options have or will become exercisable three years after the date of grant. A summary of the activity related to Stock Options for the year ended December 31, 2008 is presented below. The aggregate intrinsic value was computed using the closing share price on December 31, 2008 of $34.86 and December 31, 2007 of $61.62, as applicable.
WEIGHTED AVERAGE REMAINING AGGREGATE SHARES UNDER WEIGHTED AVERAGE CONTRACTUAL INTRINSIC OPTION EXERCISE PRICE TERM VALUE ------------ ---------------- ----------- ------------- (YEARS) (IN MILLIONS) Outstanding at January 1, 2008......... 24,362,746 $38.85 6.18 $555 ====== ==== ==== Granted.............................. 3,464,075 $59.48 Exercised............................ (1,372,254) $32.76 Cancelled/Expired.................... (142,145) $44.62 Forfeited............................ (219,330) $51.44 ---------- Outstanding at December 31, 2008....... 26,093,092 $41.75 5.73 $ -- ========== ====== ==== ==== Aggregate number of stock options expected to vest at December 31, 2008................................. 25,503,025 $41.38 5.66 $ -- ========== ====== ==== ==== Exercisable at December 31, 2008....... 19,405,732 $35.84 4.80 $ -- ========== ====== ==== ====
The fair value of Stock Options is estimated on the date of grant using a binomial lattice model. Significant assumptions used in MetLife, Inc.'s binomial lattice model, which are further described below, include: expected volatility of the price of MetLife, Inc.'s common stock; risk-free rate of return; expected dividend yield on MetLife, Inc.'s common stock; exercise multiple; and the post- vesting termination rate. Expected volatility is based upon an analysis of historical prices of MetLife, Inc.'s common stock and call options on that common stock traded on the open market. MetLife, Inc. uses a weighted-average of the implied volatility for publicly traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of its common stock. MetLife, Inc. chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer- term trends in the price of the underlying shares rather than on daily price movements. The binomial lattice model used by MetLife, Inc. incorporates different risk-free rates based on the imputed forward rates for U.S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates that were used for options granted during the respective periods. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the valuation date and held constant over the life of the Stock Option. The binomial model used by MetLife, Inc. incorporates the contractual term of the Stock Options and then factors in expected exercise behavior and a post- vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination of employment, to derive an expected life. Exercise behavior in F-113 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the binomial lattice model used by MetLife, Inc. is expressed using an exercise multiple, which reflects the ratio of exercise price to the strike price of Stock Options granted at which holders of the Stock Options are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The post-vesting termination rate is determined from actual historical exercise experience and expiration activity under the Incentive Plans. The following weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, were used to determine the fair value of Stock Options issued during the:
YEARS ENDED DECEMBER 31, --------------------------------------- 2008 2007 2006 ----------- ----------- ----------- Dividend yield............................... 1.21% 0.94% 1.04% Risk-free rate of return..................... 1.91%-7.21% 4.30%-5.32% 4.17%-4.96% Expected volatility.......................... 24.85% 19.54% 22.00% Exercise multiple............................ 1.73 1.66 1.52 Post-vesting termination rate................ 3.05% 3.66% 4.09% Contractual term (years)..................... 10 10 10 Expected life (years)........................ 6 6 6 Weighted average exercise price of stock options granted............................ $59.47 $62.86 $50.21 Weighted average fair value of stock options granted.................................... $17.51 $17.76 $13.84
Compensation expense related to Stock Option awards expected to vest and granted prior to January 1, 2006 is recognized ratably over the requisite service period, which equals the vesting term. Compensation expense related to Stock Option awards expected to vest and granted on or after January 1, 2006 is recognized ratably over the requisite service period or the period to retirement eligibility, if shorter. Compensation expense of $44 million, $49 million and $51 million related to Stock Options was allocated to the Company for the years ended December 31, 2008, 2007 and 2006, respectively. At December 31, 2008, MetLife, Inc. had $43 million of total unrecognized compensation costs related to Stock Options. It is expected that these costs will be recognized over a weighted average period of 1.81 years. The Company's allocated portion of Stock Option expense was 88%. MetLife, Inc. allocated to its subsidiaries the tax benefit associated with the deduction allowed for Stock Option exercises. The Company's consolidated results of operations include $12 million, $41 million, and $22 million of such tax benefits for the years ended December 31, 2008, 2007, and 2006, respectively. Performance Shares Beginning in 2005, MetLife, Inc. awarded certain members of management Performance Shares under (and as defined in) the 2005 Stock Plan. Participants are awarded an initial target number of Performance Shares with the final number of Performance Shares payable being determined by the product of the initial target multiplied by a factor of 0.0 to 2.0. The factor applied is based on measurements of MetLife, Inc.'s performance with respect to: (i) the change in annual net operating earnings per share, as defined; and (ii) the proportionate total shareholder return, as defined, with reference to the three-year performance period relative to other companies in the S&P Insurance Index with reference to the same three-year period. Performance Share awards will normally vest in their entirety at the end of the three-year performance period (subject to certain contingencies) and will be payable entirely in shares of MetLife, Inc.'s common stock. F-114 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following is a summary of Performance Share activity for the year ended December 31, 2008:
WEIGHTED AVERAGE GRANT DATE PERFORMANCE SHARES FAIR VALUE ------------------ ---------------- Outstanding at January 1, 2008................ 2,690,125 $48.39 Granted....................................... 954,075 $57.17 Forfeited..................................... (89,125) $57.43 Paid.......................................... (968,425) $36.87 --------- Outstanding at December 31, 2008.............. 2,586,650 $55.63 ========= Performance Shares expected to vest at December 31, 2008........................... 2,535,784 $55.56 =========
Performance Share amounts above represent aggregate initial target awards and do not reflect potential increases or decreases resulting from the final performance factor to be determined at the end of the respective performance period. At December 31, 2008, the three year performance period for the 2006 Performance Share grants was completed. Included in the immediately preceding table are 812,975 outstanding Performance Shares to which the final performance factor will be applied. The calculation of the performance factor is expected to be finalized during the second quarter of 2009 after all data necessary to perform the calculation is publicly available. Performance Share awards are accounted for as equity awards but are not credited with dividend-equivalents for actual dividends paid on MetLife, Inc.'s common stock during the performance period. Accordingly, the estimated fair value of Performance Shares is based upon the closing price of MetLife, Inc.'s common stock on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. Compensation expense related to initial Performance Shares granted prior to January 1, 2006 and expected to vest is recognized ratably during the performance period. Compensation expense related to initial Performance Shares granted on or after January 1, 2006 and expected to vest is recognized ratably over the performance period or the period to retirement eligibility, if shorter. Performance Shares expected to vest and the related compensation expenses may be further adjusted by the performance factor most likely to be achieved, as estimated by management, at the end of the performance period. Compensation expense of $64 million, $79 million and $67 million, related to Performance Shares was allocated to the Company for the years ended December 31, 2008, 2007 and 2006, respectively. At December 31, 2008, MetLife, Inc. had $57 million of total unrecognized compensation costs related to Performance Share awards. It is expected that these costs will be recognized over a weighted average period of 1.65 years. The Company's allocated portion of Performance Share expense was 90%. Long-Term Performance Compensation Plan Prior to January 1, 2005, MetLife, Inc. granted stock-based compensation to certain members of management under the LTPCP. Each participant was assigned a target compensation amount (an "Opportunity Award") at the inception of the performance period with the final compensation amount determined based on the total shareholder return on MetLife, Inc.'s common stock over the three-year performance period, subject to limited further adjustment approved by MetLife, Inc.'s Board of Directors. Payments on the Opportunity Awards were normally payable in their entirety (subject to certain contingencies) at the end of the three-year performance period, and were paid in whole or in part with shares of MetLife, Inc.'s common stock, as approved by MetLife, Inc.'s Board of Directors. There were no new grants under the LTPCP during the years ended December 31, 2008, 2007 and 2006. A portion of each Opportunity Award under the LTPCP was settled in shares of MetLife, Inc.'s common stock while the remainder was settled in cash. The portion of the Opportunity Award settled in shares of MetLife, Inc.'s F-115 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) common stock was accounted for as an equity award with the fair value of the award determined based upon the closing price of its common stock on the date of grant. The compensation expense associated with the equity award, based upon the grant date fair value, was recognized into expense ratably over the respective three-year performance period. The portion of the Opportunity Award settled in cash was accounted for as a liability and was remeasured using the closing price of MetLife, Inc.'s common stock on the final day of each subsequent reporting period during the three-year performance period. The final LTPCP performance period concluded during the six months ended June 30, 2007. Final Opportunity Awards in the amount of 618,375 shares of MetLife, Inc.'s common stock and $16 million in cash were paid on April 18, 2007. No significant compensation expense related to LTPCP was recognized during the year ended December 31, 2008 and 2007. Compensation expense of $12 million related to LTPCP Opportunity Awards was allocated to the Company for the year ended December 31, 2006. STATUTORY EQUITY AND INCOME Each insurance company's state of domicile imposes minimum risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. Metropolitan Life Insurance Company and each of its U.S. insurance subsidiaries exceeded the minimum RBC requirements for all periods presented herein. The NAIC has adopted the Codification of Statutory Accounting Principles ("Codification"). Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. The New York State Department of Insurance (the "Department") has adopted Codification with certain modifications for the preparation of statutory financial statements of insurance companies domiciled in New York. Modifications by the various state insurance departments may impact the effect of Codification on the statutory capital and surplus of Metropolitan Life Insurance Company and its insurance subsidiaries. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a different basis. In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within a year. Further, statutory accounting principles do not give recognition to purchase accounting adjustments. Statutory net income (loss) of Metropolitan Life Insurance Company, a New York domiciled insurer, was ($338) million, $2.1 billion and $1.0 billion for the years ended December 31, 2008, 2007 and 2006, respectively. Statutory capital and surplus, as filed with the Department, was $11.6 billion and $13.0 billion at December 31, 2008 and 2007, respectively. DIVIDEND RESTRICTIONS Under New York State Insurance Law, Metropolitan Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to MetLife, Inc. as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of: (i) 10% of its surplus to policyholders as of the end F-116 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life Insurance Company will be permitted to pay a cash dividend to MetLife, Inc. in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent does not disapprove the distribution within 30 days of its filing. Under New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its shareholders. The Department has established informal guidelines for such determinations. The guidelines, among other things, focus on the insurer's overall financial condition and profitability under statutory accounting practices. During the year ended December 31, 2008, Metropolitan Life Insurance Company distributed shares of RGA stock to MetLife, Inc. as an in-kind extraordinary dividend of $1,318 million. During the year ended December 31, 2007, Metropolitan Life Insurance Company paid to MetLife, Inc. $500 million in ordinary dividends. The maximum amount of dividends which Metropolitan Life Insurance Company may pay to MetLife, Inc. in 2009 without prior regulatory approval is $552 million. Stockholder dividends or other distributions proposed to be paid by New England Life Insurance Company ("NELICO") to its parent, Metropolitan Life Insurance Company, must be approved by the Massachusetts Commissioner of Insurance (the "Commissioner") if such dividends or distributions made within the preceding calendar year, exceed the greater of (i) 10% of NELICO's statutory surplus as of the end of the immediately preceding calendar year or (ii) NELICO's statutory net gains from operations for the immediately preceding calendar year. In addition, dividends cannot be paid from a source other than statutory unassigned funds surplus without prior approval of the Commissioner. During the year ended December 31, 2008, NELICO paid a common stockholder dividend of $94 million. During the year ended December 31, 2007, NELICO did not pay any common stockholder dividends. The maximum amount of the dividend which NELICO may pay to Metropolitan Life Insurance Company in 2009 without prior regulatory approval is $19 million. For the years ended December 31, 2008, 2007 and 2006, Metropolitan Life Insurance Company received dividends from subsidiaries of $48 million, $60 million and $34 million, respectively. F-117 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OTHER COMPREHENSIVE INCOME (LOSS) The following table sets forth the reclassification adjustments required for the years ended December 31, 2008, 2007 and 2006 in other comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other comprehensive income (loss) in the current or prior years:
