N-3 1 file002.txt FORM N-3 REGISTRATION STATEMENT Registration No. 333- -------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM N-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X| Pre-Effective Amendment No. __ | | Post-Effective Amendment No. __ | | AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | | Amendment No. __ | | --------------------------------------- THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Exact Name of Registrant) THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Name of Insurance Company) 1290 Avenue of the Americas, New York, New York 10104 (Address of Insurance Company's Principal Executive Offices) Insurance Company's Telephone Number, including Area Code: (212) 554-1234 --------------------------------------- ROBIN WAGNER Vice President and Counsel The Equitable Life Assurance Society of the United States 1290 Avenue of the Americas, New York, New York 10104 (Name and Address of Agent for Service) --------------------------------------- Please send copies of all communications to: PETER E. PANARITES Foley & Lardner Washington Harbour 3000 K Street, N.W., Washington, D.C. 20036 --------------------------------------- -------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
---------------------------------------------------------------------------------------------------------------------------- Title of Securities Being Amount Being Registered Proposed Maximum Proposed Maximum Amount of Registration Registered Offering Price per Unit* Aggregate Offering Fee Price* ---------------------------------------------------------------------------------------------------------------------------- Units of Interest $10,000,000 .00025 $10,000,000 $2,500 Under Group Annuity Contract ----------------------------------------------------------------------------------------------------------------------------
*Estimated solely for purpose of determining the registration fee. (1) The Contract does not provide for a predetermined amount or number of units Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this registration statement. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Retirement Investment Account PROSPECTUS DATED MAY 1, 2001 Please read this prospectus and keep it for future reference. It contains important information that you should know before purchasing, or taking any other action under a policy. Also, at the end of this prospectus you will find attached the prospectus for EQ Advisors Trust, which contains important information about its Portfolios. -------------------------------------------------------------------------------- ABOUT THE RETIREMENT INVESTMENT ACCOUNT The Retirement Investment Account ("RIA") is an investment program that allows employer plan assets to accumulate on a tax-deferred basis. Thirty-seven investment funds ("Funds") and a guaranteed interest option ("investment options") are available under RIA. The Funds and guaranteed interest option comprise the "investment options" covered by this prospectus. RIA is offered under a group annuity contract issued by THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. -------------------------------------------------------------------------- FUNDS*+ -------------------------------------------------------------------------- POOLED SEPARATE ACCOUNTS -------------------------------------------------------------------------- o Alliance Balanced -- Separate o Alliance Common Stock -- Account No. 10* Separate Account No. 4 o Alliance Bond -- Separate Account o Alliance Mid Cap Growth Fund -- No. 13 Separate Account No. 3(1) -------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 -------------------------------------------------------------------------- o EQ/Alliance Global o EQ/Equity 500 Index(3) o EQ/Alliance Growth and Income o EQ/Evergreen Omega(4) o EQ/Alliance Growth Investors o EQ/FI Mid Cap o EQ/Alliance High Yield o EQ/FI Small/Mid Cap Value(5) o EQ/Alliance Intermediate o EQ/Janus Large Cap Growth Government Securities o EQ/Lazard Small Cap Value o EQ/Alliance International o EQ/Mercury Basic Value Equity o EQ/Alliance Money Market o EQ/MFS Emerging Growth o EQ/Alliance Premier Growth Companies o EQ/Alliance Quality Bond o EQ/MFS Investors Trust(6) o EQ/Alliance Small Cap Growth o EQ/MFS Research o EQ/Alliance Technology o EQ/Morgan Stanley Emerging o EQ/AXP New Dimensions Markets Equity o EQ/AXP Strategy Aggressive o EQ/Putnam Growth & Income o EQ/Bernstein Diversified Value(2) Value o EQ/Calvert Socially Responsible o EQ/Putnam International Equity o EQ/Capital Guardian International o EQ/Putnam Investors Growth o EQ/Capital Guardian Research o EQ/T. Rowe Price International o EQ/Capital Guardian U.S. Equity Stock -------------------------------------------------------------------------- * See "Combination of certain investment options and separate accounts" on page no. 46 of this Prospectus. + Effective on May 18, 2001 the names of the investment options held in Separate Account No. 66 will include "EQ/." (1) Formerly named "Alliance Aggressive Stock -- Separate Account No. 3." (2) This reflects the merger of the Lazard Large Cap Value Portfolio into the T. Rowe Price Equity Income Portfolio and change in name. (3) Formerly named "Alliance Equity Index." (4) Formerly named "EQ/Evergreen." (5) Formerly named "Warburg Pincus Small Company Value." (6) Formerly named "MFS Growth with Income." The Alliance Bond, Alliance Balanced, Alliance Common Stock, and Alliance Mid Cap Growth Funds are managed by Equitable Life. The Alliance Bond Fund is available only to employer plans that signed an agreement to invest monies in the Alliance Bond Fund before June 1, 1994. Separate Account No. 66 Funds invest in shares of a corresponding portfolio ("portfolio") of EQ Advisors Trust. In each case, the Funds and the corresponding portfolios have the same name. You should also read the attached prospectus for EQ Advisors Trust and keep it for future reference. GUARANTEED INTEREST OPTION. The guaranteed interest option credits interest daily and we guarantee principal. Registration statements relating to this offering have been filed with the Securities and Exchange Commission ("SEC"). The Statement of Additional Information ("SAI") dated May 1, 2001, is a part of the registration statement. The SAI is available free of charge. You may request one by writing to our RIA service office or calling 1-800-967-4560. The SAI has been incorporated by reference into this prospectus. This prospectus and the SAI can also be obtained from the SEC's Website at http://www.sec.gov. The table of contents for the SAI appears at the back of this prospectus. THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL. X00033 Contents of this prospectus ----- 2 -------------------------------------------------------------------------------- RETIREMENT INVESTMENT ACCOUNT ----------------------------------------------------------- Index of key words and phrases 4 Who is Equitable Life? 5 How to reach us 6 RIA at a glance - key features 7 ----------------------------------------------------------- FEE TABLE 10 ----------------------------------------------------------- Examples 13 Condensed financial information 15 ----------------------------------------------------------- 1 RIA FEATURES AND BENEFITS 15 ----------------------------------------------------------- Investment options 15 The Alliance Bond Fund 15 The Alliance Balanced Fund 16 The Alliance Common Stock Fund 17 The Alliance Mid Cap Growth Fund 17 Investment manager of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds 18 Funds investing in EQ Advisors Trust 18 Risks of investing in the Funds 21 Risk factors -- Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds 21 Change of investment objectives 23 Guaranteed interest option 23 ----------------------------------------------------------- 2 HOW WE VALUE YOUR PLAN BALANCES 25 ----------------------------------------------------------- ------------------------- When we use the words "we," "us" and "our," we mean Equitable Life. When we address the reader of this prospectus with words such as "you" and "your," we generally mean the employer or plan sponsor of the plans considering RIA as an investment vehicle, unless otherwise explained. Further, the terms and conditions of the employer's plan govern the aspects of RIA available to plan participants. Accordingly, participants also should carefully consider the features of their employer's plan, which may be different from the features of RIA described in this prospectus. ----- 3 -------------------------------------------------------------------------------- ---------------------------------------------------------- 3 TRANSFERS 26 ----------------------------------------------------------- Transfers among investment options 26 Special rules applicable to the Alliance Bond Fund 26 Disruptive transfer activity 27 ----------------------------------------------------------- 4 ACCESS TO YOUR PLAN BALANCES 28 ----------------------------------------------------------- Participant loans 28 Choosing benefit payment options 28 ----------------------------------------------------------- 5 RIA 29 ----------------------------------------------------------- Summary of plan choices of RIA 29 Getting started 29 How to make contributions 29 Selecting investment options 30 Allocating program contributions 31 ----------------------------------------------------------- 6 DISTRIBUTIONS 32 ----------------------------------------------------------- ----------------------------------------------------------- 7 OPTIONAL PARTICIPANT RECORDKEEPING SERVICES 34 ----------------------------------------------------------- ----------------------------------------------------------- 8 CHARGES AND EXPENSES 35 ----------------------------------------------------------- Charges reflected in the unit values 35 Indirect expenses borne by the Funds 35 Charges which reduce the number of units 35 Other billing arrangements 37 Individual annuity charges 37 General information on fees and charges 37 ----------------------------------------------------------- 9 TAX INFORMATION 38 ----------------------------------------------------------- Buying a contract to fund a retirement arrangement 38 Tax aspects of contributions to a plan 38 Tax aspects of distributions from a plan 40 Certain rules applicable to plan loans 43 Impact of taxes to Equitable Life 44 Certain rules applicable to plans designed to comply with Section 404(c)of ERISA 44 ----------------------------------------------------------- 10 MORE INFORMATION 45 ----------------------------------------------------------- About changes or terminations 45 IRS disqualification 45 About the separate accounts 45 About EQ Advisors Trust 45 About the general account 46 Combination of certain investment options and separate accounts 46 When we pay proceeds 46 When transaction requests are effective 47 Voting rights 47 About legal proceedings 47 About our independent accountants 47 About the trustee 48 Reports we provide and available information 48 Acceptance and responsibilities 48 About registered units 48 Assignment and creditors' claims 48 Distribution of the contracts 49 Commissions and service fees we pay 49 ----------------------------------------------------------- APPENDIX: CONDENSED FINANCIAL INFORMATION A-1 ----------------------------------------------------------- ----------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS ----------------------------------------------------------- Index of key words and phrases ----- 4 -------------------------------------------------------------------------------- Below is an index of key words and phrases used in this prospectus. The index will refer you to the page where particular terms are defined or explained. This index should help you locate more information on the terms used in this prospectus. PAGE business day 25 benefit payment options 28 Code 8, 38 contracts 29 contributions 29 CWC 35 current rate 23 disruptive transfer activity 27 DOL 30 ERISA 7, 44 EQ Advisors Trust 18, 45 Equitable Life 5 exclusive funding employer plan 29 financial professional 49 Funds cover guaranteed interest option 23 IRS 38 investment options 15 market timing 27 Master Retirement Trust 29 minimum rate 23 optional participant recordkeeping service 34 PRS 7, 37 partial funding employer plan 29 participant-directed plans 26 portfolios cover QDRO 48 RIA cover SAI cover separate accounts 45 trustee-directed plans 26 unit 25 unit value 25 Who is Equitable Life? ----- 5 -------------------------------------------------------------------------------- We are The Equitable Life Assurance Society of the United States ("Equitable Life"), a New York stock life insurance corporation. We have been doing business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously, The Equitable Companies Incorporated). The sole shareholder of AXA Financial, Inc. is AXA, a French holding company for an international group of insurance and related financial services companies. As the sole shareholder, and under its other arrangements with Equitable Life and Equitable Life's parent, AXA exercises significant influence over the operations and capital structure of Equitable Life and its parent. No company other than Equitable Life, however, has any legal responsibility to pay amounts that Equitable Life owes under the contract. AXA Financial, Inc. and its consolidated subsidiaries managed approximately $483.1 billion in assets as of December 31, 2000. For over 100 years Equitable Life has been among the largest insurance companies in the United States. We are licensed to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is located at 1290 Avenue of the Americas, New York, N.Y. 10104. ----- 6 -------------------------------------------------------------------------------- HOW TO REACH US You may communicate with our processing office as listed below for the purposes described. Certain methods of contacting us, such as by telephone or electronically may be unavailable or delayed (for example our facsimile service may not be available at all times and/or we may be unavailable due to emergency closing). In addition, the level and type of service available may be restricted based on criteria established by us. We reserve the right to limit access to these services if we determine that you are engaged in a disruptive transfer activity, such as "market timing" (see "Disruptive transfer activity" in "Transfers"). You can reach us to obtain: o Participation agreements, or enrollment or other forms used in RIA o Unit values and other values under your plan o Any other information or materials that we provide in connection with RIA INFORMATION ON JOINING RIA ------------------------------------------------------------ BY PHONE: ------------------------------------------------------------ 1-800-967-4560 or (201) 583-2302 (9 AM to 5 PM Eastern time) Fax: (201) 583-2304, 2305, or 2306 ------------------------------------------------------------ BY REGULAR MAIL: ------------------------------------------------------------ RIA Service Office c/o Equitable Life 200 Plaza Drive, 1st floor Secaucus, NJ 07094 ------------------------------------------------------------ BY REGISTERED, CERTIFIED, OR OVERNIGHT DELIVERY: ------------------------------------------------------------ RIA Service Office c/o Equitable Life 200 Plaza Drive, 1st floor Secaucus, NJ 07094 INFORMATION ONCE YOU JOIN RIA ------------------------------------------------------------ BY REGULAR MAIL: (CORRESPONDENCE): ------------------------------------------------------------ Equitable Life 200 Plaza Drive, 1st floor Secaucus, NJ 07094 ------------------------------------------------------------ FOR CONTRIBUTION CHECKS ONLY: ------------------------------------------------------------ Equitable Life RIA/EPP P.O. Box 13503 Newark, NJ 07188 ------------------------------------------------------------ FOR OVERNIGHT DELIVERY FOR CONTRIBUTION CHECKS ONLY: ------------------------------------------------------------ Bank One, N.A. Processing Center 300 Harmon Meadow Boulevard Secaucus, NJ 07094 BY PHONE: 1-800-967-4560 (service consultants are available weekdays 9 a.m. to 5 p.m. Eastern time). To obtain pre-recorded Fund unit values, call 1-800-967-4560. NO PERSON IS AUTHORIZED BY EQUITABLE LIFE TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND THE SAI, OR IN OTHER PRINTED OR WRITTEN MATERIAL ISSUED BY EQUITABLE LIFE. YOU SHOULD NOT RELY ON ANY OTHER INFORMATION OR REPRESENTATION. RIA at a glance -- key features ----- 7 -------------------------------------------------------------------------------- EMPLOYER RIA is an investment program designed for employer plans PLAN that qualify for tax-favored treatment under Section 401(a) ARRANGEMENTS of the Internal Revenue Code of 1986, as amended ("Code"). THAT CAN Eligible employer plans include defined benefit plans, USE THE defined contribution plans or profit-sharing plans, RIA CONTRACT including 401(k) plans. These employer plans generally also must meet the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Employer plan arrangements can choose RIA: o As the exclusive funding vehicle for an employer plan. If you choose this option, the annual amount of plan contributions must be at least $10,000. o As a partial investment funding vehicle for an employer plan. Under this option, the aggregate amount of contributions in the initial participation year must be at least $50,000, and the annual aggregate amount of contributions thereafter must be at least $25,000. The guaranteed interest option is not available. Also, a partial funding agreement must be completed. -------------------------------------------------------------------------------- RIA FEATURES o Thirty-seven investment options. The maximum number of active investment options that may be selected at any time is 25. o Benefit distribution payments. o Optional Participant Recordkeeping Services ("PRS"), which includes participant-level recordkeeping and making benefit payments. o Available for trustee-directed or participant-directed plans. ------------------------------------------------------------ A participant-directed employer plan, is an employer plan that permits investment direction by plan participants for contribution allocations or transfers among investment options. A trustee-directed employer plan, is an employer plan that permits those same types of investment decisions only by the employer, a trustee or any named fiduciary or an authorized delegate of the plan. ------------------------------------------------------------ -------------------------------------------------------------------------------- CONTRIBUTIONS o Can be allocated to any one option or divided among them. o May be made by check or wire transfer. o Are credited on the day of receipt if accompanied by properly completed forms. -------------------------------------------------------------------------------- TRANSFERS AMONG o Generally, amounts may be transferred among the investment INVESTMENT OPTIONS options. o There is no charge for transfers and no tax liability. o Transfers to the Alliance Bond Fund and from the guaranteed interest option may be subject to limitations. -------------------------------------------------------------------------------- ----- 8 -------------------------------------------------------------------------------- < PROFESSIONAL The Funds are managed by professional investment advisers. INVESTMENT MANAGEMENT -------------------------------------------------------------------------------- GUARANTEED The guaranteed interest option pays interest at guaranteed OPTIONS rates and provides guarantees of principal. -------------------------------------------------------------------------------- TAX CONSIDERATIONS o On earnings No tax on investment earnings o On transfers until withdrawn. No tax on internal transfers among the investment options. ------------------------------------------------------------ Because you are purchasing an annuity contract to fund a qualified employer sponsored retirement arrangement, you should be aware that such annuities do not provide tax deferral benefits beyond those already provided by the Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative features, benefits and costs of these annuities with any other investment that you may use in connection with your retirement plan or arrangement. (For more information, see "Tax Information", below). -------------------------------------------------------------------------------- CHARGES AND o Ongoing operations fee assessed against combined assets EXPENSES invested in investment options including any outstanding loan balance. o Investment management and financial accounting fees and other expenses charged on an investment Fund-by-Fund basis, as applicable. o No sales charges deducted from contributions, but contingent withdrawal charges may apply for non-benefit distributions. o Charges of EQ Advisors Trust portfolios for management fees and other expenses, and 12b-1 fees. o Administrative fee if you purchase an annuity payout option. o Participant recordkeeping (optional) charge per participant annual fee of $25.00. o Loan fee of 1% of loan principal amount at the time the plan loan is made. o Administrative charge for certain Funds of Separate Account No. 66. o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium taxes in your state. This charge is generally deducted from the amount applied to an annuity payout option. -------------------------------------------------------------------------------- BENEFIT o Lump sum. PAYMENT OPTIONS o Installments on a time certain or dollar certain basis. o Variety of fixed annuity benefit payout options as available under an employer's plan. ----- 9 -------------------------------------------------------------------------------- ADDITIONAL o Participant loans (if elected by your employer; some FEATURES restrictions apply). o Quarterly reports showing: o transactions in the investment options during the quarter for the employer plan; o the number of units in the Funds credited to the employer plan; and o the unit values and the balances in all of the investment options as of the end of the quarter. o Automatic confirmation notice to employer/trustee following the processing of a financial investment option transfer. o Annual and semiannual report of the Funds. -------------------------------------------------------------------------------- THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES. For more detailed information we urge you to read the contents of this prospectus, as well as your contract. Please feel free to speak with your financial professional, or call us, if you have any questions. OTHER CONTRACTS We offer a variety of fixed and variable annuity contracts. They may offer features, including investment options, fees and/or charges that are different from those in the contracts offered by this prospectus. Not every contract is offered through the same distributor. Upon request, your financial professional can show you information regarding other Equitable Life annuity contracts that he or she distributes. You can also contact us to find out more about any of the Equitable Life annuity contracts. Fee table ----- 10 -------------------------------------------------------------------------------- The fee table below will help you understand the various charges and expenses that apply under RIA. The table reflects charges that affect plan balances participating in the Funds as well as Fund charges you will directly bear under your contract. The table also shows charges and expenses of the portfolios of EQ Advisors Trust that you will bear indirectly. The only charges shown in the table that apply to the guaranteed interest option are the contingent withdrawal charge and the ongoing operations fee. If an annuity payout benefit is elected, we will impose a $175 charge. Charges designed to approximate certain taxes that may be imposed on us, such as premium taxes in your state may also apply. WE DEDUCT NO SALES LOADS FROM PLAN CONTRIBUTIONS, AND THERE ARE NO TRANSFER OR EXCHANGE FEES WHEN MOVING ASSETS AMONG THE FUNDS. The tables do not include other charges which are specific to the various plans, such as optional participant recordkeeping and loan fees. Also, certain expenses and fees shown in the tables may not apply to your plan. See "Charges and expenses," for more details. THE FUND CHARGES AND FEES ARE EXPRESSED AS AN ANNUAL PERCENTAGE OF AVERAGE NET ASSETS. EQ ADVISORS TRUST FEES AND EXPENSES ARE SHOWN AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO. PARTICIPATING PLAN TRANSACTION EXPENSES: Maximum contingent withdrawal charge (as a percentage of plan balances)(1) ------------ 6% Maximum ------------ Maximum annual ongoing operations fee (as a percentage of plan balances)(2) ----------- 1.25% Maximum -----------
------------------------------------------------------------------------------------------------------------ POOLED SEPARATE ACCOUNT FUNDS ------------------------------------------------------------------------------------------------------------ ALLIANCE ALLIANCE ALLIANCE ALLIANCE BOND BALANCED COMMON MID CAP FUND FUND STOCK FUND GROWTH FUND ------------------------------------------------------------------------------------------------------------ SEPARATE ACCOUNT ANNUAL EXPENSES: Annual investment management fee including financial 0.50% 0.50% 0.50% 0.50% accounting fees (as a percentage of plan balances in each Fund)(3) TRUST ANNUAL EXPENSES: -------------- not applicable -------------- ------------------------------------------------------------------------------------------------------------
----- 11 -------------------------------------------------------------------------------- EQ ADVISORS TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)*
---------------------------------------------------------------------------------------------------------------------------------- SEPARATE NET TOTAL ACCOUNT OTHER ANNUAL ANNUAL EXPENSES EXPENSES EXPENSE (AFTER (AFTER ADMINISTRATIVE MANAGEMENT EXPENSE EXPENSE CHARGE(3)(4) FEES(5) 12B-1 FEES(6) LIMITATION)(7) LIMITATION)(8) ---------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Global 0.05% 0.72% N/A 0.09% 0.86% EQ/Alliance Growth and Income 0.05% 0.58% N/A 0.05% 0.68% EQ/Alliance Growth Investors 0.05% 0.56% N/A 0.06% 0.67% EQ/Alliance High Yield 0.05% 0.60% N/A 0.07% 0.72% EQ/Alliance Intermediate Government Securities 0.05% 0.50% N/A 0.08% 0.63% EQ/Alliance International 0.05% 0.85% N/A 0.29% 1.19% EQ/Alliance Money Market 0.05% 0.34% N/A 0.06% 0.45% EQ/Alliance Premier Growth N/A 0.89% 0.25% 0.01% 1.15% EQ/Alliance Quality Bond 0.05% 0.53% N/A 0.06% 0.64% EQ/Alliance Small Cap Growth 0.05% 0.75% N/A 0.06% 0.86% EQ/Alliance Technology N/A 0.90% 0.25% 0.00% 1.15% EQ/AXP New Dimensions N/A 0.65% 0.25% 0.05% 0.95% EQ/AXP Strategy Aggressive N/A 0.70% 0.25% 0.05% 1.00% EQ/Bernstein Diversified Value N/A 0.65% 0.25% 0.05% 0.95% EQ/Calvert Socially Responsible N/A 0.65% 0.25% 0.15% 1.05% EQ/Capital Guardian International N/A 0.85% 0.25% 0.10% 1.20% EQ/Capital Guardian Research N/A 0.65% 0.25% 0.05% 0.95% EQ/Capital Guardian U.S. Equity N/A 0.65% 0.25% 0.05% 0.95% EQ/Equity 500 Index 0.05% 0.25% N/A 0.06% 0.36% EQ/Evergreen Omega N/A 0.65% 0.25% 0.05% 0.95% EQ/FI Mid Cap N/A 0.70% 0.25% 0.05% 1.00% EQ/FI Small/Mid Cap Value N/A 0.75% 0.25% 0.10% 1.10% EQ/Janus Large Cap Growth N/A 0.90% 0.25% 0.00% 1.15% EQ/Lazard Small Cap Value N/A 0.75% 0.25% 0.10% 1.10% EQ/Mercury Basic Value Equity N/A 0.60% 0.25% 0.10% 0.95% EQ/MFS Emerging Growth Companies N/A 0.62% 0.25% 0.10% 0.97% EQ/MFS Investors Trust N/A 0.60% 0.25% 0.10% 0.95% EQ/MFS Research N/A 0.65% 0.25% 0.05% 0.95% EQ/Morgan Stanley Emerging Markets Equity N/A 1.15% 0.25% 0.40% 1.80% EQ/Putnam Growth & Income Value N/A 0.60% 0.25% 0.10% 0.95% EQ/Putnam International Equity N/A 0.85% 0.25% 0.15% 1.25% EQ/Putnam Investors Growth N/A 0.65% 0.25% 0.05% 0.95% EQ/T. Rowe Price International Stock N/A 0.85% 0.25% 0.15% 1.25% ----------------------------------------------------------------------------------------------------------------------------------
Notes: * See "Combination of certain investment options and separate accounts," on page 46 of this Prospectus. (1) The contingent withdrawal charge is waived in certain circumstances. The charge reduces to 2% of the amount withdrawn in the ninth participation year and cannot be imposed after the ninth anniversary of a plan's participation in RIA. (2) The annual ongoing operations fee is deducted monthly and applied on a decremental scale, declining to 0.50% on the portion of plan balances over $1,000,000, except for plans that adopted RIA before February 9, 1986. ----- 12 -------------------------------------------------------------------------------- (3) The Fund annual expenses and EQ Advisors Trust annual expenses (if applicable) are reflected in the unit value. (4) We reserve the right to increase the separate account administrative charge upon 90 days written notice to the employer. (5) The management fees shown reflect revised management fees, effective May 1, 2000, which were approved by shareholders. The management fee for each portfolio cannot be increased without a vote of each portfolio's shareholders. (6) The Class IB shares of EQ Advisors Trust are subject to fees imposed under a distribution plan adopted by EQ Advisors Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be increased for the life of the contracts. (7) The amount shown as "Other Expenses" will fluctuate from year to year depending on actual expenses. Since initial seed capital was invested for the EQ/Alliance Technology portfolio on May 1, 2000, "Other Expenses" shown have been annualized. Initial seed capital was invested for the EQ/Janus Large Cap Growth, EQ/FI Mid Cap, EQ/AXP New Dimensions and EQ/AXP Strategy Aggressive Portfolios, on September 1, 2000; thus, "other expenses" shown are estimated. See footnote 8 for any expense limitation agreements. (8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense limitation agreement with respect to certain Portfolios. Under this agreement Equitable Life has agreed to waive or limit its fees and assume other expenses of each of these Portfolios, if necessary, in an amount that limits each Portfolio's Total Annual Expenses (exclusive of interest, taxes, brokerage commissions, capitalized expenditures, and extraordinary expenses) to not more than the amounts specified above as "Net Total Annual Expenses." Each Portfolio may at a later date make a reimbursement to Equitable Life for any of the management fees waived or limited and other expenses assumed and paid by Equitable Life pursuant to the expense limitation agreement provided that, among other things, such Portfolio has reached a sufficient size to permit such reimbursement to be made and provided that the Portfolio's current annual operating expenses do not exceed the operating expense limit determined for such portfolio. For more information see the prospectus for EQ Advisors Trust. The amount shown for the EQ/Morgan Stanley Emerging Markets Equity Portfolio, reflects a .05% decrease in the portfolio's expense waiver. This decrease in the expense waiver was effective on May 1, 2001. The following chart indicates other expenses before any fee waivers and/or expense reimbursements that would have applied to each Portfolio. Portfolios that are not listed below do not have an expense limitation arrangement in effect.
------------------------------------------------------ ------------------------------------------------------ OTHER EXPENSES OTHER EXPENSES (BEFORE ANY FEE (BEFORE ANY FEE WAIVERS AND/OR WAIVERS AND/OR EXPENSE EXPENSE PORTFOLIO NAME REIMBURSEMENTS) PORTFOLIO NAME REIMBURSEMENTS) ------------------------------------------------------ ------------------------------------------------------ EQ/Alliance Premier Growth 0.05% EQ/Janus Large Cap Growth 0.22% EQ/Alliance Technology 0.06% EQ/Lazard Small Cap Value 0.14% EQ/AXP New Dimensions 1.23% EQ/Mercury Basic Value Equity 0.10% EQ/AXP Strategy Aggressive 0.57% EQ/MFS Investors Trust 0.13% EQ/Bernstein Diversified Value 0.15% EQ/MFS Research 0.07% EQ/Calvert Socially Responsible 1.47% EQ/Morgan Stanley Emerging EQ/Capital Guardian International 0.20% Markets Equity 0.52% EQ/Capital Guardian Research 0.16% EQ/Putnam Growth & Income Value 0.12% EQ/Capital Guardian U.S. Equity 0.11% EQ/Putnam International Equity 0.22% EQ/Evergreen Omega 0.83% EQ/Putnam Investors Growth 0.10% EQ/FI Mid Cap 0.27% EQ/T. Rowe Price International Stock 0.24% EQ/FI Small/Mid Cap Value 0.19% ------------------------------------------------------ ------------------------------------------------------
----- 13 -------------------------------------------------------------------------------- EXAMPLES* The examples below show the expenses that a plan would pay in the situations illustrated. We assume a single contribution of $1,000 invested in one of the Funds listed and a 5% annual return is earned on assets in that Fund. For purposes of these examples, the ongoing operations fee is computed by reference to the actual aggregate annual ongoing operations fee as a percentage of total assets by employer plans other than corporate plans. See "About registered units" under "More information." These examples assume that no loan has been taken and do not reflect PRS charges or a charge for premium taxes, none of which may apply to any particular participant. The examples assume the continuation of Net Total Annual Expenses (after expense limitation) shown for each portfolio of EQ Advisors Trust in the table above for the entire one, three, five and ten year periods included in the examples. The charges used in the examples are the maximum charges rather than the lower current charges.
------------------------------------------------------------------------------------------------ IF THE ENTIRE EMPLOYER PLAN BALANCE IS WITHDRAWN AT THE END OF EACH PERIOD SHOWN, THE EXPENSE WOULD BE: ----------------------------------------------- 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------ Alliance Balanced $ 75.51 $ 97.11 $ 119.50 $ 157.34 Alliance Bond $ 75.51 $ 97.11 $ 119.50 $ 157.34 Alliance Common Stock $ 75.51 $ 97.11 $ 119.50 $ 157.34 Alliance Mid Cap Growth $ 75.51 $ 97.11 $ 119.50 $ 157.34 EQ/Alliance Global $ 79.03 $ 107.98 $ 138.13 $ 198.22 EQ/Alliance Growth and Income $ 77.27 $ 102.56 $ 128.85 $ 177.96 EQ/Alliance Growth Investors $ 77.17 $ 102.26 $ 128.33 $ 176.83 EQ/Alliance High Yield $ 77.66 $ 103.77 $ 130.92 $ 182.50 EQ/Alliance Intermediate Government Securities $ 76.78 $ 101.05 $ 126.26 $ 172.27 EQ/Alliance International $ 82.27 $ 117.88 $ 154.97 $ 234.43 EQ/Alliance Money Market $ 75.02 $ 95.60 $ 116.89 $ 151.54 EQ/Alliance Premier Growth $ 81.87 $ 116.68 $ 152.94 $ 230.10 EQ/Alliance Quality Bond $ 76.88 $ 101.35 $ 126.78 $ 173.41 EQ/Alliance Small Cap Growth $ 79.03 $ 107.98 $ 138.13 $ 198.22 EQ/Alliance Technology $ 81.87 $ 116.68 $ 152.94 $ 230.10 EQ/AXP New Dimensions $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/AXP Strategy Aggressive $ 80.41 $ 112.19 $ 145.31 $ 213.73 EQ/Bernstein Diversified Value $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/Calvert Socially Responsible $ 80.90 $ 113.69 $ 147.86 $ 219.21 EQ/Capital Guardian International $ 82.36 $ 118.18 $ 155.48 $ 235.51 EQ/Capital Guardian Research $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/Capital Guardian U.S. Equity $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/Equity 500 Index $ 74.14 $ 92.86 $ 112.17 $ 141.04 EQ/Evergreen Omega $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/FI Mid Cap $ 80.41 $ 112.19 $ 145.31 $ 213.73 EQ/FI Small/Mid Cap Value $ 81.39 $ 115.19 $ 150.40 $ 224.67 EQ/Janus Large Cap Growth $ 81.87 $ 116.68 $ 152.94 $ 230.10 EQ/Lazard Small Cap Value $ 81.39 $ 115.19 $ 150.40 $ 224.67 EQ/Mercury Basic Value Equity $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/MFS Emerging Growth Companies $ 80.11 $ 111.29 $ 143.77 $ 210.42 EQ/MFS Growth with Income $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/MFS Research $ 79.92 $ 110.69 $ 142.75 $ 208.21 ------------------------------------------------------------------------------------------------ IF THE ENTIRE EMPLOYER PLAN BALANCE IS NOT WITHDRAWN AT THE END OF EACH PERIOD SHOWN, THE EXPENSE WOULD BE: ----------------------------------------------- 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------ Alliance Balanced $ 13.31 $ 41.40 $ 71.60 $ 157.34 Alliance Bond $ 13.31 $ 41.40 $ 71.60 $ 157.34 Alliance Common Stock $ 13.31 $ 41.40 $ 71.60 $ 157.34 Alliance Mid Cap Growth $ 13.31 $ 41.40 $ 71.60 $ 157.34 EQ/Alliance Global $ 17.06 $ 52.88 $ 91.10 $ 198.22 EQ/Alliance Growth and Income $ 15.18 $ 47.15 $ 81.39 $ 177.96 EQ/Alliance Growth Investors $ 15.08 $ 46.83 $ 80.84 $ 176.83 EQ/Alliance High Yield $ 15.60 $ 48.43 $ 83.55 $ 182.50 EQ/Alliance Intermediate Government Securities $ 14.66 $ 45.56 $ 78.68 $ 172.27 EQ/Alliance International $ 20.50 $ 63.32 $ 108.71 $ 234.43 EQ/Alliance Money Market $ 12.79 $ 39.80 $ 68.87 $ 151.54 EQ/Alliance Premier Growth $ 20.08 $ 62.06 $ 106.59 $ 230.10 EQ/Alliance Quality Bond $ 14.77 $ 45.88 $ 79.22 $ 173.41 EQ/Alliance Small Cap Growth $ 17.06 $ 52.88 $ 91.10 $ 198.22 EQ/Alliance Technology $ 20.08 $ 62.06 $ 106.59 $ 230.10 EQ/AXP New Dimensions $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/AXP Strategy Aggressive $ 18.52 $ 57.32 $ 98.60 $ 213.73 EQ/Bernstein Diversified Value $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/Calvert Socially Responsible $ 19.04 $ 58.90 $ 101.27 $ 219.21 EQ/Capital Guardian International $ 20.60 $ 63.64 $ 109.24 $ 235.51 EQ/Capital Guardian Research $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/Capital Guardian U.S. Equity $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/Equity 500 Index $ 11.85 $ 36.92 $ 63.94 $ 141.04 EQ/Evergreen Omega $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/FI Mid Cap $ 18.52 $ 57.32 $ 98.60 $ 213.73 EQ/FI Small/Mid Cap Value $ 19.56 $ 60.48 $ 103.93 $ 224.67 EQ/Janus Large Cap Growth $ 20.08 $ 62.06 $ 106.59 $ 230.10 EQ/Lazard Small Cap Value $ 19.56 $ 60.48 $ 103.93 $ 224.67 EQ/Mercury Basic Value Equity $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/MFS Emerging Growth Companies $ 18.20 $ 56.37 $ 97.00 $ 210.42 EQ/MFS Growth with Income $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/MFS Research $ 18.00 $ 55.73 $ 95.93 $ 208.21
----- 14 --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------ IF THE ENTIRE EMPLOYER PLAN BALANCE IS WITHDRAWN AT THE END OF EACH PERIOD SHOWN, THE EXPENSE WOULD BE: ----------------------------------------------- 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------ EQ/Morgan Stanley Emerging Markets Equity $ 88.24 $ 135.99 $ 185.47 $ 298.29 EQ/Putnam Growth & Income Value $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/Putnam International Equity $ 82.85 $ 119.67 $ 158.00 $ 240.89 EQ/Putnam Investors Growth $ 79.92 $ 110.69 $ 142.75 $ 208.21 EQ/T. Rowe Price International Stock $ 82.85 $ 119.67 $ 158.00 $ 240.89 ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ IF THE ENTIRE EMPLOYER PLAN BALANCE IS NOT WITHDRAWN AT THE END OF EACH PERIOD SHOWN, THE EXPENSE WOULD BE: ----------------------------------------------- 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------ EQ/Morgan Stanley Emerging Markets Equity $ 26.85 $ 82.43 $ 140.62 $ 298.29 EQ/Putnam Growth & Income Value $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/Putnam International Equity $ 21.12 $ 65.21 $ 111.89 $ 240.89 EQ/Putnam Investors Growth $ 18.00 $ 55.73 $ 95.93 $ 208.21 EQ/T. Rowe Price International Stock $ 21.12 $ 65.21 $ 111.89 $ 240.89 ------------------------------------------------------------------------------------------------
* See "Combination of certain investment options and separate accounts," on page 46 of this Prospectus. The examples above should not be considered a representation of past or future expenses for each Fund. Actual expenses may be greater or less than those shown above. Similarly, the annual rate of return assumed in the examples is not an estimate or guarantee of future investment performance. ANNUITY ADMINISTRATIVE FEE. We generally deduct a $175 annuity administrative fee from amounts applied to purchase certain life annuity payout options. Assuming an annuity payout option could be issued and you elect a life annuity payout option, the expenses shown in the example for "If the entire employer plan balance is not withdrawn" would, in each case, be increased by $3.04 based on the average amount applied to annuity payout options in 2000. CONDENSED FINANCIAL INFORMATION Please see the Appendix at the end of this prospectus for unit values and the number of units outstanding of each Fund available as of December 31, 2000. FINANCIAL STATEMENTS OF THE FUNDS Each of the Funds is, or is part of, one of our separate accounts as described in "About the separate accounts" under "More information." The financial statements of the Funds are contained in the SAI. The financial statements for the portfolios of EQ Advisors Trust are included in the SAI for the Trust. 1 RIA features and benefits ----- 15 -------------------------------------------------------------------------------- INVESTMENT OPTIONS We offer 37 investment options under RIA, including the Funds and the guaranteed interest option. Each Fund has a different investment objective. The Funds try to meet their investment objectives by investing either in a portfolio of securities or by holding mutual fund shares. The maximum number of active investment options that can be available under an employer plan at any time is 25. We cannot assure you that any of the Funds will meet their investment objectives. THE ALLIANCE BOND FUND OBJECTIVE The Alliance Bond Fund (Separate Account No. 13) is available only to employer plans that signed an agreement to invest monies in the Alliance Bond Fund before June 1, 1994. The Alliance Bond Fund seeks to achieve maximum total return, consistent with investment quality, with less volatility than a long-term bond account, by investing primarily in publicly traded fixed-income securities, such as bonds, debentures and notes. The Fund maintains its own portfolio of securities. The Alliance Bond Fund is designed for participants who seek a greater rate of return than that normally provided by money market investments and less volatility than that experienced by long-term bond investments. INVESTMENT STRATEGIES The Alliance Bond Fund invests primarily in investment grade fixed-income securities including, but not limited to, the following: obligations issued or guaranteed by the U.S. Government (such as U.S. Treasury securities), its agencies (such as the Government National Mortgage Association), or instrumentalities (such as the Federal National Mortgage Association); corporate debt securities; mortgage pass-through securities; collateralized mortgage obligations; asset-backed securities; zero coupon bonds; and equipment trust certificates. Investment grade securities are those rated within the four highest credit categories (AAA, AA, A or BBB) by Standard & Poor's Corp. ("S&P") or (Aaa, Aa, A or Baa) by Moody's Investors Service, Inc. ("Moody's"), or, if unrated, are of comparable investment quality as determined by our credit analysis. Bonds rated below A by S&P or Moody's are more susceptible to adverse economic conditions or changing circumstances than those rated A or higher, but we regard these lower-rated bonds as having an adequate capacity to pay principal and interest. The Alliance Bond Fund invests in fixed-income securities that have maturities of ten years or less. The weighted average duration of the Fund's total portfolio is expected to be between one and five years. Duration is a principle used in selecting portfolio securities that indicates a particular fixed-income security's price volatility. Duration is measured by taking into account (1) all of the expected payments relating to that security and (2) the time in the future when each payment will be made, and then weighting all such times by the present value of the corresponding payments. The duration of a fixed-income security with interest payments occurring prior to its maturity is always shorter than its term to maturity. In addition, given identical maturities, the lower the stated rate of interest of a fixed-income security, the longer its duration, and, conversely, the higher the stated rate of interest of a fixed-income security, the shorter its duration. We believe that the Alliance Bond Fund's policy of purchasing intermediate duration bonds significantly reduces the volatility of the Fund's unit price over that of a long-term bond account. Additionally, the Alliance Bond Fund may also invest in high-quality money market securities, including, but not limited to, obligations of the U.S. Government, its agencies and instrumentalities; negotiable certificates of deposit; banker's acceptances or bank time deposits; repurchase agreements; master demand notes; and other money market instruments. For temporary or defensive purposes, the Alliance Bond Fund also may invest in money market securities without limitation. ----- 16 -------------------------------------------------------------------------------- Finally, the Alliance Bond Fund may purchase fixed-income securities and money market securities having adjustable rates of interest with periodic demand features. The Alliance Bond Fund may also purchase fixed-income securities and certain money market securities on a when-issued or delayed delivery basis. RISKS OF INVESTMENT STRATEGIES See "Risks of investing in the Funds," below, for information on the risks associated with an investment in the Funds generally, and in the Alliance Bond Fund specifically. THE ALLIANCE BALANCED FUND OBJECTIVES The Alliance Balanced Fund (Separate Account No. 10) seeks both appreciation of capital and current income by investing in a diversified portfolio of common stocks, other equity-type securities and longer-term fixed income securities. The Fund also seeks current income by investing in publicly traded debt securities and short-term money market instruments. The Fund maintains its own portfolio of securities. INVESTMENT STRATEGIES The Alliance Balanced Fund varies the portion of its assets invested in each type of security in accordance with our evaluation of economic conditions, the general level of common stock prices, anticipated interest rates and other relevant considerations, including our assessment of the risks associated with each investment medium. In general, the Fund invests the greatest portion of its assets in equity securities. During each of the past ten years, the Fund invested between 43% and 86% of its assets in equity securities, including equity-type securities such as convertible preferred stocks or convertible debt instruments. The Fund's investment in non-money market debt securities consists primarily of (a) publicly-traded securities issued or guaranteed by the United States Government or its agencies or instrumentalities and (b) corporate fixed income securities, including, but not limited to, bank obligations, notes, asset-backed securities, mortgage pass-through obligations, collateralized mortgage obligations, zero coupon bonds, and preferred stock. The Fund may also buy debt securities with equity features such as conversion or exchange rights, warrants for the acquisition of stock, or participations based on revenues, sales or profits. The Fund only invests in investment grade non-money market debt securities, i.e., those rated, at the time of acquisition, BBB or higher by Standard & Poor's Corporation (S&P) or Baa or higher by Moody's Investors Services, Inc. (Moody's) or, if unrated, are of comparable investment quality. The average maturity of the debt securities held by the Fund varies according to market conditions and the stage of interest rate cycles. The Fund may realize gains on debt securities when such actions are considered advantageous in light of existing market conditions. The Fund also may invest (a) up to 10% of its total assets in restricted securities; (b) 20% in foreign securities without substantial business in the United States; (c) in repurchase agreements; and (d) in money market securities. The Fund may also purchase and sell securities on a when-issued or delayed delivery basis. Finally, the Fund may (a) invest in put and call options and (b) trade in stock index or interest rate futures, and foreign currency forward contracts, for hedging purposes only. In option transactions, the economic benefit will be offset by the cost of the option, while any loss would be limited to such cost. The Fund also enters into hedging transactions. These transactions are undertaken only when any required regulatory procedures have been completed and when economic and market conditions indicate that such transactions would serve the best interests of the Fund. RISKS OF INVESTMENT STRATEGIES See "Risks of investing in the Funds," below, for information on the risks associated with an investment in the Funds generally, and in the Alliance Balanced Fund specifically. ----- 17 -------------------------------------------------------------------------------- THE ALLIANCE COMMON STOCK FUND OBJECTIVE The Alliance Common Stock Fund seeks to achieve long-term growth of capital by investing in the securities of companies that we believe will share in the growth of our nation's economy -- and those of other leading industrialized countries -- over a long period. The Fund maintains its own portfolio of securities. INVESTMENT STRATEGIES The Alliance Common Stock Fund (Separate Account No. 4) invests primarily in common stocks. The Fund generally invests in securities of intermediate and large sized companies, but may invest in stocks of companies of any size. At times the Fund may invest its equity holdings in a relatively small number of issuers, provided that no investment causes: (1) more than 10% of the Fund's book value to be invested in the securities of one issuer; or (2) more than 40% of the Fund's book value to be invested in the securities of four or fewer issuers. The Alliance Common Stock Fund also may invest smaller amounts in other equity-type securities, such as convertible preferred stocks or convertible debt instruments. The Fund also may invest in non-equity investments, including non-participating and non-convertible preferred stocks, bonds and debentures. The Fund also may invest up to 15% of its total assets in foreign securities (securities of established foreign companies without substantial business in the United States). The Alliance Common Stock Fund may make temporary investments in government obligations, short-term commercial paper and other money market instruments. RISKS OF INVESTMENT STRATEGIES See "Risks of investing in the Funds," below, for information on the risks associated with an investment in the Funds generally, and in the Alliance Common Stock Fund specifically. THE ALLIANCE MID CAP GROWTH FUND OBJECTIVES The Alliance Mid Cap Growth Fund (Separate Account No. 3) seeks to achieve long-term capital growth through a diversified portfolio of equity securities. The account will attempt to achieve this objective by investing primarily in the common stock of medium-sized companies which have the potential to grow faster than the general economy and to grow into much larger companies. INVESTMENT STRATEGIES The Alliance Mid Cap Growth Fund will be actively managed to obtain excess return versus the Russell Mid Cap Growth Index. The Fund will invest at least 80% of its total assets in the common stock of companies with medium capitalizations at the time of the Fund's investment, similar to the market capitalizations of companies in the Russell Mid Cap Index. Companies whose capitalizations no longer meet this definition after purchase continue to be considered to have a medium market capitalization for purposes of the 80% policy. If deemed appropriate, in order to meet the investment objectives, the Fund may invest in companies in cyclical industries as well as in securities that the adviser believes are temporarily undervalued. The Fund may also invest in foreign companies without substantial business in the United States. The Fund may also invest in convertible preferred stocks, convertible debt securities and short-term debt securities such as corporate notes, and temporarily invest in money market instruments. Additionally, the Fund may invest up to 10% of its total assets in restricted securities. The Fund will attempt to generate excess return by taking active risk in security selection, and implementing a "bottom up" stock selection approach, looking for companies with unique growth potential. Economic sector allocation will also be taken into consideration, and the account may often be concentrated in industries where research resources indicate there is high growth potential. The Fund will be fully invested. ----- 18 -------------------------------------------------------------------------------- RISKS OF INVESTMENT STRATEGIES See "Risks of investing in the Funds," below, for information on the risks associated with an investment in the Funds generally, and in the Alliance Mid Cap Growth Fund specifically. Note, however, that due to the Alliance Mid Cap Growth Fund's aggressive investment policies and less diversified investments, this Fund provides greater growth potential and greater risk than the Alliance Bond, Alliance Common Stock and Alliance Balanced Funds. As a result, you should consider limiting the amount allocated to this Fund, particularly as you near retirement. INVESTMENT MANAGER OF THE ALLIANCE BOND, ALLIANCE BALANCED, ALLIANCE COMMON STOCK AND ALLIANCE MID CAP GROWTH FUNDS We manage the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds. We currently use the personnel and facilities of Alliance Capital Management L.P. ("Alliance") for portfolio management, securities selection and transaction services. We are the majority-owners of Alliance, a limited partnership. We and Alliance are each registered investment advisers under the Investment Advisers Act of 1940. Alliance acts as investment adviser to various separate accounts and general accounts of Equitable Life and other affiliated insurance companies. Alliance also provides investment management and advisory services to mutual funds, endowment Funds, insurance companies, foreign entities, qualified and non-tax qualified corporate Funds, public and private pension and profit-sharing plans, foundations and tax-exempt organizations. As of December 31, 2000 Alliance had total assets under management of approximately $454 billion. Alliance's main office is located at 1345 Avenue of the Americas, New York, New York 10105. The Investment Committee of our Board of Directors must authorize or approve the securities held in the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds. Subject to the Investment Committee's broad supervisory authority, our investment officers and managers have complete discretion over the assets of these Funds and have been given discretion as to sales and, within specified limits, purchases of stocks, other equity securities and certain debt securities. When an investment opportunity arises that is consistent with the objectives of more than one account, we allocate investment opportunities among accounts in an impartial manner based on certain factors such as investment objective and current investment and cash positions. FUNDS INVESTING IN EQ ADVISORS TRUST The Funds of Separate Account No. 66 invest in corresponding portfolios of EQ Advisors Trust. The investment results you will experience in any one of those Funds will depend on the investment performance of the corresponding portfolios. The table below shows the names of the corresponding portfolios, their investment objectives, and their advisers. ----- 19 --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST* You should note that some EQ Advisors Trust portfolios have objectives and strategies that are substantially similar to those of certain retail funds; they may even have the same manager(s) and/or a similar name. However, there are numerous factors that can contribute to differences in performance between two investments, particularly over short periods of time. Such factors include the timing of stock purchases and sales; differences in fund cash flows; and specific strategies employed by the portfolio manager. -------------------------------------------------------------------------------------------------------------------------------- NAME OBJECTIVE ADVISER -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Global Long-term growth of capital Alliance Capital Management L.P. -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Growth and Income High total return through investments primarily Alliance Capital Management L.P. in dividend-paying stocks of good quality, although the Portfolio also may invest in fixed income and convertible securities -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Growth Investors Highest total return consistent with the adviser's Alliance Capital Management L.P. determination of reasonable risk -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance High Yield High total return through a combination of Alliance Capital Management L.P. current income and capital appreciation by investing generally in high yield securities -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P. Government Securities stability of principal -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance International Long-term growth of capital Alliance Capital Management L.P. -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Money Market High level of current income, preserve its assets Alliance Capital Management L.P. and maintain liquidity -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Quality Bond High current income consistent with Alliance Capital Management L.P. preservation of capital -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P. -------------------------------------------------------------------------------------------------------------------------------- EQ/Calvert Socially Responsible Long-term capital appreciation Calvert Asset Management Company, Inc. and Brown Capital Management, Inc. -------------------------------------------------------------------------------------------------------------------------------- EQ/Capital Guardian International Long-term growth of capital by investing Capital Guardian Trust Company primarily in non-United States equity securities -------------------------------------------------------------------------------------------------------------------------------- EQ/Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company -------------------------------------------------------------------------------------------------------------------------------- EQ/Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P. -------------------------------------------------------------------------------------------------------------------------------- EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P. -------------------------------------------------------------------------------------------------------------------------------- EQ/AXP New Dimensions Long-term growth of capital American Express Financial Corporation -------------------------------------------------------------------------------------------------------------------------------- EQ/AXP Strategy Aggressive Long-term growth of capital American Express Financial Corporation --------------------------------------------------------------------------------------------------------------------------------
----- 20 --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST* (CONTINUED) -------------------------------------------------------------------------------------------------------------------------------- NAME OBJECTIVE ADVISER -------------------------------------------------------------------------------------------------------------------------------- EQ/Bernstein Diversified Value Capital appreciation Alliance Capital Management, L.P., through its Bernstein Investment Research and Management Unit. -------------------------------------------------------------------------------------------------------------------------------- EQ/Equity 500 Index Total return before expenses that approximates Alliance Capital Management L.P. the total return performance of the S&P 500 Stock Index, including reinvestment of dividends at a risk level consistent with that of the S&P 500 Stock Index. -------------------------------------------------------------------------------------------------------------------------------- EQ/Evergreen Omega Long-term capital growth Evergreen Asset Management, LLC -------------------------------------------------------------------------------------------------------------------------------- EQ/Janus Large Cap Growth Long-term growth in a manner that is consistent Janus Capital Corporation with preservation of capital -------------------------------------------------------------------------------------------------------------------------------- EQ/Putnam Growth & Income Value Capital growth, current income is a secondary Putnam Investment Management, LLC objective -------------------------------------------------------------------------------------------------------------------------------- EQ/Putnam International Equity Capital appreciation Putnam Investment Management, LLC -------------------------------------------------------------------------------------------------------------------------------- EQ/Putnam Investors Growth Long-term growth of capital and any increased Putnam Investment Management, LLC income that results from this growth -------------------------------------------------------------------------------------------------------------------------------- EQ/FI Mid Cap Long-term growth of capital Fidelity Management & Research Company -------------------------------------------------------------------------------------------------------------------------------- EQ/FI Small/Mid Cap Value Long-term capital appreciation Fidelity Management & Research Company -------------------------------------------------------------------------------------------------------------------------------- EQ/Lazard Small Cap Value Capital appreciation Lazard Asset Management -------------------------------------------------------------------------------------------------------------------------------- EQ/Mercury Basic Value Equity Capital appreciation and, secondarily, income Mercury Advisors -------------------------------------------------------------------------------------------------------------------------------- EQ/MFS Emerging Growth Long-term capital growth MFS Investment Management Companies -------------------------------------------------------------------------------------------------------------------------------- EQ/MFS Investors Trust Long-term growth of capital with a secondary MFS Investment Management objective to seek reasonable current income -------------------------------------------------------------------------------------------------------------------------------- EQ/MFS Research Long-term growth of capital and future income MFS Investment Management -------------------------------------------------------------------------------------------------------------------------------- EQ/Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management Markets Equity -------------------------------------------------------------------------------------------------------------------------------- EQ/T. Rowe Price International Long-term growth of capital T. Rowe Price International, Inc. Stock --------------------------------------------------------------------------------------------------------------------------------
* See "Combination of certain investment options and separate accounts," on page 46 of this Prospectus. Please see "About EQ Advisors Trust" under "More information" for further information regarding EQ Advisors Trust. PLEASE REFER TO THE PROSPECTUS AND SAI OF EQ ADVISORS TRUST FOR A DETAILED DISCUSSION OF THE INVESTMENT OBJECTIVES AND STRATEGIES, ADVISERS, RISK FACTORS AND OTHER INFORMATION CONCERNING THE EQ ADVISORS TRUST AND ITS PORTFOLIOS. ----- 21 -------------------------------------------------------------------------------- RISKS OF INVESTING IN THE FUNDS All of the Funds invest in securities of one type or another. You should be aware that any investment in securities carries with it a risk of loss, and you could lose money investing in the Funds. The different investment objectives and policies of each Fund may affect the return of each Fund and the risks associated with an investment in that Fund. Additionally, market and financial risks are inherent in any securities investment. By market risks, we mean factors which do not necessarily relate to a particular issuer, but affect the way markets, and securities within those markets, perform. Market risks can be described in terms of volatility, that is, the range and frequency of market value changes. Market risks include such things as changes in interest rates, general economic conditions and investor perceptions regarding the value of debt and equity securities. By financial risks we mean factors associated with a particular issuer which may affect the price of its securities, such as its competitive posture, its earnings and its ability to meet its debt obligations. Both the financial and market risks of an investment in the Alliance Bond Fund are expected to be less than those for the Alliance Common Stock, Alliance Balanced and Alliance Mid Cap Growth Funds. The risk factors associated with an investment in the Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds are described below. See the SAI for additional information regarding certain investment techniques used by these Funds. See the prospectus for EQ Advisors Trust for risk factors and investment techniques associated with the portfolios in which the other Funds invest. RISK FACTORS -- ALLIANCE BOND, ALLIANCE COMMON STOCK, ALLIANCE MID CAP GROWTH AND ALLIANCE BALANCED FUNDS COMMON STOCK. Investing in common stocks and related securities involves the risk that the value of the stocks or related securities purchased will fluctuate. These fluctuations could occur for a single company, an industry, a sector of the economy, or the stock market as a whole. These fluctuations could cause the value of the Fund's investments -- and, therefore, the value of the Fund's units -- to fluctuate. SECURITIES OF MEDIUM AND SMALLER SIZED COMPANIES. The Alliance Mid Cap Growth Fund invests primarily in the Securities of medium-sized companies. The Alliance Common Stock and Alliance Balanced Funds may also make these investments, as well as investments in smaller sized companies. The securities of small and medium sized, less mature, lesser known companies involve greater risks than those normally associated with larger, more mature, well-known companies. Therefore, consistent earnings may not be as likely in small companies as in large companies. The Funds also run a risk of increased and more rapid fluctuations in the value of its investments in securities of small or medium sized companies. This is due to the greater business risks of small size and limited product lines, markets, distribution channels, and financial and managerial resources. Historically, the price of small (less than $1 billion) and medium (between $1 and $15 billion) capitalization stocks and stocks of recently organized companies have fluctuated more than the larger capitalization stocks and the overall stock market. One reason is that small and medium-sized companies have a lower degree of liquidity in the markets for their stocks, and greater sensitivity to changing economic conditions. NON-EQUITY SECURITIES. Investing in non-equity securities, such as bonds and debentures, involves the risk that the value of these securities held by the Alliance Bond, the Alliance Balanced and the Alliance Common Stock Funds -- and, therefore, the value of each of the Fund's units -- will fluctuate with changes in interest rates (interest rate risk) and the perceived ability of the issuer to make interest or principal payments on time (credit risk). A decline in prevailing interest rates generally will increase the value of the securities held by the Alliance Bond Fund, while an increase in prevailing interest rates usually reduces the value of the Alliance Bond Fund's holdings. As a result, interest rate fluctuations will affect the value of Alliance Bond Fund units, but will not affect the income received from the Fund's current portfolio holdings. Moreover, convertible securities, which may be in the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance ----- 22 -------------------------------------------------------------------------------- Mid Cap Growth Funds, such as convertible preferred stocks or convertible debt instruments, contain both debt and equity features, and may lose significant value in periods of extreme market volatility. FOREIGN INVESTING. Investing in securities of foreign companies that may not do substantial business in the United States involves additional risks, including risk of loss from changes in the political or economic climate of the countries in which these companies do business. Foreign currency fluctuations, exchange controls or financial instability could cause the value of the Alliance Common Stock, Mid Cap Growth and Balanced Funds' foreign investments to fluctuate. Additionally, foreign accounting, auditing and disclosure standards may differ from domestic standards, and there may be less regulation in foreign countries of stock exchanges, brokers, banks, and listed companies than in the United States. As a result, the Fund's foreign investments may be less liquid and their prices may be subject to greater fluctuations than comparable investments in securities of U.S. issuers. RESTRICTED SECURITIES. Investing in restricted securities involves additional risks because these securities generally (1) are less liquid than non-restricted securities and (2) lack readily available market quotations. Accordingly, the Alliance Balanced and the Alliance Mid Cap Growth Funds may be unable to quickly sell their restricted security holdings at fair market value. The following discussion describes investment risks unique to either the Alliance Common Stock Fund, Alliance Mid Cap Growth Fund or the Alliance Balanced Fund. INVESTMENT CONCENTRATION. Concentrating the Alliance Common Stock Fund's equity holdings in the stocks of a few companies increases the risk of loss, because a decline in the value of one of these stocks would have a greater impact on the Fund. As of December 31, 2000, the Fund held 34.6% of its net assets in the stocks of four issuers. See Separate Account No. 4 (Pooled) Statement of Investments and Net Assets in the SAI. AGGRESSIVE INVESTMENT POLICIES. Due to the Alliance Mid Cap Growth Fund's aggressive investment policies and less diversified investments, this Fund provides greater growth potential and greater risk than the Alliance Common Stock and Alliance Balanced Funds. As a result, you should consider limiting the amount allocated to this Fund, particularly as you near retirement. ASSET ALLOCATION POLICIES. The Alliance Balanced Fund varies the portion of it's assets invested in equity and non-equity securities with our evaluation of various factors. The Fund is subject to the risk that we may incorrectly predict changes in the relative values of the stock and bond markets. DEBT INSTRUMENTS ISSUED BY SCHEDULE B BANKS. The Alliance Balanced Fund may invest in debt instruments issued by Schedule B Banks, which are foreign branches of United States banks. Schedule B Banks are not required to maintain the same financial reserves which are required of United States banks, but Schedule B Bank certificates of deposit are fully guaranteed by the U.S. parent of the issuing bank. Debt instruments issued by Schedule B Banks may include certificates of deposit and time deposits of London branches of United States banks ("Eurodollars"). Eurodollar investments are subject to the types of risks associated with foreign securities. London branches of the United States banks have extensive government regulation which may limit both the amount and the type of loans and interest rates. In addition, the banking industry's profitability is closely linked to prevailing money market conditions for financing lending operations. Both general economic conditions and credit risks play an important part in the operations of the banking industry. United States banks are required to maintain reserves, are limited in how much they can loan to a single borrower, and are subject to other regulations to promote financial soundness. Not all of these laws and regulations apply to foreign branches of United States banks. ----- 23 -------------------------------------------------------------------------------- CHANGE OF INVESTMENT OBJECTIVES We can change the investment objectives of the Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds if the New York State Insurance Department approves the change. The investment objectives of the portfolios of EQ Advisors Trust may be changed by the Board of Trustees of EQ Advisors Trust without the approval of shareholders. See "Voting rights" under "More information." GUARANTEED INTEREST OPTION The guaranteed interest option is part of our general account and pays interest at guaranteed rates. We discuss our general account under "More information." The amount allocated to the guaranteed interest option earns interest at the current guaranteed interest rate which is an annual effective rate. After we credit the interest, we deduct certain charges and fees. We credit interest through and allocate interest on the date of any transfer or withdrawal transaction. We credit interest each day of the month on the amount maintained for the employer plan at the beginning of the day at a daily rate equivalent to the guaranteed interest rate that applies to the employer plan. CURRENT AND MINIMUM INTEREST RATES Except as described below, the "current rate" is the rate of interest that we actually credit to amounts in the guaranteed interest option for any given calendar year. We declare current rates for each class of employer plan before the beginning of each calendar year. In addition to the current rate, we declare "minimum rates" for the next two calendar years. The minimum interest rates will never be lower than 4%. In general, we expect to declare current rates, in any year, greater than the previously declared minimum rates for that year. If the employer plan is permitted to invest in the Alliance Bond Fund, we may at times have the right to declare a lower current rate of interest ("revised rate") which will remain in effect for the remainder of the calendar year only for new amounts contributed or transferred by the employer plan to the guaranteed interest option. See "Special rules applicable to the Alliance Bond Fund" for the circumstances under which a revised rate might be declared. Such revised rate will reflect market interest rates for money market instruments and other short-term investments existing at the time any such amount is contributed or transferred to the guaranteed interest option without regard to any previously declared minimum rate. The current interest rate for 2001 and the 2002 and 2003 minimum interest guaranteed for each class, are stated in the proposal documents submitted to sponsors of prospective RIA employer plans. The establishment of new classes will not decrease the rates that apply to employer plans already assigned to a previous class. The effective current rate for 2002 and the minimum rates effective for calendar years 2003 and 2004 will be declared in December 2001. CLASSES OF EMPLOYER PLANS We assign an employer plan to a "class" of employer plans upon its participation in the Master Retirement Trust in order to help us determine the current and minimum guaranteed rates of interest that apply for the employer plan participating in our guaranteed interest option. The initial class of employer plans to which an employer plan is assigned will depend on the date the plan is adopted. REVISED INTEREST RATES All of the following conditions must exist for us to declare a revised rate: o on the date of the allocation, the aggregate amount held in the Alliance Bond Fund with respect to all employer plans comprising Equitable Life's Small Pension book of business is at least 10% of the aggregate amount then held under all the contracts which fund those plans; o on the date of the allocation, the "current" guaranteed interest rate with respect to the employer plan's guaranteed interest option that would otherwise apply, exceeds the benchmark treasury rate by at least 0.75%; and o prior allocations to the guaranteed interest option for the employer plan during that calendar year equal or exceed ----- 24 -------------------------------------------------------------------------------- 110% of the average annual allocations to the guaranteed interest option for the employer plan during the three immediately preceding calendar years. If we declare a revised rate for plans permitted to invest in the Alliance Bond Fund the employer or plan trustee may, by written notice, withdraw all or part of the amount that would be credited with such lower revised rate, without deduction of the contingent withdrawal charge. The investment, for the remainder of the calendar year, of such withdrawn or returned amounts in a funding vehicle other than RIA shall not be considered a violation of an employer plan's exclusive funding obligation provided such amount is contributed to RIA at the beginning of the following calendar year. 2 How we value your plan balances ----- 25 -------------------------------------------------------------------------------- FOR THE FUNDS. When you invest in a Fund, your contribution or transfer purchases "units" of that Fund. The unit value on any day reflects the value of the Fund's investments for the day and the charges and expenses we deduct from the Fund. We calculate the number of units you purchase by dividing the amount you invest by the unit value of the Fund as of the close of business on the day we receive your contribution or transfer instruction. -------------------------------------------------------------------------------- A business day is generally any day on which Equitable Life is open and the New York Stock Exchange is open for trading. We are closed on national business holidays, Martin Luther King, Jr. Day and the Friday after Thanksgiving. We may also choose to close on the day immediately preceding or following a national business holiday or close or close early due to emergency conditions. Our business day generally ends at 4:00 p.m. Eastern time. -------------------------------------------------------------------------------- On any given day, your account value in any Fund equals the number of the Fund's units credited to your account, adjusted for any Fund's units cancelled from your account, multiplied by that day's value for one Fund unit. In order to take deductions from any Fund, we cancel units having a value equal to the amount we need to deduct. Otherwise, the number of your Fund units of any Fund does not change unless you make additional contributions, make a withdrawal, make a transfer, or request some other transaction that involves moving assets into or out of that Fund. For a description of how Fund unit values are computed, see "How we determine the unit value" in the SAI. FOR THE GUARANTEED INTEREST OPTION. The value of an employer plan's investment in the guaranteed interest option is, at any time, the total contributions allocated to the guaranteed interest option, plus the interest earned, less (i) employer plan benefit payments, (ii) other employer plan withdrawals (including loans) and (iii) charges and fees provided for under the contracts. 