497 1 d497.txt EQUITY ADVANTAGE VUL - FORM 497C PROSPECTUS FOR EQUITY ADVANTAGE VUL, A FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY ("POLICY") ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") APRIL 30, 2007 This prospectus provides you with important information about MetLife's Equity Advantage VUL Policies. However, this prospectus is not the Policy. The Policy, rather, is a separate written agreement that MetLife issues to you. There may be differences between the description of the Policy contained in this prospectus and the Policy issued to you due to differences in state law. Please consult your Policy for the provisions that apply in your state. You allocate net premium payments to and transfer cash value among a fixed interest account ("Fixed Account") and the investment divisions of Metropolitan Life Separate Account UL ("Separate Account"). Each investment division (sometimes referred to in this prospectus as a "variable investment option"), in turn, invests solely in one of the following "Portfolios": METROPOLITAN SERIES FUND, INC. (CLASS A SHARES) BlackRock Aggressive Growth Portfolio BlackRock Bond Income Portfolio BlackRock Diversified Portfolio BlackRock Large Cap Value Portfolio BlackRock Legacy Large Cap Growth Portfolio BlackRock Strategic Value Portfolio Davis Venture Value Portfolio FI International Stock Portfolio FI Large Cap Portfolio FI Mid Cap Opportunities Portfolio FI Value Leaders Portfolio Franklin Templeton Small Cap Growth Portfolio Harris Oakmark Focused Value Portfolio Harris Oakmark Large Cap Value Portfolio Jennison Growth Portfolio Lehman Brothers(R) Aggregate Bond Index Portfolio Loomis Sayles Small Cap Portfolio MetLife Mid Cap Stock Index Portfolio MetLife Stock Index Portfolio MFS(R) Total Return Portfolio Morgan Stanley EAFE(R) Index Portfolio Neuberger Berman Mid Cap Value Portfolio Oppenheimer Global Equity Portfolio Russell 2000(R) Index Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio Western Asset Management Strategic Bond Opportunities Portfolio Western Asset Management U.S. Government Portfolio MetLife Conservative Allocation Portfolio MetLife Conservative to Moderate Allocation Portfolio MetLife Moderate Allocation Portfolio MetLife Moderate to Aggressive Allocation Portfolio MetLife Aggressive Allocation Portfolio MET INVESTORS SERIES TRUST (CLASS A SHARES) BlackRock Large-Cap Core Portfolio Cyclical Growth ETF Portfolio Cyclical Growth and Income ETF Portfolio Harris Oakmark International Portfolio Janus Forty Portfolio Lazard Mid-Cap Portfolio Legg Mason Partners Aggressive Growth Portfolio (formerly Legg Mason Aggressive Growth Portfolio) Legg Mason Value Equity Portfolio Lord Abbett Bond Debenture Portfolio Met/AIM Small Cap Growth Portfolio MFS(R) Research International Portfolio Neuberger Berman Real Estate Portfolio Oppenheimer Capital Appreciation Portfolio PIMCO Inflation Protected Bond Portfolio PIMCO Total Return Portfolio RCM Technology Portfolio (formerly RCM Global Technology Portfolio) T. Rowe Price Mid-Cap Growth Portfolio AMERICAN FUNDS INSURANCE SERIES (CLASS 2 SHARES) American Funds Bond Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund Separate prospectuses for the Metropolitan Series Fund, Inc., the Met Investors Series Trust and the American Funds Insurance Series (each a "Fund") are attached to this prospectus. They describe in greater detail an investment in the Portfolios listed above. Before purchasing a Policy, read the information in this prospectus and in the prospectus for each Fund. Keep these prospectuses for future reference. Neither the Securities and Exchange Commission ("SEC") nor any state securities authority has approved or disapproved these securities, nor have they determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. Interests in the Separate Account, the Fixed Account and the Portfolios are not deposits or obligations of, or insured or guaranteed by, the U.S. Government, any bank or other depository institution including the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any other agency or entity or person. We do not authorize any representations about this offering other than as contained in this prospectus or its supplements or in our authorized supplemental sales material. We do not guarantee how any of the Portfolios will perform. TABLE OF CONTENTS
PAGE IN THIS SUBJECT PROSPECTUS ------- ---------- Summary of Benefits and Risks................................................................... 3 Benefits of a Policy......................................................................... 3 Risks of a Policy............................................................................ 5 Risks of Investment in the Portfolios........................................................ 7 Fee Tables...................................................................................... 7 Transaction Fees............................................................................. 7 Periodic Charges Other Than Portfolio Operating Expenses..................................... 8 Charges for Optional Features................................................................ 9 Annual Portfolio Operating Expenses.......................................................... 10 MetLife......................................................................................... 14 Our Separate Account That Supports the Policies................................................. 14 The Separate Account......................................................................... 14 The Investment Divisions..................................................................... 15 Substitution Of Investments.................................................................. 15 The Funds and their Portfolios.................................................................. 15 Certain Payments We Receive with Regard to the Portfolios.................................... 15 Selection of Portfolios...................................................................... 16 Management of Portfolios..................................................................... 17 The Portfolio Share Classes That We Offer.................................................... 20 Purchase and Redemption of Portfolio Shares by Our Separate Account.......................... 20 Voting Rights That You Will Have............................................................. 21 The Fixed Return You Can Choose (Our Fixed Account)............................................. 21 Purchasing a Policy............................................................................. 22 Your Payment and Allocation of Premiums......................................................... 23 Sending Communications and Payments To Us....................................................... 26 Contacting Us................................................................................ 26 When Your Requests, Instructions and Notifications Become Effective.......................... 26 Third Party Requests......................................................................... 27 Insurance Proceeds Payable If The Insured Dies.................................................. 27 Death Benefit Options You Can Choose......................................................... 28 Alternate Death Benefit That Automatically Applies in Some Cases............................. 29 Guaranteed Minimum Death Benefit You Can Choose.............................................. 29 The Specified Face Amount of Your Policy..................................................... 30 Your Policy's Values............................................................................ 31 Cash Value................................................................................... 31 Cash Surrender Value......................................................................... 32 The Amount We Pay at Your Policy's Final Date................................................ 32 Surrenders and Partial Withdrawals From Your Policy............................................. 32 Transferring Cash Value Among Your Policy's Investment Options.................................. 33 Automated Investment Strategies You Can Choose............................................... 36 Transfers You Can Make by Telephone.......................................................... 37 Borrowing From Your Policy...................................................................... 38 Policy Termination and Reinstatement............................................................ 39 Optional Benefits You Can Add by Rider.......................................................... 40 Charges and Deductions You Pay.................................................................. 41 Deductions From Premiums..................................................................... 41 Transfer Charge.............................................................................. 42 Underwriting Charge.......................................................................... 42 Charges Included in the Monthly Deduction.................................................... 42 Surrender Charge............................................................................. 43 Charges for Optional Benefits................................................................ 46 Charges and Expenses of the Separate Account and the Portfolios.............................. 46 Variations in Charges........................................................................ 46 Federal Tax Matters............................................................................. 46 Rights We Reserve............................................................................... 51 Other Policy Provisions......................................................................... 51 Sale and Distribution of the Policies........................................................... 53 Distributing the Policies.................................................................... 53 Compensation to MetLife Sales Representatives and their Managers for the Sale of the Policy.. 54 Additional Cash Compensation to MetLife Sales Representatives and their Managers............. 54 Non-cash Compensation to MetLife Sales Representatives and their Managers.................... 55 Payments to Broker-Dealers................................................................... 55 Other Payments............................................................................... 56 Legal Proceedings............................................................................... 56 Restrictions on Financial Transactions.......................................................... 57 Independent Registered Public Accounting Firm................................................... 57 Experts......................................................................................... 57 Illustrations of Policy Benefits................................................................ 57 Financial Statements............................................................................ 57 Glossary........................................................................................ 58 Appendix A: Illustrations of Death Benefits, Cash Values and Cash Surrender Values.............. 59
2 SUMMARY OF BENEFITS AND RISKS This summary describes important Policy benefits and risks. The sections of this prospectus following this summary discuss the Policy in more detail. The Glossary at the end of this prospectus explains certain words and phrases used in this prospectus. BENEFITS OF A POLICY DEATH BENEFIT. The Policies are designed to provide insurance protection. If a Policy is in force and upon receipt of satisfactory proof of the death of the insured, we will pay the insurance proceeds to the beneficiary of the Policy. The insurance proceeds generally equal the death benefit on the date of the insured's death plus any additional insurance provided by rider, less any outstanding Policy loan and accrued loan interest. GUARANTEED MINIMUM DEATH BENEFIT. Generally, you may choose, in the Policy application, a period of time during which, regardless of how little cash value your Policy may have, it will continue in force and its death benefit will be guaranteed not to fall below a certain minimum. If you choose a guarantee, you will need to pay minimum premium amounts in order to keep that guarantee in force. You may later terminate (or, in some cases, reduce the length of) the guarantee, by not paying the full minimum premium amounts. CHOICE OF DEATH BENEFIT OPTIONS. Generally, you have a choice among three options. These range from an amount equal to the Policy's "specified face amount" to an amount equal to the specified face amount plus the Policy cash value at the insured's date of death. The specified face amount is the base amount of insurance coverage under a Policy. Subject to certain limits, you can change your death benefit option after the second Policy year once in any 12 month period. A change in death benefit options may have tax consequences. PREMIUM FLEXIBILITY. The Policy allows flexibility in making premium payments. You can make premium payments based on a schedule you choose in your application. You can make a payment that does not correspond to your schedule at any time. We can, however, limit or prohibit payments in some situations. There are certain minimum premium requirements to keep the Policy in force during the first policy year and, if you wish, to keep the guaranteed minimum death benefit in effect thereafter. RIGHT TO EXAMINE THE POLICY. During the later of ten days following your receipt of the Policy (more in some states) or 45 days after you sign the completed application, you have the right to return the Policy to us. Depending on state law, we will refund the premiums you paid, the Policy's cash value or any other amount required by state insurance law. CHOICE OF INVESTMENT OPTIONS. You can allocate your net premiums and cash value among the variable investment options. The variable investment options available under the Policy include several common stock funds, including funds that invest primarily in foreign securities, as well as bond funds and balanced funds. You may also allocate premiums and cash value to our Fixed Account, which provides guarantees of interest and principal. You may change your allocation of future premiums at any time. 3 SURRENDER AND PARTIAL WITHDRAWALS. You may surrender your Policy for its cash surrender value at any time. In addition, subject to certain limits, you may withdraw part of your cash surrender value from your Policy. Your Policy's cash surrender value equals your cash value, reduced by any outstanding Policy loans (plus accrued interest) and by any applicable surrender charge. A surrender or partial withdrawal may have tax consequences. TRANSFERS AND AUTOMATED INVESTMENT STRATEGIES. Subject to limitations, you may transfer your Policy's cash value among the variable investment options or between those options and the Fixed Account. You may also elect one of five Automated Investment Strategies that allow you to transfer funds periodically from the Fixed Account to the variable investment options, or among such options in accordance with an asset allocation model that you choose, based on your risk tolerance level. You may make other transfers at any time, subject to certain limitations and restrictions, (See "Transferring Cash Value Among your Policy's Investment Options".) LOANS. Subject to certain limits, you may borrow against your Policy's cash value. The maximum loan amount you may take is the Policy's cash value net of the surrender charge less two monthly deductions (in most states) and less all other outstanding Policy loans. We charge you a maximum annual interest rate of 6% (4.6% for Policy years 11 through 15, 4.3% for Policy years 16 through 20 and 4.0% after Policy year 20) on your loan. However, we credit you with an annual return of 4% on amounts that you borrow (rather than the return that such amounts would otherwise earn under our variable investment options or Fixed Account). Loans may have tax consequences. TAX ADVANTAGES. If you meet certain requirements, you will pay income taxes on cash value you receive (through withdrawals or surrenders or at the Final Date of your Policy) only to the extent that the cumulative amounts you have received exceed the cumulative premiums you have paid. The death benefit may be subject to Federal and state estate taxes, but your beneficiary will generally not be subject to income tax on the death benefit. EXCHANGE PRIVILEGE. Within the first 24 Policy months (or within 24 Policy months after a specified face amount increase you have requested), you may transfer all of your cash value (or the cash value attributable to a specified face amount increase) to the Fixed Account at no charge. The purpose of the exchange privilege is to provide you the option of fixed Policy values and benefits. In some states however, we implement this by permitting you to exchange your Policy (or the portion attributable to a specified face amount increase) to a flexible premium fixed benefit life insurance policy, which we make available. RIDER BENEFITS. We offer several riders that provide supplemental benefits under the Policy, such as the Disability Waiver of Premium Benefit which provides for the payment of certain premium amounts on proof of disability of the primary insured. We generally deduct any monthly charges for these riders as part of the monthly deduction. Your sales representative can help you determine whether any of these riders are suitable for you. These riders may not be available in all states. PERSONALIZED ILLUSTRATIONS. You will receive personalized illustrations in connection with the purchase of this Policy that reflect your own particular circumstances. These hypothetical illustrations may help you to understand the long-term effects of different levels of investment performance, the possibility of termination, and the charges and deductions under the Policy. They will also 4 help you to compare this Policy to other life insurance policies. The personalized illustrations are based on hypothetical rates of return and are not a representation or guarantee of investment returns or cash value. We have included an example of such an illustration as Appendix A to this prospectus. RISKS OF A POLICY INVESTMENT RISK. MetLife does not guarantee the investment performance of the variable investment options, and you should consider your risk tolerance before selecting any of these options. You will be subject to the risk that investment performance will be unfavorable and that your cash value will decrease. In addition, we deduct Policy fees and charges from your Policy's cash value, which can significantly reduce your Policy's cash value. During times of poor investment performance, these deductions will have an even greater impact on your Policy's cash value. It is possible to lose your full investment, and your Policy could terminate without value, unless you pay additional premiums. If you allocate cash value to the Fixed Account, we credit such cash value with a declared rate of interest. You assume the risk that the rate may decrease, although it will never be lower than the guaranteed minimum annual effective rate of 3%. SURRENDER AND WITHDRAWAL RISKS. The Policies are designed to provide lifetime insurance protection. They are not offered primarily as an investment, and are not suitable as a short-term savings vehicle. If you surrender the Policy within the first 15 Policy years (or within the first 15 years following a face amount increase), you will be subject to a surrender charge as well as income tax on any gain that is distributed or deemed to be distributed from the Policy. You will also be subject to a surrender charge if you withdraw more than 10% of your cash surrender value in any of the first 15 Policy years (or the first 15 years following a specified face amount increase). You should purchase the Policy only if you have the financial ability to keep it in force for a substantial period of time. You should not purchase the Policy if you intend to surrender all or part of the Policy's cash value in the near future. Even if you do not ask to surrender your Policy, surrender charges may play a role in determining whether your Policy will terminate without value because surrender charges determine the cash surrender value, which is a measure we use to determine whether your Policy will enter the grace period (and possibly terminate). RISK OF POLICY TERMINATION. Your Policy may terminate without value if you have paid an insufficient amount of premiums or if the investment experience of the investment divisions is poor. If your cash surrender value is not enough to pay a monthly deduction (the charge we deduct from your Policy's cash value every month) and no minimum guaranteed death benefit is in effect, your Policy will terminate without value, unless you make a premium payment sufficient to cover two monthly deductions within the 61-day grace period. If your Policy does terminate, your insurance coverage also will terminate (although you will be given an opportunity to reinstate your Policy and coverage if you satisfy certain requirements). If your Policy terminates when there is an outstanding loan, there may be adverse tax consequences. CERTAIN TAX RISKS. We anticipate that the Policy should generally be deemed a life insurance contract under Federal tax law. There is less guidance, however, with respect to Policies issued on a substandard risk basis, and it is not clear whether such Policies will in all cases satisfy the applicable requirements. Assuming that a Policy qualifies as a life insurance contract for Federal income tax purposes, you should not be deemed to be in receipt of any 5 portion of your Policy's cash value until there is a distribution from the Policy. Moreover, insurance proceeds payable under the Policy should be excludable from the gross income of the beneficiary. Although the beneficiary generally should not have to pay Federal income tax on the insurance proceeds, other taxes, such as estate taxes, may apply. If you pay more than a certain amount of premiums, you may cause your Policy to become a "modified endowment contract." If it does, you will pay income taxes on loans and other amounts we pay out to you (except for payment of insurance proceeds), to the extent of any gains in your Policy (which is generally the excess of cash value over the premiums paid). In this case, an additional 10% tax penalty may also apply. If the Policy is not a modified endowment contract, distributions generally will be treated first as a return of basis or investment in the contract and then as taxable income. Moreover, loans will generally not be treated as distributions. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. As with any taxation matter, you should consult with and rely on the advice of your own tax advisor. LOAN RISKS. A policy loan, whether or not repaid, will affect the cash value of your Policy over time because we subtract the amount of the loan from the variable investment options or Fixed Account as collateral, and hold it in your Policy loan account. This loan collateral does not participate in the investment experience of the investment divisions or receive the interest rate credited to the Fixed Account either of which may be higher than the interest rate credited on the amount you borrow. Any unpaid loan (plus accrued interest) also reduces the Policy's insurance proceeds paid to your beneficiary. In addition, your Policy may terminate if your outstanding loan and accrued loan interest reduce the cash surrender value to zero unless the guaranteed minimum death benefit is in effect. If you surrender your Policy or your Policy terminates while there is an outstanding loan, there will generally be Federal income tax payable on the amount by which loans and any prior tax-free withdrawals exceed the premiums paid. Particularly because loans and partial withdrawals reduce your Policy's cash surrender value, any remaining cash surrender value may be insufficient to pay the income tax due. LIMITATIONS ON ACCESS TO CASH VALUE. We limit loans and partial withdrawals of cash value from the Policy to amounts not less than $500 and not more than the cash surrender value less two monthly deductions. LIMITATIONS ON TRANSFERS. We may limit transfers. We do not currently charge for transfers, but we reserve the right to charge up to $25 per transfer, except for transfers under the Automated Investment Strategies. We have adopted procedures intended to limit market timing that may adversely affect other Policy owners. In addition, each Fund may restrict or refuse purchases of shares in their Portfolios as a result of its own procedures on market timing activities. You should read each Fund's prospectus for more details. POLICY CHARGE AND EXPENSE INCREASE. We have the right to increase certain Policy charges. TAX LAW CHANGES. Tax laws, regulations, and interpretations have often been changed in the past and such changes continue to be proposed. To the 6 extent that you purchase a Policy based on expected tax benefits, relative to other financial or investment products or strategies, there is no certainty that such advantages will always continue to exist. RISKS OF INVESTMENT IN THE PORTFOLIOS A comprehensive discussion of the risks associated with investment in the Portfolios can be found in the prospectus for each of the Funds attached at the end of this prospectus. There is a possibility that fees and expenses of the Portfolios may increase (or decrease). There is no assurance that any of the Portfolios will achieve its stated investment objective. FEE TABLES The following tables describe the fees and expenses that a Policy Owner will pay when buying, owning, and surrendering the Policy. In certain cases, we have the right to increase our charges for new Policies, as well as for Policies already outstanding. The maximum charges in such cases are shown in the far right-hand column of each of the first three tables below. TRANSACTION FEES This table describes the fees and expenses that a Policy Owner will pay at the time that he or she buys the Policy, surrenders the Policy, or transfers cash value among the variable investment options or the Fixed Account.
--------------------------------------------------------------------------------------- MAXIMUM WHEN CHARGE IS CURRENT AMOUNT AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT --------------------------------------------------------------------------------------- Sales Charge On payment of 2.25% of Each Same as Current premium Premium Paid Amount --------------------------------------------------------------------------------------- State Tax Imposed on On payment of 2.00% of Each Same as Current Premiums premium Premium Paid Amount --------------------------------------------------------------------------------------- Federal Tax Imposed on On payment of 1.25% of Each Same as Current Premiums premium Premium Paid Amount --------------------------------------------------------------------------------------- Surrender Charge/1/ On surrender or In years 1 and 2, the Same as Current termination of your surrender charge is the Amount Policy in the first 15 amount of premiums Policy years (or the you have actually paid first 15 years after a to date up to the specified face amount Maximum Surrender increase) Charge Premium (less in other years--see footnote 2) ----------------------------------------------- On partial withdrawal A pro-rata portion of of more than your the surrender charge Policy's 10% annual that would apply if you free withdrawal had made a full amount surrender at the time of the withdrawal ----------------------------------------------- On a specified face 50% of a pro-rata amount reduction that portion of the you request surrender charge that would apply if you had made a full surrender --------------------------------------------------------------------------------------- Transfer Fee for On transfer of cash Not currently charged $25 per transfer non-automated transfers value among variable investment options and to and from the Fixed Account ---------------------------------------------------------------------------------------
/1/Because the details of this surrender charge are complex, this table does not show all of those details, such as when there have been previous specified face amount increases, decreases or withdrawals. Please refer to "Charges and Deductions You Pay--Surrender Charge" for more information. /2/In years 3 through 15, the surrender charge is a declining percentage of the surrender charge in year 2, beginning with 90% in year 3 and reaching 0% after year 15. Please refer to "Charges and Deductions You Pay--Surrender Charge" for an explanation of the Maximum Surrender Charge Premium and other details. 7 PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES This table describes other fees and expenses that a Policy Owner will pay periodically during the time that he or she owns the Policy, not including charges for optional features (riders) or the fees and expenses of the Portfolios.
WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT ---------------------------------------------------------------------------------------------- Cost of Term Monthly, on the Insurance/1/ monthly deduction date Lowest and $.01 to $37.98 each month $.06 to $53.58 each Highest Charge per $1000 of term month per $1000 of Among All insurance amount/2/ term insurance amount Possible Insureds $.20 each month per $.20 each month per Charge for a male $1000 of term insurance $1000 of term insured, age 40, in amount insurance amount the preferred nonsmoker underwriting class with a specified face amount of $200,000 in the first policy year ---------------------------------------------------------------------------------------------- Administration Monthly, on the $35 per month (less Same as Current Charge monthly deduction depending on Age of Amount date insured and Policy year-- see footnote 3) ---------------------------------------------------------------------------------------------- Mortality and Monthly, on the annual rate of: Same as Current Expense Risk monthly deduction .90% for Policy years 1-10 Amount Charge (annual date .60% for Policy years 11-15 rate imposed on .30% after Policy year 15 cash value in our Separate Account)/4/ ---------------------------------------------------------------------------------------------- Underwriting Monthly, on the $5 per month Same as Current Charge monthly deduction Amount date, for the first 12 months after you increase your specified face amount ---------------------------------------------------------------------------------------------- Loan Interest Annually (or on loan annual rate of: Same as Current Rate Spread/5/ (on loan termination, if earlier) 2% for Policy years 1-10 amount) .6% for Policy years 11-15 .3% for Policy years 16-20 0% after Policy year 20
-------- /1/ The cost of term insurance charge varies based on individual characteristics, including the insured's age, risk class and, in most cases, sex. It also varies depending on how long the Policy has been outstanding. The cost of term insurance charges shown are probably not representative of the charges that you would pay. You can obtain more information about the cost of term insurance or other charges that would apply for a particular insured by contacting your sales representative. /2/ The term insurance amount is the difference between the death benefit (generally discounted at the monthly equivalent of 3% per year) and the Policy's cash value. /3/ $35 is the administration charge during the first Policy year for insureds Age 41 and over. The charge is less during the first Policy year, for younger insureds ($30 for Ages 26-40, $20 under Age 25). In the second and later Policy years, the charge reduces to $10 for all insureds and, if you pay the "required administrative premium" shown on page 3 of your Policy, the charge reduces further depending on the specified face amount of your Policy ($7 for less than $100,000, $6 for $100,000-$249,999 and $5 for $250,000 or more). We will deduct any amount of the first Policy year's administration charges that remains unpaid at the time of any full surrender or other termination of a Policy during its first year. /4/ We are waiving the following amount of the Mortality and Expense Risk Charge: 0.08% for the Investment Division investing in the BlackRock Large-Cap Core Portfolio. /5/ We charge interest on Policy loans but credit you with interest on the amount of the cash value we hold as collateral for the loan. The loan interest spread is the excess of the interest rate we charge over the interest rate we credit. 8 CHARGES FOR OPTIONAL FEATURES (RIDERS) This table describes the charges you will pay periodically for any of the indicated optional benefits ("riders") that you choose to add to your Policy.
WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT OPTIONAL FEATURE DEDUCTED DEDUCTED WE CAN DEDUCT --------------------------------------------------------------------------------------------- Disability Waiver of Monthly, on the Premium Benefit/1/ monthly deduction $.13 to $.60 per $100 $.14 to $.67 per $100 date of covered premium of covered premium Lowest and Highest amount amount Charge Among All Possible Insureds $.34 per $100 of $.37 per $100 of covered premium covered premium Charge for a male insured, amount amount age 40, in the preferred nonsmoker underwriting class with a specified face amount of $200,000 --------------------------------------------------------------------------------------------- Disability Waiver of Monthly, on the Monthly Deduction monthly deduction Benefit/1/ date Lowest and Highest $.01 to $.45 per $1000 $.02 to $.45 per $1000 Charge Among All of term insurance of term insurance Possible Policies amount amount Charge for a male insured, $.02 per $1000 of $.03 per $1000 of age 40, in the preferred term insurance term insurance nonsmoker underwriting amount amount class with a specified face amount of $200,000 --------------------------------------------------------------------------------------------- Accidental Death Benefit/1/ Monthly, on the monthly deduction Lowest and Highest date $.05 to $.09 per $1000 $.07 to $.12 per $1000 Charge Among All of accidental death of accidental death Possible Insureds coverage amount coverage amount Charge for a male insured, $.05 per $1000 of $.07 per $1000 of age 40, in the preferred accidental death accidental death nonsmoker underwriting coverage amount coverage amount class with a specified face amount of $200,000 --------------------------------------------------------------------------------------------- Long Term Care Monthly, on the Guaranteed Purchase monthly deduction Option/1/ date Lowest and Highest $.20 to $1.88 per $100 Same as Current Charge Among All of daily coverage Amount Possible Policies amount Same as Current Charge for a male insured, $.48 per $100 of daily Amount age 40, in the preferred coverage amount nonsmoker underwriting class with a specified face amount of $200,000 --------------------------------------------------------------------------------------------- Children's Term Insurance Monthly, on the $.39 per $1000 of $.60 per $1000 of Benefit (identical charge monthly deduction child's term child's term for all eligible children and date insurance amount insurance amount all years) --------------------------------------------------------------------------------------------- Spouse Term Insurance Monthly, on the Benefit/1/ monthly deduction $.07 to $3.90 per $.16 to $3.90 per date $1000 of spouse's $1000 of spouse's Lowest and Highest term insurance term insurance Charge Among All amount amount Possible Policies $.11 per $1000 of $.31 per $1000 of Charge for a female spouse's term spouse's term insured, age 40, in the insurance amount insurance amount preferred nonsmoker underwriting class with a specified face amount of $200,000 --------------------------------------------------------------------------------------------- Accelerated Death Benefit Not Applicable No Charge No Charge
/1/ The charges for these optional features vary based on individual characteristics, including the insured's age, risk class and, in most cases, sex. The charges shown are probably not representative of the charges that you would pay. You can obtain more information about the charges that would apply for a particular insured by contacting your sales representative. 9 ANNUAL PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that the Portfolios will pay and that therefore a Policy owner will indirectly pay periodically during the time that he or she owns a Policy. The table shows the lowest and highest fees and expenses charged by the Portfolios for the fiscal year ended December 31, 2006, before and after any contractual fee waivers and expense reimbursements. More detail concerning each Portfolio's fees and expenses is contained in the table that follows this table and in the attached Fund prospectuses.
LOWEST HIGHEST ----------------------------------------------------------------------------------- Gross Total Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets, including management fees, distribution (Rule 12b-1) fees and other expenses) .11% 1.05% ----------------------------------------------------------------------------------- Net Total Annual Portfolio Operating Expenses (net of any contractual fee waivers and expense reimbursements) .10% 1.05%
This table describes the annual operating expenses for each Portfolio for the year ended December 31, 2006, as a percentage of the Portfolio's average daily net assets for the year.
NET TOTAL ANNUAL EXPENSES INCLUDING ESTIMATED GROSS NET MANAGE- TOTAL FEE WAIVERS NET TOTAL EXPENSES OF MENT OTHER 12B-1 ANNUAL AND EXPENSE ANNUAL UNDERLYING FEES EXPENSES FEES EXPENSES REIMBURSEMENTS EXPENSES/1/ PORTFOLIOS/1/ ----------------------------------------------------------------------------------------- METROPOLITAN SERIES FUND, INC. (CLASS A SHARES)/2/ ----------------------------------------------------------------------------------------- BlackRock Aggressive Growth Portfolio .72% .06% .00% .78% .00% .78% ----------------------------------------------------------------------------------------- BlackRock Bond Income Portfolio .39% .07% .00% .46% .01% .45%/3/ ----------------------------------------------------------------------------------------- BlackRock Diversified Portfolio .44% .07% .00% .51% .00% .51% ----------------------------------------------------------------------------------------- BlackRock Large Cap Value Portfolio .70% .11% .00% .81% .00% .81%/4/ ----------------------------------------------------------------------------------------- BlackRock Legacy Large Cap Growth Portfolio .73% .07% .00% .80% .00% .80% ----------------------------------------------------------------------------------------- BlackRock Strategic Value Portfolio .82% .06% .00% .88% .00% .88% ----------------------------------------------------------------------------------------- Davis Venture Value Portfolio .71% .04% .00% .75% .00% .75% ----------------------------------------------------------------------------------------- FI International Stock Portfolio .85% .13% .00% .98% .00% .98% ----------------------------------------------------------------------------------------- FI Large Cap Portfolio .78% .06% .00% .84% .00% .84%/5/ ----------------------------------------------------------------------------------------- FI Mid Cap Opportunities Portfolio .68% .06% .00% .74% .00% .74% ----------------------------------------------------------------------------------------- FI Value Leaders Portfolio .64% .07% .00% .71% .00% .71% -----------------------------------------------------------------------------------------
10
NET TOTAL ANNUAL EXPENSES INCLUDING ESTIMATED GROSS NET MANAGE- TOTAL FEE WAIVERS NET TOTAL EXPENSES OF MENT OTHER 12B-1 ANNUAL AND EXPENSE ANNUAL UNDERLYING FEES EXPENSES FEES EXPENSES REIMBURSEMENTS EXPENSES/1/ PORTFOLIOS/1/ ---------------------------------------------------------------------------------------- Franklin Templeton Small Cap Growth Portfolio .90% .15% .00% 1.05% .00% 1.05%/6/ ---------------------------------------------------------------------------------------- Harris Oakmark Focused Value Portfolio .72% .05% .00% .77% .00% .77% ---------------------------------------------------------------------------------------- Harris Oakmark Large Cap Value Portfolio .72% .06% .00% .78% .00% .78% ---------------------------------------------------------------------------------------- Jennison Growth Portfolio .63% .05% .00% .68% .00% .68% ---------------------------------------------------------------------------------------- Lehman Brothers(R) Aggregate Bond Index Portfolio .25% .06% .00% .31% .01% .30%/7/ ---------------------------------------------------------------------------------------- Loomis Sayles Small Cap Portfolio .90% .07% .00% .97% .05% .92%/8/ ---------------------------------------------------------------------------------------- MetLife Mid Cap Stock Index Portfolio .25% .08% .00% .33% .01% .32%/9/ ---------------------------------------------------------------------------------------- MetLife Stock Index Portfolio .25% .05% .00% .30% .01% .29%/10/ ---------------------------------------------------------------------------------------- MFS(R) Total Return Portfolio .53% .05% .00% .58% .00% .58%/5/ ---------------------------------------------------------------------------------------- Morgan Stanley EAFE(R) Index Portfolio .30% .15% .00% .45% .01% .44%/11/ ---------------------------------------------------------------------------------------- Neuberger Berman Mid Cap Value Portfolio .65% .06% .00% .71% .00% .71%/5/ ---------------------------------------------------------------------------------------- Oppenheimer Global Equity Portfolio .53% .09% .00% .62% .00% .62% ---------------------------------------------------------------------------------------- Russell 2000(R) Index Portfolio .25% .11% .00% .36% .01% .35%/12/ ---------------------------------------------------------------------------------------- T. Rowe Price Large Cap Growth Portfolio .60% .08% .00% .68% .00% .68% ---------------------------------------------------------------------------------------- T. Rowe Price Small Cap Growth Portfolio .51% .07% .00% .58% .00% .58% ---------------------------------------------------------------------------------------- Western Asset Management Strategic Bond Opportunities Portfolio .63% .07% .00% .70% .00% .70% ---------------------------------------------------------------------------------------- Western Asset Management U.S. Government Portfolio .50% .07% .00% .57% .00% .57% ---------------------------------------------------------------------------------------- MetLife Conservative Allocation Portfolio .10% .09% .00% .19% .09% .10% .71%/13/ ----------------------------------------------------------------------------------------
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NET TOTAL ANNUAL EXPENSES INCLUDING ESTIMATED GROSS NET MANAGE- TOTAL FEE WAIVERS NET TOTAL EXPENSES OF MENT OTHER 12B-1 ANNUAL AND EXPENSE ANNUAL UNDERLYING FEES EXPENSES FEES EXPENSES REIMBURSEMENTS EXPENSES/1/ PORTFOLIOS/1/ ---------------------------------------------------------------------------------------- MetLife Conservative to Moderate Allocation Portfolio .10% .02% .00% .12% .02% .10% .75%/13/ ---------------------------------------------------------------------------------------- MetLife Moderate Allocation Portfolio .10% .01% .00% .11% .01% .10% .80%/13/ ---------------------------------------------------------------------------------------- MetLife Moderate to Aggressive Allocation Portfolio .10% .01% .00% .11% .01% .10% .85%/13/ ---------------------------------------------------------------------------------------- MetLife Aggressive Allocation Portfolio .10% .07% .00% .17% .07% .10% .85%/13/ ---------------------------------------------------------------------------------------- MET INVESTORS SERIES TRUST (CLASS A SHARES)/14/ ---------------------------------------------------------------------------------------- BlackRock Large-Cap Core Portfolio .63% .22% .00% .85% .00% .85%/15/ ---------------------------------------------------------------------------------------- Cyclical Growth ETF Portfolio .45% .15% .00% .60% .05% .55% .79%/16/ ---------------------------------------------------------------------------------------- Cyclical Growth and Income ETF Portfolio .45% .18% .00% .63% .08% .55% .80%/17/ ---------------------------------------------------------------------------------------- Harris Oakmark International Portfolio .78% .13% .00% .91% .00% .91% ---------------------------------------------------------------------------------------- Janus Forty Portfolio .65% .06% .00% .71% .00% .71%/18/ ---------------------------------------------------------------------------------------- Lazard Mid-Cap Portfolio .70% .06% .00% .76% .00% .76% ---------------------------------------------------------------------------------------- Legg Mason Partners Aggressive Growth Portfolio .63% .09% .00% .72% .00% .72%/19/ ---------------------------------------------------------------------------------------- Legg Mason Value Equity Portfolio .64% .08% .00% .72% .00% .72%/20/ ---------------------------------------------------------------------------------------- Lord Abbett Bond Debenture Portfolio .50% .04% .00% .54% .00% .54% ---------------------------------------------------------------------------------------- Met/AIM Small Cap Growth Portfolio .87% .06% .00% .93% .00% .93%/19/ ---------------------------------------------------------------------------------------- MFS(R) Research International Portfolio .72% .14% .00% .86% .00% .86% ---------------------------------------------------------------------------------------- Neuberger Berman Real Estate Portfolio .64% .04% .00% .68% .00% .68% ---------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Portfolio .57% .05% .00% .62% .00% .62%/19/ ---------------------------------------------------------------------------------------- PIMCO Inflation Protected Bond Portfolio .50% .05% .00% .55% .00% .55% ---------------------------------------------------------------------------------------- PIMCO Total Return Portfolio .50% .05% .00% .55% .00% .55% ----------------------------------------------------------------------------------------
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NET TOTAL ANNUAL EXPENSES INCLUDING ESTIMATED GROSS NET MANAGE- TOTAL FEE WAIVERS NET TOTAL EXPENSES OF MENT OTHER 12B-1 ANNUAL AND EXPENSE ANNUAL UNDERLYING FEES EXPENSES FEES EXPENSES REIMBURSEMENTS EXPENSES/1/ PORTFOLIOS/1/ ---------------------------------------------------------------------------------------- RCM Technology Portfolio .88% .14% .00% 1.02% .00% 1.02%/21/ ---------------------------------------------------------------------------------------- T. Rowe Price Mid-Cap Growth Portfolio .75% .04% .00% .79% .00% .79% ---------------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES (CLASS 2 SHARES) ---------------------------------------------------------------------------------------- American Funds Bond Fund .41% .01% .25% .67% .00% .67% ---------------------------------------------------------------------------------------- American Funds Global Small Capitalization Fund .72% .05% .25% 1.02% .00% 1.02% ---------------------------------------------------------------------------------------- American Funds Growth Fund .32% .02% .25% .59% .00% .59% ---------------------------------------------------------------------------------------- American Funds Growth- Income Fund .27% .01% .25% .53% .00% .53% ----------------------------------------------------------------------------------------
-------- /1/ Net Total Annual Expenses do not reflect any voluntary waivers of fees and expenses, or any expense reductions resulting from directed brokerage arrangements. /2/ Other Expenses have been restated to reflect current fees, as if current fees had been in effect for the previous fiscal year. /3/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee to the annual rate of 0.325% for amounts over $1 billion but less than $2 billion. /4/ Other Expenses reflect the repayment of expenses previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.02%. /5/ The Management Fee has been restated to reflect current fees, as if the current fees had been in effect during the previous fiscal year. /6/ Other Expenses reflect the repayment of expenses previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.03%. /7/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.244%. /8/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio by 0.05%. /9/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. Other Expenses include 0.01% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /10/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. /11/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.293%. Other Expenses include 0.02% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /12/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. Other Expenses include 0.02% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /13/ These Portfolios are "funds of funds" that invest substantially all of their assets in other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. Because the Portfolios invest in other underlying portfolios, each Portfolio will also bear it's pro rata portion of the operating expenses of the underlying portfolios in which the Portfolio invests, including the management fee. The weighted average of the total operating expenses of the underlying portfolios, after any applicable fee waivers and expense reimbursements, as of December 31, 2006, were: 0.61% for the MetLife Conservative Allocation Portfolio, 0.65% for the MetLife Conservative to Moderate Allocation Portfolio, 0.70% for the MetLife Moderate Allocation Portfolio, 0.75% for the MetLife Moderate to Aggressive Allocation Portfolio and 0.75% for the MetLife Aggressive Allocation Portfolio. The total operating expenses of the Portfolios, including the weighted average of the total operating expenses of the underlying portfolios, before any applicable fee waivers and expense reimbursements, as of December 31, 2006, were: 0.80% for the MetLife Conservative Allocation Portfolio, 0.77% for the MetLife Conservative to Moderate Allocation Portfolio, 0.82% for the MetLife Moderate Allocation Portfolio, 0.86% for the MetLife Moderate to Aggressive Allocation Portfolio and 0.93% for the MetLife Aggressive Allocation Portfolio. Contract and Policy Owners may be able to realize lower aggregate expenses by investing directly in the underlying portfolios instead of investing in the Portfolios. A Contract or Policy Owner who chooses to invest directly in the underlying portfolios would not, however, receive the asset allocation services provided by MetLife Advisers, LLC. (See the fund 13 prospectus for a description of each Portfolio's target allocation.) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to waive fees or pay all expenses (other than brokerage costs, taxes, interest and any extraordinary expenses) so as to limit net total annual operating expenses of the Portfolio to 0.10%, excluding 12b-1 fees. /14/ Other Expenses have been restated to reflect new custodian, fund administration and transfer agent fee schedules, as if these fee schedules had been in effect for the previous fiscal year. /15/ The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. Other Expenses have been restated to reflect the current Met Investors Series Trust fee schedule, as if that schedule had applied to the Portfolio for the entire fiscal year. /16/ Pursuant to an expense limitation agreement, the Investment Adviser has agreed, for a period of one year commencing May 1, 2007, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.55%, excluding 12b-1 fees. The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("Underlying ETFs"). As an investor in an Underlying ETF or other investment company, the Portfolio also will bear its pro-rata portion of the operating expenses of that Underlying ETF or other investment company. The weighted average of the total operating expenses of the Underlying ETFs and other investment companies, based on the allocation of assets as of December 31, 2006, was 0.24%. The total operating expenses of the Portfolio, including the weighted average of the total operating expenses of the Underlying ETFs and other investment companies as of December 31, 2006, before any applicable fee waivers and expense reimbursements, were 0.84%. /17/ Pursuant to an expense limitation agreement, the Investment Adviser has agreed, for a period of one year commencing May 1, 2007, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.55%, excluding 12b-1 fees. The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("Underlying ETFs"). As an investor in an Underlying ETF or other investment company, the Portfolio also will bear its pro-rata portion of the operating expenses of that Underlying ETF or other investment company. The weighted average of the total operating expenses of the Underlying ETFs or other investment companies, based upon the allocation of assets as of December 31, 2006, was 0.25%. The total operating expenses of the Portfolio, including the weighted average of the total operating expenses of the Underlying ETFs and other investment companies as of December 31, 2006, before any applicable fee waivers and expense reimbursements, were 0.88%. /18/ Other Expenses have been restated to reflect the current Met Investors Series Trust fee schedule, as if that schedule had applied to the Portfolio for the entire fiscal year. /19/ The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. /20/ Other Expenses reflect the repayment of fees previously waived or expense previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.02%. /21/ Other Expenses reflect the repayment of fees previously waived or expense previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.04%. The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. THE FEE AND EXPENSE INFORMATION REGARDING THE PORTFOLIOS WAS PROVIDED BY THOSE PORTFOLIOS. THE AMERICAN FUNDS INSURANCE SERIES IS NOT AFFILIATED WITH METLIFE. FOR INFORMATION CONCERNING COMPENSATION PAID FOR THE SALE OF THE POLICIES, SEE "SALES AND ADMINISTRATION OF THE POLICIES." METLIFE MetLife is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our main office is located at 200 Park Avenue, New York, New York 10166. We are obligated to pay all benefits under the Policies. OUR SEPARATE ACCOUNT THAT SUPPORTS THE POLICIES THE SEPARATE ACCOUNT Our Separate Account receives premium payments from owners of the Policies described in this prospectus and other variable life insurance policies that we issue. Income and realized and unrealized capital gains and losses of the Separate Account are credited to the Separate Account without regard to any of our other income or capital gains and losses. We will keep an amount in the Separate Account that at least equals the value of our commitments to policy owners that are based on their investments in the Separate Account. We can also keep charges that we deducted and other excess amounts in the Separate Account or we can take the excess out of the Separate Account. 14 The assets in the Separate Account legally belong to us, but they are held solely for the benefit of investors in the Separate Account and no one else, including our other creditors. This means that, except for excess assets that we would be free to withdraw, the assets of the Separate Account are not available to meet the claims of our general creditors, and must be used for the sole purpose of supporting the cash values of the variable life insurance policies whose premiums the Separate Account receives. THE INVESTMENT DIVISIONS [SIDEBAR: Each Separate Account investment division invests in a corresponding Portfolio of a Fund.] The Separate Account has subdivisions, called "investment divisions." Each investment division corresponds to one of our variable investment options and invests its assets exclusively in shares of a corresponding Portfolio of a Fund. We can add new investment divisions to or eliminate investment divisions from the Separate Account and can add and eliminate investment divisions from your Policy. You can designate how you would like your net premiums and cash value to be allocated among the available investment divisions and our Fixed Account. Amounts you allocate to each investment division receive the investment experience of the investment division, and you bear this investment risk. SUBSTITUTION OF INVESTMENTS If investment in the Portfolios or a particular Portfolio is no longer possible, or in our judgment becomes inappropriate for the purposes of the Policies, or for any other reason in our sole discretion, we may substitute another portfolio without your consent. The substituted portfolio may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future premium payments, or both. However, we will not make such substitution without any necessary approval of the Securities and Exchange Commission. Furthermore, we may make available or close investment divisions to allocation of premium payments or cash value, or both, for some or all classes of Policies, at any time in our sole discretion. THE FUNDS AND THEIR PORTFOLIOS [SIDEBAR: You should carefully review the investment objectives, practices, and risks of each Portfolio, which are described in the appropriate Fund prospectuses that are attached to this prospectus.] Metropolitan Series Fund, Inc., Met Investors Series Trust and American Funds Insurance Series is each a "series" type of mutual fund, which is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). Each Fund is divided into separate investment Portfolios, each of which issues its own class or "series" of stock, and in which a corresponding investment division of the Separate Account invests. You should read the Fund prospectuses that are attached to this prospectus. They contain information about each Fund and its Portfolios, including the investment objectives, strategies, risks and sub-advisers that are associated with each Portfolio. They also contain information on the different separate accounts that invest in each Fund (which may or may not be related to MetLife) and certain risks that may arise when diverse separate accounts, funding diverse types of insurance products, all invest in the same Fund. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS An investment adviser (other than our affiliates MetLife Advisers and Met Investors Advisory LLC), or a sub-adviser of a Portfolio or its affiliates may 15 make payments to us and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment of expenses for certain administrative, marketing and support services with respect to the Policies, and, in the Company's role as an intermediary, with respect to the Portfolios. The Company and its affiliates may profit from these payments. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. Policy Owners, through their direct investment in the Portfolios, bear the costs of these advisory fees. (See the Portfolios' prospectuses for more information.) The amount of the payments we receive is based on a percentage of assets of the Portfolio attributable to the Policies and certain other variable insurance products that we and our affiliates issue. These percentages differ and some advisers or sub-advisers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser or sub-adviser of a Portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the Policies and may pay us and/or certain affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies. We, and/or certain of our affiliated insurance companies have joint ownership interests in our affiliated investment advisers, MetLife Advisers and Met Investors Advisory LLC, which are formed as "limited liability companies". Our ownership interests in MetLife Advisers, LLC and Met Investors Advisory LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from a Portfolio. We will benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to the advisers. (See "Fee Tables--Annual Portfolio Operating Expenses" for information on the management fees paid by the Portfolios to the advisers and the Statement of Additional Information for the Funds for information on the management fees paid by the adviser to subadvisers.) Certain Portfolios have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. The Distribution Plan is described in more detail in each Portfolio's prospectus. (See also "Fee Tables--Annual Portfolio Operating Expenses" and "Sales and Administration of the Policies--Other Payments".) The payments are deducted from the assets of the Portfolios and paid to us or our distributor. These payments decrease the Portfolio's investment return. We or our affiliates make certain payments to American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series. For more information on these payments, see "Sales and Administration of the Policies--Other Payments." SELECTION OF PORTFOLIOS We select the Portfolios offered through the Policy based on several criteria, including asset class coverage, the strength of the adviser's or sub-adviser's reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolio's adviser or sub-adviser is one of our affiliates or whether the Portfolio, its adviser, its sub-adviser(s), or an affiliate will make payments to us or our affiliates. For additional information on these 16 arrangements, see "Certain Payments We Receive with Regard to the Portfolios." In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to portfolios advised by our affiliates than those that are not, we may be more inclined to offer portfolios advised by our affiliates in the variable insurance products we issue. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premium payments and/or transfers of cash value if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from policy owners. In some cases, we have included Portfolios based on recommendations made by selling firms. We do not provide investment advice and do not recommend or endorse any particular Portfolio. You bear the risk of any decline in the Cash Value of your Policy resulting from the performance of the Portfolios you have chosen. MANAGEMENT OF PORTFOLIOS Each Fund has an investment adviser who is responsible for overall management of the Fund. These investment advisers have contracted with sub-advisers to make the day-to-day investment decisions for some of the Portfolios. The adviser, any sub-adviser and investment objective of each Portfolio are as follows:
PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ----------------------------------------------------------------------------------- METROPOLITAN SERIES FUND, INC. ADVISER: METLIFE ADVISERS, LLC ----------------------------------------------------------------------------------- BlackRock Aggressive Growth BlackRock Advisors, LLC Seeks maximum capital Portfolio appreciation. ----------------------------------------------------------------------------------- BlackRock Bond Income Portfolio BlackRock Advisors, LLC Seeks competitive total return primarily from investing in fixed-income securities. ----------------------------------------------------------------------------------- BlackRock Diversified Portfolio BlackRock Advisors, LLC Seeks high total return while attempting to limit investment risk and preserve capital. ----------------------------------------------------------------------------------- BlackRock Large Cap Value BlackRock Advisors, LLC Seeks long-term growth of Portfolio capital. ----------------------------------------------------------------------------------- BlackRock Legacy Large Cap BlackRock Advisors, LLC Seeks long-term growth of Growth Portfolio capital. ----------------------------------------------------------------------------------- BlackRock Strategic Value BlackRock Advisors, LLC Seeks high total return, Portfolio consisting principally of capital appreciation. ----------------------------------------------------------------------------------- Davis Venture Value Portfolio Davis Selected Advisers, Seeks growth of capital. L.P./1/ ----------------------------------------------------------------------------------- FI International Stock Portfolio Fidelity Management & Seeks long-term growth of Research Company capital. ----------------------------------------------------------------------------------- FI Large Cap Portfolio Fidelity Management & Seeks long-term growth of Research Company capital. ----------------------------------------------------------------------------------- FI Mid Cap Opportunities Fidelity Management & Seeks long-term growth of Portfolio Research Company capital. ----------------------------------------------------------------------------------- FI Value Leaders Portfolio Fidelity Management & Seeks long-term growth of Research Company capital. -----------------------------------------------------------------------------------
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ------------------------------------------------------------------------------------ Franklin Templeton Small Cap Franklin Advisers, Inc. Seeks long-term capital Growth Portfolio growth. ------------------------------------------------------------------------------------ Harris Oakmark Focused Value Harris Associates L.P. Seeks long-term capital Portfolio appreciation. ------------------------------------------------------------------------------------ Harris Oakmark Large Cap Value Harris Associates L.P. Seeks long-term capital Portfolio appreciation. ------------------------------------------------------------------------------------ Jennison Growth Portfolio Jennison Associates LLC Seeks long-term growth of capital. ------------------------------------------------------------------------------------ Lehman Brothers(R) Aggregate MetLife Investment Seeks to equal the Bond Index Portfolio Advisors Company, LLC/2/ performance of the Lehman Brothers Aggregate Bond Index. ------------------------------------------------------------------------------------ Loomis Sayles Small Cap Loomis, Sayles & Seeks long-term capital Portfolio Company, L.P. growth from investments in common stocks or other equity securities. ------------------------------------------------------------------------------------ MetLife Mid Cap Stock Index MetLife Investment Seeks to equal the Portfolio Advisors Company, LLC/2/ performance of the Standard & Poor's Mid Cap 400 Composite Stock Price Index ("S&P Mid Cap 400 Index"). ------------------------------------------------------------------------------------ MetLife Stock Index Portfolio MetLife Investment Seeks to equal the Advisors Company, LLC/2/ performance of the Standard & Poor's 500 Composite Stock Price Index. ------------------------------------------------------------------------------------ MFS(R) Total Return Portfolio Massachusetts Financial Seeks a favorable total Services Company return through investment in a diversified portfolio. ------------------------------------------------------------------------------------ Morgan Stanley EAFE(R) Index MetLife Investment Seeks to equal the Portfolio Advisors Company, LLC/2/ performance of the MSCI EAFE Index. ------------------------------------------------------------------------------------ Neuberger Berman Mid Cap Neuberger Berman Seeks capital growth. Value Portfolio Management Inc. ------------------------------------------------------------------------------------ Oppenheimer Global Equity OppenheimerFunds, Inc. Seeks capital appreciation. Portfolio ------------------------------------------------------------------------------------ Russell 2000(R) Index Portfolio MetLife Investment Seeks to equal the return Advisors Company, LLC/2/ of the Russell 2000 Index. ------------------------------------------------------------------------------------ T. Rowe Price Large Cap Growth T. Rowe Price Associates Seeks long-term growth of Portfolio Inc. capital and, secondarily, dividend income. ------------------------------------------------------------------------------------ T. Rowe Price Small Cap Growth T. Rowe Price Associates Seeks long-term capital Portfolio Inc. growth. ------------------------------------------------------------------------------------ Western Asset Management Western Asset Seeks to maximize total Strategic Bond Opportunities Management Company return consistent with Portfolio preservation of capital. ------------------------------------------------------------------------------------ Western Asset Management U.S. Western Asset Seeks to maximize total Government Portfolio Management Company return consistent with preservation of capital and maintenance of liquidity. ------------------------------------------------------------------------------------ MetLife Conservative Allocation N/A Seeks high level of current Portfolio income, with growth of capital as a secondary objective. ------------------------------------------------------------------------------------ MetLife Conservative to N/A Seeks high total return in Moderate Allocation Portfolio the form of income and growth of capital, with a greater emphasis on income. ------------------------------------------------------------------------------------
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ------------------------------------------------------------------------------------ MetLife Moderate Allocation N/A Seeks a balance between a Portfolio high level of current income and growth of capital, with a greater emphasis on growth of capital. ------------------------------------------------------------------------------------ MetLife Moderate to Aggressive N/A Seeks growth of capital. Allocation Portfolio ------------------------------------------------------------------------------------ MetLife Aggressive Allocation N/A Seeks growth of capital. Portfolio ------------------------------------------------------------------------------------ MET INVESTORS SERIES TRUST ADVISER: MET INVESTORS ADVISORY LLC ------------------------------------------------------------------------------------ BlackRock Large-Cap Core BlackRock Advisors, LLC Seeks long-term capital Portfolio growth. ------------------------------------------------------------------------------------ Cyclical Growth ETF Portfolio Gallatin Asset Seeks growth of capital. Management, Inc. ------------------------------------------------------------------------------------ Cyclical Growth and Income ETF Gallatin Asset Seeks growth of capital and Portfolio Management, Inc. income. ------------------------------------------------------------------------------------ Harris Oakmark International Harris Associates L.P. Seeks long-term capital Portfolio appreciation. ------------------------------------------------------------------------------------ Janus Forty Portfolio Janus Capital Management Seeks capital appreciation. LLC ------------------------------------------------------------------------------------ Lazard Mid-Cap Portfolio Lazard Asset Seeks long-term growth of Management LLC capital. ------------------------------------------------------------------------------------ Legg Mason Partners Aggressive ClearBridge Advisors, Seeks capital appreciation. Growth Portfolio LLC ------------------------------------------------------------------------------------ Legg Mason Value Equity Legg Mason Capital Seeks long-term growth of Portfolio Management, Inc. capital. ------------------------------------------------------------------------------------ Lord Abbett Bond Debenture Lord, Abbett & Co. LLC Seeks to provide high Portfolio current income and the opportunity for capital appreciation to produce a high total return. ------------------------------------------------------------------------------------ Met/AIM Small Cap Growth AIM Capital Management, Seeks long-term growth of Portfolio Inc. capital. ------------------------------------------------------------------------------------ MFS(R) Research International Massachusetts Financial Seeks capital appreciation. Portfolio Services Company ------------------------------------------------------------------------------------ Neuberger Berman Real Estate Neuberger Berman Seeks to provide total Portfolio Management, Inc. return through investment in real estate securities, emphasizing both capital appreciation and current income. ------------------------------------------------------------------------------------ Oppenheimer Capital OppenheimerFunds, Inc. Seeks capital appreciation. Appreciation Portfolio ------------------------------------------------------------------------------------ PIMCO Inflation Protected Bond Pacific Investment Seeks to provide maximum Portfolio Management Company real return, consistent with LLC preservation of capital and prudent investment management. ------------------------------------------------------------------------------------ PIMCO Total Return Portfolio Pacific Investment Seeks maximum total Management Company return, consistent with the LLC preservation of capital and prudent investment management. ------------------------------------------------------------------------------------ RCM Technology Portfolio RCM Capital Management Seeks capital appreciation; LLC no consideration is given to income. ------------------------------------------------------------------------------------
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE -------------------------------------------------------------------------------- T. Rowe Price Mid-Cap Growth T. Rowe Price Associates Seeks long-term growth of Portfolio Inc. capital. -------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES ADVISER: CAPITAL RESEARCH AND MANAGEMENT COMPANY -------------------------------------------------------------------------------- American Funds Bond Fund N/A Seeks to maximize current income and preserve capital by investing primarily in fixed-income securities. -------------------------------------------------------------------------------- American Funds Global Small N/A Seeks capital appreciation Capitalization Fund through stocks. -------------------------------------------------------------------------------- American Funds Growth Fund N/A Seeks capital appreciation through stocks. -------------------------------------------------------------------------------- American Funds Growth-Income N/A Seeks both capital Fund appreciation and income. --------------------------------------------------------------------------------
-------- /1/Davis Selected Advisers, L.P. may also delegate any of its responsibilities to Davis Selected Advisers-NY, Inc., a wholly-owned subsidiary. /2/Prior to May 1, 2007, Metropolitan Life Insurance Company was the sub-adviser to this Portfolio. A Portfolio may have a name and/or objective that is very similar to that of a publicly available mutual fund that is managed by the same sub-investment manager or adviser. The Portfolios are not publicly available and will not have the same performance as those publicly available mutual funds. Different performance will result from differences in implementation of investment policies, cash flows, fees and size of the Portfolio. THE PORTFOLIO SHARE CLASSES THAT WE OFFER The Portfolios offer various classes of shares, each of which has a different level of expenses. The Fund prospectuses may provide information for share classes or Portfolios that are not available through the Policy. When you consult the Fund prospectus for a Portfolio, you should be careful to refer only to the information regarding the Portfolio and class of shares that is available through the Policy. The following classes of shares are available under the Policy: . For the Metropolitan Series Fund, Inc. and the Met Investors Series Trust Portfolios, we offer Class A shares only. . For the American Funds Insurance Series Portfolios, we offer Class 2 shares only. PURCHASE AND REDEMPTION OF PORTFOLIO SHARES BY OUR SEPARATE ACCOUNT As of the end of each Valuation Period (See "Sending Communications and Payments To Us--When Your Requests, Instructions and Notifications Become Effective"), we purchase and redeem Portfolio shares for the Separate Account at their net asset value without any sales or redemption charges. These purchases and redemptions reflect the amount of any of the following transactions that take effect at the end of the Valuation Period: . The allocation of net premiums to the Separate Account. . Dividends and distributions on Fund shares, which are reinvested as of the dates paid (which reduces the value of each share of the Fund and increases the number of Fund shares outstanding, but has no affect on the cash value in the Separate Account). 20 . Policy loans and loan repayments allocated to the Separate Account. . Transfers to and among investment divisions. . Withdrawals and surrenders taken from the Separate Account. VOTING RIGHTS THAT YOU WILL HAVE [SIDEBAR: You can give us voting instructions on shares of each Portfolio of a Fund that are attributed to your Policy.] The Funds have shareholder meetings from time to time to, for example, elect directors or trustees and approve some changes in investment management arrangements. We will vote the shares of each Portfolio that are attributed to your Policy based on your instructions. Should we determine that the 1940 Act no longer requires us to do this, we may decide to vote Fund shares in our own right, without input from you or any other owners of variable life insurance policies or variable annuity contracts that participate in a Fund. If you are eligible to give us voting instructions, we will send you informational material and a form to send back to us. We are entitled to disregard voting instructions in certain limited circumstances prescribed by the SEC. If we do so, we will give you our reasons in the next semi-annual report to Policy owners. If we do not receive timely voting instructions from you and other insurance and annuity owners that are entitled to give us voting instructions, we will vote those shares in the same proportion as the shares held in the same separate account for which we did receive voting instructions. The effect of this proportional voting is that a small number of Policy owners may control the outcome of the vote. Also, we will vote Fund shares that are not attributable to insurance or annuity owners (including shares that we hold in our general account) or that are held in separate accounts that are not registered under the 1940 Act in the same proportion as the aggregate of the shares for which we received voting instructions from all insurance and annuity owners. THE FIXED RETURN YOU CAN CHOOSE (OUR FIXED ACCOUNT) The Fixed Account is part of our general assets that are not in any legally-segregated separate accounts. Amounts in the Fixed Account are credited with interest at an effective annual rate of at least 3%. We may also credit excess interest on such amounts. Different excess interest rates may apply to different amounts, based upon when such amounts were allocated to the Fixed Account and whether they were premium payments or transfers from the investment divisions. Any partial amounts we remove from the Fixed Account (such as any portion of your Policy's monthly deduction that is allocable to the Fixed Account) will be taken from the most recently allocated amounts first. Any excess interest rate will be credited for at least 12 months before a new rate is credited. We can delay transfers, withdrawals, surrender and payment of Policy loans from the Fixed Account for up to 6 months. Since the Fixed Account is not registered under the federal securities laws, this prospectus contains only limited information about the Fixed Account. The Policy gives you more information on the operation of the Fixed Account. 21 PURCHASING A POLICY If you want to own a Policy, then you must complete an application, which must be received by the Designated Office. We reserve the right to reject an application for any reason permitted by law, and our acceptance of an application is subject to our underwriting rules. We offer other variable life insurance policies that have different death benefits, policy features, Portfolio selections, and optional programs. However, these other policies also have different charges that would affect your performance and cash values. To obtain more information about these other policies, contact our Designated Office or your sales representative. [SIDEBAR: We will issue a Policy to you as owner. You will have all the rights under the Policy, including the ability to name a new owner or contingent owner.] Generally, we will issue a Policy only for insureds that are age 80 or less (although we may decide to permit an insured that is older) that have provided evidence of insurability that we find acceptable. An "insured" is the person upon whose life we issue the Policy. You do not have to be the insured. The beneficiary is named in the application as the person who will receive the insurance proceeds upon the death of the insured. The beneficiary has no rights under the Policy until the death of the insured (unless the beneficiary has been designated an irrevocable beneficiary) and must survive the insured in order to receive the insurance proceeds. For the purpose of computing the insured's age under the Policy, we start with the insured's age on the Date of Policy which is set forth in the Policy. Age under the Policy at any other time is then computed using that issue age and adding the number of full Policy years completed. The Date of Policy is usually the date the Policy application is approved. (Under our current administrative rules, a Policy which would be dated the 28th day or later in a month will receive a Date of Policy of the 28th.) In certain situations when payroll deduction is being used for remittance of premiums, we may adjust the Date of Policy. We use the Date of Policy to calculate the Policy years (and Policy months and monthly anniversaries). We may permit a Date of Policy that is earlier than the date the application is approved if there have been no material misrepresentations in the application (but not earlier than the date that the application is completed) in order to preserve a younger age for the insured. Your Date of Policy can also be the date the application is completed if you ask us and if we receive a payment of at least $2,500 with the application. For applications submitted without an advance payment of the initial premium or if we have refunded an advance payment prior to the issuance of the Policy, the Policy will be redated upon delivery to you. The delivery date will be the new Date of Policy. Temporary insurance will be provided for up to 90 days from the date of the application (or a greater period of time that we may elect), provided that we receive a payment equal to at least one transfer under a preauthorized checking arrangement (see "Your Payment and Allocation of Premiums--Paying Premiums") and any necessary medical examination has been completed. Even if the insured hasn't completed the medical examination, there will be coverage if the insured dies from an accident within 30 days of the date of the application. The temporary insurance does not cover death by suicide. The temporary insurance provided is equal to the specified face 22 amount applied for up to a maximum of $500,000 (as may be increased by us). There will be no charge for the insurance protection under the temporary insurance. Insurance coverage under the Policy will begin, and any temporary insurance that is then in force will end, at the time the Policy is delivered and the Date of Receipt of the first premium payment has occurred. For coverage to be effective, the insured's health must be the same as stated in the application and, in most states, the insured must not have sought medical advice or treatment after the date of the application. As to when charges under this Policy begin, see "Charges and Deductions you Pay--Charges Included in the Monthly Deduction." It may not be in your best interest to surrender, terminate, change, or borrow from existing life insurance policies or annuity contracts in connection with the purchase of the Policy. You should compare your existing insurance and the Policy carefully. You should replace your existing insurance only when you determine that the Policy is better for you. You may have to pay a surrender charge on your existing insurance, and the Policy will impose a new surrender charge period. You should talk to your financial professional or tax adviser to make sure the exchange will be tax-free. If you surrender your existing policy for cash and then buy the Policy, you may have to pay a tax, including possibly a penalty tax, on the surrender. Because we will not issue the Policy until we have received an initial premium from your existing insurance company, the issuance of the Policy may be delayed. YOUR PAYMENT AND ALLOCATION OF PREMIUMS PAYING PREMIUMS Unless your Policy has a guaranteed minimum death benefit in effect, the payment of a given amount of premiums won't guarantee that your Policy will remain in force. Rather, this depends on your Policy's cash surrender value. Your Policy will remain in force as long as the Policy's cash surrender value is large enough to cover one monthly deduction. The monthly deduction is a charge we deduct from your Policy's cash value every month. [SIDEBAR: You can make voluntary planned periodic premium payments and unscheduled premium payments.] You can make premium payments, subject to certain limitations discussed below, through the: . VOLUNTARY PLANNED PERIODIC PREMIUM SCHEDULE: You choose the schedule on your application. The schedule sets forth the amount of premiums, fixed payment intervals, and the period of time that you intend to pay premiums. The schedule can be: (A) annual; (B) semi-annual; (C) periodic automatic pre-authorized transfers from your checking account ("preauthorized checking arrangement"); (D) systematic through payment plans that your employer makes available; or (E) through another method to which we agree. You do not have to pay premiums in accordance with your voluntary planned premium schedule. . UNSCHEDULED PREMIUM PAYMENT OPTION: You can make premium payments at any time. We do not accept premiums made in cash or by money order. We will hold a premium payment received before its scheduled payment date in a non-interest bearing holding account until the scheduled payment date, if necessary, to prevent a Policy from becoming a modified endowment contract. 23 (See "Modified Endowment Contracts" under "Federal Tax Matters".) We will send you an additional notice of this arrangement by letter immediately after receiving your payment. We will also give you the option to either have the money held until the scheduled payment date or applied on our Date of Receipt of your instructions to apply the money (unless the scheduled payment date has already passed). PAYING PREMIUMS TO MAINTAIN THE GUARANTEED MINIMUM DEATH BENEFIT You can pay certain levels of premiums that entitle you to a guaranteed minimum death benefit for a specified period of time. To keep the guarantee you will need to pay these premium levels for the entire duration of the guarantee. We will test your Policy on each monthly anniversary or upon the Policy lapse date (depending on state requirements) to verify that you have paid the minimum premium (after taking into account partial withdrawals and outstanding Policy loans) to keep the guarantee in force. If no guarantee is in force, your Policy will terminate under the circumstances described in "Policy Termination and Reinstatement". The level of premium to keep the guaranteed minimum death benefit in effect varies based on several factors including: . Duration of the guarantee (generally higher levels are required for longer durations). . Specified face amount (generally higher levels are required for higher amounts). . Smoking class and underwriting class (generally higher levels are required for classes that we consider to pose a greater mortality risk). . Death benefit option (generally higher levels are required for death benefit options B and CI). . Except for Policies issued in New York, Policy riders (generally higher levels are required if you have riders in force). MAXIMUM AND MINIMUM PREMIUM PAYMENTS . During the first Policy year you must pay an amount of premium that we call the minimum initial premium (after taking account of partial withdrawals and outstanding Policy loans) or we will terminate your Policy after the grace period. . After the first Policy year, your voluntary planned periodic payments must be at least: . $200 annually (or, for some Policies distributed by certain brokers, $2,500 annually) . $100 semi-annually . $15 on a preauthorized checking arrangement or other systematic payment schedule. . Unscheduled premium payments must be at least $250 each. . You may not pay premiums that exceed tax law premium limitations for life insurance policies. We will return any amounts that exceed these limits except that we will keep any amounts that are required to keep the Policy from terminating. We will let you make premium payments that would turn your Policy into a modified endowment contract, but we will tell you of this 24 status not later than in your annual statement. If possible, we will tell you how to reverse the status. ALLOCATING NET PREMIUMS [SIDEBAR: Net premiums are your premiums minus the charges deducted from those premiums.] We will allocate your net premiums to the Fixed Account from the Investment Start Date until 20 days after such date. Your Investment Start Date is the later of (A) the Date of Policy and (B) the Date of Receipt of your first premium payment. Your premium allocation instructions and transfer requests for investment in the separate account that you make in your Policy application, or within 20 days after your Investment Start Date, will take effect on the end of the first Valuation Date that is 20 days after your Investment Start Date. You can instruct us to allocate your net premiums among the Fixed Account and the investment divisions. The percentage of your net premium allocation into each of these investment options must be a minimum of 1% and in whole numbers. You can change your allocations (effective after the 20th day referred to above) at any time by giving us written notification at our Designated Office or in any other manner that we permit. FOR POLICIES ISSUED IN CALIFORNIA. We will allocate your net premiums among the Fixed Account and the investment divisions you select in your Policy application on the Investment Start Date. If you are age 60 or older and you allocate 100% of your net premiums to the Fixed Account in order to receive a refund of premiums should you cancel the Policy during the Free Look period (see "Other Policy Provisions--Free Look Period to Cancel your Policy"), we will not automatically transfer your cash value or reallocate your future premiums to the investment divisions once the Free Look period has ended. You must contact us to request a transfer or reallocation. 25 SENDING COMMUNICATIONS AND PAYMENTS TO US [SIDEBAR: You can contact us at our Designated Office.] CONTACTING US You can communicate all of your requests, instructions and notifications to us by contacting us in writing at our Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. These include: changing your beneficiary; taking a Policy loan; changing your death benefit option; taking a partial withdrawal; surrendering your Policy; making transfer requests (including elections with respect to the automated investment strategies) or changing your premium allocations. Below is a list of our Designated Offices for various functions. We may name additional or alternate Designated Offices. If we do, we will notify you in writing. You may also contact us at 1-800-MET-5000 for any function not listed below or for any other inquiry.