YEARS ENDED DECEMBER 31, --------------------------------- 2008 2007 2006 --------- --------- --------- (IN MILLIONS) Holding gains (losses) on investments arising during the year............................. $(18,165) $(499) $(926) Income tax effect of holding gains (losses)... 6,273 221 324 Reclassification adjustments: Recognized holding (gains) losses included in current year income................... 1,214 (173) 403 Amortization of premiums and accretion of discounts associated with investments.... (504) (493) (443) Income tax effect............................. (245) 293 14 Allocation of holding losses on investments relating to other policyholder amounts...... 3,592 532 792 Income tax effect of allocation of holding losses to other policyholder amounts........ (1,231) (235) (277) Unrealized investment loss on dividend of interests in subsidiary..................... 69 -- -- Deferred income tax on unrealized investment loss on dividend of interests in subsidiary.................................. (46) -- -- -------- --------- --------- Net unrealized investment gains (losses), net of income tax............................... (9,043) (354) (113) Foreign currency translation adjustment....... (140) 139 7 Minimum pension liability adjustment, net of income tax.................................. -- -- (18) Defined benefit plan adjustment, net of income tax......................................... (1,153) 524 -- -------- --------- --------- Other comprehensive income (loss)............. $(10,336) $ 309 $(124) ======== ========= =========
F-118 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 16. OTHER EXPENSES Information on other expenses is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ------ ------ ------ (IN MILLIONS) Compensation........................................ $2,616 $2,693 $2,661 Commissions......................................... 914 827 790 Interest and debt issue costs....................... 226 289 244 Interest costs related to funds withheld on ceded reinsurance....................................... 911 -- -- Amortization of DAC and VOBA........................ 1,081 643 583 Capitalization of DAC............................... (901) (886) (936) Rent, net of sublease income........................ 363 282 259 Minority interest................................... 4 85 14 Insurance tax....................................... 289 297 305 Other............................................... 1,079 897 1,176 ------ ------ ------ Total other expenses.............................. $6,582 $5,127 $5,096 ====== ====== ======
Amortization and Capitalization of DAC and VOBA See Note 5 for deferred acquisition costs by segment and a rollforward of deferred acquisition costs including impacts of amortization and capitalization. See also Note 9 for a description of the DAC amortization impact associated with the closed block. Interest and Debt Issue Costs See Notes 10 and 11 for attribution of interest expense by debt issuance. Lease Impairments See Note 13 for description of lease impairments included within other expenses. Affiliated Expenses See Notes 8 and 20 for description of affiliated expenses included within other expenses. Restructuring Charges MetLife Inc. has initiated an enterprise-wide cost reduction and revenue enhancement initiative. This initiative is focused on reducing complexity, leveraging scale, increasing productivity, and improving the effectiveness of MetLife Inc.'s and its subsidiaries' operations, as well as providing a foundation for future growth. During the third quarter of 2008, overall severance related restructuring charge of $58 million associated with the termination of certain employees was allocated to the Company in connection with this enterprise-wide initiative. During the fourth quarter of 2008, further severance related restructuring costs of $9 million offset by a $6 million reduction to its third quarter restructuring charge attributable to lower than anticipated costs for variable incentive compensation and for employees whose severance status changed was allocated to the Company. Total restructuring charges incurred in connection with this enterprise-wide initiative during the year ended December 31, 2008 were $61 million and were reflected within Corporate & Other. Estimated restructuring costs may change as management F-119 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) continues to execute its restructuring plans. Restructuring charges associated with this enterprise-wide initiative were as follows:
YEAR ENDED DECEMBER 31, 2008 ----------------- (IN MILLIONS) Balance as of beginning of the period..................... $-- Severance charges.................................... 67 Change in severance charge estimates................. (6) --- Balance as of end of the period........................... $61 === Total restructuring charges incurred...................... $61 ===
Management anticipates further restructuring charges including severance, lease and asset impairments will be incurred during the years ended December 31, 2009 and 2010. However, such restructuring plans are not sufficiently developed to enable MetLife Inc. to make an estimate of such restructuring charges at December 31, 2008. 17. BUSINESS SEGMENT INFORMATION The Company is a leading provider of individual insurance, employee benefits and financial services with operations throughout the United States. Subsequent to the disposition of RGA and the elimination of the Reinsurance segment as described in Notes 2 and 18, the Company's business is divided into two operating segments: Institutional and Individual, as well as Corporate & Other. These segments are managed separately because they provide different products and services, require different strategies and have different technology requirements. Institutional offers a broad range of group insurance and retirement & savings products and services, including group life insurance, non-medical health insurance, such as short and long-term disability, long-term care, and dental insurance, and other insurance products and services. Individual offers a wide variety of protection and asset accumulation products, including life insurance, annuities and mutual funds. Corporate & Other contains the excess capital not allocated to the business segments, various start-up and run-off entities, as well as interest expense related to the majority of the Company's outstanding debt, expenses associated with certain legal proceedings and income tax audit issues and certain reinsurance agreements with affiliates. Corporate & Other also includes the elimination of all intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings, as well as intersegment transactions. The operations of RGA are also reported in Corporate & Other as discontinued operations. Additionally, the Company's asset management business, including amounts reported as discontinued operations, is included in the results of operations for Corporate & Other. See Note 18 for disclosures regarding discontinued operations, including real estate. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company's businesses. As a part of the economic capital process, a portion of net investment income is credited to the segments based on the level of allocated equity. Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2008, 2007 and 2006. The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany sales, which are eliminated in consolidation. The Company allocates equity to each segment based upon the economic capital model that allows the Company to effectively manage its capital. F-120 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company evaluates the performance of each segment based upon net income excluding net investment gains (losses), net of income tax, adjustments related to net investment gains (losses), net of income tax, the impact from the cumulative effect of changes in accounting, net of income tax and discontinued operations, other than discontinued real estate, net of income tax. The Company allocates certain non-recurring items, such as expenses associated with certain legal proceedings, to Corporate & Other.
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2008 INSTITUTIONAL INDIVIDUAL OTHER TOTAL ------------------------------------ ------------- ---------- ----------- -------- (IN MILLIONS) STATEMENT OF INCOME: REVENUES Premiums........................................ $ 14,351 $ 4,083 $ 10 $ 18,444 Universal life and investment-type product policy fees................................... 844 1,441 -- 2,285 Net investment income........................... 6,189 5,047 (114) 11,122 Other revenues.................................. 764 152 966 1,882 Net investment gains (losses)................... 643 634 2,195 3,472 -------- -------- ------- -------- Total revenues............................. 22,791 11,357 3,057 37,205 -------- -------- ------- -------- EXPENSES Policyholder benefits and claims................ 15,537 5,147 15 20,699 Interest credited to policyholder account balances...................................... 2,136 1,038 7 3,181 Policyholder dividends.......................... -- 1,709 7 1,716 Other expenses.................................. 2,306 2,737 1,539 6,582 -------- -------- ------- -------- Total expenses................................ 19,979 10,631 1,568 32,178 -------- -------- ------- -------- Income from continuing operations before provision for income tax...................... 2,812 726 1,489 5,027 Provision for income tax........................ 968 233 450 1,651 -------- -------- ------- -------- Income from continuing operations............... 1,844 493 1,039 3,376 Income (loss) from discontinued operations, net of income tax................................. 3 4 (296) (289) -------- -------- ------- -------- Net income...................................... $ 1,847 $ 497 $ 743 $ 3,087 ======== ======== ======= ======== BALANCE SHEET: Total assets.................................... $166,594 $132,527 $35,098 $334,219 DAC and VOBA.................................... $ 1,005 $ 9,861 $ 5 $ 10,871 Separate account assets......................... $ 45,514 $ 26,745 $ -- $ 72,259 Policyholder liabilities........................ $109,199 $ 88,050 $ 748 $197,997 Separate account liabilities.................... $ 45,514 $ 26,745 $ -- $ 72,259
F-121 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2007 INSTITUTIONAL INDIVIDUAL OTHER TOTAL ------------------------------------ ------------- ---------- ----------- -------- (IN MILLIONS) STATEMENT OF INCOME: REVENUES Premiums.................................... $ 12,358 $ 4,073 $ 4 $ 16,435 Universal life and investment-type product policy fees............................... 763 1,483 -- 2,246 Net investment income....................... 6,664 5,552 366 12,582 Other revenues.............................. 712 152 70 934 Net investment gains (losses)............... (269) (81) 63 (287) -------- -------- ------- -------- Total revenues......................... 20,228 11,179 503 31,910 -------- -------- ------- -------- EXPENSES Policyholder benefits and claims............ 13,332 4,924 19 18,275 Interest credited to policyholder account balances.................................. 2,451 1,064 -- 3,515 Policyholder dividends...................... -- 1,685 2 1,687 Other expenses.............................. 2,391 2,290 446 5,127 -------- -------- ------- -------- Total expenses............................ 18,174 9,963 467 28,604 -------- -------- ------- -------- Income from continuing operations before provision (benefit) for income tax........ 2,054 1,216 36 3,306 Provision (benefit) for income tax.......... 699 431 (76) 1,054 -------- -------- ------- -------- Income from continuing operations........... 1,355 785 112 2,252 Income from discontinued operations, net of income tax................................ 10 -- 170 180 -------- -------- ------- -------- Net income.................................. $ 1,365 $ 785 $ 282 $ 2,432 ======== ======== ======= ======== BALANCE SHEET: Total assets................................ $170,540 $167,257 $36,580 $374,377 DAC and VOBA................................ $ 907 $ 7,715 $ 6 $ 8,628 Separate account assets..................... $ 49,577 $ 40,143 $ (17) $ 89,703 Policyholder liabilities.................... $ 95,499 $ 86,065 $ 506 $182,070 Separate account liabilities................ $ 49,577 $ 40,143 $ (17) $ 89,703
F-122 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2006 INSTITUTIONAL INDIVIDUAL OTHER TOTAL ------------------------------------ ------------- ---------- ----------- ------- (IN MILLIONS) STATEMENT OF INCOME: REVENUES Premiums..................................... $11,801 $ 4,129 $ 6 $15,936 Universal life and investment-type product policy fees................................ 750 1,433 -- 2,183 Net investment income........................ 5,810 5,480 228 11,518 Other revenues............................... 677 114 42 833 Net investment gains (losses)................ (348) (394) (92) (834) ------- ------- ----------- ------- Total revenues.......................... 18,690 10,762 184 29,636 ------- ------- ----------- ------- EXPENSES Policyholder benefits and claims............. 12,918 4,712 17 17,647 Interest credited to policyholder account balances................................... 1,944 1,049 -- 2,993 Policyholder dividends....................... -- 1,669 2 1,671 Other expenses............................... 2,483 2,213 400 5,096 ------- ------- ----------- ------- Total expenses............................. 17,345 9,643 419 27,407 ------- ------- ----------- ------- Income (loss) from continuing operations before provision (benefit) for income tax.. 1,345 1,119 (235) 2,229 Provision (benefit) for income tax........... 443 400 (286) 557 ------- ------- ----------- ------- Income from continuing operations............ 902 719 51 1,672 Income from discontinued operations, net of income tax................................. 45 19 190 254 ------- ------- ----------- ------- Net income................................... $ 947 $ 738 $ 241 $ 1,926 ======= ======= =========== =======
Net investment income and net investment gains (losses) are based upon the actual results of each segment's specifically identifiable asset portfolio adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company's product pricing. Revenues derived from any customer did not exceed 10% of consolidated revenues for the years ended December 31, 2008, 2007 and 2006. Substantially all of the Company's revenues originated in the United States. 18. DISCONTINUED OPERATIONS REAL ESTATE The Company actively manages its real estate portfolio with the objective of maximizing earnings through selective acquisitions and dispositions. Income related to real estate classified as held-for-sale or sold is presented in discontinued operations. These assets are carried at the lower of depreciated cost or estimated fair value less expected disposition costs. F-123 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following information presents the components of income from discontinued real estate operations:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Investment income...................................... $ 6 $16 $ 35 Investment expense..................................... (3) (6) (16) Net investment gains (losses).......................... 8 7 91 --- --- ---- Total revenues....................................... 11 17 110 Provision for income tax............................... 4 8 38 --- --- ---- Income from discontinued operations, net of income tax.................................................. $ 7 $ 9 $ 72 === === ====
The carrying value of real estate related to discontinued operations was $1 million and $39 million at December 31, 2008 and 2007, respectively. The following table presents the discontinued real estate operations by segment:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Net investment income Institutional....................................... $ 4 $ 8 $15 Individual.......................................... (1) -- 4 Corporate & Other................................... -- 2 -- --- --- --- Total net investment income...................... $ 3 $10 $19 === === === Net investment gains (losses) Institutional....................................... $ 2 $ 7 $58 Individual.......................................... 6 -- 23 Corporate & Other................................... -- -- 10 --- --- --- Total net investment gains (losses).............. $ 8 $ 7 $91 === === ===