3 Transfers ----- 26 -------------------------------------------------------------------------------- TRANSFERS AMONG INVESTMENT OPTIONS You may transfer accumulated amounts among the investment options at any time and in any amount, subject to the transfer limitations described below. In addition to our rules, transfers among the investment options may be subject to employer plan provisions which may limit or disallow such movements. We do not impose a charge for transfers among the investment options. The following section describes transfer limitations that apply, under certain situations, to amounts transferred out of the guaranteed interest option during the calendar quarter in which the request is made and the three preceding calendar quarters ("transfer period"). PARTICIPANT-DIRECTED PLANS. If the employer elects to fund the employer plan with the guaranteed interest option and the EQ/Alliance Money Market, Alliance Bond, EQ/Alliance Intermediate Government Securities, EQ/Alliance Quality Bond or EQ/Alliance High Yield Funds, during any transfer period, the following limitations apply: For plans electing the PRS, the maximum amount that may be transferred by a participant from the guaranteed interest option is equal to the greater of: (i) 25% of the amount the participant had in the guaranteed interest option as of the last calendar day of the prior calendar year, and (ii) the total of all amounts the participant transferred out of the guaranteed interest option during the prior calendar year. Generally, this means that new participants will not be able to transfer amounts out of the guaranteed interest option during the first calendar year of their participation under the contract. If assets have been transferred from another funding vehicle by the employer, then the participant, for the remainder of that calendar year, may transfer to the Funds up to 25% of such transferred amount that the participant initially allocated to the guaranteed interest option. For plans not electing the PRS, the maximum amount that may be transferred from the guaranteed interest option is equal to the greater of: (i) 25% of the amount the employer plan had in the guaranteed interest option as of the last calendar day of the prior calendar year, or (ii) the total of all amounts the employer plan transferred out of the guaranteed interest option during the prior calendar year. The employer plan is responsible for monitoring this transfer limitation. PRS is discussed in "Optional participant recordkeeping services" later in this prospectus. If assets have been transferred from another funding vehicle by the employer, then the trustee on behalf of the participant, for the remainder of that calendar year, may transfer to the Funds up to 25% of such transferred amount that was initially allocated to the guaranteed interest option. TRUSTEE-DIRECTED PLANS. Transfers of accumulated amounts among the investment options will be permitted as determined by us in our sole discretion only. If assets have been transferred from another funding vehicle by the employer, then the plan trustee, for the remainder of that calendar year, may transfer to an investment option up to 25% of such transferred amount that was initially allocated to the guaranteed interest option. SPECIAL RULES APPLICABLE TO THE ALLIANCE BOND FUND The Alliance Bond Fund is available only to participant- directed employer plans that signed an agreement to participate in that Fund prior to June 1, 1994 ("old employer plans"). If the employer has not made Funds of Separate Account No. 66 available under a participant-directed employer plan, special transfer rules which provide transfer restrictions, described below will apply. If an old employer plan adds any of the Funds held in Separate Account No. 66, the Alliance Bond Fund will no longer be subject to any transfer restrictions. However, transfers out of the guaranteed interest option will be subject to certain restrictions described above. TRANSFERS TO THE ALLIANCE BOND FUND. Except as described below, a plan participant in an old employer plan may elect to transfer to the Alliance Bond Fund any amount (in whole percentages) arising from participant-directed contributions. We will process requests to transfer amounts to the Alliance Bond Fund only if, at the time of the transfer request, the current guaranteed interest rate for the plan's guaranteed ----- 27 -------------------------------------------------------------------------------- interest option is higher than the then-current "benchmark treasury rate." The benchmark treasury rate, as determined in accordance with our procedures, can be obtained via a daily tape recording by calling the RIA service office at 1-800-967-4560. If we will not process a transfer request, we will notify the employer within four business days. We will not redirect the transfer to another investment option and will not maintain any record of such request for future processing. TRANSFERS FROM THE ALLIANCE BOND FUND. A plan participant in an old employer plan may elect to transfer any amount (in whole percentages) held in the Alliance Bond Fund to one or more investment options. DISRUPTIVE TRANSFER ACTIVITY You should note that the contract is not designed for professional "market timing" organizations or other organizations or individuals engaging in a market timing strategy, making programmed transfers, frequent transfers or transfers that are large in relation to the total assets of the underlying portfolio. These kinds of strategies and transfer activities are disruptive to the underlying portfolios in which the variable investment options invest. If we determine that your transfer patterns among the variable investment options are disruptive to the underlying portfolios, we may, among other things, restrict the availability of personal telephone requests, facsimile transmissions, automated telephone services or any electronic transfer services. We may also refuse to act on transfer instructions of an agent who is acting on behalf of one or more owners. We currently consider transfers into and out of (or vice versa) the same variable investment option within a five business day period as potentially disruptive transfer activity. In order to prevent disruptive activity, we monitor the frequency of transfers, including the size of transfers in relation to portfolio assets, in each underlying portfolio, and we take appropriate action, which may include the actions described above to restrict availability of voice, fax and automated transaction services, when we consider the activity of owners to be disruptive. We currently provide a letter to owners who have engaged in such activity of our intention to restrict such services. However, we may not continue to provide such letters. We may also, in our sole discretion and without further notice, change what we consider disruptive transfer activity, as well as change our procedures to restrict this activity. 4 Access to your plan balances ----- 28 -------------------------------------------------------------------------------- PARTICIPANT LOANS Participant loans are available under RIA, if the employer plan permits them. Participants must apply for a plan loan through the employer plan. The plan administrator is responsible for administering the loan program. Loans are subject to restrictions under federal tax rules and ERISA. See "Tax information." Below we briefly summarize some of the important terms of the loan provisions under RIA. A more detailed discussion is provided in the SAI under "Loan provisions." Generally, all loan amounts must be taken from the guaranteed interest option. The participant must pay the interest as required by federal income tax rules. All repayments are made back into the guaranteed interest option. If the participant fails to repay the loan when due, the amount of the unpaid balance may be subject to a contingent withdrawal charge, taxes, and additional penalty taxes. Interest paid on a retirement plan loan is not deductible. The minimum amount of a loan for a participant is $1,000, and the maximum amount is 90% of the plan participant's balances in all the investment options. An employer plan may impose additional conditions or restrictions on loan transactions. We also charge a loan fee in an amount equal to 1% of the loan principal amount on the date a loan is made. CHOOSING BENEFIT PAYMENT OPTIONS RIA offers a variety of benefit payment options, subject to the provisions of an employer's plan. Plan participants should consult their employer for details. An employer's plan may allow a choice of one or more of the following forms of distribution: o purchase of one of our annuities; o lump sum distribution; o use of part of the proceeds to purchase one of our annuities with the balance to be paid as a lump sum; or o permitted cash withdrawals. Subject to the provisions of your plan, RIA makes available the following forms of fixed annuities: o life annuity; o life annuity - period certain; o life annuity - refund certain; o period certain annuity; and o qualified joint and survivor life annuity. All of the forms outlined above (with the exception of the qualified joint and survivor life annuity) are available as either single or joint life annuities. We also offer other annuity forms not outlined here. The various fixed annuities we offer under RIA are described in greater detail in the SAI under "Annuity benefits." As a general matter, the minimum amount that can be used to purchase any type of annuity, net of all applicable charges and fees, is $3,500. An annuity administrative fee of $175 will be deducted from the amount used to purchase an annuity. We require that the amount of any benefit distribution from an employer plan that uses RIA as a partial investment funding vehicle be in proportion to the amount of plan assets held in RIA, unless we and the plan trustees specifically agree in writing to some other method. Requests for cash distributions must be made to us on an aggregate as opposed to a participant-by-participant basis, except for employer plans using the PRS discussed in "Optional participant recordkeeping service" later in this prospectus. Cash withdrawals by a plan participant prior to retirement may give rise to contingent withdrawal charges, and tax penalties or other adverse tax consequences. See "Tax information." We make distribution checks payable to the trustees of the plan. The plan trustees are responsible for distribution of Funds to the participant or other payee and for any applicable federal and state income tax withholding and reporting. See "Tax information." RIA does not have separate disability or death benefit provisions. All disability and death benefits are provided in accordance with the employer plan. 5 RIA ----- 29 -------------------------------------------------------------------------------- This section explains RIA in further detail. It is intended for employers who wish to use RIA, but contains information of interest to plan participants as well. Plan participants should, of course, understand the provisions of their plan that describes their rights in more specific terms. RIA is an investment program designed for employer plans that qualify for tax-favored treatment under Section 401(a) of the Code. Eligible employer plans include defined benefit plans, defined contribution plans or profit-sharing plans, including 401(k) plans. These employer plans generally must also meet the requirements of ERISA. RIA consists of two group annuity contracts ("contracts") issued by Equitable Life, a Master Retirement Trust agreement, a participation or installation agreement, and an optional participant recordkeeping services ("PRS") agreement. RIA had $525.7 million in assets at December 31, 2000. Our service consultants are available to answer your questions about RIA. Please contact us by using the telephone number or addresses listed under "How to reach us - Information on joining RIA" in the front of this prospectus. SUMMARY OF PLAN CHOICES OF RIA You can choose RIA: o as the exclusive funding vehicle for the assets of an employer plan. If you choose this option, the annual amount of plan contributions must be at least $10,000. We call this type of plan an "exclusive funding employer plan"; or o as a partial investment funding vehicle for an employer plan. If you choose this option, the aggregate amount of contributions in the initial participation year must be at least $50,000, and the annual aggregate amount of contributions thereafter must be at least $25,000. We determine at our sole discretion if this option will be available to you. We call this type of plan a "partial funding employer plan." We do not offer the guaranteed interest option with a partial funding employer plan. You must enter into a partial funding agreement with us to use this partial funding employer plan. An exclusive funding employer plan may not change its participation basis to that of a partial funding employer plan, or vice versa, unless the underwriting and other requirements referred to above are satisfied and approved by us. We reserve: o the right to change these amounts in the future for new sales only; and o the right to impose higher annual minimums for certain plans. We will give you advance notice of any such changes. You also have the choice of using RIA with two types of plans. You may use RIA for: o participant-directed employer plans, which permit participants to allocate contributions and transfer account accumulations among the investment options; or o trustee-directed employer plans, which permit these types of investment decisions to be made only by the employer, a trustee or any named fiduciary or an authorized delegate of the plan. At our sole discretion, a trustee-directed plan may change its participation basis to a participant-directed plan. MAKING THE RIGHT CHOICES FOR YOUR PLAN DEPENDS ON YOUR OWN SET OF CIRCUMSTANCES. WE RECOMMEND THAT YOU REVIEW ALL CONTRACTS, TRUST, PARTICIPATION AND RELATED AGREEMENTS WITH YOUR LEGAL AND TAX COUNSEL. GETTING STARTED To enroll in RIA, a partnership, sole proprietor or corporation must adopt the Master Retirement Trust as part of its employer plan. You also must execute the participation or installation agreement, and provide us with certain plan information. We will not accept contributions until we accept the enrollment of the employer plan. HOW TO MAKE CONTRIBUTIONS REGULAR CONTRIBUTIONS. Contributions may be made by check or by wire transfer. All contributions under an employer plan should be sent to the address under "For contributions checks only" in "Information once you join RIA" in the front of this ----- 30 -------------------------------------------------------------------------------- prospectus. All contributions made by check must be drawn on a U.S. bank, in U.S. dollars, and made payable to Equitable Life. Third-party checks are not acceptable, except for rollover contributions, tax-free exchanges or trustee checks that involve no refund. All checks are subject to our ability to collect the funds. We reserve the right to reject a payment if it is received in an unacceptable form. Contributions are normally credited on the business day that we receive them. Contributions are only accepted from the employer or plan trustee. There is no minimum amount for each contribution where employer plan contributions are made on a basis more frequent than annually. The total amount of contributions under an employer plan is limited by law. See "Tax information." ROLLOVER OR TRANSFERS FROM ANOTHER PLAN. You can change the funding of an existing plan to use RIA. Before making a change, however, you should carefully consider the following: o the comparative costs and benefits under existing funding arrangements and under RIA; and o the amendments or changes that may have to be made in the plan if funds are transferred. To make a rollover or transfer to RIA, funds must be in cash. Therefore, any assets accumulated under an existing plan will have to be liquidated for cash. SELECTING INVESTMENT OPTIONS You can select from the investment options available under the contracts. The maximum number of active options you may select at any time is 25. Plan participant choices will be limited to the investment options selected. If the Plan is intended to comply with the requirements of ERISA Section 404(c), the employer or the plan trustee is responsible for making sure that the investment options chosen constitute a broad range of investment choices as required by the Department of Labor ("DOL") Section 404(c) regulations. Generally, for participant-directed plans, if you intend for your plan to comply with ERISA Section 404(c), you should, among other things: o select the EQ/Alliance Money Market Fund if you select any of the EQ/Alliance Intermediate Government Securities, EQ/Alliance Quality Bond or EQ/Alliance High Yield; or o select the guaranteed interest option if you do not select any of the EQ/Alliance Money Market, EQ/Alliance Intermediate Government Securities, EQ/Alliance Quality Bond, EQ/Alliance High Yield or EQ/Alliance Small Cap Growth Funds. If you select any of the EQ/Alliance Money Market, Alliance Bond, EQ/Alliance Intermediate Government Securities, EQ/Alliance Quality Bond or EQ/Alliance High Yield Funds and the guaranteed interest option, certain restrictions will apply to transfers out of the guaranteed interest option. The Alliance Bond Fund is available only to employer plans that signed an Agreement to participate in that Fund prior to June 1, 1994, and, as described above, special transfer rules apply for these employer plans. If you add any of the Funds of Separate Account No. 66, the Alliance Bond Fund will no longer be subject to any transfer restrictions. However, transfers out of the guaranteed interest option will be subject to certain restrictions. ----- 31 -------------------------------------------------------------------------------- ALLOCATING PROGRAM CONTRIBUTIONS We allocate contributions to the investment options in accordance with the allocation instructions provided to us by the plan trustee or the individual who the plan trustee has previously authorized in writing. Allocations may be made by dollar amounts or in any whole number percentages that total 100%. Allocation changes may be made without charge, but may be subject to employer plan provisions that may limit or disallow such movements. 6 Distributions ----- 32 -------------------------------------------------------------------------------- Keep in mind two sets of rules when considering distributions or withdrawals from RIA. The first are rules and procedures that apply to the investment options, exclusive of the provisions of your plan. We discuss those in this section. The second are rules specific to your plan, which are not described here. Moreover, distribution and benefit payment options under a tax qualified retirement plan are subject to complicated legal requirements. A general explanation of the federal income tax treatment of distributions and benefit payment options is provided in "Tax information" in this prospectus and the SAI. You should discuss your options with a qualified financial advisor. Our service consultants also can be of assistance. Certain plan distributions may be subject to a contingent withdrawal charge, federal income tax, and penalty taxes. See "Charges and expenses" and "Tax information." AMOUNTS IN THE FUNDS. These are generally available for distribution at any time, subject to the provisions of your plan. Distributions from the Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds are permitted at any time. Distributions from remaining Funds are permitted at any time except if there is any delay in redemptions from the corresponding portfolio of EQ Advisors Trust, as applicable. See "When we pay proceeds." AMOUNTS IN THE GUARANTEED INTEREST OPTION. These are generally available for distribution at any time, subject to the provisions of your plan. A deferred payout provision, however, applies to trustee-directed employer plans which are terminating their RIA Contract. Under that provision, we can defer payment of the employer plan balance held in the guaranteed interest option, less the contingent withdrawal charge, by paying out the balance in six installments over five years. During the deferred payout period, we credit the balances upon which we defer payment with the current interest rate declared for each year. We also continue to deduct the ongoing operations fee monthly from the balance during the deferred payout period. When we impose the deferred payout provision, any trustee-directed employer plan benefits becoming due during the deferred payout period will not be paid from the employer plan balance in the guaranteed interest option. If, however, sufficient funds are available, the benefits would be paid from the new funding vehicle for the trustee-directed employer plan. Participant-directed employer plans are not subject to the deferred payout provision. ----- 33 -------------------------------------------------------------------------------- ILLUSTRATION OF DEFERRED PAYOUT PROVISION
Transaction Date End of Year 1 End of Year 2 ---------------------------------------------------------------------------------- guaranteed interest option Plan Assets -Withdrawal Charge ------------------- Distribution Amount 1 Dist. Amt. 1 = 1st Payment ------------- 6 Dist. Amount 1 -1st Payment ------------- Balance 1 --> Balance 1 + Interest - Operations Fee ---------------- Distribution Amount 2 Dist. Amt. 2 = 2nd Payment --------------- 5 Dist. Amount 2 -2nd Payment ------------ Balance --> Balance 2 + Interest - Operations Fee ---------------- Distribution Amount 3 Dist. Amt.3 = 3rd Payment --------------- 4 Dist. Amount 3 -3rd Payment --------------- Balance --> End of Year 3 End of Year 4 End of Year 5 ------------------------------------------------------------------------------------ Balance 3 + Interest - Operations Fee ------------------------------ Distribution Amount 4 Dist. Amt. 4 = 4th Payment --------------- 3 Dist. Amount 4 - 4th Payment --------------- Balance --> Balance 4 + Interest - Operations Fee --------------- Distribution Amount 5 Dist. Amt. 5 = 5th Payment --------------- 2 Dist. Amount 5 - 5th Payment --------------- Balance --> Balance 5 + Interest - Operations Fee ------------- Final Distribution
7 Optional participant recordkeeping services ----- 34 -------------------------------------------------------------------------------- SERVICES PROVIDED. If you elect the optional participant recordkeeping services (PRS) program, we: o establish an individual participant account for each participant covered by your plan based on data you provide; o receive and deposit contributions on behalf of participants to individual participant accounts; o maintain records reflecting, for each participant, contributions, transfers, loan transactions, withdrawals and investment experience and interest accrued, as applicable, on an individual participant's proportionate values in the plan; o provide to you individual participants' reports reflecting the activity in the individual participant's proportionate interest in the plan; and o process transfers and distributions of the participant's portion of his or her share of the employer plan assets among the investment options as you instruct. You are responsible for providing Equitable Life with required information and for complying with our procedures relating to the PRS program. We will not be liable for errors in recordkeeping if the information you provide is not provided on a timely basis or is incorrect. The plan administrator retains full responsibility for the income tax withholding and reporting requirements including required notices to the plan participants, as set forth in the federal income tax rules and applicable Treasury Regulations. INVESTMENT OPTIONS. You must include the guaranteed interest option in the investment options if you select PRS. FEES. We charge an annual fee of $25 per active participant paid in twelve equal monthly installments of $2.08. We deduct the fee from the individual participant's account at the end of each month by means of a reduction of units or a cash withdrawal from the guaranteed interest option. We retain the right to change the fee upon 30 days notice to the employer. See "Charges and expenses." ENROLLMENT. You may enroll for PRS at the time your plan is established with us under RIA, or at any time thereafter. Enrollment is subject to our approval, at our sole discretion. We have summarized the main features of PRS here, and participation in this aspect of the RIA program is subject to the terms set forth in the participation agreement (including any separate supplementary agreement) entered into between you and us. 8 Charges and expenses ----- 35 -------------------------------------------------------------------------------- You will incur two general types of charges under RIA: (1) Charges reflected as reductions in the unit values of the Funds which are recorded as expenses of the Fund. These charges apply to all amounts invested in RIA, including installment payout option payments. (2) Charges stated as a defined percentage or fixed dollar amount and deducted by reducing the number of units in the appropriate Funds and the dollars in the guaranteed interest option. We make no deduction from your contributions for sales expenses. CHARGES REFLECTED IN THE UNIT VALUES INVESTMENT MANAGEMENT AND ACCOUNTING FEES The computation of unit values for the Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds reflects fees we charge for investment management and accounting. We receive fees for investment management and financial accounting services we provide for these Funds, as well as a portion of our related administrative costs. This fee is charged daily at an effective annual rate of .50% of the net assets of the Alliance Bond, Alliance Common Stock, Alliance Mid Cap Growth and Alliance Balanced Funds. ADMINISTRATIVE CHARGE FOR THE FUNDS OF SEPARATE ACCOUNT NO. 66 We make a daily charge at an annual rate of 0.05% of the assets invested in certain of the Funds of Separate Account No. 66 as indicated under the "Fee Table," above. The charge is designed to reimburse us for our costs in providing administrative services in connection with the contracts. INDIRECT EXPENSES BORNE BY THE FUNDS ANNUAL EXPENSES OF EQ ADVISORS TRUST. The Funds that invest in portfolios of EQ Advisors Trust are indirectly subject to investment advisory and other expenses charged against assets of their corresponding portfolios. These expenses are described in the prospectus for EQ Advisors Trust attached at the end of this prospectus. OTHER EXPENSES. Certain costs and expenses are charged directly to the Funds. These may include transfer taxes, SEC filing fees and certain related expenses including printing of SEC filings, prospectuses and reports, proxy mailings, other mailing costs, and legal expenses. CHARGES WHICH REDUCE THE NUMBER OF UNITS CONTINGENT WITHDRAWAL CHARGE We may impose a contingent withdrawal charge ("CWC") against withdrawals made from any of the Funds or the guaranteed interest option at any time up to and including the ninth anniversary of the date on which the employer plan began its participation in RIA. The CWC is designed to recover the unamortized sales and promotion expenses and initial enrollment expenses incurred by us. We will not apply a CWC against amounts withdrawn for the purpose of making benefit distribution payments unless such withdrawals are made (i) on or after the date of discontinuance of an employer plan's participation in RIA or (ii) as a result of a full or partial termination, within the meaning of applicable Internal Revenue Service ("IRS") or court interpretations. We will apply a CWC against amounts withdrawn for purposes of making benefit payments to participants who terminated employment either voluntarily or involuntarily, but only when such terminations are attributable to (i) the employer's merger with another company, (ii) the sale of the employer or (iii) the bankruptcy of the employer which leads to the full or partial termination of the plan or the discontinuance of the employer plan's participation in RIA. ----- 36 -------------------------------------------------------------------------------- We do not apply a CWC on transfers between the investment options. However, we do apply a CWC to withdrawals from RIA for the purpose of transferring to another funding vehicle under the employer plan, unless an officer of Equitable Life agrees, in writing, to waive this charge. We do not consider withdrawals from RIA for the purpose of paying plan expenses or the premium on a life insurance policy, including one held under the employer plan, to be in-service withdrawals or any other type of benefit distribution. These withdrawals are subject to the CWC. The amount of any CWC is determined in accordance with the rate schedule set forth below. We include outstanding loan balances in the plan's assets for purposes of assessing the CWC.
-------------------------------------------------------------------------------- WITHDRAWAL IN PARTICIPATION YEARS CONTINGENT WITHDRAWAL CHARGE -------------------------------------------------------------------------------- 1 or 2 6% of Amount Withdrawn 3 or 4 5% 5 or 6 4% 7 or 8 3% 9 2% 10 and later 0% --------------------------------------------------------------------------------
Benefit distribution payments are those payments that become payable with respect to participants under the terms of the employer plan as follows: 1. as the result of the retirement, death or disability of a participant; 2. as the result of a participant's separation from service as defined under Section 402(d)(4)(A) of the Code; 3. in connection with a loan transaction, if the loan is repaid in accordance with its terms; 4. as a minimum distribution pursuant to Section 401(a)(9) of the Code; 5. as a hardship withdrawal pursuant to Section 401(k) of the Code; 6. pursuant to a qualified domestic relations order ("QDRO") under Section 414(p) of the Code, but only if the QDRO specifically requires that the plan administrator withdraw amounts for payment to an alternate payee; 7. as a result of an in-service withdrawal attributable to the after-tax contributions of a participant; or 8. as a result of an in-service withdrawal from a profit-sharing plan after meeting a minimum number of years of service and/or participation in the plan, and the attainment of a minimum age specified in the plan. Prior to any withdrawal from RIA for benefit distribution purposes, Equitable Life reserves the right to receive from the employer and/or trustees of the plan, evidence satisfactory to it that such benefit distribution conforms to at least one of the types mentioned above. ONGOING OPERATIONS FEE The ongoing operations fee is based on the combined net balances (including any outstanding loan balance) of an employer plan in the investment options at the close of business on the last business day of each month. The amount of the ongoing operations fee is determined under the rate schedule that applies to the employer plan. Unless you make other arrangements, we deduct the charge from employer plan balances at the close of business on the last business day of the following month. Set forth below is the rate schedule for employer plans which adopted RIA after February 9, 1986. Information concerning the rate schedule for employer plans that adopted RIA on or before February 9, 1986 is included in the SAI under "Fund information."
-------------------------------------------------------------------------------- COMBINED BALANCE MONTHLY OF INVESTMENT OPTIONS RATE -------------------------------------------------------------------------------- First $ 150,000 1/12 of 1.25% Next $ 350,000 1/12 of 1.00% Next $ 500,000 1/12 of 0.75% Over $1,000,000 1/12 of 0.50% --------------------------------------------------------------------------------
----- 37 -------------------------------------------------------------------------------- The ongoing operations fee is designed to cover such expenses as contract underwriting and issuance for employer plans, employer plan-level recordkeeping, processing transactions and benefit distributions, administratively maintaining the investment options, commissions, promotion of RIA, administrative costs (including certain enrollment and other servicing costs), systems development, legal and technical support, product and financial planning and part of our general overhead expenses. Administrative costs and overhead expenses include such items as salaries, rent, postage, telephone, travel, office equipment and stationery, and legal, actuarial and accounting fees. PARTICIPANT RECORDKEEPING SERVICES CHARGE The PRS is an optional service. If you elect this service, we charge a per participant annual fee of $25. We deduct this fee on a monthly basis at the rate of $2.08 per participant. We determine the amount of the fee for an employer plan at the close of business on the last business day of each month based on the number of participants enrolled with us at that time. Unless you make other arrangements, we deduct this fee from the combined balances of each participant in the investment options at the close of business on the last business day of the following month. The PRS fee covers expenses incurred for establishing and maintaining individual records, issuing statements and reports for individual employees and employer plans, and processing individual transactions and benefit distributions. We are not responsible for reconciling participants' individual account balances with the entire amount of the employer plan where we do not maintain individual account balances. LOAN FEE We charge a loan fee in an amount equal to 1% of the loan principal amount on the date the plan loan is made. OTHER BILLING ARRANGEMENTS The ongoing operations and participant recordkeeping services fees can be paid by a direct billing arrangement we have with the employer subject to a written agreement between Equitable Life and the employer. INDIVIDUAL ANNUITY CHARGES ANNUITY ADMINISTRATIVE CHARGE. If a participant elects an annuity payout option, we deduct a $175 charge from the amount used to purchase the annuity. This charge reimburses us for administrative expenses associated with processing the application for the annuity and issuing each month's annuity payment. CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES. We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium taxes in your state. Generally, we deduct the charge from the amount applied to provide an annuity payout option. The current tax charge that might be imposed by us varies by state and ranges from 0% to 1% (1% in Puerto Rico and 5% in the U.S. Virgin Islands). GENERAL INFORMATION ON FEES AND CHARGES We reserve the right (1) to change from time to time the charges and fees described in this prospectus upon prior notice to the employer and (2) to establish separate fee schedules for requested non-routine administrative services and for newly scheduled services not presently contemplated under the contracts. 9 Tax information ----- 38 -------------------------------------------------------------------------------- Employer retirement plans that may qualify for tax-favored treatment are governed by the provisions of the Internal Revenue Code ("Code") and ERISA. The Code is administered by the IRS. ERISA is administered primarily by the DOL. Provisions of the Code and ERISA include requirements for various features including: o participation, vesting and funding; o nondiscrimination; o limits on contributions and benefits; o distributions; o penalties; o duties of fiduciaries; o prohibited transactions; and o withholding, reporting and disclosure. IT IS THE RESPONSIBILITY OF THE EMPLOYER, PLAN TRUSTEE AND PLAN ADMINISTRATOR TO SATISFY THE REQUIREMENTS OF THE CODE AND ERISA. This prospectus does not provide detailed tax or ERISA information. The following discussion briefly outlines the Code provisions relating to contributions to and distributions from certain tax-qualified retirement plans, although some information on other provisions is also provided. Various tax disadvantages, including penalties, may result from actions that conflict with requirements of the Code or ERISA, and regulations or other interpretations thereof. In addition, federal tax laws and ERISA are continually under review by the Congress, and any changes in those laws, or in the regulations pertaining to those laws, may affect the tax treatment of amounts contributed to tax-qualified retirement plans or the legality of fiduciary actions under ERISA. Certain tax advantages of tax-qualified retirement plans may not be available under certain state and local tax laws. This outline does not discuss the effect of any state or local tax laws. It also does not discuss the effect of federal estate and gift tax laws (or state and local estate, inheritance and other similar tax laws). This outline assumes that the participant does not participate in any other qualified retirement plan. Finally, it should be noted that many tax consequences depend on the particular jurisdiction or circumstances of a participant or beneficiary. The provisions of the Code and ERISA are highly complex. For complete information on these provisions, as well as all other federal, state, local and other tax considerations, qualified legal and tax advisers should be consulted. BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT Annuity contracts can be purchased in connection with retirement plans qualified under Code section 401. How these arrangements work, including special rules applicable to each, are described below. You should be aware that the funding vehicle for a qualified arrangement does not provide any tax deferral benefit beyond that already provided by the Code for all permissible funding vehicles. Before choosing an annuity contract, therefore, you should consider the annuity's features and benefits, such as RIA's, selection of investment funds and guaranteed interest option and chocies of pay-out options, as well as the features and benefits of other permissible funding vehicles and the relative costs of annuities and other arrangements. You should be aware that cost may vary depending on the features and benefits made available and the charges and expenses of the investment options or funds that you select. TAX ASPECTS OF CONTRIBUTIONS TO A PLAN Corporations, partnerships and self-employed individuals can establish qualified plans for the working owners and their employees who participate in the plan. Qualified plans established by partnerships and sole proprietorships are frequently referred to as "Keogh" plans. Both employer and employee contributions to these plans are subject to a variety of limitations, some of which are discussed here briefly. See your tax adviser for more information. Violation of contribution limits may result in disqualification and/or imposition of monetary penalties. The trustee or plan administrator may make contributions on behalf of the plan participants which are deductible from the employer's federal gross income. ----- 39 -------------------------------------------------------------------------------- Employer contributions which exceed the amount currently deductible are subject to a 10% penalty tax. There are special rules for corporate plans and Keogh plans which are top heavy plans (i.e., more than 60% of the contributions or benefits are allocated to certain highly compensated employees otherwise known as key employees). The limits on the amount of contributions that can be made and/or forfeitures that can be allocated to each participant in defined contribution plans is the lesser of $35,000 or 25% of the compensation or earned income for each participant. In 2001, the employer may not consider compensation in excess of $170,000 in calculating contributions or benefits to the plan. This amount may be adjusted for cost-of-living changes in future years. For self-employed individuals, earned income is defined so as to exclude deductible contributions made to all tax-qualified retirement plans, including Keogh plans, and takes into account the deduction for one-half the individual's self-employment tax. Deductions for aggregate contributions to profit-sharing plans may not exceed 15% of all participants' compensation. Special limits on contributions apply to anyone who participates in more than one qualified plan or who controls another trade or business. In addition, there is an overall limit on the total amount of contributions and benefits under all tax-qualified retirement plans in which an individual participates. The deductible limits for corporate plans and Keogh plans which are defined benefit plans are based on the minimum funding standard determined by the plan actuary each year. No participant can receive a benefit which exceeds the lesser of (i) $90,000 ($140,000 as indexed for inflation for the 2001 plan year) or (ii) 100% of the participant's average compensation for the consecutive three-year period which results in the highest such average. The $90,000 limit is actuarially reduced for participants retiring prior to the social security retirement age and actuarially increased for participants retiring after the social security retirement age. Special grandfathering rules apply to certain participants whose benefits exceed the $90,000 limit. A qualified plan may allow the participant to direct the employer to make contributions which will not be included in the employee's income (elective deferrals) by entering into a salary reduction agreement with the employer under Section 401(k) of the Code. The 401(k) plan, otherwise known as a cash or deferred arrangement, must not allow withdrawals of elective deferrals and the earnings thereon prior to the earliest of the following events: (i) attainment of age 59-1/2, (ii) death, (iii) disability, (iv) certain business dispositions and plan terminations or (v) termination of employment. In addition, in-service withdrawals of elective deferrals (but not earnings after 1988) may be made in the case of financial hardship. A participant cannot elect to defer annually more than $7,000 ($10,500 as indexed for inflation in 2001) under all salary reduction arrangements with all employers in which the individual participates. Employer matching contributions to a 401(k) plan for self-employed individuals are no longer treated as elective deferrals, and are treated the same as employer matching contributions for other employees. A qualified plan must not discriminate in favor of highly compensated employees. Two special nondiscrimination rules limit contributions and benefits for highly compensated employees in the case of (1) a 401(k) plan and (2) any defined contribution plan, whether or not a 401(k) plan, which provides for employer matching contributions to employee after-tax contributions or elective deferrals. Generally, these nondiscrimination tests require an employer to compare the deferrals or the aggregate contributions, as the case may be, made by the eligible highly compensated employees with those made by the non-highly compensated employees, although alternative simplified tests are available. Highly compensated participants include five percent owners and employees earning more than $85,000 for the prior year. (If desired the latter group can be limited to employees who are in the top 20% of all employees based on compensation.) Certain 401(k) plans can adopt a "SIMPLE 401(k)" feature which will enable the plan to meet nondiscrimination ----- 40 -------------------------------------------------------------------------------- requirements without testing. The SIMPLE 401(k) feature requires the plan to meet specified contribution, vesting and exclusive plan requirements. Employers may adopt a safe harbor 401(k) arrangement. Under this arrangement, an employer agrees to offer a matching contribution equal to (a) 100% of salary deferral contributions up to 3% of compensation and (b) 50% of salary deferral contributions that exceed 3% but are less than 5% of compensation. These contributions must be nonforfeitable. If the employer makes these contributions and gives proper notification to plan participants, the plan is not subject to non-discrimination testing on salary deferral and the above contributions. TAX ASPECTS OF DISTRIBUTIONS FROM A PLAN Amounts held under qualified plans are generally not subject to federal income tax until benefits are distributed to the participant or other recipient. In addition, there will not be any tax liability for transfers of any part of the value of an employer plan among the Funds. The various types of benefit payments include withdrawals, annuity payments and lump sum distributions. Each benefit payment made to the participant or other recipient is generally fully taxable as ordinary income. An exception to this general rule is made, however, to the extent a distribution is treated as a recovery of after-tax contributions made by the participant. In addition to income tax, the taxable portion of any distribution may be subject to a 10% penalty tax. See "Penalty tax on premature distributions" in this section. INCOME TAXATION OF WITHDRAWALS The amount of any partial distribution prior to the annuity starting date is treated as ordinary income except to the extent the distribution is treated as a withdrawal of after-tax contributions. Withdrawals from a qualified plan are normally treated as pro rata withdrawals of after-tax contributions and earnings on those contributions. If the plan allowed withdrawals prior to separation from service as of May 5, 1986, however, all after-tax contributions made prior to January 1, 1987 may be withdrawn tax free prior to withdrawing any taxable amounts if properly accounted for by the plan. As discussed in this section in "Certain rules applicable to plan loans," taking a loan or failing to repay an outstanding loan as required may, in certain situations, be treated as a taxable distribution. INCOME TAXATION OF ANNUITY PAYMENTS In the case of a distribution in the form of an annuity, the amount of each annuity payment is treated as ordinary income except where the participant has a cost basis in the annuity. The cost basis is equal to the amount of after-tax contributions, plus any employer contributions that had to be included in gross income in prior years. If the participant has a cost basis in the annuity, a portion of each payment received will be excluded from gross income to reflect the return of the cost basis. The remainder of each payment will be includable in gross income as ordinary income. The excludable portion is based on the ratio of the participant's cost basis in the annuity on the annuity starting date to the expected return, generally determined in accordance with a statutory table, under the annuity as of such date. The full amount of the payments received after the cost basis of the annuity is recovered is fully taxable. If there is a refund feature under the annuity, the beneficiary of the refund may recover the remaining cost basis as payments are made. If the participant (and beneficiary under a joint and survivor annuity) die prior to recovering the full cost basis of the annuity, a deduction is allowed on the participant's (or beneficiary's) final tax return. INCOME TAXATION OF LUMP SUM DISTRIBUTIONS If benefits are paid in a lump sum, the payment may be eligible for the special tax treatment accorded lump sum distributions. In certain limited cases, the distribution may be eligible for favorable ten year averaging and long-term capital gain treatment. ----- 41 -------------------------------------------------------------------------------- ELIGIBLE ROLLOVER DISTRIBUTIONS Many types of distributions from qualified plans are "eligible rollover distributions" that can be rolled over directly to another qualified plan or a traditional individual retirement arrangement ("IRA"), or rolled over to another plan or IRA within 60 days of receipt by the individual. Death benefits received by a spouse' beneficiary may only be rolled over into an IRA. To the extent a distribution is rolled over, it remains tax deferred. Distributions not rolled over directly, however, are subject to 20% mandatory withholding. See "Federal income tax withholding" in this section. The taxable portion of most distributions will generally be an "eligible rollover distribution" unless the distribution falls within the following list of exceptions: o one of a series of substantially equal periodic payments made (not less frequently than annually); (a) for the life (or life expectancy) of the participant or the joint lives (or joint life expectancies) of the participant and his or her designated beneficiary, or (b) for a specified period of ten years or more. o nondeductible voluntary contributions; o hardship withdrawals; o any distribution to the extent it is a required distribution under Section 401(a)(9) of the Code (see "Distribution requirements and limits" below); o certain corrective distributions in plans subject to Sections 401(k), 401(m) or 402(g) of the Code; o loans that are treated as deemed distributions under Section 72(p) of the Code; o P.S. 58 costs (incurred if the plan provides life insurance protection for participants); o dividends paid on employer securities as described in Section 404(k) of the Code; and o a distribution to a non-spousal beneficiary. If a distribution is made to a participant's surviving spouse, or to a current or former spouse under a qualified domestic relations order, the distribution may be an eligible rollover distribution, subject to mandatory 20% withholding, unless one of the exceptions described above applies. PENALTY TAX ON PREMATURE DISTRIBUTIONS An additional 10% penalty tax is imposed on all taxable amounts distributed to a participant who has not reached age 59-1/2 unless the distribution falls within a specified exception or is rolled over into an IRA or other qualified plan. The specified exceptions are for: (a) distributions made on account of the participant's death or disability, (b) distributions (which begin after separation from service) in the form of a life annuity or substantially equal periodic installments over the participant's life expectancy (or the joint life expectancy of the participant and the beneficiary), (c) distributions due to separation from active service after age 55 and (d) distributions used to pay certain extraordinary medical expenses. FEDERAL INCOME TAX WITHHOLDING Mandatory federal income tax withholding at a 20% rate will apply to all "eligible rollover distributions" unless the participant elects to have the distribution directly rolled over to another qualified plan or traditional IRA. See the description above of "Eligible rollover distributions." With respect to distributions that are not eligible rollover distributions, federal income tax must be withheld on the taxable portion of pension and annuity payments, unless the recipient elects otherwise. The rate of withholding will depend on the type of distribution and, in certain cases, the amount of the distribution. Special rules may apply to foreign recipients, or United States citizens residing outside the United States. If a recipient does not have sufficient income tax withheld, or does not make sufficient estimated income tax payments, the recipient may incur penalties under the estimated income tax rules. Recipients should consult their tax advisers to determine whether they should elect out of withholding. ----- 42 -------------------------------------------------------------------------------- Requests not to withhold federal income tax must be made in writing prior to receiving payments and submitted in accordance with the terms of the employer plan. No election out of withholding is valid unless the recipient provides the recipient's correct Taxpayer Identification Number and a U.S. residence address. STATE INCOME TAX WITHHOLDING Certain states have indicated that pension and annuity withholding will apply to payments made to residents of such states. In some states a recipient may elect out of state income tax withholding, even if federal withholding applies. It is not clear whether such states may require mandatory withholding with respect to eligible rollover distributions that are not rolled over (as described in this section under "Eligible rollover distributions"). Contact your tax adviser to see how state withholding may apply to your payment. DISTRIBUTION REQUIREMENTS AND LIMITS Distributions from qualified plans generally must commence no later than April 1st of the calendar year following the calendar year in which the participant reaches age 70-1/2 (or retires from the employer sponsoring the Plan if later). Five percent owners of qualified plans must commence distribution after age 70-1/2 even if they are still working. Distributions can generally be made: (1) in a lump sum payment, (2) over the life of the participant, (3) over the joint lives of the participant and his or her designated beneficiary, (4) over a period not extending beyond the life expectancy of the participant, or (5) over a period not extending beyond the joint life expectancies of the participant and his or her designated beneficiary. The plan document will specify the options available to participants. The minimum amount required to be distributed in each year after minimum distributions are required to begin is described in the Code, Treasury Regulations and IRS guidelines. If the participant dies after required distribution has begun, payment of the remaining interest under the plan must be made at least as rapidly as under the method used prior to the participant's death. If a participant dies before required distribution has begun, payment of the entire interest under the plan must be completed within five years after death, unless payments to a designated beneficiary begin within one year of the participant's death and are made over the beneficiary's life or over a period certain which does not extend beyond the beneficiary's life expectancy. If the surviving spouse is the designated beneficiary, the spouse may delay the commencement of such payments up until the date that the participant would have attained age 70-1/2. Distributions received by a beneficiary are generally given the same tax treatment the participant would have received if distribution had been made to the participant. If there is an insufficient distribution in any year, a 50% tax may be imposed on the amount by which the minimum required to be distributed exceeds the amount actually distributed. Failure to have distributions made as the Code and Treasury Regulations require may result in plan disqualification. The IRS and Treasury recently have proposed revisions to the minimum distribution rules. We expect the rules to be finalized no earlier than January 1, 2002. The proposed revisions permit plan administrators, plan participants, and beneficiaries to apply the proposed revisions to distributions for the calendar year 2001 provided that the plan adopts a temporary amendment to permit such distributions. SPOUSAL REQUIREMENTS In the case of many qualified retirement plans, if a participant is married at the time benefit payments become payable, unless the participant elects otherwise with written consent of the spouse, the benefit must be paid in the form of a qualified joint and survivor annuity ("QJSA"). A QJSA is an annuity payable for the life of the participant with a survivor annuity for the life of the spouse in an amount which is not less than ----- 43 -------------------------------------------------------------------------------- one-half of the amount payable to the participant during his or her lifetime. In addition, a married participant's beneficiary must be the spouse, unless the spouse consents in writing to the designation of a different beneficiary. CERTAIN RULES APPLICABLE TO PLAN LOANS The following are federal tax and ERISA rules that apply to loan provisions of all employer plans. Employer plans may have additional restrictions. Employers and participants should review these matters with their own tax advisers before requesting a loan. There will not generally be any tax liability with respect to properly made loans in accordance with an employer plan. A loan may be in violation of applicable provisions unless it complies with the following conditions: o With respect to specific loans made by the plan to a plan participant, the loan administrator determines the interest rate, the maximum term and all other terms and conditions of the loan. o In general, the term of the loan cannot exceed five years unless the loan is used to acquire the participant's primary residence. o All principal and interest must be amortized in substantially level payments over the term of the loan, with payments being made at least quarterly. o The amount of a loan to a participant, when aggregated with all other loans to the participant from all qualified plans of the employer, cannot exceed the greater of $10,000 or 50% of the participant's nonforfeitable accrued benefits, and cannot exceed $50,000 in any event. This $50,000 limit is reduced by the excess (if any) of the highest outstanding loan balance over the previous twelve months over the outstanding balance of plan loans on the date the loan was made. o For loans made prior to January 1, 1987 and not renewed, modified, renegotiated or extended after December 31, 1986 the $50,000 maximum aggregate loan balance is not required to be reduced, the quarterly amortization requirement does not apply, and the term of a loan may exceed five years if used to purchase the principal residence of the participant or a member of his or her family, as defined in the Code. o Only 50% of the participant's vested account balance may serve as security for a loan. To the extent that a participant borrows an amount which should be secured by more than 50% of the participant's vested account balance, it is the responsibility of the trustee or plan administrator to obtain the additional security. o Loans must be available to all plan participants, former participants who still have account balances under the plan, beneficiaries and alternate payees on a reasonably equivalent basis. o Each new or renewed loan must bear a reasonable rate of interest commensurate with the interest rates charged by persons in the business of lending money for loans that would be made under similar circumstances. o Many plans provide that the participant's spouse must consent in writing to the loan. o Except to the extent permitted in accordance with the terms of a prohibited transaction exemption issued by the DOL, loans are not available (i) in a Keogh (non-corporate plan to an owner-employee or a partner who owns more than 10% of a partnership or (ii) to 5% shareholders in an S corporation. If the loan does not qualify under the conditions above, the participant fails to repay the interest or principal when due, or in some instances, if the participant separates from service or the plan is terminated, the amount borrowed or not repaid may be treated as a distribution. The participant may be required to include as ordinary income the unpaid amount due and a 10% penalty tax on early distributions may apply. The plan should report the amount of the unpaid loan balance to the IRS as a distribution. See "Tax aspects of distributions from a plan" in this section. The loan requirements and provisions of RIA shall apply regardless of the plan administrator's guidelines. ----- 44 -------------------------------------------------------------------------------- IMPACT OF TAXES TO EQUITABLE LIFE Under existing federal income tax law, no taxes are payable on investment income and capital gains of the Funds that are applied to increase the reserves under the contracts. Accordingly, Equitable Life does not anticipate that it will incur any federal income tax liability attributable to income allocated to the variable annuity contracts participating in the Funds and it does not currently impose a charge for federal income tax on this income when it computes unit values for the Funds. If changes in federal tax laws or interpretations thereof would result in Equitable Life being taxed, then Equitable Life may impose a charge against the Funds (on some or all contracts) to provide for payment of such taxes. CERTAIN RULES APPLICABLE TO PLANS DESIGNED TO COMPLY WITH SECTION 404(C) OF ERISA Section 404(c) of ERISA, and the related DOL regulation, provide that if a plan participant or beneficiary exercises control over the assets in his or her plan account, plan fiduciaries will not be liable for any loss that is the direct and necessary result of the plan participant's or beneficiary's exercise of control. As a result, if the plan complies with Section 404(c) and the DOL regulation thereunder, the plan participant can make and is responsible for the results of his or her own investment decisions. Section 404(c) plans must provide, among other things, that a broad range of investment choices are available to plan participants and beneficiaries and must provide such plan participants and beneficiaries with enough information to make informed investment decisions. Compliance with the Section 404(c) regulation is completely voluntary by the plan sponsor, and the plan sponsor may choose not to comply with Section 404(c). The RIA Program provides employer plans with the broad range of investment choices and information needed in order to meet the requirements of the Section 404(c) regulation. If the plan is intended to be a Section 404(c) plan, it is, however, the plan sponsor's responsibility to see that the requirements of the DOL regulation are met. Equitable Life and its agents shall not be responsible if a plan fails to meet the requirements of Section 404(c). 10 More information ----- 45 -------------------------------------------------------------------------------- ABOUT CHANGES OR TERMINATIONS AMENDMENTS. The contracts have been amended in the past and we and the trustee under the Master Trust Agreement may agree to amendments in the future. No future change can affect annuity benefits in the course of payment. If certain conditions are met, we may: (1) terminate the offer of any of the investment options and (2) offer new investment options with different terms. We may unilaterally amend or modify the contracts or the Master Retirement Trust without the consent of the employer or plan sponsor, as the case may be, in order to keep the contracts or the Master Retirement Trust in compliance with law. TERMINATION. We can discontinue offering RIA at any time. Discontinuance of RIA would not affect annuities in the course of payment, but we would not accept further contributions. The employer may elect to maintain investment options balances with us to provide annuity benefits in accordance with the terms of the contracts. The employer may elect to discontinue the participation of the employer plan in RIA at any time upon advance written notice to us. We may elect, upon written notice to the employer, to discontinue the participation of the employer plan in RIA if (1) the employer fails to comply with any terms of the Master Retirement Trust, (2) the employer fails to make the required minimum contributions, (3) as may be agreed upon in writing between Equitable Life and the employer if the plan fails to maintain minimum amounts of Funds invested in RIA, or (4) the employer fails to comply with any representations and warranties made by the employer, trustees or employer plan to Equitable Life in connection with the employer plan's participation in RIA. At any time on or after the participation of the employer in RIA has been discontinued, we may withdraw the entire amount of the employer plan assets held in the investment options, and pay them to the trustee of the employer plan, subject to our right to defer payout of amounts held in the guaranteed interest option, less any applicable charges and fees and outstanding loan balances. IRS DISQUALIFICATION If your plan is found not to qualify under the Internal Revenue Code, we can terminate your participation under RIA. In this event, we will withdraw the employer plan balances from the investment options, less applicable charges and fees and any outstanding loan balances, and pay the amounts to the trustees of the plan. ABOUT THE SEPARATE ACCOUNTS Each Fund is one, or part of one, of our separate accounts. We established the separate accounts under special provisions of the New York Insurance Law. These provisions prevent creditors from any other business we conduct from reaching the assets we hold in our Funds for owners of our variable annuity contracts, including our group annuity contracts. The results of each separate account's operations are accounted for without regard to Equitable Life's, or any other separate account's, operating results. We are the legal owner of all of the assets in the separate accounts and may withdraw any amounts we have in the separate accounts that exceed our reserves and other liabilities under variable annuity contracts. We reserve the right to take certain actions in connection with our operations and the operations of the Funds as permitted by applicable law. If necessary, we will seek approval by participants in RIA. We established the Alliance Bond Fund in 1981, Alliance Common Stock and Alliance Mid Cap Growth Funds in 1969, and Alliance Balanced Fund in 1979. We established Separate Account No. 66, which holds the other Funds offered under the contract, in 1997. Because of exclusionary provisions, none of the Funds are subject to regulation under the Investment Company Act of 1940 ("1940 Act"). EQ Advisors Trust shares are purchased by Separate Account No. 66. ABOUT EQ ADVISORS TRUST EQ Advisors Trust is registered under the Investment Company Act of 1940. It is classified as an "open-end management ----- 46 -------------------------------------------------------------------------------- investment company," more commonly called a mutual fund. EQ Advisors trust issues different shares relating to each portfolio. Equitable Life serves as the investment manager of EQ Advisors Trust. As such, Equitable Life oversees the activities of the investment advisers with respect to EQ Advisors Trust and is responsible for retaining or discontinuing the services of those advisers. (Prior to September 1999, EQ Financial Consultants, Inc., the predecessor of AXA Advisors, LLC and an affiliate of Equitable Life, served as investment manager to EQ Advisors Trust.) EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth and EQ/Alliance Technology) in which the Funds of Separate Account No. 66 invest, were part of The Hudson River Trust. On October 18, 1999, these portfolios became corresponding portfolios of EQ Advisors Trust. EQ Advisors Trust does not impose sales charges or "loads" for buying and selling its shares. All dividends and other distributions on shares are reinvested in full. The Board of Trustees of EQ Advisors Trust may establish additional portfolios or eliminate existing portfolios at any time. More detailed information about EQ Advisors Trust, its investment objectives, policies, restrictions, risks, expenses, multiple class distribution systems, the Rule 12b-1 plan relating to the Class IB shares, and other aspects of its operations, appear in the prospectus for EQ Advisors Trust attached at the end of this prospectus, or in its SAI, which is available upon request. ABOUT THE GENERAL ACCOUNT Our general account supports all of our policy and contract guarantees, including those that apply to the guaranteed interest option, as well as our general obligations. The general account is subject to regulation and supervision by the Insurance Department of the State of New York and to the insurance laws and regulations of all jurisdictions where we are authorized to do business. Because of exemptions and exclusionary provisions that apply, interests in the general account have not been registered under the Securities Act of 1933, nor is the general account an investment company under the Investment Company Act of 1940. We have been advised that the staff of the SEC has not reviewed the portions of this prospectus that relate to the general account. The disclosure, however, may be subject to certain provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. COMBINATION OF CERTAIN INVESTMENT OPTIONS AND SEPARATE ACCOUNTS On or about May 18, 2001, the following combinations will occur: (i) interests in the Alliance Balanced Fund--Separate Account No. 10 will replace interests in the Alliance Conservative Investors, EQ/Evergreen Foundation, Mercury World Strategy and EQ/Putnam Balanced Funds and these Funds will no longer be available; and (ii) interests in the EQ/Bernstein Diversified Value Fund will replace interests in the T. Rowe Price Equity Income Fund and this Fund will no longer be available. We will move the assets from the replaced Funds into the applicable surviving Fund. We will also automatically direct any contributions made to the replaced Funds to the applicable surviving Fund. Since the replaced Funds will continue to be in existence only until approximately May 18, 2001, references to these options have been omitted from the fee table and the expense examples. On May 1, 2001, Separate Account No. 51 was combined into Separate Account No. 66 and the divisions that were previously part of Separate Account No. 51 are now part of Separate Account No. 66. WHEN WE PAY PROCEEDS Ordinarily we will apply proceeds to an annuity and make payments or withdrawals out of the investment options promptly after the date of the transaction. However, we can defer payments, apply proceeds to an annuity and process withdrawals from the Funds for any period during which the New York Stock Exchange is closed for trading, sales of securities are restricted or determination of the fair market value of assets of the Funds is not reasonably practicable ----- 47 -------------------------------------------------------------------------------- because of an emergency. We may also defer withdrawals from the plan in installments in order to protect the interests of the other contract holder in a Fund. WHEN TRANSACTION REQUESTS ARE EFFECTIVE Transaction requests may be made by the authorized person for the employer plan as shown on our records, in written or facsimile form acceptable to us and signed by the employer. All requests will be effective on the business day we receive a properly completed and signed written or facsimile request for a financial transaction at the RIA service office. Transaction requests received after the end of a business day will be processed the next business day. We will honor your properly completed transaction requests received via facsimile only if we receive a properly completed transaction form. The request form must be signed by an individual who the plan trustees have previously authorized in writing. We are not responsible for determining the accuracy of a transmission and are not liable for any consequences, including but not limited to, investment losses and lost investment gains, resulting from a faulty or incomplete transmission. If your request form is not properly completed, we will contact you within 24 hours of our receipt of your facsimile. We will use our best efforts to acknowledge receipt of a facsimile transmission, but our failure to acknowledge or a failure in your receipt of such acknowledgment will not invalidate your transaction request. If you do not receive acknowledgment of your facsimile within 24 hours, contact the RIA service office at the toll free 800 number. VOTING RIGHTS No voting rights apply to any of the separate accounts or to the guaranteed interest option. We do, however, have the right to vote shares of EQ Advisors Trust held by the Funds. If EQ Advisors Trust holds a meeting of shareholders, we will vote shares of the portfolios of EQ Advisors Trust allocated to the corresponding Funds in accordance with instructions received from employers, participants or trustees, as the case may be. Shares will be voted in proportion to the voter's interest in the Funds holding the shares as of the record date for the shareholders meeting. We will vote the shares for which no instructions have been received in the same proportion as we vote shares for which we have received instructions. Employers, participants or trustees will receive: (1) periodic reports relating to EQ Advisors Trust and (2) proxy materials, together with a voting instruction form, in connection with shareholder meetings. Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to our separate accounts and an affiliated qualified plan trust. In addition, EQ Advisors Trust shares are held by separate accounts of insurance companies both affiliated and unaffiliated with us. Shares held by these separate accounts will probably be voted according to the instructions of the owners of insurance policies and contracts issued by those insurance companies. While this will dilute the effect of the voting instructions of the contract owners, we currently do not foresee any disadvantages because of this. The Board of Trustees of EQ Advisors Trust intends to monitor events in order to identify any material irreconcilable conflicts that may arise and to determine what action, if any, should be taken in response. If we believe that a response to any of those events insufficiently protects our contract owners, we will see to it that appropriate action is taken. ABOUT LEGAL PROCEEDINGS Equitable Life and its affiliates are parties to various legal proceedings. In our view, none of these proceedings is likely to have a material adverse effect upon the separate accounts, our ability to meet our obligations under RIA, or the distribution of group annuity contract interests under RIA. ABOUT OUR INDEPENDENT ACCOUNTANTS The financial statements listed below and included in the SAI have been so included in reliance on the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. ----- 48 -------------------------------------------------------------------------------- o The financial statements for Separate Account Nos. 13,10, 4, 3, 51 and 66 as of December 31, 2000 and for each of the two years in the period then ended. o The financial statements for Equitable Life as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000. ABOUT THE TRUSTEE As trustee, Chase Manhattan Bank serves as a party to the group annuity contracts. It has no responsibility for the administration of RIA or for any distributions or duties under the group annuity contracts. REPORTS WE PROVIDE AND AVAILABLE INFORMATION We send the employer a report each quarter that shows transactions in the investment options during the quarter for the employer plan, the number of units in the Funds credited to the employer plan, the unit values and the balances in all of the investment options as of the end of the quarter. The employer automatically receives a confirmation notice following the processing of a financial investment option transaction. The employer will also receive an annual report and a semiannual report containing financial statements of the Funds and a list of the Funds' or Trust's portfolio securities. As permitted by the SEC's rules, we omitted certain portions of the registration statement filed with the SEC from this prospectus and the SAI. You may obtain the omitted information by: (1) requesting a copy of the registration statement from the SEC's principal office in Washington, D.C., and paying prescribed fees, or (2) by accessing the EDGAR Database at the SEC's Web site at www.sec.gov. ACCEPTANCE AND RESPONSIBILITIES The employer or plan sponsor, as the case may be: (1) is solely responsible for determining whether RIA is a suitable funding vehicle and (2) should carefully read the prospectus and other materials before entering into a participation or installation agreement. Our duties and responsibilities are limited to those described in this prospectus. Except as explicitly set forth in the PRS program, we do not provide administrative services in connection with an employer plan. In addition, no financial professional or firm operated by a financial professional is authorized to solicit or agree to perform plan administrative services in his capacity as a financial professional. If an employer or trustee engages a financial professional to provide administrative support services to an employer plan, the employer or trustee engages that financial professional as its representative rather than Equitable Life's. WE ARE NOT LIABLE TO ANY EMPLOYER, TRUSTEE OR EMPLOYER PLAN FOR ANY DAMAGES ARISING FROM OR IN CONNECTION WITH ANY PLAN ADMINISTRATION SERVICES PERFORMED OR AGREED TO BE PERFORMED BY A FINANCIAL PROFESSIONAL. ABOUT REGISTERED UNITS This prospectus relates to our offering of units of interest in the Funds that are registered under the 1933 Act. Financial data and other information contained in this prospectus may refer to such "registered units," as offered in the RIA program. We also offer units under RIA to retirement plans maintained by corporations or governmental entities (collectively, "corporate plans"). However, because of an exemption under the 1933 Act, these corporate plan units are not registered under the 1933 Act or covered by this prospectus. ASSIGNMENT AND CREDITORS' CLAIMS Employers and plan participants cannot assign, sell, alienate, discount or pledge as collateral for a loan or other obligation to any party the employer plan balances and rights under RIA, except to the extent allowed by law for a Qualified Domestic Relations Order ("QDRO"), as that term is defined in the Code. (This reference to a loan does not apply to a loan under RIA.) Proceeds we pay under our contracts cannot be assigned or encumbered by the payee. We will pay all proceeds under our contracts free from the claims of creditors to the extent allowed by law. ----- 49 -------------------------------------------------------------------------------- DISTRIBUTION OF THE CONTRACTS AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants, Inc. and an affiliate of Equitable Life, is the distributor of the contracts and has responsibility for sales and marketing functions of the contracts. AXA Advisors is registered with the SEC as a broker-dealer and a member of the National Association of Securities Dealers, Inc. The principal business address of AXA Advisors is 1290 Avenue of the Americas, New York, New York 10104. The contracts will be sold by financial professionals who are registered representatives of AXA Advisors and its affiliates, who are also our licensed insurance agents. AXA Advisors may also receive compensation and reimbursement for its marketing services under the terms of its distribution agreement with Equitable Life. The offering of the contracts is intended to be continuous. COMMISSIONS AND SERVICE FEES WE PAY Financial professionals who assist in establishing an employer plan in RIA and providing necessary services (not including recordkeeping services) are entitled to receive commissions and service fees from us. We pay these commissions and fees, and they are not in addition to the fees and charges we describe under "Charges and expenses." Any service fees we pay to financial professionals are contingent upon their providing service satisfactory to us. While the charges and expenses that we receive from a RIA employer plan initially may be less than the commissions and service fees we pay to financial professionals, we expect that over time those charges and expenses we collect will be adequate to cover all of our expenses. CERTAIN RETIREMENT PLANS THAT USE RIA MAY ALLOW EMPLOYER PLAN ASSETS TO BE USED IN PART TO BUY LIFE INSURANCE POLICIES RATHER THAN APPLYING ALL OF THE CONTRIBUTIONS TO RIA. Financial professionals will receive commissions on any such Equitable Life insurance policies at standard rates. These commissions are subject to regulation by state law and are at rates higher than those applicable to commissions payable for placing an employer plan under RIA. Appendix: Condensed financial information ----- A-1 -------------------------------------------------------------------------------- These selected per unit data and ratios for the years ended December 31, 2000 through 1993 have been derived from the financial statements audited by PricewaterhouseCoopers LLP, independent accountants, in their reports included in the SAI. For years prior to 1993, the condensed financial information was audited by other independent accountants. The financial statements of each of the Funds as well as the consolidated financial statements of Equitable Life are contained in the SAI. Information is provided for the period that each Fund has been available under RIA, but not longer than ten years. SEPARATE ACCOUNT NO. 13 -- POOLED (ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES INCOME, EXPENSES AND CAPITAL CHANGES PER REGISTERED UNIT OUTSTANDING DURING THE PERIOD INDICATED AND OTHER SUPPLEMENTARY DATA (NOTES F AND G)