FUNCTION DESIGNATED OFFICE --------------------------------------------------------------------------------- Premium Payments MetLife, P.O. Box 371351, Pittsburgh, PA 15250-7351 --------------------------------------------------------------------------------- Payment Inquiries MetLife, P.O. Box 30375, Tampa FL 33630 --------------------------------------------------------------------------------- Surrenders, Withdrawals, Loans, MetLife, P.O. Box 543, Investment Division Transfers, Warwick, R.I. 02887-0543 Premium Reallocation --------------------------------------------------------------------------------- Death Claims MetLife, P.O. Box 353, Warwick, R.I. 02887-0353 --------------------------------------------------------------------------------- Beneficiary & Assignment MetLife, P.O. Box 313, Warwick, R.I. 02887-0313 --------------------------------------------------------------------------------- Cancellations (Free Look Period) MetLife, 500 Schoolhouse Road, Johnstown, PA 15904 Attn: Free Look --------------------------------------------------------------------------------- Address Changes MetLife, 500 Schoolhouse Road, Johnstown, PA 15904 Attn: Data Integrity --------------------------------------------------------------------------------- Reinstatements MetLife, P.O. Box 30375, Tampa FL 33630 ---------------------------------------------------------------------------------
WHEN YOUR REQUESTS, INSTRUCTIONS AND NOTIFICATIONS BECOME EFFECTIVE Generally, requests, premium payments and other instructions and notifications are effective on the Date of Receipt. In those cases, the effective time is at the end of the Valuation Period during which we receive them at our Designated Office. (Some exceptions to this general rule are noted below and elsewhere in this Prospectus.) A Valuation Period is the period between two successive Valuation Dates. It begins at the close of regular trading on the New York Stock Exchange on a Valuation Date and ends at the close of regular trading on the New York Stock Exchange on the next succeeding Valuation Date. The close of regular trading is 4:00 p.m., Eastern Time on most days. A Valuation Date is each day on which the New York Stock Exchange is open for trading. Accordingly, if we receive your request, premium, or instructions 26 after the close of regular trading on the New York Stock Exchange, or if the New York Stock Exchange is not open that day, then we will treat it as received on the next day when the New York Stock Exchange is open. These rules apply regardless of the reason we did not receive your request, premium, or instructions by the close of regular trading on the New York Stock Exchange, even if due to our delay (such as a delay in answering your telephone call). The effective date of your Automated Investment Strategies will be that set forth in the strategy chosen. THIRD PARTY REQUESTS Generally, we accept requests for transactions or information only from you. Therefore, we reserve the right not to process transactions requested on your behalf by your agent with a power of attorney or any other authorization. This includes processing transactions by an agent you designate, through a power of attorney or other authorization, who has the ability to control the amount and timing of transfers for a number of other Policy owners, and who simultaneously makes the same request or series of requests on behalf of other Policy owners. INSURANCE PROCEEDS PAYABLE IF THE INSURED DIES If the Policy is in force, we will pay your beneficiary the insurance proceeds as of the end of the Valuation Period that includes the insured's date of death. We will pay this amount after we receive documents that we request as due proof of the insured's death. The amount of the death benefit that exceeds the Policy's Cash Value is paid from our general account. Death benefit amounts paid from our general account are subject to the claims of our creditors. The beneficiary can receive the death benefit in a single sum or under various income plans described in the Statement of Additional Information. You may make this choice during the insured's lifetime. If no selection is made we may place the amount in an account to which we will credit interest, and the beneficiary will have immediate access to all or part of that amount. This account is part of our general account. It is not a bank account and it is not insured by the FDIC or any other government agency. As part of our general account, it is subject to the claims of our creditors. We receive a benefit from all amounts left in this account. The beneficiary has one year from the date the insurance proceeds are paid to change the selection from a single sum payment to an income plan, as long as we have made no payments from the interest-bearing account. If the terms of the income plan permit the beneficiary to withdraw the entire amount from the plan, the beneficiary can also name contingent beneficiaries. The insurance proceeds equal: . The death benefit under the death benefit option, alternate death benefit or minimum guaranteed death benefit that is then in effect; plus . Any additional insurance proceeds provided by rider; minus . Any unpaid Policy loans and accrued interest thereon, and any due and unpaid charges accruing during a grace period. 27 DEATH BENEFIT OPTIONS YOU CAN CHOOSE [SIDEBAR: The Policy generally offers a choice of three death benefit options.] Generally, you can choose among three options, although the choice may be limited based upon the insured's age. You select which option you want in the Policy application. The three options are: . Option A: The death benefit is a level amount and equals the specified face amount of the Policy. . Option B: The death benefit varies and equals the specified face amount of the Policy plus the cash value on the date of death. . Option C: The death benefit is one of two amounts and is available only if insured is age 60 or less when we issue the Policy: . The death benefit varies and equals the specified face amount plus the cash value on the date of death, until the insured is age 65 ("CI"). . At age 65, the death benefit becomes a level amount equal to the specified face amount under CI plus the cash value at the end of the Valuation Date immediately preceding the date on which the insured became age 65. This new amount then becomes the specified face amount ("CII"). [SIDEBAR: You can generally change your death benefit option.] There are issues that you should consider in choosing your death benefit option. For example, under Options B and CI, the cash value is added to the specified face amount. Therefore, the death benefit will generally be greater under these options than under Options A and CII, for Policies with the same specified face amount and premium payments. By the same token, the cost of term insurance will generally be greater under Options B and CI than under Options A and CII. You can change your death benefit option after the second Policy year and, thereafter, once in any 12 month period, provided that: . Your cash surrender value after the change would be enough to pay at least two monthly deductions. . The specified face amount continues to be no less than the minimum we allow after a decrease. . The total premiums you have paid do not exceed the then current maximum premium limitations permitted under Internal Revenue Service rules. . If the change is to Option C, the insured is age 60 or less. Any change will be effective on the monthly anniversary on or immediately following the Date of Receipt of the request. A change in death benefit will have the following effects on your specified face amount: . CHANGE FROM A TO B, OR FROM A TO CI, OR FROM CII TO B: The specified face amount will decrease to equal the death benefit less the cash value on the effective date of the change. . CHANGE FROM B TO A, OR FROM CI TO A: The specified face amount will increase to equal the death benefit plus the cash value of the Policy on the effective date of the change. . CHANGE FROM B TO CI OR FROM CI TO B: The specified face amount will remain the same. Before you change your death benefit option you should consider the following: . If the term insurance amount of your death benefit changes, as it may with a change from A to B, or from A to CI, or from CII to B and vice versa, the cost of term insurance will also change. This will affect your cash value and, in some cases, the amount of the death benefit. 28 . The premium requirements for maintaining the guaranteed minimum death benefit may change, which could affect your ability to maintain it. . If your specified face amount changes because of the change in death benefit option, consider also the issues presented by changing your specified face amount that are described under "Specified Face Amount," below. These issues include the possibility that your Policy would become a modified endowment contract; that you would receive a taxable distribution; that there would be an increase or decrease in the monthly administration charge; and that the maximum premium amounts that you can pay would change. A specified face amount decrease resulting from a death benefit option change, however, will not result in deduction of a surrender charge. ALTERNATE DEATH BENEFIT THAT AUTOMATICALLY APPLIES IN SOME CASES In order to ensure that the Policy qualifies as life insurance under the federal income tax laws, the beneficiary will receive an alternate death benefit if it is greater than the amount that the beneficiary would have received under the death benefit option that you chose, as discussed above. The alternate death benefit is as follows: Age of Insured at Death 40 and less 45 50 55 60 65 70 75 to 90 95 % of Cash Value: * 250 215 185 150 130 120 115 105 100
-------- *For the ages not listed, the percentage decreases by a ratable portion for each full year. GUARANTEED MINIMUM DEATH BENEFIT YOU CAN CHOOSE [SIDEBAR: The Policy offers a guaranteed minimum death benefit.] You can choose to have a guaranteed minimum death benefit for one of several specified periods of time, if you meet certain requirements. Generally, the amount of guaranteed minimum death benefit equals the specified face amount of insurance, plus any additional death benefits provided by rider. Availability may be restricted in your state or by the insured's rating class, however. There is no additional charge for the guarantee, but in order to keep the guarantee in effect, you will need to pay certain minimum premiums, which vary based on many factors (see "Premiums" below). We test the Policy on each monthly anniversary or upon the Policy's lapse date (depending on state requirements)--the "testing date"--to make sure that you have paid the minimum premiums required to keep the guarantee for the duration you chose. If you haven't made the minimum premium payments, we will tell you and give you 61 days from the testing date to make any additional payment to keep the guarantee at the then current duration. If we do not receive the required payment, we will reduce the duration of the guarantee to one that the premiums you have paid would support and that would have been available to you. If no shorter duration is available to you, we will terminate the guarantee. A duration cannot be reactivated, once we terminate it. If no guarantee is in effect, your Policy will terminate under the circumstances described in "Policy Termination and Reinstatement." 29 Each duration for the guaranteed minimum death benefit has its own premium requirement that supports it. The longer the duration, the greater the premiums required. At issue, we will look at the premium you plan to pay and give you which ever duration that premium supports. You can reduce the duration by reducing the premiums paid to an amount that will only support a shorter duration. A duration cannot be increased by subsequently paying additional premiums nor can a duration be reinstated once it is terminated. The durations for the guaranteed minimum death benefit are*: . For the first five Policy years. . To age 65, but only if the insured is age 60 or less when the Policy is issued. . To age 75, but only if the insured is age 70 or less when the Policy is issued. . To age 85, but only if the insured is age 80 or less when the Policy is issued. THE SPECIFIED FACE AMOUNT OF YOUR POLICY The specified face amount is the basic amount of insurance specified in your Policy. The Minimum Initial Specified Face amount is the smallest amount of specified face amount for which a Policy may be issued. Currently these amounts are generally: . $100,000 for insureds in the preferred rate class . $50,000 for most other insureds . $25,000 for certain insureds over age 59. . $250,000 for most Policies distributed through broker-dealers not affiliated with us. [SIDEBAR: You can generally increase or decrease your Policy's specified face amount.] Generally, you may decrease your specified face amount after the first Policy year or increase your specified face amount after the second Policy year, and thereafter, once in any 24 month period, as long as the insured is age 79 or under. Any change will be effective on the monthly anniversary on or next following (a) the Date of Receipt of your request; or (b) if we require evidence of insurability, the date we approve your request. You are permitted to decrease the specified face amount to as low as $25,000 except that no reduction may decrease the specified face amount below the Minimum Initial Specified Face Amount during the first five Policy years or one half that amount thereafter. The lowest available specified face amount requirements also apply to decreases that result from partial withdrawals or changes in death benefit option. If there have been previous specified face amount increases, any decreases in specified face amount will be made in the following order: (i) the specified face amount provided by the most recent increase; (ii) the next most recent increases successively; and (iii) the initial specified face amount. -------- *For Policies issued in New York, the guaranteed minimum death benefit guarantees payment of the specified face amount of insurance only (and not any rider benefits), and the options for the duration of the guarantee are generally: (i) for the first five Policy years; (ii) to age 55 (available only if the insured was between age 18 and age 50 on the date the Policy was issued) or for the first 20 Policy years (if the insured was less than age 18 on the date the Policy was issued); or (iii) to age 65 (available only if the insured was between age 18 and age 60 on the date the Policy was issued) or to age 60 (if the insured was less than age 18 on the date the Policy was issued). For Policies issued in Massachusetts, New Jersey and Texas, the only available duration of the guaranteed minimum death benefit is the first five Policy years. It is possible that other states may, in the future, require similar variations in the durations that are available. 30 You may increase the specified face amount only if: (a) the guaranteed minimum death benefit is in effect; or (b) the cash surrender value after the change is large enough to cover at least two monthly deductions. Generally, the minimum specified face amount increase is $5,000 ($10,000 for Policies issued in New York). Any increase will require that we receive additional evidence of insurability that is satisfactory to us. We will also impose an underwriting charge. Before you change your specified face amount you should consider the following: . The term insurance amount of your death benefit will likely change and so will the cost of term insurance. This will affect the insurance charges, cash value and, in some cases, death benefit levels. . Reducing your specified face amount in the first 15 Policy years may result in our returning an amount to you which could then be taxed on an income first basis. . We will deduct a portion of any applicable surrender charge at the time of any decrease in specified face amount that you request. . We will establish an additional amount of surrender charge at the time of any increase in the specified face amount, other than an increase resulting automatically from a change of death benefit option. . The premium requirements for maintaining the guaranteed minimum death benefit will change, which could affect your ability to maintain it. . The amount of additional premiums that the tax laws permit you to pay into your Policy may increase or decrease. The additional amount you can pay without causing your Policy to be a modified endowment contract for tax purposes may also increase or decrease. . In some circumstances, the Policy could become a modified endowment contract. . The monthly administration charge may change. YOUR POLICY'S VALUES CASH VALUE [SIDEBAR: Your Policy is designed to accumulate cash value.] Your Policy's cash value equals: . The Fixed Account cash value, plus . The Policy Loan Account cash value, plus . The Separate Account cash value. The Separate Account cash value allocated to each investment division is calculated as follows: . 20 days after your Investment Start Date, we will allocate your cash value among the investment divisions as you requested your net premiums to be allocated in your application. For Policies issued in California, see "Allocating Net Premiums." . Thereafter, at the end of each Valuation Period the cash value in an investment division will equal: . The cash value in the investment division at the beginning of the Valuation Period; plus 31 . All net premiums, loan repayments and cash value transfers into the investment division during the Valuation Period; minus . All partial cash withdrawals, loans and cash value transfers out of the investment division during the Valuation Period; minus . The portion of any charges and deductions allocated to the cash value in the investment division during the Valuation Period; plus . The net investment return for the Valuation Period on the amount of cash value in the investment division at the beginning of the Valuation Period. The net investment return currently equals the rate of increase or decrease in the net asset value per share of the underlying Fund portfolio over the Valuation Period, adjusted upward to take appropriate account of any dividends and other distributions paid by the portfolio during the period. The net investment return could in the future be reduced by a charge for taxes that we have the right to impose. CASH SURRENDER VALUE Your Policy's cash surrender value equals your cash value minus: . Any outstanding Policy loans (plus any accrued and unpaid interest); . Any surrender charges; and . The administration charge for any full Policy month remaining in the first Policy year. THE AMOUNT WE PAY AT YOUR POLICY'S FINAL DATE The Final Date is the Policy anniversary on which the insured is Age 95. We will allow you to extend that date, however, where permitted by state law. If the insured is living on the Final Date, we will pay you the cash value of the Policy, reduced by any outstanding loans (plus accrued interest). You can receive the cash value in a single sum, in an account that earns interest, or under an available income plan. The tax consequences of keeping the Policy in force beyond the insured's attained age 100 are unclear. SURRENDERS AND PARTIAL WITHDRAWALS FROM YOUR POLICY SURRENDERING (TURNING IN) YOUR POLICY You may surrender your Policy for its cash surrender value at any time while the insured is living. We may ask you to return the Policy before we honor your request to surrender your Policy. We determine the cash surrender value as of the end of the Valuation Period during which we receive the surrender request. (See "Sending Communications and Payments To Us"). You can choose to have the proceeds paid in a single sum, or under an income plan. If the insured dies after you surrender the Policy but before the end of the Policy month in which you surrendered the Policy, we will pay your beneficiary an amount equal to the difference between the Policy's death benefit and its cash value, computed as of the surrender date. PARTIAL WITHDRAWALS YOU CAN TAKE You can make partial withdrawals of your cash surrender value at any time if: . The partial withdrawal would not result in a reduction in your specified face amount during the first Policy year, as described under "The Specified Face Amount of your Policy" above; 32 . The partial withdrawal would not result in the cash surrender value being less than sufficient to pay 2 monthly deductions; . The partial withdrawal is at least $500; . The partial withdrawal would not result in your specified face amount falling below the minimum allowable amount, as described under "The Specified Face Amount of Your Policy" above; and . The partial withdrawal would not result in total premiums paid exceeding the then current maximum premium limitation determined by the Internal Revenue Code rules. If you make a request for a partial withdrawal that is not permitted, we will tell you and you may then ask for a smaller partial withdrawal or surrender the Policy. We will deduct your partial withdrawal from the Fixed Account and the investment divisions in the same way we allocate the monthly deduction. Before surrendering your Policy or requesting a partial withdrawal you should consider the following: . Surrender charges may apply. . At least some amounts received may be taxable as income and, if your Policy is a modified endowment contract, subject to certain tax penalties. (See "Federal Tax Matters--Modified Endowment Contracts.") . Your Policy could become a modified endowment contract. . For partial withdrawals, your death benefit will decrease by the amount of the withdrawal. For Options A and CII, your specified face amount also will decrease, generally by the amount of the withdrawal, but this decrease will not cause any surrender charge to be deducted other than any surrender charge attributable to the amount withdrawn. . Any partial withdrawal that causes the specified face amount to decrease could cause an increase in the monthly administrative charge. . In some cases you may be better off taking a Policy loan, rather than a partial withdrawal. [SIDEBAR: You can transfer your cash value among the investment divisions and the Fixed Account at any time beginning 20 days after the Investment Start Date.] TRANSFERRING CASH VALUE AMONG YOUR POLICY'S INVESTMENT OPTIONS The minimum amount you may transfer is $50 or, if less, the total amount in an investment option. We do not currently charge for transfers, but we do reserve the right to charge up to $25 per transfer, except for transfers under the Automated Investment Strategies. Currently, transfers are not taxable transactions. Frequent requests from Policy owners to transfer cash value may dilute the value of a Portfolio's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Portfolio and the reflection of that change in the Portfolio's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers may also increase brokerage and administrative costs of the underlying Portfolios and may disrupt portfolio management strategy, requiring a Portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations 33 ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the Portfolios, which may in turn adversely affect Policy owners and other persons who may have an interest in the Policies (E.G., beneficiaries). We have policies and procedures that attempt to detect and deter frequent transfers in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be presented in the international, small-cap, and high-yield Portfolios (I.E., BlackRock Strategic Value Portfolio, FI International Stock Portfolio, Franklin Templeton Small Cap Growth Portfolio, Loomis Sayles Small Cap Portfolio, Morgan Stanley EAFE(R) Index Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000(R) Index Portfolio, Western Asset Management Strategic Bond Opportunities Portfolio, T. Rowe Price Small Cap Growth Portfolio, Harris Oakmark International Portfolio, Lord Abbett Bond Debenture Portfolio, Met/AIM Small Cap Growth Portfolio, MFS(R) Research International Portfolio, and American Funds Global Small Capitalization Fund) and we monitor transfer activity in those Portfolios (the "Monitored Portfolios"). In addition, as described below, we intend to treat all American Funds Insurance Series portfolios ("American Funds Portfolios") as Monitored Portfolios. We employ various means to monitor transfer activity, such as examining the frequency and size of transfers into and out of the Monitored Portfolios within given periods of time. For example, we currently monitor transfer activity to determine if, for each category of international, small-cap and high-yield Portfolios, in a 12-month period there were; (1) six or more transfers involving the given category; (2) cumulative gross transfers involving the given category that exceed the current cash value; and (3) two or more "round-trips" involving any Portfolio in the given category. A round-trip generally is defined as a transfer in followed by a transfer out within the next seven calendar days or a transfer out followed by a transfer in within the next seven calendar days, in either case subject to certain other criteria. We do not believe that other Portfolios present a significant opportunity to engage in arbitrage trading and therefore do not monitor transfer activity in those Portfolios. We may change the Monitored Portfolios at any time without notice in our sole discretion. In addition to monitoring transfer activity in certain Portfolios, we rely on the underlying Portfolios to bring any potential disruptive trading activity they identify to our attention for investigation on a case-by-case basis. We will also investigate any other harmful transfer activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. AMERICAN FUNDS MONITORING POLICY. As a condition to making their portfolios available in our products, American Funds requires us to treat all American Funds portfolios as Monitored Portfolios under our current market timing and excessive trading policies and procedures. Further, American Funds requires us to impose additional specified monitoring criteria for all American Funds portfolios available under the Policy, regardless of the potential for arbitrage trading. We are required to monitor transfer activity in American Funds portfolios to determine if there were two or more transfers in followed by transfers out, in each case of a certain dollar amount or greater, in any 30-day period. A first violation of the American Funds monitoring policy will result in a written notice of violation; each additional violation will result in the imposition of a six-month restriction, during which period we will require all transfer requests to or from an American Funds portfolio to be submitted with an original signature. Further, as Monitored Portfolios, all 34 American Funds portfolios also will be subject to our current market timing and excessive trading policies, procedures and restrictions (described below), and transfer restrictions may be imposed upon a violation of either monitoring policy. Although we do not have the operational or systems capability at this time to impose the American Funds monitoring policy and/or to treat all of the American Funds portfolios as Monitored Portfolios under our policy, we intend to do so in the future. Our policies and procedures may result in transfer restrictions being applied to deter market timing. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, or other transfer activity that we believe may be harmful to other Policy owners or other persons who have an interest in the Policies, we require all future transfer requests, to or from a Monitored Portfolio or other identified Portfolios under that Policy to be submitted either (i) in writing with an original signature or (ii) by telephone prior to 10:00 a.m. Transfers made under an automated investment strategy described in this prospectus are not treated as transfers when we evaluate trading patterns for market timing. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Portfolios that we believe are susceptible to market timing or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Policy owners to avoid such detection. Our ability to restrict such transfer activity may also be limited by provisions of the Policy. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect Policy owners and other persons with interests in the Policies. We do not accommodate market timing in any Portfolios and there are no arrangements in place to permit any Policy owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The Portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares, and we reserve the right to enforce these policies and procedures. For example, Portfolios may assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period. The prospectuses for the Portfolios describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual authority or the operational capacity to apply the frequent trading policies and procedures of the Portfolios, we have entered into a written agreement, as required by SEC regulation, with each Portfolio or its principal underwriter that obligates us to provide to the Portfolio promptly upon request certain information about the trading activity of individual Policy owners, and to execute instructions from the Portfolio to restrict or prohibit further purchases or transfers by specific Policy owners who violate the frequent trading policies established by the Portfolio. In addition, Policy owners and other persons with interests in the Policies should be aware that the purchase and redemption orders received by the Portfolios generally are "omnibus" orders from intermediaries such as retirement plans or separate accounts funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance policies and/or individual retirement plan participants. The omnibus nature of these orders may limit 35 the Portfolios in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Portfolios (and thus Policy owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Portfolios. If a Portfolio believes that an omnibus order reflects one or more transfer requests from Policy owners engaged in disruptive trading activity, the Portfolio may reject the entire omnibus order. In accordance with applicable law, we reserve the right to modify or terminate the transfer privilege at any time. We also reserve the right to defer or restrict the transfer privilege at any time that we are unable to purchase or redeem shares of any of the Portfolios, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single Policy owner). You should read the Portfolio prospectuses for more details. AUTOMATED INVESTMENT STRATEGIES YOU CAN CHOOSE You can choose one of five currently available strategies. You can also change or cancel your choice at any time. . EQUITY GENERATOR: allows you to transfer an amount equal to the interest earned in the Fixed Account in any Policy month equal to at least $20 to the MetLife Stock Index investment division or the BlackRock Aggressive Growth investment division. The transfer will be made at the beginning of the Policy month following the Policy month in which the interest was earned. . EQUALIZER: allows you to periodically equalize amounts in your Fixed Account and either the MetLife Stock Index investment division or the BlackRock Aggressive Growth investment division. We currently make equalization each quarter. We will terminate this strategy if you make a transfer out of either of the investment divisions or the Fixed Account. You may then reelect the Equalizer on your next Policy anniversary. . REBALANCER: allows you to periodically redistribute amounts in the Fixed Account and investment divisions in the same proportion that the net premiums are then being allocated. We currently make the redistribution each quarter. . ALLOCATOR: allows you to systematically transfer money from the Fixed Account to any investment division(s). When you elect Allocator, you must have enough cash value in the Fixed Account to enable the election to be in effect for three months. The election can be to transfer each month: . A specific amount, until the cash value in the Fixed Account is exhausted, . A specific amount for a specific number of months, or . Amounts in equal installments until the total amount you have requested has been transferred. These transfer privileges allow you to take advantage of investment fluctuations, but none assures a profit nor protects against a loss in declining markets. Because the Allocator involves continuous investment in securities regardless of the price levels of such securities, you should consider your 36 financial ability to continue purchases through periods of fluctuating price levels. . INDEX SELECTOR: Allows you to choose one of five asset allocation models which are designed to correlate to various risk tolerance levels. We provide the elements to formulate the model. We may rely on a third party for its expertise in creating appropriate allocations. Based on your selection, 100% of your cash value will be allocated among the Lehman Brothers Aggregate Bond Index, Morgan Stanley EAFE Index, MetLife Stock Index, Russell 2000 Index and MetLife Mid Cap Stock Index investment divisions and the Fixed Account. Each quarter we will redistribute your cash value in the Fixed Account and investment divisions in order to maintain the original allocations. We will implement the Index Selector strategy using the percentage allocations of the model that was in effect when you elected the Index Selector strategy. You should consider whether it is appropriate for you to continue this strategy over time if your risk tolerance, time horizon or financial situation changes. Before electing this strategy, you should consider the fact that investment returns using this strategy may be more volatile than the other strategies. The asset allocation models used in the Index Selector strategy may change from time to time. If you are interested in an updated model, please contact your sales representative. If you request a transfer after you have elected the Index Selector strategy, we will process the transfer but on the next quarterly rebalancing date, we will redistribute your cash value in order to maintain the original allocations of the asset allocation model you chose. HOWEVER, if you change your allocation of net premiums, the Index Selector strategy will be terminated, including the rebalancing feature. You can terminate your participation in the Index Selector strategy at any time. We reserve the right to modify or terminate the Index Selector strategy or any other automated investment strategy, for any reason, including, without limitation, a change in regulatory requirements applicable to such programs. TRANSFERS YOU CAN MAKE BY TELEPHONE Subject to our market timing procedures, we may, if permitted by state law, allow you to make transfer requests, changes to Automated Investment Strategies and changes to allocations of future net premiums by phone. We generally allow you to authorize your sales representative to make such requests. The following procedures apply: . We will institute reasonable procedures to confirm that instructions we receive are genuine. Our procedures will include receiving from the caller your personalized data. Any telephone instructions that we reasonably believe to be genuine are your responsibility, including losses arising from such instructions. Because telephone transactions may be available to anyone who provides certain information about you and your Policy, you should protect that information. We may not be able to verify that you are the person providing telephone instructions, or that you have authorized any such person to act for you. . All telephone calls will be recorded. . You will receive a written confirmation of any transaction. 37 . Neither the Separate Account nor we will be liable for any loss, expense or cost arising out of a telephone request if we reasonably believed the request to be genuine. . You should contact our Designated Office with any questions regarding the procedures. Telephone, facsimile, and computer systems may not always be available. Any telephone, facsimile, or computer system, whether it is yours, your service provider's, your sales representative's, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to our Designated Office. BORROWING FROM YOUR POLICY [SIDEBAR: You can borrow from us and use your Policy as security for the loan.] The amount of each loan must be: . At least $500. . No more than the cash surrender value less two monthly deductions (unless your Policy provides for a different amount required by state law) when added to all other outstanding Policy loans. As of your loan request's Date of Receipt, we will: . Remove an amount equal to the loan first from your cash value in the Fixed Account. If an additional amount is required, we will remove it from the cash value in the investment divisions of the Separate Account in the same proportion as your cash value is then allocated. . Transfer such cash value to the Policy loan account, where it will be credited with interest at the rate of 4% per year. At least once a year, we will transfer any interest earned in your Policy loan account to the Fixed Account and the investment divisions, according to the way that we allocate monthly deductions. . Charge you interest, which will accrue daily at a rate of 6% per year (which is the maximum rate we will ever charge). We will reduce this rate to 4.6% for Policy years 11 through 15, to 4.3% for Policy years 16 through 20 and to 4.0% after Policy year 20. Your interest payments are due at the end of each Policy year. If you don't pay the amount within 31 days after it is due, we will treat it as a new Policy loan. Repaying your loans (plus accrued interest) is done by sending in payments at least equal to your voluntary planned periodic premium, or $50, if less. Any payments we receive while a loan (plus accrued interest) is outstanding, will be applied first to repaying the loan, and, if any amounts remain after repayment, they will be considered premium. Even though we will repay the loan with these payments, the resulting reduction in outstanding loans will have the same effect as premium payments for purpose of maintaining your guaranteed minimum death benefit. We will allocate your repayment to the Fixed Account and the investment divisions, in the same proportion that any new net premiums would be allocated. If a Policy loan is outstanding, it may 38 be better to repay the loan than to pay premium, because the premium payment is subject to sales and premium tax charges, and the loan repayment is not subject to charges. (See "Charges and Deductions You Pay".) Before taking a Policy loan you should consider the following: . Interest payments on loans are generally not deductible for tax purposes. . Under certain situations, Policy loans could be considered taxable distributions. . If you surrender your Policy or if we terminate your Policy, or at the Final Date, any outstanding loan amounts (plus accrued interest) will be taxed as a distribution. Generally, there will be federal income tax payable on the amount by which withdrawals and loans exceed the premiums paid to date. (See "Federal Tax Matters--Loans" below.) In addition, the amounts borrowed and withdrawn reduce the Policy's cash value and any remaining cash value of the Policy may be insufficient to pay the income tax on your gains. . A policy loan increases the chances of our terminating your policy due to insufficient cash value. Unless the guaranteed minimum death benefit is in effect, we will terminate your Policy with no value if: (A) on a monthly anniversary your loans (plus accrued interest) exceed your cash value minus the monthly deduction and minus any surrender charges; and (B) we tell you of the insufficiency and you do not make a sufficient payment within 61 days of the monthly anniversary. . Your Policy's insurance proceeds will be reduced by any unpaid loan (plus any accrued and unpaid interest). . The amount taken from your Policy's cash value, as a result of a loan does not participate in the investment experience of the investment divisions. Therefore, loans can permanently affect the death benefit and cash value of the Policy, even if they are repaid. POLICY TERMINATION AND REINSTATEMENT TERMINATION We will terminate your Policy without any cash surrender value if: . The cash surrender value is less than the monthly deduction; . No minimum guaranteed death benefit is in effect; and . We do not receive a sufficient premium payment within the 61-day grace period to cover two monthly deductions. We will mail you notice if any grace period starts. If the insured dies during the grace period, we will pay the insurance proceeds minus any overdue monthly deductions. REINSTATEMENT Upon your request, we will reinstate (put back in force) your Policy (without reinstating the guaranteed minimum death benefit or any amounts in a Policy loan account), subject to certain terms and conditions that the Policy provides. We must receive your request within 3 years (or any longer period provided by state law) after the end of the grace period and before the Final Date. You also must provide us: . A written application for reinstatement (the date we approve the application will be the effective date of the reinstatement). 39 . Evidence of insurability that we find satisfactory. . An additional premium amount that the Policy prescribes for this purpose. OPTIONAL BENEFITS YOU CAN ADD BY RIDER You may be eligible for certain benefits provided by rider, subject to certain underwriting requirements and the payment of additional premiums. We will deduct any charges for the rider(s) as part of the monthly deduction. Some of these riders can be added only at the time you purchase your Policy. Each rider contains important information, including limits and conditions that apply to the benefits. If you decide to purchase any of the riders, you should carefully review their provisions to be sure the benefit is something that you want. You should also consider: . That the premium requirements to maintain the guaranteed minimum death benefit may increase, which could affect your ability to maintain it. . That the addition of certain riders can restrict your ability to exercise certain rights under the Policy. . That the amount of benefits provided under the rider is not based on investment performance of a separate account; but, if the Policy terminates because of poor investment performance or any other reason, the riders generally will also terminate. . The tax consequences. You should also consult with your tax advisor before purchasing one of the riders. Generally, we currently make the following benefits available by rider: . Disability Waiver of Premium Benefit. This rider is designed for owners who seek to build cash value or maintain the guaranteed minimum death benefit during a period of disability. In order to qualify for this rider, you must maintain a premium level equal to that required under the rider. Otherwise, the rider will operate like the Disability Waiver of Monthly Deduction benefit rider (described below), which in some cases could increase the cost of the rider. The selected premium level will not necessarily be sufficient to keep the Policy in force to the Final Date. Therefore, the Policy could terminate before the Final Date, although not while a guaranteed minimum death benefit is in effect. If your Policy was issued in New York and your Policy includes this rider, you may not add any other rider. . Disability Waiver of Monthly Deduction Benefit. This rider provides for the waiver of certain monthly deductions including cost of insurance and monthly policy expense charges, upon proof of disability. An increase in specified face amount may not be covered by this rider. If not, the portion of the monthly deduction associated with the increase will continue to be deducted from the cash value, which if insufficient, could result in the Policy's termination. For this reason, it may be advantageous for the owner, at the time of total disability, to reduce the specified face amount to that covered by this rider. . Accidental Death Benefit. This rider provides additional death benefit coverage for an amount selected at issue upon proof of death of the insured if such death was caused by an accident. . Children's Term Insurance Benefit. This rider provides term insurance in an amount selected at issue upon proof of death for any insured child. . Spouse Term Insurance Benefit. This rider provides term insurance in an amount selected at issue upon proof of death of the insured's spouse. 40 . Accelerated Death Benefit. This rider provides for early payment of a portion of the face amount of insurance upon proof of terminal illness of the insured resulting in a life expectancy of 12 months or less. . Long Term Care Guaranteed Purchase Option. This rider gives the Policy owner the option to purchase long-term care insurance for the insured, at future specified Purchase Option Dates, without additional underwriting. The new long term care insurance policy will be offered by MetLife or by an affiliate designated by us on the Purchase Option Date, subject to rider specifications about plan benefits. This rider will be available only in states that have approved such long-term care insurance plans. CHARGES AND DEDUCTIONS YOU PAY The Policy charges compensate us for the services and benefits we provide, the costs and expenses we incur, and the risks we assume. Services and benefits we provide: . the death benefit, cash, and loan benefits under the Policy . investment options, including premium allocations . administration of elective options . the distribution of reports to policy owners Costs and expenses we incur: . costs associated with processing and underwriting applications, and with issuing and administering the Policy (including any riders) . overhead and other expenses for providing services and benefits . sales and marketing expenses . other costs of doing business, such as collecting premiums, maintaining records, processing claims, effecting transactions, and paying federal, state, and local premium and other taxes and fees Risks we assume: . that the cost of term insurance charges we may deduct are insufficient to meet our actual claims because the insureds die sooner than we estimate . that the charges of providing the services and benefits under the Policies exceed the charges we deduct Our revenues from any particular charge may be more or less than any costs or expenses that charge may be intended primarily to cover. We may use our revenues from one charge to pay other costs and expenses in connection with the Policies. We may also profit from all the charges combined, including the cost of term insurance charge and the mortality and expense risk charge. The following sets forth additional information about the Policy charges. [SIDE BAR: Carefully review the Fee Tables that set forth the charges that you pay under your Policy] DEDUCTIONS FROM PREMIUMS SALES CHARGE: We deduct a 2.25% sales charge from each premium primarily to help pay the cost of compensating sales representatives and other expenses of distributing the Policies. 41 CHARGE FOR AVERAGE EXPECTED STATE TAXES ATTRIBUTABLE TO PREMIUMS: We deduct 2.00% from each premium to reimburse us for the state premium taxes that we must pay on premiums we receive. Premium taxes vary from state to state and currently range from 0 to 3.5%. Our charge approximates the average tax rate we expect to pay on premiums we receive from all states. FEDERAL TAX CHARGE: We deduct 1.25% from each premium to reimburse us for the Federal income tax liability related to premiums. TRANSFER CHARGE We reserve the right to charge up to $25 per transfer among the investment divisions and to or from the Fixed Account, except for any transfers under the Automated Investment Strategies. UNDERWRITING CHARGE This charge applies only if you request an increase in your specified face amount. In that case, we charge $5 per month for the first twelve months after the month you increase your specified face amount. CHARGES INCLUDED IN THE MONTHLY DEDUCTION At issue, or within 30 days of any Policy anniversary, you can choose to have the monthly deduction taken from either: (a) the Fixed Account and each investment division in which you have cash value in the same proportion as your cash value is allocated among these options at the beginning of the policy month; or (b) if there is sufficient cash value, entirely from your Fixed Account. If no election is made or if amounts in the Fixed Account are insufficient, we will take the monthly deduction in accordance with (a). We deduct the monthly deductions as of each monthly anniversary beginning as of the Date of Policy. COST OF TERM INSURANCE: This charge varies monthly based on many factors. Each month, we determine the charge by multiplying your cost of term insurance rates by the term insurance amount. . The term insurance amount is the death benefit at the beginning of the Policy month divided by a discount factor to account for an assumed return during the month; minus the cash value at the beginning month after deduction of all other applicable charges. Factors that affect the term insurance amount include the specified face amount, the cash value and the death benefit you choose. (Generally, the term insurance amount will be higher for Options B and CI). . The term insurance rate is based on our expectations as to future experience, taking into account the insured's sex (if permitted by law), age and rate class. The rates will never exceed the guaranteed rates, which are based on certain 1980 Commissioners Standard Ordinary Mortality Tables and the insured's sex, age and smoking status. As a general rule, the guaranteed rate increases each year you own your Policy, as the insured's age increases. Our current rates are lower than the maximums in most cases. We review our rates periodically and may adjust them, but we will apply the same rates to everyone who purchased their policy at the same time and who is the same age, sex and rate class. . Rate class relates to the level of mortality risk we assume with respect to an insured. It can be the standard rate class, or one that is higher or lower (and, if the insured is 18 or older, we divide rate class 42 by smoking status). The insured's rate class will affect your cost of term insurance. You can also have more than one rate class in effect, if the insured's rate class has changed and you change your specified face amount. A better rate class will lower the cost of term insurance on your entire Policy and a worse rate class will affect the portion of your cost of term insurance charge attributable to the specified face amount increase. . The current cost of term insurance rate varies among otherwise identical insureds, depending on how long an insured's Policy has been in force. In the early Policy years, the rate in some cases will decrease from one year to the next. Nevertheless, if held for a long enough period of time, any Policy's current cost of term insurance rate will begin to increase from year to year as the insured's age increases. ADMINISTRATION CHARGE: We make this monthly charge primarily to compensate us for expenses we incur in the administration of the Policy, and also, in the first year, our underwriting and start-up expenses. In the first Policy year, the Administration charge is $20 per month for insureds age 25 and under, $30 per month for insureds age 26-40 and $35 per month for insureds age 41 and over. In the second and later Policy years, the Administration charge is $10 per month unless you pay the required Administrative Premium shown on page 3 of your Policy. If you pay these premiums, the monthly charge will be $5 for a specified face amount of $250,000 or more, $6 for a specified face amount between $100,000 and $249,999 and $7 for a specified face amount of less than $100,000. MORTALITY AND EXPENSE RISK CHARGE: We make this monthly charge primarily to compensate us for: . mortality risks that insureds may live for a shorter period than we expect; and . expense risks that our issuing and administrative expenses may be higher than we expect. The charge is made monthly, based on the cash value of the Policy in our Separate Account, at an annual rate of .90% for Policy years 1 through 10, .60% for Policy years 11 through 15 and .30% thereafter. SURRENDER CHARGE [SIDEBAR: Your Policy sets forth the maximum surrender charges to which your cash value could be subject.] If, during the first fifteen Policy years, or during the first fifteen years following a specified face amount increase, you surrender your Policy, reduce the face amount, make a partial withdrawal, or your Policy terminates for insufficient cash surrender value, we will deduct a surrender charge from the cash value. The amount of your Policy's surrender charge that we will deduct at the time you reduce the specified face amount will be 50% of the portion of the surrender charge that we attribute to the decrease. For partial withdrawals of up to 10% of the Policy's cash surrender value at the date of the partial withdrawal (aggregated for this purpose with all previous withdrawals during the same Policy year) no surrender charge is deducted. We make the surrender charge primarily to help pay the cost of compensating sales representatives and other expenses of distributing the Policies. The method by which we calculate the surrender charges that apply under certain circumstances is complex, because they are based on several factors that are specific to your Policy. You can request a personalized illustration 43 that will show you how this charge (along with other charges plus your loans and accrued interest) affect your cash surrender value. In order to determine the Surrender Charge, we first determine the: . "SURRENDER CHARGE MEASURE" for the Policy's initial specified face amount, which is: . For the first Policy year the lesser of: (A) actual cumulative premiums paid; and (B) the Maximum Surrender Charge Premium. . For the second Policy year and later Policy years, the lesser of: (A) actual cumulative premiums paid within the first two Policy years; and (B) the Maximum Surrender Charge Premium. . "INCREASE SURRENDER CHARGE MEASURE" (I.E., THE SURRENDER CHARGE MEASURE FOR ANY INCREASE YOU HAVE MADE IN YOUR SPECIFIED FACE AMOUNT), WHICH IS: . For the first year following the increase, the lesser of: (A)the amount by which the actual cumulative premiums paid within twelve months following the date of the application for the specified face amount increase exceeds the sum of: (i)the Surrender Charge Measure for the first Policy year, plus (ii)the Increase Surrender Charge Measure for the first year following any prior increases; and (B)the Maximum Surrender Charge Premium at the time of the increase. . For the second year and later following the increase, the lesser of: (A)the amount by which actual cumulative premiums paid within twenty-four months following the date of the application for the specified face amount increase exceeds the sum of: (i)the Surrender Charge Measure for the second Policy year, plus (ii)the Increase Surrender Charge Measure for the second year following any prior increases; and (B)the Maximum Surrender Charge Premium for the second Policy year following the increase. . MAXIMUM SURRENDER CHARGE PREMIUM, which is the amount determined at issue (or, for a specified face amount increase, at the time of the increase) which will not exceed: . For the first Policy year, or the first year after the increase, 75% of the Smoker Federal Guideline Annual Premium for Death Benefit Option A and all riders at issue, or at the time of the increase, respectively; and . For the second Policy year and thereafter, or the second and later years after the increase, 100% of the Smoker Federal Guideline Annual Premium for Death Benefit Option A and all riders at issue or at the time of the increase. . FEDERAL GUIDELINE ANNUAL PREMIUM, which is the level annual amount of premium that you would need to pay through the Final Date of your Policy 44 for the specified face amount of your Policy if we set your premiums both as to timing and amount, based on: . the 1980 Commissioners Standard Ordinary Mortality Tables; . net investment earnings at an annual effective rate of 4%; and . fees and charges as set forth in your Policy and Policy riders. This premium is based on the insured's age, sex, smoking status and rate class and is generally higher for older ages, for males, for smokers and for those in a higher rate class. Using the above determinations, we will compute the full surrender charge by first locating the Policy year in the table below that contains the date as of which we are computing the charge. Then we multiply the indicated percentage by the then-applicable Surrender Charge Measure. This gives us the surrender charge for the initial specified face amount. We compute the surrender charge for each specified face amount increase that is then in effect by a similar method, except that we multiply the percentage for the actual year following the date of the increase by the Increase Surrender Charge Measure for that increase. By totaling the surrender charge we compute for the original specified face amount with any that we compute for each specified face amount increase, we arrive at the full surrender charge.