OPERATIONS As more fully described in Note 2, on September 12, 2008, MetLife, Inc. completed a tax-free split-off of its majority-owned subsidiary, RGA. In connection with this transaction, GALIC dividended to Metropolitan Life Insurance Company and Metropolitan Life Insurance Company dividended to MetLife, Inc. substantially all of its interests in RGA. As a result of the dividend of interests in RGA, the Reinsurance segment was eliminated. (See also Note 17). RGA's assets and liabilities were reclassified to assets and liabilities of subsidiaries held-for-sale and its operating results were reclassified to discontinued operations for all periods presented. Interest on economic capital associated with the Reinsurance segment has been reclassified to the continuing operations of Corporate & Other. F-124 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following tables present the amounts related to the operations and financial position of RGA that have been reflected as discontinued operations in the consolidated statements of income:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ------ ------ ------ (IN MILLIONS) Premiums............................................ $3,535 $4,910 $4,348 Net investment income............................... 597 908 781 Other revenues...................................... 69 77 66 Net investment gains (losses)....................... (249) (177) 7 ------ ------ ------ Total revenues.................................... 3,952 5,718 5,202 ------ ------ ------ Policyholder benefits and claims.................... 2,989 3,989 3,490 Interest credited to policyholder account balances.. 108 262 254 Other expenses...................................... 699 1,226 1,227 ------ ------ ------ Total expenses.................................... 3,796 5,477 4,971 ------ ------ ------ Income before provision for income tax.............. 156 241 231 Provision for income tax............................ 53 84 81 ------ ------ ------ Income from discontinued operations, net of income tax............................................... 103 157 150 Loss in connection with the dividend of interests in subsidiary, net of income tax..................... (398) -- -- ------ ------ ------ Income (loss) from discontinued operations, net of income tax........................................ $ (295) $ 157 $ 150 ====== ====== ======
F-125 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2007 ----------------- (IN MILLIONS) Fixed maturity securities................................. $ 9,398 Equity securities......................................... 137 Mortgage and consumer loans............................... 832 Policy loans.............................................. 1,059 Short-term investments.................................... 75 Other invested assets..................................... 4,897 ------- Total investments....................................... 16,398 Cash and cash equivalents................................. 404 Accrued investment income................................. 78 Premiums and other receivables............................ 1,440 Deferred policy acquisition costs and VOBA................ 3,513 Goodwill.................................................. 96 Other assets.............................................. 91 Separate account assets................................... 17 ------- Total assets held-for-sale.............................. $22,037 ======= Future policy benefits.................................... $ 6,159 Policyholder account balances............................. 6,657 Other policyholder funds.................................. 2,297 Long-term debt............................................ 528 Collateral financing arrangements......................... 850 Junior subordinated debt securities....................... 399 Shares subject to mandatory redemption.................... 159 Current income tax payable................................ 33 Deferred income tax liability............................. 941 Other liabilities......................................... 1,918 Separate account liabilities.............................. 17 ------- Total liabilities held-for-sale......................... $19,958 =======
The operations of RGA include direct policies and reinsurance agreements with Metropolitan Life Insurance Company and some of its subsidiaries. These agreements are generally terminable by either party upon 90 days written notice with respect to future new business. Agreements related to existing business generally are not terminable, unless the underlying policies terminate or are recaptured. These direct policies and reinsurance agreements do not constitute significant continuing involvement by the Company with RGA. Included in continuing operations in the Company's consolidated statements of operations are amounts related to these transactions, including ceded amounts that reduced premiums and fees by $117 million, $185 million and $183 million and ceded amounts that reduced policyholder benefits and claims by $90 million, $185 million and $147 million for the years ended December 31, 2008, 2007 and 2006, respectively, that have not been eliminated as these transactions are expected to continue after the RGA disposition. Related amounts included in the Company's consolidated balance sheets include assets totaling $739 million, and liabilities totaling $463 million at December 31, 2007. F-126 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) On January 31, 2005, the Company completed the sale of SSRM to a third party for $328 million in cash and stock. The Company reported the operations of SSRM in discontinued operations. Under the terms of the sale agreement, the Company had an opportunity to receive additional payments based on, among other things, certain revenue retention and growth measures. The purchase price was also subject to reduction over five years, depending on retention of certain Company-related business. In the second quarter of 2008, the Company paid $3 million, net of income tax, of which $2 million was accrued in the fourth quarter of 2007, related to the termination of certain Company-related business. Also under the terms of such agreement, the Company had the opportunity to receive additional consideration for the retention of certain customers for a specific period in 2005. Upon finalization of the computation, the Company received a payment of $30 million, net of income tax, in the second quarter of 2006 due to the retention of these specific customer accounts. In the first quarter of 2007, the Company received a payment of $16 million, net of income tax, as a result of the revenue retention and growth measure provision in the sales agreement. In the fourth quarter of 2006, the Company eliminated $4 million of a liability that was previously recorded with respect to the indemnities provided in connection with the sale of SSRM, resulting in a benefit to the Company of $2 million, net of income tax. The Company believes that future payments relating to these indemnities are not probable. The following table presents the amounts related to operations of SSRM that have been reflected as discontinued operations in the consolidated statements of income:
YEARS ENDED DECEMBER 31, ------------------------ 2008 2007 2006 ---- ---- ---- (IN MILLIONS) Revenues............................................. $-- $-- $-- Expenses............................................. -- -- -- --- --- --- Income from discontinued operations before provision for income tax..................................... -- -- -- Provision for income tax............................. -- -- -- Net investment gain (loss), net of income tax........ (1) 14 32 --- --- --- Income from discontinued operations, net of income tax................................................ $(1) $14 $32 === === ===
19. FAIR VALUE FAIR VALUE OF FINANCIAL INSTRUMENTS As described in Note 1, the Company prospectively adopted the provisions of SFAS 157 effective January 1, 2008. As a result, the methodologies used to determine the estimated fair value for certain financial instruments at December 31, 2008 may have been modified from those utilized at December 31, 2007, which, while being deemed appropriate under existing accounting guidance, may not have produced an exit value as defined in SFAS 157. Accordingly, the estimated fair value of financial instruments, and the description of the methodologies used to derive those estimated fair values, are presented separately at December 31, 2007 and December 31, 2008. Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. F-127 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Amounts related to the Company's financial instruments are as follows:
NOTIONAL CARRYING ESTIMATED DECEMBER 31, 2007 AMOUNT VALUE FAIR VALUE ----------------- -------- -------- ---------- (IN MILLIONS) Assets: Fixed maturity securities..................... $152,266 $152,266 Equity securities............................. $ 4,167 $ 4,167 Trading securities............................ $ 457 $ 457 Mortgage and consumer loans................... $ 39,180 $ 39,720 Policy loans.................................. $ 7,677 $ 7,677 Short-term investments........................ $ 603 $ 603 Cash and cash equivalents..................... $ 1,927 $ 1,927 Accrued investment income..................... $ 2,451 $ 2,451 Assets of subsidiaries held-for-sale.......... $ 11,983 $ 11,992 Liabilities: Policyholder account balances................. $ 70,586 $ 70,913 Short-term debt............................... $ 357 $ 357 Long-term debt................................ $ 2,687 $ 2,763 Payables for collateral under securities loaned and other transactions.............. $ 28,952 $ 28,952 Liabilities of subsidiaries held-for-sale..... $ 6,915 $ 6,044 Commitments: (1) Mortgage loan commitments..................... $3,272 $ -- $ (32) Commitments to fund bank credit facilities, bridge loans and private corporate bond investments................................ $ 667 $ -- $ (25)
-------- (1) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows: Fixed Maturity Securities, Equity Securities and Trading Securities -- The estimated fair values of publicly held fixed maturity securities and publicly held equity securities are based on quoted market prices or estimates from independent pricing services. However, in cases where quoted market prices are not available, such as for private fixed maturity securities, fair values are estimated using present value or valuation techniques. The determination of estimated fair values is based on: (i) market standard valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the circumstances. The fair value estimates based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Factors considered in estimating fair value include: coupon rate, maturity, estimated duration, call provisions, sinking fund requirements, credit rating, industry sector of the issuer, and quoted market prices of comparable securities. Mortgage and Consumer Loans, Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities, Bridge Loans, and Private Corporate Bond Investments -- Fair values for mortgage and consumer loans are estimated by discounting expected future cash flows, using current interest rates for similar loans with similar F-128 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) credit risk. For mortgage loan commitments and commitments to fund bank credit facilities, bridge loans, and private corporate bond investments the estimated fair value is the net premium or discount of the commitments. Policy Loans -- The estimated fair values for policy loans approximate carrying values. Cash and Cash Equivalents and Short-term Investments -- The estimated fair values for cash and cash equivalents and short-term investments approximate carrying values due to the short-term maturities of these instruments. Accrued Investment Income -- The estimated fair value for accrued investment income approximates carrying value. Policyholder Account Balances -- The fair value of policyholder account balances which have final contractual maturities are estimated by discounting expected future cash flows based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the agreements being valued. The estimated fair value of policyholder account balances without final contractual maturities are assumed to equal their current net surrender value. Short-term and Long-term Debt -- The estimated fair values of short-term and long-term debt are determined by discounting expected future cash flows using risk rates currently available for debt with similar terms and remaining maturities. Payables for Collateral Under Securities Loaned and Other Transactions -- The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. Assets and Liabilities of Subsidiaries Held-For-Sale -- The carrying values of assets and liabilities of subsidiaries held-for-sale reflect those assets and liabilities which were previously determined to be financial instruments and which were reflected in other financial statement captions in the table above in previous periods but have been reclassified to this caption to reflect the discontinued nature of the operations. The estimated fair value of the assets and liabilities of subsidiaries held-for-sale have been determined on a basis consistent with similar instruments as described herein. Derivative Financial Instruments -- The estimated fair value of derivative financial instruments, including financial futures, financial forwards, interest rate, credit default and foreign currency swaps, foreign currency forwards, caps, floors, and options are based upon quotations obtained from dealers or other reliable sources. See Note 4 for derivative fair value disclosures. F-129 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTIONAL CARRYING ESTIMATED DECEMBER 31, 2008 AMOUNT VALUE FAIR VALUE ----------------- -------- -------- ---------- (IN MILLIONS) Assets: Fixed maturity securities..................... $122,229 $122,229 Equity securities............................. $ 2,298 $ 2,298 Trading securities............................ $ 277 $ 277 Mortgage and consumer loans, net.............. $ 42,105 $ 41,110 Policy loans.................................. $ 7,881 $ 9,675 Real estate joint ventures (1)................ $ 67 $ 75 Other limited partnership interests (1)....... $ 1,697 $ 2,008 Short-term investments........................ $ 7,598 $ 7,598 Other invested assets: (1) Derivative assets.......................... $71,514 $ 6,646 $ 6,646 Other...................................... $ 875 $ 691 Cash and cash equivalents..................... $ 10,279 $ 10,279 Accrued investment income..................... $ 2,079 $ 2,079 Premiums and other receivables (1)............ $ 17,856 $ 18,088 Separate account assets....................... $ 72,259 $ 72,259 Net embedded derivatives within asset host contracts (2).............................. $ 797 $ 797 Liabilities: Policyholder account balances (1)............. $ 70,799 $ 66,232 Short-term debt............................... $ 414 $ 414 Long-term debt (1)............................ $ 2,684 $ 1,995 Payables for collateral under securities loaned and other transactions.............. $ 18,649 $ 18,649 Other liabilities: (1) Derivative liabilities..................... $35,219 $ 2,521 $ 2,521 Trading liabilities........................ $ 57 $ 57 Other...................................... $ 16,163 $ 16,163 Separate account liabilities (1).............. $ 26,214 $ 26,214 Net embedded derivatives within liability host contracts (2).............................. $ (988) $ (988) Commitments: (3) Mortgage loan commitments..................... $ 2,191 $ -- $ (114) Commitments to fund bank credit facilities, bridge loans and private corporate bond investments................................ $ 611 $ -- $ 4