-------------------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------------------------------------------------------- 2000 1999 1998 1997 1996 1995 1994 1993 -------------------------------------------------------------------------------------------------------------------- Income $ 3.77 $ 3.27 $ 3.25 $ 3.29 $ 3.09 $ 3.07 $ 2.32 $ 2.18 Expenses (Note B) (0.29) (0.28) (0.28) (0.25) (0.25) (0.23) (0.12) -- -------------------------------------------------------------------------------------------------------------------- Net investment income 3.48 2.99 2.97 3.04 2.84 2.84 2.20 2.18 Net realized and unrealized gain (loss) on investments (Note C) 2.47 (3.20) 1.35 0.79 (1.49) 3.72 (2.99) 1.65 -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in unit value 5.95 (0.21) 4.32 3.83 1.35 6.56 (0.79) 3.83 Alliance Bond Fund unit value (Note A): Beginning of Period $ 58.20 58.41 54.09 50.26 48.91 42.35 43.14 39.31 -------------------------------------------------------------------------------------------------------------------- End of Period $ 64.15 $ 58.20 $ 58.41 $ 54.09 $ 50.26 $ 48.91 $ 42.35 $ 43.14 ==================================================================================================================== Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.36% N/A Ratio of net investment income to average net assets 5.81% 5.13% 5.26% 5.89% 5.81% 6.17% 5.12% 5.17% Number of units outstanding at end of period 0 264 3,003 2,021 2,698 2,392 1,632 545 Portfolio turnover rate (Note E) 337% 88% 133% 188% 137% 288% 264% 254% ==================================================================================================================== MAY 1, 1992- DECEMBER 31, 1992 Income $ 0.59 Expenses (Note B) -- ------------------------------------- Net investment income 0.59 Net realized and unrealized gain (loss) on investments (Note C) 2.37 ------------------------------------- Net increase (decrease) in unit value 2.96 Alliance Bond Fund unit value (Note A): Beginning of Period 36.35 ------------------------------------- End of Period $ 39.31 ===================================== Ratio of expenses to average net assets (Note B) N/A Ratio of net investment income to average net assets 6.00% (Note D) Number of units outstanding at end of period 288 Portfolio turnover rate (Note E) 151% =====================================
See Notes following tables. ----- A-2 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 -- POOLED (ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES INCOME, EXPENSES AND CAPITAL CHANGES PER REGISTERED UNIT OUTSTANDING DURING THE PERIODS INDICATED AND OTHER SUPPLEMENTARY DATA (NOTE F)
-------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2000 1999 1998 1997 -------------------------------------------------------------------------------- Income $ 5.89 $ 5.05 $ 4.80 $ 4.41 Expenses (Note B) (0.84) (0.76) (0.66) (0.56) -------------------------------------------------------------------------------- Net investment income 5.05 4.29 4.14 3.85 Net realized and unrealized gain (loss) on investments (Note C) (8.98) 17.51 19.07 10.33 -------------------------------------------------------------------------------- Net increase (decrease) in unit value (3.93) 21.80 23.21 14.18 Alliance Balanced Fund unit value (Note A): Beginning of Period 164.81 143.01 119.80 105.62 -------------------------------------------------------------------------------- End of Period $ 160.88 $ 164.81 $ 143.01 $ 119.80 ================================================================================ Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.50% 0.50% Ratio of net investment income to average net assets 3.06% 2.88% 3.19% 3.42% Number of units outstanding at end of period 9,759 11,870 29,340 38,304 Portfolio turnover rate (Note E) 145% 95% 89% 165% ================================================================================ ------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 ------------------------------------------------------------------------------------- Income $ 3.60 $ 3.18 $ 2.63 $ 2.67 $ 2.69 $ 2.63 Expenses (Note B) (0.50) (0.43) (0.23) -- -- -- ------------------------------------------------------------------------------------- Net investment income 3.10 2.75 2.40 2.67 2.69 2.63 Net realized and unrealized gain (loss) on investments (Note C) 7.66 13.34 (9.48) 7.28 (4.51) 20.34 ------------------------------------------------------------------------------------- Net increase (decrease) in unit value 10.76 16.09 (7.08) 9.95 (1.82) 22.97 Alliance Balanced Fund unit value (Note A): Beginning of Period 94.86 78.77 85.85 75.90 77.72 54.75 ------------------------------------------------------------------------------------- End of Period $ 105.62 $ 94.86 $ 78.77 $ 85.85 $ 75.90 $ 77.72 ===================================================================================== Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.30% N/A N/A N/A Ratio of net investment income to average net assets 3.13% 3.19% 2.94% 3.31% 3.68% 4.15% Number of units outstanding at end of period 52,080 73,979 86,914 87,242 81,860 80,964 Portfolio turnover rate (Note E) 177% 170% 107% 102% 90% 114% =====================================================================================
See Notes following tables. ----- A-3 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 -- POOLED (ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES INCOME, EXPENSES AND CAPITAL CHANGES PER REGISTERED UNIT OUTSTANDING DURING THE PERIODS INDICATED AND OTHER SUPPLEMENTARY DATA (NOTE F)
-------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------------------- 2000 1999 1998 1997 -------------------------------------------------------------------------------- Income $ 3.61 $ 4.02 $ 3.57 $ 3.39 Expenses (Note B) (4.02) (3.74) (3.38) (3.11) -------------------------------------------------------------------------------- Net investment income (loss) (0.41) 0.28 0.19 0.28 Net realized and unrealized gain (loss) on investments (Note C) (149.19) 233.22 (18.53) 144.74 -------------------------------------------------------------------------------- Net increase (decrease) in unit value (149.60) 233.50 (18.34) 145.02 Alliance Common Stock Fund unit value (Note A): Beginning of Period 898.72 665.22 683.56 538.54 -------------------------------------------------------------------------------- End of Period $ 749.12 $ 898.72 $ 665.22 $ 683.56 ================================================================================ Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.50% 0.50% Ratio of net investment income (loss) to average net assets (0.05)% 0.04% 0.03% 0.05% Number of units outstanding at end of period 7,195 10,056 17,216 21,142 Portfolio turnover rate (Note E) 48% 72% 71% 62% ================================================================================ ------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 ------------------------------------------------------------------------------------------- Income $ 2.99 $ 3.98 $ 3.83 $ 3.69 $ 3.13 $ 2.74 Expenses (Note B) (2.51) (2.03) (1.00) -- -- -- ------------------------------------------------------------------------------------------- Net investment income (loss) 0.48 1.95 2.83 3.69 3.13 2.74 Net realized and unrealized gain (loss) on investments (Note C) 80.65 108.54 (8.98) 56.16 1.86 96.86 ------------------------------------------------------------------------------------------- Net increase (decrease) in unit value 81.13 110.49 (6.15) 59.85 4.99 99.60 Alliance Common Stock Fund unit value (Note A): Beginning of Period 457.41 346.92 353.07 293.22 288.23 188.63 ------------------------------------------------------------------------------------------- End of Period $ 538.54 $ 457.41 $ 346.92 $ 353.07 $ 293.22 $ 288.23 =========================================================================================== Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.30% N/A N/A N/A Ratio of net investment income (loss) to average net assets 0.10% 0.49% 0.81% 1.17% 1.13% 1.14% Number of units outstanding at end of period 24,332 25,937 27,438 24,924 23,331 20,799 Portfolio turnover rate (Note E) 105% 108% 91% 82% 68% 66% ===========================================================================================
See Notes following tables. ----- A-4 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 -- POOLED (ALLIANCE MID CAP GROWTH FUND)* OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES INCOME, EXPENSES AND CAPITAL CHANGES PER REGISTERED UNIT OUTSTANDING DURING THE PERIODS INDICATED AND OTHER SUPPLEMENTARY DATA (NOTE F)
-------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------------------- 2000 1999 1998 1997 -------------------------------------------------------------------------------- Income $ 1.70 $ 1.61 $ 1.42 $ 1.08 Expenses (Note B) (1.15) (1.06) (1.13) (1.13) -------------------------------------------------------------------------------- Net investment income (loss) 0.55 0.55 0.29 (0.05) Net realized and unrealized gain (loss) on investments (Note C) (31.20) 34.80 (31.58) 25.34 -------------------------------------------------------------------------------- Net increase (decrease) in unit value (30.65) 35.35 (31.29) 25.29 Alliance Mid Cap Growth Fund unit value (Note A): Beginning of Period 238.41 203.06 234.35 209.06 -------------------------------------------------------------------------------- End of Period $ 207.76 $ 238.41 $ 203.06 $ 234.35 ================================================================================ Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.50% 0.50% Ratio of net investment income (loss) to average net assets 0.24% 0.27% 0.13% (0.02)% Number of units outstanding at end of period 7,276 10,300 21,322 27,762 Portfolio turnover rate (Note E) 136% 108% 195% 176% ================================================================================ -------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, -------------------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 -------------------------------------------------------------------------------------------- Income $ 1.33 $ 0.98 $ 0.71 $ 1.01 $ 1.21 $ 1.06 Expenses (Note B) (0.98) (0.75) (0.37) -- -- -- -------------------------------------------------------------------------------------------- Net investment income (loss) 0.35 0.23 0.34 1.01 1.21 1.06 Net realized and unrealized gain (loss) on investments (Note C) 38.04 40.49 (5.81) 17.43 (4.23) 55.15 -------------------------------------------------------------------------------------------- Net increase (decrease) in unit value 38.39 40.72 (5.47) 18.44 (3.02) 56.21 Alliance Mid Cap Growth Fund unit value (Note A): Beginning of Period 170.67 129.95 135.42 116.98 120.00 63.79 -------------------------------------------------------------------------------------------- End of Period $ 209.06 $ 170.67 $ 129.95 $ 135.42 $ 116.98 $ 120.00 ============================================================================================ Ratio of expenses to average net assets (Note B) 0.50% 0.50% 0.30% N/A N/A N/A Ratio of net investment income (loss) to average net assets 0.18% 0.15% 0.25% 0.82% 1.09% 1.11% Number of units outstanding at end of period 26,777 26,043 26,964 23,440 21,917 14,830 Portfolio turnover rate (Note E) 118% 137% 94% 83% 71% 63% ============================================================================================
See Notes following tables. * Formerly named "Alliance Aggressive Stock Fund." ----- A-5 -------------------------------------------------------------------------------- Notes: A. The values for a registered Alliance Bond Fund, Alliance Balanced Fund, Alliance Common Stock Fund and Alliance Mid Cap Growth Fund unit on May 1, 1992, January 23, 1985, April 8, 1985 and July 7, 1986, the first date on which payments were allocated to purchase registered units in each Fund, were $36.35, $28.07, $84.15 and $44.82, respectively. B. Certain expenses under RIA are borne directly by employer plans participating in RIA. Accordingly, those charges and fees discussed under "Charges and expenses" are not included above and did not affect the Fund unit values. Those charges and fees are recovered by Equitable Life through an appropriate reduction in the number of units credited to each employer plan participating in the Fund unless the charges and fees are billed directly to and paid by the employer. The dollar amount recovered is included in the expenses in the Statement of Operations for each Fund, which appear in the Financial Statements in the SAI. As of June 1, 1994, the annual investment management and financial accounting fee is deducted from the assets of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds and is reflected in the computation of their unit values. If all charges and fees had been made directly against employer plan assets in the Funds and had been reflected in the computation of Fund unit value, RIA registered unit expenses would have amounted to $0.46, $2.67, $12.86 and $3.77 for the year ended December 31, 2000 on a per unit basis for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds, respectively. For the same reporting periods, the ratio of expenses to average net assets attributable to registered units would have been (on an annualized basis), 0.77%, 1.61%, 1.61% and 1.64% for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds, respectively. (See Note G.) C. See Note 2 to Financial Statements of Separate Account Nos. 13 (Pooled), 10 (Pooled), 4 (Pooled), 3 (Pooled), 51 (Pooled) and 66 (Pooled) which appear in the SAI. D. Annualized basis. E. The portfolio turnover rate excludes all short-term U.S. Government securities and all other securities whose maturities at the time of acquisition were one year or less. The rate stated is the annual turnover rate for the entire Separate Account Nos. 13 -- Pooled, 10 -- Pooled, 4 -- Pooled and 3 -- Pooled. F. Income, expenses, gains and losses shown above pertain only to employer plans' accumulations attributable to RIA registered units. Other plans and trusts also participate in Separate Account Nos. 13 -- Pooled, 10 -- Pooled, 4 -- Pooled and 3 -- Pooled and may have operating results and other supplementary data different from those shown above. G. Because contractholders withdrew their participating interest in Separate Account No. 13 during March of 2000, the per unit data and ratios shown are hypothetical for these registered units. However, the per unit data and ratios developed are based upon actual values for non-registered units of Separate Account No. 13, which carry fees and expenses identical to those imposed upon registered units of the Separate Account. ----- A-6 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51* (POOLED) UNIT VALUES AND NUMBER OF REGISTERED UNITS OUTSTANDING
-------------------------------------------------------------------------------------------- ALLIANCE EQ/ALLIANCE CONSER- GROWTH EQ/ALLIANCE EQ/ALLIANCE VATIVE EQ/ALLIANCE AND GROWTH HIGH INVESTORS GLOBAL INCOME INVESTORS YIELD FUND FUND FUND FUND FUND -------------------------------------------------------------------------------------------- Unit value as of: December 31, 1994 $ 99.83 $ 99.84 $ 99.81 $ 99.52 $ 98.99 Number of units outstanding at December 31, 1994 -- 2,468 192 981 -- Unit value as of December 31, 1995 $ 120.14 $ 118.56 $ 123.78 $ 125.70 $ 118.64 Number of units outstanding at December 31, 1995 236 6,314 1,323 4,502 40 Unit value as of December 31, 1996 $ 126.33 $ 135.81 $ 148.57 $ 141.48 $ 145.72 Number of units outstanding at December 31, 1996 368 9,383 2,078 7,135 69 Unit value as of December 31, 1997 $ 142.97 $ 151.41 $ 188.22 $ 165.12 $ 172.55 Number of units outstanding at December 31, 1997 689 9,726 6,083 8,419 1,414 Unit value as of December 31, 1998 $ 162.74 $ 184.33 $ 227.38 $ 196.61 $ 163.58 Number of units outstanding at December 31, 1998 759 7,382 6,500 7,458 259 Unit value as of December 31, 1999 $ 179.16 $ 255.21 $ 269.68 $ 248.75 $ 158.02 Number of units outstanding at December 31, 1999 828 3,655 6,182 4,812 187 Unit value as of December 31, 2000 $ 185.33 $ 207.48 $ 293.68 $ 231.95 $ 144.28 Number of units outstanding at December 31, 2000 519 3,512 2,424 2,128 414 -------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------ EQ/ALLIANCE INTER. EQ/ALLIANCE EQ/ALLIANCE EQ/ALLIANCE EQ/ GOVT. MONEY QUALITY SMALL CAP EQUITY 500 SECURITIES EQ/ALLIANCE MARKET BOND GROWTH INDEX FUND INT'L FUND FUND FUND FUND FUND ------------------------------------------------------------------------------------------------------------ Unit value as of: December 31, 1994 $ 98.94 -- $ 102.65 $ 99.83 -- $ 101.71 Number of units outstanding at December 31, 1994 -- -- 28 -- -- 10 Unit value as of December 31, 1995 $ 112.07 $ 104.60 $ 108.49 $ 116.76 -- $ 138.75 Number of units outstanding at December 31, 1995 248 -- 1,374 52 -- 641 Unit value as of December 31, 1996 $ 116.24 $ 114.80 $ 114.22 $ 122.96 -- $ 169.72 Number of units outstanding at December 31, 1996 593 853 1,397 -- -- 3,856 Unit value as of December 31, 1997 $ 124.66 $ 111.24 $ 120.35 $ 134.14 $ 114.18 $ 224.89 Number of units outstanding at December 31, 1997 783 1,531 1,351 270 2,235 7,176 Unit value as of December 31, 1998 $ 134.24 $ 122.93 $ 126.71 $ 145.72 $ 109.25 $ 287.87 Number of units outstanding at December 31, 1998 1,110 1,659 1,249 1,038 1,625 11,983 Unit value as of December 31, 1999 $ 134.36 $ 169.30 $ 132.95 $ 142.73 $ 139.67 $ 346.38 Number of units outstanding at December 31, 1999 1,419 1,302 601 4,298 1,064 12,855 Unit value as of December 31, 2000 $ 146.61 $ 130.25 $ 141.19 $ 159.04 $ 159.12 $ 313.02 Number of units outstanding at December 31, 2000 -- 1,522 438 4,295 1,166 5,112 ------------------------------------------------------------------------------------------------------------
* As of May 1, 2001, Separate Account No. 51 was combined into Separate Account No. 66. ----- A-7 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) UNIT VALUES AND NUMBER OF REGISTERED UNITS OUTSTANDING
----------------------------------------------------------------------------------- EQ/MORGAN EQ/MERCURY EQ/MFS STANLEY EQ/FI BASIC EMERGING EMERGING SMALL/MID VALUE GROWTH EQ/MFS MARKETS CAP VALUE EQUITY COMPANIES RESEARCH EQUITY FUND FUND FUND FUND FUND ----------------------------------------------------------------------------------- Unit value as of: December 31, 1998 $ 105.06 $ 107.43 $ 123.19 $ 117.92 $ 111.23 Number of units outstanding at December 31, 1998 -- -- 30 -- -- Unit value as of December 31, 1999 $ 106.96 $ 127.77 $ 213.94 $ 145.18 $ 217.72 Number of units outstanding at December 31, 1999 32 164 3,035 62 197 Unit value as of December 31, 2000 $ 112.45 $ 142.86 $ 173.64 $ 137.54 $ 130.53 Number of units outstanding at December 31, 2000 32 110 3,680 130 190 ----------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- EQ/PUTNAM GROWTH & EQ/T. ROWE MERCURY EQ/PUTNAM INCOME PRICE WORLD T. ROWE BALANCED VALUE INT'L STOCK STRATEGY PRICE EQUITY FUND FUND FUND FUND INCOME FUND --------------------------------------------------------------------------------------- Unit value as of: December 31, 1998 $ 107.77 $ 113.78 $ 114.42 $ 109.65 $ 108.89 Number of units outstanding at December 31, 1998 -- -- -- -- 48 Unit value as of December 31, 1999 $ 107.81 $ 112.24 $ 150.88 $ 133.06 $ 112.76 Number of units outstanding at December 31, 1999 1 50 105 2 9 Unit value as of December 31, 2000 $ 117.47 $ 119.84 $ 122.70 $ 117.82 $ 127.26 Number of units outstanding at December 31, 2000 393 475 599 9 -- ---------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------ EQ/ALLIANCE EQ/CALVERT EQ/CAPITAL EQ/CAPITAL EQ/CAPITAL PREMIER SOCIALLY GUARDIAN GUARDIAN GUARDIAN EQ/EVERGREEN GROWTH RESPONSIBLE INTERNATIONAL RESEARCH U.S. EQUITY FOUNDATION EQ/EVERGREEN FUND FUND FUND FUND FUND FUND OMEGA FUND ------------------------------------------------------------------------------------------------------------------------------ Unit value as of December 31, 1999 $ 113.69 $ 106.58 $ 128.61 $ 105.35 $ 101.11 $ 106.05 $ 105.75 Number of units outstanding at December 31, 1999 94 -- -- -- -- -- -- Unit value as of December 31, 2000 $ 92.79 $ 103.48 $ 104.05 $ 111.58 $ 104.73 $ 100.95 $ 93.36 Number of units outstanding at December 31, 2000 1,017 -- 1 -- -- -- 1 ------------------------------------------------------------------------------------------------------------------------------
----- A-8 --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------- EQ/LAZARD EQ/PUTNAM LAZARD MFS SMALL CAP EQ/PUTNAM INTERNATIONAL INVESTORS LARGE CAP GROWTH WITH VALUE EQUITY GROWTH VALUE INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------------- Unit value as of December 31, 1999 $ 97.39 $ 136.14 $ 120.77 $ 97.35 $ 104.35 Number of units outstanding at December 31, 1999 -- 26 -- -- -- Unit value as of December 31, 2000 $ 115.42 $ 119.37 $ 99.31 $ 95.43 $ 103.62 Number of units outstanding at December 31, 2000 -- 125 400 -- 478 ----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------- EQ/AXP STRATEGY EQ/JANUS LARGE CAP EQ/ALLIANCE EQ/AXP NEW AGGRESSIVE EQ/FI MID CAP GROWTH TECHNOLOGY FUND DIMENSIONS FUND FUND FUND FUND -------------------------------------------------------------------------------------------------------------------- Unit value as of December 31, 2000 $ 79.21 $ 83.24 $ 62.40 $ 100.42 $ 84.32 Number of units outstanding at December 31, 2000 532 -- -- -- -- --------------------------------------------------------------------------------------------------------------------
Statement of additional information -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE Fund Information 2 General 2 Restrictions and requirements of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds 2 Certain investments of the Alliance Bond and Alliance Balanced Funds 3 How we determine the unit value 5 EQ/Alliance Money Market Yield information 7 Brokerage fees and charges for securities transactions 8 Additional information about RIA 9 Loan provisions 9 Annuity benefits 10 Amount of fixed-annuity payments 11 Ongoing operations fee 11 Management for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds and Equitable Life 12 Funds 12 Distribution of the contracts 12 Equitable Life 13 Directors 13 Officer-Directors 14 Other Officers 14 Financial statements index 16 Financial statements FSA-1 SEND OR FAX THIS REQUEST FORM TO RECEIVE A STATEMENT OF ADDITIONAL INFORMATION To: The Equitable Life Assurance Society of the United States--RIA service office 200 Plaza Drive--1st Floor Secaucus, NJ 07094-3689 Fax: (201) 583-2304, 2305, or 2306 -------------------------------------------------------------------------------- Please send me an Retirement Investment Account SAI for May 1, 2001. -------------------------------------------------------------------------------- Name -------------------------------------------------------------------------------- Address -------------------------------------------------------------------------------- City State Zip Client number: -------------------------------------------------------------------------------- (SAI__(5/01)) Retirement Investment Account(R) STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2001 -------------------------------------------------------------------------------- This statement of additional information ("SAI") is not a prospectus. It should be read in conjunction with the prospectus for our Retirement Investment Account ("RIA"), dated May 1, 2001 ("prospectus"), and any supplements. Terms defined in the prospectus have the same meaning in the SAI unless the context otherwise requires. You can obtain a copy of the prospectus, and any supplements to the prospectus, from us free of charge by writing or calling the RIA service office listed on the back of this SAI, or by contacting your financial professional. Our home office is located at 1290 Avenue of the Americas, New York, N.Y. 10104 (212) 554-1234. TABLE OF CONTENTS FUND INFORMATION 2 General 2 Restrictions and requirements of the Alliance Bond (Separate Account No. 13), Alliance Balanced (Separate Account No. 10), Alliance Common Stock (Separate Account No. 4) and Alliance Mid Cap Growth (Separate Account No. 3) Funds 2 Certain investments of the Alliance Bond and Alliance Balanced Funds 3 How we determine the unit value 5 EQ/Alliance Money Market yield information 7 Brokerage fees and charges for securities transactions 8 ADDITIONAL INFORMATION ABOUT RIA 9 Loan provisions 9 Annuity benefits 10 Amount of fixed-annuity payments 11 Ongoing operations fee 11 MANAGEMENT FOR THE ALLIANCE BOND, ALLIANCE BALANCED, ALLIANCE COMMON STOCK AND ALLIANCE MID CAP GROWTH FUNDS AND EQUITABLE LIFE 12 Funds 12 Distribution of the Contracts 12 Equitable Life 13 Directors 13 Officer-Directors 14 Other Officers 14 FINANCIAL STATEMENTS INDEX 16 Financial statements FSA-1 Copyright 2001 The Equitable Life Assurance Soceity of the United States All right reserved. Retirement Investment Account is a registered service mark of The Equitable Life Assurance Society of the United States. E3073 2 -------------------------------------------------------------------------------- FUND INFORMATION GENERAL In our prospectus we discuss in more detail, among other things, the structure of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth* Funds, their investment objectives and policies, including the types of portfolio securities that they may hold and levels of investment risks that may be involved and investment management. We also summarize certain of these matters with respect to the Investment Funds and their corresponding portfolios. See "Investment options." Here we will discuss special restrictions, requirements and transaction expenses that apply to the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds, certain investments of the Alliance Bond Fund and determination of the value of units for all Funds, including some historical information. You can find information about the investment objectives and policies, as well as restrictions, requirements and risks pertaining to the corresponding EQ Advisors Trust portfolio in which the Investment Funds invest in the prospectus and SAI for EQ Advisors Trust. RESTRICTIONS AND REQUIREMENTS OF THE ALLIANCE BOND, ALLIANCE BALANCED, ALLIANCE COMMON STOCK AND ALLIANCE MID CAP GROWTH FUNDS Neither the Alliance Common Stock Fund nor the Alliance Balanced Fund will make an investment in an industry if that investment would cause the Fund's holding in that industry to exceed 25% of the Fund's assets. The Alliance Bond Fund, Alliance Common Stock Fund and Alliance Mid Cap Growth Funds will not purchase or write puts or calls (options). The Alliance Balanced Fund's investment policies do not prohibit hedging transactions such as through the use of put and call options and stock index or interest rate futures. However, the Alliance Balanced Fund currently has no plans to enter into such transactions. The following investment restrictions apply to the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds. None of those Funds will: o trade in foreign exchange (except transactions incidental to the settlement of purchases or sales of securities for a Fund and contracts for the purchase or sale of a specific foreign currency at a future date at a price set at the time of the contract); o make an investment in order to exercise control or management over a company; o underwrite the securities of other companies, including purchasing securities that are restricted under the 1933 Act or rules or regulations thereunder (restricted securities cannot be sold publicly until they are registered under the 1933 Act), except as stated below; o make short sales, except when the Fund has, by reason of ownership of other securities, the right to obtain securities of equivalent kind and amount that will be held so long as they are in short position. o trade in commodities or commodity contracts (except the Alliance Balanced Fund is not prohibited from entering into hedging transactions through the use of stock index or interest rate futures); o purchase real estate or mortgages, except as stated below. The Funds may buy shares of real estate investment trusts listed on stock exchanges or reported on the NASDAQ; o have more than 5% of its assets invested in the securities of any one registered investment company. A Fund may not own more than 3% of a registered investment company's outstanding voting securities. The Fund's total holdings of registered investment company securities may not exceed 10% of the value of the Fund's assets; o purchase any security on margin or borrow money except for short-term credits necessary for clearance of securities transactions; ------------------ * Formerly named "Alliance Aggressive Stock Fund." 3 -------------------------------------------------------------------------------- o make loans, except loans through the purchase of debt obligations or through entry into repurchase agreements; or o invest more than 10% of its total assets in restricted securities, real estate investments, or portfolio securities not readily marketable (The Alliance Common Stock Fund will not invest in restricted securities). CERTAIN INVESTMENTS OF THE ALLIANCE BOND AND ALLIANCE BALANCED FUNDS The following are brief descriptions of certain types of investments which may be made by the Alliance Bond and Alliance Balanced Funds and certain risks and investment techniques. MORTGAGE PASS-THROUGH SECURITIES. The Alliance Bond and Alliance Balanced Funds may invest in mortgage pass-through securities, which are securities representing interests in pools of mortgages. Principal and interest payments made on the mortgages in the pools are passed through to the holder of such securities. Payment of principal and interest on some mortgage pass-through securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of the U.S. Government (in the case of securities guaranteed by the Government National Mortgage Association, or "GNMA"), or guaranteed by agencies or instrumen-talities of the U.S. Government (in the case of securities guaranteed by the Federal National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC"), which are supported only by discretionary authority of the U.S. Government to purchase the agency's obligations). Mortgage pass-through securities created by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers, and other secondary market issuers) may be supported by various forms of insurance or guarantees, including individual loan, title, pool, and hazard insurance, and letters of credit, which may be issued by governmental entities, private insurers or the mortgage poolers. COLLATERALIZED MORTGAGE OBLIGATIONS. The Alliance Bond and Alliance Balanced Funds may invest in collateralized mortgage obligations ("CMOs"). CMOs are debt securities collateralized by underlying mortgage loans or pools of mortgage pass-through securities guaranteed by GNMA, FHLMC or FNMA and are generally issued by limited purpose finance subsidiaries of U.S. Government instrumentalities. CMOs are not, however, mortgage pass-through securities. Rather, they are pay-through securities, i.e., securities backed by the cash flow from the underlying mortgages. Investors in CMOs are not owners of the underlying mortgages, which serve as collateral for such debt securities, but are simply owners of a debt security backed by such pledged assets. CMOs are typically structured into multiple classes, with each class bearing a different stated maturity and having different payment streams. Monthly payments of principal, including prepayments, are first returned to investors holding the shortest maturity class; investors holding longer maturity classes receive principal payments only after the shorter class or classes have been retired. ASSET-BACKED SECURITIES. The Alliance Bond and Alliance Balanced Funds may purchase asset-backed securities that represent either fractional interests or participation in pools of leases, retail installment loans or revolving credit receivables held by a trust or limited purpose finance subsidiary. Such asset-backed securities may be secured by the underlying assets (such as Certificates for Automobile Receivables) or may be unsecured (such as Credit Card Receivable Securities). Depending on the structure of the asset-backed security, monthly or quarterly payments of principal and interest or interest only are passed through like mortgage pass-through securities or paid through (like CMOs) to certificate holders. Asset-backed securities may be guaranteed up to certain amounts by guarantees, insurance or letters of credit issued by a financial institution affiliated or unaffiliated with the originator of the pool. Underlying automobile sales contracts and credit card receivables are, of course, subject to prepayment (although to a lesser degree than mortgage pass-through securities), which may shorten the securities' weighted average life and reduce their overall return to certificate holders. Certificate holders may also experience delays in payment if the full amounts due 4 -------------------------------------------------------------------------------- on underlying loans, leases or receivables are not realized because of unanticipated legal or administrative costs of enforcing the contracts or because of depreciation or damage to the collateral (usually automobiles) securing certain contracts, or other factors. The value of these securities also may change because of changes in the market's perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution providing credit support enhancement for the pool. If consistent with its investment objective and policies, the Alliance Bond and Alliance Balanced Funds may invest in other asset-backed securities that may be developed in the future. ZERO COUPON BONDS. The Alliance Bond and Alliance Balanced Funds may invest in zero coupon bonds. Such bonds may be issued directly by agencies and instrumentalities of the U.S. Government or by private corporations. Zero coupon bonds may originate as such or may be created by stripping an outstanding bond. Zero coupon bonds do not make regular interest payments. Instead, they are sold at a deep discount from their face value. Because a zero coupon bond does not pay current income, its price can be very volatile when interest rates change. REPURCHASE AGREEMENTS. In repurchase agreements, the Alliance Bond or Alliance Balanced Fund buys securities from a seller, usually a bank or brokerage firm, with the understanding that the seller will repurchase the securities at a higher price at a future date. During the term of the repurchase agreement the Fund retains the securities subject to the repurchase agreement as collateral securing the seller's repurchase obligation, continually monitors on a daily basis the market value of the securities subject to the agreement and requires the seller to deposit with the Fund collateral equal to any amount by which the market value of the securities subject to the repurchase agreement falls below the resale amount provided under the repurchase agreement. We evaluate the creditworthiness of sellers with whom we enter into repurchase agreements. Such transactions afford an opportunity for the Fund to earn a fixed rate of return on available cash at minimal market risk, although the Fund may be subject to various delays and risks of loss if the seller is unable to meet its obligation to repurchase. The Funds currently treat repurchase agreements maturing in more than seven days as illiquid securities. DEBT SECURITIES SUBJECT TO PREPAYMENT RISKS. Mortgage pass-through securities and certain collateralized mortgage obligations, asset-backed securities and other debt instruments in which the Alliance Balanced Fund may invest are subject to prepayments prior to their stated maturity. The Fund usually is unable to accurately predict the rate at which prepayments will be made, which rate may be affected, among other things, by changes in generally prevailing market interest rates. If prepayments occur, the Fund suffers the risk that it will not be able to reinvest the proceeds at as high a rate of interest as it had previously been receiving. Also, the Fund will incur a loss to the extent that prepayments are made for an amount that is less than the value at which the security was then being carried by the Fund. Moreover, securities that may be prepaid tend to increase in value less during times of declining interest rates, and to decrease in value more during times of increasing interest rates, than do securities that are not subject to prepayment. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Alliance Bond and Alliance Balanced Funds may purchase and sell securities on a when-issued or delayed delivery basis. In these transactions, securities are purchased or sold by a Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price or yield to the Fund at the time of entering into the transaction. However, the market value of such securities at the time of settlement may be more or less than the purchase price then payable. When a Fund engages in when-issued or delayed delivery transactions, the Fund relies on the other party to consummate the transaction. Failure to consummate the transaction may result in the Fund missing the opportunity of obtaining a price or yield considered to be advantageous. When-issued and delayed delivery transactions are generally expected to settle within three months from the date the transactions are entered into, although the Fund may close out its position prior to the settlement date. A Fund will sell on 5 -------------------------------------------------------------------------------- a forward settlement basis only securities it owns or has the right to acquire. FOREIGN CURRENCY FORWARD CONTRACTS. The Alliance Balanced Fund may enter into contracts for the purchase or sale of a specific foreign currency at a future date at a price set at the time of the contract. Generally, such forward contracts will be for a period of less than three months. The Fund will enter into such forward contracts for hedging purposes only. These transactions will include forward purchases or sales of foreign currencies for the purpose of protecting the dollar value of securities denominated in a foreign currency or protecting the dollar equivalent of interest or dividends to be paid on such securities. Forward contracts are traded in the inter-bank market, and not on organized commodities or securities exchanges. Accordingly, the Fund is dependent upon the good faith and creditworthiness of the other party to the transaction, as evaluated by the Fund's Manager. To the extent inconsistent with any restrictions in the SAI concerning the Fund's trading in foreign exchange, this paragraph will control. HEDGING TRANSACTIONS. The Alliance Balanced Fund may engage in hedging transactions which are designed to protect against anticipated adverse price movements in securities owned or intended to be purchased by the Fund. When interest rates go up, the market value of outstanding debt securities declines and vice versa. In recent years the volatility of the market for debt securities has increased significantly, and market prices of longer-term obligations have been subject to wide fluctuations, particularly as contrasted with those of short-term instruments. The Fund will take certain risks into consideration when determining which, if any, options or financial futures contracts it will use. If the price movements of hedged portfolio securities are in fact favorable to the Fund, the hedging transactions will tend to reduce and may eliminate the economic benefit to the Fund which otherwise would result. Also, the price movements of options and futures used for hedging purposes may not correlate as anticipated with price movements of the securities being hedged. This can make a hedge transaction less effective than anticipated and could result in a loss. The options and futures markets can sometimes become illiquid and the exchanges on which such instruments are traded may impose trading halts or delays on the exercise of options and liquidation of futures positions in certain circumstances. This could in some cases operate to the Fund's detriment. HOW WE DETERMINE THE UNIT VALUE In our prospectus, we discuss how employer plan assets are put into and taken out of the Funds by the purchase and redemption of units under the contracts, respectively. See "How we value your plan balances" in the prospectus. Here we will discuss how we determine the value of units. When contributions are invested in the Funds, the number of units outstanding attributable to each Fund is correspondingly increased; and when amounts are withdrawn from one of these Funds, the number of units outstanding attributable to that Fund is correspondingly decreased. For the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds, the unit values reflect investment performance and investment management and financial accounting fees. We determine the respective unit values for these Funds by multiplying the unit value for the preceding business day by the net investment factor for that subsequent day. We determine the net investment factor as follows: o First, we take the value of the Fund's assets at the close of business on the preceding business day. o Next, we add the investment income and capital gains, realized and unrealized, that are credited to the assets of the Fund during the business day for which the net investment factor is being determined. o Then, we subtract the capital losses, realized and unrealized, and investment management and financial accounting fees charged to the Fund during that business day. 6 -------------------------------------------------------------------------------- o Finally, we divide this amount by the value of the Fund's assets at the close of the preceding business day. Prior to June 1, 1994, for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds, the investment management and financial accounting fees were deducted monthly from employer plan balances in these Funds. Assets of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds are valued as follows: o Common stocks and other equity-type securities listed on national securities exchanges and certain over-the-counter issues traded on the NASDAQ system are valued at the last sale price or, if no sale, at the latest available bid price. Other unlisted securities reported on the NASDAQ system are valued at inside (highest) quoted bid prices. o Foreign securities not traded directly, or in ADR form in the United States are valued at the last sale price in the local currency on an exchange in the country of origin. Foreign currency is converted into dollars at current exchange rates. o United States Treasury securities and other obligations issued or guaranteed by the United States Government, its agencies or instrumentalities are valued at representative quoted prices. o Long-term (i.e., maturing in more than a year) publicly traded corporate bonds are valued at prices obtained from a bond pricing service of a major dealer in bonds when such prices are available; however, in circumstances where it is deemed appropriate to do so, an over-the-counter or exchange quotation may be used. o Short-term debt securities maturing in 60 days or less are valued at amortized cost, which approximates market value. Short-term debt securities maturing in more than 60 days are valued at representative quoted prices. As of January 1, 2001, the Funds acquire short-term debt securities directly. See "Investment options" in the prospectus. o Convertible preferred stocks listed on national securities exchanges are valued as of their last sale price or, if there is no last sale, at the latest available bid price. o Convertible bonds and unlisted convertible preferred stocks are valued at bid prices obtained from one or more major dealers in such securities; where there is a discrepancy between dealers, values may be adjusted based on recent premium spreads to the underlying common stock. The unit value for a Fund of Separate Account No. 66 for any business day together with any preceding non-business days ("valuation period") is equal to the unit value for the preceding valuation period multiplied by the net investment factor for that Investment Fund for that valuation period. The net investment factor for a valuation period is: (a/b) - c where: (a) is the value of the Fund's shares of the corresponding portfolio at the end of the valuation period before giving effect to any amounts allocated to or withdrawn from the Investment Fund for the valuation period. For this purpose, we use the share value reported to us by EQ Advisors Trust. This share value is after deduction for investment advisory fees and other expenses of EQ Advisors Trust. (b) is the value of the Fund's shares of the corresponding portfolio at the end of the preceding valuation period (after any amounts are allocated or withdrawn for that valuation period). (c) is the daily factor for the separate account administrative charge multiplied by the number of calendar days in the valuation period. 7 -------------------------------------------------------------------------------- Our investment officers and EQ Advisors Trust's investment adviser determine in good faith the fair value of securities and other assets that do not have a readily available market price in accordance with accepted accounting practices and applicable laws and regulations. EQ/ALLIANCE MONEY MARKET YIELD INFORMATION The EQ/Alliance Money Market Fund calculates yield information for seven-day periods. The seven-day current yield calculation is based on a hypothetical employer plan with one unit at the beginning of the period. To determine the seven-day rate of return, the net change in the unit value is computed by subtracting the unit value at the beginning of the period from a unit value, exclusive of capital changes, at the end of the period. The net change is then reduced by the average ongoing operations fee factor (explained below). This reduction is made to recognize the deduction of the ongoing operations fee which is not reflected in the unit value. See "Charges and expenses" in the prospectus. Accumulation unit values reflect all other accrued expenses of the EQ/Alliance Money Market Fund. The adjusted net change is divided by the unit value at the beginning of the period to obtain the adjusted base period rate of return. This seven-day adjusted base period return is then multiplied by 365/7 to produce an annualized seven-day current yield figure carried to the nearest one-hundredth of one percent. The actual dollar amount of the ongoing operations fee that is deducted from the EQ/Alliance Money Market Fund will vary for each employer plan depending upon how the plan's balance is allocated among the investment options. To determine the effect of the ongoing operations fee on the yield, we start with the total dollar amount of the fees deducted from the Fund on the last business day of the prior month. This amount is multiplied by 7/30.417 to produce an average ongoing operations fee factor which is used in all weekly yield computations for the ensuing quarter. The average ongoing operations fee factor and the separate account administrative charge is then divided by the number of EQ/Alliance Money Market Fund units as of the end of the prior month, and the resulting quotient is deducted from the net change in unit value for the seven-day period. The effective yield is obtained by modifying the current yield to give effect to the compounding nature of the EQ/Alliance Money Market Fund's investments, as follows: the unannualized adjusted base period return is compounded by adding one to the adjusted base period return, raising the sum to a power equal to 365 divided by 7, and subtracting one from the result, i.e., effective yield = (base period return + 1) 365/7-1. The EQ/Alliance Money Market Fund yield will fluctuate daily. Accordingly, yields for any given period are not necessarily representative of future results. In addition, the value of units of the EQ/Alliance Money Market Fund will fluctuate and not remain constant. The EQ/Alliance Money Market Fund yield reflects charges that are not normally reflected in the yields of other investments and therefore may be lower when compared with yields of other investments. EQ/Alliance Money Market Fund yields should not be compared to the return on fixed-rate investments which guarantee rates of interest for specified periods, such as the guaranteed interest option or bank deposits. The yield should not be compared to the yield of money market funds made available to the general public because their yields usually are calculated on the basis of a constant $1 price per share and they pay earnings in dividends which accrue on a daily basis. The EQ/Alliance Money Market Fund's seven-day current yield for the RIA contracts was 4.57% for the period ended December 31, 2000. The effective yield for that period was 4.67%. Because these yields reflect the deduction of the ongoing operations fee and the separate account administrative charge, they are lower than the corresponding yield figures for the EQ/Alliance Money Market portfolio which reflect only the deduction of EQ Advisors Trust-level expenses. 8 -------------------------------------------------------------------------------- BROKERAGE FEES AND CHARGES FOR SECURITIES TRANSACTIONS We discuss in the prospectus that we are the investment manager of the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds. As the investment manager of these Funds, we invest and reinvest the assets of these Funds in a manner consistent with the policies described in the prospectus. In providing these services we currently use the personnel and facilities of our majority-owned subsidiary, Alliance, for portfolio selection and transaction services, including arranging the execution of portfolio transactions. Alliance is also an adviser for certain portfolios in EQ Advisors Trust. Information on brokerage fees and charges for securities transactions for the EQ Advisors Trust's portfolios is provided in the prospectus for EQ Advisors Trust. The Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds are charged for securities brokers commissions, transfer taxes and other fees and expenses relating to their operation. Transactions in equity securities for a Fund are executed primarily through brokers which receive a commission paid by the Fund. Brokers are selected by Alliance. Alliance seeks to obtain the best price and execution of all orders placed for the portfolio of the Funds, considering all the circumstances. If transactions are executed in the over-the-counter market Alliance will deal with the principal market makers, unless more favorable prices or better execution is otherwise obtainable. There are occasions on which portfolio transactions for the Funds may be executed as part of concurrent authorizations to purchase or sell the same security for certain other accounts or clients advised by Alliance. Although these concurrent authorizations potentially can be either advantageous or disadvantageous to the Funds, they are effected only when it is believed that to do so is in the best interest of the Funds. When these concurrent authorizations occur, the objective is to allocate the executions among the accounts or clients in a fair manner. We try to choose only brokers which we believe will obtain the best prices and executions on securities transactions. Subject to this general requirement, we also consider the amount and quality of securities research services provided by a broker. Typical research services include general economic information and analyses and specific information on and analyses of companies, industries and markets. Factors we use in evaluating research services include the diversity of sources used by the broker and the broker's experience, analytical ability and professional stature. The receipt of research services from brokers tends to reduce our expenses in managing the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds. We take this into account when setting the expense charges. Brokers who provide research services may charge somewhat higher commissions than those who do not. However, we will select only brokers whose commissions we believe are reasonable in all the circumstances. We periodically evaluate the services provided by brokers and prepare internal proposals for allocating among those various brokers business for all the accounts we manage or advise. That evaluation involves consideration of the overall capacity of the broker to execute transactions, its financial condition, its past performance and the value of research services provided by the broker in servicing the various accounts advised or managed by us. Generally, we do not tell brokers that we will try to allocate a particular amount of business to them. We do occasionally let brokers know how their performance has been evaluated. Research information that we obtain may be used in servicing all clients or accounts under our management, including our general account. Similarly, we will not necessarily use all research provided by a broker or dealer with which the Funds transact business in connection with those Funds. Transactions for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds in the over-the-counter market are normally executed as principal transactions with a dealer that is a principal market maker in 9 -------------------------------------------------------------------------------- the security, unless a better price or better execution can be obtained from another source. Under these circumstances, the Funds pay no commission. Similarly, portfolio transactions in money market and debt securities will normally be executed through dealers or underwriters under circumstances where the Fund pays no commission. When making securities transactions for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds that do not involve paying a brokerage commission (such as the purchase of short-term debt securities), we seek to obtain prompt execution in an effective manner at the best price. Subject to this general objective, we may give orders to dealers or underwriters who provide investment research. None of the Funds will pay a higher price, however, and the fact that we may benefit from such research is not considered in setting the expense charges. In addition to using brokers and dealers to execute portfolio securities transactions for clients or accounts we manage, we may enter into other types of business transactions with brokers or dealers. These other transactions will be unrelated to allocation of the Funds' portfolio transactions. For the years ended December 31, 2000, 1999 and 1998, total brokerage commissions for Separate Account No.,10 -- Pooled were $125,602, $210,258 and $172,883, respectively; for Separate Account 4 -- Pooled were $2,218,019, $5,877,438 and $4,288,187, respectively; for Separate Account No. 3 -- Pooled were $528,925, $755,520 and $2,020,464, respectively; and for Separate Account No. 13 -- Pooled were $-0-, $ -0-, and $-0-, respectively. For the fiscal year ended December 31, 2000, commissions of $96,908, $867,153 and $184,625 were paid to brokers providing research services to Separate Account No. 10 -- Pooled, Separate Account No. 4 -- Pooled, Separate Account No. 3 -- Pooled, respectively, on portfolio transactions of $92,683,197, $1,100,389,488 and $271,157,386, respectively. ADDITIONAL INFORMATION ABOUT RIA LOAN PROVISIONS Loans to plan trustees on behalf of participants are permitted in our RIA program. It is the plan administrator's responsibility to administer the loan program. The following are important features of the RIA loan provision: o We will only permit loans from the guaranteed interest option. If the amount requested to be borrowed plus the loan fee and loan reserve we discuss below is more than the amount available in the guaranteed interest option for the loan transaction, the employer can move the additional amounts necessary from one or more Funds to the guaranteed interest option. o The plan administrator determines the interest rate, the maximum term and all other terms and conditions of the loan. o Repayment of loan principal and interest can be made only to the guaranteed interest option. The employer must identify the portion of the repayment amount which is principal and which is interest. o Upon repayment of a loan amount, any repayment of loan principal and loan reserve (see below) taken from one or more Funds for loan purposes may be moved back to a Fund. o We charge a loan fee in an amount equal to 1% of the loan principal amount on the date a loan is made. The contingent withdrawal charge will be applied to any unpaid principal, as if the amount had been withdrawn on the day the principal payment was due. See "Charges and expenses" in the prospectus. o The minimum amount of a loan for a participant is $1,000, and the maximum amount is 90% of the balances in all the investment options for a participant. An employer plan, the Code and the Department of Labor ("DOL") (as described in "Tax information" in the prospectus) may impose additional conditions or restrictions on loan transactions. 10 -------------------------------------------------------------------------------- o On the date a loan is made, we create a loan reserve account in the guaranteed interest option in an amount equal to 10% of the loan amount. The 10% loan reserve is intended to cover (1) the ongoing operations fee applicable to amounts borrowed, (2) the possibility of our having to deduct applicable contingent withdrawal charges (see "Charges and expenses" in the prospectus) and (3) the deduction of any other withholdings, if required. The loan amount will not earn any interest under the contracts while the loan is outstanding. The amount of the loan reserve will continue to earn interest at the guaranteed interest option rate applicable for the employer plan. o The ongoing operations fee will apply to the sum of the investment option balances (including the loan reserve) plus any unpaid loan principal. If the employer plan is terminated or any amount is withdrawn, or if any withdrawal from RIA results in the reduction of the 10% loan reserve amount in the guaranteed interest option, during the time a loan is outstanding, the contingent withdrawal charge will be applied to any principal loan balances outstanding as well as to any employer plan balances (including the loan reserve) in the investment options. See "Charges and expenses" in the prospectus. ANNUITY BENEFITS Subject to the provisions of an employer plan, we have available under RIA the following forms of fixed annuities. o LIFE ANNUITY: An annuity which guarantees a lifetime income to the retired employee-participant (annuitant) and ends with the last monthly payment before the annuitant's death. There is no death benefit associated with this annuity form and it provides the highest monthly amount of any of the guaranteed life annuity forms. If this form of annuity is selected, it is possible that only one payment will be made if the annuitant dies after that payment. o LIFE ANNUITY -- PERIOD CERTAIN: This annuity form guarantees a lifetime income to the annuitant and, if the annuitant dies during a previously selected minimum payment period, continuation of payments to a designated beneficiary for the balance of the period. The minimum period is usually 5, 10, 15 or 20 years. o LIFE ANNUITY -- REFUND CERTAIN: This annuity form guarantees a lifetime income to the annuitant and, if the annuitant dies before the initial single premium has been recovered, payments will continue to a designated beneficiary until the single premium has been recovered. If no beneficiary survives the annuitant, the refund will be paid in one lump sum to the estate. o PERIOD CERTAIN ANNUITY: Instead of guaranteed lifetime income, this annuity form provides for payments to the annuitant over a specified period, usually 5, 10, 15 or 20 years, with payments continuing to the designated beneficiary for the balance of the period if the annuitant dies before the period expires. o QUALIFIED JOINT AND SURVIVOR LIFE ANNUITY: This annuity form guarantees lifetime income to the annuitant, and, after the annuitant's death, the continuation of income to the surviving spouse. Generally, unless a married annuitant elects otherwise with the written consent of his spouse, this will be the form of annuity payment. If this form of annuity is selected, it is possible that only one payment will be made if both the annuitant and the spouse die after that payment. All of the forms outlined above (with the exception of Qualified Joint and Survivor Life Annuity) are available as either Single or Joint life annuities. We offer other forms not outlined here. Your financial professional can provide details. AMOUNT OF FIXED-ANNUITY PAYMENTS Our forms of a fixed annuity provide monthly payments of specified amounts. Fixed-annuity payments, once begun, will not change. The size of payments will depend on the form of annuity that is chosen, our annuity rate tables in effect when the first payment is made, and, in the case of a life income annuity, on the annuitant's age. The tables in our Contracts show monthly payments for each $1,000 of proceeds applied under an annuity. If our annuity rates in effect on the annui- 11 -------------------------------------------------------------------------------- tant's retirement date would yield a larger payment, those current rates will apply instead of the tables. Our annuity rate tables are designed to determine the amounts required for the annuity benefits elected and for administrative and investment expenses and mortality and expense risks. Under our Contracts we can change the annuity rate tables every five years. Such changes would not affect annuity payments being made. ONGOING OPERATIONS FEE We determine the ongoing operations fee based on the combined net balances of an employer plan in all the investment options (including any outstanding loan balances) at the close of business on the last business day of each month. For employer plans that adopted RIA on or before February 9, 1986, we use the rate schedule set forth below, and apply it to the employer plan balances at the close of business on the last business day of the following month. For employer plans that adopted RIA after February 9, 1986 we use the rate schedule set forth in the prospectus. See "Charges and expenses" in the prospectus. --------------------------------------------------------- COMBINED BALANCE MONTHLY OF INVESTMENT OPTIONS RATE --------------------------------------------------------- First $ 150,000 1/12 of 1.25% Next $ 350,000 1/12 of 1.00% Next $ 500,000 1/12 of 0.75% Next $1,500,000 1/12 of 0.50% Over $2,500,000 1/12 of 0.25% --------------------------------------------------------- MANAGEMENT FOR THE ALLIANCE BOND, ALLIANCE BALANCED, ALLIANCE COMMON STOCK AND ALLIANCE MID CAP GROWTH FUNDS AND EQUITABLE LIFE FUNDS In the prospectus we give information about us, the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds and how we, together with Alliance, provide investment management for the investments and operations of these Funds. See "More information" in the prospectus. The amounts of the investment management and financial accounting fees we received from employer plans participating through registered Contracts in the Alliance Balanced, Alliance Common Stock and Alliance Mid Cap Growth Funds in 2000 were $9,648, $35,474, and $10,294, respectively; in 1999 were $17,346, $50,277, and $15,975, respectively; and in 1998 were $22,847, $67,923 and $30,444, respectively. The amount of such fees received under the Alliance Bond Fund in 2000, 1999, and 1998, were $16, $807, and $747, respectively. DISTRIBUTION OF THE CONTRACTS Pursuant to a Distribution and Servicing Agreement between AXA Advisors, Equitable Life, and certain of Equitable Life's separate accounts, Equitable Life paid AXA Advisors a fee of $325,380 for each of the years 2000, 1999 and 1998. In 2000, Equitable Life paid AXA Advisors $666,577,890, as the distributor of certain contracts, including these contracts, and as the principal underwriter of several Equitable Life separate accounts. Of this amount, AXA Advisors retained $385,314,054. 12 -------------------------------------------------------------------------------- EQUITABLE LIFE We are managed by a Board of Directors. Our Directors and certain of our executive officers and their principal occupations are set forth below.