POLICY YEAR (OR ACTUAL YEAR SINCE SPECIFIED FACE 16 AND AMOUNT INCREASE) 1 2 3 4 5 6* 7 8 9 10 11 12 13 14 15 LATER -------------------------------------------------------------------------------------------- % of Measure 100 100 90 80 70 60 54 48 42 36 30 24 18 12 6 0
*After the fifth year, the surrender charges will decrease each Policy month. [SIDEBAR: There is no surrender charge on partial withdrawals of up to 10% of the Policy's Cash Surrender Value each year.] You may withdraw up to 10% of the Policy's Cash Surrender Value each year without paying a surrender charge. A withdrawal will exceed the 10% free withdrawal amount to the extent that it (together with any prior withdrawals in the same Policy year) is more than 10% of your Policy's cash surrender value on the date of the withdrawal. The amount deducted would be the same proportion of the full surrender charge as (a) the amount of the withdrawal that exceeds the 10% free withdrawal amount bears to (b) the Policy's total cash value. If you make a withdrawal of cash value or specified face amount decrease that causes us to deduct an amount of surrender charge, we will reduce the remaining surrender charge on the Policies' specified face amount by the amount deducted. If you previously increased your Policy's specified face amount, we make any such reductions first to any remaining surrender charge attributable to the most recent such increase(s) (in reverse chronological order) and then to those attributable to the original specified face amount. We deduct any surrender charge that results from a partial withdrawal or specified face amount decrease from the same sources as we take the monthly deduction. If the cash value is insufficient, we reduce the amount we pay you. Because of the surrender charge, your Policy will probably not have any cash surrender value for at least the first Policy year unless you pay significantly more than the Minimum Initial Premium. Since the Surrender Charge Measure and Increase Surrender Charge Measure are capped at the end of the first two Policy years after issue, and after increase in specified face amount, respectively, you may be able to limit your surrender charges by limiting your premium payments to levels necessary to keep the Policy and the guaranteed minimum death benefit in effect. 45 CHARGES FOR OPTIONAL BENEFITS We charge for the cost of any additional benefits you can add by rider as described in the rider form. CHARGES AND EXPENSES OF THE SEPARATE ACCOUNT AND THE PORTFOLIOS CHARGES FOR INCOME TAXES: In general, we don't expect to incur federal, state or local taxes upon the earnings or realized capital gains attributable to the assets in the Separate Account relating to the Policies' cash value. If we do incur such taxes, we reserve the right to charge the cash value allocated to the Separate Account for these taxes. PORTFOLIO EXPENSES: There are daily charges against each Portfolio's assets for investment advisory services and fund operating expenses. These are described under "Fee Tables--Annual Portfolio Operating Expenses" in this prospectus as well as in the Fund prospectuses attached to this prospectus. VARIATIONS IN CHARGES We may vary the amounts of charges described in this prospectus as a result of such factors as (1) differences in legal requirements in the jurisdiction where the Policies are sold, (2) differences in actual or expected risks, expenses, policy persistency, premium payment patterns, or mortality experience among different categories of purchasers or insureds, and (3) changes in Policy pricing that we may implement from time to time. Any such variations will be pursuant to administrative procedures that we establish and will not discriminate unfairly against any Policy owner. Any such variations may apply to existing Policies as well as to Policies issued in the future, except that the charges under any Policy may never exceed the maximums therein. FEDERAL TAX MATTERS The following is a brief summary of some tax rules that may apply to your Policy. It does not purport to be complete or cover every situation. Because individual circumstances vary, you should consult with your own tax advisor to find out how taxes can affect your benefits and rights under your Policy, especially before you make unscheduled premium payments, change your specified face amount, change your death benefit option, change coverage provided by riders, take a loan or withdrawal, or assign or surrender the Policy. Under current federal income tax law, the taxable portion of distributions from variable life contracts is taxed at ordinary income tax rates and does not qualify for the reduced tax rate applicable to long-term capital gains and dividends. IRS CIRCULAR 230 NOTICE: The tax information contained in this Prospectus is not intended to (and cannot) be used by anyone to avoid IRS penalties. It is intended to support the sale of the Policy. The Policyholder should seek tax advice based on its particular circumstances from an independent tax advisor. [SIDEBAR: You should consult with your own tax advisor to find out how taxes can affect your benefits and rights under your Policy.] INSURANCE PROCEEDS . Generally excludable from your beneficiary's gross income to the extent provided in Section 101 of the Internal Revenue Code ("Code"). In the case of employer-owned life insurance as defined in Section 101(j) of the Code, the amount excludable from gross income is limited to premiums paid unless the policy falls within certain specified exceptions and a notice and 46 consent requirement is satisfied before the policy is issued. Certain specified exceptions are based on the status of an employee as highly compensated or recently employed. There are also exceptions for policy proceeds paid to an employee's heirs. These exceptions only apply if proper notice is given to the insured employee and consent is received from the insured employee before the issuance of the policy. These rules apply to policies issued August 18, 2006 and later and also apply to policies issued before August 18, 2006 after a material increase in the death benefit or other material change. An IRS reporting requirement applies to employer-owned life insurance subject to these rules. Because these rules are complex and will affect the tax treatment of Death Benefits, it is advisable to consult tax counsel. Insurance death proceeds will also be taxable in the case of a transfer-for-value unless certain exceptions apply. . The proceeds may be subject to federal estate tax: (i) if paid to the insured's estate; or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. . If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. . Whether or not any federal estate tax is due is based on a number of factors, including the estate size. . The insurance proceeds payable upon death of the insured will never be less than the minimum amount required for the Policy issued on a standard risk basis to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. There is less guidance, however, with respect to Policies issued on a substandard risk basis, and it is not clear that such Policies basis, and it is not clear that such Policies will in all cases satisfy the applicable requirements to be treated as life insurance under section 7702 of the Internal Revenue Code. CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) You are generally not taxed on your cash value until you withdraw it, surrender your Policy or receive a distribution such as on the Final Date. In these cases, you are generally permitted to take withdrawals and receive other distributions up to the amount of premiums paid without any tax consequences. However, withdrawals and other distributions will be subject to income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules apply in the first 15 Policy years, when a distribution may be subject to tax if there is a gain in your Policy (which is generally when your cash value exceeds the cumulative premiums you paid). There may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if you are subject to that tax. SPLIT-DOLLAR INSURANCE PLANS The IRS has issued guidance on split dollar insurance plans. A tax advisor should be consulted with respect to this guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. If your split dollar plan provides deferred compensation, recently enacted rules governing deferred compensation arrangements may apply. Failure to adhere to these rules will result in adverse tax consequences. Consult a tax adviser. 47 The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on U.S. exchanges, from extending, directly or indirectly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted to apply to certain split-dollar life insurance arrangements for directors and executive officers of such companies, since at least some such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. Although the prohibition on loans generally took effect as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy or the purchase of a new Policy in connection with a split-dollar life insurance arrangement should consult legal counsel. LOANS . Loan amounts you receive will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. . Interest on loans is generally not deductible. For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. . If your Policy terminates (upon surrender, cancellation lapse, the Final Date or, in most cases, exchange) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. Since amounts borrowed reduce the cash value that will be distributed to you if the Policy is surrendered, cancelled or lapses, any cash value distributed to you in these circumstances may be insufficient to pay the income tax on any gain. . The tax consequences of loans outstanding after the 15th Policy year are uncertain. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance policies where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the Policy exceeds tax law limits referred to as the "7-pay test." Material changes in the Policy, include changes in the level of benefits and certain other changes to your Policy after the issue date. Reductions in benefits during a 7-pay period may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts. Due to the flexibility of the Policies as to premiums and benefits, the individual circumstances of each Policy will determine whether it is classified as a MEC. 48 If your Policy is considered a modified endowment contract: . The death benefit will still generally be income tax free to your beneficiary, as discussed above. . Amounts withdrawn or distributed before the insured's death, including (without limitation) loans, assignments and pledges, are (to the extent of any gains on your policy) treated as income first and subject to income tax. All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. . You will generally owe an additional 10% tax penalty on the taxable portion of the amounts you received before age 59 1/2, except generally if you are disabled or the distribution is part of a series of substantially equal periodic payments. . If a Policy becomes a modified endowment contract, distributions that occur during the Policy year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract will be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Policy. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy owners of gains under their Policies. INVESTOR CONTROL In some circumstances, owners of variable contracts who retain excessive control over the investment of the underlying Separate Account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. Although published guidance in this area does not address certain aspects of the Policies, we believe that the owner of a Policy should not be treated as an owner of the assets in our Separate Account. We reserve the right to modify the policies to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the policies from being treated as the owners of the underlying Separate Account assets. ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001. The Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") repeals the federal estate tax and replaces it with a carryover basis income tax regime effective for estates of decedents dying after December 31, 2009. EGTRRA also repeals the generation skipping transfer tax, but not the gift tax, for transfers made after December 31, 2009. EGTRRA contains a sunset provision, which essentially returns the federal estate, gift and generation-skipping transfer taxes to their pre-EGTRRA form, beginning in 2011. Congress may or may not enact permanent repeal between now and then. During the period prior to 2010, EGTRRA provides for periodic decreases in the maximum estate tax rate coupled with periodic increases in the estate tax 49 exemption. For 2007-2009 the maximum estate tax rate is 45%. The estate tax exemption is $2,000,000 for 2006-2008 and $3,500,000 in 2009. The complexity of the new tax law, along with uncertainty as to how it might be modified in coming years, underscores the importance of seeking guidance from a qualified advisor to help ensure that your estate plan adequately addresses your needs and that of your beneficiaries under all possible scenarios. WITHHOLDING To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient's federal income tax liability. Recipients can generally elect however, not to have tax withheld from distributions. LIFE INSURANCE PURCHASES BY RESIDENTS OF PUERTO RICO In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service recently announced that income received by residents of Puerto Rico under life insurance contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax. LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding taxation with respect to a life insurance Policy purchase. BUSINESS USES OF POLICY Businesses can use the policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. As noted, in the case of a business owned Policy, the provisions of Section 101(j) of the Code may limit the amount of the Death Benefit excludable from gross income unless a specified exception applies and a notice and consent requirement is satisfied, as discussed above. If you are purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax adviser. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax laws, rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: . Possible taxation of cash value transfers. . Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets. 50 . Possible limits on the number of investment funds available or the frequency of transfers among them. . Possible changes in the tax treatment of Policy benefits and rights. TAX CREDITS AND DEDUCTIONS The Company may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividend received deductions, are not passed back to the Separate Account or to Policy owners since the Company is the owner of the assets from which the tax benefits are derived. THE COMPANY'S INCOME TAXES Under current Federal income tax law we are not taxed on the Separate Account's operations. Thus, currently we do not deduct a charge from the Separate Account for company Federal income taxes. (We do deduct a charge for Federal taxes from premiums.) We reserve the right to charge the Separate Account for any future Federal income taxes we may incur. Under current laws we may incur state and local taxes (in addition to premium taxes). These taxes are not now significant and we are not currently charging for them. If they increase, we may deduct charges for such taxes. RIGHTS WE RESERVE We reserve the right to make certain changes if we believe the changes are in the best interest of our Policy owners or would help carry out the purposes of the Policy. We will make these changes in the manner permitted by applicable law and only after getting any necessary owner and regulatory approval. We will notify you of any changes that result in a material change in the underlying investments in the investment divisions, and you will have a chance to transfer out of the affected division (without charge). Some of the changes we may make include: . Operating the Separate Account in any other form that is permitted by applicable law. . Changes to obtain or continue exemptions from the 1940 Act. . Transferring assets among investment divisions or to other separate accounts, or our general account or combining or removing investment divisions from the Separate Account. . Substituting Fund shares in an investment division for shares of another portfolio of a Fund or another fund or investment permitted by law. . Changing the way we assess charges without exceeding the aggregate amount of the Policy's guaranteed maximum charges. . Making any necessary technical changes to the Policy to conform it to the changes we have made. OTHER POLICY PROVISIONS [SIDEBAR: Carefully review your Policy which contains a full discussion of all its provisions.] You should read your Policy for a full discussion of its provisions. The following is a brief discussion of some of the provisions that you should consider: "FREE LOOK" PERIOD TO CANCEL YOUR POLICY You can return the Policy during this period. The period is the later of: 51 . 10 days after you receive the Policy (unless state law requires your Policy to specify a longer specified period); and . 45 days after the completed application is signed (in the case of tele-underwritten policies, 45 days after the preliminary application is signed). If you return your Policy, we will send you a complete refund of any premiums paid (or cash value plus any charges deducted if state law requires) within seven days. FOR POLICIES ISSUED IN CALIFORNIA. You may cancel the Policy within 10 days after you receive it and we will refund the Policy's cash value. If you are age 60 or older, you may cancel the Policy within 30 days after you receive it and we will generally refund the premiums you paid, if you elected on the Policy application to allocate 100% of your net premiums to the Fixed Account. If, on the other hand, you elected to allocate your net premiums to the investment divisions, we will refund the Policy's cash value. SUICIDE If the insured commits suicide within the first two Policy years (or any different period provided by state law), your beneficiary will receive all premiums paid (without interest), less any outstanding loans (plus accrued interest) and withdrawals taken. Similarly, we will pay the beneficiary only the cost of any increase in specified face amount if the insured commits suicide within two years of such increase. ASSIGNMENT AND CHANGE IN OWNERSHIP You can assign your Policy as collateral if you notify us in writing. The assignment or release of the assignment is effective when it is recorded at the Designated Office. We are not responsible for determining the validity of the assignment or its release. Also, there could be serious adverse tax consequences to you or your beneficiary, so you should consult with your tax adviser before making any change of ownership or other assignment. PAYMENT AND DEFERMENT [SIDEBAR: Under certain situations, we may defer payments.] Generally, we will pay or transfer amounts from the Separate Account within seven days after the Date of Receipt of all necessary documentation required for such payment or transfer. We can defer this if: . The New York Stock Exchange has an unscheduled closing. . There is an emergency so that we could not reasonably determine the investment experience of a Policy. . The Securities and Exchange Commission determines that an emergency exists or by order permits us to do so for the protection of Policy owners (provided that the delay is permitted under New York State insurance law and regulations). . With respect to the insurance proceeds, if entitlement to a payment is being questioned or is uncertain. We currently pay interest on the amount of insurance proceeds at 3% per year (or higher if state law requires) from the date of death until the date we pay the benefit. 52 We may withhold payment of surrender, partial withdrawals or loan proceeds if any portion of those proceeds would be derived from a Policy owner's check or from a preauthorized checking arrangement that has not yet cleared (i.e. that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communications to verify that payment from the Policy owner's check or preauthorized checking arrangement has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Policy owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. DIVIDENDS The Policy is "nonparticipating," which means it is not eligible for dividends from us and does not share in any distributions of our surplus. EXCHANGE PRIVILEGE If you decide that you no longer want to take advantage of the investment divisions in the Separate Account, you may transfer all of your money into the Fixed Account. There is currently no charge on transfers. Even if we do have a transfer charge in the future, such charge will never be imposed on a transfer of your entire cash value (or the cash value attributable to a specified face amount increase) to the Fixed Account within the first 24 Policy months (or within 24 Policy months after a specified face amount increase you have requested, as applicable). In some states, however, we implement this by permitting you, without charge, to exchange your Policy (or the portion attributable to a specified face amount increase) to a flexible premium fixed benefit life insurance policy, which we make available. SALE AND DISTRIBUTION OF THE POLICIES On or about May 1, 2007, it is anticipated that MetLife Investors Distribution Company ("MLIDC") will become the principal underwriter and distributor of the Policies. MLIDC, which is our affiliate, is registered under the Securities Exchange Act of 1934 (the "34 Act") as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (the "NASD"). DISTRIBUTING THE POLICIES MLIDC enters into selling agreements with affiliated and unaffiliated broker-dealers who sell the Policies through their registered representatives who are also licensed life insurance sales representatives. Our affiliated broker-dealers are MetLife Securities, Inc. ("MSI"), New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. MSI and our other affiliated broker-dealers are registered with the SEC as broker-dealers under the 34 Act and are also members of the NASD. We reimburse MLIDC for expenses MLIDC incurs in distributing the Policies, (e.g. commissions payable to the broker-dealers who sell the Policies, including our affiliated broker-dealers). The payments described below do not result in a charge against the Policy in addition to the charges already described elsewhere in this prospectus. We may require all or part of the compensation to be returned to us if you do not continue your Policy for at least one year. 53 COMPENSATION TO METLIFE SALES REPRESENTATIVES AND THEIR MANAGERS FOR THE SALE OF THE POLICY MetLife sales representatives are sales representatives registered through MSI. MetLife sales representatives may be career sales representatives who are employees of MetLife or brokers who are not employees of MetLife. MetLife sales representatives receive cash payments for the products they sell and service based upon a 'gross dealer concession' model. The cash payment is equal to a percentage of the gross dealer concession amount (described below for the Policy). For MetLife sales representatives, other than those in our MetLife Resources Division (MLR), the percentage is determined based upon a formula that takes into consideration premiums and purchase payments applied to proprietary products that the MetLife sales representative sells and services. Proprietary products are those issued by us or our affiliates. (MLR sales representatives receive compensation for the sale of the Policy based upon premiums and purchase payments applied to all products sold and serviced by the MLR sales representative; however, they are entitled to the additional compensation described below based on sales of proprietary products.) Because sales of proprietary products are a factor in determining the percentage of gross dealer concession amount and/or the amount of additional compensation to which MetLife sales representatives are entitled, they have an incentive to favor the sale of proprietary products over other products issued by non-affiliates. In addition, because their sales managers' compensation is based on the sales made by the representatives they supervise, these sales managers also have an incentive to favor the sale of proprietary products. The gross dealer concession amount for the Policy is 117% of premiums up to the Maximum Commissionable Premium, but not to exceed $100 per $1,000 of specified face amount, and 7% of premiums over the Maximum Commissionable Premium in the first Policy year (8% of all premiums in Policy years 2 to 4, 3.25% of all premiums in Policy years 5 to 10, and 1.50% of all premiums in Policy year 11 and thereafter) plus, in Policy Years 2 and thereafter, .15% of an amount equal to the Policy Cash Value minus any Policy loans and loan interest and minus any premiums paid in the previous 12 months. The Maximum Commissionable Premium is the lesser of (a) actual premiums received during the first Policy year, (b) the annualized modal premium, or (c) the annual premium necessary to keep the longest duration of the guaranteed minimum death benefit effective for a like Policy with Option A and the preferred nonsmoking rating class for standard risks, or the actual rating class for other risks, in place. ADDITIONAL CASH COMPENSATION TO METLIFE SALES REPRESENTATIVES AND THEIR MANAGERS MetLife sales representatives and their managers (and the sales representatives and managers of our affiliates) may be eligible for cash compensation such as bonuses, equity awards (such as, stock options), training allowances, supplemental salary, payments based on a percentage of the Policy's cash value, financing arrangements, marketing support, medical and retirement benefits and other benefits. The amount of this additional cash compensation is based primarily on the amount of proprietary products sold. Sales representatives must meet a minimum level of sales of proprietary products in order to maintain their employment or agent status with us and in order to be eligible for most of the cash compensation listed above. Managers who supervise these sales representatives may be entitled to additional cash compensation based on sales of proprietary products by the sales 54 representatives they supervise. For some of our affiliates, managers may pay a portion of their compensation to their sales representatives. Because the additional cash compensation paid to these sales representatives and their managers is primarily based on sales of proprietary products, these sales representatives and their managers have an incentive to favor the sale of proprietary products over other products issued by non-affiliates. NON-CASH COMPENSATION TO METLIFE SALES REPRESENTATIVES AND THEIR MANAGERS MetLife sales representatives and their managers (and the sales representatives and managers of our affiliates) are also eligible for various non-cash compensation programs that we offer such as conferences, trips, prizes, and awards. Other payments may be made for other services that do not directly involve the sale of products. These services may include the recruitment and training of personnel, production of promotional literature, and similar services. PAYMENTS TO BROKER-DEALERS MLIDC pays compensation for the sale of the Policies by affiliated and unaffiliated broker-dealers. The compensation paid to broker-dealers for the sale of the Policies is generally not expected to exceed, on a present value basis, the aggregate amount of total compensation that is paid with respect to the sales made through MetLife sales representatives. (The total compensation includes payments that we make to our business unit or the business unit of our affiliate that is responsible for the operation of the distribution systems through which the Policy is sold.) Broker-dealers pay their sales representatives all or a portion of the commissions received for their sales of Policies; some broker-dealers may retain a portion of commissions. The amount that broker-dealers pass on to their sales representatives is determined in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. Sales representatives of affiliated broker-dealers and their managers may be eligible for various cash benefits and non-cash compensation items (as described above) that we may provide jointly with affiliated broker-dealers. Ask your sales representative for further information about what your sales representative and the broker-dealer for which he or she works may receive in connection with your purchase of a Policy. MLIDC also enters into selling agreements with other unaffiliated broker-dealers for the sale of the Policies and other variable insurance products, i.e., annuity contracts and life insurance policies that we and our affiliates issue. MLIDC may enter into preferred distribution arrangements with certain of these broker-dealers through which MLIDC may pay additional compensation, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. Marketing allowances are periodic payments to certain selling firms based on cumulative periodic (usually quarterly) sales of these variable insurance products. Introduction fees are payments to broker-dealers in connection with the addition of these variable products to the broker-dealer's line of investment products, including expenses relating to establishing the data communications systems necessary for the selling firm to offer, sell and administer these products. Persistency payments are periodic payments based on account and/or cash values of these variable insurance products. Preferred status fees are paid to obtain preferred treatment of these products in broker-dealers' 55 marketing programs, which may include marketing services, participation in marketing meetings, listings in data resources and increased access to their sales representatives. Industry conference fees are amounts paid to cover in part the costs associated with sales conferences and educational seminars for broker-dealers' sales representatives. The preferred distribution arrangements are not offered to all broker-dealers. The terms of any particular agreement governing compensation may vary among broker-dealers and the amounts may be significant. We may enter into similar preferred distribution arrangements with our affiliates MSI, New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. The prospect of receiving, or the receipt of, additional compensation as described above may provide broker-dealers or their representatives with an incentive to favor sales of the Policies over other variable insurance policies (or other investments) with respect to which the broker-dealer does not receive additional compensation, or lower levels of additional compensation. You may wish to take such payment arrangements into account when considering and evaluating any recommendation relating to the Policies. For more information about any such arrangements, ask your sales representative for further information about what your sales representative and the broker-dealer for which he or she works may receive in connection with your purchase of a Policy. OTHER PAYMENTS The American Funds Bond Fund, the American Funds Global Small Capitalization Fund, the American Funds Growth Fund and the American Funds Growth-Income Fund make payments to us under their distribution plans in consideration of services provided and expenses incurred by us and our affiliates in distributing their shares. These payments currently equal 0.25% of the Separate Account assets invested in the particular Portfolio. The Distribution Plan is described in more detail in the American Funds Insurance Series prospectus. We or our affiliates pay American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series, a percentage of all premiums allocated to the American Funds Bond Fund, the American Funds Growth Fund, the American Funds Growth-Income Fund and the American Funds Global Small Capitalization Fund for the services it provides in marketing the Portfolios' shares in connection with the Policies. The Statement of Additional Information contains additional information about the compensation paid for the sale of the Policies. LEGAL PROCEEDINGS In the ordinary course of business, MetLife, similar to other life insurance companies, is involved in lawsuits (including class action lawsuits), arbitrations and other legal proceedings. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance industries. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. It is not possible to predict with certainty the ultimate outcome of any pending legal proceeding or regulatory action. However, MetLife does not 56 believe any such action or proceeding will have a material adverse effect upon the Separate Account or upon the ability of MetLife Investors Distribution Company to perform its contract with the Separate Account or of MetLife to meet its obligations under the Policies. RESTRICTIONS ON FINANCIAL TRANSACTIONS Federal laws designed to counter terrorism and prevent money laundering by criminals might, in certain circumstances, require us to reject a premium payment and/or block or "freeze" your account. If these laws apply in a particular situation, we would not be allowed to process any request for withdrawals, surrenders, loans or death benefits, make transfers, or continue making payments under your death benefit option until instructions are received from the appropriate regulator. We also may be required to provide additional information about you or your Policy to government regulators. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of Metropolitan Life Separate Account UL included in this Prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. EXPERTS Paul L. LeClair, Vice-President and Actuary of MetLife has examined actuarial matters included in the registration statement, as stated in his opinion filed as an exhibit to the registration statement. ILLUSTRATION OF POLICY BENEFITS [SIDEBAR: Personalized illustrations can help you understand how your Policy values can vary.] In order to help you understand how your Policy values would vary over time under different sets of assumptions, we will provide you with certain illustrations upon request. These will be based on the age and insurance risk characteristics of the insured under your Policy and such factors as the specified face amount, death benefit option, premium payment amounts and rates of return (within limits) that you request. You can request such illustrations at any time. We have included an example of such an illustration as Appendix A to this prospectus. FINANCIAL STATEMENTS The financial statements of the Separate Account are attached to this prospectus. You can find the financial statements of MetLife in the Statement of Additional Information referred to on the page following Appendix A. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 57 GLOSSARY AGE. The age of an insured refers to the insured's age at his or her nearest birthday. DATE OF RECEIPT. The Date of Receipt is the day your requests, instructions and notifications are received in our Designated Office. LOAN ACCOUNT. The account to which cash value from the Separate Account or the Fixed Account is transferred when you take a Policy loan. PREMIUMS. Premiums include all payments you make under your Policy, whether a planned periodic premium payment or an unscheduled premium payment. RIDER. A rider is an optional, additional benefit or increase in coverage that you can add to your Policy. SPECIFIED FACE AMOUNT. The specified face amount is the base amount of insurance coverage under your Policy. TERM INSURANCE AMOUNT. The term insurance amount is the difference between the death benefit (generally discounted at the monthly equivalent of 3% per year) and the Policy's cash value. YOU. "You" refers to the Policy Owner. 58 APPENDIX A ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES AND CASH SURRENDER VALUES The tables in this Appendix A illustrate the way the Policies work based on assumptions about investment returns and the insured's characteristics. They show how the death benefit, cash surrender value and cash value could vary over an extended period of time assuming hypothetical gross rates of return (i.e., investment income and capital gains and losses, realized or unrealized) for the Separate Account equal to constant after tax annual rates of 0%, 6% and 10%. The tables are based on a specified face amount of $200,000 for a male aged 40. The insured is assumed to be in the nonsmoker preferred class. The tables assume no rider benefits and assume you made no allocations to the Fixed Account. Values are first given based on current cost of term insurance and other Policy charges and then based on the guaranteed maximums for such charges. The illustrations show the Option A death benefit. Policy values would be different (either higher or lower) from the illustrated amounts in certain circumstances. For example, illustrated amounts would be different where actual gross rates of return averaged 0%, 6% or 10%, but: (i) the rates of return varied above and below these averages during the period, (ii) premiums were paid in other amounts or at other than annual intervals, or (iii) cash values were allocated differently among individual investment divisions with varying rates of return. They would also differ if a Policy loan or partial withdrawal were made during the period of time illustrated, if the insured were female or in another risk classification, or if the Policies were issued in situations where distinctions between male and female insureds are not permitted. For example, as a result of variations in actual returns, additional premium payments beyond those illustrated may be necessary to maintain the Policy in force for the periods shown or to realize the Policy values shown on particular illustrations even if the average rate of return is achieved. The death benefits, cash surrender values and cash values shown in the tables reflect: (i) deductions from premiums for the sales charge and state and federal premium tax charge; and (ii) monthly deductions of charges for administration, for the cost of term insurance, and for mortality and expense risks. The cash surrender values reflect a Surrender Charge deducted from the cash value upon surrender, face reduction or lapse during the first 15 Policy years. (See "Charges and Deductions You Pay.") The illustrations reflect an arithmetic average of the gross investment advisory fees and operating expenses of the Portfolios, at an annual rate of 0.72% of the average daily net assets of the Portfolios. This average does not reflect expense reimbursements and subsidies by the investment advisers of certain Portfolios. (See "Annual Portfolio Operating Expenses.") The gross rates of return used in the illustration do not reflect the deductions of the charges and expenses of the Portfolios. Taking account of the average investment advisory fee and operating expenses of the Portfolios, the gross annual rates of return of 0%, 6% and 10% correspond to net investment return at constant annual rates of -0.72%, 5.24% and 9.21%, respectively. If you request, we will furnish a personalized illustration reflecting the proposed insured's age, sex, underwriting classification, and the face amount or premium schedule you request. Because these and other assumptions will differ, the values shown in the personalized illustrations can differ very substantially from those shown in the tables below. Therefore, you should carefully review the information that accompanies any personalized illustration. That information will disclose all the assumptions on which the personalized illustration is based. Where applicable, we will also furnish on request a personalized illustration for a Policy which is not affected by the sex of the insured. You should contact your registered representative to request a personalized illustration. 59 MALE ISSUE AGE 40 $1,632 ANNUAL PREMIUM FOR NONSMOKER PREFERRED UNDERWRITING RISK $200,000 SPECIFIED FACE AMOUNT OPTION A DEATH BENEFIT THIS ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
DEATH BENEFIT CASH SURRENDER VALUE CASH VALUE ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF END OF POLICY ---------------------------- -------------------------- -------------------------- YEAR 0% 6% 10% 0% 6% 10% 0% 6% 10% ------------- -------- -------- ---------- ------- ------- ---------- ------- ------- ---------- 1 $200,000 $200,000 $ 200,000 $ 0 $ 0 $ 0 $ 700 $ 765 $ 808 2 200,000 200,000 200,000 0 0 0 1,650 1,833 1,959 3 200,000 200,000 200,000 0 0 233 2,553 2,913 3,171 4 200,000 200,000 200,000 860 1,461 1,904 3,471 4,072 4,515 5 200,000 200,000 200,000 2,201 3,111 3,803 4,486 5,396 6,088 6 200,000 200,000 200,000 3,481 4,773 5,787 5,440 6,732 7,746 7 200,000 200,000 200,000 4,604 6,351 7,767 6,367 8,114 9,529 8 200,000 200,000 200,000 5,694 7,971 9,876 7,261 9,538 11,443 9 200,000 200,000 200,000 6,744 9,628 12,120 8,115 10,999 13,491 10 200,000 200,000 200,000 7,755 11,323 14,511 8,931 12,498 15,686 15 200,000 200,000 200,000 12,206 20,522 29,334 12,402 20,718 29,530 20 200,000 200,000 200,000 14,858 30,489 50,338 14,858 30,489 50,338 25 200,000 200,000 200,000 15,147 41,058 80,974 15,147 41,058 80,974 30 200,000 200,000 200,000 13,223 52,901 128,084 13,223 52,901 128,084 35 200,000 200,000 216,069 5,076 63,369 201,934 5,076 63,369 201,934 40 200,000 332,713 71,494 316,870 71,494 316,870 45 200,000 514,406 70,856 489,911 70,856 489,911 50 200,000 785,085 47,975 747,700 47,975 747,700 55 1,140,533 1,140,533 1,140,533
* Policy terminates unless greater premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY OWNER, THE FREQUENCY OF PREMIUM PAYMENTS CHOSEN BY THE POLICY OWNER, AND THE INVESTMENT EXPERIENCE OF THE INVESTMENT DIVISIONS SELECTED FOR THE POLICY. THE DEATH BENEFIT, CASH VALUE AND CASH SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED 0%, 6%, AND 10% OVER A PERIOD OF YEARS, BUT VARIED ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATION CAN BE MADE BY METLIFE OR THE PORTFOLIOS THAT THOSE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 60 MALE ISSUE AGE 40 $1,632 ANNUAL PREMIUM FOR NONSMOKER PREFERRED UNDERWRITING RISK $200,000 SPECIFIED FACE AMOUNT OPTION A DEATH BENEFIT THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
DEATH BENEFIT CASH SURRENDER VALUE CASH VALUE ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF -------------------------- ---------------------- ---------------------- END OF POLICY YEAR 0% 6% 10% 0% 6% 10% 0% 6% 10% ------------------ -------- -------- -------- ------ ------- ------- ------ ------- ------- 1 $200,000 $200,000 $200,000 $ 0 $ 0 $ 0 $ 690 $ 755 $ 798 2 200,000 200,000 200,000 0 0 0 1,622 1,803 1,928 3 200,000 200,000 200,000 0 0 180 2,506 2,863 3,118 4 200,000 200,000 200,000 725 1,317 1,754 3,336 3,928 4,365 5 200,000 200,000 200,000 1,826 2,712 3,387 4,111 4,997 5,672 6 200,000 200,000 200,000 2,867 4,104 5,080 4,825 6,063 7,039 7 200,000 200,000 200,000 3,715 5,361 6,705 5,477 7,124 8,467 8 200,000 200,000 200,000 4,497 6,609 8,394 6,064 8,176 9,960 9 200,000 200,000 200,000 5,208 7,842 10,145 6,579 9,213 11,516 10 200,000 200,000 200,000 5,844 9,053 11,963 7,019 10,228 13,138 15 200,000 200,000 200,000 7,665 14,596 22,198 7,861 14,791 22,394 20 200,000 200,000 200,000 5,142 16,997 33,230 5,142 16,997 33,230 25 200,000 200,000 13,111 44,125 13,111 44,125 30 200,000 51,445 51,445 35 200,000 45,971 45,971 40 45 50 55
* Policy terminates unless greater premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL GROSS ANNUAL RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE GROSS ANNUAL RATES OF RETURN. ACTUAL GROSS RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY A POLICY OWNER, THE FREQUENCY OF PREMIUM PAYMENTS CHOSEN BY THE POLICY OWNER, AND THE INVESTMENT EXPERIENCE OF THE INVESTMENT DIVISIONS SELECTED FOR THE POLICY. THE DEATH BENEFIT, CASH VALUE AND CASH SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED 0%, 6%, AND 10% OVER A PERIOD OF YEARS, BUT VARIED ABOVE OR BELOW THAT AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATION CAN BE MADE BY METLIFE OR THE PORTFOLIOS THAT THOSE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 61 Additional information about the Policy and the Separate Account can be found in the Statement of Additional Information. You may view the Statement of Additional Information by logging on to our website at www.metlife.com or you may obtain a copy of the Statement of Additional Information, without charge, by calling 800 MET 5000. For current information about your Policy values, for transfers and premium reallocations, to change or update Policy information such as your billing address, billing mode, beneficiary or ownership, for information about other Policy transactions, and to ask questions about your Policy, you may call our TeleService Center at 800 MET 5000. You may also obtain, without charge, a personalized illustration of death benefits, cash surrender values and cash values by contacting your sales representative or by calling our TeleService Center at 800-MET 5000. This prospectus incorporates by reference all of the information contained in the Statement of Additional Information, which is legally part of this prospectus. Information about the Policy and the Separate Account, including the Statement of Additional Information, is available for viewing and copying at the SEC's Public Reference Room in Washington, D.C. Information about the operation of the public reference room may be obtained by calling the SEC at 202-942-8090. The Statement of Additional Information, reports and other information about the Separate Account are available on the SEC Internet site as www.sec.gov. Copies of this information may be obtained upon payment of a duplicating fee, by writing to the SEC's Public Reference Section at 450 Fifth Street, NW, Washington, DC 20549-0102. MetLife was formed under the laws of New York State in 1868. MetLife Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and group customers. For more information about MetLife, please visit our website at www.metlife.com FILE NO. 811-6025 ANNUAL REPORT OF METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY DECEMBER 31, 2006 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policyholders of Metropolitan Life Separate Account UL and the Board of Directors of Metropolitan Life Insurance Company: We have audited the accompanying statement of assets and liabilities of the investment divisions (as disclosed in Appendix A) comprising Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company ("Metropolitan Life") as of December 31, 2006, and the related statements of operations and changes in net assets for each of the periods in the three years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the investment divisions comprising the Separate Account of Metropolitan Life as of December 31, 2006, and the results of their operations and the changes in their net assets for each of the periods in the three years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, FL March 26, 2007 F-1 APPENDIX A MetLife Aggressive Allocation Janus Aspen Forty Investment Investment Division Division AIM V.I. Core Equity Investment Janus Aspen Large Cap Growth Division Investment Division AIM V.I. Core Stock Investment Jennison Growth Investment Division Division Lazard Mid-Cap Investment Division AIM V.I. Global Real Estate Legg Mason Aggressive Growth Investment Division Investment Division AIM V.I. Government Securities Legg Mason Value Equity Investment Investment Division Division AllianceBernstein Global Technology Lehman Brothers Aggregate Bond Investment Division Index Investment Division American Century Vista Investment Loomis Sayles Small Cap Investment Division Division American Funds Bond Investment Lord Abbett Bond Debenture Division Investment Division American Funds Global Small Lord Abbett Growth and Income Capitalization Investment Division Investment Division American Funds Growth Investment Lord Abbett Mid Cap Value Division Investment Division American Funds Growth-Income MET/AIM Small Cap Growth Investment Investment Division Division BlackRock Aggressive Growth MetLife Mid Cap Stock Index Investment Division Investment Division BlackRock Bond Income Investment MetLife Stock Index Investment Division Division BlackRock Diversified Investment MFS Global Equity Investment Division Division BlackRock Large Cap Investment MFS High Income Investment Division Division MFS Investors Trust Investment BlackRock Large Cap Value Division Investment Division MFS Research International BlackRock Legacy Large Cap Growth Investment Division Investment Division MFS Total Return Investment Division BlackRock Money Market Investment MetLife Moderate Allocation Division Investment Division BlackRock Strategic Value MetLife Moderate to Aggressive Investment Division Allocation Investment Division MetLife Conservative Allocation Morgan Stanley EAFE Index Investment Division Investment Division MetLife Conservative to Moderate Neuberger Berman Mid Cap Value Allocation Investment Division Investment Division Cyclical Growth ETF Investment Neuberger Berman Real Estate Division Investment Division Cyclical Growth and Income ETF Oppenheimer Capital Appreciation Investment Division Investment Division Davis Venture Value Investment Oppenheimer Global Equity Division Investment Division Delaware Small Cap Value Investment PIMCO Inflation Protected Bond Division Investment Division Dreyfus Emerging Leaders Investment PIMCO Total Return Investment Division Division Dreyfus International Value RCM Global Technology Investment Investment Division Division Dreyfus MidCap Stock Index Russell 2000 Index Investment Investment Division Division FI International Stock Investment Third Avenue Small Cap Value Division Investment Division FI Large Cap Investment Division T. Rowe Price Small Cap Growth FI Mid Cap Opportunities Investment Investment Division Division T. Rowe Price Large Cap Growth FI Value Leaders Investment Division Investment Division Fidelity VIP Asset Manager Growth T. Rowe Price Mid-Cap Growth Investment Division Investment Division Fidelity VIP Contrafund Investment Van Kampen Government Investment Division Division Fidelity VIP Equity Income Wells Fargo Advantage Asset Investment Division Allocation Investment Division Fidelity VIP Investment Grade Bond Wells Fargo Advantage Equity-Income Investment Division Investment Division Franklin Mutual Discovery Wells Fargo Advantage Large Company Securities Investment Division Growth Investment Division Franklin Templeton Foreign Wells Fargo Advantage Money Market Securities Stock Investment Investment Division Division Wells Fargo Advantage Total Return Franklin Templeton Small Cap Growth Bond Investment Division Investment Division Western Asset Management Strategic Government/High Grade Securities Bond Opportunities Investment Investment Division Division Goldman Sachs Mid-Cap Value Western Asset Management U.S. Investment Division Government Investment Division Goldman Sachs Structured Small Cap Equity Investment Division Harris Oakmark Focused Value Investment Division Harris Oakmark International Investment Division Harris Oakmark Large Cap Value Investment Division Janus Aspen Balanced Investment Division F-2 [THIS PAGE INTENTIONALLY LEFT BLANK] F-3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2006
BLACKROCK BLACKROCK BLACKROCK LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH METLIFE STOCK INVESTMENT INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ----------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ 435,927,262 $ -- $ -- $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- 331,421,284 -- -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- -- 228,710,481 -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- -- -- 707,569,055 FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- -- -- -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- -- -- -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- -- -- -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- -- -- -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- -- -- -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- -- -- -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- -- -- -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- -- -- -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- -- -- -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- -- -- -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- -- -- -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- -- -- -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- -- -- -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- -- -- -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- -- -- -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- -- -- -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- -- -- -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- -- -- -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- -- -- -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Investments............................. 435,927,262 331,421,284 228,710,481 707,569,055 Due From Metropolitan Life Insurance Company.. -- 11,435 7,114 -- ---------------- ---------------- ---------------- ---------------- Total Assets.................................. 435,927,262 331,432,719 228,717,595 707,569,055 LIABILITIES Due to Metropolitan Life Insurance Company.... (30,447) -- -- (4,262) ---------------- ---------------- ---------------- ---------------- NET ASSETS.................................... $ 435,896,815 $ 331,432,719 $ 228,717,595 $ 707,564,793 ================ ================ ================ ================ Outstanding Units............................. 16,009,494 13,096,726 11,198,297 33,607,228 Unit Fair Values.............................. $13.85 to $42.25 $14.57 to $36.86 $15.63 to $22.09 $12.80 to $38.04
FI INTERNATIONAL STOCK INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... 67,578,419 FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- ---------------- Total Investments............................. 67,578,419 Due From Metropolitan Life Insurance Company.. -- ---------------- Total Assets.................................. 67,578,419 LIABILITIES Due to Metropolitan Life Insurance Company.... (69,275) ---------------- NET ASSETS.................................... $ 67,509,144 ================ Outstanding Units............................. 3,412,213 Unit Fair Values.............................. $15.68 to $21.90
The accompanying notes are an integral part of these financial statements. F-4
FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE LEHMAN BROTHERS OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH AGGREGATE BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 271,492,459 -- -- -- -- -- -- -- 81,770,152 -- -- -- -- -- -- -- 48,978,562 -- -- -- -- -- -- -- 64,227,577 -- -- -- -- -- -- -- 77,840,502 -- -- -- -- -- -- -- 49,301,365 -- -- -- -- -- -- -- 90,426,972 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 271,492,459 81,770,152 48,978,562 64,227,577 77,840,502 49,301,365 90,426,972 -- 42,594 -- 65,262 -- 14,208 -- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 271,492,459 81,812,746 48,978,562 64,292,839 77,840,502 49,315,573 90,426,972 (28,787) -- (34,027) -- (105,153) -- (9,645) --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ 271,463,672 $ 81,812,746 $ 48,944,535 $ 64,292,839 $ 77,735,349 $ 49,315,573 $ 90,417,327 =============== ================ ================ ================ ================ ================ ================ 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 6,058,549 $7.97 to $22.36 $15.76 to $17.80 $20.38 to $22.70 $14.65 to $18.40 $20.75 to $29.66 $10.63 to $16.09 $13.75 to $15.13
MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION ---------------- $ -- -- -- -- -- -- -- -- -- -- -- -- 58,374,026 -- -- -- -- -- -- -- -- -- -- -- -- ---------------- 58,374,026 27,738 ---------------- 58,401,764 -- ---------------- $ 58,401,764 ================ 3,792,545 $13.02 to $17.67
F-5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
RUSSELL 2000 JENNISON BLACKROCK METLIFE MID CAP INDEX GROWTH STRATEGIC VALUE STOCK INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- --------------- ---------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- $ -- $ -- $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- -- -- -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- -- -- -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- -- -- -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- -- -- -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- -- -- -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- -- -- -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- -- -- -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- -- -- -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- -- -- -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- -- -- -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- -- -- -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... 55,335,271 -- -- -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- 14,094,544 -- -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- -- 105,347,125 -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- -- -- 56,091,263 Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- -- -- -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- -- -- -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- -- -- -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- -- -- -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- -- -- -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- -- -- -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- -- -- -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- -- -- -- ---------------- --------------- ---------------- ---------------- Total Investments............................. 55,335,271 14,094,544 105,347,125 56,091,263 Due From Metropolitan Life Insurance Company.. -- 4,715 67,392 -- ---------------- --------------- ---------------- ---------------- Total Assets.................................. 55,335,271 14,099,259 105,414,517 56,091,263 LIABILITIES Due to Metropolitan Life Insurance Company.... (46,282) -- -- (1,127) ---------------- --------------- ---------------- ---------------- NET ASSETS.................................... $ 55,288,989 $ 14,099,259 $ 105,414,517 $ 56,090,136 ================ =============== ================ ================ Outstanding Units............................. 2,884,744 1,356,790 4,494,782 3,270,208 Unit Fair Values.............................. $15.20 to $21.19 $5.81 to $12.52 $21.68 to $23.68 $15.84 to $17.39
FRANKLIN TEMPLETON SMALL CAP GROWTH INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. 6,368,294 BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- ---------------- Total Investments............................. 6,368,294 Due From Metropolitan Life Insurance Company.. -- ---------------- Total Assets.................................. 6,368,294 LIABILITIES Due to Metropolitan Life Insurance Company.... -- ---------------- NET ASSETS.................................... $ 6,368,294 ================ Outstanding Units............................. 538,941 Unit Fair Values.............................. $11.33 to $11.92
The accompanying notes are an integral part of these financial statements. F-6
BLACKROCK BLACKROCK LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE BLACKROCK FI VALUE HARRIS OAKMARK VALUE VENTURE VALUE SMALL CAP CAP GROWTH BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 9,397,259 -- -- -- -- -- -- -- 49,859,931 -- -- -- -- -- -- -- 12,333,661 -- -- -- -- -- -- -- 2,273,929 -- -- -- -- -- -- -- 92,313,649 -- -- -- -- -- -- -- 5,778,900 -- -- -- -- -- -- -- 58,176,504 --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ 9,397,259 49,859,931 12,333,661 2,273,929 92,313,649 5,778,900 58,176,504 -- -- -- -- -- -- -- --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ 9,397,259 49,859,931 12,333,661 2,273,929 92,313,649 5,778,900 58,176,504 -- (218) (1) (4,596) (2,472) (2) -- --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ $ 9,397,259 $ 49,859,713 $ 12,333,660 $ 2,269,333 $ 92,311,177 $ 5,778,898 $ 58,176,504 =============== ================ ================= =============== ================ ================ ================== 608,908 1,301,427 78,273 190,308 4,668,001 393,835 191,529 $8.29 to $15.57 $13.90 to $40.33 $13.47 to $298.24 $8.29 to $12.45 $14.39 to $29.48 $11.79 to $14.87 $290.84 to $305.98
F-7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
WESTERN ASSET MANAGEMENT WESTERN ASSET STRATEGIC BOND MANAGEMENT BLACKROCK OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882.................................... $ 15,802,133 $ -- $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960.................................... -- 14,050,390 -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897...................................... -- -- 59,328,897 MFS Total Return Portfolio 24,178 shares; cost $3,540,225........................................ -- -- -- MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.......................................... -- -- -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575....................................... -- -- -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611....................................... -- -- -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143.................................... -- -- -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160....................................... -- -- -- FI Large Cap Portfolio 4,080 shares; cost $57,394............................................ -- -- -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505....................................... -- -- -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160................................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249........................................... -- -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.......................................... -- -- -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567............................................... -- -- -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150........................................ -- -- -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018....................................... -- -- -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.......................................... -- -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283............................................ -- -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745........................................ -- -- -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.......................................... -- -- -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569............................................ -- -- -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.......................................... -- -- -- ---------------- ---------------- ---------------- Total Investments...................................................... 15,802,133 14,050,390 59,328,897 Due From Metropolitan Life Insurance Company........................... -- -- -- ---------------- ---------------- ---------------- Total Assets........................................................... 15,802,133 14,050,390 59,328,897 LIABILITIES Due to Metropolitan Life Insurance Company............................. -- -- (76) ---------------- ---------------- ---------------- NET ASSETS............................................................. $ 15,802,133 $ 14,050,390 $ 59,328,821 ================ ================ ================ Outstanding Units...................................................... 998,939 988,756 3,575,759 Unit Fair Values....................................................... $15.16 to $15.95 $13.62 to $14.33 $16.57 to $16.87
MFS TOTAL RETURN INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882.................................... $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960.................................... -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897...................................... -- MFS Total Return Portfolio 24,178 shares; cost $3,540,225........................................ 3,781,924 MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.......................................... -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575....................................... -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611....................................... -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143.................................... -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160....................................... -- FI Large Cap Portfolio 4,080 shares; cost $57,394............................................ -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505....................................... -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160................................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249........................................... -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.......................................... -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567............................................... -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150........................................ -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018....................................... -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.......................................... -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283............................................ -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745........................................ -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.......................................... -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569............................................ -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.......................................... -- ---------------- Total Investments...................................................... 3,781,924 Due From Metropolitan Life Insurance Company........................... -- ---------------- Total Assets........................................................... 3,781,924 LIABILITIES Due to Metropolitan Life Insurance Company............................. (3) ---------------- NET ASSETS............................................................. $ 3,781,921 ================ Outstanding Units...................................................... 297,430 Unit Fair Values....................................................... $12.47 to $12.77
The accompanying notes are an integral part of these financial statements. F-8
METLIFE METLIFE CONSERVATIVE TO METLIFE MODERATE METLIFE JANUS ASPEN CONSERVATIVE MODERATE METLIFE MODERATE TO AGGRESSIVE AGGRESSIVE LARGE CAP JANUS ASPEN ALLOCATION ALLOCATION ALLOCATION ALLOCATION ALLOCATION FI LARGE CAP GROWTH BALANCED INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------- ----------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 492,252 -- -- -- -- -- -- -- -- 1,884,052 -- -- -- -- -- -- -- -- 9,406,274 -- -- -- -- -- -- -- -- 13,918,465 -- -- -- -- -- -- -- -- 2,934,559 -- -- -- -- -- -- -- -- 61,685 -- -- -- -- -- -- -- -- 5,806,347 -- 2,311 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ 492,252 1,884,052 9,406,274 13,918,465 2,934,559 61,685 5,806,347 2,311 -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ 492,252 1,884,052 9,406,274 13,918,465 2,934,559 61,685 5,806,347 2,311 -- -- -- -- -- -- (4,738) -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ $ 492,252 $ 1,884,052 $ 9,406,274 $ 13,918,465 $ 2,934,559 $ 61,685 $5,801,609 $2,311 ================ ================ ================ ================ ================ ================ ========== ====== 44,128 161,903 775,138 1,098,433 225,274 6,047 595,051 179 $11.00 to $11.17 $11.51 to $11.68 $12.01 to $12.19 $12.52 to $12.71 $12.89 to $13.08 $10.16 to $10.22 $ 9.75 $12.90
F-9 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
AIM V.I. AIM V.I. JANUS ASPEN AIM V.I. GOVERNMENT GLOBAL FORTY CORE EQUITY SECURITIES REAL ESTATE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ----------- ----------- ---------- ----------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882............................ $ -- $ -- $ -- $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960............................ -- -- -- -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897.............................. -- -- -- -- MFS Total Return Portfolio 24,178 shares; cost $3,540,225................................ -- -- -- -- MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.................................. -- -- -- -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575............................... -- -- -- -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611............................... -- -- -- -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143............................ -- -- -- -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160............................... -- -- -- -- FI Large Cap Portfolio 4,080 shares; cost $57,394.................................... -- -- -- -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505............................... -- -- -- -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160........................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249................................... 111,362 -- -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.................................. -- 317,090 -- -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567....................................... -- -- 7,402 -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150................................ -- -- -- 2,749,288 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018............................... -- -- -- -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.................................. -- -- -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283.................................... -- -- -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745................................ -- -- -- -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.................................. -- -- -- -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569.................................... -- -- -- -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.................................. -- -- -- -- -------- -------- ------ ---------- Total Investments.............................................. 111,362 317,090 7,402 2,749,288 Due From Metropolitan Life Insurance Company................... -- 67,753 255 13,325 -------- -------- ------ ---------- Total Assets................................................... 111,362 384,843 7,657 2,762,613 LIABILITIES Due to Metropolitan Life Insurance Company..................... -- -- -- -- -------- -------- ------ ---------- NET ASSETS..................................................... $111,362 $384,843 $7,657 $2,762,613 ======== ======== ====== ========== Outstanding Units.............................................. 7,954 25,159 691 70,179 Unit Fair Values............................................... $ 14.00 $ 15.30 $11.08 $ 39.37
The accompanying notes are an integral part of these financial statements. F-10
FRANKLIN FRANKLIN MUTUAL FIDELITY VIP FIDELITY VIP TEMPLETON DISCOVERY ALLIANCEBERNSTEIN FIDELITY VIP ASSET MANAGER INVESTMENT FIDELITY VIP FOREIGN SECURITIES SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH GRADE BOND EQUITY-INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ --------------- ----------------- ------------ ------------- ------------ ------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,583,950 -- -- -- -- -- -- -- 899,119 -- -- -- -- -- -- -- 63,091 -- -- -- -- -- -- -- 2,085,084 -- -- -- -- -- -- -- 961,772 -- -- -- -- -- -- -- 36,978 -- -- -- -- -- -- -- 433,051 ---------- -------- ------- ---------- -------- ------- -------- 7,583,950 899,119 63,091 2,085,084 961,772 36,978 433,051 -- -- -- 6,235 -- -- 125 ---------- -------- ------- ---------- -------- ------- -------- 7,583,950 899,119 63,091 2,091,319 961,772 36,978 433,176 (17,633) (10) -- -- (3,696) -- -- ---------- -------- ------- ---------- -------- ------- -------- $7,566,317 $899,109 $63,091 $2,091,319 $958,076 $36,978 $433,176 ========== ======== ======= ========== ======== ======= ======== 471,719 54,880 11,768 151,404 102,160 3,341 30,951 $ 16.03 $ 16.38 $ 5.36 $ 13.81 $ 9.40 $ 11.10 $ 14.00
F-11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS GROWTH GROWTH-INCOME CAPITALIZATION BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ 97,034,740 $ -- $ -- $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- 63,898,091 -- -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- -- 43,642,742 -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- -- -- 644,176 MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. -- -- -- -- MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- -- -- -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- -- -- -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- -- -- -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- -- -- -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- -- -- -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- -- -- -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- -- -- -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- -- -- -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... -- -- -- -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- -- -- -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- -- -- -- Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- -- -- -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- -- -- -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- -- -- -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- -- -- -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- -- -- -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Investments................................... 97,034,740 63,898,091 43,642,742 644,176 Due From Metropolitan Life Insurance Company........ -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Assets........................................ 97,034,740 63,898,091 43,642,742 644,176 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- -- -- -- ---------------- ---------------- ---------------- ---------------- NET ASSETS.......................................... $ 97,034,740 $ 63,898,091 $ 43,642,742 $ 644,176 ================ ================ ================ ================ Outstanding Units................................... 1,094,384 1,228,077 1,521,701 63,414 Unit Fair Values.................................... $84.90 to $89.32 $49.83 to $52.43 $27.56 to $28.99 $10.12 to $10.18
T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION --------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. 12,401,292 MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- --------------- Total Investments................................... 12,401,292 Due From Metropolitan Life Insurance Company........ -- --------------- Total Assets........................................ 12,401,292 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- --------------- NET ASSETS.......................................... $ 12,401,292 =============== Outstanding Units................................... 1,338,870 Unit Fair Values.................................... $8.84 to $13.92
The accompanying notes are an integral part of these financial statements. F-12
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT LAZARD MET/AIM HARRIS OAKMARK INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE MID-CAP SMALL CAP GROWTH INTERNATIONAL INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 9,804,463 -- -- -- -- -- -- -- 28,016,253 -- -- -- -- -- -- -- 7,523,569 -- -- -- -- -- -- -- 19,407,998 -- -- -- -- -- -- -- 4,020,887 -- -- -- -- -- -- -- 2,376,804 -- -- -- -- -- -- -- 21,411,537 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- 9,804,463 28,016,253 7,523,569 19,407,998 4,020,887 2,376,804 21,411,537 -- -- -- -- -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- 9,804,463 28,016,253 7,523,569 19,407,998 4,020,887 2,376,804 21,411,537 (938) -- -- (39,584) -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- $ 9,803,525 $ 28,016,253 $ 7,523,569 $ 19,368,414 $ 4,020,887 $ 2,376,804 $ 21,411,537 ================ ================ ============== ================ ================ ================ ================ 566,593 2,039,385 1,395,573 1,162,806 261,764 170,794 1,060,490 $15.30 to $17.63 $13.16 to $13.85 $5.16 to $5.43 $14.77 to $18.05 $14.85 to $15.48 $13.44 to $14.02 $19.54 to $20.37
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION -------------- $ -- -- -- -- -- -- -- -- -- -- -- -- 7,744,434 -- -- -- -- -- -- -- -- -- -------------- 7,744,434 -- -------------- 7,744,434 (1) -------------- $ 7,744,433 ============== 908,926 $7.37 to $8.60
F-13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
LORD ABBETT NEUBERGER LORD ABBETT GROWTH AND BERMAN REAL MID-CAP INCOME ESTATE VALUE INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION ----------- ---------------- ----------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ -- $ -- $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- -- -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- -- -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- -- -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. -- -- -- MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- -- -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- -- -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- -- -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- -- -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- -- -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- -- -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- -- -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- -- -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... 5,855,650 -- -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- 18,987,193 -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- -- 42,581 Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- -- -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- -- -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- -- -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- -- -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- -- -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- -- -- ---------- ---------------- ------- Total Investments................................... 5,855,650 18,987,193 42,581 Due From Metropolitan Life Insurance Company........ 5,718 1 -- ---------- ---------------- ------- Total Assets........................................ 5,861,368 18,987,194 42,581 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- -- (1) ---------- ---------------- ------- NET ASSETS.......................................... $5,861,368 $ 18,987,194 $42,580 ========== ================ ======= Outstanding Units................................... 523,423 939,464 2,988 Unit Fair Values.................................... $ 11.20 $19.85 to $20.33 $ 14.25