-------- (1) Carrying values presented herein differ from those presented on the consolidated balance sheet because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions omitted from the table above are not considered financial instruments. (2) Net embedded derivatives within asset host contracts are presented within premiums and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. Equity securities also include embedded derivatives of ($72) million. F-130 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (3) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows: Fixed Maturity Securities, Equity Securities and Trading Securities -- When available, the estimated fair value of the Company's fixed maturity, equity and trading securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The assumptions and inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity, estimated duration and management's assumptions regarding liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management's judgments about financial instruments. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active, liquid markets, quoted prices in markets that are not active and observable yields and spreads in the market. When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities. The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's securities holdings. Mortgage and Consumer Loans -- The Company originates mortgage and consumer loans principally for investment purposes. These loans are primarily carried at amortized cost within the consolidated financial statements. The fair value for mortgage and consumer loans is primarily determined by estimating expected future cash flows and discounting those using current interest rates for similar loans with similar credit risk. Certain mortgage and consumer loans have been impaired to their estimated fair value which is determined using independent broker quotations or, when the loan is in foreclosure or otherwise determined to be collateral dependent, the fair value of the underlying collateral estimated using internal models. Policy Loans -- For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed applying a weighted-average interest rate to the outstanding principal balance of the respective group of loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. The estimated fair value for policy F-131 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) loans with variable interest rates approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. Real Estate Joint Ventures and Other Limited Partnership Interests -- Other limited partnerships and real estate joint ventures included in the preceding table consist of those investments accounted for using the cost method. The remaining carrying value recognized in the consolidated balance sheet represents investments in real estate or real estate joint ventures and other limited partnerships accounted for using the equity method, which do not satisfy the definition of financial instruments for which fair value is required to be disclosed. The estimated fair values for other limited partnership interests and real estate joint ventures accounted for under the cost method are generally based on the Company's share of the net asset value ("NAV") as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Short-term Investments -- Certain short term investments do not qualify as securities and are recognized at amortized cost in the consolidated balance sheet. For these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required. Short-term investments that meet the definition of a security are recognized at fair value in the consolidated balance sheet in the same manner described above for similar instruments that are classified within captions of other major investment classes. Other Invested Assets -- Other invested assets in the consolidated balance sheet is principally comprised of freestanding derivatives with positive estimated fair values, leveraged leases, investments in tax credit partnerships, joint venture investments, loans to affiliates and funds withheld at interest. Leveraged leases, investments in tax credit partnerships and joint venture investments, which are accounted for under the equity method, are not financial instruments subject to fair value disclosure. Accordingly, they have been excluded from the preceding table. The estimated fair value of derivatives -- with positive and negative estimated fair values -- is described in the respectively labeled section which follows. For funds withheld at interest, the Company evaluates the specific facts and circumstances of each instrument to determine the appropriate estimated fair values. These estimated fair values were not materially different from the recognized carrying values. The estimated fair value of loans to affiliates is determined by discounting expected future cash flows using market interest rates currently available for instruments with similar terms and remaining maturities. Cash and Cash Equivalents -- Due to the short term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient solvency in the case of depository institutions, and the Company has determined additional adjustment is not required. Accrued Investment Income -- Due to the short-term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the credit quality of the issuers and has determined additional adjustment is not required. F-132 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Premiums and Other Receivables -- Premiums and other receivables in the consolidated balance sheet is principally comprised of premiums due and unpaid for insurance contracts, amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions, amounts receivable for securities sold but not yet settled, fees and general operating receivables, and embedded derivatives related to the ceded reinsurance of certain variable annuity riders. Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding table. Amounts recoverable under ceded reinsurance contracts which the Company has determined do not transfer sufficient risk such that they are accounted for using the deposit method of accounting have been included in the preceding table with the estimated fair value determined as the present value of expected future cash flows under the related contracts discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over very short periods such that the estimated fair values approximate their carrying value. In light of recent market conditions, the Company has monitored the solvency position of the financial institutions and has determined additional adjustments are not required. Embedded derivatives recognized in connection with ceded reinsurance of certain variable annuity riders are included in this caption in the consolidated financial statements but excluded from this caption in the preceding table as they are separately presented. The estimated fair value of these embedded derivatives is described in the respectively labeled section which follows. Other Assets -- Other assets in the consolidated balance sheet is principally comprised of prepaid expenses, amounts held under corporate owned life insurance, fixed assets, capitalized software, deferred sales inducements, VODA and VOCRA, all of which are not considered financial instruments subject to disclosure. Separate Account Assets -- Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheet in accordance with Statement of Position ("SOP") 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). The estimated fair value of separate account assets are based on the estimated fair value of the underlying assets owned by the separate account. Assets within the Company's separate accounts include: mutual funds, fixed maturity securities, equity securities, mortgage loans, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. The estimated fair value of mutual funds is based upon quoted prices or reported net assets values provided by the fund manager and are reviewed by management to determine whether such values require adjustment to represent exit value. The estimated fair values of fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents held by separate accounts are determined on a basis consistent with the methodologies described herein for similar financial instruments held within the general account. The estimated fair value of hedge funds is based upon NAVs provided by the fund manager and are reviewed by management to determine whether such values require adjustment to represent exit value. The estimated fair value of mortgage loans is determined by discounting expected future cash flows, using current interest rates for similar loans with similar credit risk. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest. Policyholder Account Balances -- Policyholder account balances in the table above include investment contracts. Embedded derivatives on investment contracts and certain variable annuity riders accounted for as embedded derivatives are included in this caption in the consolidated financial statements but excluded from this F-133 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) caption in the table above as they are separately presented therein. The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the consolidated balance sheet represents those amounts due under contracts that satisfy the definition of insurance contracts and are not considered financial instruments. The investment contracts primarily include guaranteed interest contracts, certain funding arrangements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities, and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate future cash flows using current market risk-free interest rates and adding a spread for the Company's own credit determined using market standard swap valuation models and observable market inputs that take into consideration publicly available information relating to the Company's debt as well as its claims paying ability. Short-term and Long-term Debt -- The estimated fair value for short-term debt approximates carrying value due to the short-term nature of these obligations. The estimated fair values of long-term debt securities are generally determined by discounting expected future cash flows using market rates currently available for debt with similar remaining maturities and reflecting the credit risk of the Company including inputs, when available, from actively traded debt of the Company or other companies with similar types of borrowing arrangements. Risk-adjusted discount rates applied to the expected future cash flows can vary significantly based upon the specific terms of each individual arrangement, including, but not limited to: subordinated rights; contractual interest rates in relation to current market rates; the structuring of the arrangement; and the nature and observability of the applicable valuation inputs. Use of different risk-adjusted discount rates could result in different estimated fair values. The carrying value of long-term debt presented in the table above differs from the amounts presented in the consolidated balance sheet as it does not include capital leases which are not required to be disclosed at estimated fair value. Payables for Collateral Under Securities Loaned and Other Transactions -- The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in its own credit are necessary. Other Liabilities -- Other liabilities in the consolidated balance sheet is principally comprised of funds withheld at interest related to certain ceded reinsurance; embedded derivatives within these funds withheld at interest related to certain ceded reinsurance; freestanding derivatives with negative estimated fair values; securities trading liabilities; tax and litigation contingency liabilities; obligations for employee-related benefits; interest due on the Company's debt obligations and on cash collateral held in relation to securities lending; interest and dividends payable; amounts due for securities purchased but not yet settled; amounts due under assumed reinsurance contracts; and general operating accruals and payables. The estimated fair value of derivatives -- with positive and negative estimated fair values -- is described in the respectively labeled section which follows. The fair value of the embedded derivatives within funds withheld at interest related to certain ceded reinsurance are included in this caption in the consolidated financial statements but excluded from this caption in the preceding table as they are separately presented. The estimated fair value of these embedded derivatives is described in the respectively labeled section which follows. The remaining other amounts included in the table above reflect those other liabilities that satisfy the definition of financial instruments subject to disclosure. These items consist primarily of securities trading liabilities; interest and dividends payable; amounts due for securities purchased but not yet settled; and amounts payable under certain ceded reinsurance contracts recognized using the deposit method of accounting. The Company evaluates the F-134 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from the recognized carrying values. Separate Account Liabilities -- Separate account liabilities included in the table above represent those balances due to policyholders under contracts that are classified as investment contracts. The difference between the separate account liabilities reflected above and the amounts presented in the consolidated balance sheet represents those contracts classified as insurance contracts which do not satisfy the criteria of financial instruments for which estimated fair value is to be disclosed. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance; funding arrangements related to institutional group life contracts; and certain contracts that provide for benefit funding under institutional retirement & savings products. Separate account liabilities, whether related to investment or insurance contracts, are recognized in the consolidated balance sheet at an equivalent summary total of the separate account assets as prescribed by SOP 03-1. Separate account assets, which equal net deposits, net investment income and realized and unrealized capital gains and losses, are fully offset by corresponding amounts credited to the contractholders' liability which is reflected in separate account liabilities. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described above, the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities. Derivatives -- The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models. The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such instruments. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter derivatives after taking into account the effects of netting agreements and collateral arrangements. Credit risk is monitored and consideration of any potential credit adjustment is based on a net exposure by counterparty. This is due to the existence of netting agreements and collateral arrangements which effectively serve to mitigate risk. The Company values its derivative positions using the standard swap curve which includes a credit risk adjustment. This credit risk adjustment is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The need for such additional credit risk adjustments is monitored by the Company. The F-135 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. Embedded Derivatives within Asset and Liability Host Contracts -- Embedded derivatives principally include certain direct variable annuity riders, certain affiliated ceded reinsurance contracts related to such variable annuity riders, certain guaranteed interest contracts with equity or bond indexed crediting rates and those related to ceded funds withheld on reinsurance. Embedded derivatives are recorded in the financial statements at estimated fair value with changes in estimated fair value adjusted through net income. The Company issues certain variable annuity products with guaranteed minimum benefit riders. GMWB, GMAB and certain GMIB riders are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). These embedded derivatives are classified within policyholder account balances. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable risk free rates. Effective January 1, 2008, upon adoption of SFAS 157, the valuation of these riders now includes an adjustment for the Company's own credit and risk margins for non-capital market inputs. The Company's own credit adjustment is determined taking into consideration publicly available information relating to the Company's debt as well as its claims paying ability. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in the Company's own credit standing; and variations in actuarial assumptions regarding policyholder behavior and risk margins related to non- capital market inputs may result in significant fluctuations in the estimated fair value of the riders that could materially affect net income. The Company cedes the risks associated with certain of the GMIB, GMAB and GMWB riders described in the preceding paragraph. These reinsurance contracts contain embedded derivatives which are included in premiums and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on the ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. In addition to ceding risks associated with riders that are accounted for as embedded derivatives, the Company also cedes to an affiliated reinsurance company certain directly written GMIB riders that are accounted for as insurance (i.e., not as embedded derivatives) but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included in premiums and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the riders directly written by the Company. Because the direct rider is not accounted for at fair value, significant fluctuations in net income may occur as the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding and offsetting change in fair value of the direct rider. F-136 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The estimated fair value of the embedded equity and bond indexed derivatives contained in certain guaranteed interest contracts is determined using market standard swap valuation models and observable market inputs, including an adjustment for the Company's own credit that takes into consideration publicly available information relating to the Company's debt as well as its claims paying ability. The estimated fair value of these embedded derivatives are included, along with their guaranteed interest contract host, within policyholder account balances with changes in estimated fair value recorded in net investment gains (losses). Changes in equity and bond indices, interest rates and the Company's credit standing may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The estimated fair value of the embedded derivatives within funds withheld at interest liabilities related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described above in "Fixed Maturity Securities, Equity Securities and Trading Securities" and "Short-term Investments." The fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities with changes in estimated fair value recorded in net investment gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The accounting for embedded derivatives is complex and interpretations of the primary accounting standards continue to evolve in practice. If interpretations change, there is a risk that features previously not bifurcated may require bifurcation and reporting at estimated fair value in the consolidated financial statements and respective changes in estimated fair value could materially affect net income. Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities, Bridge Loans, and Private Corporate Bond Investments -- The estimated fair values for mortgage loan commitments and commitments to fund bank credit facilities, bridge loans and private corporate bond investments reflected in the above table represent the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the original commitments. F-137 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ASSETS AND LIABILITIES MEASURED AT FAIR VALUE RECURRING FAIR VALUE MEASUREMENTS The fair value of assets and liabilities measured at estimated fair value on a recurring basis, are determined as described in the preceding section. These estimated fair values and their corresponding fair value hierarchy are summarized as follows:
DECEMBER 31, 2008 ------------------------------------------------------------------ FAIR VALUE MEASUREMENTS AT REPORTING DATE USING ----------------------------------------------------- QUOTED PRICES IN ACTIVE MARKETS FOR SIGNIFICANT IDENTICAL ASSETS SIGNIFICANT OTHER UNOBSERVABLE TOTAL AND LIABILITIES OBSERVABLE INPUTS INPUTS ESTIMATED (LEVEL 1) (LEVEL 2) (LEVEL 3) FAIR VALUE ------------------ ----------------- ------------ ---------- (IN MILLIONS) ASSETS Fixed maturity securities: U.S. corporate securities.............. $ -- $ 38,663 $ 5,089 $ 43,752 Residential mortgage-backed securities.......................... -- 22,680 373 23,053 Foreign corporate securities........... -- 16,857 3,367 20,224 U.S. Treasury/agency securities........ 7,427 8,461 48 15,936 Commercial mortgage-backed securities.. -- 8,939 138 9,077 Asset-backed securities................ -- 4,824 1,487 6,311 Foreign government securities.......... -- 2,573 202 2,775 State and political subdivision securities.......................... -- 1,025 76 1,101 ------- -------- ------- -------- Total fixed maturity securities..... 7,427 104,022 10,780 122,229 ------- -------- ------- -------- Equity securities: Common stock........................... 238 994 59 1,291 Non-redeemable preferred stock......... -- 89 918 1,007 ------- -------- ------- -------- Total equity securities............. 238 1,083 977 2,298 ------- -------- ------- -------- Trading securities..................... -- 161 116 277 Short-term investments (1)............. 6,812 695 75 7,582 Derivative assets (2).................. 2 6,505 139 6,646 Net embedded derivatives within asset host contracts (3).................. -- -- 797 797 Separate account assets (4)............ 39,767 31,006 1,486 72,259 ------- -------- ------- -------- Total assets........................ $54,246 $143,472 $14,370 $212,088 ======= ======== ======= ======== LIABILITIES Derivative liabilities (2)............. $ 58 $ 2,305 $ 158 $ 2,521 Net embedded derivatives within liability host contracts (3)........ -- (83) (905) (988) Trading liabilities (5)................ 57 -- -- 57 ------- -------- ------- -------- Total liabilities................... $ 115 $ 2,222 $ (747) $ 1,590 ======= ======== ======= ========
-------- (1) Short-term investments as presented in the table above differ from the amounts presented in the consolidated balance sheet because certain short-term investments are not measured at estimated fair value (e.g., time deposits, money market funds, etc.). (2) Derivative assets are presented within other invested assets and derivatives liabilities are presented within other liabilities. The amounts are presented gross in the table above to reflect the presentation in the consolidated balance sheet, but are presented net for purposes of the rollforward in the following tables. F-138 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (3) Net embedded derivatives within asset host contracts are presented within premiums and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. Equity securities also includes embedded derivatives of ($72) million. (4) Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets as prescribed by SOP 03-1. (5) Trading liabilities are presented within other liabilities. The Company has categorized its assets and liabilities into the three-level fair value hierarchy, as defined in Note 1, based upon the priority of the inputs to the respective valuation technique. The following summarizes the types of assets and liabilities included within the three-level fair value hierarchy presented in the preceding table. Level 1 This category includes certain U.S. Treasury and agency fixed maturity securities, exchange-traded common stock and certain short-term money market securities. As it relates to derivatives, this level includes financial futures including exchange-traded equity and interest rate futures. Separate account assets classified within this level principally include mutual funds. Also included are assets held within separate accounts which are similar in nature to those classified in this level for the general account. Level 2 This category includes fixed maturity and equity securities priced principally by independent pricing services using observable inputs. These fixed maturity securities include most U.S. Treasury and agency securities as well as the majority of U.S. and foreign corporate securities, residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, foreign government securities and state and political subdivision securities. Equity securities classified as Level 2 securities consist principally of non-redeemable preferred stock and certain equity securities where market quotes are available but are not considered actively traded. Short-term investments and trading securities included within Level 2 are of a similar nature to these fixed maturity and equity securities. As it relates to derivatives, this level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded futures included within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. Separate account assets classified within this level are generally similar to those classified within this level for the general account. Hedge funds owned by separate accounts are also included within this level. Embedded derivatives classified within this level include embedded equity derivatives contained in certain guaranteed interest contracts. Level 3 This category includes fixed maturity securities priced principally through independent broker quotations or market standard valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. This level consists of less liquid fixed maturity securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies including: U.S. and foreign corporate securities -- including below investment grade private placements; residential mortgage-backed securities; commercial mortgage-backed securities; asset backed securities -- including all of those supported by sub-prime mortgage loans; foreign government; U.S. Treasury and agency; and state and political subdivision securities. Equity securities classified as Level 3 securities consist principally of common stock of privately held companies and non-redeemable preferred stock where there has been very limited trading activity or where less price transparency exists around the inputs to the valuation. Short-term investments and trading securities included within Level 3 are of a similar nature to these fixed maturity and equity securities. As it relates to derivatives this category includes: financial forwards including swap spread locks with maturities which extend beyond F-139 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) observable periods; equity variance swaps with unobservable volatility inputs or that are priced via independent broker quotations; foreign currency swaps which are cancelable and priced through independent broker quotations; interest rate swaps with maturities which extend beyond the observable portion of the yield curve; credit default swaps based upon baskets of credits having unobservable credit correlations as well as credit default swaps with maturities which extend beyond the observable portion of the credit curves and credit default swaps priced through independent broker quotes; equity options with unobservable volatility inputs; and interest rate floors referencing unobservable yield curves and/or which include liquidity and volatility adjustments. Separate account assets classified within this level are generally similar to those classified within this level for the general account; however, they also include mortgage loans, and other limited partnership interests. Embedded derivatives classified within this level include embedded derivatives associated with certain variable annuity riders as well as those on the cession of the risks associated with those riders to affiliates; as well as embedded derivatives related to funds withheld on ceded reinsurance. A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs for year ended December 31, 2008 is as follows:
FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) --------------------------------------------------------------------------------------------------------- TOTAL REALIZED/UNREALIZED GAINS (LOSSES) INCLUDED IN: ----------------------------- PURCHASES, BALANCE, IMPACT OF BALANCE, OTHER SALES, TRANSFER IN BALANCE, DECEMBER 31, SFAS 157 BEGINNING COMPREHENSIVE ISSUANCES AND AND/OR OUT END OF 2007 ADOPTION (1) OF PERIOD EARNINGS (2, 3) INCOME (LOSS) SETTLEMENTS (4) OF LEVEL 3 (5) PERIOD ------------ ------------ --------- --------------- ------------- --------------- -------------- -------- (IN MILLIONS) Fixed maturity securities............. $15,066 $-- $15,066 $ (674) $(3,763) $(530) $681 $10,780 Equity securities........ 1,527 -- 1,527 (128) (346) (54) (22) 977 Trading securities....... 174 -- 174 (26) -- (32) -- 116 Short-term investments... 149 -- 149 (2) -- (72) -- 75 Net derivatives (6)...... 134 (1) 133 (60) -- (92) -- (19) Separate account assets (7).................... 1,170 -- 1,170 (86) -- (22) 424 1,486 Net embedded derivatives (8).................... 25 30 55 1,631 -- 16 -- 1,702
-------- (1) Impact of SFAS 157 adoption represents the amount recognized in earnings as a change in estimate upon the adoption of SFAS 157 associated with Level 3 financial instruments held at January 1, 2008. The net impact of adoption on Level 3 assets and liabilities presented in the table above was a $29 million increase to net assets. Such amount was also impacted by a decrease to DAC of $9 million. The impact of adoption of SFAS 157 on RGA -- not reflected in the table above as a result of the reflection of RGA in discontinued operations -- was a net increase of $2 million (i.e., a decrease in Level 3 net embedded derivative liabilities of $17 million offset by a DAC decrease of $15 million) for a total impact of $22 million on Level 3 assets and liabilities. This impact of $22 million along with a $9 million reduction in the estimated fair value of Level 2 freestanding derivatives, results in a total net impact of adoption of SFAS 157 of $13 million as described in Note 1. (2) Amortization of premium/discount is included within net investment income which is reported within the earnings caption of total gains/losses. Impairments are included within net investment gains (losses) which is reported within the earnings caption of total gains/losses. Lapses associated with embedded derivatives are included with the earnings caption of total gains/losses. (3) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (4) The amount reported within purchases, sales, issuances and settlements is the purchase/issuance price (for purchases and issuances) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased/issued or sold/settled. Items purchased/issued and sold/settled in the same period are excluded F-140 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) from the rollforward. For embedded derivatives, attributed fees are included within this caption along with settlements, if any. (5) Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers in (out) of Level 3 occurred at the beginning of the period. Items transferred in and out in the same period are excluded from the rollforward. (6) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (7) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. (8) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (9) Amounts presented do not reflect any associated hedging activities. Actual earnings associated with Level 3, inclusive of hedging activities, could differ materially. The table below summarizes both realized and unrealized gains and losses for the year ended December 31, 2008 due to changes in fair value recorded in earnings for Level 3 assets and liabilities:
TOTAL GAINS AND LOSSES ------------------------------------ CLASSIFICATION OF REALIZED/UNREALIZED GAINS (LOSSES) INCLUDED IN EARNINGS ------------------------------------ NET NET INVESTMENT INVESTMENT INCOME GAINS (LOSSES) TOTAL ---------- -------------- ------ (IN MILLIONS) Fixed maturity securities...................... $ 9 $ (683) $ (674) Equity securities.............................. -- (128) (128) Trading securities............................. (26) -- (26) Short-term investments......................... 1 (3) (2) Net derivatives................................ -- (60) (60) Net embedded derivatives....................... -- 1,631 1,631
The table below summarizes the portion of unrealized gains and losses recorded in earnings for the year ended December 31, 2008 for Level 3 assets and liabilities that are still held at December 31, 2008.