----------------------------------------------------------------------------------------------------------------------- DIRECTORS NAME AGE PRINCIPAL OCCUPATION ----------------------------------------------------------------------------------------------------------------------- Francoise Colloc'h 57 Member of the AXA Management Board and Group Executive President of AXA. Henri de Castries 46 Chairman of the Board, AXA Financial; Chairman of the Management Board of AXA. Claus-Michael Dill 47 Chairman of Management Board of AXA Colonia Konzern AG; prior thereto, member of the Holding Management Board of Gerling-Konzern in Cologne. Joseph L. Dionne 67 Retired Chairman and Chief Executive Officer, The McGraw-Hill Companies. Denis Duverne 47 Executive Vice President, International AXA; member, AXA Executive Board. Jean-Rene Fourtou 61 Vice Chairman of the Management Board, Aventis; prior thereto, Chairman and Chief Executive Officer, Rhone-Poulenc, S.A. Norman C. Francis 70 President, Xavier University of Louisiana. Donald J. Greene 68 Of Counsel, LeBoeuf, Lamb, Greene & MacRae, L.L.P.; prior thereto, Partner of the firm. John T. Hartley 71 Retired Chairman, Chief Executive Officer and Director, Harris Corporation. John H. F. Haskell, Jr. 69 Senior Advisor, UBS Warburg, LLC; prior thereto, Managing Director and member of the Board of Directors. Mary (Nina) Henderson 50 Former Corporate Vice President, Core Business Development of Bestfoods (formerly CPC International, Inc.); prior thereto, Vice President and President, Bestfoods Grocery. W. Edwin Jarmain 62 President, Jarmain Group Inc. George T. Lowy 69 Partner, Cravath, Swaine & Moore. Didier Pineau-Valencienne 70 Vice Chairman, Credit Suisse First Boston; Honorary Chairman, Schneider Electric; prior thereto, Chairman and Chief Executive Officer. George J. Sella, Jr. 72 Retired Chairman and Chief Executive Officer, American Cyanamid Company. Peter J. Tobin 57 Dean, Peter J. Tobin College of Business Administration, St. John's University; prior thereto, Chief Financial Officer, Chase Manhattan Corp. Dave H. Williams 68 Chairman, Alliance Capital Management; prior thereto, Chief Executive Officer. -----------------------------------------------------------------------------------------------------------------------
13 -------------------------------------------------------------------------------- Unless otherwise indicated, the following persons have been involved in the management of Equitable Life in various executive positions during the last five years.
----------------------------------------------------------------------------------------------------------------------- OFFICER-DIRECTORS NAME AGE PRINCIPAL OCCUPATION ----------------------------------------------------------------------------------------------------------------------- Michael Hegarty 56 President and Chief Operating Officer of Equitable Life; Senior Vice Chairman and Chief Operating Officer, AXA Financial, Inc.; prior thereto, Vice Chairman, Chase Manhattan Corporation. Edward D. Miller 60 Chairman of the Board and Chief Executive Officer, Equitable Life; former Senior Vice Chairman of Chase Manhattan Corporation; prior thereto, President and Senior Vice Chairman of Chemical Bank. Stanley B. Tulin 51 Vice Chairman of the Board and Chief Financial Officer of Equitable Life; prior thereto, Senior Executive Vice President of AXA Financial, Inc. and Chairman of the Insurance Consulting and Actuarial Practice of Coopers & Lybrand, L.L.P. ----------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS NAME AGE PRINCIPAL OCCUPATION ----------------------------------------------------------------------------------------------------------------------- Leon B. Billis 55 Executive Vice President and Chief Information Officer, Equitable Life and AXA Client Solutions, LLC. Derry E. Bishop 54 Executive Vice President and Chief Agency Officer, Equitable Life and AXA Client Solutions LLC; Director and Executive Vice President, AXA Advisors, LLC. Harvey Blitz 55 Senior Vice President, Equitable Life and AXA Financial, Inc.; Executive Vice President, AXA Advisors, LLC; Senior Vice President, AXA Client Solutions, LLC. Kevin R. Byrne 45 Senior Vice President and Treasurer, Equitable Life, AXA Financial, Inc., AXA Client Solutions, LLC, and The Equitable of Colorado. John A. Caroselli 46 Executive Vice President, Equitable Life andAXA Client Solutions, LLC; prior thereto, Senior Vice President, Chase Manhattan Corp. Judy A. Faucett 52 Senior Vice President and Actuary; Senior Vice President, AXA Client Solutions, LLC; Director, Chairman, and Chief Executive Officer, AXA Network, LLC Alvin H. Fenichel 56 Senior Vice President and Controller, Equitable Life and AXA Financial, Inc. Paul J. Flora 54 Senior Vice President and Auditor; Vice President and Auditor, AXA Financial, Inc. and AXA Client Solutions, LLC Robert E. Garber 51 Executive Vice President and Chief Legal Officer; General Counsel, AXA Financial, Inc.; Executive Vice President and Chief Legal Counsel, AXA Client Solutions, LLC. Donald R. Kaplan 44 Senior Vice President, Chief Compliance Officer and Associate General Counsel. Senior Vice President, AXA Client Solutions, LLC. Michael Martin 54 Executive Vice President and Chief Marketing Officer Equitable Life and AXA Client Solutions, LLC; Chairman and Chief Executive Officer, AXA Advisors, LLC; President, The Equitable of Colorado. Richard J. Matteis 64 Executive Vice President, Equitable Life and AXA Client Solutions, LLC; prior thereto, Executive Vice President Chase Manhattan Corp. Peter D. Noris 45 Executive Vice President and Chief Investment Officer, Equitable Life and AXA Financial, Inc.; Executive Vice President, AXA Client Solutions, LLC; President and Trustee of EQ Advisors Trust; President and Investment Officer of The Equitable of Colorado. Brian S. O'Neil 49 Executive Vice President of Equitable Life and AXA Client Solutions, LLC. Anthony C. Pasquale 53 Senior Vice President of Equitable Life and AXA Client Solutions, LLC. Pauline Sherman 57 Senior Vice President, Secretary and Associate General Counsel of Equitable Life, AXA Financial, Inc. and AXA Client Solutions; Senior Vice President and Secretary, The Equitable of Colorado.
14 -------------------------------------------------------------------------------- Richard V. Silver 45 Senior Vice President and General Counsel, Equitable Life; Senior Vice President and Associate General Counsel, AXA Financial, Inc. and AXA Client Solutions, LLC; Senior Vice President and General Counsel, The Equitable of Colorado. Jose S. Suquet 44 Senior Executive Vice President and Chief Distribution Officer, Equitable Life and AXA Client Solutions, LLC; Chairman, EDI; Senior Executive Vice President, The Equitable of Colorado. Gregory G. Wilcox 51 Executive Vice President, Equitable Life, AXA Financial, Inc. and AXA Client Solutions, LLC. R. Lee Wilson 47 Executive Vice President, Equitable Life, AXA Client Solutions, LLC and The Equitable of Colorado. -----------------------------------------------------------------------------------------------------------------------
15 --------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------- FINANCIAL STATEMENTS INDEX ----------------------------------------------------------------------------------------------------------------------- PAGE ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), Report of Independent Accountants--................................... FSA-1 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) Statement of Assets and Liabilities, December 31, 2000................ FSA-2 ----------------------------------------------------------------------------------- Statement of Operations for the Year Ended December 31, 2000.......... FSA-3 ----------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 2000 and 1999...................................... FSA-4 ----------------------------------------------------------------------------------- Portfolio of Investments, December 31, 2000........................... FSA-5 ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) Statement of Assets and Liabilities, December 31, 2000................ FSA-8 ----------------------------------------------------------------------------------- Statement of Operations for the Year Ended December 31, 2000.......... FSA-9 ----------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 2000 and 1999...................................... FSA-10 ----------------------------------------------------------------------------------- Portfolio of Investments, December 31, 2000........................... FSA-11 ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) Statement of Assets and Liabilities, December 31, 2000................ FSA-23 ----------------------------------------------------------------------------------- Statement of Operations for the Year Ended December 31, 2000.......... FSA-24 ----------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 2000 and 1999...................................... FSA-25 ----------------------------------------------------------------------------------- Portfolio of Investments, December 31, 2000........................... FSA-26 ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) Statement of Assets and Liabilities, December 31, 2000................ FSA-30 ----------------------------------------------------------------------------------- Statements of Operations for the Year Ended December 31, 2000......... FSA-31 ----------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 2000 and 1999...................................... FSA-32 ----------------------------------------------------------------------------------- Portfolio of Investments, December 31, 2000........................... FSA-33 ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED)* Statements of Assets and Liabilities, December 31, 2000............... FSA-36 ----------------------------------------------------------------------------------- Statements of Operations for the Year Ended December 31, 2000......... FSA-39 ----------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 2000 and 1999...................................... FSA-42 ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) Statements of Assets and Liabilities, December 31, 2000............... FSA-48 ----------------------------------------------------------------------------------- Statements of Operations for the Year Ended December 31, 2000......... FSA-54
16 --------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------- FINANCIAL STATEMENTS INDEX (CONT'D) ----------------------------------------------------------------------------------------------------------------------- PAGE ----------------------------------------------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years FSA-61 Ended December 31, 2000 and 1999...................................... ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), Notes to Financial Statements......................................... FSA-74 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED)*, AND 66 (POOLED) ----------------------------------------------------------------------------------------------------------------------- THE EQUITABLE LIFE ASSURANCE Report of Independent Accountants-- .................................. F-1 ----------------------------------------------------------------------------------- SOCIETY OF THE UNITED STATES Consolidated Balance Sheets as of December 31, 2000 and 1999 ......... F-2 ----------------------------------------------------------------------------------- Consolidated Statements of Earnings for the Years Ended December 31, 2000, 1999 and 1998 ..................................... F-3 ----------------------------------------------------------------------------------- Consolidated Statements of Shareholder's Equity for the Years Ended December 31, 2000, 1999 and 1998 ............................... F-4 ----------------------------------------------------------------------------------- Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 ..................................... F-5 ----------------------------------------------------------------------------------- Notes to Consolidated Financial Statements ........................... F-6 ----------------------------------------------------------------------------------------------------------------------- The financial statements of the Funds reflect fees, charges and other expenses of the Separate Accounts applicable to contracts under RIA as in effect during the periods covered, as well as the expense charges made in accordance with the terms of all other contracts participating in the respective Funds. -----------------------------------------------------------------------------------------------------------------------
* As of May 1, 2001 Separate Account No. 51 combined with Separate Account No. 66. See "Combination of certain investment options and separate accounts" in your May 1, 2001 RIA Prospectus.
----------------------------------------------------------------------------------------------------------------------- Retirement Investment Account(R) ----------------------------------------------------------------------------------------------------------------------- SEPARATE ACCOUNT UNITS OF INTEREST UNDER GROUP ANNUITY CONTRACTS FUNDS ------------------------------------------------------------------------------------------------------------------------ POOLED SEPARATE ACCOUNTS SEPARATE ACCOUNT NO. 66 o Alliance Balanced, Separate Account o EQ/Alliance Global No. 10 -- Pooled o EQ/Alliance Growth and Income o Alliance Bond, Separate Account o EQ/Alliance Growth Investors No. 13 -- Pooled o EQ/Alliance High Yield o Alliance Common Stock, Separate Account No. 4 -- o EQ/Alliance Intermediate Government Securities Pooled o EQ/Alliance International o Alliance Mid Cap Growth, Separate Account No. 3 -- o EQ/Alliance Money Market Pooled o EQ/Alliance Premier Growth o EQ/Alliance Quality Bond o EQ/Alliance Small Cap Growth o EQ/Alliance Technology o EQ/AXP New Dimensions o EQ/AXP Strategy Aggressive o EQ/Bernstein Diversified Value o EQ/Calvert Socially Responsible o EQ/Capital Guardian International o EQ/Capital Guardian Research o EQ/Capital Guardian U.S. Equity o EQ/Equity 500 Index o EQ/Evergreen Omega o EQ/FI Mid Cap o EQ/FI Small/Mid Cap Value o EQ/Janus Large Cap Growth o EQ/Lazard Small Cap Value o EQ/Mercury Basic Value Equity o EQ/MFS Emerging Growth Companies o EQ/MFS Investors Trust o EQ/MFS Research o EQ/Morgan Stanley Emerging Markets Equity o EQ/Putnam Growth & Income Value o EQ/Putnam International Equity o EQ/Putnam Investors Growth o EQ/T. Rowe Price International Stock OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES RIA SERVICE OFFICE: CONTRIBUTIONS ONLY: EXPRESS MAIL CONTRIBUTIONS ONLY: Equitable Life Equitable Life Bank One, NA RIA service office RIA/EPP 300 Harmon Meadow Boulevard 200 Plaza Drive P.O. Box 13503 Attn: Box 13503 Secaucus, NJ 07094-3689 Newark, NJ 07188 Secaucus, NJ 07094 Tel.: (800) 967-4560 (201) 583-2302 (9 A.M. to 5 P.M. Eastern time) Fax: (201) 583-2304, 2305, or 2306 (To obtain pre-recorded Fund unit values, use our toll-free number listed above)
-------------------------------------------------------------------------------- Report of Independent Accountants -------------------------------------------------------------------------------- To the Board of Directors of The Equitable Life Assurance Society of the United States and the Contractowners of Separate Account Nos. 13, 10, 4, 3, 51 and 66 of The Equitable Life Assurance Society of the United States In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and related statement of operations and statements of changes in net assets present fairly, in all material respects, the financial position of Separate Account Nos. 13 (Pooled) (The Alliance Bond Fund), 10 (Pooled) (The Alliance Balanced Fund), 4 (Pooled) (The Alliance Common Stock Fund), 3 (Pooled) (The Alliance Aggressive Stock Fund) and the separate investment options listed in Note 1 of the financial statements for 51 (Pooled) and 66 (Pooled) of The Equitable Life Assurance Society of the United States ("Equitable Life") at December 31, 2000, the results of each of their operations for the year then ended and the changes in each of their net assets for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Equitable Life's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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 and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2000 by correspondence with the custodians and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York February 5, 2001 FSA-1 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Assets and Liabilities DECEMBER 31, 2000 -------------------------------------------------------------------------------- ASSETS: Investments (Notes 2 and 3): Long-term debt securities - at value (amortized cost: $110,372,052) ..................... $112,589,923 Participation in Separate Account No. 2A - at amortized cost, which approximates market value, equivalent to 31,079 units at $320.30 ................................................. 9,954,633 Cash ..................................................................................... 938,710 Receivable for investment securities sold ................................................ 15,542,413 Interest and other receivable ............................................................ 1,498,518 ------------------------------------------------------------------------------------------- ------------ Total assets ............................................................................. 140,524,197 ------------------------------------------------------------------------------------------- ------------ LIABILITIES: Due to Equitable Life's General Account .................................................. 5,804,847 Accrued expenses ......................................................................... 26,317 ------------------------------------------------------------------------------------------- ------------ Total liabilities ........................................................................ 5,831,164 ------------------------------------------------------------------------------------------- ------------ NET ASSETS ............................................................................... $134,693,033 =========================================================================================== ============
See Notes to Financial Statements. FSA-2 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Operations YEAR ENDED DECEMBER 31, 2000 -------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): -- Interest ............................... $5,768,825 ------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Investment management and accounting fees ............................. (357,702) Administrative fees ................................................... (14,541) Expense charges ....................................................... (8,782) Operating expenses .................................................... (36,166) ------------------------------------------------------------------------------------- Total expenses ........................................................ (417,191) ------------------------------------------------------------------------------------- Net investment income ................................................. 5,351,634 ------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized loss from security transactions .............................. (726,636) Change in unrealized appreciation/depreciation of investments ......... 4,900,347 ------------------------------------------------------------------------------------- Net realized and unrealized gain on investments ....................... 4,173,711 ------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................. $9,525,345 =====================================================================================
See Notes to Financial Statements. FSA-3 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2000 1999 ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................................................... $ 5,351,634 $ 4,876,384 Net realized loss on investments ........................................................ (726,636) (1,018,407) Change in unrealized appreciation/depreciation of investments ........................... 4,900,347 (4,247,078) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets attributable to operations ........................ 9,525,345 (389,101) ------------------------------------------------------------------------------------------------------------------------------ FROM CONTRIBUTIONS AND WITHDRAWALS: Contributions ........................................................................... 75,757,720 15,016,685 Withdrawals ............................................................................. (36,988,584) (26,268,116) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets attributable to contributions and withdrawals ..... 38,769,136 (11,251,431) ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS ....................................................... 48,294,481 (11,640,532) NET ASSETS -- BEGINNING OF YEAR ......................................................... 86,398,552 98,039,084 ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS -- END OF YEAR ............................................................... $ 134,693,033 $ 86,398,552 ==============================================================================================================================
See Notes to Financial Statements. FSA-4 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- LONG-TERM DEBT SECURITIES: BUSINESS SERVICES PRINTING, PUBLISHING & BROADCASTING (1.7%) Time Warner Entertainment Co. 7.25%, 2008 ............................... $2,160,000 $2,225,720 ---------- TOTAL BUSINESS SERVICES (1.7%) ............. 2,225,720 ---------- CAPITAL GOODS AEROSPACE (1.9%) Lockheed Martin Corp. 6.85%, 2001 ............................... 2,500,000 2,498,180 ---------- TOTAL CAPITAL GOODS (1.9%) ................. 2,498,180 ---------- CONSUMER CYCLICALS RETAIL -- GENERAL (0.5%) Wal-Mart Stores, Inc. 6.875%, 2009 .............................. 700,000 731,423 ---------- TOTAL CONSUMER CYCLICALS (0.5%) ............ 731,423 ---------- CONSUMER NONCYCLICALS FOODS (2.2%) ConAgra, Inc.: 7.5%, 2005 ................................ 2,105,000 2,199,752 7.875%, 2010 .............................. 750,000 808,433 ---------- 3,008,185 ---------- MEDIA & CABLE (0.5%) Cox Communications, Inc. 7.75%, 2010 ............................... 650,000 675,024 ---------- TOTAL CONSUMER NONCYCLICALS (2.7%) ......... 3,683,209 ---------- CREDIT SENSITIVE ASSET BACKED (1.0%) Capital Auto Receivables Asset Trust 5.58%, 2002 ............................... 1,369,315 1,367,412 ---------- BANKS (3.4%) Chase Manhattan Corp. 6.375%, 2008 .............................. 1,760,000 1,713,131 Citigroup, Inc. 7.25%, 2010 ............................... 2,765,000 2,848,976 ---------- 4,562,107 ---------- FINANCIAL SERVICES (5.6%) Associates Corp. of North America 6.5%, 2002 ................................ 3,500,000 3,516,625 Goldman Sachs Group, Inc. 7.35%, 2009 ............................... 1,325,000 1,349,367
FSA-5 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued)
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- Household Finance Corp. 6.5%, 2008 ............................ $ 1,425,000 $ 1,364,594 Lehman Brothers Holdings, Inc. 7.875%, 2010 .......................... 1,285,000 1,328,753 ----------- 7,559,339 ----------- INSURANCE (4.4%) AIG SunAmerica Global Financing II 7.6%, 2005 ............................ 5,600,000 5,929,885 ----------- UTILITY -- ELECTRIC (2.8%) AEP Resources, Inc. 6.5%, 2003 ............................ 1,850,000 1,840,343 Consolidated Edison, Inc. 6.25%, 2008 ........................... 2,000,000 1,933,960 ----------- 3,774,303 ----------- UTILITY -- GAS (0.7%) KeySpan Corporation 7.25%, 2005 ........................... 935,000 971,926 ----------- U.S. GOVERNMENT AGENCIES (16.1%) Federal Home Loan Mortgage Corp. 6.875%, 2010 .......................... 4,580,000 4,882,784 Federal National Mortgage Association: 6.75%, 2002 ........................... 7,105,000 7,228,016 6.0%, 2005 ............................ 4,320,000 4,364,820 6.625%, 2007 .......................... 4,925,000 5,136,992 ----------- 21,612,612 ----------- U.S. GOVERNMENT (32.1%) U.S. Treasury Notes: 6.5%, 2002 ............................ 15,025,000 15,252,734 5.75%, 2005 ........................... 7,410,000 7,651,114 5.875%, 2005 .......................... 18,020,000 18,631,291 5.75%, 2010 ........................... 1,615,000 1,692,596 ----------- 43,227,735 ----------- TOTAL CREDIT SENSITIVE (66.1%) ......... 89,005,319 ----------- ENERGY COAL & GAS PIPELINES (2.5%) Williams Companies, Inc. 6.125%, 2001 .......................... 3,400,000 3,399,082 ----------- TOTAL ENERGY (2.5%) .................... 3,399,082 ----------- TECHNOLOGY TELECOMMUNICATIONS (4.5%) Qwest Capital Funding, Inc. 7.9%, 2010 ............................ 2,490,000 2,554,200
FSA-6 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 13 (POOLED) (THE ALLIANCE BOND FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Concluded)
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- Telefonica Europe BV 7.75%, 2010 ....................................... $ 650,000 $ 658,009 Verizon Global Funding Corp. 7.25%, 2010 ....................................... 2,800,000 2,843,106 ------------ TOTAL TECHNOLOGY (4.5%) ............................ 6,055,315 ------------ SUPRANATIONAL DEBT OBLIGATION (3.7%) International Bank Reconstruction & Development 7.0%, 2005 ........................................ 4,775,000 4,991,675 ------------ TOTAL SUPRANATIONAL DEBT OBLIGATION (3.7%) ......... 4,991,675 ------------ TOTAL LONG-TERM DEBT SECURITIES (83.6%) (Amortized Cost $110,372,052) ..................... 112,589,923 ------------ PARTICIPATION IN SEPARATE ACCOUNT NO. 2A, at amortized cost, which approximates market value, equivalent to 31,079 units at $320.30 each (7.4%)....................... 9,954,633 ------------ TOTAL INVESTMENTS (91.0%) (Amortized Cost $120,326,685) ..................... 122,544,556 OTHER ASSETS LESS LIABILITIES (9.0%) ............... 12,148,477 ------------ NET ASSETS (100.0%) ................................ $134,693,033 ============
See Notes to Financial Statements. FSA-7 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Assets and Liabilities DECEMBER 31, 2000 --------------------------------------------------------------------------------
ASSETS: Investments (Notes 2 and 3): Common stocks -- at value (cost: $42,295,134) ........................................... $ 44,326,051 Preferred stocks -- at value (cost: $952,126) ........................................... 1,003,369 Long-term debt securities -- at value (amortized cost: $45,099,998) ..................... 46,720,849 Participation in Separate Account No. 2A -- at amortized cost, which approximates market value, equivalent to 17,541 units at $320.30 .......................................... 5,618,163 Cash ..................................................................................... 684,443 Receivable for investment securities sold ................................................ 3,441,981 Interest receivable ...................................................................... 630,970 Dividends and other receivable ........................................................... 35,248 ---------------------------------------------------------------------------------------------------------- Total assets ............................................................................. 102,461,074 ---------------------------------------------------------------------------------------------------------- LIABILITIES: Due to Equitable Life's General Account .................................................. 965,022 Payable for investment securities purchased .............................................. 1,591,449 Investment management fees payable ....................................................... 928 Accrued expenses ......................................................................... 119,570 ---------------------------------------------------------------------------------------------------------- Total liabilities ........................................................................ 2,676,969 ---------------------------------------------------------------------------------------------------------- NET ASSETS ............................................................................... $ 99,784,105 ==========================================================================================================
See Notes to Financial Statements. FSA-8 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Operations YEAR ENDED DECEMBER 31, 2000 --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends (net of foreign taxes withheld of $19,298) ..................... $ 478,824 Interest ................................................................. 3,811,321 ---------------------------------------------------------------------------------------------------------- Total investment income .................................................. 4,290,145 ---------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Investment management and accounting fees and program expense charge ..... (824,295) Administrative fees ...................................................... (983,132) Expense charges .......................................................... (27,491) Operating expenses ....................................................... (147,349) ---------------------------------------------------------------------------------------------------------- Total expenses ........................................................... (1,982,267) ---------------------------------------------------------------------------------------------------------- Net investment income .................................................... 2,307,878 ---------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain from security and foreign currency transactions ............ 11,299,095 Change in unrealized appreciation/depreciation of investments ............ (17,611,759) ---------------------------------------------------------------------------------------------------------- Net realized and unrealized loss on investments .......................... (6,312,664) ---------------------------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS .................... $ (4,004,786) ==========================================================================================================
See Notes to Financial Statements. FSA-9 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2000 1999 ------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ........................................................ $ 2,307,878 $ 3,225,028 Net realized gain on investments and foreign currency transactions ........... 11,299,095 26,193,319 Change in unrealized appreciation/depreciation of investments ................ (17,611,759) (8,283,953) ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations ............. (4,004,786) 21,134,394 ------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS AND WITHDRAWALS: Contributions ................................................................ 21,466,047 30,187,271 Withdrawals .................................................................. (60,321,307) (105,989,196) ------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions and withdrawals ..... (38,855,260) (75,801,925) ------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS ....................................................... (42,860,046) (54,667,531) NET ASSETS -- BEGINNING OF YEAR .............................................. 142,644,151 197,311,682 ------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................................................... $ 99,784,105 $ 142,644,151 ===================================================================================================================
See Notes to Financial Statements. FSA-10 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 --------------------------------------------------------------------------------
NUMBER VALUE OF SHARES (NOTE 3) ----------------------------------------------------------------------------------------------- COMMON STOCKS: BASIC MATERIALS CHEMICALS (0.3%) Dow Chemical Co. .............................................. 400 $ 14,650 Union Carbide Corp. ........................................... 5,200 279,825 ------------ 294,475 ------------ CHEMICALS -- SPECIALTY (0.2%) Lyondell Chemical Company ..................................... 11,700 179,156 ------------ METALS & MINING (0.4%) Alcoa, Inc. ................................................... 9,000 301,500 Freeport-McMoran Copper & Gold, Inc. (Class B)* ............... 3,100 26,544 Newmont Mining Corp. .......................................... 1,100 18,769 Phelps Dodge Corp. ............................................ 600 33,488 ------------ 380,301 ------------ TOTAL BASIC MATERIALS (0.9%) .................................. 853,932 ------------ BUSINESS SERVICES PRINTING, PUBLISHING & BROADCASTING (1.9%) AT&T Corp. -- Liberty Media Corp. (Class A)* .................. 5,900 80,019 British Sky Broadcasting PLC* ................................. 26,070 438,163 Comcast Corp. SPL (Class A)* .................................. 7,000 292,250 Gannett Co. ................................................... 2,600 163,963 Reuters Group PLC ............................................. 19,800 335,151 Time Warner, Inc. ............................................. 5,400 282,096 Viacom, Inc. (Class B)* ....................................... 6,640 310,420 ------------ TOTAL BUSINESS SERVICES (1.9%) 1,902,062 ------------ CAPITAL GOODS AEROSPACE (0.2%) British Aerospace PLC* ........................................ 11,500 65,689 General Motors Corp. (Class H)* ............................... 5,900 135,700 ------------ 201,389 ------------ BUILDING & CONSTRUCTION (0.2%) CRH PLC* ...................................................... 13,300 247,625 ------------ BUILDING MATERIALS & FOREST PRODUCTS (0.4%) Masco Corp. ................................................... 11,000 282,563 Weyerhaeuser Co. .............................................. 2,600 131,950 ------------ 414,513 ------------ ELECTRICAL EQUIPMENT (2.0%) ................................... Alcatel SA .................................................... 3,600 204,601 General Electric Co. .......................................... 35,100 1,682,606 Taiwan Semiconductor Manufacturing Co. Ltd. Sp (ADR)* ......... 6,000 103,500 ------------ 1,990,707 ------------ MACHINERY (0.6%) Deere & Co. ................................................... 4,800 219,900
FSA-11 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) -------------------------------------------------------------------------------- United Technologies Corp. ...................... 4,200 $ 330,225 ------------ 550,125 ------------ TOTAL CAPITAL GOODS (3.4%) ..................... 3,404,359 ------------ CONSUMER CYCLICALS AIRLINES (0.2%) Continental Airliness, Inc. (Class B)* ......... 2,600 134,225 Northwest Airlines Corp. (Class A)* ............ 3,200 96,400 ------------ 230,625 ------------ AUTO RELATED (0.2%) Delphi Automotive Systems Corp. ................ 12,600 141,750 Visteon Corp. .................................. 458 5,267 ------------ 147,017 ------------ AUTOS & TRUCKS (0.1%) Ford Motor Co. ................................. 5,641 132,211 ------------ LEISURE RELATED (0.8%) Carnival Corp. ................................. 5,400 166,388 Harley Davidson, Inc. .......................... 2,800 111,300 Mattel, Inc. ................................... 16,800 242,592 Park Place Entertainment Corp.* ................ 300 3,581 The Walt Disney Co. ............................ 10,000 289,375 ------------ 813,236 ------------ RETAIL -- GENERAL (2.0%) Fast Retailing Co. Ltd. ........................ 700 136,917 Home Depot, Inc. ............................... 9,600 438,600 Kohl's Corp.* .................................. 3,400 207,400 Limited, Inc. .................................. 5,100 87,019 Lowe's Cos., Inc. .............................. 3,300 146,850 Tiffany & Co. .................................. 3,000 94,875 Wal-Mart Stores, Inc. .......................... 9,900 525,938 Walgreen Co. ................................... 8,100 338,681 ------------ 1,976,280 ------------ TOTAL CONSUMER CYCLICALS (3.3%) ................ 3,299,369 ------------ CONSUMER NONCYCLICALS BEVERAGES (0.9%) Coca-Cola Co. .................................. 6,100 371,719 Interbrew* ..................................... 1,550 54,049 Pepsi Bottling Group, Inc. ..................... 4,200 167,738 Pepsico, Inc. .................................. 6,700 332,069 ------------ 925,575 ------------ DRUGS (4.4%) American Home Products Corp. ................... 6,100 387,655 Amgen, Inc.* ................................... 2,900 185,419 AstraZeneca PLC ................................ 2,800 140,971 Bristol-Myers Squibb Co. ....................... 1,200 88,725
FSA-12 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) ---------------------------------------------------------------------------------------- Human Genome Sciences, Inc.* ............................. 2,500 $ 173,281 Merck & Co., Inc. ........................................ 6,000 561,750 Pfizer, Inc. ............................................. 23,095 1,062,370 Pharmacia Corporation .................................... 7,621 464,881 Sanofi-Synthelabo SA ..................................... 2,900 193,423 Schering Plough Corp. .................................... 8,100 459,675 Takeda Chemical Industries* .............................. 8,000 472,645 Yamanouchi Pharmaceutical Co. Ltd.* ...................... 4,000 172,697 ------------ 4,363,492 ------------ HOSPITAL SUPPLIES & SERVICES (1.7%) Applera Corp. -- Applied Biosystems Group ................ 1,900 178,719 Guidant Corp.* ........................................... 4,700 253,506 Health Management Associates, Inc. (Class A)* ............ 10,200 211,650 IMS Health, Inc. ......................................... 9,500 256,500 Johnson & Johnson ........................................ 1,100 115,569 Medtronic, Inc.* ......................................... 7,800 470,925 SYNAVANT, Inc.* .......................................... 455 2,133 Tenet Healthcare Corporation ............................. 5,200 231,075 ------------ 1,720,077 ------------ MEDIA & CABLE (0.2%) UnitedGlobalCom, Inc. (Class A)* ......................... 30 409 United Pan-Europe Communications N.V. (Class A)* ......... 18,064 184,626 ------------ 185,035 ------------ RETAIL -- FOOD (0.3%) Kroger Co.* .............................................. 12,400 335,575 ------------ SOAPS & TOILETRIES (1.0%) Avon Products, Inc. ...................................... 5,100 244,163 Colgate Palmolive Co. .................................... 5,900 380,845 Estee Lauder Cos. (Class A) .............................. 3,300 144,581 KAO Corp.* ............................................... 8,000 232,127 ------------ 1,001,716 ------------ TOTAL CONSUMER NONCYCLICALS (8.5%) ....................... 8,531,470 ------------ CREDIT SENSITIVE BANKS (4.5%) Banco Bilbao Vizcaya Argentaria S.A.* .................... 18,900 281,411 Bank of America Corp. .................................... 9,042 414,801 Bank of Ireland* ......................................... 16,000 158,571 Bank One Corp. ........................................... 9,432 345,447 BNP Paribas SA* .......................................... 4,000 351,336 Chase Manhattan Corp. .................................... 7,781 353,548 Citigroup, Inc. .......................................... 17,231 879,857 DBS Group Holdings Ltd. .................................. 4,652 52,644 Firstar Corp. ............................................ 3,000 69,750 Morgan (J.P.) & Co., Inc. ................................ 700 115,850 National City Corp. ...................................... 6,800 195,500 Royal Bank of Scotland Group PLC* ........................ 18,000 424,993
FSA-13 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) ---------------------------------------------------------------------------------------- Royal Bank of Scotland Group PLC-Value Shares* ......... 15,400 $ 18,998 Standard Chartered PLC* ................................ 11,000 158,726 Sumitomo Trust & Banking Co.* .......................... 14,000 95,071 Unicredito Italiano Spa* ............................... 61,000 319,180 Wells Fargo Company .................................... 4,800 267,300 ------------ 4,502,983 ------------ FINANCIAL SERVICES (2.3%) Alleanza Assicurazioni ................................. 24,500 390,570 CIT Group, Inc. (Class A) .............................. 9,800 197,225 Goldman Sachs Group, Inc. .............................. 1,700 181,794 Household International, Inc. .......................... 5,300 291,500 Legg Mason, Inc. ....................................... 2,200 119,900 Lehman Brothers Holdings, Inc. ......................... 3,300 223,162 MBNA Corp. ............................................. 8,512 314,412 Morgan Stanley Dean Witter & Co. ....................... 5,600 443,800 Nomura Securities Co. Ltd.* ............................ 7,000 125,721 Peregrine Investment Holdings Ltd.* .................... 90,000 0 ------------ 2,288,084 ------------ INSURANCE (1.7%) ACE Ltd. ............................................... 4,100 173,994 AFLAC, Inc. ............................................ 3,100 223,781 American International Group, Inc. ..................... 8,800 867,350 CGU PLC ................................................ 26,000 419,880 ------------ 1,685,005 ------------ MORTGAGE RELATED (0.3%) Fannie Mae ............................................. 2,000 173,500 Freddie Mac ............................................ 1,300 89,538 ------------ 263,038 ------------ REAL ESTATE (0.0%) Cheung Kong Holdings ................................... 3,000 38,367 ------------ UTILITY -- ELECTRIC (0.9%) AES Corp.* ............................................. 5,091 281,914 Calpine Corporation* ................................... 4,900 220,806 Duke Power Co. ......................................... 2,700 230,175 Pinnacle West Capital Corp. ............................ 4,600 219,075 ------------ 951,970 ------------ UTILITY -- GAS (0.4%) ENRON Corp. ............................................ 4,600 382,375 ------------ UTILITY -- TELEPHONE (1.9%) AT&T Corp. ............................................. 12,013 207,975 BellSouth Corp. ........................................ 6,400 262,000 Telefonica SA* ......................................... 9,871 163,202 SBC Communications, Inc. ............................... 15,386 734,682 Telefonos de Mexico (ADR) `L' .......................... 2,000 90,250 Verizon Communications, Inc. ........................... 9,000 451,125 ------------ 1,909,234 ------------ TOTAL CREDIT SENSITIVE (12.0%) ......................... 12,021,056 ------------
FSA-14 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) -------------------------------------------------------------------------------- ENERGY OIL -- DOMESTIC (0.6%) BP Amoco PLC (ADR) ......................... 3,860 $ 184,798 Dynegy, Inc. (Class A) ..................... 3,800 213,038 Kerr-McGee Corp. ........................... 3,400 227,588 ------------ 625,424 ------------ OIL -- INTERNATIONAL (1.6%) BP Amoco PLC* .............................. 33,300 267,391 Chevron Corp. .............................. 4,400 371,525 Exxon Mobil Corp. .......................... 7,056 613,431 Royal Dutch Petroleum Co.* ................. 900 54,506 Total Fina Elf SA* ......................... 2,100 312,482 ------------ 1,619,335 ------------ OIL -- SUPPLIES & CONSTRUCTION (0.3%) Noble Drilling Corp.* ...................... 4,100 178,094 Santa Fe International, Inc. ............... 4,200 134,663 ------------ 312,757 ------------ RAILROADS (0.3%) Burlington Northern Santa Fe Corp. ......... 8,500 240,656 ------------ TOTAL ENERGY (2.8%) ........................ 2,798,172 ------------ TECHNOLOGY ELECTRONICS (5.1%) Advantest Corp.* ........................... 1,000 93,515 Altera Corp.* .............................. 6,536 171,979 Applied Materials, Inc.* ................... 1,400 53,463 Applied Micro Circuits Corp.* .............. 1,900 142,588 ASM Lithography Holdings N.V.* ............. 7,300 165,886 BEA Systems, Inc.* ......................... 2,300 154,819 Cisco Systems, Inc.* ....................... 24,400 933,300 EMC Corp.* ................................. 8,000 532,000 Flextronics International Ltd.* ............ 2,900 82,650 Foundry Networks, Inc.* .................... 1,500 22,500 Intel Corp. ................................ 15,344 464,155 JDS Uniphase Corp.* ........................ 3,900 162,580 Juniper Networks, Inc.* .................... 1,400 176,488 Micron Technology, Inc.* ................... 5,800 205,900 NEC Corp.* ................................. 10,000 182,660 PMC-Sierra, Inc.* .......................... 1,100 86,488 Rohm Co. Ltd.* ............................. 1,000 189,652 Samsung Electronics (GDR)* ................. 900 56,498 Sanmina Corp.* ............................. 2,000 153,250 Solectron Corp.* ........................... 7,200 244,080 STMicroelectronics N.V. .................... 4,000 174,728 Texas Instruments, Inc. .................... 900 42,638 Tokyo Electron Limited* .................... 2,600 142,702
FSA-15 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) ---------------------------------------------------------------------------------- Veritas Software Corp.* ........................... 2,800 $ 245,000 Xilinx, Inc.* ..................................... 4,000 184,500 Yahoo!, Inc.* ..................................... 900 27,155 ------------- 5,091,174 ------------- OFFICE EQUIPMENT (1.6%) Canon, Inc. ....................................... 11,000 384,547 Dell Computer Corp.* .............................. 12,500 217,969 Hewlett-Packard Co. ............................... 5,600 176,750 International Business Machines Corp. ............. 5,400 459,000 Softbank Corp. .................................... 200 6,939 Sun Microsystems, Inc.* ........................... 11,800 328,925 ------------- 1,574,130 ------------- OFFICE EQUIPMENT SERVICES (1.4%) Microsoft Corp.* .................................. 17,300 752,550 Oracle Corp.* ..................................... 22,000 639,375 ------------- 1,391,925 ------------- TELECOMMUNICATIONS (2.4%) Amdocs Ltd.* ...................................... 2,900 192,125 America Online, Inc.* ............................. 11,200 389,760 AT&T Wireless Group* .............................. 6,900 119,456 Avaya, Inc.* ...................................... 422 4,352 China Telecom (Hong Kong) Ltd.* ................... 38,000 207,546 Global TeleSystems, Inc.* ......................... 5,700 4,631 Lucent Technologies, Inc. ......................... 5,275 71,213 Nokia Oyj ......................................... 5,100 227,570 Nortel Networks Corp. ............................. 5,000 160,313 NTT Mobile Communications Network, Inc.* .......... 10 172,172 Qualcomm, Inc.* ................................... 2,300 189,031 Qwest Communications International, Inc.* ......... 4,000 164,000 Vodafone Airtouch PLC* ............................ 104,307 382,127 WorldCom, Inc.* ................................... 5,486 76,804 ------------- 2,361,100 ------------- TOTAL TECHNOLOGY (10.5%) .......................... 10,418,329 ------------- DIVERSIFIED MISCELLANEOUS (1.1%) Citic Pacific Ltd.* ............................... 40,000 141,800 Corning, Inc. ..................................... 3,400 179,562 Hutchison Whampoa Ltd. ............................ 8,400 104,735 Tyco International Ltd. ........................... 9,110 505,605 Viad Corp. ........................................ 7,200 165,600 ------------- TOTAL DIVERSIFIED (1.1%) .......................... 1,097,302 ------------- TOTAL COMMON STOCKS (44.4%) (Cost $42,295,134)................................ 44,326,051 -------------
FSA-16 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- NUMBER VALUE OF SHARES (NOTE 3) -------------------------------------------------------------------------------- PREFERRED STOCKS: CREDIT SENSITIVE UTILITY -- ELECTRIC (0.4%) Calpine Capital Trust 5.75% Conv. ............................. 1,400 $ 222,425 Southern Energy, Inc. 6.25% Conv. ............................. 2,700 167,400 ---------- TOTAL CREDIT SENSITIVE (0.4%) ............ 389,825 ---------- TECHNOLOGY ELECTRONICS (0.1%) UnitedGlobalCom, Inc. 7.0% Conv. Series C ..................... 4,200 84,525 ---------- TELECOMMUNICATIONS (0.5%) Amdocs Ltd. 6.75% Conv. ............................. 6,400 371,200 XO Communications, Inc. 3.25% Conv. ............................. 1,900 157,819 ---------- 529,019 ---------- TOTAL TECHNOLOGY (0.6%) .................. 613,544 ---------- TOTAL PREFERRED STOCKS (1.0%) (Cost $952,126).......................... 1,003,369 ---------- PRINCIPAL AMOUNT --------- LONG-TERM DEBT SECURITIES: BUSINESS SERVICES PRINTING, PUBLISHING & BROADCASTING (0.6%) AT&T Corp. -- Liberty Media Corp. 8.25%, 2030 ............................. $ 600,000 547,405 ---------- TOTAL BUSINESS SERVICES (0.6%) ........... 547,405 ---------- CAPITAL GOODS AEROSPACE (0.6%) Raytheon Co. 7.9%, 2003 .............................. 615,000 632,187 ---------- MACHINERY (0.0%) ASM Lithography Holdings N.V. 4.25% Conv., 2004 ....................... 10,000 9,275 ---------- TOTAL CAPITAL GOODS (0.6%) ............... 641,462 ---------- CONSUMER CYCLICALS AIRLINES (0.3%) United Air Lines, Inc. (Class A-2) 7.186%, 2011 ............................ 340,000 346,678 ----------
FSA-17 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- RETAIL -- GENERAL (0.1%) Wal-Mart Stores, Inc. 6.875%, 2009 .............................. $ 75,000 $ 78,367 ------------ TOTAL CONSUMER CYCLICALS (0.4%) ............ 425,045 ------------ CONSUMER NONCYCLICALS DRUGS (0.2%) Millennium Pharmaceuticals, Inc. 5.5% Conv., 2007 .......................... 95,000 158,234 ------------ FOODS (0.9%) ConAgra, Inc.: 7.5%, 2005 ................................ 425,000 444,131 8.25%, 2030 ............................... 425,000 462,399 ------------ 906,530 ------------ HOSPITAL SUPPLIES & SERVICES (0.5%) Affymetrix, Inc. 5.0% Conv., 2006 .......................... 130,000 177,125 Human Genome Sciences, Inc. 5.5% Conv., 2006 .......................... 55,000 295,419 ------------ 472,544 ------------ MEDIA & CABLE (1.0%) Cox Communications, Inc. 7.75%, 2010 ............................... 240,000 249,240 Time Warner Entertainment Co.: 8.375%, 2023 .............................. 295,000 319,461 8.375%, 2033 .............................. 430,000 466,637 ------------ 1,035,338 ------------ TOTAL CONSUMER NONCYCLICALS (2.6%) ......... 2,572,646 ------------ CREDIT SENSITIVE ASSET BACKED (1.3%) Citibank Credit Card Issuance Trust 6.875%, 2009 .............................. 1,250,000 1,319,258 ------------ BANKS (1.5%) Barclays Bank PLC 8.55%, 2049 ............................... 400,000 419,350 St. George Bank Ltd. 7.15%, 2005 ............................... 1,025,000 1,043,696 ------------ 1,463,046 ------------ FOREIGN GOVERNMENT (0.3%) Quebec Province 7.5%, 2029 ................................ 300,000 320,160 ------------ FINANCIAL SERVICES (2.3%) Associates Corp. of North America 5.75%, 2003 ............................... 550,000 542,570
FSA-18 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- Goldman Sachs Group, Inc. 7.8%, 2010 ............................. $ 350,000 $ 368,066 Household Finance Corp. 6.5%, 2008 ............................. 300,000 287,283 Lehman Brothers Holdings, Inc. 7.875%, 2010 ........................... 485,000 501,514 Morgan Stanley Dean Witter & Co. 5.625%, 2004 ........................... 625,000 613,294 ------------ 2,312,727 ------------ MORTGAGE RELATED (11.3%) Federal National Mortgage Association: 7.0%, 2014 ............................. 1,476,284 1,491,308 7.0%, 2015 ............................. 1,073,194 1,084,116 6.0%, 2029 ............................. 1,560,986 1,510,043 6.5%, 2030 ............................. 1,255,088 1,237,269 7.0%, 2030 ............................. 2,273,729 2,276,357 Government National Mortgage Association: 6.5%, 2029 ............................. 1,664,269 1,646,362 7.5%, 2030 ............................. 2,028,965 2,062,295 ------------ 11,307,750 ------------ UTILITY -- ELECTRIC (0.7%) AES Corp. 4.5% Conv., 2005 ....................... 85,000 178,288 Cilcorp, Inc. 9.375%, 2029 ........................... 310,000 341,960 TXU Corp. 6.375%, 2008 ........................... 160,000 151,488 ------------ 671,736 ------------ UTILITY -- GAS (0.2%) KeySpan Corporation 7.25%, 2005 ............................ 235,000 244,281 ------------ U.S. GOVERNMENT AGENCIES (8.7%) Federal Home Loan Mortgage Corp. 6.875%, 2010 ........................... 910,000 970,160 Federal National Mortgage Association: 6.75%, 2002 ............................ 2,190,000 2,227,917 6.0%, 2005 ............................. 4,190,000 4,233,470 6.625%, 2007 ........................... 1,200,000 1,251,653 ------------ 8,683,200 ------------ U.S. GOVERNMENT (11.1%) U.S. Treasury Bonds: S.T.R.I.P.S. Zero Coupon, 2011 ...................... 1,040,000 589,981 S.T.R.I.P.S. Zero Coupon, 2012 ...................... 1,025,000 566,774
FSA-19 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- 12.0%, 2013 ........................... $ 725,000 $ 1,023,495 8.125%, 2019 .......................... 2,365,000 3,056,937 U.S. Treasury Notes: 5.75%, 2003 ........................... 3,060,000 3,105,422 5.75%, 2005 ........................... 810,000 836,356 5.875%, 2005 .......................... 1,415,000 1,463,000 5.75%, 2010 ........................... 365,000 382,537 ------------ 11,024,502 ------------ TOTAL CREDIT SENSITIVE (37.4%) ......... 37,346,660 ------------ ENERGY RAILROADS (0.1%) Union Pacific Corp. 6.625%, 2029 .......................... 150,000 134,511 ------------ TOTAL ENERGY (0.1%) .................... 134,511 ------------ TECHNOLOGY ELECTRONICS (3.9%) Advanced Energy Industries 5.25% Conv., 2006 ..................... 115,000 95,306 BEA Systems, Inc. 4.0% Conv., 2006 ...................... 70,000 145,469 Burr-Brown Corp. 4.25% Conv., 2007 ..................... 110,000 148,500 Checkfree Holdings Corp. 6.5% Conv., 2006 ...................... 85,000 76,500 Comverse Technology, Inc. 4.5% Conv., 2005 ...................... 125,000 633,438 Conexant Systems, Inc. 4.25% Conv., 2006 ..................... 95,000 82,472 Critical Path, Inc. 5.75% Conv., 2005 ..................... 220,000 146,300 Cypress Semiconductor Corp. 4.0% Conv., 2005 ...................... 190,000 146,419 Efficient Networks, Inc. 5.0% Conv., 2005 ...................... 270,000 137,025 HNC Software, Inc. 4.75% Conv., 2003 ..................... 75,000 223,125 i2 Technologies, Inc. 5.25% Conv., 2006 ..................... 90,000 145,350 Juniper Networks, Inc. 4.75% Conv., 2007 ..................... 110,000 112,338 LSI Logic Corp. 4.25% Conv., 2004 ..................... 25,000 31,438 Lattice Semiconductor Co. 4.75% Conv., 2006 ..................... 125,000 135,313 Mercury Interactive Corp. 4.75% Conv., 2007 ..................... 190,000 197,719
FSA-20 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (NOTE 3) -------------------------------------------------------------------------------- NVIDIA Corporation 4.75% Conv., 2007 ........................... $ 60,000 $ 37,725 ONI Systems Corp. 5.0% Conv., 2005 ............................ 150,000 101,063 RF Micro Devices 3.75% Conv., 2005 ........................... 65,000 55,088 Rational Software Corp. 5.0% Conv., 2007 ............................ 285,000 368,363 Sanmina Corp. 4.25% Conv., 2004 ........................... 135,000 247,725 Siebel Systems, Inc. 5.5% Conv., 2006 ............................ 60,000 180,638 STMicroelectronics N.V. Zero Coupon Conv., 2009 ..................... 145,000 175,813 TranSwitch Corp. 4.5% Conv., 2005 ............................ 150,000 130,875 TriQuint Semiconductor, Inc. 4.0% Conv., 2007 ............................ 75,000 65,531 Vitesse Semiconductor Corp. 4.0% Conv., 2005 ............................ 45,000 35,916 ------------ 3,855,449 ------------ OFFICE EQUIPMENT SERVICES (0.1%) Aether Systems, Inc. 6.0% Conv., 2005 ............................ 130,000 74,750 ------------ TELECOMMUNICATIONS (1.1%) British Telecommunications PLC 8.625%, 2030 ................................ 235,000 235,302 Nextel Communications, Inc. 4.75% Conv., 2007 ........................... 170,000 203,575 Qwest Capital Funding, Inc. 7.9%, 2010 .................................. 430,000 441,087 Telefonica Europe BV 7.75%, 2010 ................................. 240,000 242,957 ------------ 1,122,921 ------------ TOTAL TECHNOLOGY (5.1%) ...................... 5,053,120 ------------ TOTAL LONG-TERM DEBT SECURITIES (46.8%) (Amoritzed Cost $45,099,998)................. 46,720,849 ------------ PARTICIPATION IN SEPARATE ACCOUNT NO. 2A, at amortized cost, which approximates market value, equivalent to 17,541 units at $320.30 each (5.7%).......................... 5,618,163 ------------ TOTAL INVESTMENTS (97.9%) (Cost/Amoritzed Cost $93,965,421)............ 97,668,432 OTHER ASSETS LESS LIABILITIES (2.1%) ......... 2,115,673 ------------ NET ASSETS (100.0%) .......................... $ 99,784,105 ============
FSA-21 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Concluded) -------------------------------------------------------------------------------- DISTRIBUTION OF INVESTMENTS BY GLOBAL REGION
% OF INVESTMENTS --------------- United States** .................. 88.1% United Kingdom ................... 3.3 Japan ............................ 2.5 Other European Countries ......... 1.5 France ........................... 1.3 Australia ........................ 1.1 Netherlands ...................... 0.7 Southeast Asia ................... 0.7 Canada ........................... 0.5 Scandinavia ...................... 0.2 Mexico ........................... 0.1 ----- 100.0% =====
* Non-income producing. ** Includes short term investments. See Notes to Financial Statements. FSA-22 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Assets and Liabilities DECEMBER 31, 2000 -------------------------------------------------------------------------------- ASSETS: Investments (Notes 2 and 3): Common stocks -- at value (cost: $1,116,245,191) ........................................ $1,186,681,431 Preferred stocks -- at value (cost: $774,900) ........................................... 870,000 Long-term debt securities -- at value (amortized cost: $7,427,784) ...................... 3,493,125 Participation in Separate Account No. 2A -- at amortized cost, which approximates market value, equivalent to 126,899 units at $320.30 ......................................... 40,645,110 Receivable for investment securities sold ................................................ 6,187,273 Dividends and interest receivable ........................................................ 1,070,923 ------------------------------------------------------------------------------------------------------------ Total assets ............................................................................. 1,238,947,862 ------------------------------------------------------------------------------------------------------------ LIABILITIES: Due to Equitable Life's General Account .................................................. 17,151,785 Custodian fee payable .................................................................... 61,663 Investment management fees payable ....................................................... 1,762 Accrued expenses ......................................................................... 334,298 ------------------------------------------------------------------------------------------------------------ Total liabilities ........................................................................ 17,549,508 ------------------------------------------------------------------------------------------------------------ NET ASSETS ............................................................................... $1,221,398,354 ============================================================================================================ Amount retained by Equitable Life in Separate Account No. 4 .............................. $ 2,205,293 Net assets attributable to contract owners ............................................... 1,175,684,856 Net assets attributable to annuity benefits .............................................. 43,508,205 ------------------------------------------------------------------------------------------------------------ NET ASSETS ............................................................................... $1,221,398,354 ============================================================================================================
See Notes to Financial Statements. FSA-23 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Operations YEAR ENDED DECEMBER 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends (net of foreign taxes withheld of $4,734)....................... $ 7,810,989 Interest ................................................................. 505,514 -------------------------------------------------------------------------------------------- Total investment income .................................................. 8,316,503 -------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Investment management and accounting fees and program expense charge ..... (6,080,693) Administrative fees ...................................................... (5,349,440) Expense charges .......................................................... (25,423) Operating expenses ....................................................... (509,413) -------------------------------------------------------------------------------------------- Total expenses ........................................................... (11,964,969) -------------------------------------------------------------------------------------------- Net investment loss ...................................................... (3,648,466) -------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain from security and foreign currency transactions ............ 93,460,750 Change in unrealized appreciation/depreciation of investments ............ (381,915,139) -------------------------------------------------------------------------------------------- Net realized and unrealized loss on investments .......................... (288,454,389) -------------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS .................... $ (292,102,855) ============================================================================================
See Notes to Financial Statements. FSA-24 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2000 1999 ------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment loss .......................................................... $ (3,648,466) $ (4,223,520) Net realized gain on investments and foreign currency transactions ........... 93,460,750 294,811,943 Change in unrealized appreciation/depreciation of investments ................ (381,915,139) 264,368,034 ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations ............. (292,102,855) 554,956,457 ------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS AND WITHDRAWALS: Contributions ................................................................ 297,267,595 369,385,670 Withdrawals .................................................................. (575,963,871) (1,245,308,651) ------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions and withdrawals ..... (278,696,276) (875,922,981) ------------------------------------------------------------------------------------------------------------------------- Net increase in net assets attributable to Equitable Life's transactions ..... 58,000 58,823 ------------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS ....................................................... (570,741,131) (320,907,701) NET ASSETS -- BEGINNING OF YEAR .............................................. 1,792,139,485 2,113,047,186 ------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................................................... $1,221,398,354 $ 1,792,139,485 =========================================================================================================================
See Notes to Financial Statements. FSA-25 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) ------------------------------------------------------------------------------------------- COMMON STOCKS: CONSUMER CYCLICALS AIRLINES (17.6%) Alaska Air Group, Inc.* .................................... 500,000 $ 14,875,000 Continental Airlines, Inc. (Class B)* ...................... 2,275,000 117,446,875 Delta Air Lines, Inc. ...................................... 140,000 7,026,250 Northwest Airlines Corp. (Class A)* ........................ 2,500,000 75,312,500 ------------ 214,660,625 ------------ AUTO RELATED (0.3%) Budget Group, Inc.* ........................................ 1,225,000 2,603,125 Monaco Coach Corp.* ........................................ 53,500 946,281 ------------ 3,549,406 ------------ FOOD SERVICES, LODGING (2.8%) Extended Stay America, Inc.* ............................... 2,700,000 34,695,000 ------------ LEISURE RELATED (8.4%) Carnival Corp. ............................................. 800,000 24,650,000 Mattel, Inc. ............................................... 130,000 1,877,200 Metro-Goldwyn-Mayer, Inc.* ................................. 280,000 4,567,500 Park Place Entertainment Corp.* ............................ 1,430,000 17,070,625 Royal Caribbean Cruises Ltd. ............................... 2,050,000 54,222,500 ------------ 102,387,825 ------------ RETAIL -- GENERAL (0.6%) Family Dollar Stores, Inc. ................................. 350,000 7,503,125 ------------ TOTAL CONSUMER CYCLICALS (29.7%) ........................... 362,795,981 ------------ CONSUMER NONCYCLICALS HOSPITAL SUPPLIES & SERVICES (7.5%) Affymetrix Inc.* ........................................... 20,000 1,488,750 Applera Corp. -- Applied Biosystems Group .................. 140,000 13,168,750 Health Management Associates, Inc. (Class A)* .............. 3,100,000 64,325,000 IMS Health, Inc. ........................................... 455,700 12,303,900 ------------ 91,286,400 ------------ MEDIA & CABLE (2.2%) UnitedGlobalCom, Inc. (Class A)* ........................... 900,000 12,262,500 United Pan-Europe Communications (ADR) (Class A) * ......... 1,400,000 14,700,000 ------------ 26,962,500 ------------ TOTAL CONSUMER NONCYCLICALS (9.7%) ......................... 118,248,900 ------------
FSA-26 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) -------------------------------------------------------------------------------- CREDIT SENSITIVE FINANCIAL SERVICES (12.7%) Concord EFS, Inc.* ........................... 20,000 $ 878,750 Edwards (A.G.), Inc. ......................... 805,000 38,187,188 Legg Mason, Inc. ............................. 2,130,000 116,085,000 ------------ 155,150,938 ------------ INSURANCE (15.0%) ACE Ltd. ..................................... 1,600,000 67,900,000 CNA Financial Corp.* ......................... 2,927,700 113,448,375 XL Capital Ltd. (Class A) .................... 25,000 2,184,375 ------------ 183,532,750 ------------ REAL ESTATE (0.4%) Boston Properties, Inc. ...................... 111,600 4,854,600 ------------ UTILITY -- TELEPHONE (5.1%) Telephone & Data Systems, Inc. ............... 700,000 63,000,000 ------------ TOTAL CREDIT SENSITIVE (33.2%) ............... 406,538,288 ------------ ENERGY OIL -- DOMESTIC (3.9%) Dynegy, Inc. (Class A) ....................... 20,000 1,121,250 Kerr-McGee Corp. ............................. 650,000 43,509,375 Phillips Petroleum Co. ....................... 50,000 2,843,750 ------------ 47,474,375 ------------ OIL -- SUPPLIES & CONSTRUCTION (1.3%) Stolt Comex Seaway S.A.* ..................... 165,000 1,815,000 Stolt Offshore S.A. (ADR) (Class A)* ......... 1,304,600 14,024,450 ------------ 15,839,450 ------------ TOTAL ENERGY (5.2%) .......................... 63,313,825 ------------ TECHNOLOGY ELECTRONICS (3.0%) Flextronics International Ltd.* .............. 900,000 25,650,000 Solectron Corp.* ............................. 140,000 4,746,000 StorageNetworks, Inc.* ....................... 250,000 6,203,125 ------------ 36,599,125 ------------
FSA-27 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) ------------------------------------------------------------------------------------- TELECOMMUNICATIONS (13.5%) Amdocs Ltd.* .................................. 475,000 $ 31,468,750 Global TeleSystems, Inc.* ..................... 4,005,000 3,254,062 Millicom International Cellular S.A.* ......... 2,100,000 48,300,000 NTL Incorporated* ............................. 1,400,000 33,512,500 United States Cellular Corp.* ................. 800,000 48,200,000 -------------- 164,735,312 -------------- TOTAL TECHNOLOGY (16.5%) ...................... 201,334,437 -------------- DIVERSIFIED MISCELLANEOUS (2.8%) U.S. Industries, Inc. ......................... 1,000,000 8,000,000 Viad Corp. .................................... 1,150,000 26,450,000 -------------- TOTAL DIVERSIFIED (2.8%) ...................... 34,450,000 -------------- TOTAL COMMON STOCKS (97.1%) (Cost $1,116,245,191)......................... 1,186,681,431 -------------- PREFERRED STOCKS: TECHNOLOGY TELECOMMUNICATIONS (0.1%) Amdocs Ltd. 6.75% Conv. .................................. 15,000 870,000 -------------- TOTAL TECHNOLOGY (0.1%) ....................... 870,000 -------------- TOTAL PREFERRED STOCKS (0.1%) (Cost $774,900)............................... 870,000 -------------- PRINCIPAL AMOUNT --------- LONG-TERM DEBT SECURITIES: TECHNOLOGY TELECOMMUNICATIONS (0.3%) NTL, Incorporated 7.0% Conv., 2008 ............................. $4,500,000 3,493,125 -------------- TOTAL TECHNOLOGY (0.3%) ....................... 3,493,125 -------------- TOTAL LONG-TERM DEBT SECURITIES (0.3%) (Amoritzed Cost $7,427,784)................... 3,493,125 -------------- PARTICIPATION IN SEPARATE ACCOUNT NO. 2A, at amortized cost, which approximates market value, equivalent to 126,899 units at $320.30 each (3.3%).................. 40,645,110 --------------
FSA-28 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE COMMON STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Concluded) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- VALUE (NOTE 3) -------------------------------------------------------------------------------- TOTAL INVESTMENTS (100.8%) (Cost/Amoritzed Cost $1,165,092,985).......... $1,231,689,666 OTHER ASSETS LESS LIABILITIES (-0.8%) ......... (10,291,312) -------------- NET ASSETS (100.0%) ........................... $1,221,398,354 ==============
* Non-income producing. See Notes to Financial Statements. FSA-29 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Assets and Liabilities DECEMBER 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- ASSETS: Investments (Notes 2 and 3): Common stocks -- at value (cost: $101,057,849) .......................................... $105,597,703 Participation in Separate Account No. 2A -- at amortized cost, which approximates market value, equivalent to 33,106 units at $320.30 .......................................... 10,603,687 Cash ..................................................................................... 3,246 Receivable for investment securities sold ................................................ 3,547,574 Dividends receivable ..................................................................... 57,125 -------------------------------------------------------------------------------------------------------- Total assets ............................................................................. 119,809,335 -------------------------------------------------------------------------------------------------------- LIABILITIES: Due to Equitable Life's General Account .................................................. 6,415,380 Payable for investment securities purchased .............................................. 4,112,695 Investment management fees payable ....................................................... 475 Accrued expenses ......................................................................... 62,342 -------------------------------------------------------------------------------------------------------- Total liabilities ........................................................................ 10,590,892 -------------------------------------------------------------------------------------------------------- NET ASSETS ............................................................................... $109,218,443 ========================================================================================================
See Notes to Financial Statements. FSA-30 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of Operations YEAR ENDED DECEMBER 31, 2000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends ................................................................ $ 626,108 Interest ................................................................. 440,675 -------------------------------------------------------------------------------------------------------- Total investment income .................................................. 1,066,783 -------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Investment management and accounting fees and program expense charge ..... (921,058) Administrative fees ...................................................... (856,131) Expense charges .......................................................... (12,101) Operating expenses ....................................................... (104,905) -------------------------------------------------------------------------------------------------------- Total expenses ........................................................... (1,894,195) -------------------------------------------------------------------------------------------------------- Net investment loss ...................................................... (827,412) -------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain from security and foreign currency transactions ............ 196,088 Change in unrealized appreciation /depreciation of investments ........... (18,972,825) -------------------------------------------------------------------------------------------------------- Net realized and unrealized loss investments ............................. (18,776,737) -------------------------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS .................... $ (19,604,149) ========================================================================================================