The accompanying notes are an integral part of these financial statements. F-14
OPPENHIEMER THIRD AVENUE CAPITAL LEGG MASON CYCLICAL GROWTH PIMCO INFLATION SMALL CAP APPRECIATION VALUE EQUITY CYCLICAL GROWTH AND INCOME ETF PROTECTED BOND VALUE INVESTMENT INVESTMENT INVESTMENT ETF INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 275,584 -- -- -- -- -- -- 329,300 -- -- -- -- -- -- 5,514,276 -- -- -- -- -- -- 176,315 -- -- -- -- -- -- 116,548 -- -- -- -- -- -- 129,728 -------- ---------------- ---------------- ---------------- ---------------- ---------------- 275,584 329,300 5,514,276 176,315 116,548 129,728 -- -- 23,384 -- -- -- -------- ---------------- ---------------- ---------------- ---------------- ---------------- 275,584 329,300 5,537,660 176,315 116,548 129,728 -- -- -- -- -- -- -------- ---------------- ---------------- ---------------- ---------------- ---------------- $275,584 $ 329,300 $ 5,537,660 $ 176,315 $ 116,548 $ 129,728 ======== ================ ================ ================ ================ ================ 17,494 27,796 490,888 16,395 10,875 12,722 $ 15.75 $11.70 to $11.87 $10.73 to $12.11 $10.71 to $10.77 $10.67 to $10.73 $10.14 to $10.20
F-15 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
DREYFUS DELAWARE DREYFUS EMERGING AMERICAN CENTURY SMALL CAP VALUE MIDCAP STOCK LEADERS VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- --------------- ------------ ---------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313............................ $24,928 $ -- $ -- $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398.......................... -- 512,556 -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................... -- -- 107,848 -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892.............................. -- -- -- 11,878 DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267.......................... -- -- -- -- GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937.......................... -- -- -- -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344............................ -- -- -- -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424............................ -- -- -- -- MFS Global Equity Portfolio 1,736 shares; cost $23,911............................ -- -- -- -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588............................ -- -- -- -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199............................ -- -- -- -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202......................... -- -- -- -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114.............................. -- -- -- -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780.......................... -- -- -- -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................... -- -- -- -- ------- -------- -------- ------- Total Investments...................................... 24,928 512,556 107,848 11,878 Due From Metropolitan Life Insurance Company........... -- 11,548 -- -- ------- -------- -------- ------- Total Assets........................................... 24,928 524,104 107,848 11,878 LIABILITIES Due to Metropolitan Life Insurance Company............. (1) -- (17,080) -- ------- -------- -------- ------- NET ASSETS............................................. $24,927 $524,104 $ 90,768 $11,878 ======= ======== ======== ======= Outstanding Units...................................... 1,963 31,911 7,996 931 Unit Fair Values....................................... $ 12.70 $ 16.42 $ 11.35 $ 12.76
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION ------------------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313............................ $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398.......................... -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................... -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892.............................. -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267.......................... 686,496 GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937.......................... -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344............................ -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424............................ -- MFS Global Equity Portfolio 1,736 shares; cost $23,911............................ -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588............................ -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199............................ -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202......................... -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114.............................. -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780.......................... -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................... -- -------- Total Investments...................................... 686,496 Due From Metropolitan Life Insurance Company........... 29,936 -------- Total Assets........................................... 716,432 LIABILITIES Due to Metropolitan Life Insurance Company............. -- -------- NET ASSETS............................................. $716,432 ======== Outstanding Units...................................... 45,198 Unit Fair Values....................................... $ 15.85
The accompanying notes are an integral part of these financial statements. F-16
GOLDMAN SACHS WELLS FARGO WELLS FARGO WELLS FARGO GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL VAN KAMPEN ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY GOVERNMENT TOTAL RETURN MONEY MARKET ASSET ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------- ---------------- ---------- ---------- ---------- ------------ ------------ ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 265,497 -- -- -- -- -- -- -- -- 89,591 -- -- -- -- -- -- -- -- 82,011 -- -- -- -- -- -- -- -- 26,855 -- -- -- -- -- -- -- -- 14,833 -- -- -- -- -- -- -- -- 61,184 -- -- -- -- -- -- -- -- 982,202 -- -- -- -- -- -- -- -- 11,546 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -------- -------- ------- ------- ------- -------- --------- -------- 265,497 89,591 82,011 26,855 14,833 61,184 982,202 11,546 -- -- -- 1 -- 7 -- -- -------- -------- ------- ------- ------- -------- --------- -------- 265,497 89,591 82,011 26,856 14,833 61,191 982,202 11,546 (1,531) (1) -- -- -- -- (88) -- -------- -------- ------- ------- ------- -------- --------- -------- $263,966 $ 89,590 $82,011 $26,856 $14,833 $ 61,191 $ 982,114 $ 11,546 ======== ======== ======= ======= ======= ======== ========= ======== 18,362 6,743 6,738 1,789 1,342 5,553 91,188 907 $ 14.38 $ 13.29 $ 12.17 $ 15.01 $ 11.06 $ 11.02 $ 10.77 $ 12.73
F-17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2006
WELLS FARGO WELLS FARGO ADVANTAGE VT ADVANTAGE VT LARGE COMPANY EQUITY INCOME GROWTH INVESTMENT INVESTMENT DIVISION DIVISION ----------------- ------------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313......................................... $ -- $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398....................................... -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................................ -- -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892........................................... -- -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267....................................... -- -- GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937....................................... -- -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344......................................... -- -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424......................................... -- -- MFS Global Equity Portfolio 1,736 shares; cost $23,911......................................... -- -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588......................................... -- -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199......................................... -- -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202...................................... -- -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114........................................... -- -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780....................................... 200,720 -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................................ -- 8,813 --------- ------- Total Investments................................................... 200,720 8,813 Due From Metropolitan Life Insurance Company........................ -- -- --------- ------- Total Assets........................................................ 200,720 8,813 LIABILITIES Due to Metropolitan Life Insurance Company.......................... -- -- --------- ------- NET ASSETS $ 200,720 $ 8,813 ========= ======= Outstanding Units................................................... 17,802 653 Unit Fair Values.................................................... $ 11.28 $ 13.49
The accompanying notes are an integral part of these financial statements. F-18 [THIS PAGE INTENTIONALLY LEFT BLANK] F-19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK LARGE CAP INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ----------- ----------- ----------- INVESTMENT INCOME (LOSS): Income: Dividends.................................................... $ 5,365,248 $ 4,375,931 $ 2,717,041 Expenses: Mortality and expense risk charges........................... 3,616,837 3,470,220 3,262,909 ----------- ----------- ----------- Net investment income (loss)................................... 1,748,411 905,711 (545,868) ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions............. 1,910,880 834,521 (689,999) Realized gain distributions.................................... -- -- -- ----------- ----------- ----------- Net realized gains (losses) on investments..................... 1,910,880 834,521 (689,999) Change in unrealized appreciation (depreciation) of investments 47,641,145 8,704,485 37,215,298 ----------- ----------- ----------- Net realized and unrealized gains (losses) on investments...... 49,552,025 9,539,006 36,525,299 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $51,300,436 $10,444,717 $35,979,431 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-20
BLACKROCK DIVERSIFIED BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ------------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 7,880,854 $4,998,633 $ 5,543,155 $ -- $ -- $ -- $12,777,493 $ 8,971,609 $ 4,172,573 2,787,484 2,728,213 2,975,584 1,968,385 1,824,382 1,651,256 5,268,088 4,641,173 3,998,379 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,093,370 2,270,420 2,567,571 (1,968,385) (1,824,382) (1,651,256) 7,509,405 4,330,436 174,194 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 2,697,730 655,141 (558,940) (1,521,325) (2,231,885) (3,443,419) 6,189,767 3,573,660 (2,432,174) -- -- -- -- -- -- 21,804,470 -- -- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 2,697,730 655,141 (558,940) (1,521,325) (2,231,885) (3,443,419) 27,994,237 3,573,660 (2,432,174) 21,697,213 3,822,631 19,749,208 16,167,405 23,892,825 27,472,766 53,741,400 14,173,789 49,514,290 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 24,394,943 4,477,772 19,190,268 14,646,080 21,660,940 24,029,347 81,735,637 17,747,449 47,082,116 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $29,488,313 $6,748,192 $21,757,839 $12,677,695 $19,836,558 $22,378,091 $89,245,042 $22,077,885 $47,256,310 =========== ========== =========== =========== =========== =========== =========== =========== ===========
F-21 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI INTERNATIONAL STOCK INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ---------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 881,159 $ 317,306 $ 606,588 Expenses: Mortality and expense risk charges.......... 530,605 427,240 370,691 ---------- ---------- ---------- Net investment income (loss)................. 350,554 (109,934) 235,897 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 832,502 237,027 (367,092) Realized gain distributions.................. -- -- -- ---------- ---------- ---------- Net realized gains (losses) on investments... 832,502 237,027 (367,092) Change in unrealized appreciation (depreciation) of investments............... 7,805,567 8,151,109 7,284,341 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments.............................. 8,638,069 8,388,136 6,917,249 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $8,988,623 $8,278,202 $7,153,146 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-22
FI MID CAP OPPORTUNITIES T. ROWE PRICE SMALL CAP GROWTH OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ---------------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- $ 14,072 $ -- $ 1,090,068 $ -- $ -- $ -- $1,114,393 $ 209,625 $ 478,904 2,242,728 2,011,441 1,721,436 661,143 595,465 530,571 361,328 299,169 246,310 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (2,228,656) (2,011,441) (631,368) (661,143) (595,465) (530,571) 753,065 (89,544) 232,594 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (4,482,428) (1,015,121) (717,628) 842,686 37,997 (69,548) 571,820 270,279 (301,695) -- -- -- -- -- -- 861,246 -- -- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (4,482,428) (1,015,121) (717,628) 842,686 37,997 (69,548) 1,433,066 270,279 (301,695) 33,489,573 17,191,699 33,098,684 2,138,730 7,936,747 7,181,746 4,443,736 5,277,659 4,666,310 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 29,007,145 16,176,578 32,381,056 2,981,416 7,974,744 7,112,198 5,876,802 5,547,938 4,364,615 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- $26,778,489 $14,165,137 $31,749,688 $2,320,273 $7,379,279 $6,581,627 $6,629,867 $5,458,394 $4,597,209 =========== =========== =========== ========== ========== ========== ========== ========== ==========
F-23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
HARRIS OAKMARK LARGE CAP VALUE INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ---------- ----------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 447,049 $ 367,539 $ 216,340 Expenses: Mortality and expense risk charges.......... 478,172 429,104 366,329 ---------- ----------- ---------- Net investment income (loss)................. (31,123) (61,565) (149,989) ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 835,096 398,007 613,781 Realized gain distributions.................. -- -- -- ---------- ----------- ---------- Net realized gains (losses) on investments... 835,096 398,007 613,781 Change in unrealized appreciation (depreciation) of investments............... 8,574,081 (1,475,339) 4,130,792 ---------- ----------- ---------- Net realized and unrealized gains (losses) on investments.............................. 9,409,177 (1,077,332) 4,744,573 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $9,378,054 $(1,138,897) $4,594,584 ========== =========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-24
NEUBERGER BERMAN MID CAP VALUE T. ROWE PRICE LARGE CAP GROWTH LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- $ 340,446 $ 157,412 $ 89,490 $ 147,322 $ 212,638 $ 72,329 $3,647,493 $ 2,790,273 $1,838,871 602,710 468,169 312,426 370,484 319,250 290,730 616,266 528,874 414,705 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- (262,264) (310,757) (222,936) (223,162) (106,612) (218,401) 3,031,227 2,261,399 1,424,166 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 895,063 557,751 490,187 505,143 187,894 989,299 (57,852) 113,726 451,466 6,150,111 4,520,673 971,349 2,175 -- 354 -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 7,045,174 5,078,424 1,461,536 507,318 187,894 989,653 (57,852) 113,726 451,466 382,304 1,374,494 6,555,902 5,044,250 2,209,286 2,694,772 (71,436) (1,403,001) 266,268 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 7,427,478 6,452,918 8,017,438 5,551,568 2,397,180 3,684,425 (129,288) (1,289,275) 717,734 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- $7,165,214 $6,142,161 $7,794,502 $5,328,406 $2,290,568 $3,466,024 $2,901,939 $ 972,124 $2,141,900 ========== ========== ========== ========== ========== ========== ========== =========== ==========
F-25 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ----------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ 843,327 $ 597,805 $ 202,506 Expenses: Mortality and expense risk charges............... 419,647 312,106 230,962 ----------- ---------- ---------- Net investment income (loss)...................... 423,680 285,699 (28,456) ----------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 984,685 590,734 1,189,725 Realized gain distributions....................... -- -- -- ----------- ---------- ---------- Net realized gains (losses) on investments........ 984,685 590,734 1,189,725 Change in unrealized appreciation (depreciation) of investments................................... 9,577,488 3,753,078 3,997,066 ----------- ---------- ---------- Net realized and unrealized gains (losses) on investments...................................... 10,562,173 4,343,812 5,186,791 ----------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $10,985,853 $4,629,511 $5,158,335 =========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-26
RUSSELL 2000 INDEX JENNISON GROWTH BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- --------------------- ------------------------------------- 2006 2005 2004 2006 2005(A) 2006 2005 2004 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- $ 397,966 $ 293,721 $ 141,315 $ -- $ -- $ 298,959 $ -- $ -- 402,879 320,327 255,946 113,119 67,101 828,876 714,689 563,943 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- (4,913) (26,606) (114,631) (113,119) (67,101) (529,917) (714,689) (563,943) ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 793,645 811,342 973,061 116,022 36,398 1,173,096 647,742 827,418 1,842,549 1,438,122 -- 11,909 -- 17,677,150 5,489,850 -- ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 2,636,194 2,249,464 973,061 127,931 36,398 18,850,246 6,137,592 827,418 5,025,107 (613,275) 4,412,786 269,709 2,206,440 (4,073,024) (2,502,234) 9,427,091 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 7,661,301 1,636,189 5,385,847 397,640 2,242,838 14,777,222 3,635,358 10,254,509 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- $7,656,388 $1,609,583 $5,271,216 $ 284,521 $2,175,737 $14,247,305 $ 2,920,669 $ 9,690,566 ========== ========== ========== ========= ========== =========== =========== ===========
F-27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ---------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ 617,181 $ 278,096 $ 156,916 Expenses: Mortality and expense risk charges............... 431,166 340,784 259,163 ---------- ---------- ---------- Net investment income (loss)...................... 186,015 (62,688) (102,247) ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 660,796 682,809 992,035 Realized gain distributions....................... 3,502,918 2,036,561 81,073 ---------- ---------- ---------- Net realized gains (losses) on investments........ 4,163,714 2,719,370 1,073,108 Change in unrealized appreciation (depreciation) of investments................................... 201,865 1,900,535 3,817,899 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments...................................... 4,365,579 4,619,905 4,891,007 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $4,551,594 $4,557,217 $4,788,760 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-28
FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE DAVIS VENTURE VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- $ -- $ -- $ -- $ 79,434 $ 37,063 $ -- $ 403,990 $ 244,019 $ 151,001 50,288 39,601 31,464 57,120 34,801 18,736 384,612 290,656 210,672 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- (50,288) (39,601) (31,464) 22,314 2,262 (18,736) 19,378 (46,637) (59,671) -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 136,411 129,715 40,690 121,354 81,656 105,597 2,307,728 226,016 508,082 286,106 154,763 -- 389,137 39,914 -- -- -- -- -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 422,517 284,478 40,690 510,491 121,570 105,597 2,307,728 226,016 508,082 106,882 (56,267) 404,946 656,059 110,740 229,787 3,652,646 3,304,528 2,678,225 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 529,399 228,211 445,636 1,166,550 232,310 335,384 5,960,374 3,530,544 3,186,307 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- $479,111 $188,610 $414,172 $1,188,864 $234,572 $316,648 $5,979,752 $3,483,907 $3,126,636 ======== ======== ======== ========== ======== ======== ========== ========== ==========
F-29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION ------------------------------ 2006 2005 2004 ---------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ -- $ -- $ -- Expenses: Mortality and expense risk charges............... 90,220 60,646 44,015 ---------- -------- -------- Net investment income (loss)...................... (90,220) (60,646) (44,015) ---------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 208,239 74,135 142,373 Realized gain distributions....................... 848,702 83,073 -- ---------- -------- -------- Net realized gains (losses) on investments........ 1,056,941 157,208 142,373 Change in unrealized appreciation (depreciation) of investments................................... 425,449 365,753 718,393 ---------- -------- -------- Net realized and unrealized gains (losses) on investments...................................... 1,482,390 522,961 860,766 ---------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $1,392,170 $462,315 $816,751 ========== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-30
BLACKROCK LEGACY LARGE CAP GROWTH MFS INVESTORS TRUST BLACKROCK BOND INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- ----------------------------- ------------------------------------- 2006 2005 2004 2006 (B) 2005 2004 2006 2005 2004 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- $ 12,152 $ 32,623 $ -- $ 47,698 $ 15,998 $ 9,640 $ 5,391,669 $ 3,611,102 $ 3,802,105 38,586 43,887 30,183 12,243 36,252 23,709 735,582 716,223 702,302 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- (26,434) (11,264) (30,183) 35,455 (20,254) (14,069) 4,656,087 2,894,879 3,099,803 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- 954,600 84,949 117,304 487,261 75,511 10,690 (260,701) 98,977 1,244,325 -- -- -- 343,249 -- -- 92,238 1,043,295 1,587,341 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- 954,600 84,949 117,304 830,510 75,511 10,690 (168,463) 1,142,272 2,831,666 (1,121,566) 498,307 394,196 (658,871) 189,614 322,040 (1,188,505) (2,577,646) (2,928,093) ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- (166,966) 583,256 511,500 (171,610) 265,125 332,730 (1,356,968) (1,435,374) (96,427) ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- $ (193,400) $571,992 $481,317 $ 207,094 $244,871 $318,661 $ 3,299,119 $ 1,459,505 $ 3,003,376 =========== ======== ======== ========= ======== ======== =========== =========== ===========
F-31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI VALUE LEADERS INVESTMENT DIVISION -------------------------- 2006 2005 2004 -------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 45,870 $ 23,066 $ 9,363 Expenses: Mortality and expense risk charges.......... 39,722 19,333 6,936 -------- -------- -------- Net investment income (loss)................. 6,148 3,733 2,427 -------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 71,567 80,493 13,334 Realized gain distributions.................. 105,940 -- -- -------- -------- -------- Net realized gains (losses) on investments... 177,507 80,493 13,334 Change in unrealized appreciation (depreciation) of investments............... 304,366 177,601 106,438 -------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. 481,873 258,094 119,772 -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $488,021 $261,827 $122,199 ======== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-32
WESTERN ASSET MANAGEMENT WESTERN ASSET MANAGEMENT HARRIS OAKMARK FOCUSED VALUE STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ------------------------------ ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- $ 158,000 $ 17,995 $ 12,226 $ 685,459 $ 322,307 $185,168 $423,016 $ 143,164 $104,895 447,521 369,999 261,670 118,623 90,184 55,535 106,778 88,576 66,814 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- (289,521) (352,004) (249,444) 566,836 232,123 129,633 316,238 54,588 38,081 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 862,876 647,285 205,940 44,303 55,156 74,022 (10,510) (2,681) 1,624 4,875,177 432,350 306,174 109,245 198,820 -- -- 195,299 82,987 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 5,738,053 1,079,635 512,114 153,548 253,976 74,022 (10,510) 192,618 84,611 467,020 3,071,366 2,796,718 (101,864) (261,648) 217,644 127,750 (152,454) 55,424 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 6,205,073 4,151,001 3,308,832 51,684 (7,672) 291,666 117,240 40,164 140,035 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- $5,915,552 $3,798,997 $3,059,388 $ 618,520 $ 224,451 $421,299 $433,478 $ 94,752 $178,116 ========== ========== ========== ========= ========= ======== ======== ========= ========
F-33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK MONEY MARKET INVESTMENT DIVISION ---------------------------- 2006 2005 2004 ---------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $1,804,658 $795,483 $291,356 Expenses: Mortality and expense risk charges.......... 207,469 167,153 179,180 ---------- -------- -------- Net investment income (loss)................. 1,597,189 628,330 112,176 ---------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ -- -- -- Realized gain distributions.................. -- -- -- ---------- -------- -------- Net realized gains (losses) on investments... -- -- -- Change in unrealized appreciation (depreciation) of investments............... -- -- -- ---------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. -- -- -- ---------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $1,597,189 $628,330 $112,176 ========== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-34
METLIFE METLIFE CONSERVATIVE TO MODERATE MFS TOTAL RETURN CONSERVATIVE ALLOCATION ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- ----------------------- ------------------------ 2006 2005 2004 (D) 2006 2005 (A) 2006 2005 (A) -------- ------- -------- ------- -------- -------- -------- $ 93,810 $23,976 $ -- $10,638 $ 372 $ 30,389 $ 2,224 27,494 13,447 1,443 3,484 348 11,718 1,984 -------- ------- ------- ------- -------- -------- ------- 66,316 10,529 (1,443) 7,154 24 18,671 240 -------- ------- ------- ------- -------- -------- ------- 5,870 18,142 429 (1,845) 271 12,097 1,644 58,740 15,212 -- 4,082 99 20,839 108 -------- ------- ------- ------- -------- -------- ------- 64,610 33,354 429 2,237 370 32,936 1,752 205,638 (3,131) 39,191 19,393 554 73,219 9,258 -------- ------- ------- ------- -------- -------- ------- 270,248 30,223 39,620 21,630 924 106,155 11,010 -------- ------- ------- ------- -------- -------- ------- $336,564 $40,752 $38,177 $28,784 $ 948 $124,826 $11,250 ======== ======= ======= ======= ======== ======== =======
F-35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE MODERATE ALLOCATION INVESTMENT DIVISION ------------------- 2006 2005 (A) -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 76,104 $ 5,987 Expenses: Mortality and expense risk charges.......... 45,704 3,787 -------- ------- Net investment income (loss)................. 30,400 2,200 -------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 48,706 3,556 Realized gain distributions.................. 106,419 133 -------- ------- Net realized gains (losses) on investments... 155,125 3,689 Change in unrealized appreciation (depreciation) of investments............... 474,841 25,822 -------- ------- Net realized and unrealized gains (losses) on investments.............................. 629,966 29,511 -------- ------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $660,366 $31,711 ======== =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-36
METLIFE METLIFE MODERATE TO AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION FI LARGE CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- --------------------- ------------------- 2006 2005 (A) 2006 2005 (A) 2006 (C) ---------- -------- -------- -------- ------------------- $ 77,374 $ 9,012 $ 9,703 $ 1,642 $ -- 65,099 6,087 13,592 1,181 246 ---------- ------- -------- ------- ------ 12,275 2,925 (3,889) 461 (246) ---------- ------- -------- ------- ------ 14,344 4,752 (41,990) 1,894 21 196,911 210 40,723 1,242 -- ---------- ------- -------- ------- ------ 211,255 4,962 (1,267) 3,136 21 870,757 64,564 225,674 10,725 4,291 ---------- ------- -------- ------- ------ 1,082,012 69,526 224,407 13,861 4,312 ---------- ------- -------- ------- ------ $1,094,287 $72,451 $220,518 $14,322 $4,066 ========== ======= ======== ======= ======
F-37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
JANUS ASPEN LARGE CAP GROWTH INVESTMENT DIVISION ---------------------------- 2006 2005 2004 -------- -------- --------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 25,478 $ 15,028 $ 5,939 Expenses: Mortality and expense risk charges.......... 24,818 21,214 17,727 -------- -------- --------- Net investment income (loss)................. 660 (6,186) (11,788) -------- -------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 80,063 (62,709) (193,886) Realized gain distributions.................. -- -- -- -------- -------- --------- Net realized gains (losses) on investments... 80,063 (62,709) (193,886) Change in unrealized appreciation (depreciation) of investments............... 477,638 263,241 407,058 -------- -------- --------- Net realized and unrealized gains (losses) on investments.............................. 557,701 200,532 213,172 -------- -------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $558,361 $194,346 $ 201,384 ======== ======== =========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-38
JANUS ASPEN BALANCED JANUS ASPEN FORTY AIM V.I. CORE STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ----------------- ------------------------ 2006 2005 2004 2006 2005 2004 2006 (B) 2005 2004 ---- ---- ---- ------ ---- ---- -------- ------ ------ $ 44 $25 $ 4 $ 152 $-- $-- $ 2,695 $ 982 $2,041 7 1 -- 383 -- -- 383 1,116 951 ---- --- --- ------ --- --- -------- ------ ------ 37 24 4 (231) -- -- 2,312 (134) 1,090 ---- --- --- ------ --- --- -------- ------ ------ 33 1 0 (26) -- -- 37,949 5,489 (458) -- -- -- -- -- -- -- -- -- ---- --- --- ------ --- --- -------- ------ ------ 33 (26) -- -- 37,949 5,489 (458) 147 1 4 8,113 -- -- (16,441) 3,571 9,085 ---- --- --- ------ --- --- -------- ------ ------ 180 2 4 8,087 -- -- 21,508 9,060 8,627 ---- --- --- ------ --- --- -------- ------ ------ $217 $26 $ 8 $7,856 $-- $-- $ 23,820 $8,926 $9,717 ==== === === ====== === === ======== ====== ======
F-39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AIM V.I. AIM V.I. CORE EQUITY GOVERNMENT SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- 2006 (C) 2006 2005 2004 (D) -------------------- ---- ----- -------- INVESTMENT INCOME (LOSS): Income: Dividends.................................................... $ 1,689 $280 $ 239 $ 30 Expenses: Mortality and expense risk charges........................... 1,107 32 46 1 ------- ---- ----- ---- Net investment income (loss)................................... 582 248 193 29 ------- ---- ----- ---- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions............. 40 (8) 107 (2) Realized gain distributions.................................... -- -- -- -- ------- ---- ----- ---- Net realized gains (losses) on investments..................... 40 (8) 107 (2) Change in unrealized appreciation (depreciation) of investments 25,383 (28) (117) (20) ------- ---- ----- ---- Net realized and unrealized gains (losses) on investments...... 25,423 (36) (10) (22) ------- ---- ----- ---- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $26,005 $212 $ 183 $ 7 ======= ==== ===== ====
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-40
AIM V.I. GLOBAL REAL ESTATE FRANKLIN TEMPLETON FOREIGN SECURITIES STOCK FRANKLIN MUTUAL DISCOVERY SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------- ------------------------------------------- ------------------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) -------- -------- -------- ---------- -------- -------- -------- ------ -------- $ 25,329 $ 18,091 $ 9,356 $ 91,823 $ 71,641 $ 52,419 $ 5,569 $ 814 $-- 10,103 6,839 4,827 31,977 26,380 22,112 2,376 268 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 15,226 11,252 4,529 59,846 45,261 30,307 3,193 546 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 329,460 148,313 54,384 553,100 259,867 153,352 7,128 132 -- 87,476 64,792 20,514 -- -- -- 19,692 -- -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 416,936 213,105 74,898 553,100 259,867 153,352 26,820 132 -- 328,141 7,005 204,103 743,656 264,624 613,265 90,251 8,764 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 745,077 220,110 279,001 1,296,756 524,491 766,617 117,071 8,896 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- $760,303 $231,362 $283,530 $1,356,602 $569,752 $796,924 $120,264 $9,442 $-- ======== ======== ======== ========== ======== ======== ======== ====== ===
F-41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY INVESTMENT DIVISION ---------------------- 2006 2005 2004 ------ ------ ------ INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 169 135 77 ------ ------ ------ Net investment income (loss)................. (169) (135) (77) ------ ------ ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 2,596 255 108 Realized gain distributions.................. -- -- -- ------ ------ ------ Net realized gains (losses) on investments... 2,596 255 108 Change in unrealized appreciation (depreciation) of investments............... 2,024 1,638 2,247 ------ ------ ------ Net realized and unrealized gains (losses) on investments.............................. 4,620 1,893 2,355 ------ ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $4,451 $1,758 $2,278 ====== ====== ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-42
FIDELITY VIP INVESTMENT FIDELITY VIP CONTRAFUND FIDELITY VIP ASSET MANAGER GROWTH GRADE BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- --------------------------------- ---------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) --------- -------- -------- ------- -------- ------- ------ ----- -------- $ 18,557 $ 1,816 $ 1,770 $16,581 $ 18,249 $12,700 $1,506 $ 548 $-- 7,808 3,729 3,453 4,218 3,454 3,079 147 80 4 --------- -------- -------- ------- -------- ------- ------ ----- --- 10,749 (1,913) (1,683) 12,363 14,795 9,621 1,359 468 (4) --------- -------- -------- ------- -------- ------- ------ ----- --- 69,614 170,001 62,282 3,099 38,662 3,245 (928) (59) 8 161,683 165 -- -- -- -- 92 335 -- --------- -------- -------- ------- -------- ------- ------ ----- --- 231,297 170,166 62,282 3,099 38,662 3,245 (836) 276 8 (100,652) (22,158) 45,971 39,972 (29,733) 19,246 767 (370) 12 --------- -------- -------- ------- -------- ------- ------ ----- --- 130,645 148,008 108,253 43,071 8,929 22,491 (69) (94) 20 --------- -------- -------- ------- -------- ------- ------ ----- --- $ 141,394 $146,095 $106,570 $55,434 $ 23,724 $32,112 $1,290 $ 374 $16 ========= ======== ======== ======= ======== ======= ====== ===== ===
F-43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 8,458 $ 187 $-- Expenses: Mortality and expense risk charges.......... 885 259 5 ------- ------- --- Net investment income (loss)................. 7,573 (72) (5) ------- ------- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 3,265 (5,940) -- Realized gain distributions.................. 35,411 431 -- ------- ------- --- Net realized gains (losses) on investments... 38,676 (5,509) -- Change in unrealized appreciation (depreciation) of investments............... 1,802 605 -- ------- ------- --- Net realized and unrealized gains (losses) on investments.............................. 40,478 (4,904) -- ------- ------- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $48,051 $(4,976) $(5) ======= ======= ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-44
AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- -------------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $ 727,425 $ 437,807 $ 70,060 $ 918,542 $ 587,451 $ 276,574 $ 162,359 $ 167,221 $ -- 728,495 489,519 294,065 467,194 343,213 227,511 306,581 151,245 73,946 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (1,070) (51,712) (224,005) 451,348 244,238 49,063 (144,223) 15,976 (73,946) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 399,390 115,149 53,047 194,098 116,683 60,134 1,195,131 669,665 169,126 522,218 -- -- 1,285,086 163,244 -- 1,814,506 -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 921,608 115,149 53,047 1,479,184 279,927 60,134 3,009,637 669,665 169,126 6,751,062 8,793,861 4,445,539 5,509,333 1,688,136 2,605,294 4,197,799 3,507,811 1,710,690 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 7,672,670 8,909,010 4,498,586 6,988,517 1,968,063 2,665,428 7,207,436 4,177,476 1,879,816 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $7,671,600 $8,857,298 $4,274,581 $7,439,865 $2,212,301 $2,714,491 $7,063,213 $4,193,452 $1,805,870 ========== ========== ========== ========== ========== ========== ========== ========== ==========
F-45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AMERICAN FUNDS BOND T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------- 2006 (C) 2006 2005 2004 ------------------- --------- ---------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 2,483 $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 1,499 91,448 62,726 35,600 ------- --------- ---------- -------- Net investment income (loss)................. 984 (91,448) (62,726) (35,600) ------- --------- ---------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ (909) 524,517 102,486 (21,255) Realized gain distributions.................. -- 373,372 206,008 -- ------- --------- ---------- -------- Net realized gains (losses) on investments... (909) 897,889 308,494 (21,255) Change in unrealized appreciation (depreciation) of investments............... 13,837 (173,792) 895,073 874,468 ------- --------- ---------- -------- Net realized and unrealized gains (losses) on investments.............................. 12,928 724,097 1,203,567 853,213 ------- --------- ---------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $13,912 $ 632,649 $1,140,841 $817,613 ======= ========= ========== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-46
MFS RESEARCH INTERNATIONAL PIMCO TOTAL RETURN RCM GLOBAL TECHNOLOGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- -------------------------------- ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- $ 107,793 $ 21,589 $ -- $ 719,124 $ 13,007 $1,210,628 $ -- $ -- $ -- 56,798 27,070 17,381 217,239 180,282 130,372 61,070 50,588 45,242 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 50,995 (5,481) (17,381) 501,885 (167,275) 1,080,256 (61,070) (50,588) (45,242) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 81,019 80,066 226,740 74,726 52,949 58,068 222,324 194,566 (35,847) 423,780 184,503 5,870 10,617 154,127 -- -- 46,291 4,399 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 504,799 264,569 232,610 85,343 207,076 58,068 222,324 240,857 (31,448) 963,904 280,569 176,752 469,783 311,680 (439,697) 156,356 445,709 (200,859) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 1,468,703 545,138 409,362 555,126 518,756 (381,629) 378,680 686,566 (232,307) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- $1,519,698 $539,657 $391,981 $1,057,011 $ 351,481 $ 698,627 $317,610 $635,978 $(277,549) ============ ======== ======== ========== ========= ========== ======== ======== =========
F-47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION -------------------------------- 2006 2005 2004 ---------- --------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $1,191,085 $ 744,214 $ 491,562 Expenses: Mortality and expense risk charges.......... 139,802 121,860 106,961 ---------- --------- ---------- Net investment income (loss)................. 1,051,283 622,354 384,601 ---------- --------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 93,973 255,890 291,351 Realized gain distributions.................. -- -- 88,672 ---------- --------- ---------- Net realized gains (losses) on investments... 93,973 255,890 380,023 Change in unrealized appreciation (depreciation) of investments............... 324,579 (722,955) 258,228 ---------- --------- ---------- Net realized and unrealized gains (losses) on investments.............................. 418,552 (467,065) 638,251 ---------- --------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $1,469,835 $ 155,289 $1,022,852 ========== ========= ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-48
LAZARD MID-CAP MET/AIM SMALL CAP GROWTH HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- --------------------------- ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 -------- --------- -------- -------- -------- ------- ---------- -------- -------- $ 17,856 $ 10,617 $ -- $ -- $ -- $ -- $ 350,324 $ 11,138 $ 1,007 29,336 22,544 12,732 16,523 11,067 7,126 127,018 55,708 15,179 -------- --------- -------- -------- -------- ------- ---------- -------- -------- (11,480) (11,927) (12,732) (16,523) (11,067) (7,126) 223,306 (44,570) (14,172) -------- --------- -------- -------- -------- ------- ---------- -------- -------- 20,740 96,120 127,885 18,065 35,790 6,508 125,443 131,605 87,469 392,270 320,635 -- 267,325 32,434 -- 874,510 116,064 -- -------- --------- -------- -------- -------- ------- ---------- -------- -------- 413,010 416,755 127,885 285,390 68,224 6,508 999,953 247,669 87,469 56,316 (198,731) 100,268 (33,826) 47,188 68,634 2,507,928 724,928 413,695 -------- --------- -------- -------- -------- ------- ---------- -------- -------- 469,326 218,024 228,153 251,564 115,412 75,142 3,507,881 972,597 501,164 -------- --------- -------- -------- -------- ------- ---------- -------- -------- $457,846 $ 206,097 $215,421 $235,041 $104,345 $68,016 $3,731,187 $928,027 $486,992 ======== ========= ======== ======== ======== ======= ========== ======== ========
F-49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION ----------------------------- 2006 2005 2004 --------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 65,378 52,753 40,203 --------- -------- -------- Net investment income (loss)................. (65,378) (52,753) (40,203) --------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 177,119 89,582 40,466 Realized gain distributions.................. 438,536 7,588 -- --------- -------- -------- Net realized gains (losses) on investments... 615,655 97,170 40,466 Change in unrealized appreciation (depreciation) of investments............... (742,982) 756,884 408,503 --------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. (127,327) 854,054 448,969 --------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $(192,705) $801,301 $408,766 ========= ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-50
LORD ABBETT GROWTH AND INCOME NEUBERGER BERMAN REAL ESTATE LORD ABBETT MID-CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------ ----------------------------- ----------------------- 2006 2005 2004 2006 2005 2004 (D) 2006 2005 2004 (D) --------- --------- -------- ---------- -------- -------- ------ ------ -------- $ 887 $ 447 $ 15,177 $ 128,299 $ -- $ 32,646 $ 203 $ 139 $ 1 22,648 16,835 11,687 108,818 40,104 3,379 184 87 -- --------- --------- -------- ---------- -------- -------- ------ ------ --- (21,761) (16,388) 3,490 19,481 (40,104) 29,267 19 52 1 --------- --------- -------- ---------- -------- -------- ------ ------ --- 958,803 25,218 8,536 210,018 77,734 5,929 (69) 22 -- 3,901 40,557 -- 609,936 8,770 41,014 3,482 1,158 5 --------- --------- -------- ---------- -------- -------- ------ ------ --- 962,704 65,775 8,536 819,954 86,504 46,943 3,413 1,180 5 (295,172) 110,292 304,313 3,020,558 660,111 124,804 880 85 10 --------- --------- -------- ---------- -------- -------- ------ ------ --- 667,532 176,067 312,849 3,840,512 746,615 171,747 4,293 1,265 15 --------- --------- -------- ---------- -------- -------- ------ ------ --- $ 645,771 $ 159,679 $316,339 $3,859,993 $706,511 $201,014 $4,312 $1,317 $16 ========= ========= ======== ========== ======== ======== ====== ====== ===
F-51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
THIRD AVENUE SMALL CAP VALUE INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------ -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 133 $ -- $ 13 Expenses: Mortality and expense risk charges.......... 482 51 1 ------- ------ ---- Net investment income (loss)................. (349) (51) 12 ------- ------ ---- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 1,511 111 21 Realized gain distributions.................. 2,011 77 82 ------- ------ ---- Net realized gains (losses) on investments... 3,522 188 103 Change in unrealized appreciation (depreciation) of investments............... 21,745 1,856 (54) ------- ------ ---- Net realized and unrealized gains (losses) on investments.............................. 25,267 2,044 49 ------- ------ ---- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $24,918 $1,993 $ 61 ======= ====== ====
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-52
OPPENHEIMER LEGG MASON CYCLICAL CYCLICAL CAPITAL APPRECIATION VALUE EQUITY GROWTH ETF GROWTH AND INCOME ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- --------------------- 2006 2005 (A) 2006 (C) 2006 (B) 2006 (B) ------- -------- ------------------- ------------------- --------------------- $ 583 $ 77 $ 7,771 $1,841 $1,529 1,966 275 28,159 279 230 ------- ------ -------- ------ ------ (1,383) (198) (20,388) 1,562 1,299 ------- ------ -------- ------ ------ 6,117 442 (4,060) 1,385 1,197 1,330 1,100 103,047 385 -- ------- ------ -------- ------ ------ 7,447 1,542 98,987 1,770 1,197 12,744 2,715 306,184 4,607 2,231 ------- ------ -------- ------ ------ 20,191 4,257 405,171 6,377 3,428 ------- ------ -------- ------ ------ $18,808 $4,058 $384,783 $7,939 $4,727 ======= ====== ======== ====== ======
F-53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
PIMCO INFLATION PROTECTED BOND AMERICAN CENTURY VISTA INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ---------------------- 2006 (B) 2006 2005 2004 ------------------- ------ ---- ---- INVESTMENT INCOME (LOSS) : Income: Dividends................................... $ -- $ -- $ -- $-- Expenses: Mortality and expense risk charges.......... 463 81 47 -- ------- ------ ---- --- Net investment income (loss)................. (463) (81) (47) -- ------- ------ ---- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 1,472 66 6 -- Realized gain distributions.................. -- 52 -- -- ------- ------ ---- --- Net realized gains (losses) on investments... 1,472 118 6 -- Change in unrealized appreciation (depreciation) of investments............... (1,429) 1,653 961 -- ------- ------ ---- --- Net realized and unrealized gains (losses) on investments.............................. 43 1,771 967 -- ------- ------ ---- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $ (420) $1,690 $920 $-- ======= ====== ==== ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-54
DREYFUS DREYFUS DELAWARE SMALL CAP VALUE MIDCAP STOCK EMERGING LEADERS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------- -------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- ---- ---- ------ ------ ---- $ 87 $ 181 $-- $ 189 $-- $-- $ -- $ -- $-- 1,667 539 -- 337 -- -- 70 47 -- ------- ------- --- -------- --- --- ------ ------ --- (1,580) (358) -- (148) -- (70) (47) -- ------- ------- --- -------- --- --- ------ ------ --- 3,801 45 -- (525) -- -- (33) 251 -- 23,651 8,183 -- 17,011 -- -- 1,695 562 -- ------- ------- --- -------- --- --- ------ ------ --- 27,452 8,228 -- 16,486 -- -- 1,662 813 -- 21,618 2,540 -- (13,109) -- -- (791) 711 -- ------- ------- --- -------- --- --- ------ ------ --- 49,070 10,768 -- 3,377 -- -- 871 1,524 -- ------- ------- --- -------- --- --- ------ ------ --- $47,490 $10,410 $-- $ 3,229 $-- $-- $ 801 $1,477 $-- ======= ======= === ======== === === ====== ====== ===
F-55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 2,040 $ -- $ -- Expenses: Mortality and expense risk charges.......... 1,650 850 4 ------- ------- ------ Net investment income (loss)................. 390 (850) (4) ------- ------- ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 2,803 (8,588) 47 Realized gain distributions.................. 12,788 3,710 1,264 ------- ------- ------ Net realized gains (losses) on investments... 15,591 (4,878) 1,311 Change in unrealized appreciation (depreciation) of investments............... 67,169 13,060 (934) ------- ------- ------ Net realized and unrealized gains (losses) on investments.............................. 82,760 8,182 377 ------- ------- ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $83,150 $ 7,332 $ 373 ======= ======= ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-56
GOLDMAN SACHS GOLDMAN SACHS MID CAP VALUE STRUCTURED SMALL CAP EQUITY MFS HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- --------------------------- ----------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 (D) ------- ------- -------- ------ ------- ---- ------ ------- -------- $ 2,401 $ 267 $ 72 $ 576 $ 114 $-- $4,418 $ 3,911 $ -- 502 222 6 319 20 -- 372 279 87 ------- ------- ------ ------ ------- --- ------ ------- ------ 1,899 45 66 257 94 -- 4,046 3,632 (87) ------- ------- ------ ------ ------- --- ------ ------- ------ 1,291 (3,479) 1 (124) 1 -- 1,254 128 69 26,443 4,473 1,152 6,284 4,217 -- -- -- -- ------- ------- ------ ------ ------- --- ------ ------- ------ 27,734 994 1,153 6,160 4,218 -- 1,254 128 69 (2,200) 223 (464) 1,891 (5,644) -- 2,298 (2,862) 3,152 ------- ------- ------ ------ ------- --- ------ ------- ------ 25,534 1,217 689 8,051 (1,426) -- 3,552 (2,734) 3,221 ------- ------- ------ ------ ------- --- ------ ------- ------ $27,433 $ 1,262 $ 755 $8,308 $(1,332) $-- $7,598 $ 898 $3,134 ======= ======= ====== ====== ======= === ====== ======= ======
F-57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MFS GLOBAL EQUITY INVESTMENT DIVISION ----------------- 2006 2005 2004 ------ ---- ---- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $-- $-- Expenses: Mortality and expense risk charges.......... 38 -- -- ------ --- --- Net investment income (loss)................. (38) -- -- ------ --- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 100 -- -- Realized gain distributions.................. -- -- -- ------ --- --- Net realized gains (losses) on investments... 100 -- -- Change in unrealized appreciation (depreciation) of investments............... 2,944 -- -- ------ --- --- Net realized and unrealized gains (losses) on investments.............................. 3,044 -- -- ------ --- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $3,006 $-- $-- ====== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-58
WELLS FARGO ADVANTAGE VT WELLS FARGO ADVANTAGE VT VAN KAMPEN GOVERNMENT TOTAL RETURN BOND MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- ------------------------ ------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----- ---- ---- ------ ---- ---- ------- ---- ---- $ 621 $ -- $-- $1,616 $263 $-- $17,272 $-- $-- 54 12 -- 138 15 -- 1,399 -- -- ----- ---- --- ------ ---- --- ------- --- --- 567 (12) -- 1,478 248 -- 15,873 -- -- ----- ---- --- ------ ---- --- ------- --- --- (329) (1) -- (203) 238 -- -- -- -- -- -- -- -- -- -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- (329) (1) -- (203) 238 -- -- -- -- 121 124 -- 969 16 -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- (208) 123 -- 766 254 -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- $ 359 $111 $-- $2,244 $502 $-- $15,873 $-- $-- ===== ==== === ====== ==== === ======= === ===
F-59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION INVESTMENT DIVISION ------------------------ 2006 2005 2004 ---- ---- ---- INVESTMENT INCOME (LOSS): Income: Dividends................................... $112 $-- $-- Expenses: Mortality and expense risk charges.......... 13 -- -- ---- --- --- Net investment income (loss)................. 99 -- -- ---- --- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 293 -- -- Realized gain distributions.................. -- -- -- ---- --- --- Net realized gains (losses) on investments... 293 -- -- Change in unrealized appreciation (depreciation) of investments............... 432 -- -- ---- --- --- Net realized and unrealized gains (losses) on investments.............................. 725 -- -- ---- --- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $824 $-- $-- ==== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-60
WELLS FARGO ADVANTAGE VT WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ----------------------- 2006 2005 2004 (D) 2006 2005 2004 (D) ------- ---- -------- ------ ---- -------- $ -- $ 15 $-- $ 130 $113 $-- 243 31 1 34 31 1 ------- ---- --- ------ ---- --- (243) (16) (1) 96 82 (1) ------- ---- --- ------ ---- --- 5,393 (5) 6 85 25 10 -- -- -- 19 -- -- ------- ---- --- ------ ---- --- 5,393 (5) 6 104 25 10 10,126 797 16 1,202 301 3 ------- ---- --- ------ ---- --- 15,519 792 22 1,306 326 13 ------- ---- --- ------ ---- --- $15,276 $776 $21 $1,402 $408 $12 ======= ==== === ====== ==== ===
F-61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK LARGE CAP INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).................... $ 1,748,411 $ 905,711 $ (545,868) Net realized gain (loss) on investments......... 1,910,880 834,521 (689,999) Change in unrealized appreciation (depreciation) of investments.................. 47,641,145 8,704,485 37,215,298 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations................................ 51,300,436 10,444,717 35,979,431 ------------ ------------ ------------ From capital transactions: Payments received from policy owners............ 51,976,132 57,155,216 62,785,148 Transfers between investment divisions (including fixed account), net................. (12,663,855) (10,123,918) (11,723,921) Transfers for contract benefits and terminations................................... (51,743,568) (50,834,197) (49,033,109) Contract maintenance charges.................... (4,529,610) (4,901,051) (5,278,337) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions...................... (16,960,901) (8,703,950) (3,250,219) ------------ ------------ ------------ NET CHANGE IN NET ASSETS.......................... 34,339,535 1,740,767 32,729,212 NET ASSETS - BEGINNING OF PERIOD.................. 401,557,280 399,816,513 367,087,301 ------------ ------------ ------------ NET ASSETS - END OF PERIOD........................ $435,896,815 $401,557,280 $399,816,513 ============ ============ ============
BLACKROCK DIVERSIFIED INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).................... $ 5,093,370 $ 2,270,420 $ 2,567,571 Net realized gain (loss) on investments......... 2,697,730 655,141 (558,940) Change in unrealized appreciation (depreciation) of investments.................. 21,697,213 3,822,631 19,749,208 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations................................ 29,488,313 6,748,192 21,757,839 ------------ ------------ ------------ From capital transactions: Payments received from policy owners............ 43,210,333 48,752,996 50,420,345 Transfers between investment divisions (including fixed account), net................. (14,585,173) (4,525,462) (1,916,785) Transfers for contract benefits and terminations................................... (42,735,368) (42,353,138) (39,765,958) Contract maintenance charges.................... (3,695,809) (4,048,894) (4,352,099) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions...................... (17,806,017) (2,174,498) 4,385,503 ------------ ------------ ------------ NET CHANGE IN NET ASSETS.......................... 11,682,296 4,573,694 26,143,342 NET ASSETS - BEGINNING OF PERIOD.................. 319,750,423 315,176,729 289,033,387 ------------ ------------ ------------ NET ASSETS - END OF PERIOD........................ $331,432,719 $319,750,423 $315,176,729 ============ ============ ============
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-62
BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX FI INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------------- ---------------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- $ (1,968,385) $ (1,824,382) $ (1,651,256) $ 7,509,405 $ 4,330,436 $ 174,194 $ 350,554 $ (109,934) $ 235,897 (1,521,325) (2,231,885) (3,443,419) 27,994,237 3,573,660 (2,432,174) 832,502 237,027 (367,092) 16,167,405 23,892,825 27,472,766 53,741,400 14,173,789 49,514,290 7,805,567 8,151,109 7,284,341 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 12,677,695 19,836,558 22,378,091 89,245,042 22,077,885 47,256,310 8,988,623 8,278,202 7,153,146 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 26,442,113 29,002,147 31,507,761 97,155,710 113,017,163 111,296,549 7,377,673 7,207,636 7,277,661 (4,120,591) (6,037,385) (5,174,527) (16,861,291) (5,222,960) 2,484,658 2,367,896 (102,719) (3,803,574) (25,968,754) (25,630,007) (25,384,364) (61,230,714) (65,954,771) (63,376,529) (7,462,889) (6,009,029) (5,958,155) (2,532,838) (2,700,705) (2,845,972) (6,313,295) (6,523,754) (6,599,557) (617,873) (593,300) (578,443) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- (6,180,070) (5,365,950) (1,897,102) 12,750,410 35,315,678 43,805,121 1,664,807 502,588 (3,062,511) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 6,497,625 14,470,608 20,480,989 101,995,452 57,393,563 91,061,431 10,653,430 8,780,790 4,090,635 222,219,970 207,749,362 187,268,373 605,569,341 548,175,778 457,114,347 56,855,714 48,074,924 43,984,289 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- $228,717,595 $222,219,970 $207,749,362 $707,564,793 $605,569,341 $548,175,778 $67,509,144 $56,855,714 $48,074,924 ============ ============ ============ ============ ============ ============ =========== =========== ===========
F-63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI MID CAP OPPORTUNITIES INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................... $ (2,228,656) $ (2,011,441) $ (631,368) Net realized gain (loss) on investments........... (4,482,428) (1,015,121) (717,628) Change in unrealized appreciation (depreciation) of investments................................... 33,489,573 17,191,699 33,098,684 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations.................................. 26,778,489 14,165,137 31,749,688 ------------ ------------ ------------ From capital transactions: Payments received from policy owners.............. 38,876,326 43,356,457 48,069,931 Transfers between investment divisions (including fixed account), net.............................. (8,221,054) (7,897,866) (5,135,559) Transfers for contract benefits and terminations.. (31,115,888) (28,428,579) (26,517,370) Contract maintenance charges...................... (2,600,173) (2,775,385) (2,918,570) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions........................ (3,060,789) 4,254,627 13,498,432 ------------ ------------ ------------ NET CHANGE IN NET ASSETS............................ 23,717,700 18,419,764 45,248,120 NET ASSETS - BEGINNING OF PERIOD............................................. 247,745,972 229,326,208 184,078,088 ------------ ------------ ------------ NET ASSETS - END OF PERIOD.......................... $271,463,672 $247,745,972 $229,326,208 ============ ============ ============
T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................... $ (661,143) $ (595,465) $ (530,571) Net realized gain (loss) on investments........... 842,686 37,997 (69,548) Change in unrealized appreciation (depreciation) of investments................................... 2,138,730 7,936,747 7,181,746 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.................................. 2,320,273 7,379,279 6,581,627 ----------- ----------- ----------- From capital transactions: Payments received from policy owners.............. 10,038,924 11,374,021 12,623,285 Transfers between investment divisions (including fixed account), net.............................. (2,086,001) (1,830,915) (1,032,512) Transfers for contract benefits and terminations.. (8,444,978) (7,634,448) (8,592,490) Contract maintenance charges...................... (647,518) (689,925) (734,683) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions........................ (1,139,573) 1,218,733 2,263,600 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................ 1,180,700 8,598,012 8,845,227 NET ASSETS - BEGINNING OF PERIOD............................................. 80,632,046 72,034,034 63,188,807 ----------- ----------- ----------- NET ASSETS - END OF PERIOD.......................... $81,812,746 $80,632,046 $72,034,034 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-64
OPPENHEIMER GLOBAL EQUITY HARRIS OAKMARK LARGE CAP VALUE NEUBERGER BERMAN MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 753,065 $ (89,544) $ 232,594 $ (31,123) $ (61,565) $ (149,989) $ (262,264) $ (310,757) $ (222,936) 1,433,066 270,279 (301,695) 835,096 398,007 613,781 7,045,174 5,078,424 1,461,536 4,443,736 5,277,659 4,666,310 8,574,081 (1,475,339) 4,130,792 382,304 1,374,494 6,555,902 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 6,629,867 5,458,394 4,597,209 9,378,054 (1,138,897) 4,594,584 7,165,214 6,142,161 7,794,502 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,350,913 5,253,047 5,683,708 11,305,507 12,688,012 13,168,295 13,072,820 11,535,409 9,617,754 346,998 942,030 (734,504) (3,330,328) (1,524,510) 3,020,747 3,378,877 5,790,659 4,985,822 (4,641,986) (3,896,726) (3,723,703) (6,934,616) (6,083,211) (6,510,509) (8,261,662) (6,788,430) (5,533,976) (346,053) (334,426) (335,951) (571,212) (629,112) (643,594) (772,295) (742,665) (594,392) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 709,872 1,963,925 889,550 469,351 4,451,179 9,034,939 7,417,740 9,794,973 8,475,208 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 7,339,739 7,422,319 5,486,759 9,847,405 3,312,282 13,629,523 14,582,954 15,937,134 16,269,710 41,604,796 34,182,477 28,695,718 54,445,434 51,133,152 37,503,629 63,152,395 47,215,261 30,945,551 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $48,944,535 $41,604,796 $34,182,477 $64,292,839 $54,445,434 $51,133,152 $77,735,349 $63,152,395 $47,215,261 =========== =========== =========== =========== =========== =========== =========== =========== ===========
F-65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (223,162) $ (106,612) $ (218,401) Net realized gain (loss) on investments.............. 507,318 187,894 989,653 Change in unrealized appreciation (depreciation) of investments......................................... 5,044,250 2,209,286 2,694,772 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 5,328,406 2,290,568 3,466,024 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 7,320,586 7,692,933 8,249,009 Transfers between investment divisions (including fixed account), net................................. 264,173 (171,639) 1,145,251 Transfers for contract benefits and terminations..... (5,165,545) (4,403,866) (9,293,945) Contract maintenance charges......................... (382,066) (421,056) (419,952) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 2,037,148 2,696,372 (319,637) ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 7,365,554 4,986,940 3,146,387 NET ASSETS - BEGINNING OF PERIOD....................... 41,950,019 36,963,079 33,816,692 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $49,315,573 $41,950,019 $36,963,079 =========== =========== ===========
LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 3,031,227 $ 2,261,399 $ 1,424,166 Net realized gain (loss) on investments.............. (57,852) 113,726 451,466 Change in unrealized appreciation (depreciation) of investments......................................... (71,436) (1,403,001) 266,268 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 2,901,939 972,124 2,141,900 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 17,471,563 16,818,608 15,979,551 Transfers between investment divisions (including fixed account), net................................. 387,397 4,909,390 5,023,325 Transfers for contract benefits and terminations..... (9,873,441) (8,858,700) (9,500,569) Contract maintenance charges......................... (1,017,544) (1,003,817) (928,706) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 6,967,975 11,865,481 10,573,601 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 9,869,914 12,837,605 12,715,501 NET ASSETS - BEGINNING OF PERIOD....................... 80,547,413 67,709,808 54,994,307 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $90,417,327 $80,547,413 $67,709,808 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-66
MORGAN STANLEY EAFE INDEX RUSSELL 2000 INDEX JENNISON GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- ------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 (A) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 423,680 $ 285,699 $ (28,456) $ (4,913) $ (26,606) $ (114,631) $ (113,119) $ (67,101) 984,685 590,734 1,189,725 2,636,194 2,249,464 973,061 127,931 36,398 9,577,488 3,753,078 3,997,066 5,025,107 (613,275) 4,412,786 269,709 2,206,440 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 10,985,853 4,629,511 5,158,335 7,656,388 1,609,583 5,271,216 284,521 2,175,737 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 9,956,199 8,982,849 8,790,918 9,061,617 8,761,720 8,664,945 2,455,072 1,741,473 1,802,577 1,409,687 (311,398) 1,828,304 216,481 458,588 (87,387) 10,052,349 (6,191,531) (4,556,058) (4,833,983) (5,449,499) (4,585,206) (4,558,485) (1,519,992) (801,396) (608,893) (560,009) (542,470) (444,667) (451,493) (476,782) (117,200) (83,918) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 4,958,352 5,276,469 3,103,067 4,995,755 3,941,502 4,088,266 730,493 10,908,508 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 15,944,205 9,905,980 8,261,402 12,652,143 5,551,085 9,359,482 1,015,014 13,084,245 42,457,559 32,551,579 24,290,177 42,636,846 37,085,761 27,726,279 13,084,245 -- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $58,401,764 $42,457,559 $32,551,579 $55,288,989 $42,636,846 $37,085,761 $14,099,259 $13,084,245 =========== =========== =========== =========== =========== =========== =========== ===========
F-67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION --------------------------------------- 2006 2005 2004 ------------ ------------ ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (529,917) $ (714,689) $ (563,943) Net realized gain (loss) on investments.............. 18,850,246 6,137,592 827,418 Change in unrealized appreciation (depreciation) of investments......................................... (4,073,024) (2,502,234) 9,427,091 ------------ ------------ ----------- Net increase (decrease) in net assets resulting from operations.......................................... 14,247,305 2,920,669 9,690,566 ------------ ------------ ----------- From capital transactions: Payments received from policy owners................. 17,326,197 18,598,115 19,308,810 Transfers between investment divisions (including fixed account), net................................. (3,858,623) (376,162) 4,975,092 Transfers for contract benefits and terminations..... (11,473,310) (10,277,357) (9,064,500) Contract maintenance charges......................... (949,963) (1,083,993) (1,107,991) ------------ ------------ ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 1,044,301 6,860,603 14,111,411 ------------ ------------ ----------- NET CHANGE IN NET ASSETS............................... 15,291,606 9,781,272 23,801,977 NET ASSETS - BEGINNING OF PERIOD....................... 90,122,911 80,341,639 56,539,662 ------------ ------------ ----------- NET ASSETS - END OF PERIOD............................. $105,414,517 $ 90,122,911 $80,341,639 ============ ============ ===========
METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 186,015 $ (62,688) $ (102,247) Net realized gain (loss) on investments.............. 4,163,714 2,719,370 1,073,108 Change in unrealized appreciation (depreciation) of investments......................................... 201,865 1,900,535 3,817,899 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 4,551,594 4,557,217 4,788,760 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 9,822,002 9,146,889 9,137,346 Transfers between investment divisions (including fixed account), net................................. 1,873,265 1,259,495 306,699 Transfers for contract benefits and terminations..... (6,104,554) (4,761,151) (4,679,892) Contract maintenance charges......................... (575,448) (564,557) (592,416) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 5,015,265 5,080,676 4,171,737 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 9,566,859 9,637,893 8,960,497 NET ASSETS - BEGINNING OF PERIOD....................... 46,523,277 36,885,384 27,924,887 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $56,090,136 $46,523,277 $36,885,384 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-68
FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE DAVIS VENTURE VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $ (50,288) $ (39,601) $ (31,464) $ 22,314 $ 2,262 $ (18,736) $ 19,378 $ (46,637) $ (59,671) 422,517 282,478 40,690 510,491 121,570 105,597 2,307,728 226,016 508,082 106,882 (56,267) 404,946 656,059 110,740 229,787 3,652,646 3,304,528 2,678,225 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 479,111 188,610 414,172 1,188,864 234,572 316,648 5,979,752 3,483,907 3,126,636 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,209,783 1,166,638 1,182,207 1,723,914 1,318,222 918,978 9,665,122 10,136,134 7,205,230 321,633 (104,904) 410,526 2,275,636 925,771 1,361,717 (4,035,297) 4,047,247 2,046,419 (690,549) (605,735) (448,286) (815,297) (567,750) (306,545) (5,198,743) (4,572,190) (5,064,909) (59,735) (63,990) (69,434) (113,002) (94,564) (80,033) (544,235) (476,321) (368,534) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 781,132 392,009 1,075,013 3,071,251 1,581,679 1,894,117 (113,153) 9,134,870 3,818,206 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,260,243 580,619 1,489,185 4,260,115 1,816,251 2,210,765 5,866,599 12,618,777 6,944,842 5,108,051 4,527,432 3,038,247 5,137,144 3,320,893 1,110,128 43,993,114 31,374,337 24,429,495 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $6,368,294 $5,108,051 $4,527,432 $9,397,259 $5,137,144 $3,320,893 $49,859,713 $43,993,114 $31,374,337 ========== ========== ========== ========== ========== ========== =========== =========== ===========
F-69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ----------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (90,220) $ (60,646) $ (44,015) Net realized gain (loss) on investments................. 1,056,941 157,208 142,373 Change in unrealized appreciation (depreciation) of investments............................................ 425,449 365,753 718,393 ----------- ---------- ---------- Net increase (decrease) in net assets resulting from operations............................................. 1,392,170 462,315 816,751 ----------- ---------- ---------- From capital transactions: Payments received from policy owners.................... 2,123,062 1,717,028 1,479,121 Transfers between investment divisions (including fixed account), net.......................................... 2,032,759 500,932 391,267 Transfers for contract benefits and terminations........ (1,206,461) (869,065) (615,166) Contract maintenance charges............................ (122,287) (103,268) (88,437) ----------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... 2,827,073 1,245,627 1,166,785 ----------- ---------- ---------- NET CHANGE IN NET ASSETS.................................. 4,219,243 1,707,942 1,983,536 NET ASSETS - BEGINNING OF PERIOD................................................... 8,114,417 6,406,475 4,422,939 ----------- ---------- ---------- NET ASSETS - END OF PERIOD................................ $12,333,660 $8,114,417 $6,406,475 =========== ========== ==========
BLACKROCK LEGACY LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------ 2006 2005 2004 ----------- ----------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (26,434) $ (11,264) $ (30,183) Net realized gain (loss) on investments................. 954,600 84,949 117,304 Change in unrealized appreciation (depreciation) of investments............................................ (1,121,566) 498,307 394,196 ----------- ----------- ---------- Net increase (decrease) in net assets resulting from operations............................................. (193,400) 571,992 481,317 ----------- ----------- ---------- From capital transactions: Payments received from policy owners.................... 579,414 3,105,072 1,206,954 Transfers between investment divisions (including fixed account), net.......................................... (7,570,628) 801,381 276,437 Transfers for contract benefits and terminations........ (633,020) (769,004) (432,832) Contract maintenance charges............................ (22,079) (57,919) (7,784) ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... (7,646,313) 3,079,530 1,042,775 ----------- ----------- ---------- NET CHANGE IN NET ASSETS.................................. (7,839,713) 3,651,522 1,524,092 NET ASSETS - BEGINNING OF PERIOD................................................... 10,109,046 6,457,524 4,933,432 ----------- ----------- ---------- NET ASSETS - END OF PERIOD................................ $ 2,269,333 $10,109,046 $6,457,524 =========== =========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-70
MFS INVESTORS TRUST BLACKROCK BOND INCOME FI VALUE LEADERS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ---------------------------------------- ---------------------------------- 2006 (B) 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- $ 35,455 $ (20,254) $ (14,069) $ 4,656,087 $ 2,894,879 $ 3,099,803 $ 6,148 $ 3,733 $ 2,427 830,510 75,511 10,690 (168,463) 1,142,272 2,831,666 177,507 80,493 13,334 (658,871) 189,614 322,040 (1,188,505) (2,577,646) (2,928,093) 304,366 177,601 106,438 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- 207,094 244,871 318,661 3,299,119 1,459,505 3,003,376 488,021 261,827 122,199 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- 370,498 1,132,702 898,597 13,105,607 17,949,210 16,181,503 1,367,655 766,467 394,566 (4,601,373) 239 975,437 (6,953,279) (1,273,740) (8,366,427) 1,301,345 1,396,629 293,780 (172,682) (481,203) (345,319) (10,963,629) (11,652,405) (17,319,288) (560,428) (303,329) (97,951) (20,273) (66,864) (4,431) (869,770) (963,524) (1,044,671) (80,569) (49,277) (27,320) ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- (4,423,830) 584,874 1,524,284 (5,681,071) 4,059,541 (10,548,883) 2,028,003 1,810,490 563,075 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- (4,216,736) 829,745 1,842,945 (2,381,952) 5,519,046 (7,545,507) 2,516,024 2,072,317 685,274 4,216,736 3,386,991 1,544,046 94,693,129 89,174,083 96,719,590 3,262,874 1,190,557 505,283 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- $ -- $4,216,736 $3,386,991 $ 92,311,177 $ 94,693,129 $ 89,174,083 $5,778,898 $3,262,874 $1,190,557 =========== ========== ========== ============ ============ ============ ========== ========== ==========
F-71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
HARRIS OAKMARK FOCUSED VALUE INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (289,521) $ (352,004) $ (249,444) Net realized gain (loss) on investments.............. 5,738,053 1,079,635 512,114 Change in unrealized appreciation (depreciation) of investments......................................... 467,020 3,071,366 2,796,718 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 5,915,552 3,798,997 3,059,388 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 10,865,790 10,775,287 9,971,788 Transfers between investment divisions (including fixed account), net................................. (1,374,110) 2,872,307 3,578,452 Transfers for contract benefits and terminations..... (5,917,371) (5,437,808) (4,043,365) Contract maintenance charges......................... (565,118) (601,755) (587,168) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 3,009,191 7,608,031 8,919,707 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 8,924,743 11,407,028 11,979,095 NET ASSETS - BEGINNING OF PERIOD....................... 49,251,761 37,844,733 25,865,638 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $58,176,504 $49,251,761 $37,844,733 =========== =========== ===========
WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 566,836 $ 232,123 $ 129,633 Net realized gain (loss) on investments.............. 153,548 253,976 74,022 Change in unrealized appreciation (depreciation) of investments......................................... (101,864) (261,648) 217,644 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 618,520 224,451 421,299 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 4,045,076 3,710,450 2,921,606 Transfers between investment divisions (including fixed account), net................................. 608,234 1,981,025 1,525,465 Transfers for contract benefits and terminations..... (1,945,254) (1,708,034) (1,062,203) Contract maintenance charges......................... (233,149) (241,733) (226,689) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 2,474,907 3,741,708 3,158,179 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 3,093,427 3,966,159 3,579,478 NET ASSETS - BEGINNING OF PERIOD....................... 12,708,706 8,742,547 5,163,069 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $15,802,133 $12,708,706 $ 8,742,547 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-72