CHANGES IN UNREALIZED GAINS (LOSSES) RELATING TO ASSETS AND LIABILITIES HELD AT DECEMBER 31, 2008 ------------------------------------ NET NET INVESTMENT INVESTMENT INCOME GAINS (LOSSES) TOTAL ---------- -------------- ------ (IN MILLIONS) Fixed maturity securities...................... $ 5 $ (466) $ (461) Equity securities.............................. -- (114) (114) Trading securities............................. (18) -- (18) Net derivatives................................ -- (93) (93) Net embedded derivatives....................... -- 1,632 1,632
NON-RECURRING FAIR VALUE MEASUREMENTS At December 31, 2008, the Company held $204 million in mortgage loans which are carried at estimated fair value based on independent broker quotations or, if the loans were in foreclosure or are otherwise determined to be collateral dependent, on the value of the underlying collateral of which $188 million was related to impaired mortgage loans held-for-investment and $16 million to certain mortgage loans held-for-sale. These impaired F-141 METROPOLITAN LIFE INSURANCE COMPANY (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) mortgage loans were recorded at estimated fair value and represent a nonrecurring fair value measurement. The estimated fair value was categorized as Level 3. Included within net investment gains (losses) for such impaired mortgage loans are net impairments of $56 million for the year ended December 31, 2008. At December 31, 2008, the Company held $131 million in cost basis other limited partnership interests which were impaired during the year ended December 31, 2008 based on the underlying limited partnership financial statements. These other limited partnership interests were recorded at estimated fair value and represent a nonrecurring fair value measurement. The estimated fair value was categorized as Level 3. Included within net investment gains (losses) for such other limited partnerships are impairments of $99 million for the year ended December 31, 2008. 20. RELATED PARTY TRANSACTIONS The Company entered into a service agreement with MetLife Group, Inc. ("MetLife Group"), a wholly-owned subsidiary of MetLife Inc., under which MetLife Group provides personnel services, as needed, to support the activities of the Company. MetLife Group charged the Company $2.2 billion, $2.0 billion and $1.9 billion, included in other expenses, for services performed under the service agreement for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include distribution services and administrative functions. Expenses incurred by the Company related to these agreements were $667 million, $574 million and $34 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company has entered into agreements with affiliates to provide additional services necessary to conduct their activities. Typical services provided under these agreements include management, policy administrative functions, investment advice and distribution services. Expenses incurred by the Company related to these agreements were $815 million, $791 million and $657 million for the years ended December 31, 2008, 2007 and 2006, respectively, and were reimbursed to the Company by these affiliates. Revenues received from affiliates related to these agreements and recorded in other revenues was $17 million for both years ended December 31, 2008 and 2007. There was no revenue received from affiliates related to these agreements for the year ended December 31, 2006. Revenues received from affiliates related to these agreements and recorded in universal life and investment-type product policy fees was $16 million, $16 million and $17 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company had net payables to affiliates of $229 million and $116 million at December 31, 2008 and 2007, respectively, related to the items discussed above. These payables exclude affiliated reinsurance balances discussed in Note 8. See Notes 3, 7 and 10 for discussion of additional related party transactions. F-142 PART II OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (A) FINANCIAL STATEMENTS The following financial statements are included in Part B of this Post- Effective Amendment on Form N-4: Metropolitan Life Separate Account E Independent Registered Public Accounting Firm's Report Financial Statements for the Years Ended December 31, 2008 and 2007 Statements of Assets and Liabilities Statements of Operations Statements of Changes in Net Assets Notes to Financial Statements Metropolitan Life Insurance Company Independent Registered Public Accounting Firm's Report Financial Statements for the Years Ended December 31, 2008, 2007 and 2006 Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flow Consolidated Statements of Equity Notes to Consolidated Financial Statements (B) EXHIBITS (1) -- Resolution of the Board of Directors of Metropolitan Life establishing Separate Account E.(1) (2) -- Not applicable. (3)(a) -- Principal Underwriting Agreement with MetLife Investors Distribution Company (18) (b) -- Form of Metropolitan Life Insurance Company Sales Agreement.(13) (b)(i) -- Form of Retail Sales Agreement (MLIDC Retail Sales Agreement 7-1-05)(LTC). (13) (c) -- Participation Agreement--New England Zenith Fund. (3) (d) -- Participation Agreement--American Funds Insurance Series. (2) (e) -- Participation Agreement--Met Investors Series Trust. (4) (f) -- Participation Agreement--Metropolitan Series Fund. (16) (4) -- Form of Deferred Annuity Contract. (2) (a) -- ROTH Individual Retirement Annuity Endorsement--Form ML-446.2 (9/02). (5) (b) -- 401(a)/403(a) Plan Endorsement. Form ML-401.2(9/02). (5) (c) -- Individual Retirement Annuity Endorsement. Form ML-408.2 (9/02). (6) (d) -- SIMPLE Individual Retirement Annuity Endorsement. Form: ML-439.1 (9/02). (5) (e) -- Tax Sheltered Annuity Endorsement. Form ML-398.2 (9/02). (5) (f) -- Guaranteed Minimum Income Benefit Rider--Living Benefit ML-560-1 (03/03). (10) (g) -- Guaranteed Withdrawal Benefit Rider. (9) (h) -- Guaranteed Minimum Income Benefit Form ML-560-2 (5/05). (6) (i) -- Enhanced Dollar Cost Averaging Rider Form ML-510-1 (5/05). (6) (j) -- Non-Qualified Annuity Endorsement Form ML-NQ (11/04)-I. (9) (k) -- Guaranteed Withdrawal Benefit Endorsement. Form ML-GWB (11/05) E. (10) (l) -- Designated Beneficiary Non-Qualified Annuity Endorsement. Form ML-NQ (11/05)-I. (10) (m) -- Guaranteed Minimum Accumulation Benefit Rider. Form ML-670-1 (11/05). (10) (n) -- Guaranteed Withdrawal Benefit Rider. Form ML-670-2 (11/05) (Enhanced). (10) (o) -- Lifetime Withdrawal Guarantee Benefit Rider. Form MLI-690-1.24 (7/04). (12) (i) -- Lifetime Withdrawal Guarantee Benefit Rider - Specifications Form 8028-4 (11/05). (12) (p) -- Lifetime Guaranteed Withdrawal Benefit Rider ML-690-4 (4/08). (17) (i) -- Lifetime Guaranteed Withdrawal Benefit - Contract Schedule (ML-ELGWB (4-08)). (14) (q) -- Guaranteed Minimum Income Benefit Rider - Living Benefit - ML-560-4 (4/08). (17) (i) -- Guaranteed Minimum Income Benefit - Contract Schedule (ML-EGMIB(4-08)). (14) (r) -- Guaranteed Minimum Death Benefit (GMDB)Rider ML-640-1 (4/08). (17) (i) -- Guaranteed Minimum Death Benefit - Contract Schedule (ML-EDB(4-08)). (14) (5) -- Application Form for the Deferred Annuity. (2) (5)(a) -- Variable Annuity Application Preference Plus Select(R) PPS APP (06/06)LWG (04/07) with Arizona Free Look and: . Required Information PPS ADMIN (04/07) eF . Statement of Client Information SOCI-VA (04/07) eF . Compensation Disclosure Notice MPL 1651-000 COMPDISC-ADG (08/06) eF . Customer Privacy Notice ANN CPN(01/05) eF . Opting Out of Information Sharing ANN OPT OUT (01/05) eF. (15) (5)(b) -- Variable Annuity Application Preference Plus Select(R) Form PPS APP (04/08) GMDB (04/08). (20) (6)(a) -- Amended and Restated Charter of Metropolitan Life.(4) (b) -- Amended and Restated By-Laws of Metropolitan Life.(8) (7) -- Not applicable. (8) (a) -- Automatic Reinsurance Agreement between Metropolitian Life Insurance Company and Exeter Reassurance Company, LTD. effective December 1, 2004. Agreement No. 17258. (14) i. Amendment No. 1 as of May 1, 2005. ii. Amendment No. 2 as of November 1, 2005 iii. Amendment No. 3 as of June 12, 2006 iv. Amendment No. 4 as of February 26, 2007 v. Amendment No. 5 as of June 30, 2007 vi. Amendment No. 6 as of July 16, 2007 (9) -- Opinion and consent of counsel as to the legality of the securities being registered.(2) (10) -- Consent of Independent Registered Public Accounting Firm.(21) (11) -- Not applicable. (12) -- Not applicable. (13)(a) -- Powers of Attorney.(19)(21) ------------------ 1. Filed with Post-Effective Amendment No. 19 to Registration Statement No. 2-90380/811-4001 for Metropolitan Life Separate Account E on Form N-4 on February 27, 1996. As incorporated herein by reference. II-1 2. Filed with Pre-Effective Amendment No.1 to this Registration Statement on August 3, 2001. 3. Filed with Post-Effective Amendment No. 10 to Registration Statement No. 33-57320 for Metropolitan Life Separate Account UL on Form S-6 on September 18, 2000. As incorporated herein by reference. 4. Filed with Registration Statement No. 333-83716/811-4001 for Metropolitan Life Separate Account E on Form N-4 on March 5, 2002. As incorporated herein by reference. 5. Filed with Post-Effective Amendment No. 2 to this Registration Statement on April 10, 2003. 6. Filed with Post-Effective Amendment No. 7 to this Registration Statement on April 8, 2005. 7. Filed with Post-Effective Amendment No. 4 to this Registration Statement on April 20, 2004. 8. Filed with Amendment No. 16 to this Registration Statement No. 333- 52366/811-4001 for Metropolitan Life Separate Account E on Form N-4 on January 16, 2008. 9. Filed with Post-Effective Amendment No. 6 to this Registration Statement on May 18, 2004. 10. Filed with Post-Effective Amendment No. 8 to this Registration Statement on July 29, 2005. 11. Filed with Post-Effective Amendment No. 9 to this Registration Statement on October 14, 2005. 12. Filed with Post-Effective Amendment No. 12 to this Registration Statement on April 5, 2006. 13. Filed with Post-Effective Amendment No. 13 to this Registration Statement on April 25, 2006. 14. Filed with Post-Effective Amendment No. 18 to this Registration Statement on March 31, 2008. 15. Filed with Post Effective Amendment No. 15 to this Registration Statement on July 12, 2007. 16. Filed with Post-Effective Amendment No. 9 to Registration Statement 333-83716/811-4001 for Metropolitan Life Separate Account E on September 10, 2007. As incorporated herein by reference. 17. Filed with Post-Effective Amendment No. 17 to this Registration Statement on January 17, 2008. 18. Filed with Post-Effective Amendment No. 3 to Registration Statement No. 333-133675/811-07534 for Paragon Separate Account B on Form N-6 on February 6, 2008. As incorporated herein by reference. 19. Filed with Post-Effective Amendment No. 20 to this Registration Statement on December 8, 2008. Powers of Attorney for C. Robert Henrikson, Burton A. Dole, Jr., Cheryl W. Grise, R. Glenn Hubbard, John M. Keane, James M. Kilts, Sylvia Mathews Burwell, Hugh B. Price, David Satcher, Kenton J. Sicchitano, William C. Steere, Eduardo Castro-Wright, Lulu C. Wang, William J. Wheeler and James J. Prochaska, Jr. 20. Filed with Post-Effective Amendment No. 19 to this Registration Statement on April 17, 2008. 21. Filed herewith. Power of Attorney for James L. Lipscomb. II-2 ITEM 25. DIRECTORS AND OFFICERS OF DEPOSITOR
Name, Principal Occupation and Business Address Position and Offices with Depositor ----------------------------------------------- ----------------------------------- C. Robert Henrikson Chairman of the Board, President MetLife, Inc and Metropolitan Life Insurance and Chief Executive Officer Company Chairman of the Board, President and Chief Executive Officer 200 Park Avenue New York, New York 10166 Sylvia Mathews Burwell Director President, Global Development Program The Bill and Melinda Gates Foundation 1432 Elliott Avenue W Seattle, WA 98102 Eduardo Castro-Wright Director President and Chief Executive Officer Wal-Mart Stores, USA 702 Southwest 8th Street Bentonville, AR 72716 Burton A. Dole, Jr. Director Retired Chairman, Dole/Neal LLC Pauma Valley Country Club 15835 Pauma Valley Drive Pauma Valley, CA 92061 Cheryl W. Grise Director Retired Executive Vice President Northeast Utilities 24 Stratford Road West Hartford, CT 06117 R. Glenn Hubbard Director Dean and Russell L. Carson Professor of Finance and Economics Graduate School of Business Columbia University Uris Hall 3022 Broadway New York, NY 10027-6902 John M. Keane Director Co-Founder and Senior Managing Director Keane Advisors, LLC 2020 K St., N.W. Washington, DC 20006 James M. Kilts Director Partner Centerview Partners Management, LLC 16 School Street Rye, NY 10580 Hugh B. Price Director Senior Fellow Brookings Institution 1775 Massachusetts Avenue, N.W. Washington, DC 20036 David Satcher Director Director of Satcher Health Leadership Institute and Center of Excellence on Health Disparities Morehouse School of Medicine 720 Westview Drive, S.W. Suite #238 Atlanta, GA 30310-1495 Kenton J. Sicchitano Director Retired Global Managing Partner PricewaterhouseCoopers, LLC 25 Phillips Pond Road Natick, MA 01760 William C. Steere, Jr. Director Retired Chairman of the Board and Chief Executive Officer Pfizer, Inc. 235 East 42nd Street, 22nd Floor New York, NY 10017 Lulu C. Wang Director Chief Executive Officer Tupelo Capital Management LLC 12 E. 49th Street, #17 New York, NY 10017