See Notes to Financial Statements. FSA-31 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2000 1999 -------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment loss .......................................................... $ (827,412) $ (1,123,304) Net realized gain on investments and foreign currency transactions ........... 196,088 48,581,785 Change in unrealized appreciation/depreciation of investments ................ (18,972,825) (17,298,570) ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations ............. (19,604,149) 30,159,911 ------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS AND WITHDRAWALS: Contributions ................................................................ 217,893,446 142,172,242 Withdrawals .................................................................. (272,844,285) (264,920,548) ------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions and withdrawals ..... (54,950,839) (122,748,306) ------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS ....................................................... (74,554,988) (92,588,395) NET ASSETS -- BEGINNING OF YEAR .............................................. 183,773,431 276,361,826 ------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................................................... $ 109,218,443 $ 183,773,431 ===================================================================================================================
See Notes to Financial Statements. FSA-32 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) -------------------------------------------------------------------------------------- COMMON STOCKS: BUSINESS SERVICES PRINTING, PUBLISHING & BROADCASTING (1.6%) Adelphia Communications Corp. (Class A)* .............. 33,200 $ 1,713,950 ----------- TOTAL BUSINESS SERVICES (1.6%) ........................ 1,713,950 ----------- CONSUMER CYCLICALS AIRLINES (2.1%) Continental Airlines, Inc. (Class B)* ................. 43,200 2,230,200 ----------- LEISURE RELATED (10.0%) Carnival Corp. ........................................ 57,100 1,759,394 Harley Davidson, Inc. ................................. 37,000 1,470,750 MGM Mirage, Inc. ...................................... 68,100 1,919,569 Mattel, Inc. .......................................... 260,800 3,765,952 Park Place Entertainment Corp.* ....................... 169,200 2,019,825 ----------- 10,935,490 ----------- RETAIL -- GENERAL (5.2%) BJ'S Wholesale Club, Inc.* ............................ 32,200 1,235,675 Bed Bath & Beyond, Inc.* .............................. 199,800 4,470,525 ----------- 5,706,200 ----------- TOTAL CONSUMER CYCLICALS (17.3%) ...................... 18,871,890 ----------- CONSUMER NONCYCLICALS DRUGS (9.4%) ALZA Corp. (Class A)* ................................. 39,000 1,657,500 AmeriSource Health Corp. (Class A)* ................... 15,800 797,900 Biovail Corp.* ........................................ 35,000 1,359,400 Human Genome Sciences, Inc.* .......................... 23,700 1,642,706 King Pharmaceuticals, Inc.* ........................... 56,800 2,935,850 Millennium Pharmaceuticals, Inc.* ..................... 29,300 1,812,938 ----------- 10,206,294 ----------- HOSPITAL SUPPLIES & SERVICES (13.0%) Affymetrix, Inc.* ..................................... 30,350 2,259,177 Applera Corp. - Applied Biosystems Group .............. 15,700 1,476,781 HCA -The Healthcare Company ........................... 80,000 3,520,800 Health Management Associates, Inc. (Class A)* ......... 108,100 2,243,075 Tenet Healthcare Corporation .......................... 28,900 1,284,244 UnitedHealth Group, Inc. .............................. 21,400 1,313,425 Wellpoint Health Networks, Inc.* ...................... 18,600 2,143,650 ----------- 14,241,152 ----------- MEDIA & CABLE (0.2%) .................................. UnitedGlobalCom, Inc. (Class A)* ...................... 7,000 95,375 XM Satellite Radio Holdings, Inc. (Class A)* .......... 10,400 167,050 ----------- 262,425 ----------- SOAPS & TOILETRIES (0.3%) ............................. Avon Products, Inc. ................................... 6,700 320,763 ----------- TOTAL CONSUMER NONCYCLICALS (22.9%) ................... 25,030,634 ----------- CREDIT SENSITIVE FINANCIAL SERVICES (5.1%) Concord EFS, Inc.* .................................... 40,300 1,770,681
FSA-33 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) ---------------------------------------------------------------------------------------------- Edwards (A.G.), Inc. ........................................... 21,600 $ 1,024,650 Legg Mason, Inc. ............................................... 51,300 2,795,850 ----------- 5,591,181 ----------- INSURANCE (3.9%) ACE Ltd. ....................................................... 32,600 1,383,463 AFLAC, Inc. .................................................... 28,000 2,021,250 Ambac Financial Group, Inc. .................................... 13,950 813,459 ----------- 4,218,172 ----------- REAL ESTATE (2.5%) Boston Properties, Inc. ........................................ 62,100 2,701,350 ----------- UTILITY -- ELECTRIC (2.8%) Calpine Corporation* ........................................... 68,700 3,095,794 ----------- TOTAL CREDIT SENSITIVE (14.3%) ................................. 15,606,497 ----------- ENERGY OIL -- DOMESTIC (4.4%) Dynegy, Inc. (Class A) ......................................... 61,500 3,447,844 Kerr-McGee Corp. ............................................... 19,700 1,318,669 ----------- 4,766,513 ----------- OIL -- SUPPLIES & CONSTRUCTION (2.2%) Noble Drilling Corp.* .......................................... 27,400 1,190,188 R&B Falcon Corp.* .............................................. 53,800 1,234,038 ----------- 2,424,226 ----------- TOTAL ENERGY (6.6%) ............................................ 7,190,739 ----------- TECHNOLOGY ELECTRONICS (26.6%) Altera Corp.* .................................................. 35,400 931,462 Applied Micro Circuits Corp.* .................................. 18,000 1,350,843 Art Technolology Group, Inc.* .................................. 71,000 2,169,937 BEA Systems, Inc.* ............................................. 48,400 3,257,925 Charter Communications, Inc.* .................................. 107,000 2,427,562 Fairchild Semiconductor International Corp. (Class A)* ......... 54,000 779,625 Flextronics International Ltd.* ................................ 52,700 1,501,950 Foundry Networks, Inc.* ........................................ 25,000 375,000 i2 Technologies, Inc.* ......................................... 34,000 1,848,750 Mercury Interactive Corp.* ..................................... 41,600 3,754,400 Molex, Inc. .................................................... 51,600 1,831,800 Network Appliance, Inc.* ....................................... 13,100 841,470 Rational Software Corp.* ....................................... 55,400 2,157,137 Research In Motion Ltd.* ....................................... 36,200 2,896,000 Sanmina Corp.* ................................................. 35,646 2,731,375 Waters Corp.* .................................................. 2,200 183,700 ----------- 29,038,936 ----------- OFFICE EQUIPMENT (1.0%) Brocade Communications Systems, Inc.* .......................... 5,400 495,788 Redback Networks, Inc.* ........................................ 13,500 553,500 ----------- 1,049,288 ----------- OFFICE EQUIPMENT SERVICES (2.9%) Comverse Technology, Inc.* ..................................... 29,200 3,171,850 -----------
FSA-34 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE STOCK FUND) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Portfolio of Investments -- December 31, 2000 (Concluded) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------- NUMBER OF VALUE SHARES (NOTE 3) ------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS (3.5%) Amdocs Ltd.* ..................................................... 37,000 $ 2,451,250 Global TeleSystems, Inc.* ........................................ 132,100 107,331 McLeod, Inc.* .................................................... 44,100 622,913 Scientific-Atlanta, Inc. ......................................... 22,800 742,425 ------------ 3,923,919 ------------ TOTAL TECHNOLOGY (34.0%) ......................................... 37,183,993 ------------ TOTAL COMMON STOCKS (96.7%) (Cost $101,057,849).............................................. 105,597,703 ------------ PARTICIPATION IN SEPARATE ACCUNT NO. 2A, at amortized cost, which approximates market value, equivalent to 33,106 units at $320.30 each (9.7%)......... 10,603,687 ------------ TOTAL INVESTMENTS (106.4%) (Cost/Amortized Cost $111,661,536)............................... 116,201,390 OTHER ASSETS LESS LIABILITIES (-6.4%) ............................ (6,982,947) ------------ NET ASSETS (100.0%) .............................................. $109,218,443 ============
* Non-income producing. See Notes to Financial Statements. FSA-35 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities DECEMBER 31, 2000 --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------- ALLIANCE INTERMEDIATE ALLIANCE GOVERNMENT ALLIANCE ALLIANCE MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD -------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: Alliance Money Market Portfolio - $6,095,452; Alliance Intermediate Government Securities Portfolio - $752,935; Alliance Quality Bond Portfolio - $2,690,608; Alliance High Yield Portfolio - $2,220,711 ......... $6,000,327 $748,569 $2,682,633 $1,706,014 Receivable for Trust shares sold ........................ 153,878 3,841 3,740 14,861 -------------------------------------------------------------------------------------------------------------------------- Total assets ............................................ 6,154,205 752,410 2,686,373 1,720,875 -------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Due to Equitable Life's General Account ................. 150,595 3,537 1,930 13,632 Accrued expenses ........................................ 3,283 304 1,810 1,229 -------------------------------------------------------------------------------------------------------------------------- Total liabilities ....................................... 153,878 3,841 3,740 14,861 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS .............................................. $6,000,327 $748,569 $2,682,633 $1,706,014 =========================================================================================================================
See Notes to Financial Statements. FSA-36 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Continued) DECEMBER 31, 2000 --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------- ALLIANCE EQ EQUITY ALLIANCE ALLIANCE GROWTH AND INCOME 500 INDEX GLOBAL INTERNATIONAL -------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: Alliance Growth and Income Portfolio - $17,465,998; EQ Equity 500 Index Portfolio - $26,447,072; Alliance Global Portfolio - $32,486,688; Alliance International Portfolio - $2,282,353 ...... $17,294,233 $25,126,329 $29,660,600 $1,877,298 Receivable for Trust shares sold ........................ 348,384 619,043 175,741 13,975 -------------------------------------------------------------------------------------------------------------------------- Total assets ............................................ 17,642,617 25,745,372 29,836,341 1,891,273 -------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Due to Equitable Life's General Account ................. 337,818 601,411 165,826 12,510 Accrued expenses ........................................ 10,566 17,632 13,446 1,465 -------------------------------------------------------------------------------------------------------------------------- Total liabilities ....................................... 348,384 619,043 179,272 13,975 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS .............................................. $17,294,233 $25,126,329 $29,657,069 $1,877,298 ==========================================================================================================================
See Notes to Financial Statements. FSA-37 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Concluded) DECEMBER 31, 2000 --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE ALLIANCE SMALL CAP CONSERVATIVE GROWTH GROWTH INVESTORS INVESTORS -------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: Alliance Small Cap Growth Portfolio - $2,908,600; Alliance Conservative Investors Portfolio - $7,515,146; Alliance Growth Investors Portfolio - $65,006,027; ......... $2,733,855 $7,366,655 $64,082,066 Receivable for Trust shares sold ................................ 1,676 73,881 648,210 Due from Equitable Life's General Account ....................... 284 -- -- -------------------------------------------------------------------------------------------------------------------------- Total assets .................................................... 2,735,815 7,440,536 64,730,276 -------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Due to Equitable Life's General Account ......................... -- 72,509 627,078 Accrued expenses ................................................ 1,960 6,534 22,939 -------------------------------------------------------------------------------------------------------------------------- Total liabilities ............................................... 1,960 79,043 650,017 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS ...................................................... $2,733,855 $7,361,493 $64,080,259 ==========================================================================================================================
See Notes to Financial Statements. FSA-38 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations YEAR ENDED DECEMBER 31, 2000
-------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE MONEY MARKET GOVERNMENT SECURITIES QUALITY BOND HIGH YIELD -------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends from the Trust .............. $ 334,702 $ 40,903 $ 14,212 $ 5,873 -------------------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ....................... (4,047) (603) (1,846) (1,638) -------------------------------------------------------------------------------------------------------------------------- Net investment income ................. 330,655 40,300 12,366 4,235 -------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions ......................... 61,289 (27,530) (134,898) (1,473,421) Realized gain distributions from the Trust ................................ 676 -- 174,175 209,171 Change in unrealized appreciation /depreciation of investments ......... 90,080 76,653 328,068 1,062,334 -------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments ................ 152,045 49,123 367,345 (201,916) -------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ........... $ 482,700 $ 89,423 $ 379,711 $ (197,681) ==========================================================================================================================
See Notes to Financial Statements. FSA-39 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE EQ EQUITY ALLIANCE ALLIANCE GROWTH AND INCOME 500 INDEX GLOBAL INTERNATIONAL ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends from the Trust ...................... $ 154,605 $ 191,205 $ 66,878 $ 12,291 ---------------------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................... (11,353) (19,952) (47,030) (1,500) ---------------------------------------------------------------------------------------------------------------------------- Net investment income ......................... 143,252 171,253 19,848 10,791 ---------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain from share transactions ......... 2,093,142 7,242,204 3,323,623 292,990 Realized gain distributions from the Trust ........................................ 2,041,248 1,158,327 3,610,014 204,724 Change in unrealized appreciation /depreciation of investments ................. (2,204,776) (11,758,218) (14,289,455) (1,194,717) ---------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments ........................ 1,929,614 (3,357,687) (7,355,818) (697,003) ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................... $ 2,072,866 $ (3,186,434) $ (7,335,970) $ (686,212) ===========================================================================================================================
See Notes to Financial Statements. FSA-40 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Concluded) YEAR ENDED DECEMBER 31, 2000
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE ALLIANCE SMALL CAP GROWTH CONSERVATIVE INVESTORS GROWTH INVESTORS ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2): Dividends from the Trust ...................... $ -- $ 287,798 $ 1,231,698 ---------------------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................... (1,724) (22,830) (74,231) ---------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) .................. (1,724) 264,968 1,157,467 ---------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain from share transactions ......... 794,850 159,032 2,616,510 Realized gain distributions from the Trust ........................................ 366,054 174,596 4,473,741 Change in unrealized appreciation /depreciation of investments ................. (852,718) (339,616) (12,992,284) ---------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments ........................ 308,186 (5,988) (5,902,033) ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................... $ 306,462 $ 258,980 $ (4,744,566) ============================================================================================================================
See Notes to Financial Statements. FSA-41 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE INTERMEDIATE GOVERNMENT MONEY MARKET SECURITIES ----------------------------------- --------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ............................ $ 330,655 $ 447,457 $ 40,300 $ 91,124 Net realized gain (loss) ......................... 61,965 196,596 (27,530) 13,361 Change in unrealized appreciation/depreciation of investments .................................. 90,080 (165,026) 76,653 (110,904) ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations ...................... 482,700 479,027 89,423 (6,419) ---------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers ...................... 4,318,801 16,311,804 177,273 536,532 Withdrawals and transfers ........................ (10,670,951) (11,999,466) (1,305,968) (1,680,608) Administrative fees .............................. (65,004) (112,930) (10,891) (15,035) ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and administrative fees ............................. (6,417,154) 4,199,408 (1,139,586) (1,159,111) ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS ................ (5,934,454) 4,678,435 (1,050,163) (1,165,530) NET ASSETS -- BEGINNING OF YEAR .................. 11,934,781 7,256,346 1,798,732 2,964,262 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR ........................ $ 6,000,327 $ 11,934,781 $ 748,569 $ 1,798,732 ============================================================================================================================
See Notes to Financial Statements. FSA-42 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE QUALITY BOND HIGH YIELD --------------------------------- --------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ........................ $ 12,366 $ 227,145 $ 4,235 $ 547,355 Net realized gain (loss) ..................... 39,277 17,628 (1,264,250) (261,393) Change in unrealized appreciation/depreciation of investments .............................. 328,068 (357,938) 1,062,334 (464,010) ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations .................. 379,711 (113,165) (197,681) (178,048) ---------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers .................. 455,300 1,837,829 441,430 455,669 Withdrawals and transfers .................... (2,487,370) (3,633,714) (3,234,201) (1,345,304) Administrative fees .......................... (31,143) (37,274) (33,288) (42,058) ---------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions, withdrawals and administrative fees ......................... (2,063,213) (1,833,159) (2,826,059) (931,693) ---------------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS ....................... (1,683,502) (1,946,324) (3,023,740) (1,109,741) ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- BEGINNING OF YEAR .............. 4,366,135 6,312,459 4,729,754 5,839,495 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................... $ 2,682,633 $ 4,366,135 $ 1,706,014 $ 4,729,754 ============================================================================================================================
See Notes to Financial Statements. FSA-43 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE EQ EQUITY GROWTH AND INCOME 500 INDEX ---------------------------------- ---------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ........................ $ 143,252 $ 47,571 $ 171,253 $ 438,890 Net realized gain ............................ 4,134,390 5,910,648 8,400,531 10,667,799 Change in unrealized appreciation/depreciation of investments .............................. (2,204,776) (831,249) (11,758,218) (1,310,558) ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations .................. 2,072,866 5,126,970 (3,186,434) 9,796,131 ---------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers .................. 6,428,740 12,139,188 8,501,052 27,927,001 Withdrawals and transfers .................... (16,744,054) (20,285,049) (30,708,111) (35,539,783) Administrative fees .......................... (210,239) (241,311) (399,981) (451,970) ---------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions, withdrawals and administrative fees ......................... (10,525,553) (8,387,172) (22,607,040) (8,064,752) ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS ............ (8,452,687) (3,260,202) (25,793,474) 1,731,379 NET ASSETS -- BEGINNING OF YEAR .............. 25,746,920 29,007,122 50,919,803 49,188,424 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................... $ 17,294,233 $ 25,746,920 $ 25,126,329 $ 50,919,803 ============================================================================================================================
See Notes to Financial Statements. FSA-44 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE GLOBAL INTERNATIONAL ----------------------------------- --------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) ................. $ 19,848 $ (33,544) $ 10,791 $ (1,765) Net realized gain ............................ 6,933,637 8,400,232 497,714 140,592 Change in unrealized appreciation/depreciation of investments .............................. (14,289,455) 6,149,934 (1,194,717) 897,508 ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to operations .................. (7,335,970) 14,516,622 (686,212) 1,036,335 ---------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers .................. 10,625,304 12,985,246 1,122,885 608,622 Withdrawals and transfers .................... (18,163,663) (28,825,806) (2,092,013) (2,002,718) Administrative fees .......................... (428,163) (399,019) (31,165) (33,729) ---------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions, withdrawals and administrative fees ......................... (7,966,522) (16,239,579) (1,000,293) (1,427,825) ---------------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS ....................... (15,302,492) (1,722,957) (1,686,505) (391,490) NET ASSETS -- BEGINNING OF YEAR .............. 44,959,561 46,682,518 3,563,803 3,955,293 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................... $ 29,657,069 $ 44,959,561 $ 1,877,298 $ 3,563,803 ============================================================================================================================
See Notes to Financial Statements. FSA-45 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued) --------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------- ALLIANCE ALLIANCE SMALL CAP GROWTH CONSERVATIVE INVESTORS --------------------------------- --------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) ................. $ (1,724) $ (1,394) $ 264,968 $ 222,112 Net realized gain (loss) ..................... 1,160,904 (301,994) 333,628 529,053 Change in unrealized appreciation/depreciation of investments .............................. (852,718) 876,214 (339,616) (90,653) ---------------------------------------------------------------------------------------------------------------------------- Net increase in net assets attributable to operations .................. 306,462 572,826 258,980 660,512 ---------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers .................. 2,216,214 1,424,459 1,787,758 2,289,275 Withdrawals and transfers .................... (2,463,236) (2,216,616) (2,140,573) (2,330,352) Administrative fees .......................... (33,413) (25,696) (86,014) (72,625) ---------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets attributable to contributions, withdrawals and administrative fees ......................... (280,435) (817,853) (438,829) (113,702) ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS ............ 26,027 (245,027) (179,849) 546,810 NET ASSETS -- BEGINNING OF YEAR .............. 2,707,828 2,952,855 7,541,342 6,994,532 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF YEAR .................... $ 2,733,855 $ 2,707,828 $ 7,361,493 $ 7,541,342 ============================================================================================================================
See Notes to Financial Statements. FSA-46 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 51 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Concluded) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------ ALLIANCE GROWTH INVESTORS ------------------------------------------------------------------------------------ YEAR ENDED DECEMBER 31, 2000 1999 ------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ........................ $ 1,157,467 $ 1,018,984 Net realized gain ............................ 7,090,251 9,067,020 Change in unrealized appreciation/depreciation of investments .............................. (12,992,284) 6,554,957 ------------------------------------------------------------------------------------ Net increase (decrease) in net assets attributable to operations .................. (4,744,566) 16,640,961 ------------------------------------------------------------------------------------ FROM CONTRIBUTIONS, WITHDRAWALS, TRANSFERS AND ADMINISTRATIVE FEES: Contributions and transfers .................. 9,635,292 14,498,861 Withdrawals and transfers .................... (16,432,572) (19,065,275) Administrative fees .......................... (469,933) (440,871) ------------------------------------------------------------------------------------ Net decrease in net assets attributable to contributions, withdrawals and administrative fees ......................... (7,267,213) (5,007,285) ------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS ............ (12,011,779) 11,633,676 NET ASSETS -- BEGINNING OF YEAR .............. 76,092,038 64,458,362 ------------------------------------------------------------------------------------ NET ASSETS -- END OF YEAR .................... $ 64,080,259 $ 76,092,038 ==================================================================================
See Notes to Financial Statements. FSA-47 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities DECEMBER 31, 2000
----------------------------------------------------------------------------------------------------------------------- EQ/ALLIANCE EQ/AXP CALVERT PREMIER EQ/ALLIANCE EQ/AXP NEW STRATEGY SOCIALLY GROWTH TECHNOLOGY DIMENSIONS AGGRESSIVE RESPONSIBLE ----------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $4,012,054 .................................... $3,350,472 893,255 .................................... $663,476 40,875 .................................... $40,865 1,501 .................................... $1,055 138,041 .................................... $122,981 Receivable for Trust shares sold ................... 11,523 556 -- -- -- Receivable for policy related transactions ......... -- -- -- -- 1,157 ----------------------------------------------------------------------------------------------------------------------- Total assets ....................................... 3,361,995 664,032 40,865 1,055 124,138 ----------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased ................. -- -- -- -- 1,398 Payable for policy related transactions ............ 11,523 556 -- -- -- ----------------------------------------------------------------------------------------------------------------------- Total liabilities .................................. 11,523 556 -- -- 1,398 ----------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $3,350,472 $663,476 $40,865 $1,055 $122,740 ======================================================================================================================= Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................... $ 1,448 $ 1,136 $ 1,394 $1,055 $ 1,603 Net Assets Attributable to Contractowners .......... 3,349,024 662,340 39,471 -- 121,137 ----------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $3,350,472 $663,476 $40,865 $1,055 $122,740 =======================================================================================================================
See Notes to Financial Statements. FSA-48 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Continued) DECEMBER 31, 2000
-------------------------------------------------------------------------------------------------------------------------- CAPITAL CAPITAL CAPITAL GUARDIAN GUARDIAN GUARDIAN EQ/EVERGREEN INTERNATIONAL RESEARCH U.S. EQUITY EQ/EVERGREEN FOUNDATION ----------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $ 2,496........................................ $2,430 83,126 ....................................... $86,240 33,285 ....................................... $34,426 17,936 ....................................... $16,223 56,673 ....................................... $56,376 Receivable for Trust shares sold ................... 2 26 -- 10 39 Receivable for policy related transactions ......... -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------- Total assets ....................................... 2,432 86,266 34,426 16,233 56,415 ----------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased ................. -- -- -- -- -- Payable for policy related transactions ............ 2 26 -- 10 39 ----------------------------------------------------------------------------------------------------------------------- Total liabilities .................................. 2 26 -- 10 39 ----------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $2,430 $86,240 $34,426 $16,223 $56,376 ======================================================================================================================= Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................... $1,560 $ 1,787 $ 1,571 $ 1,400 $ 3,118 Net Assets Attributable to Contractowners .......... 870 84,453 32,855 14,823 53,258 ----------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $2,430 $86,240 $34,426 $16,223 $56,376 ==================================================== ====== ======= ======= ======= =======
See Notes to Financial Statements. FSA-49 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Continued) DECEMBER 31, 2000
-------------------------------------------------------------------------------------------------------------------------------- EQ/JANUS LAZARD FI SMALL/MID LARGE CAP LARGE CAP LAZARD SMALL FI MID CAP CAP VALUE GROWTH VALUE CAP VALUE -------------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $ 60,576..................................... $62,460 1,508,001 .................................... $1,592,016 60,549 .................................... $59,466 5,252 .................................... $5,055 7,100 .................................... $7,445 Receivable for Trust shares sold ................... -- -- -- 4 3 Receivable for policy related transactions ......... -- -- -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Total assets ....................................... 62,460 1,592,016 59,466 5,059 7,448 -------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased ................. -- 583 -- -- -- Payable for policy related transactions ............ -- 910 -- 4 3 -------------------------------------------------------------------------------------------------------------------------------- Total liabilities .................................. -- 1,493 -- 4 3 -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $62,460 $1,590,523 $59,466 $5,055 $7,445 ================================================================================================================================ Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................... $ 1,544 $ 7 $ 1,372 $1,431 $1,731 Net Assets Attributable to Contractowners .......... 60,916 1,590,516 58,094 3,624 5,714 -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $62,460 $1,590,523 $59,466 $5,055 $7,445 ================================================================================================================================
See Notes to Financial Statements. FSA-50 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Continued) DECEMBER 31, 2000
---------------------------------------------------------------------------------------------------------------------------- MERCURY MFS EMERGING BASIC VALUE MERCURY GROWTH MFS GROWTH MFS EQUITY WORLD STRATEGY COMPANIES WITH INCOME RESEARCH ---------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $ 1,114,526.................................... $1,125,969 1,037,236 ................................... $934,639 11,648,246 ................................... $9,661,493 78,963 ................................... $79,488 8,480,712 ................................... $8,080,941 Receivable for Trust shares sold ................... 23,152 -- 49,235 60 -- Receivable for policy related transactions ......... -- 3,557 -- -- 22,983 ---------------------------------------------------------------------------------------------------------------------------- Total assets ....................................... 1,149,121 938,196 9,710,728 79,548 8,103,924 ---------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased ................. -- 725 -- -- 5,185 Payable for policy related transactions ............ 23,152 -- 51,621 60 -- ---------------------------------------------------------------------------------------------------------------------------- Total liabilities .................................. 23,152 725 51,621 60 5,185 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $1,125,969 $937,471 $9,659,107 $79,488 $8,098,739 =========================================================================================================================== Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................... $ 2,088 $ 4,750 $ 2,679 $ 1,546 $ 99 Net Assets Attributable to Contractowners .......... 1,123,881 932,721 9,656,428 77,942 8,098,640 ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS ......................................... $1,125,969 $937,471 $9,659,107 $79,488 $8,098,739 ===========================================================================================================================
See Notes to Financial Statements. FSA-51 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Continued) DECEMBER 31, 2000
-------------------------------------------------------------------------------- MORGAN STANLEY EMERGING MARKETS EQ/PUTNAM EQUITY BALANCED -------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $982,053.................................... $538,475 326,077 ................................... $329,551 245,937 ................................... 275,084 ................................... 445,926 ................................... Receivable for Trust shares sold ................ 420 526 Receivable for policy related transactions ...... -- -- -------------------------------------------------------------------------------- Total assets .................................... 538,895 330,077 -------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased .............. -- -- Payable for policy related transactions ......... 420 526 -------------------------------------------------------------------------------- Total liabilities ............................... 420 526 -------------------------------------------------------------------------------- NET ASSETS ...................................... $538,475 $329,551 ================================================================================ Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................ $ 1,834 $ 1,764 Net Assets Attributable to Contractowners ....... 536,641 327,787 -------------------------------------------------------------------------------- NET ASSETS ...................................... $538,475 $329,551 ================================================================================ ----------------------------------------------------------------------------------------------------- EQ/PUTNAM EQ/PUTNAM GROWTH & INCOME INTERNATIONAL EQ/PUTNAM VALUE EQUITY INVESTORS GROWTH ----------------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $982,053.................................... 326,077 ................................... 245,937 ................................... $263,591 275,084 ................................... $ 223,547 445,926 ................................... $377,172 Receivable for Trust shares sold ................ 165 38,322 21,979 Receivable for policy related transactions ...... -- -- -- ----------------------------------------------------------------------------------------------------- Total assets .................................... 263,756 261,869 399,151 ----------------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased .............. -- -- -- Payable for policy related transactions ......... 165 38,322 21,979 ----------------------------------------------------------------------------------------------------- Total liabilities ............................... 165 38.322 21,979 ----------------------------------------------------------------------------------------------------- NET ASSETS ...................................... $263,591 $ 223,547 $377,172 ===================================================================================================== Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................ $ 1,758 $ 1,570 $ 1,469 Net Assets Attributable to Contractowners ....... 261,833 221,977 375,703 ----------------------------------------------------------------------------------------------------- NET ASSETS ...................................... $263,591 $ 223,547 $377,172 =====================================================================================================
See Notes to Financial Statements. FSA-52 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Assets and Liabilities (Concluded) DECEMBER 31, 2000
---------------------------------------------------------------------------------------------- T. ROWE PRICE T. ROWE PRICE EQUITY INCOME INTERNATIONAL STOCK ---------------------------------------------------------------------------------------------- ASSETS: Investments in shares of EQ Advisors Trust - at value (Note 3) Cost: $3,790,429..................................... $3,932,675 562,837 ...................................... $452,453 Receivable for Trust shares sold ................... -- 330 Receivable for policy related transactions ......... 722 -- ---------------------------------------------------------------------------------------------- Total assets ....................................... 3,933,397 452,783 ---------------------------------------------------------------------------------------------- LIABILITIES: Payable for Trust shares purchased ................. 2,343 -- Payable for policy related transactions ............ -- 330 ---------------------------------------------------------------------------------------------- Total liabilities .................................. 2,343 330 ---------------------------------------------------------------------------------------------- NET ASSETS ......................................... $3,931,054 $452,453 ============================================================================================== Amount retained by Equitable Life in Separate Account 66 (Note 1) ............................... $ 185 $ 1,851 Net Assets Attributable to Contractowners .......... 3,930,869 450,602 ---------------------------------------------------------------------------------------------- NET ASSETS ......................................... $3,931,054 $452,453 ==============================================================================================
See Notes to Financial Statements. FSA-53 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations YEAR ENDED DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------ EQ/ALLIANCE PREMIER EQ/ALLIANCE EQ/AXP EQ/AXP STRATEGY GROWTH TECHNOLOGY(A) NEW DIMENSIONS(B) AGGRESSIVE(B) ------------------------------------------------------------------------------------------------------------------------ INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 25,634 $ -- $ 55 $ 1 ------------------------------------------------------------------------------------------------------------------------ EXPENSES (NOTE 4): Expense charges ............................ -- -- -- -- ------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) ............... 25,634 -- 55 1 ------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. 56,955 257 -- -- Realized gain distributions from Trust ..... -- -- -- -- ------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) ................... 56,955 257 -- -- ------------------------------------------------------------------------------------------------------------------------ Change in unrealized appreciation/depreciation ................. (937,383) (229,779) (10) (446) ------------------------------------------------------------------------------------------------------------------------ Realized and unrealized gain (loss) on investments ............................ (880,428) (229,522) (10) (446) ------------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (854,794) $ (229,522) $ 45 $ (445) ========================================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-54 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------ CALVERT CAPITAL CAPITAL CAPITAL SOCIALLY GUARDIAN GUARDIAN GUARDIAN U.S. RESPONSIBLE INTERNATIONAL RESEARCH EQUITY ------------------------------------------------------------------------------------------------------------ INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 5,627 $ 624 $ 646 $ 5,438 ------------------------------------------------------------------------------------------------------------ EXPENSES (NOTE 4): Expense charges ............................ 471 -- -- -- ------------------------------------------------------------------------------------------------------------ Net investment income (loss) ............... 5,156 624 646 5,438 ------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. 162 (28,636) 31 18,950 Realized gain distributions from Trust ..... 1,816 1,137 -- 847 ------------------------------------------------------------------------------------------------------------ Net realized gain (loss) ................... 1,978 (27,499) 31 19,797 ------------------------------------------------------------------------------------------------------------ Change in unrealized appreciation/depreciation ................. (15,149) (16,101) 1,472 (986) ------------------------------------------------------------------------------------------------------------ Realized and unrealized gain (loss) on investments ............................ (13,171) (43,600) 1,503 18,811 ------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (8,015) $ (42,976) $2,149 $24,249 ============================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-55 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------------------------------------------------------------------- FI SMALL/ EQ/EVERGREEN MID CAP EQ/EVERGREEN FOUNDATION FI MID CAP(B) VALUE --------------------------------------------------------------------------------------------------------------- INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 41 $ 786 $ 96 $ 15,201 --------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................ -- -- -- 20,000 --------------------------------------------------------------------------------------------------------------- Net investment income (loss) ............... 41 786 96 (4,799) --------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. (1) 52 -- (14,851) Realized gain distributions from Trust ..... -- -- -- -- --------------------------------------------------------------------------------------------------------------- Net realized gain (loss) ................... (1) 52 -- (14,851) --------------------------------------------------------------------------------------------------------------- Change in unrealized appreciation/depreciation ................. (1,799) (1,975) 1,884 74,957 --------------------------------------------------------------------------------------------------------------- Realized and unrealized gain (loss) on investments ............................ (1,800) (1,923) 1,884 60,106 --------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $(1,759) $ (1,137) $1,980 $ 55,307 ===============================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-56 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
-------------------------------------------------------------------------------------------------------- EQ/JANUS LAZARD MERCURY LARGE CAP LARGE CAP LAZARD SMALL BASIC VALUE GROWTH(B) VALUE CAP VALUE EQUITY --------------------------------------------------------------------------------------------------------------- INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 69 $ 40 $182 $ 55,459 --------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................ -- -- -- -- --------------------------------------------------------------------------------------------------------------- Net investment income (loss) ............... 69 40 182 55,459 --------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. -- (2) 1 (17,647) Realized gain distributions from Trust ..... -- -- -- 55,443 --------------------------------------------------------------------------------------------------------------- Net realized gain (loss) ................... -- (2) 1 37,796 --------------------------------------------------------------------------------------------------------------- Change in unrealized appreciation/depreciation ................. (1,083) (122) 400 35,759 --------------------------------------------------------------------------------------------------------------- Realized and unrealized gain (loss) on investments ............................ (1,083) (124) 401 73,555 --------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (1,014) $ (84) $583 $ 129,014 ---------------------------------------------------------------------------------------------------------------
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-57 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------------------------------------------------------------------- MFS MERCURY EMERGING WORLD GROWTH MFS GROWTH MFS STRATEGY COMPANIES WITH INCOME RESEARCH --------------------------------------------------------------------------------------------------------------- INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 25,269 $ 208,553 $ 264 $ 66,739 --------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................ 11,707 2,833 -- 73,020 --------------------------------------------------------------------------------------------------------------- Net investment income (loss) ............... 13,562 205,720 264 (6,281) --------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. 10,806 1,542,232 594 285,426 Realized gain distributions from Trust ..... 64,474 420,341 -- 642,927 --------------------------------------------------------------------------------------------------------------- Net realized gain (loss) ................... 75,280 1,962,573 594 928,353 --------------------------------------------------------------------------------------------------------------- Change in unrealized appreciation/depreciation ................. (209,948) (4,650,712) (97) (1,609,556) --------------------------------------------------------------------------------------------------------------- Realized and unrealized gain (loss) on investments ............................ (134,668) (2,688,139) 497 (681,203) --------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (121,106) $ (2,482,419) $ 761 $ (687,484) ===============================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-58 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Continued) YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------------------------------------------------------------------- MORGAN STANLEY EQ/PUTNAM EMERGING GROWTH & EQ/PUTNAM MARKETS EQ/PUTNAM INCOME INTERNATIONAL EQUITY BALANCED VALUE EQUITY --------------------------------------------------------------------------------------------------------------- INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 53,234 $ 10,045 $ 2,599 $ 34,221 --------------------------------------------------------------------------------------------------------------- EXPENSES (NOTE 4): Expense charges ............................ -- -- -- -- --------------------------------------------------------------------------------------------------------------- Net investment income (loss) ............... 53,234 10,045 2,599 34,221 --------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. 93,634 (11,993) (50,494) (98,160) Realized gain distributions from Trust ..... 18,047 -- -- 38,584 --------------------------------------------------------------------------------------------------------------- Net realized gain (loss) ................... 111,681 (11,993) (50,494) (59,576) --------------------------------------------------------------------------------------------------------------- Change in unrealized appreciation/depreciation ................. (605,463) 26,064 61,898 (52,168) --------------------------------------------------------------------------------------------------------------- Realized and unrealized gain (loss) on investments ............................ (493,782) 14,071 11,404 (111,744) --------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (440,548) $ 24,116 $ 14,003 $ (77,523) ===============================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-59 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Operations (Concluded) YEAR ENDED DECEMBER 31, 2000
---------------------------------------------------------------------------------------------------- EQ/PUTNAM T. ROWE T. ROWE INVESTORS PRICE EQUITY PRICE GROWTH INCOME INTERNATIONAL STOCK ---------------------------------------------------------------------------------------------------- INCOME AND EXPENSE: Investment income (Note 2): Dividends from the Trust ................... $ 5,223 $ 106,353 $ 139 --------------------------------------------- --------- --------- ---------- EXPENSES (NOTE 4): Expense charges ............................ -- 40,664 -- --------------------------------------------- --------- --------- ---------- Net investment income (loss) ............... 5,223 65,689 139 --------------------------------------------- --------- --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2): Realized gain (loss) from share transactions .............................. 10,054 (77,868) 51,735 Realized gain distributions from Trust ..... 1,934 185,718 38,033 ---------------------------------------------------------------------------------------------------- Net realized gain (loss) ................... 11,988 107,850 89,768 ---------------------------------------------------------------------------------------------------- Change in unrealized appreciation/depreciation ................. (86,312) 199,173 (189,314) ---------------------------------------------------------------------------------------------------- Realized and unrealized gain (loss) on investments ............................ (74,324) 307,023 (99,546) ---------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ........................... $ (69,101) $ 372,712 $ (99,407) ====================================================================================================
(a) Commencement of operations on May 22, 2000. (b) Commencement of operations on October 22, 2000. See Notes to Financial Statements. FSA-60 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------------------------------------ EQ/ALLIANCE EQ/ALLIANCE EQ/AXP NEW PREMIER GROWTH TECHNOLOGY DIMENSIONS ----------------------------------- ----------------- ------------------ YEAR ENDED SEPTEMBER 2, 1999* MAY 22, 2000* OCTOBER 22, 2000* DECEMBER 31, TO DECEMBER 31, TO DECEMBER 31, TO DECEMBER 31, 2000 1999 2000 2000 ------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 25,634 $ 1,586 $ -- $ 55 Net realized gain (loss) ............................. 56,955 5,603 257 -- Change in unrealized appreciation/depreciation of investments ...................................... (937,383) 275,801 (229,779) (10) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (854,794) 282,990 (229,522) 45 ------------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 2,649,221 2,360,817 949,808 39,320 Withdrawals and transfers ............................ (1,046,228) -- (54,962) -- Administrative charges ............................... (39,958) (3,076) (3,348) -- ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 1,563,035 2,357,741 891,498 39,320 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 1,500 1.500 ------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 708,241 2,642,231 663,476 40,865 NET ASSETS -- BEGINNING OF PERIOD .................... 2,642,231 -- -- -- ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $3,350,472 $2,642,231 $663,476 $40,865 ===============================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-61 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
--------------------------------------------------------------------------------------------------------------------- EQ/AXP CALVERT SOCIALLY STRATEGY AGGRESSIVE RESPONSIBLE --------------------- ------------------------------------ OCTOBER 22, 2000* YEAR ENDED SEPTEMBER 2, 1999* TO DECEMBER 31, DECEMBER 31, TO DECEMBER 31, 2000 2000 1999 --------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 1 $ 5,156 $ -- Net realized gain (loss) ............................. -- 1,978 9 Change in unrealized appreciation/depreciation of investments ...................................... (446) (15,149) 90 --------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (445) (8,015) 99 --------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... -- 131,200 -- Withdrawals and transfers ............................ -- (2,040) -- Administrative charges ............................... -- (4) -- --------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... -- 129,156 -- --------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) 1,500 -- 1,500 --------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 1,055 121,141 1,599 NET ASSETS -- BEGINNING OF PERIOD .................... -- 1,599 -- --------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $1,055 $122,740 $1,599 =====================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-62 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
--------------------------------------------------------------------------------------------------------------------- CAPITAL GUARDIAN CAPITAL GUARDIAN INTERNATIONAL RESEARCH ----------------------------------- ---------------------------------- YEAR ENDED SEPTEMBER 2, 1999* YEAR ENDED SEPTEMBER 2, 1999* DECEMBER 31, TO DECEMBER 31, DECEMBER 31, TO DECEMBER 31, 2000 1999 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 624 $ -- $ 646 $ 47 Net realized gain (loss) ............................. (27,499) 15 31 7 Change in unrealized appreciation/depreciation of investments ...................................... (16,101) 16,035 1,472 1,642 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (42,976) 16,050 2,149 1,696 ----------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 118,443 100,581 56,158 25,000 Withdrawals and transfers ............................ (189,925) -- -- -- Administrative charges ............................... (1,175) (68) (222) (41) ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... (72,657) 100,513 55,936 24,959 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 -- 1,500 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... (115,633) 118,063 58,085 28,155 NET ASSETS -- BEGINNING OF PERIOD .................... 118,063 -- 28,155 -- ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 2,430 $118,063 $86,240 $28,155 =============================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-63 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
----------------------------------------------------------------------------------------------------------------------------- CAPITAL GUARDIAN U.S. EQUITY EQ/EVERGREEN ----------------------------------- ---------------------------------- YEAR ENDED SEPTEMBER 2, 1999* YEAR ENDED SEPTEMBER 2, 1999* DECEMBER 31, TO DECEMBER 31, DECEMBER 31, TO DECEMBER 31, 2000 1999 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 5,438 $ 456 $ 41 $ 6 Net realized gain (loss) ............................. 19,797 593 (1) -- Change in unrealized appreciation/depreciation of investments ...................................... (986) 2,128 (1,799) 86 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... 24,249 3,177 (1,759) 92 ----------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 203,246 410,730 16,252 189 Withdrawals and transfers ............................ (605,015) -- -- -- Administrative charges ............................... (3,334) (127) (51) -- ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... (405,103) 410,603 16,201 189 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 -- 1,500 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... (380,854) 415,280 14,442 1,781 NET ASSETS -- BEGINNING OF PERIOD .................... 415,280 -- 1,781 -- ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 34,426 $415,280 $16,223 $1,781 =============================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-64 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
--------------------------------------------------------------------------------------- EQ/EVERGREEN FOUNDATION -------------------------------- SEPTEMBER 2, YEAR ENDED 1999* DECEMBER 31, TO DECEMBER 31, 2000 1999 --------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 786 $ 17 Net realized gain (loss) ............................. 52 -- Change in unrealized appreciation/depreciation of investments ...................................... (1,975) 74 --------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (1,137) 91 --------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 57,378 -- Withdrawals and transfers ............................ (2,694) -- Administrative charges ............................... (366) -- --------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 54,318 -- --------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) 1,604 1,500 --------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 54,785 1,591 NET ASSETS -- BEGINNING OF PERIOD .................... 1,591 -- --------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 56,376 $1,591 ======================================================================================= -------------------------------------------------------------------------------------------------------- FI SMALL/MID FI MID CAP CAP VALUE ------------------ ------------------------------ OCTOBER 22, 2000* YEARS ENDED TO DECEMBER 31, DECEMBER 31, 2000 2000 1999 -------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 96 $ (4,799) $ (20,497) Net realized gain (loss) ............................. -- (14,851) (208,435) Change in unrealized appreciation/depreciation of investments ...................................... 1,884 74,957 224,588 -------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... 1,980 55,307 (4,344) -------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 58,980 567,473 1,130,117 Withdrawals and transfers ............................ -- (809,401) (1,641,059) Administrative charges ............................... -- (368) (2,259) -------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 58,980 (242,296) (513,201) -------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) 1,500 (1,694) 5,693 -------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 62,460 (188,683) (511,852) NET ASSETS -- BEGINNING OF PERIOD .................... -- 1,779,206 2,291,058 -------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $62,460 $1,590,523 $ 1,779,206 ========================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-65 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
-------------------------------------------------------------------------------------------------------------------- EQ/JANUS LARGE CAP LAZARD LARGE GROWTH CAP VALUE -------------------- ------------------------------------ OCTOBER 22, 2000* YEAR ENDED SEPTEMBER 2, 1999* TO DECEMBER 31, DECEMBER 31, TO DECEMBER 31, 2000 2000 1999 -------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 69 40 $ 13 Net realized gain (loss) ............................. -- (2) 22 Change in unrealized appreciation/depreciation of investments ...................................... (1,083) (122) (75) -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (1,014) (84) (40) -------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 58,980 3,698 -- Withdrawals and transfers ............................ -- -- -- Administrative charges ............................... -- (19) -- -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 58,980 3,679 -- -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) 1,500 -- 1,500 -------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 59,466 3,595 1,460 NET ASSETS -- BEGINNING OF PERIOD .................... -- 1,460 -- -------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 59,466 $5,055 $1,460 ====================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-66 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
------------------------------------------------------------------------------------------------------------------------------ LAZARD SMALL MERCURY BASIC CAP VALUE VALUE EQUITY ------------------------------------ ------------------------------ YEAR ENDED SEPTEMBER 2, 1999* YEARS ENDED DECEMBER 31, TO DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 182 $ 6 $ 55,459 $ 13,131 Net realized gain (loss) ............................. 1 9 37,796 113,888 Change in unrealized appreciation/depreciation of investments ...................................... 400 (54) 35,759 (23,176) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ..................................... 583 (39) 129,014 103,843 ------------------------------------------------------------------------------------------------------------------------------ FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 5,410 -- 467,279 1,334,175 Withdrawals and transfers ............................ -- -- (524,171) (517,709) Administrative charges ............................... (9) -- (12,531) (5,774) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 5,401 -- (69,423) 810,692 ------------------------------------------------------------------------------------------------------------------------------ Net Increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 -- -- ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS .................... 5,984 1,461 59,591 914,535 NET ASSETS -- BEGINNING OF PERIOD .................... 1,461 -- 1,066,378 151,843 ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS -- END OF PERIOD .......................... $7,445 $1,461 $1,125,969 $1,066,378 ==============================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-67 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
-------------------------------------------------------------------------------------------------------------------------- MERCURY MFS EMERGING WORLD STRATEGY GROWTH COMPANIES ----------------------------- --------------------------------- YEARS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 -------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 13,562 $ 2,873 $ 205,720 $ -- Net realized gain (loss) ............................. 75,280 32,407 1,962,573 485,967 Change in unrealized appreciation/depreciation of investments ...................................... (209,948) 98,166 (4,650,712) 2,540,148 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (121,106) 133,446 (2,482,419) 3,026,115 -------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 487,908 312,753 8,398,509 6,895,067 Withdrawals and transfers ............................ (171,814) (353,232) (5,403,985) (1,456,043) Administrative charges ............................... (1,891) (336) (116,897) (31,665) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 314,203 (40,815) 2,877,627 5,407,359 -------------------------------------------------------------------------------------------------------------------------- Net ncrease (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- -- -- -- -------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 193,097 92,631 395,208 8,433,474 NET ASSETS -- BEGINNING OF PERIOD .................... 744,374 651,743 9,263,899 830,425 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 937,471 $ 744,374 $ 9,659,107 $ 9,263,899 ==========================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-68 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
-------------------------------------------------------------------------------------------------------------------------- MFS GROWTH MFS WITH INCOME RESEARCH ---------------------------------- ------------------------------- YEAR ENDED SEPTEMBER 2, 1999* YEARS ENDED DECEMBER 31, TO DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 -------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 264 $ 25 $ (6,281) $ (52,209) Net realized gain (loss) ............................. 594 -- 928,353 445,650 Change in unrealized appreciation/depreciation of investments ...................................... (97) 623 (1,609,556) 893,327 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... 761 648 (687,484) 1,286,768 -------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 77,073 5,452 4,372,023 5,862,462 Withdrawals and transfers ............................ (5,444) -- (2,499,911) (3,096,907) Administrative charges ............................... (487) (15) (36,315) (19,001) -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) In net assets attributable to contributions, withdrawals and transfers ......... 71,142 5,437 1,835,797 2,746,554 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 2,773 16,227 -------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 71,903 7,585 1,151,086 4,049,549 NET ASSETS -- BEGINNING OF PERIOD .................... 7,585 -- 6,947,653 2,898,104 -------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 79,488 $7,585 $ 8,098,739 $ 6,947,653 ==========================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-69 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
-------------------------------------------------------------------------------------------------------------------- MORGAN STANLEY EMERGING EQ/PUTNAM MARKETS EQUITY BALANCED ----------------------------- --------------------------- YEARS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 -------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 53,234 $ -- $ 10,045 $ 8,747 Net realized gain (loss) ............................. 111,681 20,087 (11,993) 28,093 Change in unrealized appreciation/depreciation of investments ...................................... (605,463) 161,679 26,064 (26,515) -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (440,548) 181,766 24,116 10,325 -------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 855,159 652,133 102,778 196,828 Withdrawals and transfers ............................ (538,788) (158,660) (129,277) (369,756) Administrative charges ............................... (13,360) (1,618) (2,922) (4,691) -------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 303,011 491,855 (29,421) (177,619) -------------------------------------------------------------------------------------------------------------------- Net ncrease (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- -- -- -- -------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... (137,537) 673,621 (5,305) (167,294) NET ASSETS -- BEGINNING OF PERIOD .................... 676,012 2,391 334,856 502,150 -------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 538,475 $ 676,012 $ 329,551 $ 334,856 ===================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-70 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
--------------------------------------------------------------------------------------------------------------------------- EQ/PUTNAM EQ/PUTNAM GROWTH & INCOME VALUE INTERNATIONAL EQUITY --------------------------- ------------------------------------ YEARS ENDED YEAR ENDED SEPTEMBER 2, 1999* DECEMBER 31, DECEMBER 31, TO DECEMBER 31, 2000 1999 2000 1999 --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 2,599 $ 6,854 $ 34,221 $ 94 Net realized gain (loss) ............................. (50,494) (12,585) (59,576) 286 Change in unrealized appreciation/depreciation of investments ...................................... 61,898 (48,469) (52,168) 631 --------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... 14,003 (54,200) (77,523) 1,011 --------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 217,854 678,735 538,038 415,305 Withdrawals and transfers ............................ (283,939) (380,405) (651,244) -- Administrative charges ............................... (4,382) (3,757) (3,540) -- --------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... (70,467) 294,573 (116,746) 415,305 --------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- -- -- 1,500 --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... (56,464) 240,373 (194,269) 417,816 NET ASSETS -- BEGINNING OF PERIOD .................... 320,055 79,682 417,816 -- --------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 263,591 $ 320,055 $ 223,547 $417,816 ===========================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-71 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Continued)
------------------------------------------------------------------------------------------------------------------------- EQ/PUTNAM T. ROWE PRICE INVESTORS GROWTH EQUITY INCOME ---------------------------------- ------------------------------- YEAR ENDED SEPTEMBER 2, 1999* YEARS ENDED DECEMBER 31, TO DECEMBER 31, DECEMBER 31, 2000 1999 2000 1999 ------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ................................ $ 5,223 $ 2,436 $ 65,689 $ 20,029 Net realized gain (loss) ............................. 11,988 13 107,850 226,975 Change in unrealized appreciation/depreciation of investments ...................................... (86,312) 17,557 199,173 (193,824) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... (69,101) 20,006 372,712 53,180 ------------------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .......................... 436,220 100,466 1,607,723 1,983,241 Withdrawals and transfers ............................ (108,828) -- (1,871,851) (2,009,118) Administrative charges ............................... (2,964) (127) (3,552) (2,196) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ......... 324,428 100,339 (267,680) (28,073) ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) -- 1,500 (51,154) 61,154 ------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .................... 255,327 121,845 53,878 86,261 NET ASSETS -- BEGINNING OF PERIOD .................... 121,845 -- 3,877,176 3,790,915 ------------------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .......................... $ 377,172 $121,845 $ 3,931,054 $ 3,877,176 =========================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-72 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NO. 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statements of Changes in Net Assets (Concluded)