WESTERN ASSET MANAGEMENT U.S. GOVERNMENT BLACKROCK MONEY MARKET MFS TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- -------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- $ 316,238 $ 54,588 $ 38,081 $ 1,597,189 $ 628,330 $ 112,176 $ 66,316 $ 25,741 $ (1,443) (10,510) 192,618 84,611 -- -- -- 64,610 18,142 429 127,750 (152,454) 55,424 -- -- -- 205,638 (3,131) 39,191 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 433,478 94,752 178,116 1,597,189 628,330 112,176 336,564 40,752 38,177 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 3,383,683 3,487,915 3,283,565 5,160,393 3,943,073 6,959,659 1,268,749 657,976 133,508 68,005 764,728 190,342 28,142,059 (3,511,345) 2,796,932 560,665 970,499 628,279 (1,659,897) (1,599,285) (1,275,666) (3,552,541) (2,144,871) (8,000,833) (448,682) (210,813) (23,532) (189,188) (211,939) (203,121) (46,252) (49,337) (52,238) (92,585) (68,131) (9,505) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 1,602,603 2,441,419 1,995,120 29,703,659 (1,762,480) 1,703,520 1,288,147 1,349,531 728,750 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 2,036,081 2,536,171 2,173,236 31,300,848 (1,134,150) 1,815,696 1,624,711 1,390,283 766,927 12,014,309 9,478,138 7,304,902 28,027,973 29,162,123 27,346,427 2,157,210 766,927 -- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- $14,050,390 $12,014,309 $ 9,478,138 $59,328,821 $28,027,973 $29,162,123 $3,781,921 $2,157,210 $766,927 =========== =========== =========== =========== =========== =========== ========== ========== ========
F-73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE CONSERVATIVE METLIFE CONSERVATIVE ALLOCATION TO MODERATE INVESTMENT ALLOCATION INVESTMENT DIVISION DIVISION ------------------ -------------------- 2006 2005 (A) 2006 2005 (A) -------- -------- ---------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................................... $ 7,154 $ 24 $ 18,671 $ 240 Net realized gain (loss) on investments........................... 2,237 370 32,936 1,752 Change in unrealized appreciation (depreciation) of investments... 19,393 554 73,219 9,258 -------- -------- ---------- -------- Net increase (decrease) in net assets resulting from operations... 28,784 948 124,826 11,250 -------- -------- ---------- -------- From capital transactions: Payments received from policy owners.............................. 60,249 11,888 351,209 49,524 Transfers between investment divisions (including fixed account), net.............................................................. 382,425 113,429 1,104,702 566,129 Transfers for contract benefits and terminations.................. (90,578) (7,353) (235,736) (42,716) Contract maintenance charges...................................... (6,853) (687) (39,460) (5,676) -------- -------- ---------- -------- Net increase (decrease) in net assets resulting from capital transactions..................................................... 345,243 117,277 1,180,715 567,261 -------- -------- ---------- -------- NET CHANGE IN NET ASSETS............................................ 374,027 118,225 1,305,541 578,511 NET ASSETS - BEGINNING OF PERIOD.................................... 118,225 0 578,511 -- -------- -------- ---------- -------- NET ASSETS - END OF PERIOD.......................................... $492,252 $118,225 $1,884,052 $578,511 ======== ======== ========== ========
METLIFE MODERATE ALLOCATION INVESTMENT DIVISION ---------------------- 2006 2005 (A) ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................................... $ 30,400 $ 2,200 Net realized gain (loss) on investments........................... 155,125 3,689 Change in unrealized appreciation (depreciation) of investments... 474,841 25,822 ---------- ---------- Net increase (decrease) in net assets resulting from operations... 660,366 31,711 ---------- ---------- From capital transactions: Payments received from policy owners.............................. 2,581,867 246,532 Transfers between investment divisions (including fixed account), net.............................................................. 5,712,018 1,278,986 Transfers for contract benefits and terminations.................. (784,736) (84,277) Contract maintenance charges...................................... (212,676) (23,517) ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions..................................................... 7,296,473 1,417,724 ---------- ---------- NET CHANGE IN NET ASSETS............................................ 7,956,839 1,449,435 NET ASSETS - BEGINNING OF PERIOD.................................... 1,449,435 0 ---------- ---------- NET ASSETS - END OF PERIOD.......................................... $9,406,274 $1,449,435 ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-74
METLIFE MODERATE TO METLIFE FI LARGE JANUS ASPEN AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION CAP LARGE CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ----------------------- -------------------- ---------- ---------------------------------- 2006 2005 (A) 2006 2005 (A) 2006 (C) 2006 `2005 2004 ----------- ---------- ---------- -------- ---------- ---------- ---------- ---------- $ 12,275 $ 2,925 $ (3,889) $ 461 $ (246) $ 660 $ (6,186) $ (11,788) 211,255 4,962 (1,267) 3,136 21 80,063 (62,709) (193,886) 870,757 64,564 225,674 10,725 4,291 477,638 263,241 407,058 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 1,094,287 72,451 220,518 14,322 4,066 558,361 194,346 201,384 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 3,660,525 350,076 769,602 77,484 13,027 729,644 743,854 846,747 8,417,200 2,046,335 1,804,040 381,966 64,888 (237,146) (38,037) (5,912) (1,241,906) (89,135) (234,386) (14,778) (19,732) (183,324) (242,724) (265,477) (361,044) (30,324) (77,888) (6,321) (564) -- -- -- ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 10,474,775 2,276,952 2,261,368 438,351 57,619 309,174 463,093 575,358 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 11,569,062 2,349,403 2,481,886 452,673 61,685 867,535 657,439 776,742 2,349,403 -- 452,673 -- -- 4,934,074 4,276,635 3,499,893 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- $13,918,465 $2,349,403 $2,934,559 $452,673 $ 61,685 $5,801,609 $4,934,074 $4,276,635 =========== ========== ========== ======== ======== ========== ========== ==========
F-75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
JANUS ASPEN BALANCED JANUS ASPEN FORTY INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- 2006 2005 2004 2006 2005 2004 ------ ------ ---- -------- ---- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 37 $ 24 $ 4 $ (231) $-- $-- Net realized gain (loss) on investments................................... 33 -- -- (26) -- -- Change in unrealized appreciation (depreciation) of investments........... 147 4 4 8,113 -- -- ------ ------ ---- -------- --- --- Net increase (decrease) in net assets resulting from operations........... 217 28 8 7,856 -- -- ------ ------ ---- -------- --- --- From capital transactions: Payments received from policy owners...................................... 234 234 234 -- -- -- Transfers between investment divisions (including fixed account), net..... -- 1,745 -- 107,014 -- -- Transfers for contract benefits and terminations.......................... (328) (56) (5) (3,508) -- -- Contract maintenance charges.............................................. -- -- -- -- -- -- ------ ------ ---- -------- --- --- Net increase (decrease) in net assets resulting from capital transactions. (94) 1,923 229 103,506 -- -- ------ ------ ---- -------- --- --- NET CHANGE IN NET ASSETS.................................................... 123 1,951 237 111,362 -- -- NET ASSETS - BEGINNING OF PERIOD............................................ 2,188 237 -- -- -- -- ------ ------ ---- -------- --- --- NET ASSETS - END OF PERIOD.................................................. $2,311 $2,188 $237 $111,362 $-- $-- ====== ====== ==== ======== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-76
AIM V.I. CORE STOCK AIM V.I. CORE EQUITY AIM V.I. GOVERNMENT SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- -------------------- ----------------------------- 2006 (B) 2005 2004 2006 (C) 2006 2005 2004 (D) --------- -------- -------- -------------------- ------ ------- -------- $ 2,312 $ (134) $ 1,090 $ 582 $ 248 $ 193 $ 29 37,949 5,489 (458) 40 (8) 107 (2) (16,441) 3,571 9,085 25,383 (28) (117) (20) --------- -------- -------- -------- ------ ------- ------ 23,820 8,926 9,717 26,005 212 183 7 --------- -------- -------- -------- ------ ------- ------ 1,372 49,677 51,947 48,952 -- 4,439 2,238 (245,401) (55,334) -- 245,401 -- 6,772 2,151 (9,908) (13,071) (6,151) 64,485 (810) (7,449) (86) -- -- -- -- -- -- -- --------- -------- -------- -------- ------ ------- ------ (253,937) (18,728) 45,796 358,838 (810) 3,762 4,303 --------- -------- -------- -------- ------ ------- ------ (230,117) (9,802) 55,513 384,843 (598) 3,945 4,310 230,117 239,919 184,406 -- 8,255 4,310 -- --------- -------- -------- -------- ------ ------- ------ $ -- $230,117 $239,919 $384,843 $7,657 $ 8,255 $4,310 ========= ======== ======== ======== ====== ======= ======
F-77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AIM V.I. GLOBAL REAL ESTATE INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ 15,226 $ 11,252 $ 4,529 Net realized gain (loss) on investments...................... 416,936 213,105 74,898 Change in unrealized appreciation (depreciation) of investments................................................. 328,141 7,005 204,103 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. 760,303 231,362 283,530 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 86,308 128,022 652,190 Transfers between investment divisions (including fixed account), net............................................... 198,270 149,537 306,861 Transfers for contract benefits and terminations............. (30,087) (69,158) (113,133) Contract maintenance charges................................. -- -- -- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 254,491 208,401 845,918 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 1,014,794 439,763 1,129,448 NET ASSETS - BEGINNING OF PERIOD............................... 1,747,819 1,308,056 178,608 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $2,762,613 $1,747,819 $1,308,056 ========== ========== ==========
FRANKLIN TEMPLETON FOREIGN SECURITIES STOCK INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ---------- ---------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ 59,846 $ 45,261 $ 30,307 Net realized gain (loss) on investments...................... 553,100 259,867 153,352 Change in unrealized appreciation (depreciation) of investments................................................. 743,656 264,624 613,265 ---------- ---------- ----------- Net increase (decrease) in net assets resulting from operations.................................................. 1,356,602 569,752 796,924 ---------- ---------- ----------- From capital transactions: Payments received from policy owners......................... 763,068 695,341 1,157,933 Transfers between investment divisions (including fixed account), net............................................... (517,563) 355,482 542,291 Transfers for contract benefits and terminations............. (473,870) (482,178) (1,250,997) Contract maintenance charges................................. -- -- -- ---------- ---------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................................ (228,365) 568,645 449,227 ---------- ---------- ----------- NET CHANGE IN NET ASSETS....................................... 1,128,237 1,138,397 1,246,151 NET ASSETS - BEGINNING OF PERIOD............................... 6,438,080 5,299,683 4,053,532 ---------- ---------- ----------- NET ASSETS - END OF PERIOD..................................... $7,566,317 $6,438,080 $ 5,299,683 ========== ========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-78
FRANKLIN MUTUAL DISCOVERY SECURITIES ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FIDELITY VIP CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------------------- -------------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 -------- -------- -------- ------- ------- -------- ---------- --------- --------- $ 3,193 $ 546 $-- $ (169) $ (135) $ (77) $ 10,749 $ (1,913) $ (1,683) 26,820 132 -- 2,596 255 108 231,297 170,166 62,282 90,251 8,764 -- 2,024 1,638 2,247 (100,652) (22,158) 45,971 -------- -------- --- ------- ------- -------- ---------- --------- --------- 120,264 9,442 -- 4,451 1,758 2,278 141,394 146,095 106,570 -------- -------- --- ------- ------- -------- ---------- --------- --------- 81,841 3,124 -- 17,259 6,941 5,469 311,963 159,311 134,841 596,967 110,323 -- (346) 13,706 -- 978,906 112,842 34,413 (21,627) (1,225) -- (581) (733) (32,706) (262,058) (316,026) (350,609) -- -- -- -- -- -- -- -- -- -------- -------- --- ------- ------- -------- ---------- --------- --------- 657,181 112,222 -- 16,332 19,914 (27,237) 1,028,811 (43,873) (181,355) -------- -------- --- ------- ------- -------- ---------- --------- --------- 777,445 121,664 -- 20,783 21,672 (24,959) 1,170,205 102,222 (74,785) 121,664 -- -- 42,308 20,636 45,595 921,114 818,892 893,677 -------- -------- --- ------- ------- -------- ---------- --------- --------- $899,109 $121,664 $-- $63,091 $42,308 $ 20,636 $2,091,319 $ 921,114 $ 818,892 ======== ======== === ======= ======= ======== ========== ========= =========
F-79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FIDELITY VIP ASSET MANAGER GROWTH INVESTMENT DIVISION ----------------------------- 2006 2005 2004 -------- --------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 12,363 $ 14,795 $ 9,621 Net realized gain (loss) on investments................................... 3,099 38,662 3,245 Change in unrealized appreciation (depreciation) of investments........... 39,972 (29,733) 19,246 -------- --------- -------- Net increase (decrease) in net assets resulting from operations........... 55,434 23,724 32,112 -------- --------- -------- From capital transactions: Payments received from policy owners...................................... 206,112 202,315 261,139 Transfers between investment divisions (including fixed account), net..... 26,719 (157,813) 38,214 Transfers for contract benefits and terminations.......................... (38,590) (64,202) (59,717) Contract maintenance charges.............................................. -- -- -- -------- --------- -------- Net increase (decrease) in net assets resulting from capital transactions. 194,241 (19,700) 239,636 -------- --------- -------- NET CHANGE IN NET ASSETS.................................................... 249,675 4,024 271,748 NET ASSETS - BEGINNING OF PERIOD............................................ 708,401 704,377 432,629 -------- --------- -------- NET ASSETS - END OF PERIOD.................................................. $958,076 $ 708,401 $704,377 ======== ========= ========
FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION ------------------------- 2006 2005 2004 (D) ------- ------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 1,359 $ 468 $ (4) Net realized gain (loss) on investments................................... (836) 276 8 Change in unrealized appreciation (depreciation) of investments........... 767 (370) 12 ------- ------- ------- Net increase (decrease) in net assets resulting from operations........... 1,290 374 16 ------- ------- ------- From capital transactions: Payments received from policy owners...................................... 6,033 8,457 2,238 Transfers between investment divisions (including fixed account), net..... (2,639) 12,839 10,966 Transfers for contract benefits and terminations.......................... (1,190) (1,307) (99) Contract maintenance charges.............................................. -- -- -- ------- ------- ------- Net increase (decrease) in net assets resulting from capital transactions. 2,204 19,989 13,105 ------- ------- ------- NET CHANGE IN NET ASSETS.................................................... 3,494 20,363 13,121 NET ASSETS - BEGINNING OF PERIOD............................................ 33,484 13,121 -- ------- ------- ------- NET ASSETS - END OF PERIOD.................................................. $36,978 $33,484 $13,121 ======= ======= =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-80
FIDELITY VIP EQUITY-INCOME AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------- -------------------------------------- ------------------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 -------- --------- -------- ------------ ----------- ----------- ----------- ----------- ----------- $ 7,573 $ (72) $ (5) $ (1,070) $ (51,712) $ (224,005) $ 451,348 $ 245,238 $ 49,063 38,676 (5,509) -- 921,608 115,149 53,047 1,479,184 279,927 60,134 1,802 605 -- 6,751,062 8,793,861 4,445,539 5,509,333 1,688,136 2,605,294 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 48,051 (4,976) (5) 7,671,600 8,857,298 4,274,581 7,439,865 2,212,301 2,714,491 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 100,155 5,510 2,238 20,408,448 17,644,031 13,227,421 13,556,781 12,314,898 10,343,250 268,439 158,037 7,499 7,977,297 8,768,204 7,788,495 3,888,560 3,766,503 5,800,181 (8,877) (143,273) 378 (10,216,286) (7,385,112) (4,525,688) (7,007,825) (5,437,593) (3,791,653) -- -- -- (1,137,561) (1,124,951) (952,977) (774,015) (763,087) (733,477) -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 359,717 20,274 10,115 17,031,898 17,902,172 15,537,251 9,663,501 9,880,721 11,618,301 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 407,768 15,298 10,110 24,703,498 26,759,470 19,811,832 17,103,366 12,093,022 14,332,792 25,408 10,110 -- 72,331,242 45,571,772 25,759,940 46,794,725 34,701,703 20,368,911 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- $433,176 $ 25,408 $10,110 $ 97,034,740 $72,331,242 $45,571,772 $63,898,091 $46,794,725 $34,701,703 ======== ========= ======= ============ =========== =========== =========== =========== ===========
F-81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION AMERICAN FUNDS BOND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------- 2006 2005 2004 2006 (C) ----------- ----------- ----------- ------------------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)..................... $ (144,223) $ 15,976 $ (73,946) $ 984 Net realized gain (loss) on investments.......... 3,009,637 669,665 169,126 (909) Change in unrealized appreciation (depreciation) of investments................... 4,197,799 3,507,811 1,710,690 13,837 ----------- ----------- ----------- -------- Net increase (decrease) in net assets resulting from operations....................... 7,063,213 4,193,452 1,805,870 13,912 ----------- ----------- ----------- -------- From capital transactions: Payments received from policy owners............. 7,823,334 5,167,339 3,240,987 89,127 Transfers between investment divisions (including fixed account), net.................. 8,047,794 6,080,729 3,070,772 574,222 Transfers for contract benefits and terminations. (4,078,614) (2,417,794) (1,167,960) (25,984) Contract maintenance charges..................... (444,175) (320,403) (222,662) (7,101) ----------- ----------- ----------- -------- Net increase (decrease) in net assets resulting from capital transactions............. 11,348,339 8,509,871 4,921,137 630,264 ----------- ----------- ----------- -------- NET CHANGE IN NET ASSETS........................... 18,411,552 12,703,323 6,727,007 644,176 NET ASSETS - BEGINNING OF PERIOD............................................ 25,231,190 12,527,867 5,800,860 -- ----------- ----------- ----------- -------- NET ASSETS - END OF PERIOD......................... $43,642,742 $25,231,190 $12,527,867 $644,176 =========== =========== =========== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-82
T. ROWE PRICE MID-CAP GROWTH MFS RESEARCH INTERNATIONAL PIMCO TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ---------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $ (91,448) $ (62,726) $ (35,600) $ 50,995 $ (5,481) $ (17,381) $ 501,885 $ (167,275) $ 1,080,256 897,889 308,494 (21,255) 504,799 264,569 232,610 85,343 207,076 58,068 (173,792) 895,073 874,468 963,904 280,569 176,752 469,783 311,680 (439,697) ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 632,649 1,140,841 817,613 1,519,698 539,657 391,981 1,057,011 351,481 698,627 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 2,471,595 2,046,729 1,669,261 1,296,474 893,225 654,113 6,639,135 6,481,179 5,789,117 1,091,785 1,212,270 1,315,562 3,802,566 262,049 530,150 (231,899) 1,715,784 2,455,515 (1,496,131) (940,796) (604,570) (803,202) (364,173) (252,598) (3,387,681) (2,934,170) (2,238,890) (116,408) (116,429) (97,949) (70,083) (53,518) (40,034) (324,273) (370,173) (381,576) ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,950,841 2,201,774 2,282,304 4,225,755 737,583 891,631 2,695,282 4,892,620 5,624,166 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 2,583,490 3,342,615 3,099,917 5,745,453 1,277,240 1,283,612 3,752,293 5,244,101 6,322,793 9,817,802 6,475,187 3,375,270 4,058,072 2,780,832 1,497,220 24,263,960 19,019,859 12,697,066 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $12,401,292 $9,817,802 $6,475,187 $9,803,525 $4,058,072 $2,780,832 $28,016,253 $24,263,960 $19,019,859 =========== ========== ========== ========== ========== ========== =========== =========== ===========
F-83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
RCM GLOBAL TECHNOLOGY INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (61,070) $ (50,588) $ (45,242) Net realized gain (loss) on investments................. 222,324 240,857 (31,448) Change in unrealized appreciation (depreciation) of investments............................................ 156,356 445,709 (200,859) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations............................................. 317,610 635,978 (277,549) ---------- ---------- ---------- From capital transactions: Payments received from policy owners.................... 1,514,309 1,643,816 1,896,573 Transfers between investment divisions (including fixed account), net.......................................... (174,207) (451,962) 570,609 Transfers for contract benefits and terminations........ (886,683) (773,840) (704,221) Contract maintenance charges............................ (72,151) (78,461) (117,065) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... 381,268 339,553 1,645,896 ---------- ---------- ---------- NET CHANGE IN NET ASSETS.................................. 698,878 975,531 1,368,347 NET ASSETS - BEGINNING OF PERIOD.......................... 6,824,691 5,849,160 4,480,813 ---------- ---------- ---------- NET ASSETS - END OF PERIOD................................ $7,523,569 $6,824,691 $5,849,160 ========== ========== ==========
LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ 1,051,283 $ 622,354 $ 384,601 Net realized gain (loss) on investments................. 93,973 255,890 380,023 Change in unrealized appreciation (depreciation) of investments............................................ 324,579 (722,955) 258,228 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations............................................. 1,469,835 155,289 1,022,852 ----------- ----------- ----------- From capital transactions: Payments received from policy owners.................... 3,396,611 3,151,962 2,983,780 Transfers between investment divisions (including fixed account), net.......................................... 251,738 360,705 337,183 Transfers for contract benefits and terminations........ (2,112,390) (2,102,171) (1,886,757) Contract maintenance charges............................ (168,589) (176,300) (161,744) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................... 1,367,370 1,234,196 1,272,462 ----------- ----------- ----------- NET CHANGE IN NET ASSETS.................................. 2,837,205 1,389,485 2,295,314 NET ASSETS - BEGINNING OF PERIOD.......................... 16,531,209 15,141,724 12,846,410 ----------- ----------- ----------- NET ASSETS - END OF PERIOD................................ $19,368,414 $16,531,209 $15,141,724 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-84
MET/AIM HARRIS OAKMARK LAZARD MID-CAP SMALL CAP GROWTH INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- $ (11,480) $ (11,927) $ (12,732) $ (16,523) $ (11,067) $ (7,126) $ 223,306 $ (44,570) $ (14,172) 413,010 416,755 127,885 285,390 68,224 6,508 999,953 247,669 87,469 56,316 (198,731) 100,268 (33,826) 47,188 68,634 2,507,928 724,928 413,695 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 457,846 206,097 215,421 235,041 104,345 68,016 3,731,187 928,027 486,992 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 908,370 900,458 685,733 582,851 446,774 398,392 3,829,877 2,085,109 717,538 136,080 189,141 562,287 239,798 77,613 177,443 5,611,008 3,959,003 2,229,550 (467,249) (331,466) (273,310) (239,245) (159,651) (116,400) (1,529,961) (827,493) (233,164) (48,424) (54,363) (54,666) (28,878) (25,202) (27,544) (204,430) (133,999) (50,723) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 528,777 703,770 920,044 554,526 339,534 431,891 7,706,494 5,082,620 2,663,201 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 986,623 909,867 1,135,465 789,567 443,879 499,907 11,437,681 6,010,647 3,150,193 3,034,264 2,124,397 988,932 1,587,237 1,143,358 643,451 9,973,856 3,963,209 813,016 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- $4,020,887 $3,034,264 $2,124,397 $2,376,804 $1,587,237 $1,143,358 $21,411,537 $9,973,856 $3,963,209 ========== ========== ========== ========== ========== ========== =========== ========== ==========
F-85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ (65,378) $ (52,753) $ (40,203) Net realized gain (loss) on investments...................... 615,655 97,170 40,466 Change in unrealized appreciation (depreciation) of investments................................................. (742,982) 756,884 408,503 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. (192,705) 801,301 408,766 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 1,626,695 1,636,045 1,751,040 Transfers between investment divisions (including fixed account), net............................................... (19,816) 62,227 96,192 Transfers for contract benefits and terminations............. (911,520) (749,000) (602,629) Contract maintenance charges................................. (81,217) (85,030) (82,692) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 614,142 864,242 1,161,911 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 421,437 1,665,543 1,570,677 NET ASSETS - BEGINNING OF PERIOD............................... 7,322,996 5,657,453 4,086,776 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $7,744,433 $7,322,996 $5,657,453 ========== ========== ==========
LORD ABBETT GROWTH AND INCOME INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ (21,761) $ (16,388) $ 3,490 Net realized gain (loss) on investments...................... 962,704 65,775 8,536 Change in unrealized appreciation (depreciation) of investments................................................. (295,172) 110,292 304,313 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. 645,771 159,679 316,339 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 975,882 908,127 906,975 Transfers between investment divisions (including fixed account), net............................................... 189,576 (24,320) 46,230 Transfers for contract benefits and terminations............. (110,448) (137,531) (98,526) Contract maintenance charges................................. -- -- -- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 1,055,010 746,276 854,679 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 1,700,781 905,955 1,171,018 NET ASSETS - BEGINNING OF PERIOD............................... 4,160,587 3,254,632 2,083,614 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $5,861,368 $4,160,587 $3,254,632 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-86
NEUBERGER BERMAN LORD ABBETT THIRD AVENUE REAL ESTATE MID-CAP VALUE SMALL CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ------------------------- -------------------------- 2006 2005 2004 (D) 2006 2005 2004 (D) 2006 2005 2004 (D) ----------- ---------- ---------- ------- ------- -------- -------- ------- -------- $ 19,481 $ (40,104) $ 29,267 $ 19 $ 52 $ 1 $ (349) $ (51) $ 12 819,954 86,504 46,943 3,413 1,180 5 3,522 188 103 3,020,558 660,111 124,804 880 85 10 21,745 1,856 (54) ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 3,859,993 706,511 201,014 4,312 1,317 16 24,918 1,993 61 ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 3,735,060 2,008,005 228,551 3,267 1,127 234 55,993 7,110 2,238 5,998,130 3,582,147 1,619,564 5,000 30,132 -- 172,022 16,509 2,151 (1,746,498) (678,678) (65,198) (2,303) (518) (4) (6,209) (1,159) (43) (254,482) (187,747) (19,178) -- -- -- -- -- -- ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 7,732,210 4,723,727 1,763,739 5,964 30,741 230 221,806 22,460 4,346 ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 11,592,203 5,430,238 1,964,753 10,276 32,058 246 246,724 24,453 4,407 7,394,991 1,964,753 -- 32,304 246 -- 28,860 4,407 -- ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ $18,987,194 $7,394,991 $1,964,753 $42,580 $32,304 $246 $275,584 $28,860 $4,407 =========== ========== ========== ======= ======= ==== ======== ======= ======
F-87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG CYCLICAL MASON CYCLICAL GROWTH AND OPPENHEIMER CAPITAL VALUE GROWTH INCOME PIMCO INFLATION APPRECIATION EQUITY ETF ETF PROTECTED BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION TRUST DIVISION DIVISION DIVISION ------------------ ---------- ---------- ---------- --------------- 2006 2005 (A) 2006 (C) 2006 (B) 2006 (B) 2006 (B) -------- -------- ---------- ---------- ---------- --------------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (1,383) $ (199) $ (20,388) $ 1,562 $ 1,299 $ (463) Net realized gain (loss) on investments................. 7,447 1,542 98,987 1,770 1,197 1,472 Change in unrealized appreciation (depreciation) of investments............................................ 12,744 2,715 306,184 4,607 2,231 (1,429) -------- -------- ---------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations............................................. 18,808 4,058 384,783 7,939 4,727 (420) -------- -------- ---------- -------- -------- -------- From capital transactions: Payments received from policy owners.................... 117,398 12,067 765,241 9,903 6,299 30,639 Transfers between investment divisions (including fixed account), net.......................................... 123,969 108,334 4,793,005 162,517 108,357 134,189 Transfers for contract benefits and terminations........ (34,745) (5,960) (368,052) (3,472) (2,406) (33,233) Contract maintenance charges............................ (12,440) (2,189) (37,317) (572) (429) (1,447) -------- -------- ---------- -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions................................... 194,182 112,252 5,152,877 168,376 111,821 130,148 -------- -------- ---------- -------- -------- -------- NET CHANGE IN NET ASSETS.................................. 212,990 116,310 5,537,660 176,315 116,548 129,728 NET ASSETS - BEGINNING OF PERIOD.......................... 116,310 -- -- -- -- -- -------- -------- ---------- -------- -------- -------- NET ASSETS - END OF PERIOD................................ $329,300 $116,310 $5,537,660 $176,315 $116,548 $129,728 ======== ======== ========== ======== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-88
AMERICAN CENTURY VISTA DELAWARE SMALL CAP VALUE DREYFUS MIDCAP STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------------ -------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- -------- ---- -------- ---- ---- $ (81) $ (47) $-- $ (1,580) $ (358) $-- $ (148) $-- $-- 118 6 -- 27,452 8,228 -- 16,486 -- -- 1,653 961 -- 21,618 2,540 -- (13,109) -- -- ------- ------- --- -------- -------- --- -------- --- --- 1,690 920 -- 47,490 10,410 -- 3,229 -- -- ------- ------- --- -------- -------- --- -------- --- --- -- -- -- 5,729 6,852 -- -- -- -- 9,705 14,262 -- 342,518 121,033 -- 107,014 -- -- (1,051) (599) -- (11,599) 1,671 -- (19,475) -- -- -- -- -- -- -- -- -- -- -- ------- ------- --- -------- -------- --- -------- --- --- 8,654 13,663 -- 336,648 129,556 -- 87,539 -- -- ------- ------- --- -------- -------- --- -------- --- --- 10,344 14,583 -- 384,138 139,966 -- 90,768 -- -- 14,583 -- -- 139,966 -- -- -- -- -- ------- ------- --- -------- -------- --- -------- --- --- $24,927 $14,583 $-- $524,104 $139,966 $-- $ 90,768 $-- $-- ======= ======= === ======== ======== === ======== === ===
F-89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
DREYFUS EMERGING LEADERS INVESTMENT DIVISION ---------------------- 2006 2005 2004 ------- ------- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (70) $ (47) $-- Net realized gain (loss) on investments................................... 1,662 813 -- Change in unrealized appreciation (depreciation) of investments........... (791) 711 -- ------- ------- --- Net increase (decrease) in net assets resulting from operations........... 801 1,477 -- ------- ------- --- From capital transactions: Payments received from policy owners...................................... 511 -- -- Transfers between investment divisions (including fixed account), net..... -- 11,018 -- Transfers for contract benefits and terminations.......................... (255) (1,674) -- Contract maintenance charges.............................................. -- -- -- ------- ------- --- Net increase (decrease) in net assets resulting from capital transactions. 256 9,344 -- ------- ------- --- NET CHANGE IN NET ASSETS.................................................... 1,057 10,821 -- NET ASSETS - BEGINNING OF PERIOD............................................ 10,821 -- -- ------- ------- --- NET ASSETS - END OF PERIOD.................................................. $11,878 $10,821 $-- ======= ======= ===
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION --------------------------- 2006 2005 2004 (D) -------- -------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 390 $ (850) $ (4) Net realized gain (loss) on investments................................... 15,591 (4,878) 1,311 Change in unrealized appreciation (depreciation) of investments........... 67,169 13,060 (934) -------- -------- ------- Net increase (decrease) in net assets resulting from operations........... 83,150 7,332 373 -------- -------- ------- From capital transactions: Payments received from policy owners...................................... 66,631 19,214 2,238 Transfers between investment divisions (including fixed account), net..... 383,627 243,471 12,947 Transfers for contract benefits and terminations.......................... (5,453) (97,080) (18) Contract maintenance charges.............................................. -- -- -- -------- -------- ------- Net increase (decrease) in net assets resulting from capital transactions. 444,805 165,605 15,167 -------- -------- ------- NET CHANGE IN NET ASSETS.................................................... 527,955 172,937 15,540 NET ASSETS - BEGINNING OF PERIOD............................................ 188,477 15,540 -- -------- -------- ------- NET ASSETS - END OF PERIOD.................................................. $716,432 $188,477 $15,540 ======== ======== =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-90
GOLDMAN SACHS GOLDMAN SACHS MFS MID CAP VALUE STRUCTURED SMALL CAP EQUITY HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- --------------------------- ------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 (D) -------- -------- -------- ------- ------- ---- ------- ------- -------- $ 1,899 $ 45 $ 66 $ 257 $ 94 $-- $ 4,046 $ 3,632 $ (87) 27,734 994 1,153 6,160 4,218 -- 1,254 128 69 (2,200) 223 (464) 1,891 (5,644) -- 2,298 (2,862) 3,152 -------- -------- ------- ------- ------- --- ------- ------- ------- 27,433 1,262 755 8,308 (1,332) -- 7,598 898 3,134 -------- -------- ------- ------- ------- --- ------- ------- ------- 35,499 3,107 -- 19,548 -- -- 14,794 2,055 -- 156,680 107,030 12,663 13,395 51,421 -- (7,401) 16,844 48,923 (2,292) (77,029) (1,142) (1,827) 77 -- (2,007) (1,736) (1,091) -- -- -- -- -- -- -- -- -- -------- -------- ------- ------- ------- --- ------- ------- ------- 189,887 33,108 11,521 31,116 51,498 -- 5,386 17,163 47,832 -------- -------- ------- ------- ------- --- ------- ------- ------- 217,320 34,370 12,276 39,424 50,166 -- 12,984 18,061 50,966 46,646 12,276 -- 50,166 -- -- 69,027 50,966 -- -------- -------- ------- ------- ------- --- ------- ------- ------- $263,966 $ 46,646 $12,276 $89,590 $50,166 $-- $82,011 $69,027 $50,966 ======== ======== ======= ======= ======= === ======= ======= =======
F-91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MFS GLOBAL EQUITY VAN KAMPEN GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION ------------------ ---------------------- 2006 2005 2004 2006 2005 2004 ------- ---- ---- ------- ------- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (38) $-- $-- $ 567 $ (12) $-- Net realized gain (loss) on investments................................... 100 -- -- (329) (1) -- Change in unrealized appreciation (depreciation) of investments........... 2,944 -- -- 121 124 -- ------- --- --- ------- ------- --- Net increase (decrease) in net assets resulting from operations........... 3,006 -- -- 359 111 -- ------- --- --- ------- ------- --- From capital transactions: Payments received from policy owners...................................... 11,259 -- -- 4,438 2,678 -- Transfers between investment divisions (including fixed account), net..... 13,359 -- -- (3,528) 10,908 -- Transfers for contract benefits and terminations.......................... (768) -- -- (72) (61) -- Contract maintenance charges.............................................. -- -- -- -- -- -- ------- --- --- ------- ------- --- Net increase (decrease) in net assets resulting from capital transactions. 23,850 -- -- 838 13,525 -- ------- --- --- ------- ------- --- NET CHANGE IN NET ASSETS.................................................... 26,856 -- -- 1,197 13,636 -- NET ASSETS - BEGINNING OF PERIOD............................................ -- -- -- 13,636 -- -- ------- --- --- ------- ------- --- NET ASSETS - END OF PERIOD.................................................. $26,856 $-- $-- $14,833 $13,636 $-- ======= === === ======= ======= ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-92
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE WELLS FARGO TOTAL RETURN BOND MONEY MARKET ADVANTAGE ASSET ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------- -------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- ---- ---- ------- ---- ---- $ 1,478 $ 248 $-- $ 15,873 $-- $-- $ 99 $-- $-- (203) 238 -- -- -- -- 293 -- -- 969 16 -- -- -- -- 432 -- -- ------- ------- --- -------- --- --- ------- --- --- 2,244 502 -- 15,873 -- -- 824 -- -- ------- ------- --- -------- --- --- ------- --- --- 5,794 3,570 -- 465,461 -- -- 4,896 -- -- 36,582 13,581 -- 527,851 -- -- 5,994 -- -- (628) (454) -- (27,071) -- -- (168) -- -- -- -- -- -- -- -- -- -- -- ------- ------- --- -------- --- --- ------- --- --- 41,748 16,697 -- 966,241 -- -- 10,722 -- -- ------- ------- --- -------- --- --- ------- --- --- 43,992 17,199 -- 982,114 -- -- 11,546 -- -- 17,199 -- -- -- -- -- -- -- -- ------- ------- --- -------- --- --- ------- --- --- $61,191 $17,199 $-- $982,114 $-- $-- $11,546 $-- $-- ======= ======= === ======== === === ======= === ===
F-93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- ------------------------ 2006 2005 2004 (D) 2006 2005 2004 (D) -------- ------ -------- ------ ------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (243) $ (16) $ (1) $ 96 $ 82 $ (1) Net realized gain (loss) on investments................................... 5,393 (5) 6 104 25 10 Change in unrealized appreciation (depreciation) of investments........... 10,126 797 16 1,202 301 3 -------- ------ ------ ------ ------- ------ Net increase (decrease) in net assets resulting from operations........... 15,276 776 21 1,402 408 12 -------- ------ ------ ------ ------- ------ From capital transactions: Payments received from policy owners...................................... 73,440 4,434 2,238 -- 4,436 2,238 Transfers between investment divisions (including fixed account), net..... 106,314 (49) 2,151 -- 110 2,151 Transfers for contract benefits and terminations.......................... (2,821) (985) (75) (871) (1,013) (60) Contract maintenance charges.............................................. -- -- -- -- -- -- -------- ------ ------ ------ ------- ------ Net increase (decrease) in net assets resulting from capital transactions. 176,933 3,400 4,314 (871) 3,533 4,329 -------- ------ ------ ------ ------- ------ NET CHANGE IN NET ASSETS.................................................... 192,209 4,176 4,335 531 3,941 4,341 NET ASSETS - BEGINNING OF PERIOD............................................ 8,511 4,335 -- 8,282 4,341 -- -------- ------ ------ ------ ------- ------ NET ASSETS - END OF PERIOD.................................................. $200,720 $8,511 $4,335 $8,813 $ 8,282 $4,341 ======== ====== ====== ====== ======= ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-94 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006 1. BUSINESS Metropolitan Life Separate Account UL (the "Separate Account"), a Separate Account of Metropolitan Life Insurance Company ("Metropolitan Life"), was established by the Board of Directors of Metropolitan Life Insurance Company on December 13, 1988 to support Metropolitan Life's operations with respect to certain variable universal life insurance policies ("Policies"). Metropolitan Life is a wholly owned subsidiary of MetLife, Inc. ("MetLife"). The Separate Account was registered as a unit investment trust on January 5, 1990 under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York Insurance Department. The Separate Account supports six Policies: Flexible Premium Multifunded Life ("UL II"), MetLife Flexible Premium Variable Life ("MetFlex"), Group Variable Universal Life ("GVUL"), Flexible Premium Multifunded Life ("Equity Advantage VUL"), Variable Additional Insurance ("VAI") and Variable Additional Benefits Rider ("VABR"). The Separate Account is divided into investment divisions, each of which is treated as an individual separate account for financial reporting purposes. The Separate Account presently does not have assets invested in each of the investment divisions but each investment division is available as an investment option. Each investment division invests its assets exclusively in shares of corresponding portfolios, series or funds (with the same name) within the Metropolitan Fund, Janus Fund, AIM Funds, Franklin Fund, Alliance Fund, Fidelity Funds, American Fund, Met Investors Fund, American Century Fund, Delaware Fund, Dreyfus IP Fund, Dreyfus Fund, Goldman Sachs Fund, MFS Fund, Van Kampen Fund, or Wells Fargo Fund (collectively, the "Funds"). For convenience, the portfolios, series, and funds are referred to as "portfolios." The assets of the Separate Account are registered in the name of Metropolitan Life. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from Metropolitan Life's other assets and liabilities. The portion of the Separate Account's assets attributable to the variable universal life policies is not chargeable with liabilities arising out of any other business Metropolitan Life may conduct. The following investment divisions were available for investment as of December 31, 2006: BlackRock Large Cap Fidelity VIP Contrafund Investment Division Investment Division BlackRock Diversified Fidelity VIP Asset Investment Division Manager Growth Investment Division BlackRock Aggressive Fidelity VIP Investment Growth Investment Grade Bond Investment Division Division MetLife Stock Index Fidelity VIP Investment Division Equity-Income Investment Division FI International Stock American Funds Growth Investment Division Investment Division FI Mid Cap Opportunities American Funds Investment Division Growth-Income Investment Division T. Rowe Price Small Cap American Funds Global Growth Investment Small Capitalization Division* Investment Division Oppenheimer Global Equity American Funds Bond Investment Division Investment Division Harris Oakmark Large Cap T. Rowe Price Mid-Cap Value Investment Division Growth Investment Division* Neuberger Berman Mid Cap MFS Research Value Investment Division International Investment Division T. Rowe Price Large Cap Growth Investment PIMCO Total Return Division Investment Division Lehman Brothers Aggregate Bond Index Investment RCM Global Technology Division Investment Division Morgan Stanley EAFE Index Lord Abbett Bond Investment Division Debenture Investment Division Russell 2000 Index Lazard Mid-Cap Investment Investment Division Division Jennison Growth Met/AIM Small Cap Growth Investment Division Investment Division BlackRock Strategic Value Harris Oakmark Investment Division International Investment Division MetLife Mid Cap Stock Legg Mason Aggressive Index Investment Division Growth Investment Division* Franklin Templeton Small Cap Growth Investment Lord Abbett Growth and Division Income Investment Division BlackRock Large Cap Value Neuberger Berman Real Investment Division Estate Investment Division* Davis Venture Value Van Kampen Mid Cap Growth Investment Division Investment Division** Loomis Sayles Small Cap Lord Abbett Mid-Cap Value Investment Division Investment Division BlackRock Legacy Large Cap Growth Investment Third Avenue Small Cap Division Value Investment Division BlackRock Bond Income Oppenheimer Capital Investment Division Appreciation Investment Division FI Value Leaders Legg Mason Value Equity Investment Division Investment Division Harris Oakmark Focused Cyclical Growth ETF Value Investment Division Investment Division Western Asset Management Strategic Bond Cyclical Growth and Opportunities Investment Income ETF Investment Division Division Western Asset Management U.S. Government PIMCO Inflation Protected Investment Division Bond Investment Division F-95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONTINUED) BlackRock Money Market American Century Vista Investment Division Investment Division MFS Total Return Delaware Small Cap Value Investment Division* Investment Division MetLife Conservative Allocation Investment Dreyfus MidCap Stock Division Investment Division MetLife Conservative to Moderate Allocation Dreyfus Emerging Leaders Investment Division Investment Division MetLife Moderate Allocation Investment Dreyfus International Division Value Investment Division MetLife Moderate to Aggressive Allocation Goldman Sachs Mid Cap Investment Division Value Investment Division MetLife Aggressive Goldman Sachs Structured Allocation Investment Small Cap Equity Division Investment Division FI Large Cap Investment MFS High Income Division Investment Division Janus Aspen Large Cap Growth Investment MFS Global Equity Division Investment Division Janus Aspen Balanced MFS Value Investment Investment Division Division** Janus Aspen Forty MFS New Discovery Investment Division Investment Division** AIM V.I Core Equity Van Kampen Government Investment Division Investment Division AIM V.I. Government Wells Fargo Advantage VT Securities Investment Total Return Bond Division Investment Division AIM V.I. Global Real Wells Fargo Advantage VT Estate Investment Money Market Investment Division Division Franklin Templeton Wells Fargo Advantage VT Foreign Securities Asset Allocation Investment Division Investment Division Franklin Mutual Discovery Wells Fargo Advantage VT Securities Investment Large Company Core Division Investment Division** AllianceBernstein Global Wells Fargo Advantage VT Technology Investment Large Company Growth Division Investment Division AllianceBernstein U.S. Government/High Grade Wells Fargo Advantage VT Securities Investment Equity Income Investment Division** Division * These investment divisions within the Separate Account invest in two or more share classes within the underlying portfolios of the funds that may assess 12b-1 fees. ** These investment divisions had no net assets as of December 31, 2006. The operations of the investment divisions changed as follows during the years ended 2006, 2005 and 2004: For the year ended December 31, 2006: NAME CHANGES: OLD NAME NEW NAME -------- -------- Salomon Brothers Western Asset Management Strategic Bond Strategic Bond Opportunities Investment Opportunities Investment Division Division Salomon Brothers U.S. Western Asset Management Government Investment U.S Government Investment Division Division Goldman Sachs CORE Small Goldman Sachs Structured Cap Equity Investment Small Cap Equity Division Investment Division AIM V.I. Real Estate AIM V.I. Global Real Investment Division Estate Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Total Return Bond Total Return Bond Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Money Market Investment Money Market Investment Division Division Wells Fargo Advantage Wells Fargo Advantage VT Asset Allocation Asset Allocation Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Large Company Core Large Company Core Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Large Company Growth Large Company Growth Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Equity Income Investment Equity Income Investment Division Division Janus Aggressive Growth Legg Mason Aggressive Investment Division Growth Investment Division Lord Abbett Growth Opportunities Investment Van Kampen Mid Cap Growth Division Investment Division BlackRock Investment BlackRock Large Cap Trust Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- MFS Investors Trust Legg Mason Value Equity Portfolio Portfolio AIM V.I. Core Stock AIM V.I. Core Equity Portfolio Portfolio ADDITIONS: FI Large Cap Investment Division American Funds Bond Investment Division Legg Mason Value Equity Investment Division Cyclical Growth ETF Investment Division Cyclical Growth and Income ETF Investment Division PIMCO Inflation Protected Bond Investment Division F-96 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONTINUED) SUBSTITUTIONS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Franklin Templeton Growth Oppenheimer Global Equity Securities Portfolio Portfolio AllianceBernstein Growth Lord Abbett Growth and and Income Portfolio Income Portfolio Dreyfus VIF Appreciation T. Rowe Price Large Cap Portfolio Growth Portfolio Fidelity VIP Growth T. Rowe Price Large Cap Portfolio Growth Portfolio For the year ended December 31, 2005 NAME CHANGES: OLD NAME NEW NAME -------- -------- Met/AIM Mid Cap Core Equity Investment Lazard Mid Cap Investment Division Division Neuberger Berman Partners Mid Cap Value Investment Neuberger Berman Mid Cap Division Value Investment Division Janus Aspen Capital Appreciation Investment Janus Aspen Forty Division Investment Division Janus Aspen Growth Janus Aspen Large Cap Investment Division Growth Investment Division AllianceBernstein AllianceBernstein Global Technology Investment Technology Investment Division Division Scudder Global Equity Oppenheimer Global Equity Investment Division Investment Division Invesco VIF Core Equity AIM V.I. Core Stock Investment Division Investment Division Wells Fargo Total Return Wells Fargo Advantage Bond Investment Division Total Return Bond Investment Division Wells Fargo Money Market Wells Fargo Advantage Investment Division Money Market Investment Division Wells Fargo Asset Wells Fargo Advantage Allocation Investment Asset Allocation Division Investment Division Wells Fargo Growth Wells Fargo Advantage Investment Division Large Company Core Investment Division Wells Fargo Large Company Wells Fargo Advantage Growth Investment Large Company Growth Division Investment Division Wells Fargo Equity Income Wells Fargo Advantage Investment Division Equity Income Investment Division State Street Research Investment Trust BlackRock Investment Investment Division Trust Investment Division State Street Research Diversified Investment BlackRock Diversified Division Investment Division State Street Research Aggressive Growth BlackRock Aggressive Investment Division Growth Investment Division State Street Research Large Cap Value BlackRock Large Cap Value Investment Division Investment Division State Street Research Bond Income Investment BlackRock Bond Income Division Investment Division State Street Research Money Market Investment BlackRock Money Market Division Investment Division State Street Research BlackRock Legacy Large Large Cap Growth Cap Growth Investment Investment Division Division State Street Research Aurora Investment BlackRock Strategic Value Division Investment Division PIMCO PEA Innovation RCM Global Technology Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Met/Putnam Voyager Portfolio Jennison Growth Portfolio ADDITIONS: Jennison Growth Investment Division MetLife Conservative Allocation Investment Division MetLife Conservative to Moderate Allocation Investment Division MetLife Moderate Allocation Investment Division MetLife Moderate to Aggressive Allocation Investment Division MetLife Aggressive Allocation Investment Division Oppenheimer Capital Appreciation Investment Division F-97 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONCLUDED) For the year ended December 31, 2004 NAME CHANGES: OLD NAME NEW NAME -------- -------- Janus Mid Cap Investment FI Mid Cap Opportunities Division Investment Division Invesco Real Estate Opportunities Investment AIM Real Estate Division Investment Division PIMCO Innovation PIMCO PEA Innovation Investment Division Investment Division FI Structured Equity FI Value Leaders Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- FI Mid Cap Opportunities Portfolio Janus Mid Cap Portfolio ADDITIONS: MFS Total Return Dreyfus International Investment Division Value Investment Division Janus Aspen Forty Goldman Sachs Mid Cap Investment Division Value Investment Division AIM V.I. Government Goldman Sachs Structured Securities Investment Small Cap Equity Division Investment Division Franklin Mutual Discovery Securities Investment MFS High Income Division Investment Division AllianceBernstein U.S. Government/High Grade Securities Investment MFS Global Equity Division Investment Division Fidelity VIP Investment Grade Bond Investment MFS Value Investment Division Division Fidelity VIP Equity-Income Investment MFS New Discovery Division Investment Division Neuberger Berman Real Estate Investment Van Kampen Government Division Investment Division Lord Abbett Growth Opportunities Investment Wells Fargo Total Return Division Bond Investment Division Lord Abbett Mid-Cap Value Wells Fargo Money Market Investment Division Investment Division Third Avenue Small Cap Wells Fargo Asset Value Investment Division Allocation Investment Division American Century Vista Wells Fargo Large Company Investment Division Core Investment Division Delaware Small Cap Value Wells Fargo Large Company Investment Division Growth Investment Division Dreyfus MidCap Stock Wells Fargo Equity Income Investment Division Investment Divisions Dreyfus Emerging Leaders Investment Division SUBSTITUTIONS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Alger Equity Growth State Street Research Portfolio Large Cap Growth Portfolio Franklin Templeton Small T. Rowe Price Small Cap Cap Valuemark Portfolio Portfolio Alliance Premier Growth Janus Aggressive Growth Portfolio Portfolio Invesco High Yield Lord Abbett Bond Portfolio Debenture Portfolio 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements included herein have been provided in accordance with accounting principles generally accepted in the United States of America for variable universal life separate accounts registered as unit investment trusts. A. VALUATION OF INVESTMENTS Investments are made in the portfolios of the Funds and are valued at the reported net asset values of these portfolios. The investments of the portfolios are valued at fair value. Money market portfolio investments are valued utilizing the amortized cost method of valuation. Changes in fair values are recorded in the Statement of Operations. F-98 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) B. SECURITY TRANSACTIONS Purchases and sales are recorded on the trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the identified cost of the investment sold. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date. C. FEDERAL INCOME TAXES The operations of the Separate Account are included in the Federal income tax return of Metropolitan Life, which is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, Metropolitan Life does not expect to incur Federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the contracts. Accordingly, no charge is being made currently to the Separate Account for Federal income taxes. Metropolitan Life will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any Federal income taxes that would be attributable to the Policies. D. NET PREMIUMS Metropolitan Life deducts a sales load and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain Policies, Metropolitan Life also deducts a Federal income tax charge before amounts are allocated to the Separate Account. The Federal income tax charge is imposed in connection with certain policies to recover a portion of the Federal income tax adjustment attributable to policy acquisition expenses. E. USE OF ESTIMATES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. F. PREMIUM PAYMENTS Premium payments by Metropolitan Life are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus. G. RECLASSIFICATION In prior year Statement of Operations, the Separate Account reported dividend income and realized gain distributions collectively as dividend income. The realized gain distributions have been reclassified and now appear as a separate line item in the Statement of Operations for all periods presented. In the prior year financial statements, the realized gain distributions were included in the calculation of the investment income ratios. These distributions were appropriately excluded from the current year calculations and prior year periods have been adjusted to conform to the current year presentation. These reclassifications had no effect on the net assets of the investment divisions or unit values of the contracts. Certain amounts in the prior year financial statements have been reclassified to conform with the amounts in the current year financial statements. 3. EXPENSES AND RELATED PARTY TRANSACTIONS With respect to assets in the Separate Account that support certain Policies, Metropolitan Life deducts a charge from the assets of the Separate Account for the assumption of general administrative expenses and mortality and expense risks. This charge is equivalent to an effective annual rate of 0.45% of the average daily values of the assets in the Separate Account for GVUL policies, 0.90% for UL II & Equity Advantage VUL policies, 0.75% for VAI and VABR policies less than $250,000, and 0.50% for VAI and VABR policies $250,000 and greater. These charges result in the F-99 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 3. EXPENSES AND RELATED PARTY TRANSACTIONS -- (CONTINUED) reduction of unit values. A charge of 0.60% is assessed against the cash value of the assets in the Separate Account for MetFlex policies outstanding less than ten years. For Metflex policies that have been outstanding for greater than ten years, the charge is reduced to 0.30%. A charge of 0.48% and 0.40% is assessed against the cash value of the assets in the Separate Account for MetFlex C policies and 0.40% for MetFlex Executive policies, respectively. The charges result in the redemption of units. For a full explanation of product charges and associated product features and benefits, please refer to your product prospectus. 4. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and the proceeds from sales of investments for the year ended December 31, 2006 were as follows:
PURCHASES SALES ----------- ----------- BlackRock Large Cap Investment Division.................................. $11,467,983 $26,671,870 BlackRock Diversified Investment Division................................ 15,680,568 28,394,210 BlackRock Aggressive Growth Investment Division.......................... 4,494,902 12,643,730 MetLife Stock Index Investment Division.................................. 75,343,525 33,098,963 FI International Stock Investment Division............................... 6,093,150 4,067,917 FI Mid Cap Opportunities Investment Division............................. 8,064,969 13,208,656 T. Rowe Price Small Cap Growth Investment Division....................... 5,040,563 6,842,815 Oppenheimer Global Equity Investment Division............................ 5,090,140 2,731,827 Harris Oakmark Large Cap Value Investment Division....................... 4,961,515 4,533,285 Neuberger Berman Mid Cap Value Investment Division....................... 16,601,752 3,257,209 T. Rowe Price Large Cap Growth Investment Division....................... 5,611,464 3,796,948 Lehman Brothers Aggregate Bond Index Investment Division................. 14,653,710 4,654,122 Morgan Stanley EAFE Index Investment Division............................ 7,973,083 2,596,658 Russell 2000 Index Investment Division................................... 9,135,332 2,257,319 Jennison Growth Investment Division...................................... 1,310,797 681,638 BlackRock Strategic Value Investment Division............................ 23,570,106 5,388,213 MetLife Mid Cap Stock Index Investment Division.......................... 10,966,694 2,262,386 Franklin Templeton Small Cap Growth Investment Division.................. 1,373,244 356,294 BlackRock Large Cap Value Investment Division............................ 4,049,522 566,819 Davis Venture Value Investment Division.................................. 9,229,149 9,322,889 Loomis Sayles Small Cap Investment Division.............................. 4,302,530 718,737 BlackRock Legacy Large Cap Growth Investment Division.................... 1,507,602 9,175,754 MFS Investors Trust Investment Division (a).............................. 607,762 4,643,739 BlackRock Bond Income Investment Division................................ 11,031,995 11,964,605 FI Value Leaders Investment Division..................................... 2,434,815 294,720 Harris Oakmark Focused Value Investment Division......................... 10,589,353 2,994,506 Western Asset Management Strategic Bond Opportunities Investment Division 4,199,097 1,048,109 Western Asset Management U.S. Government Investment Division............. 2,526,072 607,230 BlackRock Money Market Investment Division............................... 42,614,216 11,326,838 MFS Total Return Investment Division..................................... 2,013,405 600,195 MetLife Conservative Allocation Investment Division...................... 865,072 508,594 MetLife Conservative to Moderate Allocation Investment Division.......... 1,667,586 447,361 MetLife Moderate Allocation Investment Division.......................... 8,480,026 1,046,734 MetLife Moderate to Aggressive Allocation Investment Division............ 10,898,067 214,108 MetLife Aggressive Allocation Investment Division........................ 3,531,254 1,233,052 FI Large Cap Investment Division (b)..................................... 103,282 45,909 Janus Aspen Large Cap Growth Investment Division......................... 773,477 463,142 Janus Aspen Balanced Investment Division................................. 279 334 Janus Aspen Forty Investment Division.................................... 107,128 3,852 AIM V.I. Core Stock Income Investment Division (a)....................... 1,017,764 1,268,370 AIM V.I. Core Equity Income Investment Division (b)...................... 294,892 3,224
F-100 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. PURCHASES AND SALES OF INVESTMENTS -- (CONTINUED)
PURCHASES SALES ------------ ------------ AIM V.I. Government Securities Investment Division............... $ 280 $ 850 AIM V.I. Global Real Estate Investment Division.................. 1,527,094 1,192,937 Franklin Templeton Foreign Securities Investment Division........ 1,078,375 1,243,592 Franklin Mutual Discovery Securities Investment Division......... 722,365 42,288 AllianceBernstein Global Technology Investment Division.......... 30,546 14,382 Fidelity VIP Contrafund Investment Division...................... 1,568,664 368,062 Fidelity VIP Asset Manager Growth Investment Division............ 263,490 56,619 Fidelity VIP Investment Grade Bond Investment Division........... 15,692 12,038 Fidelity VIP Equity-Income Investment Division................... 444,511 41,830 American Funds Growth Investment Division........................ 18,848,930 1,295,883 American Funds Growth-Income Investment Division................. 12,439,562 1,039,626 American Funds Global Small Capitalization Investment Division... 15,088,862 2,070,241 American Funds Bond Investment Division (b)...................... 675,070 43,822 T. Rowe Price Mid-Cap Growth Investment Division................. 3,559,488 1,335,976 MFS Research International Investment Division................... 5,017,601 321,985 PIMCO Total Return Investment Division........................... 4,967,727 1,759,942 RCM Global Technology Investment Division........................ 1,152,777 832,579 Lord Abbett Bond Debenture Investment Division................... 3,655,660 1,217,695 Lazard Mid-Cap Investment Division............................... 1,183,426 273,858 Met/AIM Small Cap Growth Investment Division..................... 927,830 122,502 Harris Oakmark International Investment Division................. 9,243,627 439,317 Legg Mason Aggressive Growth Investment Division................. 1,574,834 587,533 Lord Abbett Growth and Income Investment Division................ 5,490,350 4,453,922 Neuberger Berman Real Estate Investment Division................. 9,093,945 732,319 Van Kampen Mid Cap Growth Investment Division.................... 527 543 Lord Abbett Mid-Cap Value Investment Division.................... 14,758 5,292 Third Avenue Small Cap Value Investment Division................. 238,934 15,466 Oppenheimer Capital Appreciation Investment Division............. 311,122 116,992 Legg Mason Value Equity Investment Division (b).................. 5,402,976 190,823 Cyclical Growth EFT Investment Division (b)...................... 190,590 20,268 Cyclical Growth and Income ETF Investment Division (b)........... 129,590 16,469 PIMCO Inflation Protected Bond Investment Division (b)........... 334,773 205,088 American Century Vista Investment Division....................... 9,225 600 Delaware Small Cap Value Investment Division..................... 418,980 61,838 Dreyfus MidCap Stock Investment Division......................... 124,866 3,384 Dreyfus Emerging Leaders Investment Division..................... 2,226 345 Dreyfus International Value Investment Division.................. 482,219 29,709 Goldman Sachs Mid Cap Value Investment Division.................. 232,239 13,759 Goldman Sachs Structured Small Cap Equity Investment Division.... 39,596 1,938 MFS High Income Investment Division.............................. 101,581 92,148 MFS Global Equity Investment Division............................ 25,345 1,534 Van Kampen Government Investment Division........................ 11,755 10,351 Wells Fargo Advantage VT Total Return Bond Investment Division... 55,323 12,108 Wells Fargo Advantage VT Money Market Investment Division........ 1,010,945 28,743 Wells Fargo Advantage VT Asset Allocation Investment Division.... 15,711 4,889 Wells Fargo Advantage VT Large Company Growth Investment Division 235,927 59,242 Wells Fargo Advantage VT Equity Income Investment Division....... 149 901 ------------ ------------ Total............................................................ $458,237,905 $236,335,109 ============ ============
(a) For the period January 1, 2006 to April 30, 2006 (b) For the period May 1, 2006 to December 31, 2006 F-101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
BLACKROCK BLACKROCK BLACKROCK LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH METLIFE STOCK INVESTMENT INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------- ----------- ----------------- ---------------- Outstanding at December, 2005... 16,488,159 13,638,816 11,502,614 32,156,989 Activity during 2006: Issued........................ 5,827,504 5,196,699 3,534,643 14,883,687 Redeemed...................... (6,306,169) (5,738,789) (3,838,960) (13,433,448) ---------- ---------- ---------- ----------- Outstanding at December 31, 2006 16,009,494 13,096,726 11,198,297 33,607,228 ========== ========== ========== =========== Outstanding at December, 2004... 16,507,025 13,455,017 11,775,258 29,475,869 Activity during 2005: Issued........................ 3,207,492 2,906,692 1,944,636 8,538,465 Redeemed...................... (3,226,358) (2,722,893) (2,217,280) (5,857,345) ---------- ---------- ---------- ----------- Outstanding at December 31, 2005 16,488,159 13,638,816 11,502,614 32,156,989 ========== ========== ========== =========== Outstanding at December, 2003... 16,150,806 12,880,974 11,833,051 25,746,955 Activity during 2004: Issued........................ 3,924,235 3,355,335 2,392,708 9,695,680 Redeemed...................... (3,568,016) (2,781,292) (2,450,501) (5,966,766) ---------- ---------- ---------- ----------- Outstanding at December 31, 2004 16,507,025 13,455,017 11,775,258 29,475,869 ========== ========== ========== ===========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-102
FI FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE INTERNATIONAL OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH STOCK INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ------------- ---------------- ------------- --------------- ---------------- ---------------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 1,366,842 5,633,860 1,690,078 882,876 2,271,700 2,211,103 1,740,365 (1,248,970) (5,855,765) (1,880,129) (852,656) (2,258,368) (1,898,103) (1,667,047) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,412,213 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 ========== ========== ========== ========= ========== ========== ========== 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,772 681,133 3,117,992 928,886 507,092 1,297,280 1,131,537 992,846 (628,162) (2,881,655) (882,149) (393,736) (978,617) (654,171) (799,990) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 ========== ========== ========== ========= ========== ========== ========== 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 3,337,478 836,252 3,915,991 1,398,854 581,796 1,553,632 1,037,887 1,173,122 (1,078,946) (2,979,500) (1,244,173) (520,764) (846,601) (548,501) (1,155,828) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,772 ========== ========== ========== ========= ========== ========== ==========
F-103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
LEHMAN BROTHERS MORGAN STANLEY RUSSELL 2000 JENNISON AGGREGATE BOND EAFE INDEX INDEX GROWTH INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- -------------- ------------ ---------- Outstanding at December, 2005... 5,619,973 3,464,106 2,619,288 1,297,642 Activity during 2006: Issued........................ 3,458,933 2,413,387 1,598,139 1,435,002 Redeemed...................... (3,020,357) (2,084,948) (1,332,683) (1,375,854) ---------- ---------- ---------- ---------- Outstanding at December 31, 2006 6,058,549 3,792,545 2,884,744 1,356,790 ========== ========== ========== ========== Outstanding at December, 2004... 4,812,639 3,014,776 2,380,540 -- Activity during 2005: Issued........................ 1,885,856 1,268,548 809,404 1,299,954 Redeemed...................... (1,078,522) (819,218) (570,656) (2,312) ---------- ---------- ---------- ---------- Outstanding at December 31, 2005 5,619,973 3,464,106 2,619,288 1,297,642 ========== ========== ========== ========== Outstanding at December, 2003... 4,063,920 2,675,762 2,084,869 -- Activity during 2004: Issued........................ 2,029,620 1,731,659 1,029,824 -- Redeemed...................... (1,280,901) (1,392,645) (734,153) -- ---------- ---------- ---------- ---------- Outstanding at December 31, 2004 4,812,639 3,014,776 2,380,540 -- ========== ========== ========== ==========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-104
FRANKLIN BLACKROCK BLACKROCK BLACKROCK METLIFE MID CAP TEMPLETON SMALL LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE STRATEGIC VALUE STOCK INDEX CAP GROWTH VALUE VENTURE VALUE SMALL CAP CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- --------------- --------------- ---------- ------------- ------------- ------------ 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 2,369,030 1,900,659 358,131 614,025 934,602 62,838 396,179 (2,360,184) (1,616,392) (294,156) (401,224) (1,373,159) (24,543) (1,407,052) ---------- ---------- -------- -------- ---------- ------- ---------- 4,494,782 3,270,208 538,941 608,908 1,301,427 78,273 190,308 ========== ========== ======== ======== ========== ======= ========== 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 1,327,411 949,998 163,769 238,963 643,359 13,626 506,273 (1,005,489) (622,167) (128,927) (113,868) (269,331) (11,195) (156,106) ---------- ---------- -------- -------- ---------- ------- ---------- 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 ========== ========== ======== ======== ========== ======= ========== 3,371,798 2,338,101 328,803 102,570 1,321,574 30,184 721,385 1,705,456 1,211,510 240,018 263,903 446,367 16,531 210,673 (913,240) (891,501) (128,697) (95,461) (401,985) (9,168) (81,044) ---------- ---------- -------- -------- ---------- ------- ---------- 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 ========== ========== ======== ======== ========== ======= ==========
F-105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
MFS BLACKROCK FI VALUE HARRIS OAKMARK INVESTORS TRUST BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (A) DIVISION DIVISION DIVISION --------------- ----------- ---------- -------------- Outstanding at December, 2005..................... 425,864 5,010,744 248,972 182,165 Activity during 2006: Issued........................................... 418 2,023,116 471,583 130,546 Redeemed......................................... (426,282) (2,365,859) (326,720) (121,182) -------- ---------- -------- -------- Outstanding at December 31, 2006.................. -- 4,668,001 393,835 191,529 ======== ========== ======== ======== Outstanding at December, 2004..................... 366,699 4,716,266 101,071 153,755 Activity during 2005: Issued........................................... 159,329 1,284,065 221,903 71,513 Redeemed......................................... (100,164) (989,587) (74,002) (43,103) -------- ---------- -------- -------- Outstanding at December 31, 2005.................. 425,864 5,010,744 248,972 182,165 ======== ========== ======== ======== Outstanding at December, 2003..................... 185,958 5,516,605 48,986 115,343 Activity during 2004: Issued........................................... 271,608 1,298,199 78,162 73,501 Redeemed......................................... (90,867) (2,098,538) (26,077) (35,089) -------- ---------- -------- -------- Outstanding at December 31, 2004.................. 366,699 4,716,266 101,071 153,755 ======== ========== ======== ========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-106
WESTERN ASSET METLIFE MANAGEMENT WESTERN ASSET METLIFE CONSERVATIVE TO STRATEGIC BOND MANAGEMENT BLACKROCK MFS CONSERVATIVE MODERATE METLIFE MODERATE OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN ALLOCATION ALLOCATION ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION -------------- --------------- ------------ ------------ ------------ --------------- ---------------- 843,296 879,572 1,760,759 190,293 53,570 65,370 165,720 946,567 760,575 2,526,901 495,889 137,937 243,072 1,073,164 (790,924) (651,391) (711,901) (388,752) (147,379) (146,539) (463,746) -------- -------- --------- -------- -------- -------- --------- 998,939 988,756 3,575,759 297,430 44,128 161,903 775,138 ======== ======== ========= ======== ======== ======== ========= 595,935 705,185 1,880,485 69,569 -- -- -- 474,609 399,842 380,493 201,331 53,570 65,370 165,720 (227,248) (225,455) (500,219) (80,607) -- -- -- -------- -------- --------- -------- -------- -------- --------- 843,296 879,572 1,760,759 190,293 53,570 65,370 165,720 ======== ======== ========= ======== ======== ======== ========= 374,682 559,100 1,760,371 -- -- -- -- 412,201 424,585 965,141 78,820 -- -- -- (190,948) (278,500) (845,027) (9,251) -- -- -- -------- -------- --------- -------- -------- -------- --------- 595,935 705,185 1,880,485 69,569 -- -- -- ======== ======== ========= ======== ======== ======== =========
F-107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
METLIFE JANUS ASPEN METLIFE MODERATE AGGRESSIVE LARGE CAP TO AGGRESSIVE ALLOCATION FI LARGE CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) DIVISION ---------------- ---------- ------------ ----------- Outstanding at December, 2005..................... 249,839 49,908 -- 563,653 Activity during 2006: Issued........................................... 1,395,647 388,486 11,244 80,037 Redeemed......................................... (547,053) (213,120) (5,197) (48,639) --------- -------- ------ ------- Outstanding at December 31, 2006.................. 1,098,433 225,274 6,047 595,051 ========= ======== ====== ======= Outstanding at December, 2004..................... -- -- -- 509,009 Activity during 2005: Issued........................................... 249,839 49,908 -- 87,782 Redeemed......................................... -- -- -- (33,138) --------- -------- ------ ------- Outstanding at December 31, 2005.................. 249,839 49,908 -- 563,653 ========= ======== ====== ======= Outstanding at December, 2003..................... -- -- -- 435,309 Activity during 2004: Issued........................................... -- -- -- 109,707 Redeemed......................................... -- -- -- (36,007) --------- -------- ------ ------- Outstanding at December 31, 2004.................. -- -- -- 509,009 ========= ======== ====== =======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-108