Set forth below is a list of certain principal officers of MetLife. The principal business address of each officer of MetLife is 200 Park Avenue, New York, New York 10166
Name Position with MetLife ------------------------ --------------------------------------------------------- C. Robert Henrikson Chairman of the Board, President and Chief Executive Officer Gwenn L. Carr Senior Vice President and Secretary Steven A. Kandarian Executive Vice President and Chief Investment Officer James L. Lipscomb Executive Vice President and General Counsel Maria R. Morris Executive Vice President, Technology and Operations William J. Mullaney President, Institutional Business Joseph J. Prochaska, Jr. Executive Vice President and Chief Accounting Officer William J. Toppeta President, International Business Lisa M. Weber President, Individual Business William J. Wheeler Executive Vice President and Chief Financial Officer
II-3 ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT. The registrant is a separate account of Metropolitan Life Insurance Company under the New York Insurance law. Under said law the assets allocated to the separate account are the property of Metropolitan Life Insurance Company, which is a wholly-owned subsidiary of MetLife, Inc. The following outline indicates those persons who are controlled by or under common control with Metropolitan Life Insurance Company: II-4 ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 2008 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2008. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, (if any)) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Bank National Association (USA) C. Exeter Reassurance Company, Ltd. (Bermuda) D. MetLife Taiwan Insurance Company Limited (Taiwan) E. Metropolitan Tower Life Insurance Company (DE) 1. TH Tower NGP, LLC (DE) 2. Partners Tower, L.P. (DE) - a 99% limited partnership interest of Partners Tower, L.P. is held by Metropolitan Tower Life Insurance Company and 1% general partnership interest is held by TH Tower NGP, LLC (DE) 3. TH Tower Leasing, LLC (DE) 4. MetLife Reinsurance Company of Vermont (VT) 5. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 6. Plaza Drive Properties, LLC (DE) 7. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. F. MetLife Pensiones Mexico S.A. (Mexico)- 97.4738% is owned by MetLife, Inc. and 2.5262% is owned by MetLife International Holdings, Inc. G. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by MetLife, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Seguros de Vida S.A. (Chile)- 99.99% is owned by MetLife Chile Inversiones Limitada and 0.01% is owned by MetLife International Holdings, Inc. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile)- 99.99% is owned by MetLife Chile Seguros de Vida S.A. and 0.01% is owned by MetLife Chile Inversiones Limitada. H. MetLife Mexico S.A. (Mexico)- 98.70541% is owned by MetLife, Inc., 1.29459% is owned by MetLife International Holdings, Inc. 1. MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. a) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. b) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. c) MetA SIEFORE Adicional, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. d) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. e) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. f) Met5 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and .01% is owned by MetLife Mexico S.A. 2. ML Capacitacion Comercial S.A. de C.V. (Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. I. MetLife Mexico Servicios, S.A. de C.V. (Mexico)- 98% is owned by MetLife, Inc. and 2% is owned by MetLife International Holdings, Inc. J. Metropolitan Life Seguros de Vida S.A. (Uruguay) K. MetLife Securities, Inc. (DE) L. Enterprise General Insurance Agency, Inc. (DE) 1. MetLife General Insurance Agency of Texas, Inc. (DE) 2. MetLife General Insurance Agency of Massachusetts, Inc. (MA) 1 M. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. Met P&C Managing General Agency, Inc. (TX) 5. MetLife Auto & Home Insurance Agency, Inc. (RI) 6. Metropolitan Group Property and Casualty Insurance Company (RI) a) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) 7. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 8. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) N. Cova Corporation (MO) 1. Texas Life Insurance Company (TX) O. MetLife Investors Insurance Company (MO) P. First MetLife Investors Insurance Company (NY) Q. Walnut Street Securities, Inc. (MO) R. Newbury Insurance Company, Limited (BERMUDA) S. MetLife Investors Group, Inc. (DE) 1. MetLife Investors Distribution Company (MO) 2. Met Investors Advisory, LLC (DE) 3. MetLife Investors Financial Agency, Inc. (TX) 2 T. MetLife International Holdings, Inc. (DE) 1. MetLife Mexico Cares, S.A. de C.V. (Mexico) a) Fundacion MetLife Mexico, A.C. (Mexico) 2. Natiloportem Holdings, Inc. (DE) a) Servicios Administrativos Gen, S.A. de C.V. (Mexico) i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. 3. MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, Inc. and 74% is owned by third parties. 4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99924% is owned by MetLife International Holdings, Inc. and 0.00076% is owned by Natiloporterm Holdings, Inc. 5. MetLife Seguros de Vida S.A. (Argentina)- 95.2499% is owned by MetLife International Holdings, Inc. and 4.7473% is owned by Natiloportem Holdings, Inc. 6. MetLife Insurance Company of Korea Limited (South Korea)- 14.64% of MetLife Insurance Company of Korea Limited is owned by MetLife, Mexico, S.A. and 85.36% is owned by Metlife International Holdings, Inc. 7. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)- 66.6617540% is owned by MetLife International Holdings, Inc. and 33.3382457% is owned by MetLife Worldwide Holdings, Inc. and 0.0000003% is owned by Natiloportem Holdings, Inc. 8. MetLife Global, Inc. (DE) 9. MetLife Administradora de Fundos Multipatrocinados Ltda (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. 10. MetLife Insurance Limited (United Kingdom) 11. MetLife General Insurance Limited (Australia) 12. MetLife Limited (United Kingdom) 13. MetLife Insurance S.A./NV (Belgium) 14. MetLife Services Limited (United Kingdom) 15. MetLife Insurance Limited (Australia) a) MetLife Investments Pty Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investment Pty Limited. MetLife Investments Pty Limited is a wholly owned subsidiary of MetLife Insurance Limited. b) MetLife Services (Singapore) PTE Limited (Australia) 16. MetLife Seguros de Retiro S.A. (Argentina) - 96.8819% is owned by MetLife International Holdings, Inc. and 3.1180% is owned by Natiloportem Holdings, Inc. 17. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, Inc. and 94.9999% is owned by MetLife International Holdings Inc. 18. Compania Previsional MetLife S.A. (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. (a) Met AFJP S.A. (Argentina) - 75.4088% of the shares of Met AFJP S.A. are held by Compania Previsional MetLife SA, 19.5912% is owned by MetLife Seguros de Vida SA, 3.9689% is held by Natiloportem Holdings, Inc. and 1.0310% is held by MetLife Seguros de Retiro SA. 19. MetLife Worldwide Holdings, Inc. (DE) a) MetLife Towarzystwo Ubezpieczen na Zycie Spolka Akcyjna. (Poland) b) MetLife Direct Co., Ltd. (Japan) c) MetLife Limited (Hong Kong) U. Metropolitan Life Insurance Company (NY) 1. 334 Madison Euro Investments, Inc. (DE) a) Park Twenty Three Investments Company (United Kingdom)- 1% voting control of Park Twenty Three Investments Company is held by St. James Fleet Investments Two Limited. 1% of the shares of Park Twenty Three Investments Company is held by Metropolitan Life Insurance Company. 99% is owned by 334 Madison Euro Investment, Inc. i) Convent Station Euro Investments Four Company (United Kingdom)- 1% voting control of Convent Station Euro Investments Four Company is held by 334 Madison Euro Investments, Inc. as nominee for Park Twenty Three Investments Company. 99% is owned by Park Twenty Three Investments Company. 2. St. James Fleet Investments Two Limited (Cayman Islands)- 34% of the shares of St. James Fleet Investments Two Limited is held by Metropolitan Life Insurance Company. 3. One Madison Investments (Cayco) Limited (Cayman Islands)- 10.1% voting control of One Madison Investments (Cayco) Limited is held by Convent Station Euro Investments Four Company. 89.9% of the shares of One Madison Investments (Cayco) Limited is held by Metropolitan Life Insurance Company. 4. CRB Co, Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000 preferred non-voting shares and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 5. GA Holding Corp. (MA) 3 6. Thorngate, LLC (DE) 7. Alternative Fuel I, LLC (DE) 8. Transmountain Land & Livestock Company (MT) 9. MetPark Funding, Inc. (DE) 10. HPZ Assets LLC (DE) 11. Missouri Reinsurance (Barbados), Inc. (Barbados) 12. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 13. MetLife Real Estate Cayman Company (Cayman Islands) 14. Metropolitan Marine Way Investments Limited (Canada) 15. MetLife Private Equity Holdings, LLC (DE) 16. 23rd Street Investments, Inc. (DE) a) Mezzanine Investment Limited Partnership-BDR (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. b) Mezzanine Investment Limited Partnership-LG (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. c) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. d) MetLife Capital Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc., 99% Limited Partnership Interest is held by Metropolitan Life Insurance Company. 17. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 18. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 4 19. Bond Trust Account A (MA) 20. MetLife Investments Asia Limited (Hong Kong). 21. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 22. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 23. New England Life Insurance Company (MA) a) MetLife Advisers, LLC (MA) b) New England Securities Corporation (MA) 24. GenAmerica Financial, LLC (MO) a) GenAmerica Capital I (DE) b) General American Life Insurance Company (MO) i) GenAmerica Management Corporation (MO) 5 25. Corporate Real Estate Holdings, LLC (DE) 26. Ten Park SPC (CAYMAN ISLANDS ) - 1% voting control of Ten Park SPC is held by 23rd Street Investments, Inc. 27. MetLife Tower Resources Group, Inc. (DE) 28. Headland - Pacific Palisades, LLC (CA) 29. Headland Properties Associates (CA) - 1% is owned by Headland - Pacific Palisades, LLC and 99% is owned by Metropolitan Life Insurance Company. 30. Krisman, Inc. (MO) 31. Special Multi-Asset Receivables Trust (DE) 32. White Oak Royalty Company (OK) 33. 500 Grant Street GP LLC (DE) 34. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC 35. MetLife Canada/MetVie Canada (Canada) 36. MetLife Retirement Services LLC (NJ) a) MetLife Investment Funds Services LLC (NJ) (i) MetLife Investment Funds Management LLC (NJ) (ii) MetLife Associates LLC (DE) 37. Euro CL Investments LLC (DE) 38. MEX DF Properties, LLC (DE) 39. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company 40. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (UK) 41. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 42. MLIC Asset Holdings, LLC (DE) 43. 85 Brood Street LLC (CT) 44. The Building at 575 LLC (DE) V. MetLife Capital Trust III (DE) W. MetLife Capital Trust IV (DE) X. MetLife Insurance Company of Connecticut (CT) 1. MetLife Property Ventures Canada ULC (Canada) 2. Pilgrim Alternative Investments Opportunity Fund I, LLC (DE) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party. 