---------------------------------------------------------------------------------------------------------------- T. ROWE PRICE INTERNATIONAL STOCK ----------------------------- YEARS ENDED DECEMBER 31, 2000 1999 ---------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income .......................................................... $ 139 $ 393 Net realized gain (loss) ....................................................... 89,768 39,746 Change in unrealized appreciation/depreciation of investments ................................................................ (189,314) 69,941 ---------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ............................................................... (99,407) 110,080 ---------------------------------------------------------------------------------------------------------------- FROM CONTRIBUTIONS, WITHDRAWALS AND TRANSFERS: Contributions and transfers .................................................... 467,227 443,638 Withdrawals and transfers ...................................................... (262,077) (432,860) Administrative charges ......................................................... (4,990) (4,251) ---------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets attributable to contributions, withdrawals and transfers ................................... 200,160 6,527 ---------------------------------------------------------------------------------------------------------------- Net increase (decrease) in amount retained by Equitable Life in Separate Account 66 (Note 1) ................................................................... -- -- ---------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS .............................................. 100,753 116,607 NET ASSETS -- BEGINNING OF PERIOD .............................................. 351,700 235,093 ---------------------------------------------------------------------------------------------------------------- NET ASSETS -- END OF PERIOD .................................................... $ 452,453 $ 351,700 ================================================================================================================
* Commencement of operations. See Notes to Financial Statements. FSA-73 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements -------------------------------------------------------------------------------- 1. General Separate Account Nos. 13 (Pooled) (the Alliance Bond Fund), 10 (Pooled) (the Alliance Balanced Fund), 4 (Pooled) (the Alliance Common Stock Fund), 3 (Pooled) (the Alliance Aggressive Stock Fund), 51 (Pooled) and 66 (Pooled) (collectively, the Funds) of The Equitable Life Assurance Society of the United States (Equitable Life), a wholly owned subsidiary of AXA Financial, Inc., (previously The Equitable Companies Incorporated) were established in conformity with the New York State Insurance Law. Pursuant to such law, to the extent provided in the applicable contracts, the net assets in the Funds are not chargeable with liabilities arising out of any other business of Equitable Life. These financial statements reflect the total net assets and results of operations for Separate Account Nos. 13, 10, 4, 3, 51 and 66. The Retirement Investment Account Program is one of the many products participating in these Funds. Separate Account No. 51 consists of 11 investment options:
o Alliance Money Market o Alliance Global o Alliance Intermediate Government Securities o Alliance International o Alliance Quality Bond o Alliance Small Cap Growth o Alliance High Yield o Alliance Conservative Investors o Alliance Growth and Income o Alliance Growth Investors o EQ Equity 500 Index (1)
Separate Account No. 66 consists of 28 investment options of which 27 are presented herein:
o EQ/Alliance Premier Growth o Lazard Large Cap Value o EQ/Alliance Technology o Lazard Small Cap Value o EQ/AXP New Dimensions o Mercury Basic Value Equity (3) o EQ/AXP Strategy Aggressive o Mercury World Strategy (4) o Calvert Socially Responsible o MFS Emerging Growth Companies o Capital Guardian International o MFS Growth with Income o Capital Guardian Research o MFS Research o Capital Guardian U.S. Equity o Morgan Stanley Emerging Markets Equity o EQ/Evergreen o EQ/Putnam Balanced o EQ/Evergreen Foundation o EQ/Putnam Growth & Income Value o FI Mid Cap o EQ/Putnam International Equity o FI Small/Mid Cap Value (2) o EQ/Putnam Investors Growth o EQ/Janus Large Cap Growth o T. Rowe Price Equity Income o T. Rowe Price International Stock
------------ (1) Formerly Alliance Equity Index (2) Formerly Warburg Pincus Small Company Value (3) Formerly Merrill Lynch Basic Value Equity (4) Formerly Merrill Lynch World Strategy FSA-74 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements (Continued) -------------------------------------------------------------------------------- Separate Account No. 51 has eleven investment funds which invest in Class 1A shares of corresponding portfolios of EQ Advisors Trust ("EQAT" or "Trust"). Separate Account No. 66 has twenty-eight investment funds which invest in Class 1B shares of corresponding portfolios of EQAT. Class 1A and 1B shares are offered by EQAT at net asset value. Both classes of shares are subject to fees for investment management and advisory services and other Trust expenses. Class 1A shares are not subject to distribution fees imposed pursuant to a distribution plan. Class 1B shares are also subject to distribution fees imposed under a distribution plan (herein, the "Rule 12b-1 Plans") adopted pursuant to Rule 12b-1 under the 1940 Act, as amended. The Rule 12b-1 Plans provide that EQAT, on behalf of each Fund, may charge annually up to 0.25% of the average daily net assets of an investment option attributable to its Class 1B shares in respect to activities primarily intended to result in the sale of the Class 1B shares. These fees are reflected in the net asset value of the shares. Interests of retirement and investment plans for employees, managers and agents of Equitable Life in Separate Account Nos. 4 and 3 aggregated $286,412,684 (23.4%) and $55,571,635 (50.9%), respectively, at December 31, 2000 and $365,557,809 (20.4%) and $79,363,438 (43.2%), respectively, at December 31, 1999, of the net assets in these Funds. Equitable Life serves as investment manager of EQAT. As such Equitable Life oversees the activities of the investment advisors with respect to EQAT and is responsible for retaining or discontinuing the services of those advisors. Alliance Capital Management L.P. (Alliance) serves as the investment adviser to Equitable Life with respect to the management of Separate Account Nos. 13, 10, 4 and 3 (the Equitable Funds). Alliance is a limited partnership which is majority-owned by Equitable Life and AXA Financial, Inc. AXA Advisors, LLC (AXA Advisors), the successor to EQ Financial Consultants, Inc., is an affiliate of Equitable Life, and a distributor and principal underwriter of the contracts and the account. AXA Advisors is registered with the SEC as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. EQAT commenced operations on May 1, 1997. EQAT is an open-end diversified management company that sells shares of a portfolio ("Portfolio") of a mutual fund to separate accounts of insurance companies. Each Portfolio has separate investment objectives. For periods prior to October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier Growth and EQ/Alliance Technology) were part of the Hudson River Trust. On October 18, 1999, these portfolios became corresponding portfolios of EQ Advisors Trust. Equitable Life, Alliance and AXA Advisors seek to obtain the best price and execution of all orders placed for the portfolios of the Equitable Funds considering all circumstances. In addition to using brokers and dealers to execute portfolio security transactions for accounts under their management, Equitable Life, Alliance and AXA Advisors may also enter into other types of business and securities transactions with brokers and dealers, which will be unrelated to allocation of the Equitable Funds' portfolio transactions. The contracts are sold by financial professionals who are registered representatives of AXA Advisors and licensed insurance agents of AXA Network, LLC, its subsidiaries and AXA Network Insurance Agency of Texas, Inc. (affiliates of Equitable Life). AXA Advisors receives commissions and other service-related payments under its distribution agreement with Equitable Life and its networking agreement with AXA Network. The net assets of the account are not chargeable with liabilities arising out of any other business Equitable Life may conduct. The excess of assets over reserves and other contract liabilities, if any, in the Separate Accounts Nos. 4 and 66 may be transferred to Equitable Life's General Account. Equitable Life's General Account is subject to creditor rights. The receivable for policy related transactions represents amounts receivable/payable to the General Account predominately related to policy-related transactions, premiums, surrenders and death benefits. The amount retained by Equitable Life in Separate Accounts Nos. 4 and 66 arises principally from (1) contributions from Equitable Life, (2) expense risk charges accumulated in the account, and (3) that portion, determined ratably, of the account's investment results applicable to those assets in the account in excess of the net assets for the contracts. Amounts retained by Equitable Life are not subject to charges for expense risks. FSA-75 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements (Continued) -------------------------------------------------------------------------------- 2. Significant Accounting Policies Security transactions are recorded on the trade date. Amortized cost of debt securities, where applicable, are adjusted for amortization of premium or accretion of discount. Dividend income is recorded on the ex-dividend date; interest income (including amortization of premium and discount on securities using the effective yield method) is accrued daily. Realized gains and losses on the sale of investments are computed on the basis of the identified cost of the related investments sold. Separate Account Nos. 51 and 66 invest in the shares of EQAT and are valued at the net asset value per share of the respective Portfolios. The net asset value is determined by EQAT using the market or fair value of the underlying assets of the Portfolios less liabilities. For Separate Account Nos. 51 and 66, realized gains and losses on investments include gains and losses on redemptions of the EQAT's shares (determined on the identified cost basis) and Trust distributions representing the net realized gains on Trust investment transactions. Dividends and capital gains are declared and distributed by the Trust at the end of the year and are automatically reinvested on the ex-dividend date. Transactions denominated in foreign currencies are recorded at the rate prevailing at the date of such transactions. Asset and liability accounts that are denominated in a foreign currency are adjusted to reflect the current exchange rate at the end of the period. Transaction gains or losses resulting from changes in the exchange rate during the reporting period or upon settlement of the foreign currency transactions are reflected under "Realized and Unrealized Gain (Loss) on Investments" in the Statement of Operations. Separate Account No. 10 may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign security holdings. Forward contracts are agreements to buy or sell a foreign currency for a set price in the future. During the period the forward contracts are open, changes in the value of the contract are recognized as unrealized gains or losses by "marking-to-market" on a daily basis to reflect the market value of the contract at the end of each trading day. The realized gain or loss arising from the difference between the original contracts and the closing of such contracts is included in realized gains or losses from foreign currency transactions. The use of forward transactions involves the risk of imperfect correlation in movements in the price of forward contracts, interest rates and the underlying hedged assets. Forward contracts involve elements of both market and credit risk in excess of the amounts reflected in the Statement of Assets and Liabilities. The contract amounts of these forward contracts reflect the extent of the Fund's exposure to off-balance sheet risk. The Funds bear the market risk which arises from any changes in security values. Forward contracts are entered into directly with the counterparty and not through an exchange and can be terminated only by agreement of both parties to the contract. There is no daily margin settlement and the fund is exposed to the risk of default by the counterparty. At December 31, 2000, Separate Account No. 10 had no outstanding forward currency contracts to buy/sell foreign currencies. FSA-76 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements (Continued) -------------------------------------------------------------------------------- Equitable Life's internal short-term investment account, Separate Account No. 2A, was established to provide a more flexible and efficient vehicle to combine and invest temporary cash positions of certain eligible accounts (Participating Funds) under Equitable Life's management. Separate Account No. 2A invests in debt securities maturing in sixty days or less from the date of the acquisition. At December 31, 2000, the investments held by all separate accounts in Separate Account No. 2A consist of the following:
------------------------------------------------------------------------------------------ Amortized Cost % ------------------------------------------------------------------------------------------ U.S. Government Agencies, 5.70% due 01/02/01 ......... $ 212,312,104 99.9% ------------------------------------------------------------------------------------------ Total Investments .................................... 212,312,104 99.9 Other Assets Less Liabilities ........................ 154,556 0.1 ------------------------------------------------------------------------------------------ Net Assets of Separate Account No. 2A ................ $ 212,466,660 100.0% ========================================================================================== Units Outstanding .................................... 663,345 Unit Value ........................................... $ 320.30
Participating Funds purchase or redeem units depending on each participating account's excess cash availability or cash needs to meet its liabilities. Separate Account No. 2A is not subject to investment management fees. Short-term debt securities may also be purchased directly by the Equitable Funds. For 2000 and 1999, investment security transactions, excluding short-term debt securities, were as follows:
----------------------------------------------------------------------------------------------------------- Purchases Sales ------------------------------------- ------------------------------------ Stocks and Debt U.S. Government Stocks and Debt U.S. Government FUND Securities and Agencies Securities and Agencies ----------------------------------------------------------------------------------------------------------- Alliance Bond: 2000 .................... $ 57,661,318 $263,999,463 $ 47,403,290 $248,791,364 1999 .................... 29,332,313 52,626,222 14,659,571 72,769,493 Alliance Balanced: 2000 .................... 76,250,875 92,694,965 106,064,918 105,643,326 1999 .................... 89,523,699 65,935,492 143,448,209 82,753,815 Alliance Common Stock: 2000 .................... 722,297,282 -- 1,032,330,838 -- 1999 .................... 1,340,597,736 -- 2,209,410,520 -- Alliance Aggressive Stock: 2000 .................... 187,072,785 -- 244,180,349 -- 1999 .................... 241,091,928 -- 359,200,204 --
No activity is shown for Separate Account Nos. 51 and 66 since they trade exclusively in shares of portfolios of EQAT. The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. 3. Investments Investment securities for the Equitable Funds are valued as follows: Stocks listed on national securities exchanges and certain over-the-counter issues traded on the National Association of Securities Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued at the last sale price, or, if there is no sale, at the latest available bid price. FSA-77 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements (Continued) -------------------------------------------------------------------------------- Foreign securities not traded directly, or in American Depository Receipt (ADR) form in the United States, are valued at the last sale price in the local currency on an exchange in the country of origin. Foreign currency is converted into its U.S. dollar equivalent at current exchange rates. Futures and forward contracts are valued at their last sale price or, if there is no sale, at the latest available bid price. United States Treasury securities and other obligations issued or guaranteed by the United States Government, its agencies or instrumentalities are valued at representative quoted prices. Long-term (i.e., maturing in more than a year) publicly traded corporate bonds are valued at prices obtained from a bond pricing service of a major dealer in bonds when such prices are available; however, in circumstances where Equitable Life and Alliance deem it appropriate to do so, an over-the-counter or exchange quotation may be used. Convertible preferred stocks listed on national securities exchanges are valued at their last sale price or, if there is no sale, at the latest available bid price. Convertible bonds and unlisted convertible preferred stocks are valued at bid prices obtained from one or more major dealers in such securities; where there is a discrepancy between dealers, values may be adjusted based on recent premium spreads to the underlying common stock. Other assets that do not have a readily available market price are valued at fair value as determined in good faith by Equitable Life's investment officers. Separate Account No. 2A is valued daily at amortized cost, which approximates market value. Short-term debt securities purchased directly by the Equitable Funds which mature in 60 days or less are valued at amortized cost. Short-term debt securities which mature in more than 60 days are valued at representative quoted prices. The value of the investments in Separate Account Nos. 51 and 66 held in the corresponding EQAT Portfolios is calculated by multiplying the number of shares held in each Portfolio by the net asset value per share of that Portfolio determined as of the close of business each day. 4. Expenses Charges and fees relating to the Funds are deducted in accordance with the terms of the various contracts which participate in the Funds. Depending upon the terms of a contract, sales-related fees and operating expenses are paid (i) by a reduction of an appropriate number of Fund Units or (ii) by a direct payment. Asset management fee is deducted in the daily unit values for the Equitable Funds. Fees with respect to the Retirement Investment Account (RIA) contracts are as follows: Investment Management and Financial Accounting Fee: An annual fee of 0.50% of the net assets is deducted in the daily unit values for the Alliance Bond, Alliance Balanced, Alliance Common Stock and Alliance Aggressive Stock Funds. Administrative Fees: Ongoing Operations Fee -- An expense charge is made based on the combined net balances of each plan in the Separate and Guaranteed Interest Accounts. Depending upon when the employer adopted RIA, the monthly rate ranges from 1/12 of 1.25% to 1/12 of 0.50% or from 1/12 of 1.25% to 1/12 of 0.25%. FSA-78 -------------------------------------------------------------------------------- SEPARATE ACCOUNT NOS. 13 (POOLED), 10 (POOLED), 4 (POOLED), 3 (POOLED), 51 (POOLED) AND 66 (POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Notes to Financial Statements (Concluded) -------------------------------------------------------------------------------- Participant Recordkeeping Services Charge -- Employers electing RIA's optional Participant Recordkeeping Services are subject to an annual charge of $25 per employee-participant under the employer plan. Depending upon the terms of a contract, the Ongoing Operations Fee and Participant Recordkeeping Services Charge are paid (i) by a reduction of an appropriate number of Fund units or (ii) by a direct payment. Contingent Withdrawal Charge -- Certain withdrawals are subject to defined contingent withdrawal charges. The maximum charge is 6% of the total plan assets withdrawn. Operating and Expense Charges: In addition to the charges and fees mentioned above, the Funds are charged for certain costs and expenses directly related to their operations. These may include transfer taxes, SEC filing fees and certain related expenses including printing of SEC filings, prospectuses and reports. These charges and fees are recorded as expenses in the accompanying Statement of Operations. The RIA contract is the sole investor in the following investment funds of Separate Account No. 66: EQ/Alliance Premier Growth, EQ/Alliance Technology, EQ/AXP New Dimensions, EQ/AXP Strategy Aggressive, Capital Guardian International, Capital Guardian Research, Capital Guardian U.S. Equity, EQ/Evergreen, EQ/Evergreen Foundation, FI Mid Cap, EQ/Janus Large Cap Growth, Lazard Large Cap Value, Lazard Small Cap Value, Mercury Basic Value Equity, MFS Growth with Income, Morgan Stanley Emerging Markets Equity, EQ/Putnam Balanced, EQ/Putnam Growth and Income, EQ/Putnam International Equity, EQ Putnam Investors Growth and T. Rowe Price International. There are no expenses shown in the Statement of Operations for these funds as the only fees assessed are paid directly by the participant via liquidation of units. Administrative fees paid through a liquidation of units in Separate Account Nos. 51 and 66 are shown in the Statement of Changes in Net Assets. The aggregate of all other fees are included in Expenses in the Statement of Operations. Separate Account Nos. 51 and 66 investment in EQAT shares are valued at their net asset value, investment advisory fees and direct operating expenses of EQAT are, ineffect, passed on to the account and are reflected in the computation of the accumulation unit values of the contracts. 5. Taxes No federal income tax based on net income or realized and unrealized capital gains was applicable to contracts participating in the Funds by reason of applicable provisions of the Internal Revenue Code and no federal income tax payable by Equitable Life will affect such contracts. Accordingly, no provision for federal income taxes is required. 6. Subsequent Event (Unaudited) On December 19, 2000, the Chief Investment Officer of Equitable Life with the permission of the Board of Directors, authorized the merger of Separate Account Nos. 51 and 66. On May 1, 2001, the Portfolios of Separate Account No. 51 will become Portfolios of Separate Account No. 66. Separate Account No. 66 will be the surviving account. The Portfolios of Separate Account No. 51 were not held by Separate Account No. 66 before the merger. FSA-79 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholder of The Equitable Life Assurance Society of the United States In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of shareholder's equity and comprehensive income and of cash flows present fairly, in all material respects, the financial position of The Equitable Life Assurance Society of the United States and its subsidiaries ("Equitable Life") at December 31, 2000 and December 31, 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Equitable Life's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP New York, New York February 5, 2001 F-1 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2000 AND 1999
2000 1999 ----------------- ----------------- (IN MILLIONS) ASSETS Investments: Fixed maturities: Available for sale, at estimated fair value............................. $ 16,251.4 $ 18,599.7 Held to maturity, at amortized cost..................................... 204.6 133.2 Mortgage loans on real estate............................................. 3,130.8 3,270.0 Equity real estate........................................................ 975.5 1,160.2 Policy loans.............................................................. 2,476.9 2,257.3 Other equity investments.................................................. 2,392.8 671.2 Investment in and loans to affiliates..................................... - 1,201.8 Other invested assets..................................................... 762.5 911.6 ----------------- ----------------- Total investments..................................................... 26,194.5 28,205.0 Cash and cash equivalents................................................... 2,022.1 628.0 Cash and securities segregated, at estimated fair value..................... 1,306.3 - Broker-dealer related receivables........................................... 1,900.3 521.3 Deferred policy acquisition costs........................................... 4,429.1 4,033.0 Intangible assets, net...................................................... 3,525.8 114.5 Amounts due from reinsurers................................................. 1,989.2 881.5 Other assets................................................................ 3,594.3 2,351.0 Closed Block assets......................................................... 8,659.0 8,607.3 Separate Accounts assets.................................................... 51,705.9 54,453.9 ----------------- ----------------- TOTAL ASSETS................................................................ $ 105,326.5 $ 99,795.5 ================= ================= LIABILITIES Policyholders' account balances............................................. $ 19,866.4 $ 21,351.4 Future policy benefits and other policyholders liabilities.................. 4,920.4 4,777.6 Broker-dealer related payables.............................................. 1,283.0 319.3 Customers related payables.................................................. 1,636.9 - Amounts due to reinsurers................................................... 730.3 682.5 Short-term and long-term debt............................................... 1,630.1 1,407.9 Federal income taxes payable................................................ 1,988.2 496.0 Other liabilities........................................................... 1,642.1 1,379.0 Closed Block liabilities.................................................... 9,050.2 9,025.0 Separate Accounts liabilities............................................... 51,632.1 54,332.5 Minority interest in equity of consolidated subsidiaries.................... 1,820.4 256.8 Minority interest subject to redemption rights.............................. 681.1 - ----------------- ----------------- Total liabilities..................................................... 96,881.2 94,028.0 ----------------- ----------------- Commitments and contingencies (Notes 11, 13, 14, 15 and 16) SHAREHOLDER'S EQUITY Common stock, $1.25 par value, 2.0 million shares authorized, issued and outstanding........................................................... 2.5 2.5 Capital in excess of par value.............................................. 4,723.8 3,557.2 Retained earnings........................................................... 3,706.2 2,600.7 Accumulated other comprehensive income (loss)............................... 12.8 (392.9) ----------------- ----------------- Total shareholder's equity............................................ 8,445.3 5,767.5 ----------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 105,326.5 $ 99,795.5 ================= =================
See Notes to Consolidated Financial Statements. F-2 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF EARNINGS YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998 ----------------- ----------------- ----------------- (IN MILLIONS) REVENUES Universal life and investment-type product policy fee income...................................................... $ 1,413.3 $ 1,257.5 $ 1,056.2 Premiums...................................................... 579.9 558.2 588.1 Net investment income......................................... 2,173.2 2,240.9 2,228.1 Gain on sale of equity investee............................... 1,962.0 - - Investment (losses) gains, net................................ (756.0) (96.9) 100.2 Commissions, fees and other income............................ 2,731.1 2,177.9 1,503.0 Contribution from the Closed Block............................ 92.7 86.4 87.1 ----------------- ----------------- ----------------- Total revenues.......................................... 8,196.2 6,224.0 5,562.7 ----------------- ----------------- ----------------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances.......... 1,034.3 1,078.2 1,153.0 Policyholders' benefits....................................... 1,049.3 1,038.6 1,024.7 Compensation and benefits..................................... 1,081.2 1,010.6 772.0 Commissions................................................... 779.2 549.5 478.1 Distribution plan payments.................................... 476.0 346.6 266.4 Amortization of deferred sales commissions.................... 219.7 163.9 108.9 Interest expense.............................................. 116.3 93.0 110.7 Amortization of deferred policy acquisition costs............. 294.5 314.5 292.7 Capitalization of deferred policy acquisition costs........... (778.1) (709.9) (609.1) Writedown of deferred policy acquisition costs................ - 131.7 - Rent expense.................................................. 146.4 113.9 100.0 Expenses related to AXA's minority interest acquisition of the Holding Company..................................... 493.9 - - Other operating costs and expenses............................ 698.0 783.5 681.5 ----------------- ----------------- ----------------- Total benefits and other deductions..................... 5,610.7 4,914.1 4,378.9 ----------------- ----------------- ----------------- Earnings from continuing operations before Federal income taxes and minority interest.......................... 2,585.5 1,309.9 1,183.8 Federal income taxes.......................................... (958.3) (332.0) (353.1) Minority interest in net income of consolidated subsidiaries.. (330.3) (199.4) (125.2) ----------------- ----------------- ----------------- Earnings from continuing operations........................... 1,296.9 778.5 705.5 Earnings from discontinued operations, net of Federal income taxes............................................... 58.6 28.1 2.7 ----------------- ----------------- ----------------- Net Earnings.................................................. $ 1,355.5 $ 806.6 $ 708.2 ================= ================= =================
See Notes to Consolidated Financial Statements. F-3 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998 ----------------- ----------------- ----------------- (IN MILLIONS) Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5 ----------------- ----------------- ----------------- Capital in excess of par value, beginning of year............. 3,557.2 3,110.2 3,105.8 Capital contributions......................................... 1,166.6 447.0 4.4 ----------------- ----------------- ----------------- Capital in excess of par value, end of year................... 4,723.8 3,557.2 3,110.2 ----------------- ----------------- ----------------- Retained earnings, beginning of year.......................... 2,600.7 1,944.1 1,235.9 Net earnings.................................................. 1,355.5 806.6 708.2 Dividends paid to AXA Financial............................... (250.0) (150.0) - ----------------- ----------------- ----------------- Retained earnings, end of year................................ 3,706.2 2,600.7 1,944.1 ----------------- ----------------- ----------------- Accumulated other comprehensive (loss) income, beginning of year........................................... (392.9) 355.8 516.3 Other comprehensive income (loss)............................. 405.7 (748.7) (160.5) ----------------- ----------------- ----------------- Accumulated other comprehensive income (loss), end of year.... 12.8 (392.9) 355.8 ----------------- ----------------- ----------------- Total Shareholder's Equity, End of Year....................... $ 8,445.3 $ 5,767.5 $ 5,412.6 ================= ================= ================= COMPREHENSIVE INCOME Net earnings.................................................. $ 1,355.5 $ 806.6 $ 708.2 ----------------- ----------------- ----------------- Change in unrealized gains (losses), net of reclassification adjustments................................................ 405.7 (776.9) (149.5) Minimum pension liability adjustment.......................... - 28.2 (11.0) ----------------- ----------------- ----------------- Other comprehensive income (loss)............................. 405.7 (748.7) (160.5) ----------------- ----------------- ----------------- Comprehensive Income.......................................... $ 1,761.2 $ 57.9 $ 547.7 ================= ================= =================
See Notes to Consolidated Financial Statements. F-4 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998 ----------------- ----------------- ----------------- (IN MILLIONS) Net earnings.................................................. $ 1,355.5 $ 806.6 $ 708.2 Adjustments to reconcile net earnings to net cash provided by operating activities: Interest credited to policyholders' account balances........ 1,034.3 1,078.2 1,153.0 Universal life and investment-type product policy fee income......................................... (1,413.3) (1,257.5) (1,056.2) Investment losses (gains)................................... 756.0 96.9 (100.2) Net change in broker-dealer and customer related receivables/payables...................................... (422.9) (119.9) (17.5) Gain on sale of equity investee............................. (1,962.0) - - Change in Federal income tax payable........................ 2,078.4 157.4 123.1 Change in future policy benefits............................ (850.6) 22.8 66.8 Change in property and equipment............................ (321.0) (256.3) (81.8) Change in deferred acquisition costs........................ (476.9) (260.7) (314.0) Expenses related to AXA's acquisition of the Holding Company's minority interest................ 493.9 - - Purchase of segregated cash and securities, net............. (610.4) - - Other, net.................................................. (560.8) (71.7) 21.6 ----------------- ----------------- ----------------- Net cash (used) provided by operating activities.............. (54.0) 195.8 503.0 ----------------- ----------------- ----------------- Cash flows from investing activities: Maturities and repayments................................... 2,091.0 2,019.0 2,289.0 Sales....................................................... 7,810.2 7,572.9 16,972.1 Purchases................................................... (8,895.1) (10,737.3) (18,578.5) Decrease (increase) in short-term investments............... 142.6 (178.3) 102.4 Decrease in loans to discontinued operations................ - - 660.0 Sale of equity investee..................................... 1,580.6 - - Subsidiary acquisition ..................................... (1,480.0) - - Other, net.................................................. (164.5) (134.8) (341.8) ----------------- ----------------- ----------------- Net cash provided (used) by investing activities.............. 1,084.8 (1,458.5) 1,103.2 ----------------- ----------------- ----------------- Cash flows from financing activities: Policyholders' account balances: Deposits.................................................. 2,659.9 2,366.2 1,508.1 Withdrawals and transfers to Separate Accounts............ (3,887.7) (1,765.8) (1,724.6) Net increase (decrease) in short-term financings............ 225.2 378.2 (243.5) Repayments of long-term debt................................ - (41.3) (24.5) Payment of obligation to fund accumulated deficit of discontinued operations................................... - - (87.2) Proceeds from newly issued Alliance Units................... 1,600.0 - - Dividends paid to AXA Financial............................. (250.0) (150.0) - Other, net.................................................. 15.9 (142.1) (89.5) ----------------- ----------------- ----------------- Net cash provided (used) by financing activities.............. 363.3 645.2 (661.2) ----------------- ----------------- ----------------- Change in cash and cash equivalents........................... 1,394.1 (617.5) 945.0 Cash and cash equivalents, beginning of year.................. 628.0 1,245.5 300.5 ----------------- ----------------- ----------------- Cash and Cash Equivalents, End of Year........................ $ 2,022.1 $ 628.0 $ 1,245.5 ================= ================= =================
F-5 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 CONTINUED
2000 1999 1998 ----------------- ----------------- ----------------- (IN MILLIONS) Supplemental cash flow information Interest Paid............................................... $ 97.0 $ 92.2 $ 130.7 ================= ================= ================= Income Taxes Paid........................................... $ 358.2 $ 116.5 $ 254.3 ================= ================= =================
See Notes to Consolidated Financial Statements. F-6 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1) ORGANIZATION The Equitable Life Assurance Society of the United States ("Equitable Life") is an indirect, wholly owned subsidiary of AXA Financial, Inc. (the "Holding Company," and collectively with its consolidated subsidiaries, "AXA Financial"). Equitable Life's insurance business is conducted principally by Equitable Life and its wholly owned life insurance subsidiary, Equitable of Colorado ("EOC"). Equitable Life's investment management business, which comprises the Investment Services segment, is principally conducted by Alliance Capital Management L.P. ("Alliance"), and, through November 3, 2000, Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an investment banking and brokerage affiliate which was sold. On September 20, 1999, as part of AXA Financial's "branding" strategic initiative, EQ Financial Consultants, Inc., a broker-dealer subsidiary of Equitable Life, was merged into a new company, AXA Advisors, LLC ("AXA Advisors"). Also, on September 21, 1999, AXA Advisors was transferred by Equitable Life to AXA Distribution Holding Corporation ("AXA Distribution"), a wholly owned indirect subsidiary of the Holding Company, for $15.3 million. The excess of the sales price over AXA Advisors' book value has been recorded in Equitable Life's books as a capital contribution. Equitable Life continues to develop and market the "Equitable" brand of life and annuity products, while AXA Distribution and its subsidiaries provide financial planning services, distribute products and manage customer relationships. In February 2000, Equitable Life transferred AXA Network, LLC ("AXA Network") to AXA Distribution, an indirect wholly owned subsidiary of the Holding Company for $8.7 million. The excess of sales price over AXA Network's book value has been recorded in Equitable Life's financial statements as a capital contribution. In October 2000, Alliance acquired substantially all of the assets and liabilities of Sanford C. Bernstein Inc. ("Bernstein") for an aggregate current value of approximately $3.50 billion ($1.48 billion in cash and 40.8 million newly issued Alliance units). The Holding Company provided Alliance with the cash portion of the consideration by purchasing approximately 32.6 million newly issued Alliance Units for $1.60 billion in June 2000. Equitable Life and, collectively with its consolidated subsidiaries (the "Company"), recorded a non-cash gain of $416.2 million (net of related Federal income tax of $224.1 million) related to the Holding Company's purchase of Alliance Units which is reflected as an addition to capital in excess of par value. The acquisition was accounted for under the purchase method with the results of Bernstein included in the consolidated financial statements from the acquisition date. The excess of the purchase price over the fair value of net assets acquired resulted in the recognition of goodwill and intangible assets of approximately $3.40 billion and is being amortized over an estimated overall 20 year life. In connection with the issuance of Alliance Units to former Bernstein shareholders, the Company recorded a non-cash gain of $393.5 million (net of related Federal income tax of $211.9 million) which is reflected as an addition to capital in excess of par value. The Company's consolidated economic interest in Alliance was 39.43% at December 31, 2000. In 1999, Alliance reorganized into Alliance Capital Management Holding L.P. ("Alliance Holding") and Alliance. Alliance Holding's principal asset is its interest in Alliance and it functions as a holding entity through which holders of its publicly traded units own an indirect interest in Alliance, the operating partnership. The Company exchanged substantially all of its Alliance Holding units for units in Alliance ("Alliance Units"). AXA, a French holding company for an international group of insurance and related financial services companies, has been the Holding Company's largest shareholder since 1992. In October 2000, the Board of Directors of the Holding Company, acting upon a unanimous recommendation of a special committee of independent directors, approved an agreement with AXA for the acquisition of the approximately 40% of outstanding Holding Company common stock ("Common Stock") it did not already own. Under terms of the agreement, the minority shareholders of the Holding Company would receive $35.75 in cash and 0.295 of an AXA American Depositary Share ("ADS") for each Holding Company share. When the tender offer expired on December 29, 2000, approximately 148.1 million shares of Common Stock had been acquired by AXA and its wholly owned subsidiary, AXA Merger Corp. On January 2, 2001, AXA Merger Corp. was merged with and into the Holding Company, resulting in the Holding Company becoming a wholly owned subsidiary of AXA. F-7 2) SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation ----------------------------------------------------- The accompanying consolidated financial statements are prepared in conformity with generally accepted accounting principles ("GAAP") which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying consolidated financial statements include the accounts of Equitable Life and its subsidiary engaged in insurance related businesses (collectively, the "Insurance Group"); other subsidiaries, principally Alliance; and those partnerships and joint ventures in which Equitable Life or its subsidiaries has control or a majority economic interest. The Company's investment in DLJ was reported on the equity basis of accounting. Closed Block assets, liabilities and results of operations are presented in the consolidated financial statements as single line items (see Note 7). Unless specifically stated, all other footnote disclosures contained herein exclude the Closed Block related amounts. All significant intercompany transactions and balances except those with the Closed Block, DLJ and discontinued operations (see Note 8) have been eliminated in consolidation. The years "2000," "1999" and "1998" refer to the years ended December 31, 2000, 1999 and 1998, respectively. Certain reclassifications have been made in the amounts presented for prior periods to conform these periods with the 2000 presentation. Closed Block ------------ When it demutualized on July 22, 1992, Equitable Life established a Closed Block for the benefit of certain individual participating policies which were in force on that date. The assets allocated to the Closed Block, together with anticipated revenues from policies included in the Closed Block, were reasonably expected to be sufficient to support such business, including provision for the payment of claims, certain expenses and taxes, and for continuation of dividend scales payable in 1991, assuming the experience underlying such scales continues. Assets allocated to the Closed Block inure solely to the benefit of the Closed Block policyholders and will not revert to the benefit of the Holding Company. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of Equitable Life's General Account, any of its Separate Accounts or any affiliate of Equitable Life without the approval of the New York Superintendent of Insurance (the "Superintendent"). Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the General Account. The excess of Closed Block liabilities over Closed Block assets represents the expected future post-tax contribution from the Closed Block which would be recognized in income over the period the policies and contracts in the Closed Block remain in force. Discontinued Operations ----------------------- In 1991, management discontinued the business of certain pension operations ("Discontinued Operations"). Discontinued Operations at December 31, 2000 principally consists of the Group Non-Participating Wind-Up Annuities ("Wind-Up Annuities"), for which a premium deficiency reserve has been established. Management reviews the adequacy of the allowance for future losses each quarter and makes adjustments when necessary. Management believes the allowance for future losses at December 31, 2000 is adequate to provide for all future losses; however, the quarterly allowance review continues to involve numerous estimates and subjective judgments regarding the expected performance of invested assets ("Discontinued Operations Investment Assets") held by Discontinued Operations. There can be no assurance the losses provided for will not differ from the losses ultimately realized. To the extent actual results or future projections of discontinued operations differ from management's current best estimates and assumptions underlying the allowance for future losses, the difference would be reflected in the consolidated statements of earnings in discontinued operations. In particular, to the extent income, sales proceeds and holding periods for equity real estate differ from management's previous assumptions, periodic adjustments to the allowance are likely to result (see Note 8). F-8 New Accounting Pronouncements ----------------------------- As required beginning January 1, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, that establishes new accounting and reporting standards for all derivative instruments, including certain derivatives embedded in other contracts, and for hedging activities. As further described and quantified in Note 13, the only free-standing derivative instruments maintained by the Company at January 1, 2001 were interest rate caps, floors and collars intended to hedge crediting rates on interest-sensitive individual annuities contracts. However, based upon guidance from the Financial Accounting Standards Board ("FASB") and the Derivatives Implementation Group ("DIG"), these contracts cannot be designated in a qualifying hedging relationship under FAS 133 and, consequently, require mark-to-market accounting through earnings for changes in their fair values beginning January 1, 2001. With respect to adoption of the requirements on embedded derivatives, the Company elected a January 1, 1999 transition date, thereby effectively "grandfathering" existing accounting for derivatives embedded in hybrid instruments acquired, issued, or substantively modified on or before that date. As a consequence of this election, coupled with recent interpretive guidance from the FASB and the DIG with respect to issues specifically related to insurance contracts and features, adoption of the new requirements for embedded derivatives did not have a material impact on the Company's consolidated financial position or earnings. In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of SFAS No. 125". SFAS No. 140 specifies the accounting and reporting requirements for securitizations and other transfers of financial assets and collateral, the recognition and measurement of servicing assets and liabilities and the extinguishment of liabilities. SFAS No. 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001 and is to be applied prospectively with certain exceptions. This statement is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. Adoption of the new requirements is not expected to have a significant impact on the Company's consolidated financial position or earnings. In December 2000, the American Institute of Certified Public Accountants (the "AICPA") issued Statement of Position ("SOP") 00-3, "Accounting by Insurance Enterprises for Demutualizations and Formations of Mutual Insurance Holding Companies and for Certain Long-Duration Participating Contracts". Since Equitable Life's July 1992 demutualization occurred before December 31, 2000, SOP 00-3 should be applied retroactively through restatement or reclassification, as appropriate, of all previously issued financial statements no later than the end of the fiscal year that begins after December 15, 2000. However, if implementation is impracticable because the demutualization occurred many years prior to January 1, 2001 no retroactive restatement is required. The Company has determined it is not practicable to produce an actuarial calculation as of the July 1992 demutualization date. Therefore, SOP 00-3 will be adopted prospectively as of January 1, 2001 with no financial impact associated with its initial implementation. However, future earnings will be affected to the extent actual Closed Block earnings exceed those assumed at January 1, 2001. Additionally, the presentation of all previously issued financial statements will be revised to include Closed Block assets and liabilities on a line-by-line basis as required by SOP 00-3. In December 1999, the staff of the Securities and Exchange Commission (the "SEC") issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," which was effective fourth quarter 2000. SAB No. 101 addresses revenue recognition issues; its implementation did not have a material impact on the Company's consolidated financial position or earnings. Investments ----------- Fixed maturities identified as available for sale are reported at estimated fair value. Those fixed maturities which the Company has both the ability and the intent to hold to maturity, are stated principally at amortized cost. The amortized cost of fixed maturities is adjusted for impairments in value deemed to be other than temporary. Mortgage loans on real estate are stated at unpaid principal balances, net of unamortized discounts and valuation allowances. Valuation allowances are based on the present value of expected future cash flows discounted at the loan's original effective interest rate or on its collateral value if the loan is collateral dependent. However, if foreclosure is or becomes probable, the collateral value measurement method is used. F-9 Impaired mortgage loans without provision for losses are loans where the fair value of the collateral or the net present value of the expected future cash flows related to the loan equals or exceeds the recorded investment. Interest income earned on loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income on loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Changes in the present value attributable to changes in the amount or timing of expected cash flows are reported as investment gains or losses. Real estate, including real estate acquired in satisfaction of debt, is stated at depreciated cost less valuation allowances. At the date of foreclosure (including in-substance foreclosure), real estate acquired in satisfaction of debt is valued at estimated fair value. Impaired real estate is written down to fair value with the impairment loss being included in investment gains (losses), net. Valuation allowances on real estate held for sale are computed using the lower of depreciated cost or current estimated fair value, net of disposition costs. Depreciation is discontinued on real estate held for sale. Depreciation of real estate held for production of income is computed using the straight-line method over the estimated useful lives of the properties, which generally range from 40 to 50 years. Valuation allowances are netted against the asset categories to which they apply. Policy loans are stated at unpaid principal balances. Partnerships and joint venture interests in which the Company has control or a majority economic interest (that is, greater than 50% of the economic return generated by the entity) are consolidated; those in which the Company does not have control or a majority economic interest are reported on the equity basis of accounting and are included either with equity real estate or other equity investments, as appropriate. Equity securities includes common stock classified as both trading and available for sale securities and non-redeemable preferred stock; they are carried at estimated fair value and are included in other equity investments. Short-term investments are stated at amortized cost which approximates fair value and are included with other invested assets. Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments purchased with an original maturity of three months or less. All securities owned as well as United States government and agency securities, mortgage-backed securities, futures and forwards transactions are recorded in the consolidated financial statements on a trade date basis. Net Investment Income, Investment Gains (Losses), Net and Unrealized Investment Gains (Losses) ------------------------------------------------------ Net investment income and realized investment gains (losses) related to certain participating group annuity contracts which are passed through to the contractholders are reflected as interest credited to policyholders' account balances. Realized investment gains (losses) are determined by identification with the specific asset and are presented as a component of revenue. Changes in the valuation allowances are included in investment gains or losses. Realized and unrealized holding gains (losses) on trading securities are reflected in net investment income. Unrealized investment gains and losses on fixed maturities and equity securities available for sale held by the Company are accounted for as a separate component of accumulated comprehensive income, net of related deferred Federal income taxes, amounts attributable to Discontinued Operations, participating group annuity contracts and deferred policy acquisition costs ("DAC") related to universal life and investment-type products and participating traditional life contracts. F-10 Net investment income and investment gains (losses), net related to investment assets are collectively referred to as "investment results." Recognition of Insurance Income and Related Expenses ---------------------------------------------------- Premiums from universal life and investment-type contracts are reported as deposits to policyholders' account balances. Revenues from these contracts consist of amounts assessed during the period against policyholders' account balances for mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policyholders' account balances. Premiums from participating and non-participating traditional life and annuity policies with life contingencies generally are recognized as income when due. Benefits and expenses are matched with such income so as to result in the recognition of profits over the life of the contracts. This match is accomplished by means of the provision for liabilities for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. For contracts with a single premium or a limited number of premium payments due over a significantly shorter period than the total period over which benefits are provided, premiums are recorded as income when due with any excess profit deferred and recognized in income in a constant relationship to insurance in force or, for annuities, the amount of expected future benefit payments. Premiums from individual health contracts are recognized as income over the period to which the premiums relate in proportion to the amount of insurance protection provided. The Insurance Group assumes and cedes reinsurance with other insurance companies. The Insurance Group evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Ceded reinsurance does not relieve the originating insurer of liability. Deferred Policy Acquisition Costs --------------------------------- Acquisition costs, including commissions, underwriting, agency and policy issue expenses, all of which vary with and primarily are related to new business, are deferred. DAC is subject to recoverability testing at the time of policy issue and loss recognition testing at the end of each accounting period. For universal life products and investment-type products, DAC is amortized over the expected total life of the contract group as a constant percentage of estimated gross profits arising principally from investment results, mortality and expense margins and surrender charges based on historical and anticipated future experience, updated at the end of each accounting period. The effect on the amortization of DAC of revisions to estimated gross profits is reflected in earnings in the period such estimated gross profits are revised. The effect on the DAC asset that would result from realization of unrealized gains (losses) is recognized with an offset to accumulated comprehensive income in consolidated shareholder's equity as of the balance sheet date. For participating traditional life policies (substantially all of which are in the Closed Block), DAC is amortized over the expected total life of the contract group as a constant percentage based on the present value of the estimated gross margin amounts expected to be realized over the life of the contracts using the expected investment yield. At December 31, 2000, the expected investment yield, excluding policy loans, was 7.6% over a 40 year period. Estimated gross margin includes anticipated premiums and investment results less claims and administrative expenses, changes in the net level premium reserve and expected annual policyholder dividends. The effect on the amortization of DAC of revisions to estimated gross margins is reflected in earnings in the period such estimated gross margins are revised. The effect on the DAC asset that would result from realization of unrealized gains (losses) is recognized with an offset to accumulated comprehensive income in consolidated shareholder's equity as of the balance sheet date. For non-participating traditional life policies, DAC is amortized in proportion to anticipated premiums. Assumptions as to anticipated premiums are estimated at the date of policy issue and are consistently applied during the life of the contracts. Deviations from estimated experience are reflected in earnings in the period such deviations occur. For these contracts, the amortization periods generally are for the total life of the policy. F-11 In second quarter 1999, management completed a study of the cash flows and liability characteristics of its insurance product lines as compared to the expected cash flows of the underlying assets. That analysis reflected an assessment of the potential impact on future operating cash flows from current economic conditions and trends, including rising interest rates and securities market volatility and the impact of increasing competitiveness within the insurance marketplace (evidenced, for example, by the proliferation of bonus annuity products) on in-force business. The review indicated that changes to the then-current invested asset allocation strategy were required to reposition assets with greater price volatility away from products with demand liquidity characteristics to support those products with lower liquidity needs. To implement these findings, the existing investment portfolio was reallocated, and prospective investment allocation targets were revised. The reallocation of the assets impacted investment results by product, thereby impacting the future gross margin estimates utilized in the amortization of DAC for universal life and investment-type products. The revisions to estimated future gross profits resulted in an after-tax writedown of DAC of $85.6 million (net of a Federal income tax benefit of $46.1 million) in 1999. Policyholders' Account Balances and Future Policy Benefits Policyholders' account balances for universal life and investment-type contracts are equal to the policy account values. The policy account values represent an accumulation of gross premium payments plus credited interest less expense and mortality charges and withdrawals. For participating traditional life policies, future policy benefit liabilities are calculated using a net level premium method on the basis of actuarial assumptions equal to guaranteed mortality and dividend fund interest rates. The liability for annual dividends represents the accrual of annual dividends earned. Terminal dividends are accrued in proportion to gross margins over the life of the contract. For non-participating traditional life insurance policies, future policy benefit liabilities are estimated using a net level premium method on the basis of actuarial assumptions as to mortality, persistency and interest established at policy issue. Assumptions established at policy issue as to mortality and persistency are based on the Insurance Group's experience which, together with interest and expense assumptions, includes a margin for adverse deviation. When the liabilities for future policy benefits plus the present value of expected future gross premiums for a product are insufficient to provide for expected future policy benefits and expenses for that product, DAC is written off and thereafter, if required, a premium deficiency reserve is established by a charge to earnings. Benefit liabilities for traditional annuities during the accumulation period are equal to accumulated contractholders' fund balances and after annuitization are equal to the present value of expected future payments. Interest rates used in establishing such liabilities range from 2.25% to 10.9% for life insurance liabilities and from 2.25% to 8.15% for annuity liabilities. Individual health benefit liabilities for active lives are estimated using the net level premium method and assumptions as to future morbidity, withdrawals and interest. Benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. While management believes its disability income ("DI") reserves have been calculated on a reasonable basis and are adequate, there can be no assurance reserves will be sufficient to provide for future liabilities. F-12 Claim reserves and associated liabilities for individual DI and major medical policies were $120.3 million and $948.4 million at December 31, 2000 and 1999, respectively. At December 31, 2000, $1,046.5 million of DI reserves and associated liabilities were ceded through an indemnity reinsurance agreement (see Note 14). Incurred benefits (benefits paid plus changes in claim reserves) and benefits paid for individual DI and major medical are summarized as follows:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Incurred benefits related to current year.......... $ 56.1 $ 150.7 $ 140.1 Incurred benefits related to prior years........... 15.0 64.7 84.2 ----------------- ---------------- ----------------- Total Incurred Benefits............................ $ 71.1 $ 215.4 $ 224.3 ================= ================ ================= Benefits paid related to current year.............. $ 14.8 $ 28.9 $ 17.0 Benefits paid related to prior years............... 106.0 189.8 155.4 ----------------- ---------------- ----------------- Total Benefits Paid................................ $ 120.8 $ 218.7 $ 172.4 ================= ================ =================
Policyholders' Dividends ------------------------ The amount of policyholders' dividends to be paid (including dividends on policies included in the Closed Block) is determined annually by Equitable Life's board of directors. The aggregate amount of policyholders' dividends is related to actual interest, mortality, morbidity and expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by Equitable Life. At December 31, 2000, participating policies, including those in the Closed Block, represent approximately 20.8% ($41.1 billion) of directly written life insurance in force, net of amounts ceded. Separate Accounts ----------------- Separate Accounts established under New York State Insurance Law generally are not chargeable with liabilities that arise from any other business of the Insurance Group. Separate Accounts assets are subject to General Account claims only to the extent Separate Accounts assets exceed Separate Accounts liabilities. Assets and liabilities of the Separate Accounts represent the net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contractholders, and for which the Insurance Group does not bear the investment risk. They are shown as separate lines in the consolidated balance sheets. The Insurance Group bears the investment risk on assets held in one Separate Account; therefore, such assets are carried on the same basis as similar assets held in the General Account portfolio. Assets held in the other Separate Accounts are carried at quoted market values or, where quoted values are not available, at estimated fair values as determined by the Insurance Group. The investment results of Separate Accounts on which the Insurance Group does not bear the investment risk are reflected directly in Separate Accounts liabilities. For 2000, 1999 and 1998, investment results of such Separate Accounts were $8,051.7 million, $6,045.5 million and $4,591.0 million, respectively. Deposits to Separate Accounts are reported as increases in Separate Accounts liabilities and are not reported in revenues. Mortality, policy administration and surrender charges on all Separate Accounts are included in revenues. Other Accounting Policies ------------------------- In accordance with regulations of the SEC, securities with a fair value of $1.31 billion have been segregated in a special reserve bank custody account for the exclusive benefit of customers under Rule 15c-3-3 at December 31, 2000. Intangible assets consist principally of goodwill resulting from acquisitions and costs assigned to contracts of businesses acquired. Goodwill is being amortized on a straight-line basis over estimated useful lives ranging from twenty to forty years. Costs assigned to investment contracts of businesses acquired are being amortized on a straight-line basis over estimated useful lives of twenty years. Impairment of intangible assets is evaluated by comparing the undiscounted cash flows expected to be realized from those intangible F-13 assets to their recorded values, pursuant to SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". If the expected future cash flows are less than the carrying value of intangible assets, an impairment loss is recognized for the difference between the carrying amount and the estimated fair value of those intangible assets. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life of the software. The Company files a consolidated Federal income tax return with the Holding Company and its consolidated subsidiaries. Current Federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax bases of assets and liabilities using enacted income tax rates and laws. Minority interest subject to redemption rights represents the 40.8 million private Alliance Units issued to former Bernstein shareholders in connection with Alliance's acquisition of Bernstein. The Holding Company has agreed to provide liquidity to these former Bernstein shareholders after a two-year period by allowing the 40.8 million Alliance Units to be sold to the Holding Company over the subsequent eight years but generally not more than 20% of such Units in any one annual period. Commissions, fees and other income principally include Investment Management advisory and service fees. Investment Management advisory and service fees are recorded as revenue as the related services are performed. Certain investment advisory contracts provide for a performance fee, in addition to or in lieu of a base fee, that is calculated as a percentage of the related investment results over a specified period of time. Performance fees are recorded as revenue at the end of the measurement period. Sales commissions paid to financial intermediaries in connection with the sale of shares of open-end Alliance mutual funds sold without a front-end sales charge are capitalized and amortized over periods not exceeding five and one-half years, the period of time during which deferred sales commissions are expected to be recovered from distribution plan payments received from those funds upon the redemption of their shares. Contingent deferred sales charges reduce unamortized deferred sales commissions when received. At December 31, 2000 and 1999, respectively, deferred sales commissions totaled $715.7 million and $604.7 million and are included with other assets. The Company accounts for its stock option plans in accordance with the provisions of Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees," and related interpretations. In accordance with the opinion, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeds the option strike price at the grant date. See Note 20 for the pro forma disclosures required by SFAS No. 123, "Accounting for Stock-Based Compensation". F-14 3) INVESTMENTS The following tables provide additional information relating to fixed maturities and equity securities:
GROSS GROSS AMORTIZED UNREALIZED UNREALIZED ESTIMATED COST GAINS LOSSES FAIR VALUE ----------------- ----------------- ---------------- ----------------- (IN MILLIONS) DECEMBER 31, 2000 Fixed Maturities: Available for Sale: Corporate.......................... $ 12,481.0 $ 241.5 $ 298.9 $ 12,423.6 Mortgage-backed.................... 2,215.1 19.2 7.8 2,226.5 U.S. Treasury, government and agency securities................ 938.1 40.2 .5 977.8 States and political subdivisions.. 110.4 4.5 1.0 113.9 Foreign governments................ 177.4 17.3 5.2 189.5 Redeemable preferred stock......... 315.5 13.4 8.7 320.1 ----------------- ----------------- ---------------- ----------------- Total Available for Sale............... $ 16,237.5 $ 336.1 $ 322.1 $ 16,251.4 ================= ================= ================ ================= Held to Maturity: Corporate......... $ 204.6 $ 6.0 $ .1 $ 210.5 ================= ================= ================ ================= Equity Securities: Available for sale................... $ 22.0 $ 1.7 $ 4.7 $ 19.0 Trading securities................... 1,606.3 1.8 46.2 1,561.9 ----------------- ----------------- ---------------- ----------------- Total Equity Securities................ $ 1,628.3 $ 3.5 $ 50.9 $ 1,580.9 ================= ================= ================ ================= December 31, 1999 Fixed Maturities: Available for Sale: Corporate.......................... $ 14,866.8 $ 139.5 $ 787.0 $ 14,219.3 Mortgage-backed.................... 2,554.5 2.3 87.8 2,469.0 U.S. Treasury, government and agency securities................ 1,194.1 18.9 23.4 1,189.6 States and political subdivisions.. 110.0 1.4 4.9 106.5 Foreign governments................ 361.8 16.2 14.8 363.2 Redeemable preferred stock......... 286.4 1.7 36.0 252.1 ----------------- ----------------- ---------------- ----------------- Total Available for Sale............... $ 19,373.6 $ 180.0 $ 953.9 $ 18,599.7 ================= ================= ================ ================= Held to Maturity: Corporate......... $ 133.2 $ - $ - $ 133.2 ================= ================= ================ ================= Equity Securities: Available for sale................... $ 25.5 $ 1.5 $ 17.8 $ 9.2 Trading securities................... 7.2 9.1 2.2 14.1 ----------------- ----------------- ---------------- ----------------- Total Equity Securities................ $ 32.7 $ 10.6 $ 20.0 $ 23.3 ================= ================= ================ =================
For publicly-traded fixed maturities and equity securities, estimated fair value is determined using quoted market prices. For fixed maturities without a readily ascertainable market value, the Company determines estimated fair values using a discounted cash flow approach, including provisions for credit risk, generally based on the assumption such securities will be held to maturity. Such estimated fair values do not necessarily represent the values for which these securities could have been sold at the dates of the consolidated balance sheets. At December 31, 2000 and 1999, securities without a readily ascertainable market value having an amortized cost of $2,820.2 million and $3,322.2 million, respectively, had estimated fair values of $2,838.2 million and $3,177.7 million, respectively. F-15 The contractual maturity of bonds at December 31, 2000 is shown below:
AVAILABLE FOR SALE ------------------------------------ AMORTIZED ESTIMATED COST FAIR VALUE ---------------- ----------------- (IN MILLIONS) Due in one year or less................................................ $ 568.2 $ 568.2 Due in years two through five.......................................... 2,850.0 2,848.1 Due in years six through ten........................................... 5,277.2 5,239.9 Due after ten years.................................................... 5,011.6 5,048.6 Mortgage-backed securities............................................. 2,215.1 2,226.5 ---------------- ----------------- Total.................................................................. $ 15,922.1 $ 15,931.3 ================ =================
Corporate bonds held to maturity with an amortized cost and estimated fair value of $142.4 million are due from one to five years. Bonds not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The Insurance Group's fixed maturity investment portfolio includes corporate high yield securities consisting of public high yield bonds, redeemable preferred stocks and directly negotiated debt in leveraged buyout transactions. The Insurance Group seeks to minimize the higher than normal credit risks associated with such securities by monitoring concentrations in any single issuer or a particular industry group. Certain of these corporate high yield securities are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa or National Association of Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At December 31, 2000, approximately 12% of the $16,126.6 million aggregate amortized cost of bonds held by the Company was considered to be other than investment grade. The Insurance Group holds equity in limited partnership interests which primarily invest in securities considered to be other than investment grade. The carrying values at December 31, 2000 and 1999 were $811.9 million and $647.9 million, respectively. At December 31, 2000, the carrying value of fixed maturities which are non-income producing for the twelve months preceding the consolidated balance sheet date was $60.3 million. The payment terms of mortgage loans on real estate may from time to time be restructured or modified. The investment in restructured mortgage loans on real estate, based on amortized cost, amounted to $92.9 million and $106.0 million at December 31, 2000 and 1999, respectively. Gross interest income on these loans included in net investment income aggregated $7.8 million, $8.2 million and $8.3 million in 2000, 1999 and 1998, respectively. Gross interest income on restructured mortgage loans on real estate that would have been recorded in accordance with the original terms of such loans amounted to $8.7 million, $9.5 million and $10.3 million in 2000, 1999 and 1998, respectively. Impaired mortgage loans along with the related provision for losses were as follows:
DECEMBER 31, ---------------------------------------- 2000 1999 ------------------- ------------------- (IN MILLIONS) Impaired mortgage loans with provision for losses.................. $ 144.2 $ 142.4 Impaired mortgage loans without provision for losses............... 1.8 2.2 ------------------- ------------------- Recorded investment in impaired mortgage loans..................... 146.0 144.6 Provision for losses............................................... (37.0) (23.0) ------------------- ------------------- Net Impaired Mortgage Loans........................................ $ 109.0 $ 121.6 =================== ===================
F-16 During 2000, 1999 and 1998, respectively, the Company's average recorded investment in impaired mortgage loans was $138.8 million, $141.7 million and $161.3 million. Interest income recognized on these impaired mortgage loans totaled $10.4 million, $12.0 million and $12.3 million ($.5 million, $.0 million and $.9 million recognized on a cash basis) for 2000, 1999 and 1998, respectively. The Insurance Group's investment in equity real estate is through direct ownership and through investments in real estate joint ventures. At December 31, 2000 and 1999, the carrying value of equity real estate held for sale amounted to $526.3 million and $382.2 million, respectively. For 2000, 1999 and 1998, respectively, real estate of $.3 million, $20.5 million and $7.1 million was acquired in satisfaction of debt. At December 31, 2000 and 1999, the Company owned $322.3 million and $443.9 million, respectively, of real estate acquired in satisfaction of debt. Accumulated depreciation on real estate was $208.8 million and $251.6 million at December 31, 2000 and 1999, respectively. Depreciation expense on real estate totaled $21.7 million, $21.8 million and $30.5 million for 2000, 1999 and 1998, respectively. Investment valuation allowances and changes thereto are shown below:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Balances, beginning of year........................ $ 148.6 $ 230.6 $ 384.5 Additions charged to income........................ 53.7 68.2 86.2 Deductions for writedowns and asset dispositions............................... (102.4) (150.2) (240.1) ----------------- ---------------- ----------------- Balances, End of Year.............................. $ 99.9 $ 148.6 $ 230.6 ================= ================ ================= Balances, end of year comprise: Mortgage loans on real estate.................... $ 41.4 $ 27.5 $ 34.3 Equity real estate............................... 58.5 121.1 196.3 ----------------- ---------------- ----------------- Total.............................................. $ 99.9 $ 148.6 $ 230.6 ================= ================ =================
F-17 4) JOINT VENTURES AND PARTNERSHIPS Summarized combined financial information for unconsolidated real estate joint ventures (14 individual ventures at both December 31, 2000 and 1999) and for limited partnership interests accounted for under the equity method, in which the Company has an investment of $10.0 million or greater and an equity interest of 10% or greater, follows:
DECEMBER 31, ------------------------------------ 2000 1999 ---------------- ----------------- (IN MILLIONS) BALANCE SHEETS Investments in real estate, at depreciated cost........................ $ 730.1 $ 861.1 Investments in securities, generally at estimated fair value........... 226.6 262.0 Cash and cash equivalents.............................................. 43.9 68.4 Other assets........................................................... 65.5 232.5 ---------------- ----------------- Total Assets........................................................... $ 1,066.1 $ 1,424.0 ================ ================= Borrowed funds - third party........................................... $ 249.9 $ 354.2 Borrowed funds - AXA Financial......................................... 12.9 28.9 Other liabilities...................................................... 26.3 191.2 ---------------- ----------------- Total liabilities...................................................... 289.1 574.3 ---------------- ----------------- Partners' capital...................................................... 777.0 849.7 ---------------- ----------------- Total Liabilities and Partners' Capital................................ $ 1,066.1 $ 1,424.0 ================ ================= Equity in partners' capital included above............................. $ 272.3 $ 298.5 Equity in limited partnership interests not included above and other... 720.7 542.1 ---------------- ----------------- Carrying Value......................................................... $ 993.0 $ 840.6 ================ =================
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) STATEMENTS OF EARNINGS Revenues of real estate joint ventures............. $ 187.1 $ 180.5 $ 246.1 Revenues of other limited partnership interests.... 16.5 85.0 128.9 Interest expense - third party..................... (32.5) (26.6) (33.3) Interest expense - AXA Financial................... (2.0) (2.5) (2.6) Other expenses..................................... (126.4) (133.0) (197.0) ----------------- ---------------- ----------------- Net Earnings....................................... $ 42.7 $ 103.4 $ 142.1 ================= ================ ================= Equity in net earnings included above.............. $ 17.7 $ 9.4 $ 44.4 Equity in net earnings of limited partnership interests not included above..................... 216.3 77.1 37.9 ----------------- ---------------- ----------------- Total Equity in Net Earnings....................... $ 234.0 $ 86.5 $ 82.3 ================= ================ =================
F-18 5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES) The sources of net investment income follows:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................... $ 1,439.2 $ 1,499.8 $ 1,489.0 Mortgage loans on real estate...................... 257.3 253.4 235.4 Equity real estate................................. 191.6 250.2 356.1 Other equity investments........................... 129.8 165.1 83.8 Policy loans....................................... 156.7 143.8 144.9 Other investment income............................ 199.3 161.3 185.7 ----------------- ---------------- ----------------- Gross investment income.......................... 2,373.9 2,473.6 2,494.9 Investment expenses.............................. (200.7) (232.7) (266.8) ----------------- ---------------- ----------------- Net Investment Income.............................. $ 2,173.2 $ 2,240.9 $ 2,228.1 ================= ================ =================
Investment (losses) gains, net, including changes in the valuation allowances, follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................... $ (766.1) $ (290.9) $ (24.3) Mortgage loans on real estate...................... (15.1) (3.3) (10.9) Equity real estate................................. 4.8 (2.4) 74.5 Other equity investments........................... (22.6) 88.1 29.9 Sale of subsidiaries............................... - - (2.6) Issuance and sales of Alliance Units............... 3.9 5.5 19.8 Issuance and sales of DLJ common stock............. 38.8 106.0 18.2 Other.............................................. .3 .1 (4.4) ----------------- ---------------- ----------------- Investment (Losses) Gains, Net..................... $ (756.0) $ (96.9) $ 100.2 ================= ================ =================
Writedowns of fixed maturities amounted to $607.8 million, $223.2 million and $101.6 million for 2000, 1999 and 1998, respectively, including $472.2 million in fourth quarter 2000. For 2000, 1999 and 1998, respectively, proceeds received on sales of fixed maturities classified as available for sale amounted to $7,361.5 million, $7,138.6 million and $15,961.0 million. Gross gains of $78.7 million, $74.7 million and $149.3 million and gross losses of $215.4 million, $214.3 million and $95.1 million, respectively, were realized on these sales. The change in unrealized investment gains (losses) related to fixed maturities classified as available for sale for 2000, 1999 and 1998 amounted to $789.1 million, $(1,313.8) million and $(331.7) million, respectively. On November 3, 2000, the Company sold its interest in DLJ to Credit Suisse Group ("CSG"). The Company received $1.05 billion in cash and $2.19 billion (or 11.4 million shares) in CSG common stock, 2.8 million shares of which were immediately repurchased by CSG at closing. The CSG shares have been designated as trading account securities. The remaining 8.2 million shares held by the Company had a carrying value of $1.56 billion at December 31, 2000 and were sold in January 2001. Net investment income for 2000 included holding losses of $43.2 million on the CSG shares. On January 1, 1999, investments in publicly-traded common equity securities in the General Account portfolio within other equity investments amounting to $102.3 million were transferred from available for sale securities to trading securities. As a result of this transfer, unrealized investment gains of $83.3 million ($43.2 million net of related DAC and Federal income taxes) were recognized as realized investment gains in the consolidated statements of earnings. In 2000 and 1999, respectively, net unrealized holding (losses) gains of $(44.4) million and $6.9 million were included in net investment income in the F-19 consolidated statements of earnings. These trading securities had a carrying value of $1,561.9 million and $14.1 million and costs of $1,606.3 million and $7.2 million at December 31, 2000 and 1999, respectively. For 2000, 1999 and 1998, investment results passed through to certain participating group annuity contracts as interest credited to policyholders' account balances amounted to $110.6 million, $131.5 million and $136.9 million, respectively. Net unrealized investment gains (losses), included in the consolidated balance sheets as a component of accumulated comprehensive income and the changes for the corresponding years including Closed Block and Discontinued Operations on a line-by-line basis, follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Balance, beginning of year......................... $ (392.8) $ 384.1 $ 533.6 Changes in unrealized investment (losses) gains.... 979.7 (1,821.3) (168.7) Changes in unrealized investment losses (gains) attributable to: Participating group annuity contracts and other...................................... (18.3) 25.0 (5.4) DAC............................................ (262.1) 493.1 (28.8) Deferred Federal income taxes.................. (293.6) 526.3 53.4 ----------------- ---------------- ----------------- Balance, End of Year............................... $ 12.9 $ (392.8) $ 384.1 ================= ================ ================= Balance, end of year comprises: Unrealized investment gains (losses) on: Fixed maturities............................... $ 65.9 $ (904.6) $ 766.0 Other equity investments....................... (2.3) (22.2) 86.5 Other.......................................... (1.2) 9.4 51.6 ----------------- ---------------- ----------------- Total........................................ 62.4 (917.4) 904.1 Amounts of unrealized investment (losses) gains attributable to: Participating group annuity contracts and other.................................... (15.3) 3.0 (22.0) DAC.......................................... (28.3) 233.8 (259.3) Deferred Federal income taxes................ (5.9) 287.8 (238.7) ----------------- ---------------- ----------------- Total.............................................. $ 12.9 $ (392.8) $ 384.1 ================= ================ =================
Changes in unrealized gains (losses) reflect changes in fair value of only those fixed maturities and equity securities classified as available for sale and do not reflect any changes in fair value of policyholders' account balances and future policy benefits. F-20 6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) represents cumulative gains and losses on items that are not reflected in earnings. The balances for the past three years follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Unrealized gains (losses) on investments........... $ 12.9 $ (392.8) $ 384.1 Minimum pension liability.......................... (.1) (.1) (28.3) ----------------- ---------------- ----------------- Total Accumulated Other Comprehensive Income (Loss)...................... $ 12.8 $ (392.9) $ 355.8 ================= ================ =================
The components of other comprehensive income (loss) for the past three years follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Net unrealized gains (losses) on investments: Net unrealized gains (losses) arising during the period..................................... $ 191.0 $ (1,625.6) $ (112.4) Losses (gains) reclassified into net earnings during the period.............................. 788.7 (195.7) (56.3) ----------------- ---------------- ----------------- Net unrealized gains (losses) on investments....... 979.7 (1,821.3) (168.7) Adjustments for policyholders liabilities, DAC and deferred Federal income taxes.......... (574.0) 1,044.4 19.2 ----------------- ---------------- ----------------- Change in unrealized gains (losses), net of adjustments.................................... 405.7 (776.9) (149.5) Change in minimum pension liability................ - 28.2 (11.0) ----------------- ---------------- ----------------- Total Other Comprehensive Income (Loss)............ $ 405.7 $ (748.7) $ (160.5) ================= ================ =================
F-21 7) CLOSED BLOCK Summarized financial information for the Closed Block follows:
DECEMBER 31, -------------------------------------- 2000 1999 ----------------- ----------------- (IN MILLIONS) BALANCE SHEETS Fixed Maturities: Available for sale, at estimated fair value (amortized cost, $4,373.5 and $4,144.8)........................................... $ 4,408.0 $ 4,014.0 Mortgage loans on real estate........................................ 1,581.8 1,704.2 Policy loans......................................................... 1,557.7 1,593.9 Cash and other invested assets....................................... 174.7 194.4 Deferred policy acquisitions costs................................... 699.7 895.5 Other assets......................................................... 237.1 205.3 ----------------- ----------------- Total Assets......................................................... $ 8,659.0 $ 8,607.3 ================= ================= Future policy benefits and policyholders' account balances........... $ 9,026.4 $ 9,011.7 Other liabilities.................................................... 23.8 13.3 ----------------- ----------------- Total Liabilities.................................................... $ 9,050.2 $ 9,025.0 ================= =================
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) STATEMENTS OF EARNINGS Premiums and other revenue......................... $ 594.7 $ 619.1 $ 661.7 Investment income (net of investment expenses of $8.1, $15.8 and $15.5)............... 578.7 574.2 569.7 Investment (losses) gains, net..................... (35.8) (11.3) .5 ----------------- ---------------- ----------------- Total revenues............................... 1,137.6 1,182.0 1,231.9 ----------------- ---------------- ----------------- Policyholders' benefits and dividends.............. 1,025.2 1,024.7 1,082.0 Other operating costs and expenses................. 19.7 70.9 62.8 ----------------- ---------------- ----------------- Total benefits and other deductions.......... 1,044.9 1,095.6 1,144.8 ----------------- ---------------- ----------------- Contribution from the Closed Block................. $ 92.7 $ 86.4 $ 87.1 ================= ================ =================
Impaired mortgage loans along with the related provision for losses follows:
DECEMBER 31, ------------------------------------ 2000 1999 ---------------- ----------------- (IN MILLIONS) Impaired mortgage loans with provision for losses...................... $ 26.7 $ 26.8 Impaired mortgage loans without provision for losses................... 4.0 4.5 ---------------- ----------------- Recorded investment in impaired mortgages.............................. 30.7 31.3 Provision for losses................................................... (8.7) (4.1) ---------------- ----------------- Net Impaired Mortgage Loans............................................ $ 22.0 $ 27.2 ================ =================
During 2000, 1999 and 1998, the Closed Block's average recorded investment in impaired mortgage loans was $31.0 million, $37.0 million and $85.5 million, respectively. Interest income recognized on these impaired mortgage loans totaled $2.0 million, $3.3 million and $4.7 million ($.1 million, $.3 million and $1.5 million recognized on a cash basis) for 2000, 1999 and 1998, respectively. F-22 Valuation allowances amounted to $9.1 million and $4.6 million on mortgage loans on real estate and $17.2 million and $24.7 million on equity real estate at December 31, 2000 and 1999, respectively. Writedowns of fixed maturities amounted to $27.7 million and 3.3 million for 2000 and 1999, respectively, including $20.0 million in fourth quarter 2000. Many expenses related to Closed Block operations are charged to operations outside of the Closed Block; accordingly, the contribution from the Closed Block does not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block. 8) DISCONTINUED OPERATIONS Summarized financial information for Discontinued Operations follows:
DECEMBER 31, -------------------------------------- 2000 1999 ----------------- ----------------- (IN MILLIONS) BALANCE SHEETS Mortgage loans on real estate........................................ $ 330.9 $ 454.6 Equity real estate................................................... 350.9 426.6 Fixed maturities, available for sale, at estimated fair value (amortized cost of $321.5 and $85.3)............................... 336.5 85.5 Other equity investments............................................. 43.1 55.8 Other invested assets................................................ 1.9 1.6 ----------------- ----------------- Total investments.................................................. 1,063.3 1,024.1 Cash and cash equivalents............................................ 84.3 164.5 Other assets......................................................... 148.8 213.0 ----------------- ----------------- Total Assets......................................................... $ 1,296.4 $ 1,401.6 ================= ================= Policyholder liabilities............................................. $ 966.8 $ 993.3 Allowance for future losses.......................................... 159.8 242.2 Other liabilities.................................................... 169.8 166.1 ----------------- ----------------- Total Liabilities.................................................... $ 1,296.4 $ 1,401.6 ================= =================
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) STATEMENTS OF EARNINGS Investment income (net of investment expenses of $37.0, $49.3 and $63.3).............. $ 102.2 $ 98.7 $ 160.4 Investment (losses) gains, net..................... (6.6) (13.4) 35.7 Policy fees, premiums and other income............. .7 .2 (4.3) ----------------- ---------------- ----------------- Total revenues..................................... 96.3 85.5 191.8 Benefits and other deductions...................... 106.9 104.8 141.5 (Losses charged) earnings credited to allowance for future losses................................ (10.6) (19.3) 50.3 ----------------- ---------------- ----------------- Pre-tax loss from operations....................... - - - Pre-tax earnings from releasing the allowance for future losses................................ 90.2 43.3 4.2 Federal income tax expense......................... (31.6) (15.2) (1.5) ----------------- ---------------- ----------------- Earnings from Discontinued Operations.......................... $ 58.6 $ 28.1 $ 2.7 ================= ================ =================
F-23 The Company's quarterly process for evaluating the allowance for future losses applies the current period's results of discontinued operations against the allowance, re-estimates future losses and adjusts the allowance, if appropriate. Additionally, as part of the Company's annual planning process which takes place in the fourth quarter of each year, investment and benefit cash flow projections are prepared. These updated assumptions and estimates resulted in a release of allowance in each of the three years presented. Benefits and other deductions included $26.6 million of interest expense related to amounts borrowed from continuing operations in 1998. Valuation allowances of $2.9 million and $1.9 million on mortgage loans on real estate and $11.4 million and $54.8 million on equity real estate were held at December 31, 2000 and 1999, respectively. During 2000, 1999 and 1998, other discontinued operations' average recorded investment in impaired mortgage loans was $11.3 million, $13.8 million and $73.3 million, respectively. Interest income recognized on these impaired mortgage loans totaled $.9 million, $1.7 million and $4.7 million ($.5 million, $.0 million and $3.4 million recognized on a cash basis) for 2000, 1999 and 1998, respectively. At December 31, 2000 and 1999, Discontinued Operations had real estate acquired in satisfaction of debt with carrying values of $4.5 million and $24.1 million, respectively. 9) SHORT-TERM AND LONG-TERM DEBT Short-term and long-term debt consists of the following:
DECEMBER 31, -------------------------------------- 2000 1999 ----------------- ----------------- (IN MILLIONS) Short-term debt...................................................... $ 782.2 $ 557.0 ----------------- ----------------- Long-term debt: Equitable Life: Surplus notes, 6.95% due 2005...................................... 399.6 399.5 Surplus notes, 7.70% due 2015...................................... 199.7 199.7 Other.............................................................. .3 .4 ----------------- ----------------- Total Equitable Life........................................... 599.6 599.6 ----------------- ----------------- Wholly Owned and Joint Venture Real Estate: Mortgage notes, 5.43% - 9.5%, due through 2017..................... 248.3 251.3 ----------------- ----------------- Total long-term debt................................................. 847.9 850.9 ----------------- ----------------- Total Short-term and Long-term Debt.................................. $ 1,630.1 $ 1,407.9 ================= =================
Short-term Debt --------------- Equitable Life has a $350.0 million 5-year bank credit facility and a $350.0 million 364-day credit facility. The interest rates are based on external indices dependent on the type of borrowing ranging from 6.93% to 6.97%. No amounts were outstanding under these credit facilities at December 31, 2000. Equitable Life has a commercial paper program with an issue limit of $1.0 billion. This program is available for general corporate purposes used to support Equitable Life's liquidity needs and is supported by Equitable Life's existing $700.0 million bank credit facilities. At December 31, 2000, there were no amounts outstanding under this program. Alliance has a $425.0 million five-year revolving credit facility and a $200.0 million three-year revolving credit facility with a group of commercial banks. Borrowings from the revolving credit facility and the original commercial paper program may not exceed $425.0 million in the aggregate. Under the facilities, the interest rate, at the option of Alliance, is a floating rate generally based upon a defined prime rate, a rate related to the London Interbank Offered Rate ("LIBOR") or the Federal Funds Rate. A facility fee is payable on the total facility. In October 2000, Alliance entered into a $250.0 million two-year revolving credit facility using terms substantially similar to the $425.0 million and $200.0 million revolving credit facilities. The revolving credit facilities will be used to provide backup liquidity for Alliance's F-24 commercial program, to fund commission payments to financial intermediaries for the sale of certain mutual funds and for general working capital purposes. The revolving credit facilities contain covenants that require Alliance to, among other things, meet certain financial ratios. At December 31, 2000, Alliance had commercial paper outstanding totaling $396.9 million at an effective interest rate of 6.7%; and $284.0 million at an effective interest rate of 7.0% in borrowings outstanding under Alliance's revolving credit facilities. In December 1999, Alliance established a $100.0 million extendible commercial notes ("ECN") program to supplement its commercial paper program. ECN's are short-term debt instruments that do not require any back-up liquidity support. At December 31, 2000, $98.2 million was outstanding under the ECN program with an effective interest rate of 6.8%. Long-term Debt -------------- Several of the long-term debt agreements have restrictive covenants related to the total amount of debt, net tangible assets and other matters. At December 31, 2000, the Company is in compliance with all debt covenants. At December 31, 2000 and 1999, respectively, the Company has pledged real estate of $298.8 million and $323.6 million as collateral for certain long-term debt. At December 31, 2000, aggregate maturities of the long-term debt based on required principal payments at maturity is $248.6 million for 2001, $400.0 million for 2005 and $200.0 million for 2006 and thereafter. 10) FEDERAL INCOME TAXES A summary of the Federal income tax expense in the consolidated statements of earnings follows:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Federal income tax expense: Current.......................................... $ 820.6 $ 174.0 $ 283.3 Deferred......................................... 137.7 158.0 69.8 ----------------- ---------------- ----------------- Total.............................................. $ 958.3 $ 332.0 $ 353.1 ================= ================ =================
The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before Federal income taxes and minority interest by the expected Federal income tax rate of 35%. The sources of the difference and their tax effects follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Expected Federal income tax expense................ $ 904.9 $ 458.4 $ 414.3 Minority interest.................................. (117.9) (47.8) (33.2) Non deductible stock option compensation expense.......................................... 34.4 - - Subsidiary gains................................... 161.4 (37.1) (6.4) Adjustment of tax audit reserves................... 17.9 27.8 16.0 Equity in unconsolidated subsidiaries.............. (48.7) (64.0) (39.3) Other.............................................. 6.3 (5.3) 1.7 ----------------- ---------------- ----------------- Federal Income Tax Expense......................... $ 958.3 $ 332.0 $ 353.1 ================= ================ =================
F-25 The components of the net deferred Federal income taxes are as follows:
DECEMBER 31, 2000 DECEMBER 31, 1999 --------------------------------- --------------------------------- ASSETS LIABILITIES ASSETS LIABILITIES --------------- ---------------- --------------- --------------- (IN MILLIONS) Compensation and related benefits...... $ - $ 79.7 $ - $ 37.7 Other.................................. 4.9 - - 20.6 DAC, reserves and reinsurance.......... - 733.0 - 329.7 Investments............................ - 229.2 115.1 - --------------- ---------------- --------------- --------------- Total.................................. $ 4.9 $ 1,041.9 $ 115.1 $ 388.0 =============== ================ =============== ===============
At December 31, 1999, $236.8 million in deferred tax assets were transferred to the Holding Company in conjunction with its assumption of the non-qualified employee benefit liabilities. See Note 12 for discussion of the benefit plans transferred. The deferred Federal income taxes impacting operations reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The sources of these temporary differences and their tax effects follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) DAC, reserves and reinsurance...................... $ 403.3 $ 83.2 $ (7.7) Investments........................................ (140.7) 3.2 46.8 Compensation and related benefits.................. (96.4) 21.0 28.6 Other.............................................. (28.5) 50.6 2.1 ----------------- ---------------- ----------------- Deferred Federal Income Tax Expense.......................................... $ 137.7 $ 158.0 $ 69.8 ================= ================ =================
Federal income taxes payable at December 31, 2000 included $858.2 million of taxes related to the gain on disposal of DLJ. The Internal Revenue Service (the "IRS") is in the process of examining the Holding Company's consolidated Federal income tax returns for the years 1992 through 1996. Management believes these audits will have no material adverse effect on the Company's results of operations. 11) REINSURANCE AGREEMENTS The effect of reinsurance (excluding group life and health) is summarized as follows:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Direct premiums.................................... $ 508.6 $ 420.6 $ 438.8 Reinsurance assumed................................ 194.2 206.7 203.6 Reinsurance ceded.................................. (122.9) (69.1) (54.3) ----------------- ---------------- ----------------- Premiums........................................... $ 579.9 $ 558.2 $ 588.1 ================= ================ ================= Universal Life and Investment-type Product Policy Fee Income Ceded.......................... $ 92.1 $ 69.7 $ 75.7 ================= ================ ================= Policyholders' Benefits Ceded...................... $ 202.6 $ 99.6 $ 85.9 ================= ================ ================= Interest Credited to Policyholders' Account Balances Ceded................................... $ 46.5 $ 38.5 $ 39.5 ================= ================ =================
F-26 Since 1997, the Company reinsures on a yearly renewal term basis 90% of the mortality risk on new issues of certain term, universal and variable life products. The Company's retention limit on joint survivorship policies is $15.0 million. All other in force business above $5.0 million is reinsured. The Insurance Group also reinsures the entire risk on certain substandard underwriting risks and in certain other cases. During July 2000, Equitable Life transferred, at no gain or loss, all the risk of its directly written DI business for years 1993 and prior through an indemnity reinsurance contract. The cost of the arrangement will be amortized over the expected lives of the contracts reinsured and will not have a significant impact on the results of operations in any specific period. At December 31, 2000 and 1999, respectively, reinsurance recoverables related to insurance contracts outside of the Closed Block amounting to $1,989.2 million and $881.5 million are included in the consolidated balance sheets in other assets and reinsurance payables related to insurance contracts outside of the Closed Block amounting to $730.3 million and $682.5 million are included in other liabilities. The Insurance Group cedes 100% of its group life and health business to a third party insurer. Insurance liabilities ceded totaled $487.7 million and $510.5 million at December 31, 2000 and 1999, respectively. 12) EMPLOYEE BENEFIT PLANS The Company sponsors qualified and non-qualified defined benefit plans covering substantially all employees (including certain qualified part-time employees), managers and certain agents. The pension plans are non-contributory. Equitable Life's benefits are based on a cash balance formula or years of service and final average earnings, if greater, under certain grandfathering rules in the plans. Alliance's benefits are based on years of credited service, average final base salary and primary social security benefits. The Company's funding policy is to make the minimum contribution required by the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective December 31, 1999, the Holding Company legally assumed primary liability from Equitable Life for all current and future obligations of its Excess Retirement Plan, Supplemental Executive Retirement Plan and certain other employee benefit plans that provide participants with medical, life insurance, and deferred compensation benefits; Equitable Life remains secondarily liable. The amount of the liability associated with employee benefits transferred was $676.5 million, including $183.0 million of non-qualified pension benefit obligations and $394.1 million of postretirement benefits obligations at December 31, 1999. This transfer was recorded as a non-cash capital contribution to Equitable Life. Components of net periodic pension credit for the qualified and non-qualified plans follow:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Service cost....................................... $ 29.5 $ 36.7 $ 33.2 Interest cost on projected benefit obligations..... 124.2 131.6 129.2 Actual return on assets............................ (223.2) (189.8) (175.6) Net amortization and deferrals..................... (.6) 7.5 6.1 ----------------- ---------------- ----------------- Net Periodic Pension Credit........................ $ (70.1) $ (14.0) $ (7.1) ================= ================ =================
F-27 The projected benefit obligations under the qualified and non-qualified pension plans were comprised of:
DECEMBER 31, ------------------------------------ 2000 1999 ---------------- ----------------- (IN MILLIONS) Benefit obligations, beginning of year................................. $ 1,659.6 $ 1,933.4 Service cost........................................................... 29.5 36.7 Interest cost.......................................................... 124.2 131.6 Actuarial losses (gains)............................................... 6.5 (53.3) Benefits paid.......................................................... (110.0) (123.1) ---------------- ----------------- Subtotal before transfer............................................... 1,709.8 1,925.3 Transfer of Non-qualified Pension Benefit Obligation to the Holding Company............................................... - (265.7) ---------------- ----------------- Benefit Obligation, End of Year........................................ $ 1,709.8 $ 1,659.6 ================ =================
The funded status of the qualified and non-qualified pension plans was as follows:
DECEMBER 31, ------------------------------------ 2000 1999 ---------------- ----------------- (IN MILLIONS) Plan assets at fair value, beginning of year........................... $ 2,341.6 $ 2,083.1 Actual return on plan assets........................................... (107.7) 369.0 Contributions.......................................................... - .1 Benefits paid and fees................................................. (114.6) (108.5) ---------------- ----------------- Plan assets at fair value, end of year................................. 2,119.3 2,343.7 Projected benefit obligations.......................................... 1,709.8 1,925.3 ---------------- ----------------- Excess of plan assets over projected benefit obligations............... 409.5 418.4 Unrecognized prior service cost........................................ 1.2 (5.2) Unrecognized net gain (loss) from past experience different from that assumed.................................................... 61.2 (197.3) Unrecognized net asset at transition................................... (1.9) (.1) ----------------- ---------------- Subtotal before transfer............................................... 470.0 215.8 Transfer of Accrued Non-qualified Pension Benefit Obligation to the Holding Company............................................... - 184.3 ---------------- ----------------- Prepaid Pension Cost, Net.............................................. $ 470.0 $ 400.1 ================ =================
The prepaid pension cost for pension plans with assets in excess of projected benefit obligations was $483.5 million and $412.2 million and the accrued liability for pension plans with projected benefit obligations in excess of plan assets was $13.5 million and $12.2 million at December 31, 2000 and 1999, respectively. The pension plan assets include corporate and government debt securities, equity securities, equity real estate and shares of group trusts managed by Alliance. The discount rate and rate of increase in future compensation levels used in determining the actuarial present value of projected benefit obligations were 7.75% and 7.19%, respectively, at December 31, 2000 and 8.0% and 6.38%, respectively, at December 31, 1999. As of January 1, 2000 and 1999, the expected long-term rate of return on assets for the retirement plan was 10.5% and 10.0%, respectively. The Company recorded, as a reduction of shareholder's equity, an additional minimum pension liability of $.1 million, $.1 million and $28.3 million, net of Federal income taxes, at December 31, 2000, 1999 and 1998, respectively, primarily representing the excess of the accumulated benefit obligation of the non-qualified pension plan over the accrued liability. The aggregate accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were $333.5 million and $42.1 million, respectively, at December 31, 2000 and $325.7 million and $36.3 million, respectively, at December 31, 1999. F-28 Prior to 1987, the qualified plan funded participants' benefits through the purchase of non-participating annuity contracts from Equitable Life. Benefit payments under these contracts were approximately $28.7 million, $30.2 million and $31.8 million for 2000, 1999 and 1998, respectively. The Company provides certain medical and life insurance benefits (collectively, "postretirement benefits") for qualifying employees, managers and agents retiring from the Company (i) on or after attaining age 55 who have at least 10 years of service or (ii) on or after attaining age 65 or (iii) whose jobs have been abolished and who have attained age 50 with 20 years of service. The life insurance benefits are related to age and salary at retirement. The costs of postretirement benefits are recognized in accordance with the provisions of SFAS No. 106. The Company continues to fund postretirement benefits costs on a pay-as-you-go basis and, for 2000, 1999 and 1998, the Company made estimated postretirement benefits payments of $.9 million, $29.5 million and $28.4 million, respectively. The following table sets forth the postretirement benefits plan's status, reconciled to amounts recognized in the Company's consolidated financial statements:
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Service cost....................................... $ - $ 4.7 $ 4.6 Interest cost on accumulated postretirement benefits obligation.............................. .7 34.4 33.6 Unrecognized prior service costs................... - (7.0) - Net amortization and deferrals..................... (.2) 8.4 .5 ----------------- ---------------- ----------------- Net Periodic Postretirement Benefits Costs......... $ .5 $ 40.5 $ 38.7 ================= ================ =================
DECEMBER 31, ------------------------------------ 2000 1999 ---------------- ----------------- (IN MILLIONS) Accumulated postretirement benefits obligation, beginning of year.............................................................. $ 17.8 $ 490.4 Service cost........................................................... - 4.7 Interest cost.......................................................... .5 34.4 Contributions and benefits paid........................................ (.9) (29.5) Actuarial gains........................................................ - (29.0) ---------------- ----------------- Accumulated postretirement benefits obligation, end of year............ 17.4 471.0 Unrecognized prior service cost........................................ - 26.9 Unrecognized net gain from past experience different from that assumed and from changes in assumptions.................... - (86.0) ---------------- ----------------- Subtotal before transfer............................................... 17.4 411.9 Transfer to the Holding Company........................................ - (394.1) ---------------- ----------------- Accrued Postretirement Benefits Cost................................... $ 17.4 $ 17.8 ================ =================
Since January 1, 1994, costs to the Company for providing these medical benefits available to retirees under age 65 are the same as those offered to active employees and medical benefits will be limited to 200% of 1993 costs for all participants. The assumed health care cost trend rate used in measuring the accumulated postretirement benefits obligation was 7.0% in 2000, gradually declining to 4.25% in the year 2010, and in 1999 was 7.5%, gradually declining to 4.75% in the year 2009. The discount rate used in determining the accumulated postretirement benefits obligation was 7.75% and 8.0% at December 31, 2000 and 1999, respectively. If the health care cost trend rate assumptions were increased by 1%, the accumulated postretirement benefits obligation as of December 31, 2000 would be increased 3.5%. The effect of this change on the sum of the service cost and interest cost would be an increase of 3.5%. If the health care cost trend rate assumptions were decreased by 1% the accumulated postretirement benefits obligation as of December 31, 2000 would be decreased by 4.4%. The effect of this change on the sum of the service cost and interest cost would be a decrease of 4.4%. F-29 13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS The Insurance Group primarily uses derivatives for asset/liability risk management and for hedging individual securities. Derivatives mainly are utilized to reduce the Insurance Group's exposure to interest rate fluctuations. Accounting for interest rate swap transactions is on an accrual basis. Gains and losses related to interest rate swap transactions are amortized as yield adjustments over the remaining life of the underlying hedged security. Income and expense resulting from interest rate swap activities are reflected in net investment income. There were no swaps outstanding as of December 31, 2000. The notional amount of matched interest rate swaps outstanding at December 31, 1999 was $797.3 million. Equitable Life maintains an interest rate cap program designed to offset crediting rate increases on interest-sensitive individual annuities contracts. The outstanding notional amounts at December 31, 2000 of contracts purchased and sold were $6,775.0 million and $375.0 million, respectively. The net premium paid by Equitable Life on these contracts was $46.7 million and is being amortized ratably over the contract periods ranging from 1 to 3 years. Income and expense resulting from this program are reflected as an adjustment to interest credited to policyholders' account balances. Fair Value of Financial Instruments ----------------------------------- The Company defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument. Certain financial instruments are excluded, particularly insurance liabilities other than financial guarantees and investment contracts. Fair market value of off-balance-sheet financial instruments of the Insurance Group was not material at December 31, 2000 and 1999. Fair values for mortgage loans on real estate are estimated by discounting future contractual cash flows using interest rates at which loans with similar characteristics and credit quality would be made. Fair values for foreclosed mortgage loans and problem mortgage loans are limited to the estimated fair value of the underlying collateral if lower. Fair values of policy loans are estimated by discounting the face value of the loans from the time of the next interest rate review to the present, at a rate equal to the excess of the current estimated market rates over the current interest rate charged on the loan. The estimated fair values for the Company's association plan contracts, supplementary contracts not involving life contingencies ("SCNILC") and annuities certain, which are included in policyholders' account balances, and guaranteed interest contracts are estimated using projected cash flows discounted at rates reflecting expected current offering rates. The estimated fair values for variable deferred annuities and single premium deferred annuities, which are included in policyholders' account balances, are estimated by discounting the account value back from the time of the next crediting rate review to the present, at a rate equal to the excess of current estimated market rates offered on new policies over the current crediting rates. Fair values for long-term debt are determined using published market values, where available, or contractual cash flows discounted at market interest rates. The estimated fair values for non-recourse mortgage debt are determined by discounting contractual cash flows at a rate which takes into account the level of current market interest rates and collateral risk. The estimated fair values for recourse mortgage debt are determined by discounting contractual cash flows at a rate based upon current interest rates of other companies with credit ratings similar to the Company. The Company's carrying value of short-term borrowings approximates their estimated fair value. F-30 The carrying value and estimated fair value for financial instruments not previously disclosed in Notes 3, 7 and 8:
DECEMBER 31, -------------------------------------------------------------------- 2000 1999 --------------------------------- --------------------------------- CARRYING ESTIMATED Carrying Estimated VALUE FAIR VALUE Value Fair Value --------------- ---------------- --------------- --------------- (IN MILLIONS) Consolidated: ------------ Mortgage loans on real estate.......... $ 3,130.8 $ 3,184.4 $ 3,270.0 $ 3,239.3 Other limited partnership interests.... 811.9 811.9 647.9 647.9 Policy loans........................... 2,476.9 2,622.4 2,257.3 2,359.5 Policyholders' account balances - investment contracts................. 11,468.6 11,643.7 12,740.4 12,800.5 Long-term debt......................... 847.9 847.5 850.9 834.9 Closed Block: ------------ Mortgage loans on real estate.......... $ 1,581.8 $ 1,582.6 $ 1,704.2 $ 1,650.3 Other equity investments............... 34.4 34.4 36.3 36.3 Policy loans........................... 1,557.7 1,667.6 1,593.9 1,712.0 SCNILC liability....................... 20.2 20.1 22.8 22.5 Discontinued Operations: ----------------------- Mortgage loans on real estate.......... $ 330.9 $ 347.7 $ 454.6 $ 467.0 Fixed maturities....................... 336.5 336.5 85.5 85.5 Other equity investments............... 43.1 43.1 55.8 55.8 Guaranteed interest contracts.......... 26.4 23.4 33.2 27.5 Long-term debt......................... 101.8 101.7 101.9 101.9
F-31 14) COMMITMENTS AND CONTINGENT LIABILITIES From time to time, the Company has provided certain guarantees or commitments to affiliates, investors and others. At December 31, 2000, these arrangements include commitments by the Company, under certain conditions: to make capital contributions of up to $9.3 million to affiliated real estate joint ventures; and to provide equity financing to certain limited partnerships of $303.1 million under existing loan or loan commitment agreements. Management believes the Company will not incur any material losses as a result of these commitments. Equitable Life is the obligor under certain structured settlement agreements which it had entered into with unaffiliated insurance companies and beneficiaries. To satisfy its obligations under these agreements, Equitable Life owns single premium annuities issued by previously wholly owned life insurance subsidiaries. Equitable Life has directed payment under these annuities to be made directly to the beneficiaries under the structured settlement agreements. A contingent liability exists with respect to these agreements should the previously wholly owned subsidiaries be unable to meet their obligations. Management believes the need for Equitable Life to satisfy those obligations is remote. The Insurance Group had $14.9 million of letters of credit outstanding at December 31, 2000. The Holding Company has entered into continuity agreements with forty-three executives of the Company in connection with AXA's minority interest acquisition. The continuity agreements generally provide cash severance payments ranging from 1.5 times to 3 times an executive's base salary plus bonus and other benefits. Such cash severance payments will generally be made if an executive's employment is terminated at any time within two years from December 27, 2000 for any reason other than the executive's death, disability, retirement or for cause, or if the executive resigns for good reason as defined in the agreements. 15) LITIGATION Life Insurance and Annuity Sales Cases A number of lawsuits are pending as individual claims and purported class actions against Equitable Life, its subsidiary insurance company and a former insurance subsidiary. These actions involve, among other things, sales of life and annuity products for varying periods from 1980 to the present, and allege, among other things, (i) sales practice misrepresentation primarily involving: the number of premium payments required; the propriety of a product as an investment vehicle; the propriety of a product as a replacement of an existing policy; and failure to disclose a product as life insurance; and (ii) the use of fraudulent and deceptive practices in connection with the marketing and sale of deferred annuity products to fund tax-qualified contributory retirement plans. Some actions are in state courts and others are in U.S. District Courts in different jurisdictions, and are in varying stages of discovery and motions for class certification. In general, the plaintiffs request an unspecified amount of damages, compensatory and punitive damages, recession of the contracts, enjoinment from the described practices, prohibition against cancellation of policies for non-payment of premium or other remedies, as well as attorneys' fees and expenses. Similar actions have been filed against other life and health insurers and have resulted in the award of substantial judgments, including material amounts of punitive damages, or in substantial settlements. Annuity Contract Case In October 2000, an action was commenced in the United States District Court for the Northern District of Illinois. The complaint alleges that the defendants (i) in connection with certain annuities issued by Equitable Life breached an agreement with the plaintiffs involving the execution of mutual fund transfers and (ii) wrongfully withheld withdrawal charges in connection with the termination of such annuities. Plaintiffs seek unspecified lost profits and injunctive relief, punitive damages and attorneys' fees. The plaintiffs also seek return of the withdrawal charges. In February 2001, the District Court granted in part and denied in part defendants' motion to dismiss the complaint, without prejudice to the plaintiffs to seek leave to file an amended complaint. F-32 Discrimination Case Equitable Life is a defendant in an action, certified as a class action in September 1997, in the United States District Court for the Northern District of Alabama, Southern Division, involving alleged discrimination on the basis of race against African-American applicants and potential applicants in hiring individuals as sales agents. Plaintiffs seek a declaratory judgment and affirmative and negative injunctive relief, including the payment of back-pay, pension and other compensation. The court referred the case to mediation, which has been successful. The parties have reached a tentative agreement for the settlement of this case as a nationwide class action. In connection with the proposed settlement, the case will be dismissed in the United States District Court for the Northern District of Alabama, Southern Division and will be refiled in the United States District Court for Georgia, Atlanta Division. The final settlement requires notice to class members and is subject to court approval. The Company's management believes that the settlement of this matter will not have a material adverse effect on the consolidated financial position or results of operations of the Company. Agent Health Benefits Case Equitable Life is a defendant in an action, certified as a class action in March 1999, in the United States District Court for the Northern District of California, alleging, among other things, that Equitable Life violated ERISA by eliminating certain alternatives pursuant to which agents of Equitable Life could qualify for health care coverage. The class consists of "[a]ll current, former and retired Equitable agents, who while associated with Equitable satisfied [certain alternatives] to qualify for health coverage or contributions thereto under applicable plans." Plaintiffs allege various causes of action under ERISA, including claims for enforcement of alleged promises contained in plan documents and for enforcement of agent bulletins, breach of a unilateral contract, breach of fiduciary duty and promissory estoppel. The parties are currently engaged in discovery. In June 2000, plaintiffs appealed to the Court of Appeals for the Ninth Circuit contesting the District Court's award of legal fees to plaintiffs' counsel in connection with a previously settled count of the complaint unrelated to the health benefit claims. In that appeal, plaintiffs have challenged the District Court's subject matter jurisdiction over the health benefit claims. Briefing has been completed, but the appeal has not yet been decided. Prime Property Fund Case In January 2000, the California Supreme Court denied Equitable Life's petition for review of an October 1999 decision by the California Superior Court of Appeal. Such decision reversed the dismissal by the Supreme Court of Orange County, California of an action which was commenced in 1995 by a real estate developer in connection with a limited partnership formed in 1991 with Equitable Life on behalf of Prime Property Fund ("PPF"). Equitable Life serves as investment manager for PPF, an open-end, commingled real estate separate account of Equitable Life for pension clients. Plaintiff alleges breach of fiduciary duty and other claims principally in connection with PPF's 1995 purchase and subsequent foreclosure of the loan which financed the partnership's property. Plaintiff seeks compensatory and punitive damages. In reversing the Superior Court's dismissal of the plaintiff's claims, the Court of Appeal held that a general partner who acquires a partnership obligation breaches its fiduciary duty by foreclosing on partnership assets. The case was remanded to the Superior Court for further proceedings. In August 2000, Equitable Life filed a motion for summary adjudication on plaintiff's claims, based on the purchase and subsequent foreclosure of the loan which financed the partnership's property, for punitive damages. In November 2000, the Superior Court granted Equitable Life's motion as to one of plaintiff's claims, dismissing the claim for punitive damages sought in conjunction with plaintiff's claim for breach of the covenant of good faith and fair dealing. The Superior Court denied Equitable Life's motion with respect to plaintiff's claim for punitive damages sought in conjunction with its claim for breach of fiduciary duty. In December 2000, the Superior Court granted plaintiff's motion for leave to file a supplemental complaint to add allegations relating to the post-foreclosure transfer of certain funds from the partnership to Equitable Life. The supplemental complaint alleges, among other things, that such conduct constitutes self-dealing and breach of fiduciary duty, and seeks compensatory and punitive damages based on such conduct. A jury trial previously scheduled for February 2001 tentatively has been rescheduled for May 2001. F-33 Alliance Reorganization Case In September 1999, an action was brought on behalf of a purported class of owners of limited partnership units of Alliance Holding challenging the then-proposed reorganization of Alliance Holding. Named defendants include Alliance Holding, Alliance, four Alliance Holding executives and the general partner of Alliance Holding and Alliance. Equitable Life is obligated to indemnify the defendants for losses and expenses arising out of the litigation. Plaintiffs allege inadequate and misleading disclosures, breaches of fiduciary duties, and the improper adoption of an amended partnership agreement by Alliance Holding and seek payment of unspecified money damages and an accounting of all benefits alleged to have been improperly obtained by the defendants. In August 2000, plaintiffs filed a first amended and supplemental class action complaint. The amended complaint alleges in connection with the reorganization that the partnership agreement of Alliance Holding was not validly amended, the reorganization of Alliance Holding was not validly effected, the information disseminated to holders of units of limited partnership interests in Alliance Holding was materially false and misleading, and the defendants breached their fiduciary duties by structuring the reorganization in a manner that was grossly unfair to plaintiffs. Plaintiffs seek declaratory, monetary and injunctive relief relating to the allegations contained in the amended complaint. In September 2000, all defendants, except one Alliance Holding executive, filed an answer to the amended complaint denying the material allegations contained therein; in lieu of joining in the answer to the amended complaint, the Alliance Holding executive filed a motion to dismiss in September 2000. In November 2000, the remaining defendants filed a motion to dismiss the amended complaint. In December 2000, plaintiffs filed a motion for partial summary judgment on the claim that the Alliance Holding partnership agreement was not validly amended. Oral argument of the motions was held in January 2001. Disposal of DLJ Subsequent to the August 30, 2000 announcement of the proposed sale of DLJ, four putative class action lawsuits have been filed in the Delaware Court of Chancery naming AXA Financial as one of the defendants and challenging the sale of DLJ because the transaction did not include the sale of DLJdirect tracking stock. The plaintiffs in these cases purport to represent a class consisting of the holders of DLJdirect tracking stock and their successors in interest, excluding the defendants and any person or entity related to or affiliated with any of the defendants. AXA Financial, DLJ and the DLJ directors are named as defendants. The complaints assert claims for breaches of fiduciary duties, and seek an unspecified amount of compensatory damages and costs and expenses, including attorneys' fees. The parties in these cases have agreed to extend the time for defendants to respond to the complaints. Subsequent to the August 30, 2000 announcement of the proposed sale of DLJ, a putative class action lawsuit was filed in New York challenging the sale of DLJ (for omitting the DLJdirect tracking stock) and also alleges Federal securities law claims relating to the initial public offering of the DLJdirect tracking stock. The complaint alleges claims for violations of the securities laws, breaches of the fiduciary duties of loyalty, good faith and due care, aiding and abetting such breaches, and breach of contract. The plaintiff purports to represent a class consisting of: all purchasers of DLJdirect tracking stock in the initial public offering and thereafter (with respect to the securities law claims); and all owners of DLJdirect tracking stock who allegedly have been or will be injured by the proposed sale of DLJ (with respect to all other claims). AXA Financial, Equitable Life, AXA, DLJ, Donaldson, Lufkin & Jenrette Securities Corporation, CSG, Diamond Acquisition Corp., and DLJ's directors are named as defendants. The complaint seeks declaratory and injunctive relief, an unspecified amount of damages, and costs and expenses, including attorney's fees. Defendants have until February 28, 2001 to respond to plaintiffs' complaint. AXA's Purchase of Holding Company Minority Interest Subsequent to the August 30, 2000 announcement of AXA's proposal to purchase the outstanding shares of Holding Company Common Stock that it did not already own, fourteen putative class action lawsuits were commenced in the Delaware Court of Chancery. The Holding Company, AXA, and directors and/or officers of the Holding Company are named as defendants in each of these lawsuits. The various plaintiffs each purport to represent a class consisting of owners of Holding Company Common Stock and their successors in interest, excluding the defendants and any person or entity related to or affiliated with any of the defendants. They challenge the adequacy of the offer announced by AXA and allege that the defendants have engaged or will engage in unfair dealing, overreaching and/or have breached or will breach fiduciary duties owed to the minority shareholders of the Holding Company. The complaints seek declaratory and F-34 injunctive relief, an accounting, and unspecified compensatory damages, costs and expenses, including attorneys' fees. A similar lawsuit was filed in the Supreme Court of the State of New York, County of New York, after the filing of the first Delaware action. In December 2000, the parties to the Delaware suits reached a tentative agreement for settlement and executed a Memorandum of Understanding. Shortly thereafter, agreement was reached with the plaintiff in the New York suit to stay proceedings in New York and to participate in and be bound by the terms of the settlement of the Delaware suits. The settlement, which does not involve any payment by the Holding Company, is subject to a number of conditions, including confirmatory discovery, the preparation of definitive documentation and approval by the Delaware Court of Chancery after a hearing. Outcome of Litigation Although the outcome of litigation cannot be predicted with certainty, particularly in the early stages of an action, the Company's management believes that the ultimate resolution of the matters described above should not have a material adverse effect on the consolidated financial position of the Company. The Company's management cannot make an estimate of loss, if any, or predict whether or not any such litigation will have a material adverse effect on the Company's consolidated results of operations in any particular period. Other Matters In addition to the matters described above, the Company and its subsidiaries are involved in various legal actions and proceedings in connection with their businesses. Some of the actions and proceedings have been brought on behalf of various alleged classes of claimants and certain of these claimants seek damages of unspecified amounts. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on the Company's consolidated financial position or results of operations. 16) LEASES The Company has entered into operating leases for office space and certain other assets, principally information technology equipment and office furniture and equipment. Future minimum payments under noncancelable leases for 2001 and the four successive years are $123.9 million, $110.8 million, $101.6 million, $108.5 million, $97.4 million and $896.5 million thereafter. Minimum future sublease rental income on these noncancelable leases for 2001 and the four successive years is $5.2 million, $4.3 million, $5.1 million, $3.3 million, $2.9 million and $22.0 million thereafter. At December 31, 2000, the minimum future rental income on non-cancelable operating leases for wholly owned investments in real estate for 2001 and the four successive years is $95.2 million, $61.4 million, $72.9 million, $66.2 million, $59.2 million and $76.6 million thereafter. 17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION Equitable Life is restricted as to the amounts it may pay as dividends to the Holding Company. Under the New York Insurance Law, the Superintendent has broad discretion to determine whether the financial condition of a stock life insurance company would support the payment of dividends to its shareholders. For 2000, 1999 and 1998, statutory net income (loss) totaled $1,068.6 million, $547.0 million and $384.4 million, respectively. Statutory surplus, capital stock and Asset Valuation Reserve ("AVR") totaled $6,226.5 million and $5,570.6 million at December 31, 2000 and 1999, respectively. In 2000 and 1999, respectively, $250.0 million and $150.0 million in dividends were paid to the Holding Company by Equitable Life. At December 31, 2000, the Insurance Group, in accordance with various government and state regulations, had $26.4 million of securities deposited with such government or state agencies. In 1998, the NAIC adopted the Codification of Statutory Accounting Principles ("Codification"). Codification provides regulators and insurers with uniform statutory guidance, addressing areas where statutory accounting was previously silent and changing certain existing statutory positions. The New York Insurance Department recently adopted Regulation 172 concerning Codification, effective January 1, 2001, but did not adopt several key provisions of Codification, including deferred income taxes and the establishment of goodwill as an asset. The application of the codification rules as adopted by New York currently is estimated to have no significant effect on Equitable Life. The Insurance Group expects that statutory surplus after adoption will continue to be in excess of the regulatory risk-based capital requirements. F-35 The differences between statutory surplus and capital stock determined in accordance with Statutory Accounting Principles ("SAP") and total shareholders' equity under GAAP are primarily: (a) the inclusion in SAP of an AVR intended to stabilize surplus from fluctuations in the value of the investment portfolio; (b) future policy benefits and policyholders' account balances under SAP differ from GAAP due to differences between actuarial assumptions and reserving methodologies; (c) certain policy acquisition costs are expensed under SAP but deferred under GAAP and amortized over future periods to achieve a matching of revenues and expenses; (d) external and certain internal costs incurred to obtain or develop internal use computer software during the application development stage is capitalized under GAAP but expensed under SAP; (e) Federal income taxes are generally accrued under SAP based upon revenues and expenses in the Federal income tax return while under GAAP deferred taxes provide for timing differences between recognition of revenues and expenses for financial reporting and income tax purposes; (f) the valuation of assets under SAP and GAAP differ due to different investment valuation and depreciation methodologies, as well as the deferral of interest-related realized capital gains and losses on fixed income investments; and (g) differences in the accrual methodologies for post-employment and retirement benefit plans. Accounting practices used to prepare statutory financial statements for regulatory filings of stock life insurance companies differ in certain instances from GAAP. The following reconciles the Insurance Group's statutory change in surplus and capital stock and statutory surplus and capital stock determined in accordance with accounting practices prescribed by the New York Insurance Department with net earnings and equity on a GAAP basis.
2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Net change in statutory surplus and capital stock.................................... $ 1,321.4 $ 848.8 $ 709.2 Change in asset valuation reserves................. (665.5) (6.3) 111.8 ----------------- ---------------- ----------------- Net change in statutory surplus, capital stock and asset valuation reserves..................... 655.9 842.5 821.0 Adjustments: Future policy benefits and policyholders' account balances............................... 259.0 (85.0) (189.9) DAC.............................................. 483.6 263.6 316.5 Deferred Federal income taxes.................... (128.3) (161.4) (67.6) Valuation of investments......................... (126.2) 23.2 83.6 Valuation of investment subsidiary............... (29.2) (133.6) (419.5) Limited risk reinsurance......................... - 128.4 83.7 Dividends paid to the Holding Company........................................ 250.0 150.0 - Capital contribution............................. - (470.8) - Postretirement benefits.......................... - - 54.8 Stock option expense related to AXA's minority Interest acquisition........................... (493.9) - - Other, net....................................... 443.7 248.2 134.7 GAAP adjustments of Closed Block................. (13.4) (49.8) (27.1) GAAP adjustments of discontinued operations..................................... 54.3 51.3 (82.0) ----------------- ---------------- ----------------- Net Earnings of the Insurance Group................ $ 1,355.5 $ 806.6 $ 708.2 ================= ================ =================
F-36
DECEMBER 31, -------------------------------------------------------- 2000 1999 1998 ----------------- ---------------- ----------------- (IN MILLIONS) Statutory surplus and capital stock................ $ 5,341.9 $ 4,020.5 $ 3,171.7 Asset valuation reserves........................... 884.6 1,550.1 1,556.4 ----------------- ---------------- ----------------- Statutory surplus, capital stock and asset valuation reserves............................... 6,226.5 5,570.6 4,728.1 Adjustments: Future policy benefits and policyholders' account balances............................... (1,363.0) (1,622.0) (1,526.0) DAC.............................................. 4,429.1 4,033.0 3,563.8 Deferred Federal income taxes.................... (681.9) (283.9) (346.9) Valuation of investments......................... 99.7 (568.2) 626.9 Valuation of investment subsidiary............... (1,082.9) (1,891.7) (1,758.1) Limited risk reinsurance......................... - (39.6) (168.0) Issuance of surplus notes........................ (539.1) (539.1) (539.1) Postretirement benefits.......................... - - (262.7) Other, net....................................... 844.1 544.8 313.4 GAAP adjustments of Closed Block................. 677.1 723.6 795.4 GAAP adjustments of discontinued operations...... (164.3) (160.0) (14.2) ----------------- ---------------- ----------------- Equity of the Insurance Group...................... $ 8,445.3 $ 5,767.5 $ 5,412.6 ================= ================ =================
18) BUSINESS SEGMENT INFORMATION The Company's operations consist of Insurance and Investment Services. The Company's management evaluates the performance of each of these segments independently and allocates resources based on current and future requirements of each segment. Management evaluates the performance of each segment based upon operating results adjusted to exclude the effect of unusual or non-recurring events and transactions and certain revenue and expense categories not related to the base operations of the particular business net of minority interest. AXA's acquisition of the Company's minority interest shares has resulted in a change in the measurement of the Company's reportable operating segments. Discontinued Operations, discontinued by the Company in 1991, are included in the Life Insurance segment results reported by AXA in their French GAAP financial statements. To more closely conform the Company's management reporting to that of its parent, Discontinued Operations is now reported together with continuing operations in measuring profits or losses for the Company's Insurance segment. Prior period amounts have been restated to conform to this presentation. The Insurance segment offers a variety of traditional, variable and interest-sensitive life insurance products, disability income, annuity products, mutual fund and other investment products to individuals and small groups. It also administers traditional participating group annuity contracts with conversion features, generally for corporate qualified pension plans, and association plans which provide full service retirement programs for individuals affiliated with professional and trade associations. This segment includes Separate Accounts for individual insurance and annuity products. The Investment Services segment includes Alliance and the results of DLJ which are accounted for on an equity basis. In 1999, Alliance reorganized into Alliance Capital Management Holding L.P. ("Alliance Holding") and Alliance (the "Reorganization"). Alliance Holding's principal asset is its interest in Alliance and it functions as a holding entity through which holders of its publicly traded units own an indirect interest in the operating partnership. The Company exchanged substantially all of its Alliance Holding units for units in Alliance ("Alliance Units"). As a result of the reorganization, the Company was the beneficial owner of approximately 2% of Alliance Holding and 37% of Alliance. Alliance provides diversified investment fund management services to a variety of institutional clients, including pension funds, endowments, and foreign financial institutions, as well as to individual investors, principally through a broad line of mutual funds. This segment includes institutional Separate Accounts which provide various investment options for large group pension clients, primarily deferred benefit contribution plans, through pooled or single group accounts. F-37 Intersegment investment advisory and other fees of approximately $153.2 million, $75.6 million and $61.8 million for 2000, 1999 and 1998, respectively, are included in total revenues of the Investment Services segment. The following tables reconcile segment revenues and adjusted earnings to consolidated revenues and earnings from continuing operations before Federal income taxes as reported on the consolidated statements of earnings and the segments' assets to total assets on the consolidated balance sheets, respectively.