AIM V.I. AIM V.I. FRANKLIN JANUS ASPEN JANUS ASPEN AIM V.I. AIM V.I. GOVERNMENT GLOBAL TEMPLETON BALANCED FORTY CORE STOCK CORE EQUITY SECURITIES REAL ESTATE FOREIGN SECURITIES INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (A) DIVISION (B) DIVISION DIVISION DIVISION ----------- ----------- ------------ ------------ ---------- ----------- ------------------ 187 -- 21,852 -- 769 63,997 488,477 20 8,253 124 25,387 -- 11,212 66,725 (28) (299) (21,976) (228) (78) (5,030) (83,483) --- ----- ------- ------ ----- ------- -------- 179 7,954 -- 25,159 691 70,179 471,719 === ===== ======= ====== ===== ======= ======== 22 -- 23,651 -- 420 54,709 444,204 171 -- 4,977 -- 1,092 25,913 97,898 (6) -- (6,776) -- (743) (16,625) (53,625) --- ----- ------- ------ ----- ------- -------- 187 -- 21,852 -- 769 63,997 488,477 === ===== ======= ====== ===== ======= ======== -- -- 18,859 -- -- 10,108 403,047 23 -- 5,644 -- 428 54,984 183,668 (1) -- (852) -- (8) (10,383) (142,511) --- ----- ------- ------ ----- ------- -------- 22 -- 23,651 -- 420 54,709 444,204 === ===== ======= ====== ===== ======= ========
F-109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
FRANKLIN MUTUAL FIDELITY VIP DISCOVERY ALLIANCEBERNSTEIN FIDELITY VIP ASSET MANAGER SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION --------------- ----------------- ------------ ------------- Outstanding at December, 2005..................... 9,138 8,553 74,414 80,752 Activity during 2006: Issued........................................... 47,509 6,356 104,221 26,178 Redeemed......................................... (1,767) (3,141) (27,231) (4,770) ------ ------ ------- ------- Outstanding at December 31, 2006.................. 54,880 11,768 151,404 102,160 ====== ====== ======= ======= Outstanding at December, 2004..................... -- 4,324 77,301 83,331 Activity during 2005: Issued........................................... 9,276 4,400 24,890 24,061 Redeemed......................................... (138) (171) (27,777) (26,640) ------ ------ ------- ------- Outstanding at December 31, 2005.................. 9,138 8,553 74,414 80,752 ====== ====== ======= ======= Outstanding at December, 2003..................... -- 10,005 97,404 53,872 Activity during 2004: Issued........................................... -- 1,377 19,035 37,333 Redeemed......................................... -- (7,058) (39,138) (7,874) ------ ------ ------- ------- Outstanding at December 31, 2004.................. -- 4,324 77,301 83,331 ====== ====== ======= =======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-110
FIDELITY VIP AMERICAN FUNDS INVESTMENT FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS T. ROWE PRICE GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME CAPITALIZATION BOND MID-CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION DIVISION DIVISION DIVISION DIVISION (B) DIVISION ------------ ------------- -------------- -------------- -------------- -------------- -------------- 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 1,406 30,655 867,857 919,357 1,590,658 77,194 1,200,709 (1,221) (1,894) (671,607) (726,327) (1,157,560) (13,780) (993,873) ------ ------- --------- --------- ---------- ------- --------- 3,341 30,951 1,094,384 1,228,077 1,521,701 63,414 1,338,870 ====== ======= ========= ========= ========== ======= ========= 1,268 928 656,749 811,401 676,191 -- 856,351 2,025 19,013 429,219 460,047 728,909 -- 562,461 (137) (17,751) (187,834) (236,401) (316,497) -- (286,778) ------ ------- --------- --------- ---------- ------- --------- 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 ====== ======= ========= ========= ========== ======= ========= -- -- 417,055 524,999 377,860 -- 526,964 1,268 928 378,500 469,450 517,429 -- 519,499 -- -- (138,806) (183,048) (219,098) -- (190,112) ------ ------- --------- --------- ---------- ------- --------- 1,268 928 656,749 811,401 676,191 -- 856,351 ====== ======= ========= ========= ========== ======= =========
F-111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------- ------------ ---------- -------------- Outstanding at December, 2005..................... 294,106 1,849,249 1,334,943 1,085,144 Activity during 2006: Issued........................................... 541,071 1,580,219 1,036,397 609,507 Redeemed......................................... (268,584) (1,390,083) (975,767) (531,845) -------- ---------- --------- --------- Outstanding at December 31, 2006.................. 566,593 2,039,385 1,395,573 1,162,806 ======== ========== ========= ========= Outstanding at December, 2004..................... 234,898 1,483,392 1,273,073 1,015,708 Activity during 2005: Issued........................................... 152,985 818,646 518,666 328,926 Redeemed......................................... (93,776) (452,789) (456,796) (259,490) -------- ---------- --------- --------- Outstanding at December 31, 2005.................. 294,106 1,849,249 1,334,943 1,085,144 ======== ========== ========= ========= Outstanding at December, 2003..................... 151,293 1,041,644 932,206 963,357 Activity during 2004: Issued........................................... 415,775 865,523 888,971 444,003 Redeemed......................................... (332,170) (423,775) (548,104) (391,652) -------- ---------- --------- --------- Outstanding at December 31, 2004.................. 234,898 1,483,392 1,273,073 1,015,708 ======== ========== ========= =========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-112
LAZARD MET/AIM HARRIS OAKMARK LEGG MASON LORD ABBETT NEUBERGER BERMAN LORD ABBETT MID-CAP SMALL CAP GROWTH INTERNATIONAL AGGRESSIVE GROWTH GROWTH AND INCOME REAL ESTATE MID-CAP VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ---------------- -------------- ----------------- ----------------- ---------------- ------------- 226,296 129,221 636,793 844,525 342,402 503,432 2,543 244,858 152,658 1,213,847 564,765 529,241 1,259,740 710 (209,390) (111,085) (790,150) (500,364) (348,220) (823,708) (265) -------- -------- --------- -------- -------- --------- ----- 261,764 170,794 1,060,490 908,926 523,423 939,464 2,988 ======== ======== ========= ======== ======== ========= ===== 171,772 101,110 289,245 741,720 280,704 151,740 21 136,196 72,111 536,478 290,526 78,527 536,011 2,575 (81,672) (44,000) (188,930) (187,721) (16,829) (184,319) (53) -------- -------- --------- -------- -------- --------- ----- 226,296 129,221 636,793 844,525 342,402 503,432 2,543 ======== ======== ========= ======== ======== ========= ===== 91,521 60,439 71,528 582,357 199,532 -- -- 171,923 79,501 431,218 350,165 93,825 172,116 22 (91,672) (38,830) (213,501) (190,802) (12,653) (20,376) (1) -------- -------- --------- -------- -------- --------- ----- 171,772 101,110 289,245 741,720 280,704 151,740 21 ======== ======== ========= ======== ======== ========= =====
F-113 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
OPPENHEIMER THIRD AVENUE CAPITAL LEGG MASON SMALL CAP APPRECIATION VALUE EQUITY CYCLICAL GROWTH VALUE INVESTMENT INVESTMENT INVESTMENT ETF INVESTMENT DIVISION DIVISION DIVISION (B) DIVISION (B) ---------------- ------------ ------------ --------------- Outstanding at December, 2005..................... 2,073 10,588 -- -- Activity during 2006: Issued........................................... 16,123 48,969 548,298 18,885 Redeemed......................................... (702) (31,761) (57,410) (2,490) ------ ------- ------- ------ Outstanding at December 31, 2006.................. 17,494 27,796 490,888 16,395 ====== ======= ======= ====== Outstanding at December, 2004..................... 366 -- -- -- Activity during 2005: Issued........................................... 1,821 13,476 -- -- Redeemed......................................... (114) (2,888) -- -- ------ ------- ------- ------ Outstanding at December 31, 2005.................. 2,073 10,588 -- -- ====== ======= ======= ====== Outstanding at December, 2003..................... -- -- -- -- Activity during 2004: Issued........................................... 373 -- -- -- Redeemed......................................... (7) -- -- -- ------ ------- ------- ------ Outstanding at December 31, 2004.................. 366 -- -- -- ====== ======= ======= ======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-114
DREYFUS CYCLICAL GROWTH PIMCO INFLATION DELAWARE DREYFUS EMERGING DREYFUS AND INCOME ETF PROTECTED BOND AMERICAN CENTURY SMALL CAP VALUE MIDCAP STOCK LEADERS INTERNATIONAL VALUE INVESTMENT INVESTMENT VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION (B) DIVISION DIVISION DIVISION DIVISION DIVISION --------------- --------------- ---------------- --------------- ------------ ---------- ------------------- -- -- 1,252 9,876 -- 916 14,559 12,571 33,652 761 25,950 8,296 43 32,872 (1,696) (20,930) (50) (3,915) (300) (28) (2,233) ------ ------- ----- ------ ----- --- ------- 10,875 12,722 1,963 31,911 7,996 931 45,198 ====== ======= ===== ====== ===== === ======= -- -- -- -- -- -- 1,371 -- -- 1,295 10,566 -- 940 25,402 -- -- (43) (690) -- (24) (12,214) ------ ------- ----- ------ ----- --- ------- -- -- 1,252 9,876 -- 916 14,559 ====== ======= ===== ====== ===== === ======= -- -- -- -- -- -- -- -- -- -- -- -- -- 1,371 -- -- -- -- -- -- -- ------ ------- ----- ------ ----- --- ------- -- -- -- -- -- -- 1,371 ====== ======= ===== ====== ===== === =======
F-115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONCLUDED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
GOLDMAN SACHS GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------- ---------------- ---------- ---------- Outstanding at December, 2005..................... 3,769 4,239 6,238 -- Activity during 2006: Issued........................................... 15,229 2,659 8,397 1,849 Redeemed......................................... (637) (155) (7,897) (60) ------ ----- ------ ----- Outstanding at December 31, 2006.................. 18,362 6,743 6,738 1,789 ====== ===== ====== ===== Outstanding at December, 2004..................... 1,123 -- 4,700 -- Activity during 2005: Issued........................................... 9,745 4,244 1,719 -- Redeemed......................................... (7,099) (5) (181) -- ------ ----- ------ ----- Outstanding at December 31, 2005.................. 3,769 4,239 6,238 -- ====== ===== ====== ===== Outstanding at December, 2003..................... -- -- -- -- Activity during 2004: Issued........................................... 1,123 -- 4,700 -- Redeemed......................................... -- -- -- -- ------ ----- ------ ----- Outstanding at December 31, 2004.................. 1,123 -- 4,700 -- ====== ===== ====== =====
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-116
WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO VAN KAMPEN VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE GOVERNMENT TOTAL RETURN BOND MONEY MARKET ASSET ALLOCATION LARGE COMPANY EQUITY INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT GROWTH INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ----------------- ------------ ---------------- ----------------- ------------- 1,272 1,620 -- -- 772 727 701 4,733 93,909 1,099 18,861 -- (631) (800) (2,721) (192) (1,831) (74) ----- ----- ------ ----- ------ --- 1,342 5,553 91,188 907 17,802 653 ===== ===== ====== ===== ====== === -- -- -- -- 416 402 1,280 1,631 -- -- 464 422 (8) (11) -- -- (108) (97) ----- ----- ------ ----- ------ --- 1,272 1,620 -- -- 772 727 ===== ===== ====== ===== ====== === -- -- -- -- -- -- -- -- -- -- 424 410 -- -- -- -- (8) (8) ----- ----- ------ ----- ------ --- -- -- -- -- 416 402 ===== ===== ====== ===== ====== ===
F-117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
BLACKROCK BLACKROCK BLACKROCK METLIFE LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH STOCK INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ----------------- ------------------ 2006 Units................................... 16,009,494 13,096,726 11,198,297 33,607,228 Unit Fair Value, Lowest to Highest (1).. $13.85 to $42.25 $14.57 to $36.86 $15.63 to $22.09 $12.80 to $38.04 Net Assets.............................. $435,896,815 $331,432,719 $228,717,595 $707,564,793 Investment Income Ratio to Net Assets (2).................................... 1.30% 2.44% 0.00% 1.97% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 12.10% to 14.15% 7.38% to 10.53% 5.76% to 6.75% 8.73% to 15.48% 2005 Units................................... 16,488,159 13,638,816 11,502,614 32,156,989 Unit Fair Value, Lowest to Highest (1).. $12.13 to $37.35 $13.18 to $33.65 $14.64 to $20.73 $11.08 to $33.24 Net Assets.............................. $401,557,280 $319,750,423 $222,219,970 $605,569,341 Investment Income Ratio to Net Assets (2).................................... 1.09% 1.57% 0.00% 1.56% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 2.67% to 3.59% 2.13% to 3.05% 9.72% to 10.70% 3.71% to 4.64% 2004 Units................................... 16,507,025 13,455,017 11,775,258 29,475,869 Unit Fair Value, Lowest to Highest (1).. $11.71 to $36.38 $12.79 to $32.95 $13.23 to $18.89 $10.59 to $32.05 Net Assets.............................. $399,816,513 $315,176,729 $207,749,362 $548,175,778 Investment Income Ratio to Net Assets (2).................................... 0.71% 1.83% 0.00% 0.83% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 9.87% to 10.86% 7.54% to 8.51% 11.97% to 12.98% 9.55% to 10.53% 2003 Units................................... 16,150,806 12,880,974 11,833,051 25,746,955 Unit Fair Value, Lowest to Highest (1).. $10.57 to $33.12 $11.79 to $30.64 $11.71 to $16.87 $9.58 to $29.26 Net Assets.............................. $367,087,301 $289,033,387 $187,268,373 $457,114,347 Investment Income Ratio to Net Assets (2).................................... 0.83% 3.73% 0.00% 1.65% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... 29.08% to 30.24% 19.48% to 20.56% 39.53% to 40.79% 27.06% to 28.20% 2002 Units................................... 15,059,725 12,267,711 11,447,188 22,139,983 Unit Fair Value, Lowest to Highest (1).. $8.11 to $25.66 $9.78 to $25.64 $8.32 to $12.09 $7.48 to $23.03 Net Assets.............................. $276,979,969 $238,020,353 $130,815,618 $326,227,963 Investment Income Ratio to Net Assets (2).................................... 0.54% 2.27% 0.00% 0.82% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... -27.00% to -26.00% -15.00% to -14.00% -29.00% -23.00% to -22.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-118
FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE FI INTERNATIONAL OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH STOCK INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ------------------ ------------------ ------------------ ---------------- ----------------- 3,412,213 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 $15.68 to $21.90 $7.97 to $22.36 $15.76 to $17.80 $20.38 to $22.70 $14.65 to $18.40 $20.75 to $29.66 $10.63 to $16.09 $67,509,144 $271,463,672 $81,812,746 $48,944,535 $64,292,839 $77,735,349 $49,315,573 1.40% 0.01% 0.00% 2.49% 0.77% 0.48% 0.33% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 14.38% to 16.49% 10.85% to 28.32% 2.96% to 3.93% 11.00% to 16.59% 16.70% to 18.14% 10.46% to 11.46% 12.21% to 13.23% 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 $13.71 to $18.97 $7.12 to $20.08 $8.20 to $17.21 $17.48 to $19.47 $12.55 to $15.72 $18.79 to $26.61 $6.84 to $14.21 $56,855,714 $247,745,972 $80,632,046 $41,604,796 $54,445,434 $63,152,395 $41,950,019 0.60% 0.00% 0.00% 0.55% 0.70% 0.29% 0.54% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 16.95% to 18.00% 5.97% to 6.92% 10.02% to 11.01% 15.19% to 16.22% -2.26% to -1.38% 11.27% to 12.27% 4.12% to 6.59% 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,771 $11.67 to $16.22 $6.66 to $18.87 $7.41 to $15.57 $15.04 to $16.76 $12.79 to $16.08 $16.88 to $23.70 $6.47 to $13.33 $48,075,000 $229,326,208 $72,034,034 $34,182,477 $51,133,000 $47,215,000 $36,962,724 1.32% 0.53% 0.00% 1.52% 0.49% 0.23% 0.21% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 17.14% to 18.19% 16.15% to 17.19% 9.58% to 11.08% 15.38% to 16.42% 10.42% to 11.42% 21.81% to 22.91% 2.91% to 9.93% 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 3,337,477 $9.92 to $13.85 $5.69 to $16.17 $6.76 to $14.08 $12.92 to $14.39 $11.53 to $14.56 $13.86 to $19.29 $6.27 to $12.13 $43,984,289 $184,078,088 $63,188,807 $28,695,718 $37,503,629 $30,945,551 $33,816,692 0.65% 0.00% 0.00% 2.04% 0.00% 0.32% 0.11% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% 0.60% to 0.90% 26.90% to 28.04% 33.38% to 35.10% 37.24% to 40.87% 29.29% to 30.45% 24.38% to 25.49% 35.30% to 36.52% 29.64% to 32.78% 3,295,967 11,520,986 4,424,009 1,978,122 2,346,360 1,567,159 2,881,316 $7.78 to $10.91 $4.22 to $12.07 $4.93 to $10.04 $9.90 to $11.03 $9.23 to $11.71 $10.24 to $14.13 $4.72 to $9.27 $32,966,098 $119,019,575 $40,681,000 $20,475,933 $23,072,554 $18,285,822 $22,228,496 0.89% 0.00% 0.00% 1.68% 0.81% 0.10% 0.26% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -18.00% to -17.00% -30.00% to -29.00% -29.00% to -27.00% -17.00% to -16.00% -15.00% to -14.00% -10.00% -30.00% to 23.00%
F-119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
LEHMAN BROTHERS MORGAN STANLEY RUSSELL 2000 JENNISON AGGREGATE BOND EAFE INDEX INDEX GROWTH INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION (A) ---------------- ---------------- ------------------ ---------------- 2006 Units................................... 6,058,549 3,792,545 2,884,744 1,356,790 Unit Fair Value, Lowest to Highest (1).. $13.75 to $15.13 $13.02 to $17.67 $15.20 to $21.19 $5.81 to $12.52 Net Assets.............................. $90,417,327 $58,401,764 $55,288,989 $14,099,259 Investment Income Ratio to Net Assets (2).................................... 4.29% 1.70% 0.81% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... -0.88% to 4.15% 23.03% to 25.75% 12.11% to 17.99% 1.88% to 2.82% 2005 Units................................... 5,619,973 3,464,106 2,619,288 1,147,750 Unit Fair Value, Lowest to Highest (1).. $13.32 to $14.53 $10.45 to $14.05 $13.00 to $17.96 $5.65 to $12.19 Net Assets.............................. $80,547,413 $42,457,559 $42,636,846 $13,084,245 Investment Income Ratio to Net Assets (2).................................... 3.76% 1.59% 0.74% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 1.16% to 2.06% 12.24% to 13.24% 3.57% to 4.50% 20.77% to 21.49% 2004 Units................................... 4,812,639 3,014,776 2,380,540 -- Unit Fair Value, Lowest to Highest (1).. $13.17 to $14.23 $9.31 to $12.41 $12.55 to $17.19 $-- Net Assets.............................. $67,709,808 $32,551,579 $37,085,761 $-- Investment Income Ratio to Net Assets (2).................................... 3.00% 0.71% 0.44% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 3.17% to 4.10% 18.58% to 19.64% 16.71% to 17.77% -- 2003 Units................................... 4,063,920 2,675,762 2,084,869 -- Unit Fair Value, Lowest to Highest (1).. $12.77 to $13.67 $7.85 to $10.37 $10.75 to $14.59 $-- Net Assets.............................. $54,994,307 $24,290,177 $27,726,279 $-- Investment Income Ratio to Net Assets (2).................................... 5.25% 1.48% 0.63% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 2.71% to 3.63% 36.41% to 37.70% 44.77% to 46.07% -- 2002 Units................................... 4,147,462 2,043,759 1,614,358 -- Unit Fair Value, Lowest to Highest (1).. $12.43 to $13.19 $5.76 to $7.53 $7.43 to $9.99 $-- Net Assets.............................. $54,046,288 $13,496,072 $14,828,534 $-- Investment Income Ratio to Net Assets (2).................................... 2.81% 0.49% 0.54% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 9.00% to 10.00% -17.00% -21.00% to -20.00% 0.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-120
FRANKLIN BLACKROCK BLACKROCK BLACKROCK METLIFE MID CAP TEMPLETON SMALL LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE STRATEGIC VALUE STOCK INDEX CAP GROWTH VALUE VENTURE VALUE SMALL CAP CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ---------------- ---------------- ------------------ ----------------- --------------- 4,494,782 3,270,208 538,941 608,908 1,301,427 78,273 190,308 $21.68 to $23.68 $15.84 to $17.39 $11.33 to $11.92 $8.29 to $15.57 $13.90 to $40.33 $13.47 to $298.24 $8.29 to $12.45 $105,414,517 $56,090,136 $6,368,294 $9,397,259 $49,859,713 $12,333,660 $2,269,333 0.31% 1.19% 0.00% 1.17% 0.85% 0.00% 0.16% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 15.68% to 16.74% 9.11% to 10.09% 9.07% to 10.05% 18.29% to 19.30% 13.55% to 14.62% 15.64% to 16.72% 3.23% to 4.13% 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 $18.58 to $20.28 $14.39 to $15.80 $8.20 to $10.83 $12.63 to $13.05 $12.13 to $35.19 $11.54 to $255.61 $7.96 to $11.96 $90,122,911 $46,523,277 $5,108,051 $5,137,144 $43,993,114 $8,114,417 $10,109,046 0.00% 0.67% 0.00% 0.88% 0.65% 0.00% 0.39% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 3.23% to 4.15% 11.28% to 12.27% 3.72% to 10.71% 5.04% to 5.98% 9.32% to 10.30% 6.00% to 6.96% 6.05% to 7.00% 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 $17.84 to $19.48 $12.82 to $14.07 $10.01 to $10.35 $12.02 to $12.31 $11.00 to $31.91 $10.79 to $238.98 $7.44 to $11.17 $80,342,000 $36,885,384 $4,527,432 $3,320,893 $31,374,337 $6,406,000 $6,457,524 0.00% 0.48% 0.00% 0.00% 0.54% 0.00% 0.00% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 14.31% to 15.34% 15.01% to 16.05% 10.41% to 11.41% 12.39% to 13.40% 11.36% to 12.37% 15.31% to 16.35% 8.81% to 11.74% 3,371,798 2,338,101 328,803 102,570 1,321,574 30,184 721,385 $15.46 to $16.89 $11.04 to $12.13 $9.07 to $9.29 $10.70 to $10.86 $9.79 to $28.40 $9.27 to $205.39 $6.84 $56,539,662 $27,924,887 $3,038,000 $1,110,128 $24,429,495 $4,422,939 $4,933,432 0.00% 0.46% 0.00% 1.37% 0.37% 0.00% 0.06% 0.60% to 0.90% 0.60% to 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% to 0.90% 0.60% 48.80% to 50.14% 33.76% to 34.96% 43.64% to 44.93% 34.47% to 35.68% 29.70% to 30.87% 35.25% to 36.47% 35.15% 2,598,639 1,762,240 197,685 23,496 900,662 18,232 589,478 $10.30 to $11.25 $8.18 to $8.98 $6.31 to $6.41 $7.96 to $8.00 $7.48 to $21.70 $6.80 to $150.51 $5.06 $29,060,558 $15,567,957 $1,268,000 $188,913 $13,430,192 $2,408,393 $2,982,730 0.06% 0.35% 0.00% 0.92% 0.88% 0.11% 0.00% 0.50% to 0.90% 0.50% to 0.90% 0.90% 0.90% 0.50% to 0.90% 0.50% to 0.90% 0.60% -22.00% to -21.00% -16.00% to -15.00% -28.00% -20.00% -17.00% to -16.00% -22.00% -33.00%
F-121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
MFS BLACKROCK FI VALUE HARRIS OAKMARK INVESTORS TRUST BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION DIVISION DIVISION ------------------ ---------------- ------------------ ------------------ 2006 Units................................... -- 4,668,001 393,835 191,529 Unit Fair Value, Lowest to Highest (1).. $-- $14.39 to $29.48 $11.79 to $14.87 $290.84 to $305.98 Net Assets.............................. $-- $92,311,177 $5,778,898 $58,176,504 Investment Income Ratio to Net Assets (2).................................... 1.09% 5.74% 1.00% 0.30% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 17.49% to 21.04% -2.17% to 4.43% 10.97% to 11.91% 11.45% to 12.45% 2005 Units................................... 425,864 5,010,744 248,972 182,165 Unit Fair Value, Lowest to Highest (1).. $9.51 to $9.95 $13.78 to $28.49 $10.54 to $13.29 $260.95 to $272.09 Net Assets.............................. $4,216,736 $94,693,129 $3,262,874 $49,251,761 Investment Income Ratio to Net Assets (2).................................... 0.76% 3.93% 1.04% 0.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 6.32% to 7.27% 1.50% to 2.41% 9.71% to 10.69% 9.00% to 9.98% 2004 Units................................... 366,699 4,716,266 101,071 153,755 Unit Fair Value, Lowest to Highest (1).. $8.87 to $9.28 $13.46 to $28.07 $9.52 to $12.01 $239.40 to $247.40 Net Assets.............................. $3,387 $89,174,083 $1,190,557 $37,844,733 Investment Income Ratio to Net Assets (2).................................... 0.39% 4.09% 1.10% 0.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 10.37% to 11.37% 3.50% to 4.43% 12.71% to 13.73% 8.95% to 9.93% 2003 Units................................... 185,957 5,516,605 48,986 115,343 Unit Fair Value, Lowest to Highest (1).. $7.96 to $8.33 $12.89 to $27.12 $8.37 to $10.56 $219.73 to $225.05 Net Assets.............................. $1,544 $96,719,590 $505,283 $25,865,638 Investment Income Ratio to Net Assets (2).................................... 0.25% 3.06% 0.52% 0.12% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.60% to 0.90% 0.60% to 0.90% 0.60% to .90% 0.90% Total Return, Lowest to Highest (4)..... 20.76% to 21.85% 4.91% to 5.85% 25.79% to 26.92% 31.47% to 32.66% 2002 Units................................... 103,733 5,564,010 11,904 76,067 Unit Fair Value, Lowest to Highest (1).. $6.54 to $6.84 $12.18 to $25.85 $6.59 to $8.32 $167.13 to $169.65 Net Assets.............................. $694 $93,157,932 $92,898 $12,878,533 Investment Income Ratio to Net Assets (2).................................... 0.72% 5.72% 0.89% 0.18% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.60% to 0.90% 0.60% to 0.90% 0.60% to .90% 0.90% Total Return, Lowest to Highest (4)..... -21.00% to -20.00% 7.00% to 8.00% -19.00% to -17.00% -10.00% to -9.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-122
WESTERN ASSET METLIFE MANAGEMENT WESTERN ASSET METLIFE CONSERVATIVE TO STRATEGIC BOND MANAGEMENT BLACKROCK MFS CONSERVATIVE MODERATE METLIFE MODERATE OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN ALLOCATION ALLOCATION ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 998,939 988,756 3,575,759 297,430 44,128 161,903 775,138 $15.16 to $15.95 $13.62 to $14.33 $16.57 to $16.87 $12.47 to $12.77 $11.00 to $11.17 $11.51 to $11.68 $12.01 to $12.19 $15,802,133 $14,050,390 $59,328,821 $3,781,921 $492,252 $ 1,884,052 $9,406,274 4.79% 3.26% 4.81% 3.21% 2.90% 2.36% 1.48% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% 0.90% 0.90% 4.10% to 5.04% 3.25% to 4.19% 3.86% to 4.82% 11.19% to 12.18% 6.27% to 7.27% 8.80% to 9.74% 11.20% to 12.19% 843,296 879,572 1,760,759 190,293 11,372 54,464 133,610 $14.56 to $15.19 $13.19 to $13.75 $12.92 to $16.24 $11.21 to $11.68 $10.35 to $10.41 $10.58 to $10.64 $10.80 to $10.87 $12,708,706 $12,014,309 $28,027,973 $2,159,396 $118,225 $ 578,511 $1,449,435 3.01% 1.33% 2.78% 1.64% 0.63% 0.77% 0.83% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% 0.90% 0.90% 1.92% to 2.83% 0.82% to 1.72% 1.97% to 2.89% 2.20% to 7.66% 3.51% to 4.13% 5.80% to 6.43% 8.02% to 8.66% 595,935 705,185 1,880,485 69,569 -- -- -- $14.29 to $14.77 $13.08 to $13.52 $15.36 to $15.93 $10.85 to $11.04 $-- $-- $-- $8,742,547 $9,478,138 $29,162,123 $767,164 $-- $-- $-- 2.66% 1.25% 1.03% 0.00% -- -- -- 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% -- -- -- 5.66% to 6.61% 2.09% to 3.01% 0.08% to 0.99% 8.52%% to 10.39% -- -- -- 374,682 559,100 1,760,371 -- -- -- -- $13.52 to $13.85 $12.82 to $13.13 $15.21 to $15.92 $-- $-- $-- $-- $5,163,069 $7,304,902 $27,346,427 $-- $-- $-- $-- 1.70% 0.62% 0.78% -- -- -- -- 0.90% 0.90% 0.60% to 0.90% -- -- -- -- 11.62% to 12.62% 0.77% to 1.68% -0.09% to 0.81% -- -- -- -- 177,044 340,014 1,980,526 -- -- -- -- $12.12 to $12.30 $12.72 to $12.91 $13.09 to $15.93 $-- $-- $-- $-- $2,173,663 $4,365,410 $30,811,000 $-- $-- $-- $-- 6.33% 2.20% 1.57% -- -- -- -- 0.90% 0.90% 0.45% to 0.90% -- -- -- -- 9.00% to 10.00% 7.00% to 8.00% 0.00% to 1.00% -- -- -- --
F-123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
METLIFE MODERATE METLIFE TO AGGRESSIVE AGGRESSIVE ALLOCATION ALLOCATION FI LARGE CAP INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) ---------------- ---------------- ---------------- 2006 Units............................................................. 1,098,433 225,274 6,047 Unit Fair Value, Lowest to Highest (1)............................ $12.52 to $12.71 $12.89 to $13.08 $10.16 to $10.22 Net Assets........................................................ $ 13,918,465 $2,934,559 $61,685 Investment Income Ratio to Net Assets (2)......................... 1.07% 0.67% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% 0.90% 0.90% Total Return, Lowest to Highest (4)............................... 13.54% to 14.57% 15.05% to 16.04% 1.60% to 2.20% 2005 Units............................................................. 212,022 40,224 -- Unit Fair Value, Lowest to Highest (1)............................ $11.03 to $11.09 $11.20 to $11.27 $-- Net Assets........................................................ $ 2,349,403 $452,673 $-- Investment Income Ratio to Net Assets (2)......................... 0.77% 0.73% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% 0.90% -- Total Return, Lowest to Highest (4)............................... 10.28% to 10.94% 12.05% to 12.72% -- 2004 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2003 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2002 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- --
JANUS ASPEN LARGE CAP GROWTH INVESTMENT DIVISION -------------- 2006 Units............................................................. 595,051 Unit Fair Value, Lowest to Highest (1)............................ $9.75 Net Assets........................................................ $5,801,609 Investment Income Ratio to Net Assets (2)......................... 0.49% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 11.38% 2005 Units............................................................. 563,653 Unit Fair Value, Lowest to Highest (1)............................ $8.75 Net Assets........................................................ $4,934,074 Investment Income Ratio to Net Assets (2)......................... 0.33% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 4.29% 2004 Units............................................................. 509,009 Unit Fair Value, Lowest to Highest (1)............................ $8.39 Net Assets........................................................ $4,276,635 Investment Income Ratio to Net Assets (2)......................... 0.15% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 4.52% 2003 Units............................................................. 435,309 Unit Fair Value, Lowest to Highest (1)............................ $8.03 Net Assets........................................................ $3,499,893 Investment Income Ratio to Net Assets (2)......................... 0.10% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.60% Total Return, Lowest to Highest (4)............................... 31.73% 2002 Units............................................................. 354,373 Unit Fair Value, Lowest to Highest (1)............................ $6.10 Net Assets........................................................ $2,163,422 Investment Income Ratio to Net Assets (2)......................... 0.03% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.60% Total Return, Lowest to Highest (4)............................... -27.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-124
AIM V.I. AIM V.I. FRANKLIN JANUS ASPEN JANUS AIM V.I. AIM V.I. GOVERNMENT GLOBAL TEMPLETON BALANCED FORTY CORE STOCK CORE EQUITY SECURITIES REAL ESTATE FOREIGN SECURITIES INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (A) DIVISION (B) DIVISION DIVISION DIVISION ----------- ---------- ------------ ------------ ---------- -------------- ------------------ 179 7,954 -- 25,159 691 70,179 471,719 $12.90 $14.00 $-- $15.30 $11.08 $39.37 $16.03 $2,311 $111,362 $-- $384,843 $7,657 $2,762,613 $7,566,317 1.92% 0.14% 1.13% 0.50% 3.54% 1.18% 1.35% 0.48% 0.48% 0.48% 0.48% 0.40% 0.40% to 0.60% 0.48% to 0.60% 10.41% 9.11% 30.58% 36.32% 3.28% 42.62% 21.69% 187 -- 21,852 -- 769 63,997 488,477 $11.68 $-- $10.53 $-- $10.73 $27.61 $13.17 $2,186 $-- $230,117 $-- $8,255 $1,747,819 $6,438,080 2.07% -- 0.42% -- 3.80% 1.18% 1.22% 0.60% -- 0.48% -- 0.40% 0.40% to 0.60% 0.48% to 0.60% 7.66% -- 3.79% -- 4.57% 15.46% 10.48% 22 -- 23,651 -- 420 54,709 444,204 $10.85 $-- $10.15 $-- $10.26 $23.91 $11.92 $237 $-- $239,919 $-- $4,310 $1,308,000 $5,300,000 3.38% -- 0.96% -- 1.40% 1.25% 1.12% 0.60% -- 0.48% -- 0.40% 0.40% to 0.60% 0.48% to 0.60% 8.52% -- 4.24% -- 2.60% 34.40% 18.87% -- -- 18,859 -- -- 10,108 403,047 $-- $-- $9.73 $-- $-- $17.79 $10.03 $-- $-- $184,406 $-- $-- $178,608 $4,053,532 -- -- 1.26% -- -- 1.49% 1.52% -- -- 0.60% -- -- 0.60% 0.60% -- -- 22.60% -- -- 38.82% 32.55% -- -- 15,365 -- -- 14,055 344,105 $-- $-- $7.94 $-- $-- $12.82 $7.57 $-- $-- $125,063 $-- $-- $179,233 $2,612,034 -- -- 1.74% -- -- 1.40% 2.03% -- -- 0.60% -- -- 0.60% 0.60% -- -- -19.00% -- -- -6.00% -18.00%
F-125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
FRANKLIN MUTUAL FIDELITY VIP DISCOVERY ALLIANCEBERNSTIEN FIDELITY VIP ASSET MANAGER SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION DIVISION DIVISION --------------- ----------------- -------------- ------------- 2006 Units............................................................. 54,880 11,768 151,404 102,160 Unit Fair Value, Lowest to Highest (1)............................ $16.38 $5.36 $13.81 $9.40 Net Assets........................................................ $899,109 $63,091 $2,091,319 $958,076 Investment Income Ratio to Net Assets (2)......................... 0.99% 0.00% 1.15% 1.87% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.40% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... 23.03% 8.36% 11.57% 6.89% 2005 Units............................................................. 9,138 8,553 74,414 80,752 Unit Fair Value, Lowest to Highest (1)............................ $13.31 $4.95 $12.38 $8.79 Net Assets........................................................ $121,664 $42,308 $921,114 $708,401 Investment Income Ratio to Net Assets (2)......................... 1.34% 0.00% 0.21% 2.58% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.40% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... 15.97% 3.65% 16.85% 3.79% 2004 Units............................................................. -- 4,324 77,301 83,331 Unit Fair Value, Lowest to Highest (1)............................ $-- $4.77 $10.59 $8.47 Net Assets........................................................ $-- $20,636 $819 $704,000 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.21% 2.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.48% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... -- 5.09% 15.34% 5.85% 2003 Units............................................................. -- 10,005 97,404 53,872 Unit Fair Value, Lowest to Highest (1)............................ $-- $4.54 $9.18 $8.00 Net Assets........................................................ $-- $45,595 $894 $432,629 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.15% 2.96% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)............................... -- 43.79% 28.35% 23.15% 2002 Units............................................................. -- 5,945 34,844 19,894 Unit Fair Value, Lowest to Highest (1)............................ $-- $3.16 $7.16 $6.50 Net Assets........................................................ $-- $18,230 $249 $130,875 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.14% 3.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)............................... -- -42.00% -10.00% -18.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-126
FIDELITY VIP AMERICAN FUNDS INVESTMENT FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS T. ROWE PRICE GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME CAPITALIZATION BOND MID-CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION (D) DIVISION DIVISION DIVISION DIVISION (C) DIVISION -------------- -------------- ------------------ ------------------ ------------------ ---------------- ---------------- 3,341 30,951 1,094,384 1,228,077 1,521,701 63,414 1,338,870 $11.10 $14.00 $84.90 to $89.32 $49.83 to $52.43 $27.56 to $28.99 $10.12 to $10.18 $8.84 to $13.92 $36,978 $433,176 $97,034,740 $63,898,091 $43,642,742 $644,176 $12,401,292 4.18% 3.96% 0.86% 1.68% 0.46% 0.87% 0.00% 0.40% to 0.48% 0.40% to 0.48% 0.90% 0.90% 0.90% 0.90% 0.60% to 0.90% 4.28% 20.07% 9.24% to 10.22% 14.17% to 15.21% 22.97% to 24.05% 1.20% to 1.80% 5.66% to 6.60% 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 $10.64 $11.66 $77.72 to $81.04 $43.64 to $45.51 $22.41 to $23.37 $-- $8.37 to $13.11 $33,484 $25,408 $72,331,242 $46,794,725 $25,231,190 $-- $9,817,802 2.35% 1.05% 0.74% 1.44% 0.89% -- 0.00% 0.40% to 0.48% 0.40% to 0.48% 0.90% 0.90% 0.90% -- 0.60% to 0.90% 2.08% 5.76% 15.16% to 16.19% 4.89% to 5.83% 24.24% to 25.35% -- 13.85% to 14.87% 1,268 928 656,749 811,401 676,191 -- 856,351 $10.43 $11.02 $67.49 to $69.75 $41.61 to $43.00 $18.04 to $18.64 $-- $7.35 to $11.44 $13,121 $10,110 $45,571,772 $34,701,703 $12,527,867 $-- $6,475,187 0.00% 0.00% 0.20% 1.00% 0.00% -- 0.00% .40% .40% 0.90% 0.90% 0.90% -- 0.60% to 0.90% 4.27% 10.25% 11.49% to 12.50% 9.39% to 10.37% 19.80% to 20.88% -- 14.40% to 18.15% -- -- 417,055 524,999 377,860 -- 526,964 $-- $-- $60.53 to $62.00 $38.04 to $38.96 $15.06 to $15.42 $-- $6.28 to $6.43 $-- $-- $25,759,940 $20,368,911 $5,800,860 $-- $3,375,270 -- -- 0.13% 1.18% 0.49% -- 0.00% -- -- 0.90% 0.90% 0.90% -- 0.90% -- -- 35.59% to 36.81% 31.25% to 32.43% 52.16% to 53.53% -- 35.90% to 37.12% -- -- 221,157 286,757 202,753 -- 293,610 $-- $-- $44.64 to $45.32 $28.98 to $29.42 $9.90 to $10.05 $-- $4.62 to $4.69 $-- $-- $9,992,022 $8,407,501 $2,032,913 $-- $1,372,997 -- -- 0.05% 1.53% 0.81% -- 0.82% -- -- 0.90% 0.90% 0.90% -- 0.90% -- -- -25.00% to -24.00% -19.00% to -18.00% -20.00% to -19.00% -- -44.00%
F-127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- 2006 Units................................... 566,593 2,039,385 1,395,573 1,162,806 Unit Fair Value, Lowest to Highest (1).. $15.30 to $17.63 $13.16 to $13.85 $5.16 to $5.43 $14.77 to $18.05 Net Assets.............................. $9,803,525 $28,016,253 $7,523,569 $19,368,414 Investment Income Ratio to Net Assets (2).................................... 1.59% 2.73% 0.00% 6.71% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to .90% Total Return, Lowest to Highest (4)..... 25.80% to 26.90% 3.85% to 4.81% 4.51% to 5.47% 1.42% to 9.34% 2005 Units................................... 294,107 1,849,249 1,334,943 1,085,144 Unit Fair Value, Lowest to Highest (1).. $12.09 to $13.89 $12.67 to $13.21 $4.94 to $5.15 $13.96 to $16.51 Net Assets.............................. $4,058,072 $24,263,960 $6,824,691 $16,531,209 Investment Income Ratio to Net Assets (2).................................... 0.63% 0.06% 0.00% 4.70% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to .90% Total Return, Lowest to Highest (4)..... 6.38% to 16.77% 1.55% to 2.46% 10.36% to 11.35% 0.90% to 1.81% 2004 Units................................... 234,898 1,483,392 1,273,073 1,015,708 Unit Fair Value, Lowest to Highest (1).. $11.51 to $11.90 $12.48 to $12.90 $4.47 to 4.62 $10.84 to $16.22 Net Assets.............................. $2,780,832 $19,019,859 $5,849,160 $15,192,966 Investment Income Ratio to Net Assets (2).................................... 0.00% 7.63% 0.00% 3.51% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 18.65% to 19.72% 4.31% to 5.25% -5.13% to -4.28% 7.46% to 9.61% 2003 Units................................... 151,293 1,041,644 932,206 963,357 Unit Fair Value, Lowest to Highest (1).. $9.70 to $9.94 $11.96 to $12.25 $4.72 to $4.83 $9.21 to $14.95 Net Assets.............................. $1,497,220 $12,697,066 $4,480,813 $12,846,410 Investment Income Ratio to Net Assets (2).................................... 0.97% 1.48% 0.00% 1.85% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... 31.01% to 32.19% 3.59% to 4.52% 56.44% to 57.84% 17.17% to 25.04% 2002 Units................................... 95,230 533,674 415,928 812,767 Unit Fair Value, Lowest to Highest (1).. $7.41 to $7.52 $11.55 to $11.72 $3.01 to $3.06 $7.37 to $12.51 Net Assets.............................. $713,682 $6,213,682 $1,269,081 $9,072,240 Investment Income Ratio to Net Assets (2).................................... 0.25% 0.00% 0.00% 11.43% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% -2% to 0.90% Total Return, Lowest to Highest (4)..... -12.00% 9.00% to 10.00% -51.00% -1.00% to 1.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-128
LEGG MASON LORD ABBETT NEUBERGER LORD ABBETT LAZARD MET/AIM HARRIS OAKMARK AGGRESSIVE GROWTH AND BERMAN REAL MID-CAP MID-CAP SMALL CAP GROWTH INTERNATIONAL GROWTH INCOME ESTATE VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ---------------- ---------------- ---------------- ---------------- ---------------- -------------- 261,764 170,794 1,060,490 908,926 523,423 939,464 2,988 $14.85 to $15.48 $13.44 to $14.02 $19.54 to $20.37 $7.37 to $8.60 $11.20 $19.85 to $20.33 $14.25 $4,020,887 $2,376,804 $21,411,537 $7,744,433 $5,861,368 $18,987,194 $42,580 0.52% 0.00% 2.33% 0.00% 0.03% 1.01% 0.54% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.48% to 0.60% 6.62% to 14.86% 3.77% to 13.93% 28.05% to 29.18% -2.53% to -1.60% 18.05% 36.70% to 37.93% 12.16% 226,296 129,221 636,793 844,525 342,402 503,432 2,543 $11.78 to $13.48 $11.71 to $12.31 $15.26 to $15.77 $7.50 to $8.74 $9.49 to $12.19 $14.52 to $14.74 $12.71 $3,034,264 $1,587,237 $9,973,856 $7,322,996 $4,160,587 $7,394,991 $32,304 0.41% 0.00% 0.16% 0.00% 0.10% 0.00% 0.86% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.48% to 0.60% 7.44% to 8.40% 7.63% to 10.16% 13.47% to 14.48% 12.83% to 13.84% 3.68% to 4.62% 12.60% to 13.61% 8.05% 171,772 101,110 289,245 741,720 280,704 151,740 21 $12.14 to $12.43 $11.06 to $11.33 $13.45 to $13.77 $6.60 to $7.68 $9.15 to $11.65 $12.90 to $12.97 $11.76 $2,124,397 $1,143,358 $3,963,209 $5,657,453 $3,254,684 $1,964,753 $246 0.00% 0.00% 0.04% 0.00% 0.49% 3.30% 0.72% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.60% 13.57% to 14.60% 5.78% to 6.73% 19.73% to 20.80% 7.85% to 8.82% 11.22% to 12.92% 28.97% to 29.74% 17.59% 91,521 60,439 71,528 582,357 199,532 -- -- $10.69 to $10.85 $10.46 to $10.62 $11.23 to $11.40 $6.10 to $7.06 $8.10 to $10.47 $-- $-- $988,932 $643,451 $813,505 $4,086,776 $2,083,614 $-- $-- 1.35% 0.00% 1.84% 0.00% 0.70% -- -- 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% -- -- 25.29% to 26.42% 37.84% to 39.08% 34.16% to 35.37% 23.37% to 29.93% 29.15% to 32.18% -- -- 29,655 15,245 17,743 389,441 150,344 -- -- $8.53 to $8.58 $7.59 to $7.63 $8.37 to $8.42 $4.94 to $5.43 $7.92 $-- $-- $252,980 $115,796 $149,970 $2,087,511 $1,191,135 $-- $-- 0.10% 0.00% 0.00% 0.00% 3.31% -- -- 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% -- -- -15.00% to -14.00% -24.00% -16.00% -31.00% -22.00% -- --
F-129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
OPPENHEIMER THIRD AVENUE CAPITAL LEGG MASON SMALLCAP APPRECIATION VALUE EQUITY VALUE INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) ---------------- ---------------- ---------------- 2006 Units............................................................. 17,494 27,796 490,888 Unit Fair Value, Lowest to Highest (1)............................ $15.75 $11.70 to $11.87 $10.73 to $12.11 Net Assets........................................................ $275,584 $329,300 $5,537,660 Investment Income Ratio to Net Assets (2)......................... 0.11% 0.26% 0.16% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% 0.90% 0.48% to 0.90% Total Return, Lowest to Highest (4)............................... 13.11% 6.88% to 7.78% 7.73% to 27.65% 2005 Units............................................................. 2,073 10,588 -- Unit Fair Value, Lowest to Highest (1)............................ $13.92 $10.95 to $11.01 $-- Net Assets........................................................ $28,860 $116,310 $-- Investment Income Ratio to Net Assets (2)......................... 0.00% 0.13% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.60% 0.90% -- Total Return, Lowest to Highest (4)............................... 15.48% 9.21% to 9.86% -- 2004 Units............................................................. 366 -- -- Unit Fair Value, Lowest to Highest (1)............................ $12.06 $-- $-- Net Assets........................................................ $4,407 $-- $-- Investment Income Ratio to Net Assets (2)......................... 0.55% -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% -- -- Total Return, Lowest to Highest (4)............................... 20.58% -- -- 2003 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- Net Assets........................................................ $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2002 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- Net Assets........................................................ $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- --
CYCLICAL GROWTH ETF INVESTMENT DIVISION (B) ---------------- 2006 Units............................................................. 16,395 Unit Fair Value, Lowest to Highest (1)............................ $10.71 to $10.77 Net Assets........................................................ $176,315 Investment Income Ratio to Net Assets (2)......................... 2.52% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% Total Return, Lowest to Highest (4)............................... 7.10% to 7.70% 2005 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2004 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2003 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2002 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... --
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-130
DREYFUS CYCLICAL GROWTH PIMCO INFLATION DELAWARE DREYFUS EMERGING DREYFUS AND INCOME ETF PROTECTED BOND AMERICAN CENTURY SMALL CAP VALUE MID CAP STOCK LEADERS INTERNATIONAL VALUE INVESTMENT INVESTMENT VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION (B) DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- --------------- ------------- ---------- ------------------- 10,875 12,722 1,963 31,911 7,996 931 45,198 $10.67 to $10.73 $10.14 to $10.20 $12.70 $16.42 $11.35 $12.76 $15.85 $116,548 $129,728 $24,927 $524,104 $90,768 $11,878 $716,432 3.14% 0.00% 0.00% 0.02% 0.20% 0.00% 0.54% 0.90% 0.90% 0.40% 0.48% 0.48% 0.60% 0.40% to 0.48% 6.70% to 7.30% 1.40% to 2.00% 9.03% 15.86% -8.96% 8.05% 22.35% -- -- 1,252 9,876 -- 916 14,559 $-- $-- $11.65 $14.17 $-- $11.81 $12.95 $-- $-- $14,583 $139,966 $-- $10,821 $188,477 -- -- 0.00% 0.26% -- 0.00% 0.00% -- -- 0.40% 0.48% -- 0.60% 0.40% to 0.48% -- -- 8.13% 17.85% -- 4.75% 11.69% -- -- -- -- -- -- 1,371 $-- $-- $-- $-- $-- $-- $11.60 $-- $-- $-- $-- $-- $-- $15,540 -- -- -- -- -- -- 0.00% -- -- -- -- -- -- 0.40% -- -- -- -- -- -- 15.99% -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
F-131 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONCLUDED) 6. UNIT VALUES -- (CONCLUDED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
GOLDMAN SACHS GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION -------------- ---------------- -------------- -------------- 2006 Units............................................................. 18,362 6,743 6,738 1,789 Unit Fair Value, Lowest to Highest (1)............................ $14.38 $13.29 $12.17 $15.01 Net Assets........................................................ $263,966 $89,590 $82,011 $26,856 Investment Income Ratio to Net Assets (2)......................... 1.82% 0.87% 5.42% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.48% 0.40% to 0.48% 0.40% to 0.48% Total Return, Lowest to Highest (4)............................... 16.17% 12.30% 9.98% 24.04% 2005 Units............................................................. 3,769 4,239 6,238 -- Unit Fair Value, Lowest to Highest (1)............................ $12.38 $11.83 $11.07 $-- Net Assets........................................................ $46,646 $50,166 $69,027 $-- Investment Income Ratio to Net Assets (2)......................... 0.91% 0.45% 11.32% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.48% 0.40% to 0.48% -- Total Return, Lowest to Highest (4)............................... 12.83% 6.07% 2.05% -- 2004 Units............................................................. 1,123 $-- 4,700 -- Unit Fair Value, Lowest to Highest (1)............................ $10.97 $-- $10.84 $-- Net Assets........................................................ $12,276 -- $51 $-- Investment Income Ratio to Net Assets (2)......................... 1.17% -- 0.00% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% -- 0.48% -- Total Return, Lowest to Highest (4)............................... 9.71% -- 8.43% -- 2003 Units............................................................. -- -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- $-- Net Assets........................................................ $-- $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- -- 2002 Units............................................................. -- -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- $-- Net Assets........................................................ $-- $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- --
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-132
WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO VAN KAMPEN ADVANTAGE VT ADVANTAGE VT ADVANTAGE ADVANTAGE ADVANTAGE GOVERNMENT TOTAL RETURN BOND MONEY MARKET ASSET ALLOCATION LARGE COMPANY EQUITY INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT GROWTH INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ----------------- ------------ ---------------- ----------------- ------------- 1,342 5,553 91,188 907 17,802 653 $11.06 $11.02 $10.77 $12.73 $11.28 $13.49 $14,833 $61,191 $982,114 $11,546 $200,720 $8,813 4.52% 4.43% 2.41% 0.99% 0.00% 1.55% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 3.14% 3.79% 4.39% 12.11% 2.39% 18.51% 1,272 1,620 -- -- 772 727 $10.72 $10.62 $-- $-- $11.02 $11.38 $13,636 $17,199 $-- $-- $8,511 $8,282 0.00% 3.06% -- -- 0.23% 1.79% 0.40% 0.40% -- -- 0.40% 0.40% 3.28% 1.90% -- -- 5.70% 5.38% -- -- -- -- 416 402 $-- $-- $-- $-- $10.42 $10.80 $-- $-- $-- $-- $4,335 $4,341 -- -- -- -- 0.00% 0.00% -- -- -- -- 0.40% 0.40% -- -- -- -- 4.23% 8.03% -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
F-133 METROPOLITAN LIFE INSURANCE COMPANY UL II -- FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICIES SUPPLEMENT DATED APRIL 30, 2007 TO Prospectus Dated May 1, 2003 as previously amended This supplement updates certain information contained in the last prospectus you received. The last prospectus you received was dated May 1, 2003 and supplemented on May 1, 2004, May 1, 2005 and May 1, 2006. You should read and retain this supplement with your Policy. We will send you an additional copy of your most recent prospectus (and any previous supplements thereto), without charge, on written request sent to MetLife, P.O. Box 543, Warwick, RI 02887-0543. New UL II Policies are no longer available for sale. You allocate net premiums to and may transfer cash value among the investment divisions of the Metropolitan Life Separate Account UL. Each investment division, in turn, invests in the shares of one of the following Portfolios: METROPOLITAN SERIES FUND, INC. (CLASS A SHARES) BlackRock Aggressive Growth Portfolio BlackRock Bond Income Portfolio BlackRock Diversified Portfolio BlackRock Large Cap Value Portfolio BlackRock Legacy Large Cap Growth Portfolio BlackRock Money Market Portfolio BlackRock Strategic Value Portfolio Davis Venture Value Portfolio FI International Stock Portfolio FI Large Cap Portfolio FI Mid Cap Opportunities Portfolio FI Value Leaders Portfolio Franklin Templeton Small Cap Growth Portfolio Harris Oakmark Focused Value Portfolio Harris Oakmark Large Cap Value Portfolio Jennison Growth Portfolio Lehman Brothers(R) Aggregate Bond Index Portfolio Loomis Sayles Small Cap Portfolio MetLife Mid Cap Stock Index Portfolio MetLife Stock Index Portfolio MFS(R) Total Return Portfolio Morgan Stanley EAFE(R) Index Portfolio Neuberger Berman Mid Cap Value Portfolio Oppenheimer Global Equity Portfolio Russell 2000(R) Index Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio Western Asset Management Strategic Bond Opportunities Portfolio Western Asset Management U.S. Government Portfolio MetLife Conservative Allocation Portfolio MetLife Conservative to Moderate Allocation Portfolio MetLife Moderate Allocation Portfolio MetLife Moderate to Aggressive Allocation Portfolio MetLife Aggressive Allocation Portfolio MET INVESTORS SERIES TRUST (CLASS A SHARES) BlackRock Large-Cap Core Portfolio Cyclical Growth ETF Portfolio Cyclical Growth and Income ETF Portfolio Harris Oakmark International Portfolio Janus Forty Portfolio Lazard Mid-Cap Portfolio Legg Mason Partners Aggressive Growth Portfolio (formerly Legg Mason Aggressive Growth Portfolio) Legg Mason Value Equity Portfolio Lord Abbett Bond Debenture Portfolio Met/AIM Small Cap Growth Portfolio MFS(R) Research International Portfolio Neuberger Berman Real Estate Portfolio Oppenheimer Capital Appreciation Portfolio PIMCO Inflation Protected Bond Portfolio PIMCO Total Return Portfolio RCM Technology Portfolio (formerly RCM Global Technology Portfolio) T. Rowe Price Mid-Cap Growth Portfolio AMERICAN FUNDS INSURANCE SERIES (CLASS 2 SHARES) American Funds Bond Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund The prospectuses for the Portfolios are attached to this supplement. They describe in greater detail an investment in the Portfolios listed above. Please read them and keep them for reference. 1 SENDING COMMUNICATIONS AND PAYMENTS TO US You can communicate all of your requests, instructions and notifications to us by contacting us in writing at our Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. These include: changing your beneficiary; taking a Policy loan; changing your death benefit option; taking a partial withdrawal; surrendering your Policy; making transfer requests (including elections with respect to the automated investment strategies) or changing your premium allocations. Below is a list of our Designated Offices for various functions. We may name additional or alternate Designated Offices. If we do, we will notify you in writing. You may also contact us at 1-800-MET-5000 for information on where to direct communication regarding any function not listed below.
FUNCTION DESIGNATED OFFICE ADDRESS --------------------------------------------------------------------------------- Premium Payments MetLife P.O. Box 371351, Pittsburgh, PA 15250-7351 --------------------------------------------------------------------------------- Payment Inquiries MetLife, P.O. Box 30375, Tampa, FL 33630 --------------------------------------------------------------------------------- Surrenders, Withdrawals, Loans, MetLife, P.O. Box 543, Warwick, R.I. Investment Division Transfers, 02887-0543 Premium Reallocation --------------------------------------------------------------------------------- Death Claims MetLife, P.O. Box 353, Warwick, R.I. 02887-0353 --------------------------------------------------------------------------------- Beneficiary & Assignment MetLife, P.O. Box 313, Warwick, R.I. 02887-0313 --------------------------------------------------------------------------------- Address Changes MetLife, 500 Schoolhouse Road, Johnstown, PA 15904 Attn: Data Integrity --------------------------------------------------------------------------------- Reinstatements MetLife, P.O. Box 30375, Tampa, FL 33630 ---------------------------------------------------------------------------------
WHEN YOUR REQUESTS, INSTRUCTIONS AND NOTIFICATIONS BECOME EFFECTIVE Generally, requests, premium payments and other instructions and notifications are effective on the Date of Receipt. In those cases, the effective time is at the end of the Valuation Period during which we receive them at our Designated Office. (Some exceptions to this general rule are noted below.) A Valuation Period is the period between two successive Valuation Dates. It begins at the close of regular trading on the New York Stock Exchange on a Valuation Date and ends at the close of regular trading on the New York Stock Exchange on the next succeeding Valuation Date. The close of regular trading is 4:00 p.m., Eastern Time on most days. A Valuation Date is each day on which the New York Stock Exchange is open for trading. Accordingly, if we receive your request, premium, or instructions after the close of regular trading on the New York Stock Exchange, or if the New York Stock Exchange is not open that day, then we will treat it as received on the next day when the New York Stock Exchange is open. These rules apply regardless of the reason we did not receive your request, premium, or instructions by the close of regular trading on the New York Stock Exchange, even if due to our delay (such as a delay in answering your telephone call). The effective date of your Automated Investment Strategies will be that set forth in the strategy chosen. THE FUNDS AND THEIR PORTFOLIOS Metropolitan Series Fund, Inc., Met Investors Series Trust and American Funds Insurance Series is each a "series" type of mutual fund (each a "Fund"), which is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). Each Fund is divided into separate investment Portfolios, each of which issues its own class or "series" of stock, and in which a corresponding investment division of the Separate Account invests. 2 You should read the Fund prospectuses that are attached to this supplement. They contain information about each Fund and its Portfolios, including the investment objectives, strategies, risks and sub-advisers that are associated with each Portfolio. They also contain information on the different separate accounts that invest in each Fund (which may or may not be related to MetLife) and certain risks that may arise when diverse separate accounts, funding diverse types of insurance products, all invest in the same Fund. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS An investment adviser (other than our affiliates MetLife Advisers, LLC; and Met Investors Advisory LLC) or subadviser of a portfolio, or its affiliates, may make payments to us and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment of expenses for certain administrative, marketing, and support services with respect to the Policies and, in the Company's role as an intermediary, with respect to the Portfolios. The Company and its affiliates may profit from these payments. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. Policy Owners, through their indirect investment in the Portfolios, bear the costs of these advisory fees (see the Portfolios' prospectuses for more information). The amount of the payments we receive is based on a percentage of assets of the Portfolios attributable to the Policies and certain other variable insurance products that we and our affiliates issue. These percentages differ and some advisers or subadvisers (or other affiliates) may pay us more than others. These percentages currently range up to .50%. We, and/or certain of our affiliated insurance companies, have joint ownership interests in our affiliated investment advisers, MetLife Advisers and Met Investors Advisory LLC, which are formed as "limited liability companies." Our ownership interests in MetLife Advisers, LLC and Met Investors Advisory LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from a Portfolio. We will benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to the advisers. (See "Fee Tables--Annual Portfolio Operating Expenses" for information on the management fees paid by the Portfolios to the advisers and the Statement of Additional Information for the Portfolios for information on the management fees paid by the adviser to sub-advisers.) Additionally, an investment adviser or sub-adviser of a Portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the Policies and may pay us and/or certain affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies. Certain Portfolios have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. The Distribution Plan is described in more detail in each Portfolio's prospectus. (See also "Fee Tables--Annual Portfolio Operating Expenses.") The payments are deducted from the assets of the Portfolios and paid to us or our distributor. These payments decrease the Portfolio's investment return. SELECTION OF PORTFOLIOS We select the Portfolios offered through the Policy based on several criteria, including asset class coverage, the strength of the adviser's or sub-adviser's reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolio's adviser or sub-adviser is one of our affiliates or whether the Portfolio, its adviser, its sub-adviser(s), or an affiliate will make payments to us or our affiliates. In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to portfolios advised by our affiliates than those that are not, we may be more inclined to offer portfolios advised by our affiliates in the variable insurance products we issue. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premium payments and/or transfers of cash value if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from policy owners. In some cases, we have included Portfolios based on recommendations made by selling firms. 3 We do not provide investment advice and do not recommend or endorse any particular Portfolio. You bear the risk of any decline in the Cash Value of your Policy resulting from the performance of the Portfolios you have chosen. MANAGEMENT OF PORTFOLIOS Each Fund has an investment adviser who is responsible for overall management of the Fund. These investment advisers have contracted with sub-advisers to make the day-to-day investment decisions for some of the Portfolios. The adviser, any sub-adviser and investment objective of each Portfolio are as follows:
PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ------------------------------------------------------------------------------------------------------------------- METROPOLITAN SERIES FUND, INC. ADVISER: METLIFE ADVISERS, LLC ------------------------------------------------------------------------------------------------------------------- BlackRock Aggressive Growth Portfolio BlackRock Advisors, LLC Seeks maximum capital appreciation. ------------------------------------------------------------------------------------------------------------------- BlackRock Bond Income Portfolio BlackRock Advisors, LLC Seeks competitive total return primarily from investing in fixed- income securities. ------------------------------------------------------------------------------------------------------------------- BlackRock Diversified Portfolio BlackRock Advisors, LLC Seeks high total return while attempting to limit investment risk and preserve capital. ------------------------------------------------------------------------------------------------------------------- BlackRock Large Cap Value Portfolio BlackRock Advisors, LLC Seeks long-term growth of capital. ------------------------------------------------------------------------------------------------------------------- BlackRock Legacy Large Cap Growth Portfolio BlackRock Advisors, LLC Seeks long-term growth of capital. ------------------------------------------------------------------------------------------------------------------- BlackRock Money Market Portfolio/1/ BlackRock Advisors, LLC Seeks a high level of current income consistent with preservation of capital. ------------------------------------------------------------------------------------------------------------------- BlackRock Strategic Value Portfolio BlackRock Advisors, LLC Seeks high total return, consisting principally of capital appreciation. ------------------------------------------------------------------------------------------------------------------- Davis Venture Value Portfolio Davis Selected Advisers, L.P./2/ Seeks growth of capital. ------------------------------------------------------------------------------------------------------------------- FI International Stock Portfolio Fidelity Management & Research Seeks long-term growth of capital. Company ------------------------------------------------------------------------------------------------------------------- FI Large Cap Portfolio Fidelity Management & Research Seeks long-term growth of capital. Company ------------------------------------------------------------------------------------------------------------------- FI Mid Cap Opportunities Portfolio Fidelity Management & Research Seeks long-term growth of capital. Company ------------------------------------------------------------------------------------------------------------------- FI Value Leaders Portfolio Fidelity Management & Research Seeks long-term growth of capital. Company ------------------------------------------------------------------------------------------------------------------- Franklin Templeton Small Cap Growth Portfolio Franklin Advisers, Inc. Seeks long-term capital growth. ------------------------------------------------------------------------------------------------------------------- Harris Oakmark Focused Value Portfolio Harris Associates L.P. Seeks long-term capital appreciation. ------------------------------------------------------------------------------------------------------------------- Harris Oakmark Large Cap Value Portfolio Harris Associates L.P. Seeks long-term capital appreciation. ------------------------------------------------------------------------------------------------------------------- Jennison Growth Portfolio Jennison Associates LLC Seeks long-term growth of capital. ------------------------------------------------------------------------------------------------------------------- Lehman Brothers(R) Aggregate Bond Index MetLife Investment Advisors Seeks to equal the performance of Portfolio Company, LLC/3/ the Lehman Brothers Aggregate Bond Index. ------------------------------------------------------------------------------------------------------------------- Loomis Sayles Small Cap Portfolio Loomis, Sayles & Company, L.P. Seeks long-term capital growth from investments in common stocks or other equity securities. ------------------------------------------------------------------------------------------------------------------- MetLife Mid Cap Stock Index Portfolio MetLife Investment Advisors Seeks to equal the performance of Company, LLC/3/ the Standard & Poor's Mid Cap 400 Composite Stock Price Index ("S&P Mid Cap 400 Index"). ------------------------------------------------------------------------------------------------------------------- MetLife Stock Index Portfolio MetLife Investment Advisors Seeks to equal the performance of Company, LLC/3/ the Standard & Poor's 500 Composite Stock Price Index. -------------------------------------------------------------------------------------------------------------------
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ------------------------------------------------------------------------------------------------------------------- MFS(R) Total Return Portfolio Massachusetts Financial Services Seeks a favorable total return Company through investment in a diversified portfolio. ------------------------------------------------------------------------------------------------------------------- Morgan Stanley EAFE(R) Index Portfolio MetLife Investment Advisors Seeks to equal the performance of Company, LLC/3/ the MSCI EAFE Index. ------------------------------------------------------------------------------------------------------------------- Neuberger Berman Mid Cap Value Portfolio Neuberger Berman Management Seeks capital growth. Inc. ------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Equity Portfolio OppenheimerFunds, Inc. Seeks capital appreciation. ------------------------------------------------------------------------------------------------------------------- Russell 2000(R) Index Portfolio MetLife Investment Advisors Seeks to equal the return of the Company, LLC/3/ Russell 2000 Index. ------------------------------------------------------------------------------------------------------------------- T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Associates Inc. Seeks long-term growth of capital and, secondarily, dividend income. ------------------------------------------------------------------------------------------------------------------- T. Rowe Price Small Cap Growth Portfolio T. Rowe Price Associates Inc. Seeks long-term capital growth. ------------------------------------------------------------------------------------------------------------------- Western Asset Management Strategic Bond Western Asset Management Seeks to maximize total return Opportunities Portfolio Company consistent with preservation of capital. ------------------------------------------------------------------------------------------------------------------- Western Asset Management U.S. Government Western Asset Management Seeks to maximize total return Portfolio Company consistent with preservation of capital and maintenance of liquidity. ------------------------------------------------------------------------------------------------------------------- MetLife Conservative Allocation Portfolio N/A Seeks high level of current income, with growth of capital as a secondary objective. ------------------------------------------------------------------------------------------------------------------- MetLife Conservative to Moderate Allocation N/A Seeks high total return in the Portfolio form of income and growth of capital, with a greater emphasis on income. ------------------------------------------------------------------------------------------------------------------- MetLife Moderate Allocation Portfolio N/A Seeks a balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital. ------------------------------------------------------------------------------------------------------------------- MetLife Moderate to Aggressive Allocation N/A Seeks growth of capital. Portfolio ------------------------------------------------------------------------------------------------------------------- MetLife Aggressive Allocation Portfolio N/A Seeks growth of capital. ------------------------------------------------------------------------------------------------------------------- MET INVESTORS SERIES TRUST ADVISER: MET INVESTORS ADVISORY LLC ------------------------------------------------------------------------------------------------------------------- BlackRock Large-Cap Core Portfolio BlackRock Advisors, LLC Seeks long-term capital growth. ------------------------------------------------------------------------------------------------------------------- Cyclical Growth ETF Portfolio Gallatin Asset Management, Inc. Seeks growth of capital. ------------------------------------------------------------------------------------------------------------------- Cyclical Growth and Income ETF Portfolio Gallatin Asset Management, Inc. Seeks growth of capital and income. ------------------------------------------------------------------------------------------------------------------- Harris Oakmark International Portfolio Harris Associates L.P. Seeks long-term capital appreciation. ------------------------------------------------------------------------------------------------------------------- Janus Forty Portfolio Janus Capital Management LLC Seeks capital appreciation. ------------------------------------------------------------------------------------------------------------------- Lazard Mid-Cap Portfolio Lazard Asset Seeks long-term growth of capital. Management LLC ------------------------------------------------------------------------------------------------------------------- Legg Mason Partners Aggressive Growth Portfolio ClearBridge Advisors, LLC Seeks capital appreciation. ------------------------------------------------------------------------------------------------------------------- Legg Mason Value Equity Portfolio Legg Mason Capital Management, The Portfolio seeks long-term Inc. growth of capital. ------------------------------------------------------------------------------------------------------------------- Lord Abbett Bond Debenture Portfolio Lord, Abbett & Co. LLC Seeks to provide high current income and the opportunity for capital appreciation to produce a high total return. ------------------------------------------------------------------------------------------------------------------- Met/AIM Small Cap Growth Portfolio AIM Capital Management, Inc. Seeks long-term growth of capital. ------------------------------------------------------------------------------------------------------------------- MFS(R) Research International Portfolio Massachusetts Financial Services Seeks capital appreciation. Company ------------------------------------------------------------------------------------------------------------------- Neuberger Berman Real Estate Portfolio Neuberger Berman Management, Seeks to provide total return Inc. through investment in real estate securities, emphasizing both capital appreciation and current income. -------------------------------------------------------------------------------------------------------------------
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE ---------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Portfolio OppenheimerFunds, Inc. Seeks capital appreciation. ---------------------------------------------------------------------------------------------------------------- PIMCO Inflation Protected Bond Portfolio Pacific Investment Management Seeks to provide maximum real Company LLC return, consistent with preservation of capital and prudent investment management. ---------------------------------------------------------------------------------------------------------------- PIMCO Total Return Portfolio Pacific Investment Management Seeks maximum total return, Company LLC consistent with the preservation of capital and prudent investment management. ---------------------------------------------------------------------------------------------------------------- RCM Technology Portfolio RCM Capital Management LLC Seeks capital appreciation; no consideration is given to income. ---------------------------------------------------------------------------------------------------------------- T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price Associates Inc. Seeks long-term growth of capital. ---------------------------------------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES ADVISER: CAPITAL RESEARCH AND MANAGEMENT COMPANY ---------------------------------------------------------------------------------------------------------------- American Funds Bond Fund N/A Seeks to maximize current income and preserve capital by investing primarily in fixed-income securities. ---------------------------------------------------------------------------------------------------------------- American Funds Global Small Capitalization Fund N/A Seeks capital appreciation through stocks. ---------------------------------------------------------------------------------------------------------------- American Funds Growth Fund N/A Seeks capital appreciation through stocks. ---------------------------------------------------------------------------------------------------------------- American Funds Growth-Income Fund N/A Seeks both capital appreciation and income. ----------------------------------------------------------------------------------------------------------------
-------- /1/ An investment in the BlackRock Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $100 per share, it is possible to lose money by investing in the Portfolio. During extended periods of low interest rates, the yields of the investment division investing in the BlackRock Money Market Portfolio may become extremely low and possibly negative. /2/ Davis Selected Advisers, L.P. may also delegate any of its responsibilities to Davis Selected Advisers-NY, Inc., a wholly-owned subsidiary. /3/ Prior to May 1, 2007, Metropolitan Life Insurance Company was the sub-adviser to this Portfolio. A Portfolio may have a name and/or objective that is very similar to that of a publicly available mutual fund that is managed by the same sub-investment manager or adviser. The Portfolios are not publicly available and will not have the same performance as those publicly available mutual funds. Different performance will result from differences in implementation of investment policies, cash flows, fees and size of the Portfolio. THE PORTFOLIO SHARE CLASSES THAT WE OFFER The Portfolios offer various classes of shares, each of which has a different level of expenses. The Fund prospectuses may provide information for share classes or Portfolios that are not available through the Policy. When you consult the Fund prospectus for a Portfolio, you should be careful to refer only to the information regarding the Portfolio and class of shares that is available through the Policy. The following classes of shares are available under the Policy: . For the Metropolitan Series Fund, Inc. and the Met Investors Series Trust Portfolios, we offer Class A shares only. . For the American Funds Insurance Series Portfolios, we offer Class 2 shares only. SUBSTITUTION OF INVESTMENTS If investment in the Portfolios or a particular Portfolio is no longer possible, or in our judgment becomes inappropriate for the purposes of the Policies, or for any other reason in our sole discretion, we may substitute another portfolio without your consent. The substituted portfolio may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future premium payments, or both. However, we will not make such substitution without any necessary approval of the Securities and Exchange Commission. Furthermore, we may make available or close investment divisions to allocation of premium payments or cash value, or both, for some or all classes of Policies, at any time in our sole discretion. 6 FEE TABLES ANNUAL PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that the Portfolios will pay and that therefore a Policy owner will indirectly pay periodically during the time that he or she owns a Policy. The table shows the lowest and highest fees and expenses charged by the Portfolios for the fiscal year ended December 31, 2006 (or estimated for the current fiscal year), before and after any contractual fee waivers and expense reimbursements. More detail concerning each Portfolio's fees and expenses is contained in the table that follows this table and in the attached Fund prospectuses.
LOWEST* HIGHEST* ------------------------------------------------------------------------------------------------------------------ Gross Total Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets, including management fees, distribution (Rule 12b-1) fees and other expenses) .11% 1.05% ------------------------------------------------------------------------------------------------------------------ Net Total Annual Portfolio Operating Expenses (net of any contractual fee waivers and expense reimbursements) .10% 1.05%
-------- *The lowest and highest percentages have been selected after adjustment of the percentage for all Portfolios (on a consistent basis) to reflect any changes in expenses during the 12 months ended December 31, 2006 or expected to occur during the 12 months ended December 31, 2007. This table describes the annual operating expenses for each Portfolio for the year ended December 31, 2006, as a percentage of the Portfolio's average daily net assets for the year.