3. Pilgrim Alternative Investments Opportunity Fund III Associates, LLC (CT) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party. 4. Pilgrim Investments Highland Park, LLC (DE) 5. Metropolitan Connecticut Properties Ventures, LLC (DE) 6. MetLife Canadian Property Ventures LLC (NY) 7. Euro TI Investments LLC (DE) 8. Greenwich Street Investments, LLC (DE) a) Greenwich Street Capital Offshore Fund, Ltd. (Virgin Islands) b) Greenwich Street Investments, L.P. (DE) 9. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company of Connecticut. 10. Plaza LLC (CT) a) Tower Square Securities, Inc. (CT) 11. TIC European Real Estate LP, LLC (DE) 12. MetLife European Holdings, Inc. (UK) a) MetLife Europe Limited (IRELAND) i) MetLife Pensions Trustees Limited (UK) b) MetLife Assurance Limited (UK) 13. Travelers International Investments Ltd. (Cayman Islands) 14. Euro TL Investments LLC (DE) 15. Corrigan TLP LLC (DE) 16. TLA Holdings LLC (DE) a) The Prospect Company (DE) i) Panther Valley, Inc. (NJ) 17. TRAL & Co. (CT) - TRAL & Co. is a general partnership. Its partners are MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company. 18. Tribeca Distressed Securities, L.L.C. (DE) 19. MetLife Investors USA Insurance Comapny (DE) Y. MetLife Reinsurance Company of South Carolina (SC) Z. MetLife Investment Advisors Company, LLC (DE) AA. MetLife Standby I, LLC (DE) 1. MetLife Exchange Trust I (DE) BB. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) i) MetLife Services East Private Limited (India) ii) MetLife Global Operations Support Center Private Limited - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, Inc. CC. SafeGuard Health Enterprises, Inc. (DE) 1. SafeGuard Dental Services, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) DD. MetLife Capital Trust X (DE) EE. Cova Life Management Company (DE) FF. MetLife Reinsurance Company of Charleston (SC) GG. Federal Flood Certification Corp (TX) HH. MetLife Planos Odontologicos Ltda. (Brazil) II. Metropolitan Realty Management, Inc. (DE) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. In addition to the entities shown on the organizational chart, MetLife, Inc. (or where indicated, a subsidiary) also owns interests in the following entities: 1) Metropolitan Life Insurance Company owns varying interests in certain mutual funds distributed by its affiliates. These ownership interests are generally expected to decrease as shares of the funds are purchased by unaffiliated investors. 2) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited partnerships, are investment vehicles through which investments in certain entities are held. A wholly owned subsidiary of Metropolitan Life Insurance Company serves as the general partner of the limited partnerships and Metropolitan Life Insurance Company directly owns a 99% limited partnership interest in each MILP. The MILPs have various ownership and/or debt interests in certain companies. 3) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. NOTE: THE METLIFE, INC. ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE JOINT ---- VENTURES AND PARTNERSHIPS OF WHICH METLIFE, INC. AND/OR ITS SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE SUBSIDIARIES HAVE ALSO BEEN OMITTED. 6 ITEM 27. NUMBER OF CONTRACTOWNERS. As of February 28, 2009 Non-Qualified: 80,077 Qualified: 181,616 ITEM 28. INDEMNIFICATION UNDERTAKING PURSUANT TO RULE 484(B)(1) UNDER THE SECURITIES ACT OF 1933 MetLife, Inc. has secured a Financial Institutions Bond in the amount of $50,000,000, subject to a $5,000,000 deductible. MetLife, Inc. also maintains a Directors & Officers Liability and Corporate Reimbursement Insurance Policy with a limit of $400 million. The directors and officers of Metropolitan Life Insurance Company ("Metropolitan"), a subsidiary of MetLife, Inc. are also covered under the Financial Institutions Bond as well as under the directors' and officers' liability policy. A provision in Metropolitans by-laws provides for the indemnification (under certain circumstances) of individuals serving as directors or officers of Metropolitan. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Metropolitan pursuant to the foregoing provisions, or otherwise, Metropolitan has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Metropolitan of expenses incurred or paid by a director, officer or controlling person of Metropolitan in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Metropolitan will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 29. PRINCIPAL UNDERWRITERS. (a) MetLife Investors Distribution Company is the principal underwriter and distributor of the Contracts. MetLife Investors Distribution Company is the principal underwriter for the following investment companies: Met Investors Series Trust Metropolitan Series Fund, Inc. Metropolitan Life Separate Account E Metropolitan Life Separate Account UL Metropolitan Tower Separate Account One Metropolitan Tower Separate Account Two MetLife Investors USA Separate Account A MetLife Investors USA Variable Life Account A MetLife Investors Variable Annuity Account One MetLife Investors Variable Annuity Account Five MetLife Investors Variable Life Account One MetLife Investors Variable Life Account Five First MetLife Investors Variable Annuity Account One General American Separate Account Eleven General American Separate Account Twenty- Eight General American Separate Account Twenty- Nine General American Separate Account Two Security Equity Separate Account 26 Security Equity Separate Account 27 MetLife of CT Separate Account Eleven for Variable Annuities MetLife of CT Separate Account QPN for Variable Annuities MetLife of CT Fund UL for Variable Life Insurance MetLife of CT Fund UL III for Variable Life Insurance Metropolitan Life Variable Annuity Separate Account I Metropolitan Life Variable Annuity Separate Account II Paragon Separate Account A Paragon Separate Account B Paragon Separate Account C and Paragon Separate Account D. (b) MetLife Investors Distribution Company is the principal underwriter for the Contracts. The following persons are the officers and directors of MetLife Investors Distribution Company. The principal business address for MetLife Investors Distribution Company is 5 Park Plaza, Suite 1900, Irvine, CA 92614. NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH UNDERWRITER -------------------------- --------------------------------------------------- Michael K. Farrell Director 10 Park Avenue, 1st Floor Morristown, NJ 07962 Craig W. Markham Director and Vice President 13045 Tesson Ferry Road St. Louis, MO 63128 William J. Toppeta Director 1095 Avenue of the Americas New York, NY 10036 Paul A. Sylvester President, National Sales Manager-Annuities & LTC 10 Park Avenue Morristown, NJ 07962 Elizabeth M. Forget Executive Vice President, Investment Fund 1095 Avenue of the Management & Marketing Americas New York, NY 10036 Paul A. LaPiana Executive Vice President, National Sales 5 Park Plaza Manager-Life Suite 1900 Irvine, CA 92614 Richard C. Pearson Executive Vice President, General Counsel and 5 Park Plaza Secretary Suite 1900 Irvine, CA 92614 Andrew Aiello Senior Vice President, Channel Head-National 5 Park Plaza Accounts Suite 1900 Irvine, CA 92614 Jeffrey A. Barker Senior Vice President, Channel Head-Independent One MetLife Plaza Accounts 27-01 Queens Plaza North Long Island City, NY 11101 Douglas P. Rodgers Senior Vice President, Channel Head-LTC 10 Park Avenue, 1st Floor Morristown, NJ 07962 John C. Kennedy Senior Vice President, National Sales Manager, One MetLife Plaza Bank and Broker/Dealer 27-01 Queens Plaza North Long Island City, NY 11101 Curtis Wohlers Senior Vice President, National Sales Manager, One MetLife Plaza Independent Planners and Insurance Advisors 27-01 Queens Plaza North Long Island City, NY 11101 Jay S. Kaduson Senior Vice President 10 Park Avenue Morristown, NJ 07962 Eric T. Steigerwalt Treasurer 1095 Avenue of the Americas New York, NY 10036 Peter Gruppuso Vice President and Chief Financial Officer 485-E US Highway 1 South Iselin, NJ 08830 Debora L. Buffington Vice President, Director of Compliance 5 Park Plaza Suite 1900 Irvine, CA 92614 David DeCarlo Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Paul M. Kos Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Deron J. Richens Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Cathy Sturdivant Vice President 5 Park Plaza Suite 1900 Irvine, CA 92614 Paulina Vakouros Vice President 1095 Avenue of the Americas New York, NY 10036 Jonnie L. Crawford Assistant Secretary 5 Park Plaza Suite 1900 Irvine, CA 92614 James W. Koeger Assistant Treasurer 13045 Jesson Ferry Rd St. Louis, MO 63128 James R. Allen Assistant Treasurer 5 Park Plaza Suite 1900 Irvine, CA 92614 Joseph A. Zdeb Assistant Vice President 1095 Avenue of the Americas New York, NY 10036 Timothy J. McLinden Assistant Vice President 1095 Avenue of the Americas New York, NY 10036 (c) Compensation from the Registrant. The following commissions and other compensation were received by the Distributor, directly or indirectly, from the Registrant during the Registrant's last fiscal year:
(2) (1) NET UNDERWRITING (3) (4) (5) NAME OF PRINCIPAL DISCOUNTS AND COMPENSATION ON BROKERAGE OTHER UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS COMPENSATION ----------------------------------------- ---------------- --------------- ----------- ------------ MetLife Investors Distribution Company $144,689,685 $0 $0 $0
II-5 Item 30. Location of Account and Records. Metropolitan Life Insurance Company 200 Park Avenue New York, N.Y. 10166 Item 31. Management Services. Not Applicable Item 32. Undertakings. (a) The undersigned registrant hereby undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the financial statements in this registration statement are not more than 16 months old for as long as payments under these variable annuity contracts may be accepted. (b) The undersigned registrant hereby undertakes to include a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information. (c) The undersigned registrant hereby undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this form promptly upon written or oral request. (d) Metropolitan Life Insurance Company represents that the fees and charges deducted under the Deferred Annuity described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life Insurance Company under the Deferred Annuity. II-6 SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(B) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the City of New York, and State of New York on this 15th day of April, 2009. Metropolitan Life Separate Account E (Registrant) By: Metropolitan Life Insurance Company (Depositor) /s/ Paul G. Cellupica By: ______________________________________________ Paul G. Cellupica Chief Counsel, Securities Regulation and Corporate Services Metropolitan Life Insurance Company (Depositor) /s/ Paul G. Cellupica By: ______________________________________________ Paul G. Cellupica Chief Counsel, Securities Regulation and Corporate Services II-7 SIGNATURES As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- * Chairman, President and Chief Executive ______________________________________ Officer and Director C. Robert Henrikson * Executive Vice President and ______________________________________ Chief Financial Officer William J. Wheeler * Executive Vice President, ______________________________________ and Chief Accounting Officer Joseph J. Prochaska * Director ______________________________________ Sylvia Mathews Burwell * Director ______________________________________ Eduardo Castro-Wright * Director ______________________________________ Burton A. Dole, Jr. * Director _______________________________________ Cheryl W. Grise * Director ______________________________________ R. Glenn Hubbard * Director ______________________________________ John M. Keane * Director ______________________________________ James M. Kilts * Director ______________________________________ Hugh B. Price * Director ______________________________________ David Satcher * Director ______________________________________ Kenton J. Sicchitano * Director ______________________________________ William C. Steere, Jr. * Director ______________________________________ Lulu C. Wang *By: /s/ Myra L. Saul, Esq. _________________________________ Myra L. Saul, Esq. Attorney-in-Fact April 15, 2009 II-8