2000 1999 1998 -------------------- ------------------- ---------------------- (IN MILLIONS) Segment revenues: Insurance............................... $ 5,662.4 $ 5,488.8 5,330.2 Investment Services..................... 2,667.7 2,052.7 1,438.4 Consolidation/elimination............... (113.1) (23.8) (5.7) -------------------- ------------------- ---------------------- Total segment revenues.................. 8,217.0 7,517.7 6,762.9 Loss on CSG shares...................... (43.2) - - Investment (losses) gains, net of other charges.............................. (798.4) (112.6) 136.4 Gain on sale of equity investee......... 1,962.0 - - Closed Block............................ (1,044.9) (1,095.6) (1,144.8) Discontinued Operations................. (96.3) (85.5) (191.8) -------------------- ------------------- ---------------------- Total Consolidated Revenues............. $ 8,196.2 $ 6,224.0 $ 5,562.7 ==================== =================== ====================== Pre-tax adjusted earnings: Insurance............................... $ 1,198.9 $ 950.8 $ 656.9 Investment Services..................... 480.6 430.2 287.7 -------------------- ------------------- ---------------------- Total pre-tax adjusted earnings......... 1,679.5 1,381.0 944.6 Loss on CSG shares...................... (43.2) - - Investment (losses) gains, net of related DAC and other charges........ (731.9) (109.7) 105.3 Gain on sale of equity investee......... 1,962.0 - - Amortization of acquisition related goodwill and intangible assets....... (34.6) (3.2) (3.4) Minority purchase transaction related expenses..................... (493.9) - - Discontinued Operations................. (90.2) (43.3) (4.2) Pre-tax subsidiary minority interest.... 337.8 216.8 141.5 Non-recurring DAC adjustments........... - (131.7) - -------------------- ------------------- ---------------------- Earnings from Continuing Operations before Federal Income Taxes and Minority Interest......... $ 2,585.5 $ 1,309.9 $ 1,183.8 ==================== =================== ====================== Assets: Insurance............................... $ 88,576.4 $ 86,842.7 $ 75,626.0 Investment Services..................... 16,807.2 12,961.7 12,379.2 Consolidation/elimination............... (57.1) (8.9) (64.4) -------------------- ------------------- ---------------------- Total Assets............................ $ 105,326.5 $ 99,795.5 $ 87,940.8 ==================== =================== ======================
F-38 19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The quarterly results of operations for 2000 and 1999 are summarized below:
THREE MONTHS ENDED ------------------------------------------------------------------------------ MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 ----------------- ----------------- ------------------ ------------------ (IN MILLIONS) 2000 Total Revenues................ $ 1,622.5 $ 1,684.7 $ 1,728.3 $ 3,160.7 ================= ================= ================== ================== Earnings from Continuing Operations.................. $ 226.6 $ 256.9 $ 70.5 $ 742.9 ================= ================= ================== ================== Net Earnings.................. $ 221.7 $ 255.4 $ 70.5 $ 807.9 ================= ================= ================== ================== 1999 Total Revenues................ $ 1,489.0 $ 1,615.6 $ 1,512.1 $ 1,607.3 ================= ================= ================== ================== Earnings from Continuing Operations.................. $ 187.3 $ 222.6 $ 186.5 $ 182.1 ================= ================= ================== ================== Net Earnings.................. $ 182.0 $ 221.3 $ 183.1 $ 220.2 ================= ================= ================== ==================
F-39 20) ACCOUNTING FOR STOCK-BASED COMPENSATION The Holding Company sponsors a stock incentive plan for employees of Equitable Life. Alliance sponsors its own stock option plans for certain employees. The Company has elected to continue to account for stock-based compensation using the intrinsic value method prescribed in APB No. 25. Had compensation expense for the Holding Company and Alliance Stock Option Incentive Plan options been determined based on SFAS No. 123's fair value based method, the Company's pro forma net earnings for 2000, 1999 and 1998 would have been $1,627.3 million, $757.1 million and $678.4 million, respectively. In conjunction with approval of the agreement for AXA's acquisition of the minority interest in the Holding Company's Common Stock, generally all outstanding options awarded under the 1997 and 1991 Stock Incentive Plans were amended to become immediately and fully exercisable pursuant to their terms upon expiration of the initial tender offer. In addition, the agreement provided that at the effective time of the merger, the terms of all outstanding options granted under those Plans would be further amended and converted into options of equivalent intrinsic value to acquire a number of AXA ordinary shares in the form of American Depository Shares (ADSs). Also pursuant to the agreement, holders of non-qualified options were provided with an alternative to elect cancellation of those options at the effective time of the merger in exchange for a cash payment from the Holding Company. For the year ended December 31, 2000, the Company recognized compensation expense of $493.9 million, representing the cost of these Plan amendments and modifications offset by an addition to capital in excess of par value. The fair values of options granted after December 31, 1994, used as a basis for the pro forma disclosures above, were estimated as of the grant dates using the Black-Scholes option pricing model. The option pricing assumptions for 2000, 1999 and 1998 follow:
HOLDING COMPANY ALLIANCE ----------------------------------------- ------------------------------- 2000 1999 1998 2000 1999 1998 ------------- ------------- ------------ --------------------- --------- Dividend yield.... 0.32% 0.31% 0.32% 7.20% 8.70% 6.50% Expected volatility...... 28% 28% 28% 30% 29% 29% Risk-free interest rate............ 6.24% 5.46% 5.48% 5.90% 5.70% 4.40% Expected life in years........ 5 5 5 7.4 7 7.2 Weighted average fair value per option at grant-date...... $11.08 $10.78 $11.32 $8.32 $3.88 $3.86
F-40 A summary of the Holding Company and Alliance's option plans follows:
HOLDING COMPANY ALLIANCE ----------------------------- ----------------------------------- Weighted Weighted Average Average Exercise Exercise Price of Price of Shares Options Units Options (In Millions) Outstanding (In Millions) Outstanding ------------- ----------- ------------- ----------- Balance as of January 1, 1998........ 15.8 $14.53 10.6 $11.41 Granted................ 8.6 $33.13 2.8 $26.28 Exercised.............. (2.2) $10.59 (.9) $ 8.91 Forfeited.............. (.8) $23.51 (.2) $13.14 --------------- ---------------- Balance as of December 31, 1998...... 21.4 $22.00 12.3 $14.92 Granted................ 4.3 $31.70 2.0 $30.18 Exercised.............. (2.4) $13.26 (1.5) $ 9.51 Forfeited.............. (.6) $24.29 (.3) $17.79 --------------- ---------------- Balance as of December 31, 1999...... 22.7 $24.60 12.5 $17.95 Granted................ 6.5 $31.06 4.7 $50.93 Exercised.............. (4.5) $18.57 (1.7) $10.90 Forfeited.............. (1.2) $26.15 (.1) $26.62 --------------- ---------------- Balance as of December 31, 2000...... 23.5 $27.20 15.4 $17.95 =============== ================
Information about options outstanding and exercisable at December 31, 2000 follows:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE --------------------------------------------------- ------------------------------------- Weighted Average Weighted Weighted Range of Number Remaining Average Number Average Exercise Outstanding Contractual Exercise Exercisable Exercise Prices (In Millions) Life (Years) Price (In Millions) Price --------------------------------------- ---------------- --------------- ------------------ ---------------- Holding Company ---------------------- $ 9.06 -$13.88 3.4 3.3 $10.58 22.7 $27.14 $14.25 -$22.63 3.9 6.7 $20.81 - - $25.32 -$34.59 13.0 8.4 $29.76 - - $40.97 -$41.28 3.2 7.6 $41.28 - - $52.25 -$52.25 .1 9.7 $52.25 - - ----------------- ------------------ $ 9.06 -$41.28 23.5 7.3 $27.20 22.7 $27.14 ================= ================ =============== ================== ================ Alliance ---------------------- $ 6.63 -$11.13 3.6 3.6 $ 9.60 3.6 $ 9.60 $12.44 -$26.31 5.2 7.3 $21.29 2.6 $19.85 $27.31 -$30.94 1.9 8.9 $30.24 .4 $30.24 $48.50 -$53.75 2.5 9.5 $48.50 - - $48.50 -$53.75 2.2 10.0 $53.75 - - ----------------- ------------------ $ 6.63 -$53.75 15.4 7.4 $28.73 6.6 $14.87 ================= ================ =============== ================== ================
F-41 21) RELATED PARTY TRANSACTIONS Beginning January 1, 2000, the Company reimbursed the Holding Company for expenses relating to the Excess Retirement Plan, Supplemental Executive Retirement Plan and certain other employee benefit plans that provide participants with medical, life insurance, and deferred compensation benefits. Such reimbursement was based on the cost to the Holding Company of the benefits provided which totaled $16.0 million for 2000. Also in 2000, the Company paid $678.9 million of commissions and fees to AXA Distribution and its subsidiaries for sales of insurance products in 2000. The Company charged AXA Distribution's subsidiaries $395.0 million for their applicable share of operating expenses in 2000 pursuant to the Agreements for Services. 22) PRO FORMA FINANCIAL INFORMATION (UNAUDITED) Assuming the Bernstein acquisition had occurred on January 1, 1999, revenues for the Company would have been $8.79 billion and $7.05 billion for 2000 and 1999, respectively, on a pro forma basis. The impact of the acquisition on net earnings on a pro-forma basis would not have been material. This pro forma financial information does not necessarily reflect the results of operations that would have resulted had the Bernstein acquisition actually occurred on January 1, 1999, nor is the pro forma financial information necessarily indicative of the results of operations that may be achieved for any future period. F-42 ` PART C OTHER INFORMATION ----------------- Item 28. Financial Statements and Exhibits --------------------------------- (a) Financial Statements included in Part B. 1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 13 (Pooled) (The Aggressive Equity, Common Stock, Balanced and Bond Funds): - Report of Independent Accountants - PricewaterhouseCoopers LLP 2. Separate Account No. 3 (Pooled): - Statements of Assets and Liabilities, December 31, 2000 - Statements of Operations and Changes in Net Assets for the Year Ended December 31, 2000 - Portfolio of Investments, December 31, 2000 3. Separate Account No. 4 (Pooled): - Statements of Assets and Liabilities, December 31, 2000 - Statements of Operations and Changes in Net Assets for the Years Ended December 31, 2000 and 1999 - Portfolio of Investments, December 31, 2000 4. Separate Account No. 10 (Pooled): - Statement of Assets and Liabilities December 31, 2000 - Statements of Operations and Changes in Net Assets for the Years Ended December 31, 2000 and 1999 - Portfolio of Investments, December 31, 2000 5. Separate Account No. 13 (Pooled): - Statements of Assets and Liabilities, December 31, 2000 - Statements of Operations and Changes in Net Assets for the Years Ended December 31, 2000 and 1999 - Portfolio of Investments, December 31, 2000 6. Separate Account No. 51 (Pooled) -------------------------------- - Report of Independent Accountants - PricewaterhouseCoopers LLP - Statement of Assets and Liabilities, December 31, 2000 - Statements of Operations and Changes in Net Assets for the Years Ended December 31, 2000 and 1999 7. Separate Account No. 66: ------------------------ - Report of Independent Accountants - PricewaterhouseCoopers LLP - Statement of Assets and Liabilities, December 31, 2000 - Statements of Operations for the Year Ended December 31, 2000 - Statement of Changes in Net Assets for the Years Ended December 31, 2000 and 1999 8. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled), 13 (Pooled) and 51 (Pooled): Notes to Financial Statements 9. The Equitable Life Assurance Society of the United States: ---------------------------------------------------------- - Report of Independent Accountants - PricewaterhouseCoopers LLP - Consolidated Balance Sheets, as of December 31, 2000 and 1999 - Consolidated Statements of Earnings for the Years Ended December 31, 2000, 1999 and 1998 C-1 - Consolidated Statements of Shareholder's Equity for the Years Ended December 31, 2000, 1999 and 1998 - Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 - Notes to Consolidated Financial Statements (b) Exhibits. The following Exhibits are filed herewith: 1. Resolutions of the Board of Directors of The Equitable Life Assurance Society of the United States ("Equitable") authorizing the establishment of Separate Account Nos. 3, 4 and 10 and additional similar separate accounts, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant, filed April 14, 1986. 2. Not Applicable. 3. Not Applicable. 4. (a) Investment Advisory Agreement between Equitable and Equitable Investment Management Corporation dated October 31, 1983, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed on April 14, 1986. (b) Investment Advisory and Management Agreement by and between Alliance Capital Management L.P., Alliance Corporate Finance Group Incorporated, an indirect wholly owned subsidiary of Alliance, and The Equitable Life Assurance Society of the United States, incorporated by reference to Exhibit No. 4(b) to Registration Statement No. 33-76028 filed on March 3, 1994. (c) Participation Agreement among EQ Advisors Trust, The Equitable Life Assurance Society of the United States, Equitable Distributors, Inc. and EQ Financial Consultants, Inc. (now AXA Advisors, LLC), dated as of the 14th day of April 1997, incorporated by reference to the Registration Statement of EQ Advisors Trust (File No. 333-17217) on Form N-1A, filed August 28, 1997. (d) Sales Agreement, dated as of January 1, 1996, by and among Equico Securities, Inc., Equitable, and Separate Account A, Separate Account No. 301 and Separate Account No. 51, incorporated by reference to Exhibit No. 4(d) to Registration Statement No. 33-76028 filed on April 29, 1996. (e) Distribution Agreement for services by The Equitable Life Assurance Society of the United States to AXA Network, LLC and its subsidiaries dated January 1, 2000, incorporated by reference to Exhibit No. 3(d) to Registration Statement File No. 33-58950, filed on April 19, 2001. (f) Distribution Agreement for services by AXA Network, LLC and its subsidiaries to The Equitable Life Assurance Society of the United States dated January 1, 2000, incorporated by reference to Exhibit No. 3(e) to Registration File No. 33-58950, filed on April 19, 2001. 5. Not Applicable. 6. (a)1 Group Annuity Contract AC 5000 - 83T (No. 15,740) between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Master Retirement Trust, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. C-2 (a)2 Riders 1, 2, 3, 4, 5, 6 and 7 to Group Annuity Contract AC 5000 - 83T (No. 15,740) between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Master Retirement Trust, as executed, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 28, 1988. (a)3 Form of Rider 8 to Group Annuity Contract AC 5000 - 83T (No. 15,740) between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Master Retirement Trust, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed February 25, 1992. (a)4 Form of Rider 9 to Group Annuity Contract AC 5000 - 83T between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Master Retirement Trust, incorporated by reference to Exhibit No. 6(a)4 to Registration Statement No. 33-76028 filed on March 3, 1994. (b)1 Group Annuity Contract AC 5000 - 83E (No. 15,739) between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Retirement Trust, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (b)2 Riders l, 2, 3, 4, 5, 6 and 7 to Group Annuity Contract AC 5000 - 83E (No. 15,739) between Equitable and United States Trust Company of New York as Trustee under Retirement Investment Account Retirement Trust, as executed, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (b)3 Form of Rider 8 to Group Annuity Contract AC 5000 - 83E (No. 15,739) between Equitable and United States Trust Company of New York, as Trustee under Retirement Investment Account Master Retirement Trust, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed February 25, 1992. (b)4 Form of Rider 9 to Group Annuity Contract AC 5000 - 83E between Equitable and United States Trust Company of New York, as Trustee under Retirement Investment Account Master Retirement Trust, incorporated by reference to Exhibit No. 6(b)4 to Registration Statement No. 33-76028 filed on March 3, 1994. (c)1 Retirement Investment Account Master Retirement Trust effective as of January 1, 1979, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (c)2 Amendment to the Retirement Investment Account Master Retirement Trust effective July 1, 1984,incorporated by C-3 reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (c)3 Revised Retirement Investment Account Master Retirement Trust effective as of March 1, 1990, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 27, 1990. (c)4 Form of Restated Retirement Investment Account Master Retirement Trust as submitted to the Internal Revenue Service, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed February 25, 1992. 7. (a) Retirement Investment Account Enrollment Forms - Including Participation and Enrollment Agreements, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (b)(1) Supplementary Agreement to Master Retirement Trust Participation Agreement, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 14, 1986. (b)(2) Supplementary Agreement B to Master Retirement Trust Participation Agreement (RIA Loans), incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 28, 1988. (b)(3) Form of Supplementary Agreement A to Master Retirement Trust Participation Agreement (RIA Partial Funding), as amended, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 30, 1991. (b)(4) Form of Supplementary Agreement to Master Retirement Trust Participation Agreement (The Bond Account), incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed February 25, 1992. (c) Basic Installation Information Form, dated May, 1989, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 24, 1992. (d) RIA Installation Agreement, dated May, 1989, incorporated by reference to Registration No. 2-91983 on Form N-3 of Registrant filed April 24, 1992. C-4 8 (a) Copy of the Restated Charter of Equitable, as amended January 1, 1997, incorporated by reference to Exhibit No. 8(a) to the Registration Statement No. 333-23019 filed on March 7, 1997. (b) By-Laws of Equitable, as amended November 21, 1996, incorporated by reference to Exhibit No. 8(b) to the Registration Statement No. 333-23019 filed on March 7, 1997. 9. Not Applicable. 10. Not Applicable. 11. Not Applicable. 12. (a) Opinion and consent of Hope E. Rosenbaum-Werner, Vice President and Counsel of Equitable, incorporated by reference to Exhibit No. 12(a) to Registration Statement No. 333-23019 filed on March 7, 1997. (b) Opinion and Consent of Robin Wagner, Vice President and Counsel of Equitable. 13. (a) Consent of PricewaterhouseCoopers LLP. (b) Powers of Attorney, incorporated herein by reference to Exhibit No. 13(b) to Registration Statement File No. 333-23019 filed on April 26, 2000. (c) Power of Attorney for Claus-Michael Dill. 27. Financial Data Schedule. C-5 Item 29: Directors and Officers of Equitable. Set forth below is information regarding the directors and principal officers of Equitable. Equitable's address is 1290 Avenue of the Americas, New York, New York 10104. The business address of the persons whose names are preceded by an asterisk is that of Equitable.
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- DIRECTORS ----------- Francoise Colloc'h Director Member of AXA Management Board and Group Executive AXA President of AXA and various positions with 25, Avenue Matignon AXA affiliated companies. (Director, AXA Financial, 75008 Paris, France Inc.). Henri de Castries Director Director and Chairman of the Board of AXA Financial AXA (since April 1998), and prior thereto, Director and Vice 25, Avenue Matignon Chairman (February 1996 to April 1998); Chairman of the 75008 Paris, France Management Board of AXA (since January 2000) and various positions with AXA affiliated companies; formerly Vice Chairman of the Management Board of AXA (January 2000 to present); Senior Executive Vice President, Financial Services and Life Insurance Activities of AXA (January 1999 to January 2000). Claus-Michael Dill Director Chairman of the Management Board, AXA Colonia Konzern AG AXA Colonia Konzern AG (since June 1999). Member of the Management Board Gereonsdriesch 9-11 (representing the Germany and Central Europe operating 50670 Cologne, Germany unit) since April 1999. Prior thereto, member of the Holding Management Board of Gerling-Konzern in Cologne (1995 to April 1999). Chairman of the Management Board of AXA Colonia Versicherung AG, AXA Colonia Lebensversicherung AG, Colonia Nordstern Versicherungs- Management AG and Colonia Nordstern Lebensversicherungs- Management AG (since June 1999). Director of AXA Financial, Inc. (since May 2000).
C-6
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- Joseph L. Dionne Director Former Chairman (until January 2000) and Chief 198 N. Wilton Road Executive Officer (until April 1998) (Director, AXA New Canaan, CT 06840 Financial, Inc., Harris Corporation, and Ryder System, Inc.)) Denis Duverne Director Executive Vice President--International (US-UK-Benelux), AXA AXA and member of AXA Executive Board (since January 25, Avenue Matignon 2000); (Director, Alliance (since February 1996) and 75008 Paris, France formerly a Director of DLJ (from February 1997 until November 2000)). Jean-Rene Fourtou Director Vice Chairman of the Management Board of Aventis (since Aventis December 1999). Chairman and Chief Executive Officer 46 quai de la Rapee Rhone-Poulenc, S.A. (1986 to December 1999); (Director, 75601 Paris Cedex 12 AXA Financial, Inc., Finaxa, Rhodia, Schneider Electric France and Groupe Pernod-Ricard (July 1997 to present); Member, Supervisory Board, AXA. Former member of European Advisory Board of Bankers Trust Company and Consulting Council of Banque de France). Norman C. Francis Director President, Xavier University of Louisiana; (Chairman, Xavier University of Louisiana Liberty Bank and Trust, New Orleans, LA; (former Director, 7325 Palmetto Street First National Bank of Commerce, New Orleans, LA. New Orleans, LA 70125 Director, Piccadilly Cafeterias, Inc., and Entergy Corporation).
C-7
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- Donald J. Greene Director Of Counsel, LeBoeuf, Lamb, Greene & MacRae, LLP.; LeBoeuf, Lamb, Greene & MacRae Prior thereto, Partner of the firm (1965-1999). 125 West 55th Street (Director, AXA Financial, Inc. (since May 1992)). New York, NY 10019-4513 John T. Hartley Director Retired Chairman and Chief Executive Officer, the Harris Corporation Harris Corporation and the McGraw-Hill Companies 1025 NASA Boulevard Director, AXA Financial, Inc. (since May 1992). Melbourne, FL 32919 Former Director of Harris Corporation and The McGraw-Hill Companies)). John H.F. Haskell, Jr. Director Director, AXA Financial, Inc. (since July 1992); UBS Warburg LLC Senior Advisor, USB Warburg LLC (since 1999); Retired 299 Park Avenue Director (1975-2000); prior thereto, Managing Director New York, NY 10171 and member of its Board of Directors (1975-1999); Chairman, Supervisory Board, Dillon Read (France) Gestion (until 1998); Director, Dillon Read Limited; Director, Pall Corporation (November 1998 to present) and Kaydon Corporation (February 1984 to March 1998)). Mary R. (Nina) Henderson Director Former Corporate Vice President, Corporate Business Development 425 East 86th Street of Bestfoods (June 1999 until December 2000). Prior thereto, Apt. 12-C President, Bestfood's Grocery and Vice President, New York, NY 10028 Bestfoods (formerly CPC International, Inc.); (Director, Hunt Corporation, PACTIV Corporation and AXA Financial, Inc. (since December 1996)). W. Edwin Jarmain Director President, Jarmain Group, Inc. (since 1979) and an Jarmain Group, Inc. officer or director of several affiliated companies; 77 King Street West Chairman, FCA International, Ltd. (until May 1998); (Box 298 TD Centre) (Director, DLJ (since October 1992 until November 2000), Suite 4545, Royal Trust Tower Anglo-Canada General Insurance Company, AXA Insurance Toronto, Ontario M5K 1K2, (Canada), AXA Pacific Insurance Company and a former Canada Alternate Director, AXA Asia Pacific Holdings (December 1999 to September 2000). Chairman (non-executive) and Director, FCA International Ltd. (January 1994 to May 1998). Director, AXA Financial, Inc. (since July 1992)).
C-8
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- George T. Lowy Director Counselor-at-Law; Partner, Cravath, Swaine & Moore. Cravath, Swaine & Moore (Director, Eramet since June 1995). 825 Eighth Avenue New York, NY 10019 Didier Pineau-Valencienne Director Vice Chairman, Credit Suisse First Boston (since March 1999). Credit Suisse First Boston Honorary Chairman, Schneider Electric (formerly Schneider c/o Schneider Electric S.A.) (formerly Chairman and Chief Executive Officer) (1981 64 rue de Miromesnil to February 1999); Honorary Chairman, Square D (formerly 75008 Paris France Chairman and Chief Executive Officer); Director, AXA Financial, Inc. (since February 1996); Member, Supervisory Board, AXA and Lagardere, Director, CGIP, Sema Group plc (UK), and Aventis (formerly Rhone-Poulenc, S.A.), Soft Computing and Swiss Helvetic Fund; Member of Advisory Board of Booz Allen & Hamilton). George J. Sella, Jr. Director Director, AXA Financial, Inc. (since May 1992) (Director, P.O. Box 397 Coulter Pharmaceutical (May 1987 to present). Newton, NJ 07860 Peter J. Tobin Director Dean, Peter J. Tobin College of Business Administration, St. St. John's University John's University (August 1998 to present). Director, P.A. Bent Hall Consulting, The CIT Group, Inc. and H.W. Wilson Company. 8000 Utopia Parkway Jamaica, NY 11439 Dave H. Williams Director Senior Executive Vice President of AXA (January 1997 Alliance Capital Management to January 2000). Chairman and former Chief Executive Corporation Officer (until January 1999), Alliance, and Chairman and 1345 Avenue of the Americas Director of numerous subsidiary and affiliated companies of New York, NY 10105 Alliance; (Director, AXA Financial, Inc. (since May 1992).
C-9
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- OFFICERS AND DIRECTORS ---------------------- *Michael Hegarty Director and President See Column 2; Director (Since January 1998); Senior Vice (since January 1998) Chairman (since November 1999); Vice Chairman (April and Chief Operating 1998 to November 1999); Chief Operating Officer (since Officer (since February February 1998) and Senior Executive Vice President, AXA 1998) Financial, Inc. (January 1998 to April 1998); Director ACMC, Inc. (since March 1998), Director, Equitable Capital Management Corporation ("ECMC") (March 1998 to November 1999), Alliance (since May 1998) and DLJ (May 1998 to November 2000). Director, President and Chief Operating Officer, Equitable of Colorado (since December 1999), AXA Client Solutions, LLC and Equitable Distribution Holding Corp. (since September 1999). *Edward D. Miller Director (since August See Column 2; Director, President and Chief Executive 1997), Chairman of the Officer, AXA Financial, Inc. (since August 1997); Member of Board (since January the Management Board, AXA (since January 1999); (Director, 1998) and Chief Executive Alliance (since August 1997), DLJ (November 1997 to November Officer (since August 2000), ECMC (March 1998 to November 1999), ACMC, Inc. (since 1997) March 1998), and AXA Canada (since September 1998), and KeySpan Energy Corporation (since June 1993). Director, Chairman of the Board and Chief Executive Officer, The Equitable of Colorado (since December 1999), AXA Client Solutions, LLC and Equitable Distribution Holding Corp. (since September 1999) *Stanley B. Tulin Director and Vice See Column 2; Vice Chairman of the Board (since November Chairman of the Board 1999) and Chief Financial Officer (since May 1997); prior (since February 1998) thereto, Senior Executive Vice President (February 1998 to and Chief Financial November 1999), AXA Financial, Inc.; Executive Vice Officer (since May President, AXA (since December 2000); Member, AXA's 1996) Executive Committee (since December 2000); Director, Vice Chairman and Chief Financial Officer (since December 1999), Equitable of Colorado, AXA Client Solutions, LLC and Equitable Distributions Holding Corp. (since September 1999). (Director, Alliance (since July 1997) and DLJ (June 1997 to November 2000)).
C-10
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- OTHER OFFICERS *Leon B. Billis Executive Vice President Chief Information Officer (November 1994 to February 2001) (since February 1998) See Column 2; prior thereto, Senior Vice President (until and AXA Group Deputy Chief February 1998) and Chief Information Officer; Executive Vice Information Officer (since President (since September 1999) and AXA Group Deputy Chief February 2001) Information Officer (since February 2001), AXA Client Solutions, LLC; prior thereto, EVP and Chief Information Officer (September 1999 to February 2001). Director, J.M.R. Realty Services, Inc. (March 1995 to May 1999). *Derry E Bishop Executive Vice President See Column 2; Chief Agency Officer (December 1997 to May (since September 1998), 2000); Director and Executive Vice President, AXA Advisors Managing Director of LLC and Executive Vice President, Chief Agency Officer, AXA Retail Distribution Client Solutions, LLC (all since September 1999). Director (since May 2000) (since 1995) and Executive Vice President (since 1994) of and Senior Vice President AXA Advisors, LLC (formerly EQF). (January 1995 to September 1998)
C-11
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- *Harvey Blitz Senior Vice President See Column 2; Senior Vice President, AXA Financial, Inc.; Senior Vice President, AXA Client Solutions, LLC (since September 1999); Senior Vice President, The Equitable of Colorado, Inc.; Director and Chairman, Frontier Trust Company, FSB ("Frontier"); Executive Vice President and Director, AXA Advisors LLC (since September 1999) (formerly, "EQF" (until September 1999)); Senior Vice President and Director, AXA Network, LLC (formerly EquiSource); Director and Officer of various Equitable Life affiliates. *Kevin R. Byrne Senior Vice President and See Column 2; Senior Vice President and Treasurer, AXA Treasurer Financial, Inc.; Senior Vice President and Treasurer, AXA Client Solutions, LLC (since September 1999) and The Equitable of Colorado, Inc. (since December 1999). Treasurer, Frontier Trust Company, FSB (since 1990) and AXA Network, LLC (since 1999). Vice President and Treasurer (since March 1997), EQ ADVISORS TRUST. Director, Chairman, President and Chief Executive Officer, Equitable JV Holdings (since August 1997). Director (since July 1997), and Senior Vice President and Chief Financial Officer (since April 1998), ACMC. Senior Vice President and Treasurer, AXA Distribution Holding Corporation (since November 1999); Director (since July 1998), Chairman (since August 2000) and Chief Executive Officer (since September 1997), Equitable Casualty Insurance Company; Director (since July 1997), President and Chief Executive Officer (since August 1997), EQ Services, Inc. Previously held other officerships with Equitable Life and its affiliates.
C-12
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- *John A. Caroselli Executive Vice President See Column 2; Senior Vice President (February 1998 (since September 1998) to September 1998); Executive Vice President, AXA Client Solutions, LLC (since September 1999). *Judy A. Faucett Senior Vice President See Column 2; Senior Vice President, AXA Client Solutions, (since September 1996) LLC (since September 1999); Director, Chairman of the Board and Actuary (September and Chief Executive Officer, AXA Network, LLC (since July 1996 to December 1998). 1999). Partner and Senior Actuarial Consultant, Coopers & Lybrand, LLC (January 1989 to August 1996); Consulting Actuary, Milliman & Robertson (January 1986 to January 1989). *Alvin H. Fenichel Senior Vice President and See Column 2; Senior Vice President and Controller, AXA Controller Financial, Inc. (since May 1992), The Equitable of Colorado, Inc. (since December 1999) and AXA Client Solutions, LLC (since September 1999). Previously held other officerships with Equitable Life and its affiliates. *Ehrlich, Selig Senior Vice President Chief Actuary (September 1999 to September 2000): Senior Vice (since September 1999) President (since September 1999) and Deputy General Manager and Deputy General (since September 2000), AXA Client Solutions, LLC; Senior Manager (since September Vice President and Deputy General Manager (since September 2000) 2000), The Equitable of Colorado, Inc.
C-13
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- *Paul J. Flora Senior Vice President and See Column 2; Senior Vice President (since March 1996) and Auditor (since March 1996) Auditor (since September 1994), AXA Financial, Inc. Prior thereto, Vice President and Auditor (September 1984 to March 1996). Senior Vice President and Auditor, AXA Client Solutions, LLC (since September 1999). *Robert E. Garber Executive Vice President See Column 2; Executive Vice President and General Counsel, and Chief Legal Officer AXA Financial, Inc. Prior thereto, Executive Vice President (since November 1999) and General Counsel, Equitable Life. Executive Vice President (since September 1999) and Chief Legal Officer (since November 1999); AXA Client Solutions, LLC. Previously held other officerships with Equitable Life and its affiliates. *Donald R. Kaplan Senior Vice President See Column 2; Senior Vice President (since October 1999), (since September 1999) Chief Compliance Officer and Associate General Counsel and Chief Compliance (since April 1, 2000), AXA Client Solutions, LLC. Previously Officer and Associate held other officerships with Equitable Life and its General Counsel affiliates. *Michael S. Martin Executive Vice President See Column 2; Chief Marketing Officer (December 1997 to May (September 1998 to 2000). Prior thereto, Senior Vice President and Chief present) and Managing Marketing Officer. Director (since July 1999), Chairman, Director of Retail Acting President (since February 2000) and Chief Executive Distribution (since Officer (since August 1999), AXA Advisors LLC. Vice May 2000) President, EQ ADVISORS TRUST (until April 1998), Director Equitable Underwriting and Sales Agency (Bahamas), Ltd. (May 1996 to December 2000) and AXA Network LLC (since July 1999); President (since February 2000); Executive Vice President (since December 1998), The Equitable of Colorado; prior thereto, Director and Senior Vice President (since December 1998). Executive Vice President and Chief Marketing Officer, AXA Client Solutions, LLC (since September 1999). Previously held other officerships with Equitable Life and its affiliates. *Richard J. Matteis Executive Vice President Director, AXA Advisors LLC (October 1998 to May 1999). (since May 1998) Executive Vice President, AXA Client Solutions, LLC (since September 1999). *Peter D. Noris Executive Vice President See Column 2; Executive Vice President (since May 1995) and and Chief Investment Chief Investment Officer (since July 1995), AXA Financial. Officer President and Trustee (since March 1997), EQ ADVISORS TRUST. Executive Vice President and Chief Investment Officer, The Equitable of Colorado (since December 1999), Executive Vice President, AXA Client Solutions, LLC (since September 1999). Executive Vice President, EQF (now AXA Advisors, LLC), (November 1996 to September 1999). Director, EREIM Managers Corp. (since July 1997), and EREIM LP Corp. (since October 1997). *Brian S O'Neil Executive Vice President See Column 2; Executive Vice President, AXA Client (since June 1998) Solutions, LLC (since September 1999). Director of Investment, AXA Investment Management (January 1998 to June 1998); Chief Investment Officer, AXA Investment Management (July 1995 to January 1998). Vice President (since March 1999), EQ ADVISORS TRUST. *William I. Levine Executive Vice President Executive Vice President and Chief Information Officer, AXA and Chief Information Client Solutions, LLC (since February 2001). Officer (since February 2001)
C-14
PRINCIPAL OCCUPATION NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS) BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS ------------------------------------ -------------------------- ---------------------------------------------------- *Anthony C. Pasquale Senior Vice President See Column 2; Senior Vice President, AXA Client Solutions LLC (since September 1999). Director, Chairman and Chief Operating Officer, Casualty, (September 1997 to August 2000). Director, EREIM LP Corp. (since October 1997). Previously held other officerships with Equitable Life and its affiliates. *Pauline Sherman Senior Vice President See Column 2, Prior thereto, Vice President, Secretary and (since February 1999) Associate General Counsel. Senior Vice President, Secretary Secretary and Associate and Associate General Counsel, AXA Financial Inc. and AXA General Counsel (since Client Solutions LLC (since November 1999). Senior Vice September 1995) President, Secretary, and Associate General Counsel, Equitable of Colorado (since December 1999). Secretary, AXA Distribution Holding Corporation (since September 1999). Previously held other officerships with Equitable Life. *Richard V. Silver Senior Vice President and See Column 2; prior thereto, Deputy General Counsel General Counsel (1996-1999). Senior Vice President and Associate General (since November 1999) Counsel, AXA Financial, Inc. (since September 1996). Senior Vice President and General Counsel, AXA Client Solutions LLC (since November 1999). Senior Vice President and General Counsel, Equitable of Colorado, Inc. (since December 1999). Director, AXA Advisors LLC. Senior Vice President and General Counsel, EIC (June 1997 to March 1998). Previously held other officerships with Equitable Life and its affiliates. *Jose S. Suquet Senior Executive Vice See Column 2; prior thereto, Executive Vice President and President (February 1998 Chief Agency Officer (until December 1997); Senior Executive to present) and Chief Vice President (since September 1999); prior thereto, Distribution Officer Executive Vice President (May 1996 to September 1999), AXA (December 1997 to present) Financial, Inc.; Vice President, HRT (March 1998 to present). Director and Chairman, Equitable Distributors, Inc. (since December 1997); Director and Chairman, Equitable Distributors, LLC (since April 2000); Senior Executive Vice President and Chief Distribution Officer, AXA Client Solutions, LLC (since September 1999); Senior Executive Vice President, The Equitable of Colorado, Inc. *Maureen K. Wolfson Vice President See Column 2. Vice President, AXA Client Solutions, LLC (since April 2000). *Gregory C. Wilcox Executive Vice President See Column 2; Executive Vice President (since November (since September 1998), 1999), AXA Financial, Inc.; prior thereto, Senior Vice Senior Vice President President. Senior Vice President, AXA (since December 2000). (May 1992 to September Executive Vice President, AXA Client Solutions, LLC (since 1998) September 1999) *R. Lee Wilson Executive Vice President See Column 2; Executive Vice President, AXA Client Solutions (since May 1998) and LLC (since September 1999). Executive Vice President, The Deputy Chief Financial Equitable of Colorado, Inc. (since December 1999); Director, Officer (September 1998 Equitable Distributors, Inc. (since May 2000); Director, to July 1999) Equitable Distributors, LLC (since April 2000). Prior thereto, Executive Vice President, Chase Manhattan Bank.
C-15 Item 30. Persons Controlled by or Under Common Control with the Insurance ---------------------------------------------------------------- Company or Registrant --------------------- Separate Account Nos. 3, 4, 10, 13 and 66 of The Equitable Life Assurance Society of the United States (the "Separate Accounts") are separate accounts of Equitable. Equitable, a New York stock life insurance company is a wholly owned subsidiary of AXA Financial, Inc. (the "Holding Company"), (formerly The Equitable Companies Incorporated). AXA owns 100% of the Holding Company's outstanding common stock plus convertible preferred stock. AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable life. AXA, a French company, is the holding company for an international group of insurance and related financial services companies. C-16 ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
SOVEREIGN % OF VOTING PRINCIPAL POWER UNDER NAME OF SECURITIES BUSINESS WHICH ORGANIZED NAME OF COMPANY CONTROLLING ENTITY OWNED ----------------------------------------------------------------------------------------------------------------------------------- DE AXA Financial, Inc. The Axa Group ND Frontier Trust Company, FSB AXA Financial, Inc. 100.00% DE AXA Client Solutions, LLC AXA Financial, Inc. 100.00% DE AXA Distribution Holding Corporation AXA Client Solutions, LLC 100.00% DE AXA Advisors, LLC AXA Distribution Holding Corporation 100.00% Operating DE AXA Network, LLC AXA Distribution Holding Corporation 100.00% Operating AL AXA Network of Alabama, LLC AXA Network, LLC 100.00% Operating DE AXA Network of Connecticut, Maine AXA Network, LLC 100.00% and New York, LLC Operating MA AXA Network Insurance Agency of AXA Network, LLC 100.00% Massachusetts, LLC Operating NV AXA Network of Nevada, Inc. AXA Network, LLC - Operating P.R. AXA Network of Puerto Rico, Inc. AXA Network, LLC - Operating TX AXA Network Insurance Agency of of Texas, Inc. AXA Network, LLC - Insurance NY The Equitable Life Assurance Society AXAeClient Solutions, LLC 100.00% of the United States Insurance CO The Equitable of Colorado, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment DE Equitable Deal Flow Fund, L.P. The Equitable Life Assurance Society - of the United States Investment DE Equitable Managed Assets, L.P. Equitable Deal Flow Fund, L.P. - Investment ** Real Estate Partnership Equities (various) The Equitable Life Assurance Society - of the United States HCO NY Equitable Holdings, LLC The Equitable Life Assurance Society 100.00% of the United States Real Estate NY EREIM LP Associates (L.P.) The Equitable Life Assurance Society - of the United States Investment NY EML Associates, L.P. EREIM LP Associates (L.P.) - ACMC, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment PA Wil-Gro, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment DE STCS, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment MA Fox Run, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment MD FTM Corp. The Equitable Life Assurance Society 100.00% of the United States Investment DE EVSA, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment CA Equitable BJVS, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment MA Equitable Rowes Wharf, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment TX GP/EQ Southwest, Inc. The Equitable Life Assurance Society 100.00% of the United States Operating DE Equitable Structured Settlement Corp. The Equitable Life Assurance Society 100.00% of the United States Investment DE ELAS Realty, Inc. The Equitable Life Assurance Society 100.00% of the United States Real Estate DE Prime Property Funding II, Inc. The Equitable Life Assurance Society 100.00% of the United States Investment FL Sarasota Prime Hotels, LLC The Equitable Life Assurance Society 100.00% of the United States Investment MI ECLL, Inc. The Equitable Life Assurance Society 100.00% of the United States
LISTING A -- EQUITABLE HOLDINGS, LLC
SOVEREIGN % OF VOTING PRINCIPAL POWER UNDER NAME OF SECURITIES BUSINESS WHICH ORGANIZED NAME OF COMPANY CONTROLLING ENTITY OWNED ----------------------------------------------------------------------------------------------------------------------------------- AXA Financial, Inc. The AXA Group - AXA Client Solutions, LLC AXA Financial, Inc. - The Equitable Life Assurance Society AXA Client Solutions, LLC - of the United States Equitable Holdings, LLC The Equitable Life Assurance Society - of the United States Operating DE ELAS Securities Acquisition Corporation Equitable Holdings, LLC 100.00% Operating MA 100 Federal Street Realty Corporation Equitable Holdings, LLC 100.00% Operating MA 100 Federal Street Funding Corporation Equitable Holdings, LLC 100.00% Operating VT Equitable Casualty Insurance Company * Equitable Holdings, LLC 100.00% Operating DE EREIM LP Corporation Equitable Holdings, LLC 100.00% Operating NY EREIM LP Associates (L.P.) EREIM LP Corporation - Investment NY EML Associates, L.P. EREIM LP Associates (L.P.) - Operating DE ECMC, LLC Equitable Holdings, LLC 100.00% Investment DE Equitable Capital Private Income & EMC, LLC - Equity Partnership II, L.P. Operating DE Alliance Capital Management Corporation Equitable Holdings, LLC 100.00% Operating DE Equitable JV Holding Corp. Equitable Holdings, LLC 100.00% Operating DE EQ Services, Inc. Equitable Holdings, LLC 100.00% Operating DE EREIM Managers Corporation Equitable Holdings, LLC 100.00% Investment DE ML/EQ Real Estate Portfolio, L.P. EREIM Managers Corporation - Investment NY EML Associates, L.P. ML/EQ Real Estate Portfolio - Investment DE Equitable JVS, Inc. Equitable Holdings, LLC 100.00% Investment NY Astor Times Square Corp. Equitable JVS, Inc. 100.00% Investment NY Astor/Broadway Acquisition Corp. Equitable JVS, Inc. 100.00% Investment TX PC Landmark, Inc. Equitable JVS, Inc. 100.00% Investment DE EJSVS, Inc. Equitable JVS, Inc. 100.00% Investment MD Equitable JVS II, Inc. Equitable Holdings, LLC 100.00% Investment GA Six-Pac G.P., Inc. Equitable Holdings, LLC 100.00% Operating DE Equitable Distributors, Inc. Equitable Holdings, LLC 100.00% Operating DE Equitable Distributors, LLC Equitable Holdings, LLC 100.00% Operating AL Equitable Distributors Insurance Equitable Distributors, LLC 100.00% Agency of Alabama, LLC Operating DE Equitable Distriburors Insurance Agency of Equitable Distributors, LLC 100.00% Connecticut, Maine and New York, LLC Operating DE J.M.R. Realty Services, Inc. Equitable Holdings, LLC 100.00%
LISTING B -- ALLIANCE CAPITAL MANAGEMENT CORP.
SOVEREIGN % OF VOTING PRINCIPAL POWER UNDER NAME OF SECURITIES BUSINESS WHICH ORGANIZED NAME OF COMPANY CONTROLLING ENTITY OWNED ----------------------------------------------------------------------------------------------------------------------------------- AXA Financial, Inc. The AXA Group - AXA Client Solutions, LLC AXA Financial, Inc. - The Equitable Life Assurance Society AXA Client Solutions, LLC - of the United States Equitable Holdings, LLC The Equitable Life Assurance Society - of the United States Alliance Capital Management Corporation Equitable Holdings, LLC - Operating DE Alliance Capital Management Holding L.P. Alliance Capital Management - Operating DE Alliance Capital Management L.P. Alliance Capital Management - Operating DE Albion Alliance LLC Alliance Capital Management, L.P. 37.60% HCO DE Cursitor Alliance LLC Alliance Capital Management, L.P. 93.00% Operating U.K. Cursitor Alliance Holdings Ltd. Cursitor Alliance LLC 100.00% Operating MA Draycott Partners. Ltd. Cursitor Alliance Holdings, Ltd. 100.00% Operating U.K. Cursitor Alliance Services Ltd. Cursitor Alliance Holdings, Ltd. 100.00% Operating Lux. Cursitor Management Co. S.A. Cursitor Alliance Holdings, Ltd. 100.00% Operating U.K. Alliance Asset Allocation Ltd. Cursitor Alliance Holdings, Ltd. 100.00% Operating NY Cursitor Eaton Asset Management Co. Alliance Asset Allocation, Ltd. 50.00% Operating France Alliance Cecogest Alliance Asset Allocation, Ltd. 75.00% HCO DE Alliance Capital Management LLC Alliance Capital Management, L.P. 100.00% HCO DE Sanford C. Bernstein & Co., LLC Alliance Capital Management, LLC 100.00% HCO DE Alliance Capital Management Corp. of Delaware Alliance Capital Management, L.P. 100.00% Operating U.K. Sanford C. Bernstein Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating Aust. Sanford C. Bernstein Proprietary Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Fund Services, Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Fund Distributors, Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Capital Oceanic Corp. Alliance Capital Management Corp. 100.00% of Delaware Operating Brazil Alliance Capital Management (Brazil) Ltd. Alliance Capital Management Corp. 99.00% of Delaware Operating Aust. Alliance Capital Management Australia Limited Alliance Capital Management Corp. 100.00% of Delaware Operating DE Meiji - Alliance Capital Corp. Alliance Capital Management Corp. 50.00% of Delaware Operating Lux. Alliance Capital (Luxembourg) S.A. Alliance Capital Management Corp. 99.98% of Delaware Operating DE Alliance Barra Research Institute, Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Capital Management Canada, Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Capital Global Derivatives Corp. Alliance Capital Management Corp. 100.00% of Delaware Operating Lux. ACM Global Investor Services S.A. Alliance Capital Management Corp. 99.00% of Delaware Operating Spain ACM Fund Services (Espana) S.L. ACM Global Investor Services S.A. 100.00% Operating Singapore Alliance Capital Management (Singapore) Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating Cayman Isl. ACM CIIC Investment Management Ltd. Alliance Capital Management Corp. 54.00% of Delaware Operating DE ACM Software Services Ltd. Alliance Capital Management Corp. 100.00% of Delaware
LISTING B -- ALLIANCE CAPITAL MANAGEMENT CORP.
SOVEREIGN % OF VOTING PRINCIPAL POWER UNDER NAME OF SECURITIES BUSINESS WHICH ORGANIZED NAME OF COMPANY CONTROLLING ENTITY OWNED ----------------------------------------------------------------------------------------------------------------------------------- AXA Financial, Inc. The AXA Group - AXA Client Solutions, LLC AXA Financial, Inc. 100.00% The Equitable Life Assurance Society AXA Client Solutions, LLC - of the United States Equitable Holdings, LLC The Equitable Life Assurance Society - of the United States Alliance Capital Management Corporation Equitable Holdings, LLC - Alliance Capital Management L.P. Alliance Capital Management - Corporation Alliance Capital Management Corp. Alliance Capital Management L.P. - of Delaware (Cont'd) Operating Austria East Fund Managementberatung GmbH. Alliance Capital Management Corp. of 51.00% of Delaware Operating Czech Albion Alliance EFM East Fund Managementberatung GmbH 49.00% Operating Cyprus East Fund Management (Cyprus) Ltd. East Fund Managementberatung GmbH 100.00% Operating Romania EFM Consultanta Financiara Bucuresti SRL East Fund Management (Cyprus) Ltd. 100.00% Operating Mauritius Alliance Capital (Mauritius) Private Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating India Alliance Capital Asset Management Alliance Capital (Mauritius) 75.00% (India) Private Ltd. Private Ltd. Operating India ACSYS Software India Private Ltd. Alliance Capital (Mauritius) 51.00% Private Ltd. Operating India ACAM Trust Company Private Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Eastern Europe, Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating DE Alliance Capital Management (Asia) Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating Turkey Alliance Capital Management (Turkey) Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating Japan Alliance Capital Asset Management (Japan) Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating U.K. Alliance Capital Limited Alliance Capital Management Corp. 100.00% of Delaware Operating U.K. Alliance Capital Services Ltd. Alliance Capital Limited 100.00% Operating U.K. Dimensional Trust Management Ltd. Alliance Capital Services Ltd. 100.00% Operating DE Alliance Corporate Finance Group Inc. Alliance Capital Management Corp. 100.00% of Delaware Operating Brazil BCN Alliance Capital Management SA Alliance Capital Management Corp. 50.00% of Delaware Operating Poland Przymierze Trust Fund Co. Alliance Capital Management Corp. 49.00% of Delaware Operating Russia Alliance SBS-AGRO Capital Management Co. Alliance Capital Management Corp. 49.00% of Delaware Operating Poland Pekao/Alliance PTE S.A. Alliance Capital Management Corp. 49.00% of Delaware Operating U.K. Whittingdale Holdings Ltd. Alliance Capital Management Corp. 100.00% of Delaware Operating U.K. Alliance Capital Whittingdale Ltd. Whittingdale Holdings Ltd. 100.00% Operating U.K. ACM Investments Ltd. Whittingdale Holdings Ltd. 100.00% Operating U.K. Whittingdale Nominees Ltd. Whittingdale Holdings Ltd. 100.00% Operating So Korea Hanwha Investment Trust Mgmt. Co., Ltd Alliance Capital Management Corp. 20.00% of Delaware Operating H.K. New Alliance Asset Management (Asia) Ltd Alliance Capital Management Corp. 50.00% of Delaware Operating Lux. ACM New-Alliance (Luxembourg) S.A. Alliance Capital Management Corp. 100.00% of Delaware Operating So Africa Alliance Capital Mgmt. (Proprietary) Ltd. Alliance Capital Management Corp. 80.00% of Delaware Operating Zimbabwe Alliance-MBCA Capital (Private) Ltd. Alliance Capital Mgmt. 50.00% (Proprietary) Ltd. Operating Namibia Alliance Odyssey Capital Mgmt. (Nambia) Alliance Capital Mgmt. 100.00% (Proprietary) Ltd. (Proprietary) Ltd.
AXA GROUP CHART
SOVEREIGN POWER % OF VOTING UNDER WHICH SECURITIES PRINCIPAL BUSINESS ORGANIZED NAME OF COMPANY NAME OF CONTROLLING ENTITY OWNED ------------------------------------------------------------------------------------------------------------------------------------ FINANCIAL SERVICES & REAL ESTATE AUSTRALIA NATIONAL MUTUAL FUND MANAGEMENT AXA ASIA PACIFIC HOLDINGS LIMITED 100.00 FINANCIAL SERVICES & REAL ESTATE BELGIUM AXA INVESTMENT MANAGERS AXA INVESTMENT MANAGERS 100.00 BRUXELLES FINANCIAL SERVICES & REAL ESTATE BELGIUM AXA BANK BELGIUM AXA HOLDINGS BELGIUM 100.00 FINANCIAL SERVICES & REAL ESTATE BELGIUM IPPA VASTGOED AXA HOLDINGS BELGIUM 100.00 FINANCIAL SERVICES & REAL ESTATE BELGIUM ROYALE BELGE INVESTISSEMENT AXA ROYALE BELGE 33.03 FINANCIAL SERVICES & REAL ESTATE BELGIUM ROYALE BELGE INVESTISSEMENT AXA ROYALE BELGE 66.97 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA ROYALE BELGE 1.89 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA ROYALE BELGE 2.32 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA 45.04 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA CORPORATE SOLUTIONS 0.81 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA ASSURANCES IARD 15.11 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA COLONIA KONZERN AG 5.93 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS DIRECT ASSURANCES IARD 0.20 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA LEVEN NV 2.10 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS NATIONAL MUTUAL FUND MANAGEMENT 4.07 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA UK PLC 18.40 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA INVESTMENT MANAGERS AXA COURTAGE IARD 1.62 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA GRANDE ARMEE AXA INVESTMENT MANAGERS 99.99 FINANCIAL SERVICES & REAL ESTATE FRANCE AXA GESTION FCP AXA INVESTMENT MANAGERS PARIS 99.99 FINANCIAL SERVICES 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INSURANCE & REINSURANCE LUXEMBOURG PANEURORE ROYALE BELGE INVESTISSEMENT 20.00 SOVEREIGN POWER % OF VOTING UNDER WHICH SECURITIES PRINCIPAL BUSINESS ORGANIZED NAME OF COMPANY NAME OF CONTROLLING ENTITY OWNED ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE & REINSURANCE LUXEMBOURG PANEURORE SAINT GEORGES RE 20.00 INSURANCE & REINSURANCE MOROCCO AXA ASSURANCE MAROC AXA ONA 99.99 INSURANCE & REINSURANCE MOROCCO EPARGNE CROISSANCE AXA ASSURANCE MAROC 99.59 INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL COMPANHIA DE AXA CORPORATE SOLUTIONS ASSURANCE 9.07 SEGUROS INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL COMPANHIA DE AXA PORTUGAL SEGUROS VIDA 2.15 SEGUROS INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL COMPANHIA DE AXA CONSEIL VIE 5.37 SEGUROS INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL COMPANHIA DE AXA 82.98 SEGUROS INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL SEGUROS VIDA AXA CONSEIL VIE 87.63 INSURANCE & REINSURANCE PORTUGAL AXA PORTUGAL SEGUROS VIDA AXA 7.46 INSURANCE & REINSURANCE SINGAPORE AXA INSURANCE SINGAPORE AXA 25.77 INSURANCE & REINSURANCE SINGAPORE AXA INSURANCE SINGAPORE AXA INSURANCE INVESTMENT HOLDING 74.23 INSURANCE & REINSURANCE SINGAPORE AXA LIFE SINGAPOUR NATIONAL MUTUAL INTERNATIONAL 100.00 INSURANCE & REINSURANCE SINGAPORE AXA CORPORATE SOLUTIONS ASIA AXA CORPORATE SOLUTIONS 100.00 PACIFIC PRIVATE LTD INSURANCE & REINSURANCE SPAIN AXA AURORA IBERICA AXA AURORA 99.68 INSURANCE & REINSURANCE SPAIN AXA AURORA VIDA DE SEGUROS Y AXA 1.45 REASEGUROS INSURANCE & REINSURANCE SPAIN AXA AURORA VIDA DE SEGUROS Y AURORA IBERICA SA DE SEGUROS Y 98.51 REASEGUROS REAS. INSURANCE & REINSURANCE SPAIN AYUDA LEGAL SA DE SEGUROS Y AXA AURORA VIDA DE SEGUROS Y 12.00 REASEGUROS REASEGUROS INSURANCE & REINSURANCE SPAIN AYUDA LEGAL SA DE SEGUROS Y AURORA IBERICA SA DE SEGUROS Y 88.00 REASEGUROS REAS. INSURANCE & REINSURANCE SPAIN HILO DIRECT SA DE SEGUROS Y AXA AURORA 50.00 REASEGUROS INSURANCE & REINSURANCE SPAIN AURORA IBERICA SA DE SEGUROS Y AXA AURORA 99.68 REAS. INSURANCE & REINSURANCE SWITZERLAND AXA COMPAGNIE D'ASSURANCES AXA 99.95 INSURANCE & REINSURANCE SWITZERLAND AXA COMPAGNIE D'ASSURANCE SUR AXA 94.99 LA VIE INSURANCE & REINSURANCE SWITZERLAND AXA COMPAGNIE D'ASSURANCE SUR AXA COMPAGNIE D'ASSURANCES 5.00 LA VIE INSURANCE & REINSURANCE THE NETHERLANDS AXA LEVEN NV AXA VERZEKERINGEN 100.00 INSURANCE & REINSURANCE THE NETHERLANDS UNIROBE GROEP AXA NEDERLAND BV 100.00 INSURANCE & REINSURANCE THE NETHERLANDS AXA SCHADE AXA VERZEKERINGEN 100.00 INSURANCE & REINSURANCE THE NETHERLANDS AXA ZORG NV AXA VERZEKERINGEN 100.00 INSURANCE & REINSURANCE TURKEY AXA OYAK HAYAT SIGORTA AXA OYAK HOLDING AS 100.00 INSURANCE & REINSURANCE TURKEY AXA OYAK SIGORTA AXA OYAK HAYAT SIGORTA 0.70 INSURANCE & REINSURANCE TURKEY AXA OYAK SIGORTA AXA OYAK HOLDING AS 70.32 INSURANCE & REINSURANCE UNITED STATES AXA CORPORATE SOLUTIONS AXA CORPORATE SOLUTIONS 100.00 INSURANCE CO INSURANCE & REINSURANCE UNITED STATES AXA AMERICA CORPORATE AXA CORPORATE SOLUTIONS 100.00 SOLUTIONS, INC INSURANCE & REINSURANCE UNITED STATES THE EQUITABLE LIFE ASSURANCE AXA FINANCIAL INC. 100.00 SOCIETY INSURANCE & REINSURANCE UNITED STATES AXA CORPORATE SOLUTIONS AXA AMERICA CORPORATE SOLUTIONS, 100.00 REINSURANCE CY INC INSURANCE & REINSURANCE UNITED STATES AXA CORPORATE SOLUTIONS AXA CORPORATE SOLUTIONS 100.00 AMERICA INS. CY REINSURANCE CY INSURANCE & REINSURANCE UNITED STATES AXA CORPORATE SOLUTIONS LIFE AXA AMERICA CORPORATE SOLUTIONS, 0.21 REINSURANCE COMPANY INC INSURANCE & REINSURANCE UNITED STATES AXA CORPORATE SOLUTIONS LIFE AXA CORPORATE SOLUTIONS 99.79 REINSURANCE COMPANY REINSURANCE CY
Item 31. Number of Contractowners ------------------------ As of February 28, 2001 there were 1,211 owners of qualified RIA Contracts offered by the registrant. Item 32. Indemnification --------------- (a) Indemnification of Directors and Officers The By-Laws of The Equitable Life Assurance Society of the United States ("Equitable Life") provide, in Article VII, as follows: 7.4 Indemnification of Directors, Officers and Employees. (a) To the extent permitted by the law of the State of New York and subject to all applicable requirements thereof: (i) any person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate, is or was a director, officer or employee of the Company shall be indemnified by the Company; (ii) any person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate serves or served any other organization in any capacity at the request of the Company may be indemnified by the Company; and (iii) the related expenses of any such person in any of said categories may be advanced by the Company. (b) To the extent permitted by the law of the State of New York, the Company may provide for further indemnification or advancement of expenses by resolution of shareholders of the Company or the Board of Directors, by amendment of these By-Laws, or by agreement. (Business Corporation Law ss. 721-726; Insurance Law ss. 1216) The directors and officers of Equitable Life are insured under policies issued by Lloyd's of London, X.L. Insurance Company and ACE Insurance Company. The annual limit on such policies is $150 million, and the policies insure that officers and directors against certain liabilities arising out of their conduct in such capacities. (b) Indemnification of Principal Underwriter To the extent permitted by law of the State of New York and subject to all applicable requirements thereof, AXA Advisors, LLC has undertaken to indemnify each of its directors and officers who is made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact the director or officer, or his or her testator or intestate, is or was a director or officer of AXA Advisors, LLC. (c) Undertaking Insofar as indemnification for liability arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the registrant 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 33. Business and Other Connections of Investment Adviser ---------------------------------------------------- The Equitable Life Assurance Society of the United States ("Equitable Life") acts as the investment manager for Separate Account Nos. 3, 4, 10 and 13. In providing these services to the Separate Accounts, Equitable Life uses the personnel and facilities of Alliance Capital Management L.P. ("Alliance"), a limited partnership, that is majority-owned by Equitable Life, to provide personnel and facilities for portfolio selection and transaction services. Alliance recommends the securities investments to be purchased and sold for Separate Account Nos. 3, 4, 10 and 13 and arranges for the execution of portfolio transactions. Alliance coordinates related accounting and bookkeeping functions with Equitable Life. Both Equitable Life and Alliance are registered investment advisers under the Investment Advisers Act of 1940. Information regarding the directors and principal officers of Equitable is provided in Item 29 of this Part C and is incorporated herein by reference. C-32 Set forth below is certain information regarding the directors and principal officers of Alliance Capital Management Corporation. The business address of the Alliance persons whose names are preceded by an asterisk is 1345 Avenue of the Americas, New York, New York 10105.
POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- Directors *Dave H. Williams Director and Chairman See Column 2; Chief of the Board Executive Officer (until January 1999); Director- The Equitable Life Assurance Society of the United States ("Equitable Life") and AXA Financial, Inc., Senior Executive Vice President and Member of Executive Committee - AXA (January 1997 to January 2000).
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- Donald H. Brydon Director Chairman and Chief AXA Investment Managers S.A. Executive Officer - 7 Newgate Street AXA Investment Managers London EC1A 7NX S.A. England *Bruce W. Calvert Director, Vice See Column 2; Chief Chairman and Chief Investment Officer (until Executive Officer January 1999) (January 1999 to present)
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- *John D. Carifa Director, President and See Column 2. Chief Operating Officer Henri de Castries Director Chairman of AXA's AXA Management Board (January 23, Avenue Matignon 20, 2000 to present); 75008, Paris, France Vice Chairman of AXA's Management Board and Senior Executive Vice President, Financial Services and Life Insurance Activities - AXA and various positions with AXA affiliated companies (January 1999 - January 2000); Director and Chairman (April 1998 to present) - AXA Financial, Inc.; Director - Equitable Life. Denis Duverne Director Group Executive Vice AXA President - Finance, 21, Avenue Matignon Control and Strategy, 75008, Paris, France AXA; Director - Equitable Life (February 1988 to present). Richard Dziadzio Director Senior Vice President - AXA Asset Management 21, Avenue Matignon Activities, AXA 75008, Paris, France Alfred Harrison Director, Vice Chairman See Column 2. Alliance Capital Management L.P. 601 Second Avenue South Suite 5000 Minneapolis, MN 55402 Herve Hatt Director Senior Vice President, AXA AXA. 23/25 Ave. Matignon 75008, Paris, France Michael Hegarty Director Director, Senior Vice AXA Financial, Inc. Chairman (February 1998 1290 Avenue of the Americas to present) and Chief 16th Floor Operating Officer - AXA New York, NY 10104 Financial (November 1999 to present); President and Director (January 1998 to Present); Chief Operating Officer (February 1998 to Present), Equitable Life, prior thereto, formerly Vice Chairman Chase Manhattan Corporation (1996-1997).
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- Roger Hertog Director and See Column 2; President of Alliance Capital Vice Chairman Sanford C. Bernstein Inc. Management L.P. (1993 to October 2, 2000). 767 5th Avenue New York, NY 10019 Benjamin D. Holloway Director Financial Consultant; Director - Continental Companies Interstate Hotels Corporation 3250 Mary Street, Suite 501 and the Museum of Contemporary Miami, Florida 33133 Art in Miami. W. Edwin Jarmain Director President - Jarmain Group Jarmain Group Inc. Inc. Suite 4545 Royal Trust Tower 77 King Street West Toronto, Ontario M5K 1K2 Canada Edward D. Miller Director Director, Chairman (January AXA Financial, Inc. 1998 to present) and Chief 16th Floor Executive Officer 1290 Avenue of the Americas (August 1997 to present) - New York, NY 10104 Equitable Life; Director, President and Chief Executive Officer - AXA Financial, Inc. (all August 1997 to present); Senior Executive Vice President and Vice Chairman of the Management Board - AXA (January 2000 - present); Senior Executive Vice President and Member of Executive Committee - AXA (September 1997 to January 2000); Director - KeySpan Corp. and Phoenix House; Member of the Business Roundtable.
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- Peter D. Noris Director Executive Vice President AXA Financial, Inc. and Chief Investment 1290 Avenue of the Americas Officer - Equitable 16th Floor Life and AXA Financial, New York, NY 10104 Inc. Lewis A. Sanders Director, Vice See Column 2; Chairman and Alliance Capital Chairman and Chief Chief Executive Officer - Management L.P. Investment Officer Sanford C. Bernstein Inc. 767 5th Avenue (1993 to October 2, 2000) New York, NY 10019
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- *Frank Savage Director Chairman - Alliance Capital Management International; Director - ACFG; Director - Lockheed Martin Corporation, Enron Corp. and Qualcomm Inc. Peter J. Tobin Director Dean - Tobin College of St. John's University Business Administration Tobin College of (August 1998 to present) Business Administration 8000 Utopia Parkway Bent Hall Jamaica, NY 11439
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POSITIONS AND PRINCIPAL OCCUPATION NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS) BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS ---------------- -------- ------------------- Stanley B. Tulin Director Director and Vice AXA Financial, Inc. Chairman (both February 1290 Avenue of the Americas 1998 to present) and 16th Floor Chief Financial Officer New York, NY 10104 (May 1996 to present) - Equitable Life; Vice Chairman (February 1998 to present) and Chief Financial Officer (May 1997 to present) - AXA Financial, Inc.; Executive Vice President and Member of Executive Board - AXA (December 2000 to present). *Reba White Williams Director Director of Special Projects. OFFICERS *Gerald M. Lieberman Executive Vice President, See Column 2; Director, Finance and Operations Finance and Administration - Sanford C. Bernstein Inc. (1998 to October 2, 2000) *David R. Brewer, Jr. Senior Vice President See Column 2. and General Counsel and Secretary *Robert H. Joseph, Jr. Senior Vice President & See Column 2. Chief Financial Officer
Item 34. Principal Underwriters (a) AXA Advisors, LLC (formerly EQ Financial Consultants, Inc.), an affiliate of Equitable, is the principal underwriter and depositor for its Separate Account A, Separate Account No. 301, Separate Account No. 45, Separate Account I, Separate Account FP and EQ Advisors Trust. AXA Advisors, LLC's principal business address is 1290 Avenue of the Americas, New York, NY 10104. (b) See Item 29 of this Part C, which is incorporated herein by reference. (c) Not applicable. Item 35. Location of Accounts and Records The Equitable Life Assurance Society of the United States 135 West 50th Street New York, New York 10020 1290 Avenue of the Americas New York, New York 10104 200 Plaza Drive Secaucus, New Jersey 07094 Item 36. Management Services Not applicable. C-39 Item 37. Undertakings ------------ The Registrant hereby undertakes the following: (a) to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for so long as payments under the variable annuity contracts may be accepted; (b) to include (1) as part of its applications to purchase any contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; and (c) 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. C-40 SIGNATURES As required by the Securities Act of 1933, the Registrant has caused this Registration Statement to be signed on its behalf, in the City and State of New York, on this 23rd day of April, 2001. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Registrant) By: The Equitable Life Assurance Society of the United States By: /s/ Maureen K. Wolfson --------------------------- Maureen K. Wolfson Vice President C-41 SIGNATURES As required by the Securities Act of 1933, the Depositor has caused this Registration Statement to be signed on its behalf, in the City and State of New York, on the 23rd day of April, 2001. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Depositor) By: /s/ Maureen K. Wolfson --------------------------- Maureen K. Wolfson Vice President As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated: PRINCIPAL EXECUTIVE OFFICERS: *Edward D. Miller Chairman of the Board, Chief Executive Officer and Director *Michael Hegarty President, Chief Operating Officer and Director PRINCIPAL FINANCIAL OFFICER: *Stanley B. Tulin Chairman of the Board, Chief Financial Officer and Director PRINCIPAL ACCOUNTING OFFICER: *Alvin H. Fenichel Senior Vice President and Controller *DIRECTORS: Francoise Colloc'h Donald J. Greene Edward D. Miller Henri de Castries John T. Hartley Didier Pineau-Valencienne Claus-Michael Dill John H.F. Haskell, Jr. George J. Sella, Jr. Joseph L. Dionne Michael Hegarty Peter J. Tobin Denis Duverne Mary R. (Nina) Henderson Stanley B. Tulin Jean-Rene Fourtou W. Edwin Jarmain Dave H. Williams Norman C. Francis George T. Lowy *By: /s/ Maureen K. Wolfson -------------------------- Maureen K. Wolfson Attorney-in-Fact April 23, 2001 C-42 EXHIBIT INDEX -------------
EXHIBIT NO. TAG VALUE ----------- --------- 12 (b) Opinion and Consent of Counsel EX-99.12b 13 (a) Consent of PricewaterhouseCoopers, LLP. EX-99.13a 13 (b) Power of Attorney EX-99.13b 27 Financial Data Schedule EX-27
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