NET TOTAL ANNUAL EXPENSES INCLUDING FEE ESTIMATED WAIVERS NET GROSS AND EXPENSES MANAGE- TOTAL EXPENSE NET TOTAL OF MENT OTHER ANNUAL REIMBURSE- ANNUAL UNDERLYING FEES EXPENSES 12B-1 FEES EXPENSES MENTS EXPENSES/1/ PORTFOLIOS/1/ ----------------------------------------------------------------------------------------------------------------------- METROPOLITAN SERIES FUND, INC. (CLASS A SHARES)/2/ ----------------------------------------------------------------------------------------------------------------------- BlackRock Aggressive Growth Portfolio .72% .06% .00% .78% .00% .78% ----------------------------------------------------------------------------------------------------------------------- BlackRock Bond Income Portfolio .39% .07% .00% .46% .01% .45%/3/ ----------------------------------------------------------------------------------------------------------------------- BlackRock Diversified Portfolio .44% .07% .00% .51% .00% .51% ----------------------------------------------------------------------------------------------------------------------- BlackRock Large Cap Value Portfolio .70% .11% .00% .81% .00% .81%/4/ ----------------------------------------------------------------------------------------------------------------------- BlackRock Legacy Large Cap Growth Portfolio .73% .07% .00% .80% .00% .80% ----------------------------------------------------------------------------------------------------------------------- BlackRock Money Market Portfolio .34% .04% .00% .38% .01% .37%/5/ ----------------------------------------------------------------------------------------------------------------------- BlackRock Strategic Value Portfolio .82% .06% .00% .88% .00% .88% ----------------------------------------------------------------------------------------------------------------------- Davis Venture Value Portfolio .71% .04% .00% .75% .00% .75% ----------------------------------------------------------------------------------------------------------------------- FI International Stock Portfolio .85% .13% .00% .98% .00% .98% ----------------------------------------------------------------------------------------------------------------------- FI Large Cap Portfolio .78% .06% .00% .84% .00% .84%/6/ ----------------------------------------------------------------------------------------------------------------------- FI Mid Cap Opportunities Portfolio .68% .06% .00% .74% .00% .74% ----------------------------------------------------------------------------------------------------------------------- FI Value Leaders Portfolio .64% .07% .00% .71% .00% .71% ----------------------------------------------------------------------------------------------------------------------- Franklin Templeton Small Cap Growth Portfolio .90% .15% .00% 1.05% .00% 1.05%/7/ ----------------------------------------------------------------------------------------------------------------------- Harris Oakmark Focused Value Portfolio .72% .05% .00% .77% .00% .77% ----------------------------------------------------------------------------------------------------------------------- Harris Oakmark Large Cap Value Portfolio .72% .06% .00% .78% .00% .78% ----------------------------------------------------------------------------------------------------------------------- Jennison Growth Portfolio .63% .05% .00% .68% .00% .68% -----------------------------------------------------------------------------------------------------------------------
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NET TOTAL ANNUAL EXPENSES INCLUDING FEE ESTIMATED WAIVERS NET GROSS AND EXPENSES MANAGE- TOTAL EXPENSE NET TOTAL OF MENT OTHER ANNUAL REIMBURSE- ANNUAL UNDERLYING FEES EXPENSES 12B-1 FEES EXPENSES MENTS EXPENSES/1/ PORTFOLIOS/1/ ----------------------------------------------------------------------------------------------------------------------- Lehman Brothers(R) Aggregate Bond Index Portfolio .25% .06% .00% .31% .01% .30%/8/ ----------------------------------------------------------------------------------------------------------------------- Loomis Sayles Small Cap Portfolio .90% .07% .00% .97% .05% .92%/9/ ----------------------------------------------------------------------------------------------------------------------- MetLife Mid Cap Stock Index Portfolio .25% .08% .00% .33% .01% .32%/10/ ----------------------------------------------------------------------------------------------------------------------- MetLife Stock Index Portfolio .25% .05% .00% .30% .01% .29%/11/ ----------------------------------------------------------------------------------------------------------------------- MFS(R) Total Return Portfolio .53% .05% .00% .58% .00% .58%/6/ ----------------------------------------------------------------------------------------------------------------------- Morgan Stanley EAFE(R) Index Portfolio .30% .15% .00% .45% .01% .44%/12/ ----------------------------------------------------------------------------------------------------------------------- Neuberger Berman Mid Cap Value Portfolio .65% .06% .00% .71% .00% .71%/6/ ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Equity Portfolio .53% .09% .00% .62% .00% .62% ----------------------------------------------------------------------------------------------------------------------- Russell 2000(R) Index Portfolio .25% .11% .00% .36% .01% .35%/13/ ----------------------------------------------------------------------------------------------------------------------- T. Rowe Price Large Cap Growth Portfolio .60% .08% .00% .68% .00% .68% ----------------------------------------------------------------------------------------------------------------------- T. Rowe Price Small Cap Growth Portfolio .51% .07% .00% .58% .00% .58% ----------------------------------------------------------------------------------------------------------------------- Western Asset Management Strategic Bond Opportunities Portfolio .63% .07% .00% .70% .00% .70% ----------------------------------------------------------------------------------------------------------------------- Western Asset Management U.S. Government Portfolio .50% .07% .00% .57% .00% .57% ----------------------------------------------------------------------------------------------------------------------- MetLife Conservative Allocation Portfolio .10% .09% .00% .19% .09% .10% .71%/14/ ----------------------------------------------------------------------------------------------------------------------- MetLife Conservative to Moderate Allocation Portfolio .10% .02% .00% .12% .02% .10% .75%/14/ ----------------------------------------------------------------------------------------------------------------------- MetLife Moderate Allocation Portfolio .10% .01% .00% .11% .01% .10% .80%/14/ ----------------------------------------------------------------------------------------------------------------------- MetLife Moderate to Aggressive Allocation Portfolio .10% .01% .00% .11% .01% .10% .85%/14/ ----------------------------------------------------------------------------------------------------------------------- MetLife Aggressive Allocation Portfolio .10% .07% .00% .17% .07% .10% .85%/14/ ----------------------------------------------------------------------------------------------------------------------- MET INVESTORS SERIES TRUST (CLASS A SHARES)/15/ ----------------------------------------------------------------------------------------------------------------------- BlackRock Large-Cap Core Portfolio .63% .22% .00% .85% .00% .85%/16/ ----------------------------------------------------------------------------------------------------------------------- Cyclical Growth ETF Portfolio .45% .15% .00% .60% .05% .55% .79%/17/ ----------------------------------------------------------------------------------------------------------------------- Cyclical Growth and Income ETF Portfolio .45% .18% .00% .63% .08% .55% .80%/18/ ----------------------------------------------------------------------------------------------------------------------- Harris Oakmark International Portfolio .78% .13% .00% .91% .00% .91% ----------------------------------------------------------------------------------------------------------------------- Janus Forty Portfolio .65% .06% .00% .71% .00% .71%/19/ ----------------------------------------------------------------------------------------------------------------------- Lazard Mid-Cap Portfolio .70% .06% .00% .76% .00% .76% ----------------------------------------------------------------------------------------------------------------------- Legg Mason Partners Aggressive Growth Portfolio .63% .09% .00% .72% .00% .72%/20/ ----------------------------------------------------------------------------------------------------------------------- Legg Mason Value Equity Portfolio .64% .08% .00% .72% .00% .72%/21/ -----------------------------------------------------------------------------------------------------------------------
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NET TOTAL ANNUAL EXPENSES INCLUDING FEE ESTIMATED WAIVERS NET GROSS AND EXPENSES MANAGE- TOTAL EXPENSE NET TOTAL OF MENT OTHER ANNUAL REIMBURSE- ANNUAL UNDERLYING FEES EXPENSES 12B-1 FEES EXPENSES MENTS EXPENSES/1/ PORTFOLIOS/1/ ----------------------------------------------------------------------------------------------------------------------- Lord Abbett Bond Debenture Portfolio .50% .04% .00% .54% .00% .54% ----------------------------------------------------------------------------------------------------------------------- Met/AIM Small Cap Growth Portfolio .87% .06% .00% .93% .00% .93%/20/ ----------------------------------------------------------------------------------------------------------------------- MFS(R) Research International Portfolio .72% .14% .00% .86% .00% .86% ----------------------------------------------------------------------------------------------------------------------- Neuberger Berman Real Estate Portfolio .64% .04% .00% .68% .00% .68% ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Portfolio .57% .05% .00% .62% .00% .62%/20/ ----------------------------------------------------------------------------------------------------------------------- PIMCO Inflation Protected Bond Portfolio .50% .05% .00% .55% .00% .55% ----------------------------------------------------------------------------------------------------------------------- PIMCO Total Return Portfolio .50% .05% .00% .55% .00% .55% ----------------------------------------------------------------------------------------------------------------------- RCM Technology Portfolio .88% .14% .00% 1.02% .00% 1.02%/22/ ----------------------------------------------------------------------------------------------------------------------- T. Rowe Price Mid-Cap Growth Portfolio .75% .04% .00% .79% .00% .79% ----------------------------------------------------------------------------------------------------------------------- AMERICAN FUNDS INSURANCE SERIES (CLASS 2 SHARES) ----------------------------------------------------------------------------------------------------------------------- American Funds Bond Fund .41% .01% .25% .67% .00% .67% ----------------------------------------------------------------------------------------------------------------------- American Funds Global Small Capitalization Fund .72% .05% .25% 1.02% .00% 1.02% ----------------------------------------------------------------------------------------------------------------------- American Funds Growth Fund .32% .02% .25% .59% .00% .59% ----------------------------------------------------------------------------------------------------------------------- American Funds Growth-Income Fund .27% .01% .25% .53% .00% .53% -----------------------------------------------------------------------------------------------------------------------
-------- /1/ Net Total Annual Expenses do not reflect any voluntary waivers of fees and expenses, or any expense reductions resulting from directed brokerage arrangements. /2/ Other Expenses have been restated to reflect current fees, as if current fees had been in effect for the previous fiscal year. /3/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee to the annual rate of 0.325% for amounts over $1 billion but less than $2 billion. /4/ Other Expenses reflect the repayment of expenses previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.02%. /5/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee to the annual rate of 0.345% for the first $500 million of the Portfolio's average daily net assets and 0.335% for the next $500 million. /6/ The Management Fee has been restated to reflect current fees, as if the current fees had been in effect during the previous fiscal year. /7/ Other Expenses reflect the repayment of expenses previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.03%. /8/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.244%. /9/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio by 0.05%. /10/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. Other Expenses include 0.01% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /11/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. /12/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.293%. Other Expenses include 0.02% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /13/ MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to reduce the Management Fee of the Portfolio to 0.243%. Other Expenses include 0.02% of "Acquired Fund Fees and Expenses," which are fees and expenses attributable to underlying portfolios in which the Portfolio invested during the preceding fiscal year. /14/ These Portfolios are "funds of funds" that invest substantially all of their assets in other portfolios of the Met Investors Series Trust and the Metropolitan Series Fund, Inc. Because the Portfolios invest in other underlying portfolios, each Portfolio will also bear it's pro rata portion of the operating expenses of the underlying portfolios in which the Portfolio invests, including the management fee. The weighted average of the total operating expenses of the underlying portfolios, after any applicable fee waivers and expense reimbursements, as of December 31, 2006, were: 0.61% for the MetLife Conservative Allocation Portfolio, 0.65% for the MetLife Conservative to Moderate Allocation Portfolio, 0.70% for the MetLife Moderate Allocation Portfolio, 0.75% for the MetLife Moderate to Aggressive Allocation Portfolio and 0.75% for the MetLife Aggressive Allocation Portfolio. The total operating expenses of the Portfolios, including the weighted average of the total operating expenses of the underlying 9 portfolios, before any applicable fee waivers and expense reimbursements, as of December 31, 2006, were: 0.80% for the MetLife Conservative Allocation Portfolio, 0.77% for the MetLife Conservative to Moderate Allocation Portfolio, 0.82% for the MetLife Moderate Allocation Portfolio, 0.86% for the MetLife Moderate to Aggressive Allocation Portfolio and 0.93% for the MetLife Aggressive Allocation Portfolio. Contract and Policy Owners may be able to realize lower aggregate expenses by investing directly in the underlying portfolios instead of investing in the Portfolios. A Contract or Policy Owner who chooses to invest directly in the underlying portfolios would not, however, receive the asset allocation services provided by MetLife Advisers, LLC. (See the fund prospectus for a description of each Portfolio's target allocation.) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007 through April 30, 2008, to waive fees or pay all expenses (other than brokerage costs, taxes, interest and any extraordinary expenses) so as to limit net total annual operating expenses of the Portfolio to 0.10%, excluding 12b-1 fees. /15/ Other Expenses have been restated to reflect new custodian, fund administration and transfer agent fee schedules, as if these fee schedules had been in effect for the previous fiscal year. /16/ The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. Other Expenses have been restated to reflect the current Met Investors Series Trust fee schedule, as if that schedule had applied to the Portfolio for the entire fiscal year. /17/ Pursuant to an expense limitation agreement, the Investment Adviser has agreed, for a period of one year commencing May 1, 2007, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.55%, excluding 12b-1 fees. The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("Underlying ETFs"). As an investor in an Underlying ETF or other investment company, the Portfolio also will bear its pro-rata portion of the operating expenses of that Underlying ETF or other investment company. The weighted average of the total operating expenses of the Underlying ETFs and other investment companies, based on the allocation of assets as of December 31, 2006, was 0.24%. The total operating expenses of the Portfolio, including the weighted average of the total operating expenses of the Underlying ETFs and other investment companies as of December 31, 2006, before any applicable fee waivers and expense reimbursements, were 0.84%. /18/ Pursuant to an expense limitation agreement, the Investment Adviser has agreed, for a period of one year commencing May 1, 2007, to limit its fee and to reimburse expenses to the extent necessary to limit total operating expenses to 0.55%, excluding 12b-1 fees. The Portfolio primarily invests its assets in other investment companies known as exchange-traded funds ("Underlying ETFs"). As an investor in an Underlying ETF or other investment company, the Portfolio also will bear its pro-rata portion of the operating expenses of that Underlying ETF or other investment company. The weighted average of the total operating expenses of the Underlying ETFs or other investment companies, based upon the allocation of assets as of December 31, 2006, was 0.25%. The total operating expenses of the Portfolio, including the weighted average of the total operating expenses of the Underlying ETFs and other investment companies as of December 31, 2006, before any applicable fee waivers and expense reimbursements, were 0.88%. /19/ Other Expenses have been restated to reflect the current Met Investors Series Trust fee schedule, as if that schedule had applied to the Portfolio for the entire fiscal year. /20/ The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. /21/ Other Expenses reflect the repayment of fees previously waived or expense previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.02%. /22/ Other Expenses reflect the repayment of fees previously waived or expense previously paid by the Investment Adviser, under the terms of prior expense limitation agreements, in the amount of 0.04%. The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the previous fiscal year. THE FEE AND EXPENSE INFORMATION REGARDING THE PORTFOLIOS WAS PROVIDED BY THOSE PORTFOLIOS. THE AMERICAN FUNDS INSURANCE SERIES IS NOT AFFILIATED WITH METLIFE. TRANSFERRING CASH VALUE AMONG YOUR POLICY'S INVESTMENT OPTIONS The minimum amount you may transfer is $50 or, if less, the total amount in an investment option. We do not currently charge for transfers, but we do reserve the right to charge up to $25 per transfer, except for transfers under the Automated Investment Strategies. Currently, transfers are not taxable transactions. Frequent requests from Policy Owners to transfer cash value may dilute the value of a Portfolio's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Portfolio and the reflection of that change in the Portfolio's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers may also increase brokerage and administrative costs of the underlying Portfolios and may disrupt portfolio management strategy, requiring a Portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the Portfolios, which may in turn adversely affect Policy Owners and other persons who may have an interest in the Policies (E.G., beneficiaries). We have policies and procedures that attempt to detect and deter frequent transfers in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be presented in the international, small-cap, and high-yield Portfolios (I.E., the 10 BlackRock Strategic Value Portfolio, FI International Stock Portfolio, Franklin Templeton Small Cap Growth Portfolio, Loomis Sayles Small Cap Portfolio, Morgan Stanley EAFE(R) Index Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000(R) Index Portfolio, Western Asset Management Strategic Bond Opportunities Portfolio, T. Rowe Price Small Cap Growth Portfolio, Harris Oakmark International Portfolio, Lord Abbett Bond Debenture Portfolio, Met/AIM Small Cap Growth Portfolio, MFS(R) Research International Portfolio, and American Funds Global Small Capitalization Fund) and we monitor transfer activity in those Portfolios (the "Monitored Portfolios"). In addition, as described below, we intend to treat all American Funds Insurance Series portfolios ("American Funds portfolios") as Monitored Portfolios. We employ various means to monitor transfer activity, such as examining the frequency and size of transfers into and out of the Monitored Portfolios within given periods of time. For example, we currently monitor transfer activity to determine if, for each category of international, small-cap and high-yield Portfolios, in a 12-month period there were; (1) six or more transfers involving the given category; (2) cumulative gross transfers involving the given category that exceed the current cash value; and (3) two or more "round-trips" involving any Portfolio in the given category. A round-trip generally is defined as a transfer in followed by a transfer out within the next seven calendar days or a transfer out followed by a transfer in within the next seven calendar days, in either case subject to certain other criteria. We do not believe that other Portfolios present a significant opportunity to engage in arbitrage trading and therefore do not monitor transfer activity in those Portfolios. We may change the Monitored Portfolios at any time without notice in our sole discretion. In addition to monitoring transfer activity in certain Portfolios, we rely on the underlying Portfolios to bring any potential disruptive trading activity they identify to our attention for investigation on a case-by-case basis. We will also investigate any other harmful transfer activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. American Funds Monitoring Policy. As a condition to making their portfolios available in our products, American Funds requires us to treat all American Funds portfolios as Monitored Portfolios under our current market timing and excessive trading policies and procedures. Further, American Funds requires us to impose additional specified monitoring criteria for all American Funds portfolios available under the Policy, regardless of the potential for arbitrage trading. We are required to monitor transfer activity in American Funds portfolios to determine if there were two or more transfers in followed by transfers out, in each case of a certain dollar amount or greater, in any 30-day period. A first violation of the American Funds monitoring policy will result in a written notice of violation; each additional violation will result in the imposition of a six-month restriction, during which period we will require all transfer requests to or from an American Funds portfolio to be submitted with an original signature. Further, as Monitored Portfolios, all American Funds portfolios also will be subject to our current market timing and excessive trading policies, procedures and restrictions (described below), and transfer restrictions may be imposed upon a violation of either monitoring policy. Although we do not have the operational or systems capability at this time to impose the American Funds monitoring policy and/or to treat all of the American Funds portfolios as Monitored Portfolios under our policy, we intend to do so in the future. Our policies and procedures may result in transfer restrictions being applied to deter market timing. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, or other transfer activity that we believe may be harmful to other Policy Owners or other persons who have an interest in the Policies, we require all future transfer requests, to or from a Monitored Portfolio or other identified Portfolio under that Policy to be submitted either (i) in writing with an original signature or (ii) by telephone prior to 10:00 a.m. Transfers made under an automated investment strategy described in this prospectus are not treated as transfers when we evaluate trading patterns for market timing. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Portfolios that we believe are susceptible to market timing or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Policy Owners to avoid such detection. Our ability to restrict such 11 transfer activity may also be limited by provisions of the Policy. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect Policy Owners and other persons with interests in the Policies. We do not accommodate market timing in any Portfolios and there are no arrangements in place to permit any Policy Owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The Portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares and we reserve the right to enforce these policies and procedures. For example, Portfolios may assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period. The prospectuses for the Portfolios describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual authority or the operational capacity to apply the frequent trading policies and procedures of the Portfolios, we have entered into a written agreement, as required by SEC regulation, with each Portfolio or its principal underwriter that obligates us to provide to the Portfolio promptly upon request certain information about the trading activity of individual Policy Owners, and to execute instructions from the Portfolio to restrict or prohibit further purchases or transfers by specific Policy Owners who violate the frequent trading policies established by the Portfolio. In addition, Policy Owners and other persons with interests in the policies should be aware that the purchase and redemption orders received by the Portfolios generally are "omnibus" orders from intermediaries, such as retirement plans or separate account funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and/or individual retirement plan participants. The omnibus nature of these orders may limit the Portfolios in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Portfolios (and thus Policy Owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Portfolios. If a Portfolio believes that an omnibus order reflects one or more transfer requests from contract owners engaged in disruptive trading activity, the Portfolio may reject the entire omnibus order. In accordance with applicable law, we reserve the right to modify or terminate the transfer privilege at any time. We also reserve the right to defer or restrict the transfer privilege at any time that we are unable to purchase or redeem shares of any of the Portfolios, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single Policy Owner). You should read the Portfolio prospectuses for more details. TRANSFERS YOU CAN MAKE BY TELEPHONE Subject to our market timing procedures, we may, if permitted by state law, allow you to make transfer requests, changes to Automated Investment Strategies and changes to allocations of future net premiums by phone. We generally allow you to authorize your sales representative to make such requests. The following procedures apply: . We will institute reasonable procedures to confirm that instructions we receive are genuine. Our procedures will include receiving from the caller your personalized data. Any telephone instructions that we reasonably believe to be genuine are your responsibility, including losses arising from such instructions. Because telephone transactions may be available to anyone who provides certain information about you and your Policy, you should protect that information. We may not be able to verify that you are the person providing telephone instructions, or that you have authorized any such person to act for you. . All telephone calls will be recorded. . You will receive a written confirmation of any transaction. 12 . Neither the Separate Account nor we will be liable for any loss, expense or cost arising out of a telephone request if we reasonably believed the request to be genuine. . You should contact our Designated Office with any questions regarding the procedures. Telephone, facsimile, and computer systems may not always be available. Any telephone, facsimile, or computer system, whether it is yours, your service provider's, your sales representative's, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to our Designated Office. CHARGES AND DEDUCTIONS YOU PAY MORTALITY AND EXPENSE RISK CHARGE. We are waiving the following amount of the Mortality and Expense Risk Charge: 0.08% of the Investment Division investing in the BlackRock Large-Cap Core Portfolio. FEDERAL TAX MATTERS The following is a brief summary of some tax rules that may apply to your Policy. It does not purport to be complete or cover every situation. Because individual circumstances vary, you should consult with your own tax advisor to find out how taxes can affect your benefits and rights under your Policy, especially before you make unscheduled premium payments, change your specified face amount, change your death benefit option, change coverage provided by riders, take a loan or withdrawal, or assign or surrender the Policy. Under current federal income tax law, the taxable portion of distributions from variable life contracts is taxed at ordinary income tax rates and does not qualify for the reduced tax rate applicable to long-term capital gains and dividends. IRS CIRCULAR 230 NOTICE: The tax information contained in this Prospectus is not intended to (and cannot) be used by anyone to avoid IRS penalties. It is intended to support the sale of the Policy. The Policyholder should seek tax advice based on its particular circumstances from an independent tax advisor. INSURANCE PROCEEDS . Generally excludable from your beneficiary's gross income to the extent provided in Section 101 of the Internal Revenue Code ("Code"). In the case of employer-owned life insurance as defined in Section 101(j) of the Code, the amount excludable from gross income is limited to premiums paid unless the policy falls within certain specified exceptions and a notice and consent requirement is satisfied before the policy issued. Certain specified exceptions are based on the status of an employee as highly compensated or recently employed. There are also exceptions for policy proceeds paid to an employee's heirs. These exceptions only apply if proper notice is given to the insured employee and consent is received from the insured employee before the issuance of the policy. These rules apply to policies issued August 18, 2006 and later and also apply to policies issued before August 18, 2006 after a material increase in the death benefit or other material change. An IRS reporting requirement applies to employer-owned life insurance subject to these rules. Because these rules are complex and will affect the tax treatment of Death Benefits, it is advisable to consult tax counsel. Insurance death proceeds will also be taxable in the case of a transfer-for-value unless certain exceptions apply. . The proceeds may be subject to federal estate tax: (i) if paid to the insured's estate; or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. 13 . If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. . Whether or not any federal estate tax is due is based on a number of factors, including the estate size. . The insurance proceeds payable upon death of the insured will never be less than the minimum amount required for the Policy issued on a standard risk basis to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. There is less guidance, however, with respect to Policies issued on a substandard risk basis, and it is not clear that such Policies basis, and it is not clear that such Policies will in all cases satisfy the applicable requirements to be treated as life insurance under section 7702 of the Internal Revenue Code. CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) You are generally not taxed on your cash value until you withdraw it, surrender your Policy or receive a distribution such as on the Final Date. In these cases, you are generally permitted to take withdrawals and receive other distributions up to the amount of premiums paid without any tax consequences. However, withdrawals and other distributions will be subject to income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules apply in the first 15 Policy years, when a distribution may be subject to tax if there is a gain in your Policy (which is generally when your cash value exceeds the cumulative premiums you paid). There may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if you are subject to that tax. SPLIT-DOLLAR INSURANCE PLANS The IRS has issued guidance on split dollar insurance plans. A tax advisor should be consulted with respect to this guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. If your split dollar plan provides deferred compensation, recently enacted rules governing deferred compensation arrangement may apply. Failure to adhere to these rules will result in adverse tax consequences. Consult a tax adviser. The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on U.S. exchanges, from extending, directly or indirectly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted to apply to certain split-dollar life insurance arrangements for directors and executive officers of such companies, since at least some such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. Although the prohibition on loans generally took effect as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy or the purchase of a new Policy in connection with a split-dollar life insurance arrangement should consult legal counsel. LOANS . Loan amounts you receive will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. . Interest on loans is generally not deductible. For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. . If your Policy terminates (upon surrender, cancellation lapse, the Final Date or, in most cases, exchange) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. Since amounts borrowed reduce the cash value that 14 will be distributed to you if the Policy is surrendered, cancelled or lapses, any cash value distributed to you in these circumstances may be insufficient to pay the income tax on any gain. . The tax consequences of loans outstanding after the 15th Policy year are uncertain. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance policies where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the Policy exceeds tax law limits referred to as the "7-pay test." Material changes in the Policy, include changes in the level of benefits and certain other changes to your Policy after the issue date. Reductions in benefits during a 7-pay period may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts. Due to the flexibility of the Policies as to premiums and benefits, the individual circumstances of each Policy will determine whether it is classified as a MEC. If your Policy is considered a modified endowment contract: . The death benefit will still generally be income tax free to your beneficiary, as discussed above. . Amounts withdrawn or distributed before the insured's death, including (without limitation) loans, assignments and pledges, are (to the extent of any gains on your policy) treated as income first and subject to income tax. All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. . You will generally owe an additional 10% tax penalty on the taxable portion of the amounts you received before age 59 1/2, except generally if you are disabled or the distribution is part of a series of substantially equal periodic payments. . If a Policy becomes a modified endowment contract, distributions that occur during the Policy year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract will be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Policy. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy owners of gains under their Policies. INVESTOR CONTROL In some circumstances, owners of variable contracts who retain excessive control over the investment of the underlying Separate Account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. Although published guidance in this area does not address certain aspects of the Policies, we believe that the owner of a Policy should not be treated as an owner of the assets in our Separate Account. We reserve the right to modify the policies to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the policies from being treated as the owners of the underlying Separate Account assets. ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001. The Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") repeals the federal estate tax and replaces it with a carryover basis income tax regime effective for estates of decedents dying after December 31, 2009. 15 EGTRRA also repeals the generation skipping transfer tax, but not the gift tax, for transfers made after December 31, 2009. EGTRRA contains a sunset provision, which essentially returns the federal estate, gift and generation-skipping transfer taxes to their pre-EGTRRA form, beginning in 2011. Congress may or may not enact permanent repeal between now and then. During the period prior to 2010, EGTRRA provides for periodic decreases in the maximum estate tax rate coupled with periodic increases in the estate tax exemption. For 2006, the maximum estate tax rate is 46% and the maximum rate for 2007-2009 the maximum estate tax rate is 45%. The estate tax exemption is $2,000,000 for 2006-2008 and $3,500,000 in 2009. The complexity of the new tax law, along with uncertainty as to how it might be modified in coming years, underscores the importance of seeking guidance from a qualified advisor to help ensure that your estate plan adequately addresses your needs and that of your beneficiaries under all possible scenarios. WITHHOLDING To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient's federal income tax liability. Recipients can generally elect however, not to have tax withheld from distributions. LIFE INSURANCE PURCHASES BY RESIDENTS OF PUERTO RICO In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service recently announced that income received by residents of Puerto Rico under life insurance contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax. LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding taxation with respect to a life insurance Policy purchase. BUSINESS USES OF POLICY Businesses can use the policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. As noted, in the case of a business owned Policy, the provisions of Section 101(j) of the Code may limit the amount of the Death Benefit excludable from gross income unless a specified exception applies and a notice and consent requirement is satisfied, as discussed above. If you are purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax adviser. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax laws, rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: . Possible taxation of cash value transfers. . Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets. . Possible limits on the number of investment funds available or the frequency of transfers among them. . Possible changes in the tax treatment of Policy benefits and rights. 16 TAX CREDITS AND DEDUCTIONS The Company may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividend received deductions, are not passed back to the Separate Account or to Policy owners since the Company is the owner of the assets from which the tax benefits are derived. THE COMPANY'S INCOME TAXES Under current Federal income tax law we are not taxed on the Separate Account's operations. Thus, currently we do not deduct a charge from the Separate Account for company Federal income taxes. (We do deduct a charge for Federal taxes from premiums.) We reserve the right to charge the Separate Account for any future Federal income taxes we may incur. Under current laws we may incur state and local taxes (in addition to premium taxes). These taxes are not now significant and we are not currently charging for them. If they increase, we may deduct charges for such taxes. OTHER POLICY PROVISIONS PREMIUMS We do not accept payment of premium in cash or by money order. PAYMENT AND DEFERMENT We may withhold payment of surrender, partial withdrawals or loan proceeds if any portion of those proceeds would be derived from a Policy owner's check or from a preauthorized checking arrangement that has not yet cleared (i.e. that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communications to verify that payment from the Policy owner's check or preauthorized checking arrangement has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Policy owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of Metropolitan Life Separate Account UL included in this Prospectus Supplement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. FINANCIAL STATEMENTS The financial statements of the Separate Account are attached to this Supplement. You can find the financial statements of MetLife in the Statement of Additional Information. You may view the Statement of Additional Information by logging on to our website at www.metlife.com or you may obtain a copy of the Statement of Additional Information, without charge, by calling 800-MET-5000. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 17 ANNUAL REPORT OF METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY DECEMBER 31, 2006 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policyholders of Metropolitan Life Separate Account UL and the Board of Directors of Metropolitan Life Insurance Company: We have audited the accompanying statement of assets and liabilities of the investment divisions (as disclosed in Appendix A) comprising Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company ("Metropolitan Life") as of December 31, 2006, and the related statements of operations and changes in net assets for each of the periods in the three years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the investment divisions comprising the Separate Account of Metropolitan Life as of December 31, 2006, and the results of their operations and the changes in their net assets for each of the periods in the three years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, FL March 26, 2007 F-1 APPENDIX A MetLife Aggressive Allocation Janus Aspen Forty Investment Investment Division Division AIM V.I. Core Equity Investment Janus Aspen Large Cap Growth Division Investment Division AIM V.I. Core Stock Investment Jennison Growth Investment Division Division Lazard Mid-Cap Investment Division AIM V.I. Global Real Estate Legg Mason Aggressive Growth Investment Division Investment Division AIM V.I. Government Securities Legg Mason Value Equity Investment Investment Division Division AllianceBernstein Global Technology Lehman Brothers Aggregate Bond Investment Division Index Investment Division American Century Vista Investment Loomis Sayles Small Cap Investment Division Division American Funds Bond Investment Lord Abbett Bond Debenture Division Investment Division American Funds Global Small Lord Abbett Growth and Income Capitalization Investment Division Investment Division American Funds Growth Investment Lord Abbett Mid Cap Value Division Investment Division American Funds Growth-Income MET/AIM Small Cap Growth Investment Investment Division Division BlackRock Aggressive Growth MetLife Mid Cap Stock Index Investment Division Investment Division BlackRock Bond Income Investment MetLife Stock Index Investment Division Division BlackRock Diversified Investment MFS Global Equity Investment Division Division BlackRock Large Cap Investment MFS High Income Investment Division Division MFS Investors Trust Investment BlackRock Large Cap Value Division Investment Division MFS Research International BlackRock Legacy Large Cap Growth Investment Division Investment Division MFS Total Return Investment Division BlackRock Money Market Investment MetLife Moderate Allocation Division Investment Division BlackRock Strategic Value MetLife Moderate to Aggressive Investment Division Allocation Investment Division MetLife Conservative Allocation Morgan Stanley EAFE Index Investment Division Investment Division MetLife Conservative to Moderate Neuberger Berman Mid Cap Value Allocation Investment Division Investment Division Cyclical Growth ETF Investment Neuberger Berman Real Estate Division Investment Division Cyclical Growth and Income ETF Oppenheimer Capital Appreciation Investment Division Investment Division Davis Venture Value Investment Oppenheimer Global Equity Division Investment Division Delaware Small Cap Value Investment PIMCO Inflation Protected Bond Division Investment Division Dreyfus Emerging Leaders Investment PIMCO Total Return Investment Division Division Dreyfus International Value RCM Global Technology Investment Investment Division Division Dreyfus MidCap Stock Index Russell 2000 Index Investment Investment Division Division FI International Stock Investment Third Avenue Small Cap Value Division Investment Division FI Large Cap Investment Division T. Rowe Price Small Cap Growth FI Mid Cap Opportunities Investment Investment Division Division T. Rowe Price Large Cap Growth FI Value Leaders Investment Division Investment Division Fidelity VIP Asset Manager Growth T. Rowe Price Mid-Cap Growth Investment Division Investment Division Fidelity VIP Contrafund Investment Van Kampen Government Investment Division Division Fidelity VIP Equity Income Wells Fargo Advantage Asset Investment Division Allocation Investment Division Fidelity VIP Investment Grade Bond Wells Fargo Advantage Equity-Income Investment Division Investment Division Franklin Mutual Discovery Wells Fargo Advantage Large Company Securities Investment Division Growth Investment Division Franklin Templeton Foreign Wells Fargo Advantage Money Market Securities Stock Investment Investment Division Division Wells Fargo Advantage Total Return Franklin Templeton Small Cap Growth Bond Investment Division Investment Division Western Asset Management Strategic Government/High Grade Securities Bond Opportunities Investment Investment Division Division Goldman Sachs Mid-Cap Value Western Asset Management U.S. Investment Division Government Investment Division Goldman Sachs Structured Small Cap Equity Investment Division Harris Oakmark Focused Value Investment Division Harris Oakmark International Investment Division Harris Oakmark Large Cap Value Investment Division Janus Aspen Balanced Investment Division F-2 [THIS PAGE INTENTIONALLY LEFT BLANK] F-3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2006
BLACKROCK BLACKROCK BLACKROCK LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH METLIFE STOCK INVESTMENT INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ----------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ 435,927,262 $ -- $ -- $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- 331,421,284 -- -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- -- 228,710,481 -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- -- -- 707,569,055 FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- -- -- -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- -- -- -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- -- -- -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- -- -- -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- -- -- -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- -- -- -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- -- -- -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- -- -- -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- -- -- -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- -- -- -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- -- -- -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- -- -- -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- -- -- -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- -- -- -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- -- -- -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- -- -- -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- -- -- -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- -- -- -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- -- -- -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Investments............................. 435,927,262 331,421,284 228,710,481 707,569,055 Due From Metropolitan Life Insurance Company.. -- 11,435 7,114 -- ---------------- ---------------- ---------------- ---------------- Total Assets.................................. 435,927,262 331,432,719 228,717,595 707,569,055 LIABILITIES Due to Metropolitan Life Insurance Company.... (30,447) -- -- (4,262) ---------------- ---------------- ---------------- ---------------- NET ASSETS.................................... $ 435,896,815 $ 331,432,719 $ 228,717,595 $ 707,564,793 ================ ================ ================ ================ Outstanding Units............................. 16,009,494 13,096,726 11,198,297 33,607,228 Unit Fair Values.............................. $13.85 to $42.25 $14.57 to $36.86 $15.63 to $22.09 $12.80 to $38.04
FI INTERNATIONAL STOCK INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... 67,578,419 FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- ---------------- Total Investments............................. 67,578,419 Due From Metropolitan Life Insurance Company.. -- ---------------- Total Assets.................................. 67,578,419 LIABILITIES Due to Metropolitan Life Insurance Company.... (69,275) ---------------- NET ASSETS.................................... $ 67,509,144 ================ Outstanding Units............................. 3,412,213 Unit Fair Values.............................. $15.68 to $21.90
The accompanying notes are an integral part of these financial statements. F-4
FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE LEHMAN BROTHERS OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH AGGREGATE BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 271,492,459 -- -- -- -- -- -- -- 81,770,152 -- -- -- -- -- -- -- 48,978,562 -- -- -- -- -- -- -- 64,227,577 -- -- -- -- -- -- -- 77,840,502 -- -- -- -- -- -- -- 49,301,365 -- -- -- -- -- -- -- 90,426,972 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 271,492,459 81,770,152 48,978,562 64,227,577 77,840,502 49,301,365 90,426,972 -- 42,594 -- 65,262 -- 14,208 -- --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 271,492,459 81,812,746 48,978,562 64,292,839 77,840,502 49,315,573 90,426,972 (28,787) -- (34,027) -- (105,153) -- (9,645) --------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ 271,463,672 $ 81,812,746 $ 48,944,535 $ 64,292,839 $ 77,735,349 $ 49,315,573 $ 90,417,327 =============== ================ ================ ================ ================ ================ ================ 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 6,058,549 $7.97 to $22.36 $15.76 to $17.80 $20.38 to $22.70 $14.65 to $18.40 $20.75 to $29.66 $10.63 to $16.09 $13.75 to $15.13
MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION ---------------- $ -- -- -- -- -- -- -- -- -- -- -- -- 58,374,026 -- -- -- -- -- -- -- -- -- -- -- -- ---------------- 58,374,026 27,738 ---------------- 58,401,764 -- ---------------- $ 58,401,764 ================ 3,792,545 $13.02 to $17.67
F-5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
RUSSELL 2000 JENNISON BLACKROCK METLIFE MID CAP INDEX GROWTH STRATEGIC VALUE STOCK INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- --------------- ---------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- $ -- $ -- $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- -- -- -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- -- -- -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- -- -- -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- -- -- -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- -- -- -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- -- -- -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- -- -- -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- -- -- -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- -- -- -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- -- -- -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- -- -- -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- -- -- -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... 55,335,271 -- -- -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- 14,094,544 -- -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- -- 105,347,125 -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- -- -- 56,091,263 Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. -- -- -- -- BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- -- -- -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- -- -- -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- -- -- -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- -- -- -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- -- -- -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- -- -- -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- -- -- -- ---------------- --------------- ---------------- ---------------- Total Investments............................. 55,335,271 14,094,544 105,347,125 56,091,263 Due From Metropolitan Life Insurance Company.. -- 4,715 67,392 -- ---------------- --------------- ---------------- ---------------- Total Assets.................................. 55,335,271 14,099,259 105,414,517 56,091,263 LIABILITIES Due to Metropolitan Life Insurance Company.... (46,282) -- -- (1,127) ---------------- --------------- ---------------- ---------------- NET ASSETS.................................... $ 55,288,989 $ 14,099,259 $ 105,414,517 $ 56,090,136 ================ =============== ================ ================ Outstanding Units............................. 2,884,744 1,356,790 4,494,782 3,270,208 Unit Fair Values.............................. $15.20 to $21.19 $5.81 to $12.52 $21.68 to $23.68 $15.84 to $17.39
FRANKLIN TEMPLETON SMALL CAP GROWTH INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Large Cap Portfolio 13,922,940 shares; cost $417,515,055......... $ -- BlackRock Diversified Portfolio 18,820,062 shares; cost $305,902,881......... -- BlackRock Aggressive Growth Portfolio 9,545,513 shares; cost $221,153,714.......... -- MetLife Stock Index Portfolio 19,513,763 shares; cost $605,351,222......... -- FI International Stock Portfolio 4,362,713 shares; cost $49,519,684........... -- FI Mid Cap Opportunities Portfolio 13,894,189 shares; cost $250,695,232......... -- T. Rowe Price Small Cap Growth Portfolio 5,201,966 shares; cost $63,333,340........... -- Oppenheimer Global Equity Portfolio 2,905,016 shares; cost $34,835,367........... -- Harris Oakmark Large Cap Value Portfolio 4,186,935 shares; cost $48,822,541........... -- Neuberger Berman Mid Cap Value Portfolio 3,659,638 shares; cost $63,493,738........... -- T. Rowe Price Large Cap Growth Portfolio 3,228,642 shares; cost $37,231,216........... -- Lehman Brothers Aggregate Bond Index Portfolio 8,403,994 shares; cost $90,073,108........... -- Morgan Stanley EAFE Index Portfolio 3,648,377 shares; cost $36,798,184........... -- Russell 2000 Index Portfolio 3,529,035 shares; cost $40,899,187........... -- Jennison Growth Portfolio 1,108,933 shares; cost $11,618,395........... -- BlackRock Strategic Value Portfolio 5,938,395 shares; cost $90,540,700........... -- MetLife Mid Cap Stock Index Portfolio 3,831,370 shares; cost $45,370,279........... -- Franklin Templeton Small Cap Growth Portfolio 582,111 shares; cost $5,371,397.............. 6,368,294 BlackRock Large Cap Value Portfolio 680,468 shares; cost $8,247,706.............. -- Davis Venture Value Portfolio 1,419,702 shares; cost $37,107,951........... -- Loomis Sayles Small Cap Portfolio 49,459 shares; cost $10,124,033.............. -- BlackRock Legacy Large Cap Growth Portfolio 100,750 shares; cost $2,151,564.............. -- BlackRock Bond Income Portfolio 849,956 shares; cost $92,031,528............. -- FI Value Leaders Portfolio 27,735 shares; cost $5,139,096............... -- Harris Oakmark Focused Value Portfolio 216,077 shares; cost $46,962,437............. -- ---------------- Total Investments............................. 6,368,294 Due From Metropolitan Life Insurance Company.. -- ---------------- Total Assets.................................. 6,368,294 LIABILITIES Due to Metropolitan Life Insurance Company.... -- ---------------- NET ASSETS.................................... $ 6,368,294 ================ Outstanding Units............................. 538,941 Unit Fair Values.............................. $11.33 to $11.92
The accompanying notes are an integral part of these financial statements. F-6
BLACKROCK BLACKROCK LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE BLACKROCK FI VALUE HARRIS OAKMARK VALUE VENTURE VALUE SMALL CAP CAP GROWTH BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 9,397,259 -- -- -- -- -- -- -- 49,859,931 -- -- -- -- -- -- -- 12,333,661 -- -- -- -- -- -- -- 2,273,929 -- -- -- -- -- -- -- 92,313,649 -- -- -- -- -- -- -- 5,778,900 -- -- -- -- -- -- -- 58,176,504 --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ 9,397,259 49,859,931 12,333,661 2,273,929 92,313,649 5,778,900 58,176,504 -- -- -- -- -- -- -- --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ 9,397,259 49,859,931 12,333,661 2,273,929 92,313,649 5,778,900 58,176,504 -- (218) (1) (4,596) (2,472) (2) -- --------------- ---------------- ----------------- --------------- ---------------- ---------------- ------------------ $ 9,397,259 $ 49,859,713 $ 12,333,660 $ 2,269,333 $ 92,311,177 $ 5,778,898 $ 58,176,504 =============== ================ ================= =============== ================ ================ ================== 608,908 1,301,427 78,273 190,308 4,668,001 393,835 191,529 $8.29 to $15.57 $13.90 to $40.33 $13.47 to $298.24 $8.29 to $12.45 $14.39 to $29.48 $11.79 to $14.87 $290.84 to $305.98
F-7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
WESTERN ASSET MANAGEMENT WESTERN ASSET STRATEGIC BOND MANAGEMENT BLACKROCK OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882.................................... $ 15,802,133 $ -- $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960.................................... -- 14,050,390 -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897...................................... -- -- 59,328,897 MFS Total Return Portfolio 24,178 shares; cost $3,540,225........................................ -- -- -- MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.......................................... -- -- -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575....................................... -- -- -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611....................................... -- -- -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143.................................... -- -- -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160....................................... -- -- -- FI Large Cap Portfolio 4,080 shares; cost $57,394............................................ -- -- -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505....................................... -- -- -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160................................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249........................................... -- -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.......................................... -- -- -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567............................................... -- -- -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150........................................ -- -- -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018....................................... -- -- -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.......................................... -- -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283............................................ -- -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745........................................ -- -- -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.......................................... -- -- -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569............................................ -- -- -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.......................................... -- -- -- ---------------- ---------------- ---------------- Total Investments...................................................... 15,802,133 14,050,390 59,328,897 Due From Metropolitan Life Insurance Company........................... -- -- -- ---------------- ---------------- ---------------- Total Assets........................................................... 15,802,133 14,050,390 59,328,897 LIABILITIES Due to Metropolitan Life Insurance Company............................. -- -- (76) ---------------- ---------------- ---------------- NET ASSETS............................................................. $ 15,802,133 $ 14,050,390 $ 59,328,821 ================ ================ ================ Outstanding Units...................................................... 998,939 988,756 3,575,759 Unit Fair Values....................................................... $15.16 to $15.95 $13.62 to $14.33 $16.57 to $16.87
MFS TOTAL RETURN INVESTMENT DIVISION ---------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882.................................... $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960.................................... -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897...................................... -- MFS Total Return Portfolio 24,178 shares; cost $3,540,225........................................ 3,781,924 MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.......................................... -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575....................................... -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611....................................... -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143.................................... -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160....................................... -- FI Large Cap Portfolio 4,080 shares; cost $57,394............................................ -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505....................................... -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160................................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249........................................... -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.......................................... -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567............................................... -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150........................................ -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018....................................... -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.......................................... -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283............................................ -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745........................................ -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.......................................... -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569............................................ -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.......................................... -- ---------------- Total Investments...................................................... 3,781,924 Due From Metropolitan Life Insurance Company........................... -- ---------------- Total Assets........................................................... 3,781,924 LIABILITIES Due to Metropolitan Life Insurance Company............................. (3) ---------------- NET ASSETS............................................................. $ 3,781,921 ================ Outstanding Units...................................................... 297,430 Unit Fair Values....................................................... $12.47 to $12.77
The accompanying notes are an integral part of these financial statements. F-8
METLIFE METLIFE CONSERVATIVE TO METLIFE MODERATE METLIFE JANUS ASPEN CONSERVATIVE MODERATE METLIFE MODERATE TO AGGRESSIVE AGGRESSIVE LARGE CAP JANUS ASPEN ALLOCATION ALLOCATION ALLOCATION ALLOCATION ALLOCATION FI LARGE CAP GROWTH BALANCED INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------- ----------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 492,252 -- -- -- -- -- -- -- -- 1,884,052 -- -- -- -- -- -- -- -- 9,406,274 -- -- -- -- -- -- -- -- 13,918,465 -- -- -- -- -- -- -- -- 2,934,559 -- -- -- -- -- -- -- -- 61,685 -- -- -- -- -- -- -- -- 5,806,347 -- 2,311 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ 492,252 1,884,052 9,406,274 13,918,465 2,934,559 61,685 5,806,347 2,311 -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ 492,252 1,884,052 9,406,274 13,918,465 2,934,559 61,685 5,806,347 2,311 -- -- -- -- -- -- (4,738) -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------- ------ $ 492,252 $ 1,884,052 $ 9,406,274 $ 13,918,465 $ 2,934,559 $ 61,685 $5,801,609 $2,311 ================ ================ ================ ================ ================ ================ ========== ====== 44,128 161,903 775,138 1,098,433 225,274 6,047 595,051 179 $11.00 to $11.17 $11.51 to $11.68 $12.01 to $12.19 $12.52 to $12.71 $12.89 to $13.08 $10.16 to $10.22 $ 9.75 $12.90
F-9 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
AIM V.I. AIM V.I. JANUS ASPEN AIM V.I. GOVERNMENT GLOBAL FORTY CORE EQUITY SECURITIES REAL ESTATE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ----------- ----------- ---------- ----------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND--(CONTINUED) Western Asset Management Strategic Bond Opportunities Portfolio 1,256,131 shares; cost $15,647,882............................ $ -- $ -- $ -- $ -- Western Asset Management U.S. Government Portfolio 1,142,308 shares; cost $13,978,960............................ -- -- -- -- BlackRock Money Market Portfolio 593,289 shares; cost $59,328,897.............................. -- -- -- -- MFS Total Return Portfolio 24,178 shares; cost $3,540,225................................ -- -- -- -- MetLife Conservative Allocation Portfolio 46,527 shares; cost $472,304.................................. -- -- -- -- MetLife Conservative to Moderate Allocation Portfolio 170,195 shares; cost $1,801,575............................... -- -- -- -- MetLife Moderate Allocation Portfolio 816,517 shares; cost $8,905,611............................... -- -- -- -- MetLife Moderate to Aggressive Allocation Portfolio 1,161,808 shares; cost $12,983,143............................ -- -- -- -- MetLife Aggressive Allocation Portfolio 238,776 shares; cost $2,698,160............................... -- -- -- -- FI Large Cap Portfolio 4,080 shares; cost $57,394.................................... -- -- -- -- JANUS ASPEN SERIES ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio 251,140 shares; cost $4,476,505............................... -- -- -- -- Janus Aspen Balanced Portfolio 80 shares; cost $2,160........................................ Janus Aspen Forty Portfolio 3,723 shares; cost $103,249................................... 111,362 -- -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Equity Portfolio 11,649 shares; cost $291,707.................................. -- 317,090 -- -- AIM V. I. Government Securities Portfolio 631 shares; cost $7,567....................................... -- -- 7,402 -- AIM V.I. Global Real Estate Portfolio 95,661 shares; cost $2,164,150................................ -- -- -- 2,749,288 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio 399,365 shares; cost $5,496,018............................... -- -- -- -- Franklin Mutual Discovery Securities Portfolio 41,377 shares; cost $800,104.................................. -- -- -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. ("ALLIANCE FUND") AllianceBernstein Global Technology Portfolio 3,724 shares; cost $55,283.................................... -- -- -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio 66,446 shares; cost $2,051,745................................ -- -- -- -- Fidelity VIP Asset Manager Growth Portfolio 71,242 shares; cost $894,705.................................. -- -- -- -- Fidelity VIP Investment Grade Bond Portfolio 2,916 shares; cost $36,569.................................... -- -- -- -- Fidelity VIP Equity-Income Portfolio 16,586 shares; cost $430,644.................................. -- -- -- -- -------- -------- ------ ---------- Total Investments.............................................. 111,362 317,090 7,402 2,749,288 Due From Metropolitan Life Insurance Company................... -- 67,753 255 13,325 -------- -------- ------ ---------- Total Assets................................................... 111,362 384,843 7,657 2,762,613 LIABILITIES Due to Metropolitan Life Insurance Company..................... -- -- -- -- -------- -------- ------ ---------- NET ASSETS..................................................... $111,362 $384,843 $7,657 $2,762,613 ======== ======== ====== ========== Outstanding Units.............................................. 7,954 25,159 691 70,179 Unit Fair Values............................................... $ 14.00 $ 15.30 $11.08 $ 39.37
The accompanying notes are an integral part of these financial statements. F-10
FRANKLIN FRANKLIN MUTUAL FIDELITY VIP FIDELITY VIP TEMPLETON DISCOVERY ALLIANCEBERNSTEIN FIDELITY VIP ASSET MANAGER INVESTMENT FIDELITY VIP FOREIGN SECURITIES SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH GRADE BOND EQUITY-INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ --------------- ----------------- ------------ ------------- ------------ ------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,583,950 -- -- -- -- -- -- -- 899,119 -- -- -- -- -- -- -- 63,091 -- -- -- -- -- -- -- 2,085,084 -- -- -- -- -- -- -- 961,772 -- -- -- -- -- -- -- 36,978 -- -- -- -- -- -- -- 433,051 ---------- -------- ------- ---------- -------- ------- -------- 7,583,950 899,119 63,091 2,085,084 961,772 36,978 433,051 -- -- -- 6,235 -- -- 125 ---------- -------- ------- ---------- -------- ------- -------- 7,583,950 899,119 63,091 2,091,319 961,772 36,978 433,176 (17,633) (10) -- -- (3,696) -- -- ---------- -------- ------- ---------- -------- ------- -------- $7,566,317 $899,109 $63,091 $2,091,319 $958,076 $36,978 $433,176 ========== ======== ======= ========== ======== ======= ======== 471,719 54,880 11,768 151,404 102,160 3,341 30,951 $ 16.03 $ 16.38 $ 5.36 $ 13.81 $ 9.40 $ 11.10 $ 14.00
F-11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS GROWTH GROWTH-INCOME CAPITALIZATION BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ 97,034,740 $ -- $ -- $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- 63,898,091 -- -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- -- 43,642,742 -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- -- -- 644,176 MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. -- -- -- -- MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- -- -- -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- -- -- -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- -- -- -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- -- -- -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- -- -- -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- -- -- -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- -- -- -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- -- -- -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... -- -- -- -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- -- -- -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- -- -- -- Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- -- -- -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- -- -- -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- -- -- -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- -- -- -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- -- -- -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Investments................................... 97,034,740 63,898,091 43,642,742 644,176 Due From Metropolitan Life Insurance Company........ -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total Assets........................................ 97,034,740 63,898,091 43,642,742 644,176 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- -- -- -- ---------------- ---------------- ---------------- ---------------- NET ASSETS.......................................... $ 97,034,740 $ 63,898,091 $ 43,642,742 $ 644,176 ================ ================ ================ ================ Outstanding Units................................... 1,094,384 1,228,077 1,521,701 63,414 Unit Fair Values.................................... $84.90 to $89.32 $49.83 to $52.43 $27.56 to $28.99 $10.12 to $10.18
T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION --------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. 12,401,292 MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- --------------- Total Investments................................... 12,401,292 Due From Metropolitan Life Insurance Company........ -- --------------- Total Assets........................................ 12,401,292 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- --------------- NET ASSETS.......................................... $ 12,401,292 =============== Outstanding Units................................... 1,338,870 Unit Fair Values.................................... $8.84 to $13.92
The accompanying notes are an integral part of these financial statements. F-12
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT LAZARD MET/AIM HARRIS OAKMARK INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE MID-CAP SMALL CAP GROWTH INTERNATIONAL INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 9,804,463 -- -- -- -- -- -- -- 28,016,253 -- -- -- -- -- -- -- 7,523,569 -- -- -- -- -- -- -- 19,407,998 -- -- -- -- -- -- -- 4,020,887 -- -- -- -- -- -- -- 2,376,804 -- -- -- -- -- -- -- 21,411,537 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- 9,804,463 28,016,253 7,523,569 19,407,998 4,020,887 2,376,804 21,411,537 -- -- -- -- -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- 9,804,463 28,016,253 7,523,569 19,407,998 4,020,887 2,376,804 21,411,537 (938) -- -- (39,584) -- -- -- ---------------- ---------------- -------------- ---------------- ---------------- ---------------- ---------------- $ 9,803,525 $ 28,016,253 $ 7,523,569 $ 19,368,414 $ 4,020,887 $ 2,376,804 $ 21,411,537 ================ ================ ============== ================ ================ ================ ================ 566,593 2,039,385 1,395,573 1,162,806 261,764 170,794 1,060,490 $15.30 to $17.63 $13.16 to $13.85 $5.16 to $5.43 $14.77 to $18.05 $14.85 to $15.48 $13.44 to $14.02 $19.54 to $20.37
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION -------------- $ -- -- -- -- -- -- -- -- -- -- -- -- 7,744,434 -- -- -- -- -- -- -- -- -- -------------- 7,744,434 -- -------------- 7,744,434 (1) -------------- $ 7,744,433 ============== 908,926 $7.37 to $8.60
F-13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
LORD ABBETT NEUBERGER LORD ABBETT GROWTH AND BERMAN REAL MID-CAP INCOME ESTATE VALUE INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION ----------- ---------------- ----------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio 1,514,275 shares; cost $73,434,106................. $ -- $ -- $ -- American Funds Growth-Income Portfolio 1,514,532 shares; cost $51,310,447................. -- -- -- American Funds Global Small Capitalization Portfolio 1,771,215 shares; cost $33,062,652................. -- -- -- American Funds Bond Portfolio 55,870 shares; cost $630,339....................... -- -- -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio 1,415,886 shares; cost $10,397,004................. -- -- -- MFS Research International Portfolio 651,892 shares; cost $8,193,409.................... -- -- -- PIMCO Total Return Portfolio 2,372,248 shares; cost $27,443,339................. -- -- -- RCM Global Technology Portfolio 1,395,838 shares; cost $6,510,344.................. -- -- -- Lord Abbett Bond Debenture Portfolio 1,551,399 shares; cost $18,240,717................. -- -- -- Lazard Mid-Cap Portfolio 292,641 shares; cost $3,928,653.................... -- -- -- Met/AIM Small Cap Growth Portfolio 175,669 shares; cost $2,247,889.................... -- -- -- Harris Oakmark International Portfolio 1,125,146 shares; cost $17,718,505................. -- -- -- Legg Mason Aggressive Growth Portfolio 957,698 shares; cost $6,636,838.................... -- -- -- Lord Abbett Growth and Income Portfolio 199,443 shares; cost $5,401,248.................... 5,855,650 -- -- Neuberger Berman Real Estate Portfolio 1,047,324 shares; cost $15,181,720................. -- 18,987,193 -- Lord Abbett Mid-Cap Value Portfolio 1,888 shares; cost $41,606......................... -- -- 42,581 Third Avenue Small Cap Value Portfolio 15,820 shares; cost $252,037....................... -- -- -- Oppenheimer Capital Appreciation Portfolio 35,523 shares; cost $313,842....................... -- -- -- Legg Mason Value Equity Portfolio 494,554 shares; cost $5,208,092.................... -- -- -- Cyclical Growth ETF Portfolio 15,480 shares; cost $171,708....................... -- -- -- Cyclical Growth and Income ETF Portfolio 10,472 shares; cost $114,317....................... -- -- -- PIMCO Inflation Protected Bond Portfolio 12,844 shares; cost $131,157....................... -- -- -- ---------- ---------------- ------- Total Investments................................... 5,855,650 18,987,193 42,581 Due From Metropolitan Life Insurance Company........ 5,718 1 -- ---------- ---------------- ------- Total Assets........................................ 5,861,368 18,987,194 42,581 LIABILITIES Due to Metropolitan Life Insurance Company.......... -- -- (1) ---------- ---------------- ------- NET ASSETS.......................................... $5,861,368 $ 18,987,194 $42,580 ========== ================ ======= Outstanding Units................................... 523,423 939,464 2,988 Unit Fair Values.................................... $ 11.20 $19.85 to $20.33 $ 14.25
The accompanying notes are an integral part of these financial statements. F-14
OPPENHIEMER THIRD AVENUE CAPITAL LEGG MASON CYCLICAL GROWTH PIMCO INFLATION SMALL CAP APPRECIATION VALUE EQUITY CYCLICAL GROWTH AND INCOME ETF PROTECTED BOND VALUE INVESTMENT INVESTMENT INVESTMENT ETF INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 275,584 -- -- -- -- -- -- 329,300 -- -- -- -- -- -- 5,514,276 -- -- -- -- -- -- 176,315 -- -- -- -- -- -- 116,548 -- -- -- -- -- -- 129,728 -------- ---------------- ---------------- ---------------- ---------------- ---------------- 275,584 329,300 5,514,276 176,315 116,548 129,728 -- -- 23,384 -- -- -- -------- ---------------- ---------------- ---------------- ---------------- ---------------- 275,584 329,300 5,537,660 176,315 116,548 129,728 -- -- -- -- -- -- -------- ---------------- ---------------- ---------------- ---------------- ---------------- $275,584 $ 329,300 $ 5,537,660 $ 176,315 $ 116,548 $ 129,728 ======== ================ ================ ================ ================ ================ 17,494 27,796 490,888 16,395 10,875 12,722 $ 15.75 $11.70 to $11.87 $10.73 to $12.11 $10.71 to $10.77 $10.67 to $10.73 $10.14 to $10.20
F-15 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2006
DREYFUS DELAWARE DREYFUS EMERGING AMERICAN CENTURY SMALL CAP VALUE MIDCAP STOCK LEADERS VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- --------------- ------------ ---------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313............................ $24,928 $ -- $ -- $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398.......................... -- 512,556 -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................... -- -- 107,848 -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892.............................. -- -- -- 11,878 DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267.......................... -- -- -- -- GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937.......................... -- -- -- -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344............................ -- -- -- -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424............................ -- -- -- -- MFS Global Equity Portfolio 1,736 shares; cost $23,911............................ -- -- -- -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588............................ -- -- -- -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199............................ -- -- -- -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202......................... -- -- -- -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114.............................. -- -- -- -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780.......................... -- -- -- -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................... -- -- -- -- ------- -------- -------- ------- Total Investments...................................... 24,928 512,556 107,848 11,878 Due From Metropolitan Life Insurance Company........... -- 11,548 -- -- ------- -------- -------- ------- Total Assets........................................... 24,928 524,104 107,848 11,878 LIABILITIES Due to Metropolitan Life Insurance Company............. (1) -- (17,080) -- ------- -------- -------- ------- NET ASSETS............................................. $24,927 $524,104 $ 90,768 $11,878 ======= ======== ======== ======= Outstanding Units...................................... 1,963 31,911 7,996 931 Unit Fair Values....................................... $ 12.70 $ 16.42 $ 11.35 $ 12.76
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION ------------------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313............................ $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398.......................... -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................... -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892.............................. -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267.......................... 686,496 GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937.......................... -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344............................ -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424............................ -- MFS Global Equity Portfolio 1,736 shares; cost $23,911............................ -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588............................ -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199............................ -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202......................... -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114.............................. -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780.......................... -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................... -- -------- Total Investments...................................... 686,496 Due From Metropolitan Life Insurance Company........... 29,936 -------- Total Assets........................................... 716,432 LIABILITIES Due to Metropolitan Life Insurance Company............. -- -------- NET ASSETS............................................. $716,432 ======== Outstanding Units...................................... 45,198 Unit Fair Values....................................... $ 15.85
The accompanying notes are an integral part of these financial statements. F-16
GOLDMAN SACHS WELLS FARGO WELLS FARGO WELLS FARGO GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL VAN KAMPEN ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY GOVERNMENT TOTAL RETURN MONEY MARKET ASSET ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------- ---------------- ---------- ---------- ---------- ------------ ------------ ---------------- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 265,497 -- -- -- -- -- -- -- -- 89,591 -- -- -- -- -- -- -- -- 82,011 -- -- -- -- -- -- -- -- 26,855 -- -- -- -- -- -- -- -- 14,833 -- -- -- -- -- -- -- -- 61,184 -- -- -- -- -- -- -- -- 982,202 -- -- -- -- -- -- -- -- 11,546 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -------- -------- ------- ------- ------- -------- --------- -------- 265,497 89,591 82,011 26,855 14,833 61,184 982,202 11,546 -- -- -- 1 -- 7 -- -- -------- -------- ------- ------- ------- -------- --------- -------- 265,497 89,591 82,011 26,856 14,833 61,191 982,202 11,546 (1,531) (1) -- -- -- -- (88) -- -------- -------- ------- ------- ------- -------- --------- -------- $263,966 $ 89,590 $82,011 $26,856 $14,833 $ 61,191 $ 982,114 $ 11,546 ======== ======== ======= ======= ======= ======== ========= ======== 18,362 6,743 6,738 1,789 1,342 5,553 91,188 907 $ 14.38 $ 13.29 $ 12.17 $ 15.01 $ 11.06 $ 11.02 $ 10.77 $ 12.73
F-17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2006
WELLS FARGO WELLS FARGO ADVANTAGE VT ADVANTAGE VT LARGE COMPANY EQUITY INCOME GROWTH INVESTMENT INVESTMENT DIVISION DIVISION ----------------- ------------- INVESTMENTS AT FAIR VALUE: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio 1,584 shares; cost $22,313......................................... $ -- $ -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio 15,378 shares; cost $488,398....................................... -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Mid Cap Stock Portfolio 6,227 shares; cost $120,957........................................ -- -- Dreyfus Emerging Leaders Portfolio 562 shares; cost $12,892........................................... -- -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio 35,259 shares; cost $606,267....................................... -- -- GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio 16,501 shares; cost $267,937....................................... -- -- Goldman Sachs Structured Small Cap Equity Portfolio 6,204 shares; cost $93,344......................................... -- -- MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio 8,209 shares; cost $79,424......................................... -- -- MFS Global Equity Portfolio 1,736 shares; cost $23,911......................................... -- -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio 1,595 shares; cost $14,588......................................... -- -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage VT Total Return Bond Portfolio 6,243 shares; cost $60,199......................................... -- -- Wells Fargo Advantage VT Money Market Portfolio 982,203 shares; cost $982,202...................................... -- -- Wells Fargo Advantage VT Asset Allocation Portfolio 817 shares; cost $11,114........................................... -- -- Wells Fargo Advantage VT Large Company Growth Portfolio 20,930 shares; cost $189,780....................................... 200,720 -- Wells Fargo Advantage VT Equity Income Portfolio 446 shares; cost $7,306............................................ -- 8,813 --------- ------- Total Investments................................................... 200,720 8,813 Due From Metropolitan Life Insurance Company........................ -- -- --------- ------- Total Assets........................................................ 200,720 8,813 LIABILITIES Due to Metropolitan Life Insurance Company.......................... -- -- --------- ------- NET ASSETS $ 200,720 $ 8,813 ========= ======= Outstanding Units................................................... 17,802 653 Unit Fair Values.................................................... $ 11.28 $ 13.49
The accompanying notes are an integral part of these financial statements. F-18 [THIS PAGE INTENTIONALLY LEFT BLANK] F-19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK LARGE CAP INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ----------- ----------- ----------- INVESTMENT INCOME (LOSS): Income: Dividends.................................................... $ 5,365,248 $ 4,375,931 $ 2,717,041 Expenses: Mortality and expense risk charges........................... 3,616,837 3,470,220 3,262,909 ----------- ----------- ----------- Net investment income (loss)................................... 1,748,411 905,711 (545,868) ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions............. 1,910,880 834,521 (689,999) Realized gain distributions.................................... -- -- -- ----------- ----------- ----------- Net realized gains (losses) on investments..................... 1,910,880 834,521 (689,999) Change in unrealized appreciation (depreciation) of investments 47,641,145 8,704,485 37,215,298 ----------- ----------- ----------- Net realized and unrealized gains (losses) on investments...... 49,552,025 9,539,006 36,525,299 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $51,300,436 $10,444,717 $35,979,431 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-20
BLACKROCK DIVERSIFIED BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ------------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 7,880,854 $4,998,633 $ 5,543,155 $ -- $ -- $ -- $12,777,493 $ 8,971,609 $ 4,172,573 2,787,484 2,728,213 2,975,584 1,968,385 1,824,382 1,651,256 5,268,088 4,641,173 3,998,379 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,093,370 2,270,420 2,567,571 (1,968,385) (1,824,382) (1,651,256) 7,509,405 4,330,436 174,194 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 2,697,730 655,141 (558,940) (1,521,325) (2,231,885) (3,443,419) 6,189,767 3,573,660 (2,432,174) -- -- -- -- -- -- 21,804,470 -- -- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 2,697,730 655,141 (558,940) (1,521,325) (2,231,885) (3,443,419) 27,994,237 3,573,660 (2,432,174) 21,697,213 3,822,631 19,749,208 16,167,405 23,892,825 27,472,766 53,741,400 14,173,789 49,514,290 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 24,394,943 4,477,772 19,190,268 14,646,080 21,660,940 24,029,347 81,735,637 17,747,449 47,082,116 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $29,488,313 $6,748,192 $21,757,839 $12,677,695 $19,836,558 $22,378,091 $89,245,042 $22,077,885 $47,256,310 =========== ========== =========== =========== =========== =========== =========== =========== ===========
F-21 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI INTERNATIONAL STOCK INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ---------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 881,159 $ 317,306 $ 606,588 Expenses: Mortality and expense risk charges.......... 530,605 427,240 370,691 ---------- ---------- ---------- Net investment income (loss)................. 350,554 (109,934) 235,897 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 832,502 237,027 (367,092) Realized gain distributions.................. -- -- -- ---------- ---------- ---------- Net realized gains (losses) on investments... 832,502 237,027 (367,092) Change in unrealized appreciation (depreciation) of investments............... 7,805,567 8,151,109 7,284,341 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments.............................. 8,638,069 8,388,136 6,917,249 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $8,988,623 $8,278,202 $7,153,146 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-22
FI MID CAP OPPORTUNITIES T. ROWE PRICE SMALL CAP GROWTH OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ---------------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- $ 14,072 $ -- $ 1,090,068 $ -- $ -- $ -- $1,114,393 $ 209,625 $ 478,904 2,242,728 2,011,441 1,721,436 661,143 595,465 530,571 361,328 299,169 246,310 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (2,228,656) (2,011,441) (631,368) (661,143) (595,465) (530,571) 753,065 (89,544) 232,594 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (4,482,428) (1,015,121) (717,628) 842,686 37,997 (69,548) 571,820 270,279 (301,695) -- -- -- -- -- -- 861,246 -- -- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- (4,482,428) (1,015,121) (717,628) 842,686 37,997 (69,548) 1,433,066 270,279 (301,695) 33,489,573 17,191,699 33,098,684 2,138,730 7,936,747 7,181,746 4,443,736 5,277,659 4,666,310 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 29,007,145 16,176,578 32,381,056 2,981,416 7,974,744 7,112,198 5,876,802 5,547,938 4,364,615 ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- $26,778,489 $14,165,137 $31,749,688 $2,320,273 $7,379,279 $6,581,627 $6,629,867 $5,458,394 $4,597,209 =========== =========== =========== ========== ========== ========== ========== ========== ==========
F-23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
HARRIS OAKMARK LARGE CAP VALUE INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ---------- ----------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 447,049 $ 367,539 $ 216,340 Expenses: Mortality and expense risk charges.......... 478,172 429,104 366,329 ---------- ----------- ---------- Net investment income (loss)................. (31,123) (61,565) (149,989) ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 835,096 398,007 613,781 Realized gain distributions.................. -- -- -- ---------- ----------- ---------- Net realized gains (losses) on investments... 835,096 398,007 613,781 Change in unrealized appreciation (depreciation) of investments............... 8,574,081 (1,475,339) 4,130,792 ---------- ----------- ---------- Net realized and unrealized gains (losses) on investments.............................. 9,409,177 (1,077,332) 4,744,573 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $9,378,054 $(1,138,897) $4,594,584 ========== =========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-24
NEUBERGER BERMAN MID CAP VALUE T. ROWE PRICE LARGE CAP GROWTH LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- $ 340,446 $ 157,412 $ 89,490 $ 147,322 $ 212,638 $ 72,329 $3,647,493 $ 2,790,273 $1,838,871 602,710 468,169 312,426 370,484 319,250 290,730 616,266 528,874 414,705 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- (262,264) (310,757) (222,936) (223,162) (106,612) (218,401) 3,031,227 2,261,399 1,424,166 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 895,063 557,751 490,187 505,143 187,894 989,299 (57,852) 113,726 451,466 6,150,111 4,520,673 971,349 2,175 -- 354 -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 7,045,174 5,078,424 1,461,536 507,318 187,894 989,653 (57,852) 113,726 451,466 382,304 1,374,494 6,555,902 5,044,250 2,209,286 2,694,772 (71,436) (1,403,001) 266,268 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- 7,427,478 6,452,918 8,017,438 5,551,568 2,397,180 3,684,425 (129,288) (1,289,275) 717,734 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- $7,165,214 $6,142,161 $7,794,502 $5,328,406 $2,290,568 $3,466,024 $2,901,939 $ 972,124 $2,141,900 ========== ========== ========== ========== ========== ========== ========== =========== ==========
F-25 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ----------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ 843,327 $ 597,805 $ 202,506 Expenses: Mortality and expense risk charges............... 419,647 312,106 230,962 ----------- ---------- ---------- Net investment income (loss)...................... 423,680 285,699 (28,456) ----------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 984,685 590,734 1,189,725 Realized gain distributions....................... -- -- -- ----------- ---------- ---------- Net realized gains (losses) on investments........ 984,685 590,734 1,189,725 Change in unrealized appreciation (depreciation) of investments................................... 9,577,488 3,753,078 3,997,066 ----------- ---------- ---------- Net realized and unrealized gains (losses) on investments...................................... 10,562,173 4,343,812 5,186,791 ----------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $10,985,853 $4,629,511 $5,158,335 =========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-26
RUSSELL 2000 INDEX JENNISON GROWTH BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- --------------------- ------------------------------------- 2006 2005 2004 2006 2005(A) 2006 2005 2004 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- $ 397,966 $ 293,721 $ 141,315 $ -- $ -- $ 298,959 $ -- $ -- 402,879 320,327 255,946 113,119 67,101 828,876 714,689 563,943 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- (4,913) (26,606) (114,631) (113,119) (67,101) (529,917) (714,689) (563,943) ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 793,645 811,342 973,061 116,022 36,398 1,173,096 647,742 827,418 1,842,549 1,438,122 -- 11,909 -- 17,677,150 5,489,850 -- ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 2,636,194 2,249,464 973,061 127,931 36,398 18,850,246 6,137,592 827,418 5,025,107 (613,275) 4,412,786 269,709 2,206,440 (4,073,024) (2,502,234) 9,427,091 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- 7,661,301 1,636,189 5,385,847 397,640 2,242,838 14,777,222 3,635,358 10,254,509 ---------- ---------- ---------- --------- ---------- ----------- ----------- ----------- $7,656,388 $1,609,583 $5,271,216 $ 284,521 $2,175,737 $14,247,305 $ 2,920,669 $ 9,690,566 ========== ========== ========== ========= ========== =========== =========== ===========
F-27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION --------------------------------- 2006 2005 2004 ---------- ---------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ 617,181 $ 278,096 $ 156,916 Expenses: Mortality and expense risk charges............... 431,166 340,784 259,163 ---------- ---------- ---------- Net investment income (loss)...................... 186,015 (62,688) (102,247) ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 660,796 682,809 992,035 Realized gain distributions....................... 3,502,918 2,036,561 81,073 ---------- ---------- ---------- Net realized gains (losses) on investments........ 4,163,714 2,719,370 1,073,108 Change in unrealized appreciation (depreciation) of investments................................... 201,865 1,900,535 3,817,899 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments...................................... 4,365,579 4,619,905 4,891,007 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $4,551,594 $4,557,217 $4,788,760 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-28
FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE DAVIS VENTURE VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- $ -- $ -- $ -- $ 79,434 $ 37,063 $ -- $ 403,990 $ 244,019 $ 151,001 50,288 39,601 31,464 57,120 34,801 18,736 384,612 290,656 210,672 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- (50,288) (39,601) (31,464) 22,314 2,262 (18,736) 19,378 (46,637) (59,671) -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 136,411 129,715 40,690 121,354 81,656 105,597 2,307,728 226,016 508,082 286,106 154,763 -- 389,137 39,914 -- -- -- -- -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 422,517 284,478 40,690 510,491 121,570 105,597 2,307,728 226,016 508,082 106,882 (56,267) 404,946 656,059 110,740 229,787 3,652,646 3,304,528 2,678,225 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- 529,399 228,211 445,636 1,166,550 232,310 335,384 5,960,374 3,530,544 3,186,307 -------- -------- -------- ---------- -------- -------- ---------- ---------- ---------- $479,111 $188,610 $414,172 $1,188,864 $234,572 $316,648 $5,979,752 $3,483,907 $3,126,636 ======== ======== ======== ========== ======== ======== ========== ========== ==========
F-29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION ------------------------------ 2006 2005 2004 ---------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends........................................ $ -- $ -- $ -- Expenses: Mortality and expense risk charges............... 90,220 60,646 44,015 ---------- -------- -------- Net investment income (loss)...................... (90,220) (60,646) (44,015) ---------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions 208,239 74,135 142,373 Realized gain distributions....................... 848,702 83,073 -- ---------- -------- -------- Net realized gains (losses) on investments........ 1,056,941 157,208 142,373 Change in unrealized appreciation (depreciation) of investments................................... 425,449 365,753 718,393 ---------- -------- -------- Net realized and unrealized gains (losses) on investments...................................... 1,482,390 522,961 860,766 ---------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................................. $1,392,170 $462,315 $816,751 ========== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-30
BLACKROCK LEGACY LARGE CAP GROWTH MFS INVESTORS TRUST BLACKROCK BOND INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- ----------------------------- ------------------------------------- 2006 2005 2004 2006 (B) 2005 2004 2006 2005 2004 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- $ 12,152 $ 32,623 $ -- $ 47,698 $ 15,998 $ 9,640 $ 5,391,669 $ 3,611,102 $ 3,802,105 38,586 43,887 30,183 12,243 36,252 23,709 735,582 716,223 702,302 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- (26,434) (11,264) (30,183) 35,455 (20,254) (14,069) 4,656,087 2,894,879 3,099,803 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- 954,600 84,949 117,304 487,261 75,511 10,690 (260,701) 98,977 1,244,325 -- -- -- 343,249 -- -- 92,238 1,043,295 1,587,341 ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- 954,600 84,949 117,304 830,510 75,511 10,690 (168,463) 1,142,272 2,831,666 (1,121,566) 498,307 394,196 (658,871) 189,614 322,040 (1,188,505) (2,577,646) (2,928,093) ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- (166,966) 583,256 511,500 (171,610) 265,125 332,730 (1,356,968) (1,435,374) (96,427) ----------- -------- -------- --------- -------- -------- ----------- ----------- ----------- $ (193,400) $571,992 $481,317 $ 207,094 $244,871 $318,661 $ 3,299,119 $ 1,459,505 $ 3,003,376 =========== ======== ======== ========= ======== ======== =========== =========== ===========
F-31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI VALUE LEADERS INVESTMENT DIVISION -------------------------- 2006 2005 2004 -------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 45,870 $ 23,066 $ 9,363 Expenses: Mortality and expense risk charges.......... 39,722 19,333 6,936 -------- -------- -------- Net investment income (loss)................. 6,148 3,733 2,427 -------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 71,567 80,493 13,334 Realized gain distributions.................. 105,940 -- -- -------- -------- -------- Net realized gains (losses) on investments... 177,507 80,493 13,334 Change in unrealized appreciation (depreciation) of investments............... 304,366 177,601 106,438 -------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. 481,873 258,094 119,772 -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $488,021 $261,827 $122,199 ======== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-32
WESTERN ASSET MANAGEMENT WESTERN ASSET MANAGEMENT HARRIS OAKMARK FOCUSED VALUE STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ------------------------------ ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- $ 158,000 $ 17,995 $ 12,226 $ 685,459 $ 322,307 $185,168 $423,016 $ 143,164 $104,895 447,521 369,999 261,670 118,623 90,184 55,535 106,778 88,576 66,814 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- (289,521) (352,004) (249,444) 566,836 232,123 129,633 316,238 54,588 38,081 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 862,876 647,285 205,940 44,303 55,156 74,022 (10,510) (2,681) 1,624 4,875,177 432,350 306,174 109,245 198,820 -- -- 195,299 82,987 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 5,738,053 1,079,635 512,114 153,548 253,976 74,022 (10,510) 192,618 84,611 467,020 3,071,366 2,796,718 (101,864) (261,648) 217,644 127,750 (152,454) 55,424 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- 6,205,073 4,151,001 3,308,832 51,684 (7,672) 291,666 117,240 40,164 140,035 ---------- ---------- ---------- --------- --------- -------- -------- --------- -------- $5,915,552 $3,798,997 $3,059,388 $ 618,520 $ 224,451 $421,299 $433,478 $ 94,752 $178,116 ========== ========== ========== ========= ========= ======== ======== ========= ========
F-33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK MONEY MARKET INVESTMENT DIVISION ---------------------------- 2006 2005 2004 ---------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $1,804,658 $795,483 $291,356 Expenses: Mortality and expense risk charges.......... 207,469 167,153 179,180 ---------- -------- -------- Net investment income (loss)................. 1,597,189 628,330 112,176 ---------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ -- -- -- Realized gain distributions.................. -- -- -- ---------- -------- -------- Net realized gains (losses) on investments... -- -- -- Change in unrealized appreciation (depreciation) of investments............... -- -- -- ---------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. -- -- -- ---------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $1,597,189 $628,330 $112,176 ========== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-34
METLIFE METLIFE CONSERVATIVE TO MODERATE MFS TOTAL RETURN CONSERVATIVE ALLOCATION ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- ----------------------- ------------------------ 2006 2005 2004 (D) 2006 2005 (A) 2006 2005 (A) -------- ------- -------- ------- -------- -------- -------- $ 93,810 $23,976 $ -- $10,638 $ 372 $ 30,389 $ 2,224 27,494 13,447 1,443 3,484 348 11,718 1,984 -------- ------- ------- ------- -------- -------- ------- 66,316 10,529 (1,443) 7,154 24 18,671 240 -------- ------- ------- ------- -------- -------- ------- 5,870 18,142 429 (1,845) 271 12,097 1,644 58,740 15,212 -- 4,082 99 20,839 108 -------- ------- ------- ------- -------- -------- ------- 64,610 33,354 429 2,237 370 32,936 1,752 205,638 (3,131) 39,191 19,393 554 73,219 9,258 -------- ------- ------- ------- -------- -------- ------- 270,248 30,223 39,620 21,630 924 106,155 11,010 -------- ------- ------- ------- -------- -------- ------- $336,564 $40,752 $38,177 $28,784 $ 948 $124,826 $11,250 ======== ======= ======= ======= ======== ======== =======
F-35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE MODERATE ALLOCATION INVESTMENT DIVISION ------------------- 2006 2005 (A) -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 76,104 $ 5,987 Expenses: Mortality and expense risk charges.......... 45,704 3,787 -------- ------- Net investment income (loss)................. 30,400 2,200 -------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 48,706 3,556 Realized gain distributions.................. 106,419 133 -------- ------- Net realized gains (losses) on investments... 155,125 3,689 Change in unrealized appreciation (depreciation) of investments............... 474,841 25,822 -------- ------- Net realized and unrealized gains (losses) on investments.............................. 629,966 29,511 -------- ------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $660,366 $31,711 ======== =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-36
METLIFE METLIFE MODERATE TO AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION FI LARGE CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------- --------------------- ------------------- 2006 2005 (A) 2006 2005 (A) 2006 (C) ---------- -------- -------- -------- ------------------- $ 77,374 $ 9,012 $ 9,703 $ 1,642 $ -- 65,099 6,087 13,592 1,181 246 ---------- ------- -------- ------- ------ 12,275 2,925 (3,889) 461 (246) ---------- ------- -------- ------- ------ 14,344 4,752 (41,990) 1,894 21 196,911 210 40,723 1,242 -- ---------- ------- -------- ------- ------ 211,255 4,962 (1,267) 3,136 21 870,757 64,564 225,674 10,725 4,291 ---------- ------- -------- ------- ------ 1,082,012 69,526 224,407 13,861 4,312 ---------- ------- -------- ------- ------ $1,094,287 $72,451 $220,518 $14,322 $4,066 ========== ======= ======== ======= ======
F-37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
JANUS ASPEN LARGE CAP GROWTH INVESTMENT DIVISION ---------------------------- 2006 2005 2004 -------- -------- --------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 25,478 $ 15,028 $ 5,939 Expenses: Mortality and expense risk charges.......... 24,818 21,214 17,727 -------- -------- --------- Net investment income (loss)................. 660 (6,186) (11,788) -------- -------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 80,063 (62,709) (193,886) Realized gain distributions.................. -- -- -- -------- -------- --------- Net realized gains (losses) on investments... 80,063 (62,709) (193,886) Change in unrealized appreciation (depreciation) of investments............... 477,638 263,241 407,058 -------- -------- --------- Net realized and unrealized gains (losses) on investments.............................. 557,701 200,532 213,172 -------- -------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $558,361 $194,346 $ 201,384 ======== ======== =========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-38
JANUS ASPEN BALANCED JANUS ASPEN FORTY AIM V.I. CORE STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ----------------- ------------------------ 2006 2005 2004 2006 2005 2004 2006 (B) 2005 2004 ---- ---- ---- ------ ---- ---- -------- ------ ------ $ 44 $25 $ 4 $ 152 $-- $-- $ 2,695 $ 982 $2,041 7 1 -- 383 -- -- 383 1,116 951 ---- --- --- ------ --- --- -------- ------ ------ 37 24 4 (231) -- -- 2,312 (134) 1,090 ---- --- --- ------ --- --- -------- ------ ------ 33 1 0 (26) -- -- 37,949 5,489 (458) -- -- -- -- -- -- -- -- -- ---- --- --- ------ --- --- -------- ------ ------ 33 (26) -- -- 37,949 5,489 (458) 147 1 4 8,113 -- -- (16,441) 3,571 9,085 ---- --- --- ------ --- --- -------- ------ ------ 180 2 4 8,087 -- -- 21,508 9,060 8,627 ---- --- --- ------ --- --- -------- ------ ------ $217 $26 $ 8 $7,856 $-- $-- $ 23,820 $8,926 $9,717 ==== === === ====== === === ======== ====== ======
F-39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AIM V.I. AIM V.I. CORE EQUITY GOVERNMENT SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- 2006 (C) 2006 2005 2004 (D) -------------------- ---- ----- -------- INVESTMENT INCOME (LOSS): Income: Dividends.................................................... $ 1,689 $280 $ 239 $ 30 Expenses: Mortality and expense risk charges........................... 1,107 32 46 1 ------- ---- ----- ---- Net investment income (loss)................................... 582 248 193 29 ------- ---- ----- ---- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions............. 40 (8) 107 (2) Realized gain distributions.................................... -- -- -- -- ------- ---- ----- ---- Net realized gains (losses) on investments..................... 40 (8) 107 (2) Change in unrealized appreciation (depreciation) of investments 25,383 (28) (117) (20) ------- ---- ----- ---- Net realized and unrealized gains (losses) on investments...... 25,423 (36) (10) (22) ------- ---- ----- ---- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $26,005 $212 $ 183 $ 7 ======= ==== ===== ====
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-40
AIM V.I. GLOBAL REAL ESTATE FRANKLIN TEMPLETON FOREIGN SECURITIES STOCK FRANKLIN MUTUAL DISCOVERY SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------- ------------------------------------------- ------------------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) -------- -------- -------- ---------- -------- -------- -------- ------ -------- $ 25,329 $ 18,091 $ 9,356 $ 91,823 $ 71,641 $ 52,419 $ 5,569 $ 814 $-- 10,103 6,839 4,827 31,977 26,380 22,112 2,376 268 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 15,226 11,252 4,529 59,846 45,261 30,307 3,193 546 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 329,460 148,313 54,384 553,100 259,867 153,352 7,128 132 -- 87,476 64,792 20,514 -- -- -- 19,692 -- -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 416,936 213,105 74,898 553,100 259,867 153,352 26,820 132 -- 328,141 7,005 204,103 743,656 264,624 613,265 90,251 8,764 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- 745,077 220,110 279,001 1,296,756 524,491 766,617 117,071 8,896 -- -------- -------- -------- ---------- -------- -------- -------- ------ --- $760,303 $231,362 $283,530 $1,356,602 $569,752 $796,924 $120,264 $9,442 $-- ======== ======== ======== ========== ======== ======== ======== ====== ===
F-41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY INVESTMENT DIVISION ---------------------- 2006 2005 2004 ------ ------ ------ INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 169 135 77 ------ ------ ------ Net investment income (loss)................. (169) (135) (77) ------ ------ ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 2,596 255 108 Realized gain distributions.................. -- -- -- ------ ------ ------ Net realized gains (losses) on investments... 2,596 255 108 Change in unrealized appreciation (depreciation) of investments............... 2,024 1,638 2,247 ------ ------ ------ Net realized and unrealized gains (losses) on investments.............................. 4,620 1,893 2,355 ------ ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $4,451 $1,758 $2,278 ====== ====== ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-42
FIDELITY VIP INVESTMENT FIDELITY VIP CONTRAFUND FIDELITY VIP ASSET MANAGER GROWTH GRADE BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- --------------------------------- ---------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) --------- -------- -------- ------- -------- ------- ------ ----- -------- $ 18,557 $ 1,816 $ 1,770 $16,581 $ 18,249 $12,700 $1,506 $ 548 $-- 7,808 3,729 3,453 4,218 3,454 3,079 147 80 4 --------- -------- -------- ------- -------- ------- ------ ----- --- 10,749 (1,913) (1,683) 12,363 14,795 9,621 1,359 468 (4) --------- -------- -------- ------- -------- ------- ------ ----- --- 69,614 170,001 62,282 3,099 38,662 3,245 (928) (59) 8 161,683 165 -- -- -- -- 92 335 -- --------- -------- -------- ------- -------- ------- ------ ----- --- 231,297 170,166 62,282 3,099 38,662 3,245 (836) 276 8 (100,652) (22,158) 45,971 39,972 (29,733) 19,246 767 (370) 12 --------- -------- -------- ------- -------- ------- ------ ----- --- 130,645 148,008 108,253 43,071 8,929 22,491 (69) (94) 20 --------- -------- -------- ------- -------- ------- ------ ----- --- $ 141,394 $146,095 $106,570 $55,434 $ 23,724 $32,112 $1,290 $ 374 $16 ========= ======== ======== ======= ======== ======= ====== ===== ===
F-43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 8,458 $ 187 $-- Expenses: Mortality and expense risk charges.......... 885 259 5 ------- ------- --- Net investment income (loss)................. 7,573 (72) (5) ------- ------- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 3,265 (5,940) -- Realized gain distributions.................. 35,411 431 -- ------- ------- --- Net realized gains (losses) on investments... 38,676 (5,509) -- Change in unrealized appreciation (depreciation) of investments............... 1,802 605 -- ------- ------- --- Net realized and unrealized gains (losses) on investments.............................. 40,478 (4,904) -- ------- ------- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $48,051 $(4,976) $(5) ======= ======= ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-44
AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- -------------------------------- --------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $ 727,425 $ 437,807 $ 70,060 $ 918,542 $ 587,451 $ 276,574 $ 162,359 $ 167,221 $ -- 728,495 489,519 294,065 467,194 343,213 227,511 306,581 151,245 73,946 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (1,070) (51,712) (224,005) 451,348 244,238 49,063 (144,223) 15,976 (73,946) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 399,390 115,149 53,047 194,098 116,683 60,134 1,195,131 669,665 169,126 522,218 -- -- 1,285,086 163,244 -- 1,814,506 -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 921,608 115,149 53,047 1,479,184 279,927 60,134 3,009,637 669,665 169,126 6,751,062 8,793,861 4,445,539 5,509,333 1,688,136 2,605,294 4,197,799 3,507,811 1,710,690 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 7,672,670 8,909,010 4,498,586 6,988,517 1,968,063 2,665,428 7,207,436 4,177,476 1,879,816 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $7,671,600 $8,857,298 $4,274,581 $7,439,865 $2,212,301 $2,714,491 $7,063,213 $4,193,452 $1,805,870 ========== ========== ========== ========== ========== ========== ========== ========== ==========
F-45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AMERICAN FUNDS BOND T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------- 2006 (C) 2006 2005 2004 ------------------- --------- ---------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 2,483 $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 1,499 91,448 62,726 35,600 ------- --------- ---------- -------- Net investment income (loss)................. 984 (91,448) (62,726) (35,600) ------- --------- ---------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ (909) 524,517 102,486 (21,255) Realized gain distributions.................. -- 373,372 206,008 -- ------- --------- ---------- -------- Net realized gains (losses) on investments... (909) 897,889 308,494 (21,255) Change in unrealized appreciation (depreciation) of investments............... 13,837 (173,792) 895,073 874,468 ------- --------- ---------- -------- Net realized and unrealized gains (losses) on investments.............................. 12,928 724,097 1,203,567 853,213 ------- --------- ---------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $13,912 $ 632,649 $1,140,841 $817,613 ======= ========= ========== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-46
MFS RESEARCH INTERNATIONAL PIMCO TOTAL RETURN RCM GLOBAL TECHNOLOGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------- -------------------------------- ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- $ 107,793 $ 21,589 $ -- $ 719,124 $ 13,007 $1,210,628 $ -- $ -- $ -- 56,798 27,070 17,381 217,239 180,282 130,372 61,070 50,588 45,242 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 50,995 (5,481) (17,381) 501,885 (167,275) 1,080,256 (61,070) (50,588) (45,242) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 81,019 80,066 226,740 74,726 52,949 58,068 222,324 194,566 (35,847) 423,780 184,503 5,870 10,617 154,127 -- -- 46,291 4,399 ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 504,799 264,569 232,610 85,343 207,076 58,068 222,324 240,857 (31,448) 963,904 280,569 176,752 469,783 311,680 (439,697) 156,356 445,709 (200,859) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- 1,468,703 545,138 409,362 555,126 518,756 (381,629) 378,680 686,566 (232,307) ------------ -------- -------- ---------- --------- ---------- -------- -------- --------- $1,519,698 $539,657 $391,981 $1,057,011 $ 351,481 $ 698,627 $317,610 $635,978 $(277,549) ============ ======== ======== ========== ========= ========== ======== ======== =========
F-47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION -------------------------------- 2006 2005 2004 ---------- --------- ---------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $1,191,085 $ 744,214 $ 491,562 Expenses: Mortality and expense risk charges.......... 139,802 121,860 106,961 ---------- --------- ---------- Net investment income (loss)................. 1,051,283 622,354 384,601 ---------- --------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 93,973 255,890 291,351 Realized gain distributions.................. -- -- 88,672 ---------- --------- ---------- Net realized gains (losses) on investments... 93,973 255,890 380,023 Change in unrealized appreciation (depreciation) of investments............... 324,579 (722,955) 258,228 ---------- --------- ---------- Net realized and unrealized gains (losses) on investments.............................. 418,552 (467,065) 638,251 ---------- --------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $1,469,835 $ 155,289 $1,022,852 ========== ========= ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-48
LAZARD MID-CAP MET/AIM SMALL CAP GROWTH HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- --------------------------- ----------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 -------- --------- -------- -------- -------- ------- ---------- -------- -------- $ 17,856 $ 10,617 $ -- $ -- $ -- $ -- $ 350,324 $ 11,138 $ 1,007 29,336 22,544 12,732 16,523 11,067 7,126 127,018 55,708 15,179 -------- --------- -------- -------- -------- ------- ---------- -------- -------- (11,480) (11,927) (12,732) (16,523) (11,067) (7,126) 223,306 (44,570) (14,172) -------- --------- -------- -------- -------- ------- ---------- -------- -------- 20,740 96,120 127,885 18,065 35,790 6,508 125,443 131,605 87,469 392,270 320,635 -- 267,325 32,434 -- 874,510 116,064 -- -------- --------- -------- -------- -------- ------- ---------- -------- -------- 413,010 416,755 127,885 285,390 68,224 6,508 999,953 247,669 87,469 56,316 (198,731) 100,268 (33,826) 47,188 68,634 2,507,928 724,928 413,695 -------- --------- -------- -------- -------- ------- ---------- -------- -------- 469,326 218,024 228,153 251,564 115,412 75,142 3,507,881 972,597 501,164 -------- --------- -------- -------- -------- ------- ---------- -------- -------- $457,846 $ 206,097 $215,421 $235,041 $104,345 $68,016 $3,731,187 $928,027 $486,992 ======== ========= ======== ======== ======== ======= ========== ======== ========
F-49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION ----------------------------- 2006 2005 2004 --------- -------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $ -- $ -- Expenses: Mortality and expense risk charges.......... 65,378 52,753 40,203 --------- -------- -------- Net investment income (loss)................. (65,378) (52,753) (40,203) --------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 177,119 89,582 40,466 Realized gain distributions.................. 438,536 7,588 -- --------- -------- -------- Net realized gains (losses) on investments... 615,655 97,170 40,466 Change in unrealized appreciation (depreciation) of investments............... (742,982) 756,884 408,503 --------- -------- -------- Net realized and unrealized gains (losses) on investments.............................. (127,327) 854,054 448,969 --------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $(192,705) $801,301 $408,766 ========= ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-50
LORD ABBETT GROWTH AND INCOME NEUBERGER BERMAN REAL ESTATE LORD ABBETT MID-CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------ ----------------------------- ----------------------- 2006 2005 2004 2006 2005 2004 (D) 2006 2005 2004 (D) --------- --------- -------- ---------- -------- -------- ------ ------ -------- $ 887 $ 447 $ 15,177 $ 128,299 $ -- $ 32,646 $ 203 $ 139 $ 1 22,648 16,835 11,687 108,818 40,104 3,379 184 87 -- --------- --------- -------- ---------- -------- -------- ------ ------ --- (21,761) (16,388) 3,490 19,481 (40,104) 29,267 19 52 1 --------- --------- -------- ---------- -------- -------- ------ ------ --- 958,803 25,218 8,536 210,018 77,734 5,929 (69) 22 -- 3,901 40,557 -- 609,936 8,770 41,014 3,482 1,158 5 --------- --------- -------- ---------- -------- -------- ------ ------ --- 962,704 65,775 8,536 819,954 86,504 46,943 3,413 1,180 5 (295,172) 110,292 304,313 3,020,558 660,111 124,804 880 85 10 --------- --------- -------- ---------- -------- -------- ------ ------ --- 667,532 176,067 312,849 3,840,512 746,615 171,747 4,293 1,265 15 --------- --------- -------- ---------- -------- -------- ------ ------ --- $ 645,771 $ 159,679 $316,339 $3,859,993 $706,511 $201,014 $4,312 $1,317 $16 ========= ========= ======== ========== ======== ======== ====== ====== ===
F-51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
THIRD AVENUE SMALL CAP VALUE INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------ -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 133 $ -- $ 13 Expenses: Mortality and expense risk charges.......... 482 51 1 ------- ------ ---- Net investment income (loss)................. (349) (51) 12 ------- ------ ---- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 1,511 111 21 Realized gain distributions.................. 2,011 77 82 ------- ------ ---- Net realized gains (losses) on investments... 3,522 188 103 Change in unrealized appreciation (depreciation) of investments............... 21,745 1,856 (54) ------- ------ ---- Net realized and unrealized gains (losses) on investments.............................. 25,267 2,044 49 ------- ------ ---- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $24,918 $1,993 $ 61 ======= ====== ====
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-52
OPPENHEIMER LEGG MASON CYCLICAL CYCLICAL CAPITAL APPRECIATION VALUE EQUITY GROWTH ETF GROWTH AND INCOME ETF INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- --------------------- 2006 2005 (A) 2006 (C) 2006 (B) 2006 (B) ------- -------- ------------------- ------------------- --------------------- $ 583 $ 77 $ 7,771 $1,841 $1,529 1,966 275 28,159 279 230 ------- ------ -------- ------ ------ (1,383) (198) (20,388) 1,562 1,299 ------- ------ -------- ------ ------ 6,117 442 (4,060) 1,385 1,197 1,330 1,100 103,047 385 -- ------- ------ -------- ------ ------ 7,447 1,542 98,987 1,770 1,197 12,744 2,715 306,184 4,607 2,231 ------- ------ -------- ------ ------ 20,191 4,257 405,171 6,377 3,428 ------- ------ -------- ------ ------ $18,808 $4,058 $384,783 $7,939 $4,727 ======= ====== ======== ====== ======
F-53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
PIMCO INFLATION PROTECTED BOND AMERICAN CENTURY VISTA INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ---------------------- 2006 (B) 2006 2005 2004 ------------------- ------ ---- ---- INVESTMENT INCOME (LOSS) : Income: Dividends................................... $ -- $ -- $ -- $-- Expenses: Mortality and expense risk charges.......... 463 81 47 -- ------- ------ ---- --- Net investment income (loss)................. (463) (81) (47) -- ------- ------ ---- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 1,472 66 6 -- Realized gain distributions.................. -- 52 -- -- ------- ------ ---- --- Net realized gains (losses) on investments... 1,472 118 6 -- Change in unrealized appreciation (depreciation) of investments............... (1,429) 1,653 961 -- ------- ------ ---- --- Net realized and unrealized gains (losses) on investments.............................. 43 1,771 967 -- ------- ------ ---- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $ (420) $1,690 $920 $-- ======= ====== ==== ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-54
DREYFUS DREYFUS DELAWARE SMALL CAP VALUE MIDCAP STOCK EMERGING LEADERS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------- -------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- ---- ---- ------ ------ ---- $ 87 $ 181 $-- $ 189 $-- $-- $ -- $ -- $-- 1,667 539 -- 337 -- -- 70 47 -- ------- ------- --- -------- --- --- ------ ------ --- (1,580) (358) -- (148) -- (70) (47) -- ------- ------- --- -------- --- --- ------ ------ --- 3,801 45 -- (525) -- -- (33) 251 -- 23,651 8,183 -- 17,011 -- -- 1,695 562 -- ------- ------- --- -------- --- --- ------ ------ --- 27,452 8,228 -- 16,486 -- -- 1,662 813 -- 21,618 2,540 -- (13,109) -- -- (791) 711 -- ------- ------- --- -------- --- --- ------ ------ --- 49,070 10,768 -- 3,377 -- -- 871 1,524 -- ------- ------- --- -------- --- --- ------ ------ --- $47,490 $10,410 $-- $ 3,229 $-- $-- $ 801 $1,477 $-- ======= ======= === ======== === === ====== ====== ===
F-55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION ------------------------ 2006 2005 2004 (D) ------- ------- -------- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ 2,040 $ -- $ -- Expenses: Mortality and expense risk charges.......... 1,650 850 4 ------- ------- ------ Net investment income (loss)................. 390 (850) (4) ------- ------- ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 2,803 (8,588) 47 Realized gain distributions.................. 12,788 3,710 1,264 ------- ------- ------ Net realized gains (losses) on investments... 15,591 (4,878) 1,311 Change in unrealized appreciation (depreciation) of investments............... 67,169 13,060 (934) ------- ------- ------ Net realized and unrealized gains (losses) on investments.............................. 82,760 8,182 377 ------- ------- ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $83,150 $ 7,332 $ 373 ======= ======= ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-56
GOLDMAN SACHS GOLDMAN SACHS MID CAP VALUE STRUCTURED SMALL CAP EQUITY MFS HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- --------------------------- ----------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 (D) ------- ------- -------- ------ ------- ---- ------ ------- -------- $ 2,401 $ 267 $ 72 $ 576 $ 114 $-- $4,418 $ 3,911 $ -- 502 222 6 319 20 -- 372 279 87 ------- ------- ------ ------ ------- --- ------ ------- ------ 1,899 45 66 257 94 -- 4,046 3,632 (87) ------- ------- ------ ------ ------- --- ------ ------- ------ 1,291 (3,479) 1 (124) 1 -- 1,254 128 69 26,443 4,473 1,152 6,284 4,217 -- -- -- -- ------- ------- ------ ------ ------- --- ------ ------- ------ 27,734 994 1,153 6,160 4,218 -- 1,254 128 69 (2,200) 223 (464) 1,891 (5,644) -- 2,298 (2,862) 3,152 ------- ------- ------ ------ ------- --- ------ ------- ------ 25,534 1,217 689 8,051 (1,426) -- 3,552 (2,734) 3,221 ------- ------- ------ ------ ------- --- ------ ------- ------ $27,433 $ 1,262 $ 755 $8,308 $(1,332) $-- $7,598 $ 898 $3,134 ======= ======= ====== ====== ======= === ====== ======= ======
F-57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MFS GLOBAL EQUITY INVESTMENT DIVISION ----------------- 2006 2005 2004 ------ ---- ---- INVESTMENT INCOME (LOSS): Income: Dividends................................... $ -- $-- $-- Expenses: Mortality and expense risk charges.......... 38 -- -- ------ --- --- Net investment income (loss)................. (38) -- -- ------ --- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 100 -- -- Realized gain distributions.................. -- -- -- ------ --- --- Net realized gains (losses) on investments... 100 -- -- Change in unrealized appreciation (depreciation) of investments............... 2,944 -- -- ------ --- --- Net realized and unrealized gains (losses) on investments.............................. 3,044 -- -- ------ --- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $3,006 $-- $-- ====== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-58
WELLS FARGO ADVANTAGE VT WELLS FARGO ADVANTAGE VT VAN KAMPEN GOVERNMENT TOTAL RETURN BOND MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- ------------------------ ------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----- ---- ---- ------ ---- ---- ------- ---- ---- $ 621 $ -- $-- $1,616 $263 $-- $17,272 $-- $-- 54 12 -- 138 15 -- 1,399 -- -- ----- ---- --- ------ ---- --- ------- --- --- 567 (12) -- 1,478 248 -- 15,873 -- -- ----- ---- --- ------ ---- --- ------- --- --- (329) (1) -- (203) 238 -- -- -- -- -- -- -- -- -- -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- (329) (1) -- (203) 238 -- -- -- -- 121 124 -- 969 16 -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- (208) 123 -- 766 254 -- -- -- -- ----- ---- --- ------ ---- --- ------- --- --- $ 359 $111 $-- $2,244 $502 $-- $15,873 $-- $-- ===== ==== === ====== ==== === ======= === ===
F-59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION INVESTMENT DIVISION ------------------------ 2006 2005 2004 ---- ---- ---- INVESTMENT INCOME (LOSS): Income: Dividends................................... $112 $-- $-- Expenses: Mortality and expense risk charges.......... 13 -- -- ---- --- --- Net investment income (loss)................. 99 -- -- ---- --- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gains (losses) from security transactions................................ 293 -- -- Realized gain distributions.................. -- -- -- ---- --- --- Net realized gains (losses) on investments... 293 -- -- Change in unrealized appreciation (depreciation) of investments............... 432 -- -- ---- --- --- Net realized and unrealized gains (losses) on investments.............................. 725 -- -- ---- --- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................... $824 $-- $-- ==== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-60
WELLS FARGO ADVANTAGE VT WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ----------------------- 2006 2005 2004 (D) 2006 2005 2004 (D) ------- ---- -------- ------ ---- -------- $ -- $ 15 $-- $ 130 $113 $-- 243 31 1 34 31 1 ------- ---- --- ------ ---- --- (243) (16) (1) 96 82 (1) ------- ---- --- ------ ---- --- 5,393 (5) 6 85 25 10 -- -- -- 19 -- -- ------- ---- --- ------ ---- --- 5,393 (5) 6 104 25 10 10,126 797 16 1,202 301 3 ------- ---- --- ------ ---- --- 15,519 792 22 1,306 326 13 ------- ---- --- ------ ---- --- $15,276 $776 $21 $1,402 $408 $12 ======= ==== === ====== ==== ===
F-61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK LARGE CAP INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).................... $ 1,748,411 $ 905,711 $ (545,868) Net realized gain (loss) on investments......... 1,910,880 834,521 (689,999) Change in unrealized appreciation (depreciation) of investments.................. 47,641,145 8,704,485 37,215,298 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations................................ 51,300,436 10,444,717 35,979,431 ------------ ------------ ------------ From capital transactions: Payments received from policy owners............ 51,976,132 57,155,216 62,785,148 Transfers between investment divisions (including fixed account), net................. (12,663,855) (10,123,918) (11,723,921) Transfers for contract benefits and terminations................................... (51,743,568) (50,834,197) (49,033,109) Contract maintenance charges.................... (4,529,610) (4,901,051) (5,278,337) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions...................... (16,960,901) (8,703,950) (3,250,219) ------------ ------------ ------------ NET CHANGE IN NET ASSETS.......................... 34,339,535 1,740,767 32,729,212 NET ASSETS - BEGINNING OF PERIOD.................. 401,557,280 399,816,513 367,087,301 ------------ ------------ ------------ NET ASSETS - END OF PERIOD........................ $435,896,815 $401,557,280 $399,816,513 ============ ============ ============
BLACKROCK DIVERSIFIED INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).................... $ 5,093,370 $ 2,270,420 $ 2,567,571 Net realized gain (loss) on investments......... 2,697,730 655,141 (558,940) Change in unrealized appreciation (depreciation) of investments.................. 21,697,213 3,822,631 19,749,208 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations................................ 29,488,313 6,748,192 21,757,839 ------------ ------------ ------------ From capital transactions: Payments received from policy owners............ 43,210,333 48,752,996 50,420,345 Transfers between investment divisions (including fixed account), net................. (14,585,173) (4,525,462) (1,916,785) Transfers for contract benefits and terminations................................... (42,735,368) (42,353,138) (39,765,958) Contract maintenance charges.................... (3,695,809) (4,048,894) (4,352,099) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions...................... (17,806,017) (2,174,498) 4,385,503 ------------ ------------ ------------ NET CHANGE IN NET ASSETS.......................... 11,682,296 4,573,694 26,143,342 NET ASSETS - BEGINNING OF PERIOD.................. 319,750,423 315,176,729 289,033,387 ------------ ------------ ------------ NET ASSETS - END OF PERIOD........................ $331,432,719 $319,750,423 $315,176,729 ============ ============ ============
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-62
BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX FI INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------------- ---------------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- $ (1,968,385) $ (1,824,382) $ (1,651,256) $ 7,509,405 $ 4,330,436 $ 174,194 $ 350,554 $ (109,934) $ 235,897 (1,521,325) (2,231,885) (3,443,419) 27,994,237 3,573,660 (2,432,174) 832,502 237,027 (367,092) 16,167,405 23,892,825 27,472,766 53,741,400 14,173,789 49,514,290 7,805,567 8,151,109 7,284,341 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 12,677,695 19,836,558 22,378,091 89,245,042 22,077,885 47,256,310 8,988,623 8,278,202 7,153,146 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 26,442,113 29,002,147 31,507,761 97,155,710 113,017,163 111,296,549 7,377,673 7,207,636 7,277,661 (4,120,591) (6,037,385) (5,174,527) (16,861,291) (5,222,960) 2,484,658 2,367,896 (102,719) (3,803,574) (25,968,754) (25,630,007) (25,384,364) (61,230,714) (65,954,771) (63,376,529) (7,462,889) (6,009,029) (5,958,155) (2,532,838) (2,700,705) (2,845,972) (6,313,295) (6,523,754) (6,599,557) (617,873) (593,300) (578,443) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- (6,180,070) (5,365,950) (1,897,102) 12,750,410 35,315,678 43,805,121 1,664,807 502,588 (3,062,511) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 6,497,625 14,470,608 20,480,989 101,995,452 57,393,563 91,061,431 10,653,430 8,780,790 4,090,635 222,219,970 207,749,362 187,268,373 605,569,341 548,175,778 457,114,347 56,855,714 48,074,924 43,984,289 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- $228,717,595 $222,219,970 $207,749,362 $707,564,793 $605,569,341 $548,175,778 $67,509,144 $56,855,714 $48,074,924 ============ ============ ============ ============ ============ ============ =========== =========== ===========
F-63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FI MID CAP OPPORTUNITIES INVESTMENT DIVISION ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................... $ (2,228,656) $ (2,011,441) $ (631,368) Net realized gain (loss) on investments........... (4,482,428) (1,015,121) (717,628) Change in unrealized appreciation (depreciation) of investments................................... 33,489,573 17,191,699 33,098,684 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations.................................. 26,778,489 14,165,137 31,749,688 ------------ ------------ ------------ From capital transactions: Payments received from policy owners.............. 38,876,326 43,356,457 48,069,931 Transfers between investment divisions (including fixed account), net.............................. (8,221,054) (7,897,866) (5,135,559) Transfers for contract benefits and terminations.. (31,115,888) (28,428,579) (26,517,370) Contract maintenance charges...................... (2,600,173) (2,775,385) (2,918,570) ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions........................ (3,060,789) 4,254,627 13,498,432 ------------ ------------ ------------ NET CHANGE IN NET ASSETS............................ 23,717,700 18,419,764 45,248,120 NET ASSETS - BEGINNING OF PERIOD............................................. 247,745,972 229,326,208 184,078,088 ------------ ------------ ------------ NET ASSETS - END OF PERIOD.......................... $271,463,672 $247,745,972 $229,326,208 ============ ============ ============
T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................... $ (661,143) $ (595,465) $ (530,571) Net realized gain (loss) on investments........... 842,686 37,997 (69,548) Change in unrealized appreciation (depreciation) of investments................................... 2,138,730 7,936,747 7,181,746 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.................................. 2,320,273 7,379,279 6,581,627 ----------- ----------- ----------- From capital transactions: Payments received from policy owners.............. 10,038,924 11,374,021 12,623,285 Transfers between investment divisions (including fixed account), net.............................. (2,086,001) (1,830,915) (1,032,512) Transfers for contract benefits and terminations.. (8,444,978) (7,634,448) (8,592,490) Contract maintenance charges...................... (647,518) (689,925) (734,683) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions........................ (1,139,573) 1,218,733 2,263,600 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................ 1,180,700 8,598,012 8,845,227 NET ASSETS - BEGINNING OF PERIOD............................................. 80,632,046 72,034,034 63,188,807 ----------- ----------- ----------- NET ASSETS - END OF PERIOD.......................... $81,812,746 $80,632,046 $72,034,034 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-64
OPPENHEIMER GLOBAL EQUITY HARRIS OAKMARK LARGE CAP VALUE NEUBERGER BERMAN MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 753,065 $ (89,544) $ 232,594 $ (31,123) $ (61,565) $ (149,989) $ (262,264) $ (310,757) $ (222,936) 1,433,066 270,279 (301,695) 835,096 398,007 613,781 7,045,174 5,078,424 1,461,536 4,443,736 5,277,659 4,666,310 8,574,081 (1,475,339) 4,130,792 382,304 1,374,494 6,555,902 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 6,629,867 5,458,394 4,597,209 9,378,054 (1,138,897) 4,594,584 7,165,214 6,142,161 7,794,502 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,350,913 5,253,047 5,683,708 11,305,507 12,688,012 13,168,295 13,072,820 11,535,409 9,617,754 346,998 942,030 (734,504) (3,330,328) (1,524,510) 3,020,747 3,378,877 5,790,659 4,985,822 (4,641,986) (3,896,726) (3,723,703) (6,934,616) (6,083,211) (6,510,509) (8,261,662) (6,788,430) (5,533,976) (346,053) (334,426) (335,951) (571,212) (629,112) (643,594) (772,295) (742,665) (594,392) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 709,872 1,963,925 889,550 469,351 4,451,179 9,034,939 7,417,740 9,794,973 8,475,208 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 7,339,739 7,422,319 5,486,759 9,847,405 3,312,282 13,629,523 14,582,954 15,937,134 16,269,710 41,604,796 34,182,477 28,695,718 54,445,434 51,133,152 37,503,629 63,152,395 47,215,261 30,945,551 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $48,944,535 $41,604,796 $34,182,477 $64,292,839 $54,445,434 $51,133,152 $77,735,349 $63,152,395 $47,215,261 =========== =========== =========== =========== =========== =========== =========== =========== ===========
F-65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (223,162) $ (106,612) $ (218,401) Net realized gain (loss) on investments.............. 507,318 187,894 989,653 Change in unrealized appreciation (depreciation) of investments......................................... 5,044,250 2,209,286 2,694,772 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 5,328,406 2,290,568 3,466,024 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 7,320,586 7,692,933 8,249,009 Transfers between investment divisions (including fixed account), net................................. 264,173 (171,639) 1,145,251 Transfers for contract benefits and terminations..... (5,165,545) (4,403,866) (9,293,945) Contract maintenance charges......................... (382,066) (421,056) (419,952) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 2,037,148 2,696,372 (319,637) ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 7,365,554 4,986,940 3,146,387 NET ASSETS - BEGINNING OF PERIOD....................... 41,950,019 36,963,079 33,816,692 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $49,315,573 $41,950,019 $36,963,079 =========== =========== ===========
LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 3,031,227 $ 2,261,399 $ 1,424,166 Net realized gain (loss) on investments.............. (57,852) 113,726 451,466 Change in unrealized appreciation (depreciation) of investments......................................... (71,436) (1,403,001) 266,268 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 2,901,939 972,124 2,141,900 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 17,471,563 16,818,608 15,979,551 Transfers between investment divisions (including fixed account), net................................. 387,397 4,909,390 5,023,325 Transfers for contract benefits and terminations..... (9,873,441) (8,858,700) (9,500,569) Contract maintenance charges......................... (1,017,544) (1,003,817) (928,706) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 6,967,975 11,865,481 10,573,601 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 9,869,914 12,837,605 12,715,501 NET ASSETS - BEGINNING OF PERIOD....................... 80,547,413 67,709,808 54,994,307 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $90,417,327 $80,547,413 $67,709,808 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-66
MORGAN STANLEY EAFE INDEX RUSSELL 2000 INDEX JENNISON GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- ------------------------ 2006 2005 2004 2006 2005 2004 2006 2005 (A) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 423,680 $ 285,699 $ (28,456) $ (4,913) $ (26,606) $ (114,631) $ (113,119) $ (67,101) 984,685 590,734 1,189,725 2,636,194 2,249,464 973,061 127,931 36,398 9,577,488 3,753,078 3,997,066 5,025,107 (613,275) 4,412,786 269,709 2,206,440 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 10,985,853 4,629,511 5,158,335 7,656,388 1,609,583 5,271,216 284,521 2,175,737 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 9,956,199 8,982,849 8,790,918 9,061,617 8,761,720 8,664,945 2,455,072 1,741,473 1,802,577 1,409,687 (311,398) 1,828,304 216,481 458,588 (87,387) 10,052,349 (6,191,531) (4,556,058) (4,833,983) (5,449,499) (4,585,206) (4,558,485) (1,519,992) (801,396) (608,893) (560,009) (542,470) (444,667) (451,493) (476,782) (117,200) (83,918) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 4,958,352 5,276,469 3,103,067 4,995,755 3,941,502 4,088,266 730,493 10,908,508 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 15,944,205 9,905,980 8,261,402 12,652,143 5,551,085 9,359,482 1,015,014 13,084,245 42,457,559 32,551,579 24,290,177 42,636,846 37,085,761 27,726,279 13,084,245 -- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $58,401,764 $42,457,559 $32,551,579 $55,288,989 $42,636,846 $37,085,761 $14,099,259 $13,084,245 =========== =========== =========== =========== =========== =========== =========== ===========
F-67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION --------------------------------------- 2006 2005 2004 ------------ ------------ ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (529,917) $ (714,689) $ (563,943) Net realized gain (loss) on investments.............. 18,850,246 6,137,592 827,418 Change in unrealized appreciation (depreciation) of investments......................................... (4,073,024) (2,502,234) 9,427,091 ------------ ------------ ----------- Net increase (decrease) in net assets resulting from operations.......................................... 14,247,305 2,920,669 9,690,566 ------------ ------------ ----------- From capital transactions: Payments received from policy owners................. 17,326,197 18,598,115 19,308,810 Transfers between investment divisions (including fixed account), net................................. (3,858,623) (376,162) 4,975,092 Transfers for contract benefits and terminations..... (11,473,310) (10,277,357) (9,064,500) Contract maintenance charges......................... (949,963) (1,083,993) (1,107,991) ------------ ------------ ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 1,044,301 6,860,603 14,111,411 ------------ ------------ ----------- NET CHANGE IN NET ASSETS............................... 15,291,606 9,781,272 23,801,977 NET ASSETS - BEGINNING OF PERIOD....................... 90,122,911 80,341,639 56,539,662 ------------ ------------ ----------- NET ASSETS - END OF PERIOD............................. $105,414,517 $ 90,122,911 $80,341,639 ============ ============ ===========
METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 186,015 $ (62,688) $ (102,247) Net realized gain (loss) on investments.............. 4,163,714 2,719,370 1,073,108 Change in unrealized appreciation (depreciation) of investments......................................... 201,865 1,900,535 3,817,899 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 4,551,594 4,557,217 4,788,760 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 9,822,002 9,146,889 9,137,346 Transfers between investment divisions (including fixed account), net................................. 1,873,265 1,259,495 306,699 Transfers for contract benefits and terminations..... (6,104,554) (4,761,151) (4,679,892) Contract maintenance charges......................... (575,448) (564,557) (592,416) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 5,015,265 5,080,676 4,171,737 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 9,566,859 9,637,893 8,960,497 NET ASSETS - BEGINNING OF PERIOD....................... 46,523,277 36,885,384 27,924,887 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $56,090,136 $46,523,277 $36,885,384 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-68
FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE DAVIS VENTURE VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $ (50,288) $ (39,601) $ (31,464) $ 22,314 $ 2,262 $ (18,736) $ 19,378 $ (46,637) $ (59,671) 422,517 282,478 40,690 510,491 121,570 105,597 2,307,728 226,016 508,082 106,882 (56,267) 404,946 656,059 110,740 229,787 3,652,646 3,304,528 2,678,225 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 479,111 188,610 414,172 1,188,864 234,572 316,648 5,979,752 3,483,907 3,126,636 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,209,783 1,166,638 1,182,207 1,723,914 1,318,222 918,978 9,665,122 10,136,134 7,205,230 321,633 (104,904) 410,526 2,275,636 925,771 1,361,717 (4,035,297) 4,047,247 2,046,419 (690,549) (605,735) (448,286) (815,297) (567,750) (306,545) (5,198,743) (4,572,190) (5,064,909) (59,735) (63,990) (69,434) (113,002) (94,564) (80,033) (544,235) (476,321) (368,534) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 781,132 392,009 1,075,013 3,071,251 1,581,679 1,894,117 (113,153) 9,134,870 3,818,206 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,260,243 580,619 1,489,185 4,260,115 1,816,251 2,210,765 5,866,599 12,618,777 6,944,842 5,108,051 4,527,432 3,038,247 5,137,144 3,320,893 1,110,128 43,993,114 31,374,337 24,429,495 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $6,368,294 $5,108,051 $4,527,432 $9,397,259 $5,137,144 $3,320,893 $49,859,713 $43,993,114 $31,374,337 ========== ========== ========== ========== ========== ========== =========== =========== ===========
F-69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ----------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (90,220) $ (60,646) $ (44,015) Net realized gain (loss) on investments................. 1,056,941 157,208 142,373 Change in unrealized appreciation (depreciation) of investments............................................ 425,449 365,753 718,393 ----------- ---------- ---------- Net increase (decrease) in net assets resulting from operations............................................. 1,392,170 462,315 816,751 ----------- ---------- ---------- From capital transactions: Payments received from policy owners.................... 2,123,062 1,717,028 1,479,121 Transfers between investment divisions (including fixed account), net.......................................... 2,032,759 500,932 391,267 Transfers for contract benefits and terminations........ (1,206,461) (869,065) (615,166) Contract maintenance charges............................ (122,287) (103,268) (88,437) ----------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... 2,827,073 1,245,627 1,166,785 ----------- ---------- ---------- NET CHANGE IN NET ASSETS.................................. 4,219,243 1,707,942 1,983,536 NET ASSETS - BEGINNING OF PERIOD................................................... 8,114,417 6,406,475 4,422,939 ----------- ---------- ---------- NET ASSETS - END OF PERIOD................................ $12,333,660 $8,114,417 $6,406,475 =========== ========== ==========
BLACKROCK LEGACY LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------ 2006 2005 2004 ----------- ----------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (26,434) $ (11,264) $ (30,183) Net realized gain (loss) on investments................. 954,600 84,949 117,304 Change in unrealized appreciation (depreciation) of investments............................................ (1,121,566) 498,307 394,196 ----------- ----------- ---------- Net increase (decrease) in net assets resulting from operations............................................. (193,400) 571,992 481,317 ----------- ----------- ---------- From capital transactions: Payments received from policy owners.................... 579,414 3,105,072 1,206,954 Transfers between investment divisions (including fixed account), net.......................................... (7,570,628) 801,381 276,437 Transfers for contract benefits and terminations........ (633,020) (769,004) (432,832) Contract maintenance charges............................ (22,079) (57,919) (7,784) ----------- ----------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... (7,646,313) 3,079,530 1,042,775 ----------- ----------- ---------- NET CHANGE IN NET ASSETS.................................. (7,839,713) 3,651,522 1,524,092 NET ASSETS - BEGINNING OF PERIOD................................................... 10,109,046 6,457,524 4,933,432 ----------- ----------- ---------- NET ASSETS - END OF PERIOD................................ $ 2,269,333 $10,109,046 $6,457,524 =========== =========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-70
MFS INVESTORS TRUST BLACKROCK BOND INCOME FI VALUE LEADERS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ---------------------------------------- ---------------------------------- 2006 (B) 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- $ 35,455 $ (20,254) $ (14,069) $ 4,656,087 $ 2,894,879 $ 3,099,803 $ 6,148 $ 3,733 $ 2,427 830,510 75,511 10,690 (168,463) 1,142,272 2,831,666 177,507 80,493 13,334 (658,871) 189,614 322,040 (1,188,505) (2,577,646) (2,928,093) 304,366 177,601 106,438 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- 207,094 244,871 318,661 3,299,119 1,459,505 3,003,376 488,021 261,827 122,199 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- 370,498 1,132,702 898,597 13,105,607 17,949,210 16,181,503 1,367,655 766,467 394,566 (4,601,373) 239 975,437 (6,953,279) (1,273,740) (8,366,427) 1,301,345 1,396,629 293,780 (172,682) (481,203) (345,319) (10,963,629) (11,652,405) (17,319,288) (560,428) (303,329) (97,951) (20,273) (66,864) (4,431) (869,770) (963,524) (1,044,671) (80,569) (49,277) (27,320) ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- (4,423,830) 584,874 1,524,284 (5,681,071) 4,059,541 (10,548,883) 2,028,003 1,810,490 563,075 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- (4,216,736) 829,745 1,842,945 (2,381,952) 5,519,046 (7,545,507) 2,516,024 2,072,317 685,274 4,216,736 3,386,991 1,544,046 94,693,129 89,174,083 96,719,590 3,262,874 1,190,557 505,283 ----------- ---------- ---------- ------------ ------------ ------------ ---------- ---------- ---------- $ -- $4,216,736 $3,386,991 $ 92,311,177 $ 94,693,129 $ 89,174,083 $5,778,898 $3,262,874 $1,190,557 =========== ========== ========== ============ ============ ============ ========== ========== ==========
F-71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
HARRIS OAKMARK FOCUSED VALUE INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ (289,521) $ (352,004) $ (249,444) Net realized gain (loss) on investments.............. 5,738,053 1,079,635 512,114 Change in unrealized appreciation (depreciation) of investments......................................... 467,020 3,071,366 2,796,718 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 5,915,552 3,798,997 3,059,388 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 10,865,790 10,775,287 9,971,788 Transfers between investment divisions (including fixed account), net................................. (1,374,110) 2,872,307 3,578,452 Transfers for contract benefits and terminations..... (5,917,371) (5,437,808) (4,043,365) Contract maintenance charges......................... (565,118) (601,755) (587,168) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 3,009,191 7,608,031 8,919,707 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 8,924,743 11,407,028 11,979,095 NET ASSETS - BEGINNING OF PERIOD....................... 49,251,761 37,844,733 25,865,638 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $58,176,504 $49,251,761 $37,844,733 =========== =========== ===========
WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)......................... $ 566,836 $ 232,123 $ 129,633 Net realized gain (loss) on investments.............. 153,548 253,976 74,022 Change in unrealized appreciation (depreciation) of investments......................................... (101,864) (261,648) 217,644 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations.......................................... 618,520 224,451 421,299 ----------- ----------- ----------- From capital transactions: Payments received from policy owners................. 4,045,076 3,710,450 2,921,606 Transfers between investment divisions (including fixed account), net................................. 608,234 1,981,025 1,525,465 Transfers for contract benefits and terminations..... (1,945,254) (1,708,034) (1,062,203) Contract maintenance charges......................... (233,149) (241,733) (226,689) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................ 2,474,907 3,741,708 3,158,179 ----------- ----------- ----------- NET CHANGE IN NET ASSETS............................... 3,093,427 3,966,159 3,579,478 NET ASSETS - BEGINNING OF PERIOD....................... 12,708,706 8,742,547 5,163,069 ----------- ----------- ----------- NET ASSETS - END OF PERIOD............................. $15,802,133 $12,708,706 $ 8,742,547 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-72
WESTERN ASSET MANAGEMENT U.S. GOVERNMENT BLACKROCK MONEY MARKET MFS TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- -------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 (D) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- $ 316,238 $ 54,588 $ 38,081 $ 1,597,189 $ 628,330 $ 112,176 $ 66,316 $ 25,741 $ (1,443) (10,510) 192,618 84,611 -- -- -- 64,610 18,142 429 127,750 (152,454) 55,424 -- -- -- 205,638 (3,131) 39,191 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 433,478 94,752 178,116 1,597,189 628,330 112,176 336,564 40,752 38,177 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 3,383,683 3,487,915 3,283,565 5,160,393 3,943,073 6,959,659 1,268,749 657,976 133,508 68,005 764,728 190,342 28,142,059 (3,511,345) 2,796,932 560,665 970,499 628,279 (1,659,897) (1,599,285) (1,275,666) (3,552,541) (2,144,871) (8,000,833) (448,682) (210,813) (23,532) (189,188) (211,939) (203,121) (46,252) (49,337) (52,238) (92,585) (68,131) (9,505) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 1,602,603 2,441,419 1,995,120 29,703,659 (1,762,480) 1,703,520 1,288,147 1,349,531 728,750 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- 2,036,081 2,536,171 2,173,236 31,300,848 (1,134,150) 1,815,696 1,624,711 1,390,283 766,927 12,014,309 9,478,138 7,304,902 28,027,973 29,162,123 27,346,427 2,157,210 766,927 -- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- -------- $14,050,390 $12,014,309 $ 9,478,138 $59,328,821 $28,027,973 $29,162,123 $3,781,921 $2,157,210 $766,927 =========== =========== =========== =========== =========== =========== ========== ========== ========
F-73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
METLIFE CONSERVATIVE METLIFE CONSERVATIVE ALLOCATION TO MODERATE INVESTMENT ALLOCATION INVESTMENT DIVISION DIVISION ------------------ -------------------- 2006 2005 (A) 2006 2005 (A) -------- -------- ---------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................................... $ 7,154 $ 24 $ 18,671 $ 240 Net realized gain (loss) on investments........................... 2,237 370 32,936 1,752 Change in unrealized appreciation (depreciation) of investments... 19,393 554 73,219 9,258 -------- -------- ---------- -------- Net increase (decrease) in net assets resulting from operations... 28,784 948 124,826 11,250 -------- -------- ---------- -------- From capital transactions: Payments received from policy owners.............................. 60,249 11,888 351,209 49,524 Transfers between investment divisions (including fixed account), net.............................................................. 382,425 113,429 1,104,702 566,129 Transfers for contract benefits and terminations.................. (90,578) (7,353) (235,736) (42,716) Contract maintenance charges...................................... (6,853) (687) (39,460) (5,676) -------- -------- ---------- -------- Net increase (decrease) in net assets resulting from capital transactions..................................................... 345,243 117,277 1,180,715 567,261 -------- -------- ---------- -------- NET CHANGE IN NET ASSETS............................................ 374,027 118,225 1,305,541 578,511 NET ASSETS - BEGINNING OF PERIOD.................................... 118,225 0 578,511 -- -------- -------- ---------- -------- NET ASSETS - END OF PERIOD.......................................... $492,252 $118,225 $1,884,052 $578,511 ======== ======== ========== ========
METLIFE MODERATE ALLOCATION INVESTMENT DIVISION ---------------------- 2006 2005 (A) ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)...................................... $ 30,400 $ 2,200 Net realized gain (loss) on investments........................... 155,125 3,689 Change in unrealized appreciation (depreciation) of investments... 474,841 25,822 ---------- ---------- Net increase (decrease) in net assets resulting from operations... 660,366 31,711 ---------- ---------- From capital transactions: Payments received from policy owners.............................. 2,581,867 246,532 Transfers between investment divisions (including fixed account), net.............................................................. 5,712,018 1,278,986 Transfers for contract benefits and terminations.................. (784,736) (84,277) Contract maintenance charges...................................... (212,676) (23,517) ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions..................................................... 7,296,473 1,417,724 ---------- ---------- NET CHANGE IN NET ASSETS............................................ 7,956,839 1,449,435 NET ASSETS - BEGINNING OF PERIOD.................................... 1,449,435 0 ---------- ---------- NET ASSETS - END OF PERIOD.......................................... $9,406,274 $1,449,435 ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-74
METLIFE MODERATE TO METLIFE FI LARGE JANUS ASPEN AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION CAP LARGE CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ----------------------- -------------------- ---------- ---------------------------------- 2006 2005 (A) 2006 2005 (A) 2006 (C) 2006 `2005 2004 ----------- ---------- ---------- -------- ---------- ---------- ---------- ---------- $ 12,275 $ 2,925 $ (3,889) $ 461 $ (246) $ 660 $ (6,186) $ (11,788) 211,255 4,962 (1,267) 3,136 21 80,063 (62,709) (193,886) 870,757 64,564 225,674 10,725 4,291 477,638 263,241 407,058 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 1,094,287 72,451 220,518 14,322 4,066 558,361 194,346 201,384 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 3,660,525 350,076 769,602 77,484 13,027 729,644 743,854 846,747 8,417,200 2,046,335 1,804,040 381,966 64,888 (237,146) (38,037) (5,912) (1,241,906) (89,135) (234,386) (14,778) (19,732) (183,324) (242,724) (265,477) (361,044) (30,324) (77,888) (6,321) (564) -- -- -- ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 10,474,775 2,276,952 2,261,368 438,351 57,619 309,174 463,093 575,358 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- 11,569,062 2,349,403 2,481,886 452,673 61,685 867,535 657,439 776,742 2,349,403 -- 452,673 -- -- 4,934,074 4,276,635 3,499,893 ----------- ---------- ---------- -------- -------- ---------- ---------- ---------- $13,918,465 $2,349,403 $2,934,559 $452,673 $ 61,685 $5,801,609 $4,934,074 $4,276,635 =========== ========== ========== ======== ======== ========== ========== ==========
F-75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
JANUS ASPEN BALANCED JANUS ASPEN FORTY INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- 2006 2005 2004 2006 2005 2004 ------ ------ ---- -------- ---- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 37 $ 24 $ 4 $ (231) $-- $-- Net realized gain (loss) on investments................................... 33 -- -- (26) -- -- Change in unrealized appreciation (depreciation) of investments........... 147 4 4 8,113 -- -- ------ ------ ---- -------- --- --- Net increase (decrease) in net assets resulting from operations........... 217 28 8 7,856 -- -- ------ ------ ---- -------- --- --- From capital transactions: Payments received from policy owners...................................... 234 234 234 -- -- -- Transfers between investment divisions (including fixed account), net..... -- 1,745 -- 107,014 -- -- Transfers for contract benefits and terminations.......................... (328) (56) (5) (3,508) -- -- Contract maintenance charges.............................................. -- -- -- -- -- -- ------ ------ ---- -------- --- --- Net increase (decrease) in net assets resulting from capital transactions. (94) 1,923 229 103,506 -- -- ------ ------ ---- -------- --- --- NET CHANGE IN NET ASSETS.................................................... 123 1,951 237 111,362 -- -- NET ASSETS - BEGINNING OF PERIOD............................................ 2,188 237 -- -- -- -- ------ ------ ---- -------- --- --- NET ASSETS - END OF PERIOD.................................................. $2,311 $2,188 $237 $111,362 $-- $-- ====== ====== ==== ======== === ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-76
AIM V.I. CORE STOCK AIM V.I. CORE EQUITY AIM V.I. GOVERNMENT SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------- -------------------- ----------------------------- 2006 (B) 2005 2004 2006 (C) 2006 2005 2004 (D) --------- -------- -------- -------------------- ------ ------- -------- $ 2,312 $ (134) $ 1,090 $ 582 $ 248 $ 193 $ 29 37,949 5,489 (458) 40 (8) 107 (2) (16,441) 3,571 9,085 25,383 (28) (117) (20) --------- -------- -------- -------- ------ ------- ------ 23,820 8,926 9,717 26,005 212 183 7 --------- -------- -------- -------- ------ ------- ------ 1,372 49,677 51,947 48,952 -- 4,439 2,238 (245,401) (55,334) -- 245,401 -- 6,772 2,151 (9,908) (13,071) (6,151) 64,485 (810) (7,449) (86) -- -- -- -- -- -- -- --------- -------- -------- -------- ------ ------- ------ (253,937) (18,728) 45,796 358,838 (810) 3,762 4,303 --------- -------- -------- -------- ------ ------- ------ (230,117) (9,802) 55,513 384,843 (598) 3,945 4,310 230,117 239,919 184,406 -- 8,255 4,310 -- --------- -------- -------- -------- ------ ------- ------ $ -- $230,117 $239,919 $384,843 $7,657 $ 8,255 $4,310 ========= ======== ======== ======== ====== ======= ======
F-77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AIM V.I. GLOBAL REAL ESTATE INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ 15,226 $ 11,252 $ 4,529 Net realized gain (loss) on investments...................... 416,936 213,105 74,898 Change in unrealized appreciation (depreciation) of investments................................................. 328,141 7,005 204,103 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. 760,303 231,362 283,530 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 86,308 128,022 652,190 Transfers between investment divisions (including fixed account), net............................................... 198,270 149,537 306,861 Transfers for contract benefits and terminations............. (30,087) (69,158) (113,133) Contract maintenance charges................................. -- -- -- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 254,491 208,401 845,918 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 1,014,794 439,763 1,129,448 NET ASSETS - BEGINNING OF PERIOD............................... 1,747,819 1,308,056 178,608 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $2,762,613 $1,747,819 $1,308,056 ========== ========== ==========
FRANKLIN TEMPLETON FOREIGN SECURITIES STOCK INVESTMENT DIVISION ----------------------------------- 2006 2005 2004 ---------- ---------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ 59,846 $ 45,261 $ 30,307 Net realized gain (loss) on investments...................... 553,100 259,867 153,352 Change in unrealized appreciation (depreciation) of investments................................................. 743,656 264,624 613,265 ---------- ---------- ----------- Net increase (decrease) in net assets resulting from operations.................................................. 1,356,602 569,752 796,924 ---------- ---------- ----------- From capital transactions: Payments received from policy owners......................... 763,068 695,341 1,157,933 Transfers between investment divisions (including fixed account), net............................................... (517,563) 355,482 542,291 Transfers for contract benefits and terminations............. (473,870) (482,178) (1,250,997) Contract maintenance charges................................. -- -- -- ---------- ---------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................................ (228,365) 568,645 449,227 ---------- ---------- ----------- NET CHANGE IN NET ASSETS....................................... 1,128,237 1,138,397 1,246,151 NET ASSETS - BEGINNING OF PERIOD............................... 6,438,080 5,299,683 4,053,532 ---------- ---------- ----------- NET ASSETS - END OF PERIOD..................................... $7,566,317 $6,438,080 $ 5,299,683 ========== ========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-78
FRANKLIN MUTUAL DISCOVERY SECURITIES ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FIDELITY VIP CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ---------------------------------- -------------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 -------- -------- -------- ------- ------- -------- ---------- --------- --------- $ 3,193 $ 546 $-- $ (169) $ (135) $ (77) $ 10,749 $ (1,913) $ (1,683) 26,820 132 -- 2,596 255 108 231,297 170,166 62,282 90,251 8,764 -- 2,024 1,638 2,247 (100,652) (22,158) 45,971 -------- -------- --- ------- ------- -------- ---------- --------- --------- 120,264 9,442 -- 4,451 1,758 2,278 141,394 146,095 106,570 -------- -------- --- ------- ------- -------- ---------- --------- --------- 81,841 3,124 -- 17,259 6,941 5,469 311,963 159,311 134,841 596,967 110,323 -- (346) 13,706 -- 978,906 112,842 34,413 (21,627) (1,225) -- (581) (733) (32,706) (262,058) (316,026) (350,609) -- -- -- -- -- -- -- -- -- -------- -------- --- ------- ------- -------- ---------- --------- --------- 657,181 112,222 -- 16,332 19,914 (27,237) 1,028,811 (43,873) (181,355) -------- -------- --- ------- ------- -------- ---------- --------- --------- 777,445 121,664 -- 20,783 21,672 (24,959) 1,170,205 102,222 (74,785) 121,664 -- -- 42,308 20,636 45,595 921,114 818,892 893,677 -------- -------- --- ------- ------- -------- ---------- --------- --------- $899,109 $121,664 $-- $63,091 $42,308 $ 20,636 $2,091,319 $ 921,114 $ 818,892 ======== ======== === ======= ======= ======== ========== ========= =========
F-79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FIDELITY VIP ASSET MANAGER GROWTH INVESTMENT DIVISION ----------------------------- 2006 2005 2004 -------- --------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 12,363 $ 14,795 $ 9,621 Net realized gain (loss) on investments................................... 3,099 38,662 3,245 Change in unrealized appreciation (depreciation) of investments........... 39,972 (29,733) 19,246 -------- --------- -------- Net increase (decrease) in net assets resulting from operations........... 55,434 23,724 32,112 -------- --------- -------- From capital transactions: Payments received from policy owners...................................... 206,112 202,315 261,139 Transfers between investment divisions (including fixed account), net..... 26,719 (157,813) 38,214 Transfers for contract benefits and terminations.......................... (38,590) (64,202) (59,717) Contract maintenance charges.............................................. -- -- -- -------- --------- -------- Net increase (decrease) in net assets resulting from capital transactions. 194,241 (19,700) 239,636 -------- --------- -------- NET CHANGE IN NET ASSETS.................................................... 249,675 4,024 271,748 NET ASSETS - BEGINNING OF PERIOD............................................ 708,401 704,377 432,629 -------- --------- -------- NET ASSETS - END OF PERIOD.................................................. $958,076 $ 708,401 $704,377 ======== ========= ========
FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION ------------------------- 2006 2005 2004 (D) ------- ------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 1,359 $ 468 $ (4) Net realized gain (loss) on investments................................... (836) 276 8 Change in unrealized appreciation (depreciation) of investments........... 767 (370) 12 ------- ------- ------- Net increase (decrease) in net assets resulting from operations........... 1,290 374 16 ------- ------- ------- From capital transactions: Payments received from policy owners...................................... 6,033 8,457 2,238 Transfers between investment divisions (including fixed account), net..... (2,639) 12,839 10,966 Transfers for contract benefits and terminations.......................... (1,190) (1,307) (99) Contract maintenance charges.............................................. -- -- -- ------- ------- ------- Net increase (decrease) in net assets resulting from capital transactions. 2,204 19,989 13,105 ------- ------- ------- NET CHANGE IN NET ASSETS.................................................... 3,494 20,363 13,121 NET ASSETS - BEGINNING OF PERIOD............................................ 33,484 13,121 -- ------- ------- ------- NET ASSETS - END OF PERIOD.................................................. $36,978 $33,484 $13,121 ======= ======= =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-80
FIDELITY VIP EQUITY-INCOME AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------- -------------------------------------- ------------------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 -------- --------- -------- ------------ ----------- ----------- ----------- ----------- ----------- $ 7,573 $ (72) $ (5) $ (1,070) $ (51,712) $ (224,005) $ 451,348 $ 245,238 $ 49,063 38,676 (5,509) -- 921,608 115,149 53,047 1,479,184 279,927 60,134 1,802 605 -- 6,751,062 8,793,861 4,445,539 5,509,333 1,688,136 2,605,294 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 48,051 (4,976) (5) 7,671,600 8,857,298 4,274,581 7,439,865 2,212,301 2,714,491 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 100,155 5,510 2,238 20,408,448 17,644,031 13,227,421 13,556,781 12,314,898 10,343,250 268,439 158,037 7,499 7,977,297 8,768,204 7,788,495 3,888,560 3,766,503 5,800,181 (8,877) (143,273) 378 (10,216,286) (7,385,112) (4,525,688) (7,007,825) (5,437,593) (3,791,653) -- -- -- (1,137,561) (1,124,951) (952,977) (774,015) (763,087) (733,477) -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 359,717 20,274 10,115 17,031,898 17,902,172 15,537,251 9,663,501 9,880,721 11,618,301 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- 407,768 15,298 10,110 24,703,498 26,759,470 19,811,832 17,103,366 12,093,022 14,332,792 25,408 10,110 -- 72,331,242 45,571,772 25,759,940 46,794,725 34,701,703 20,368,911 -------- --------- ------- ------------ ----------- ----------- ----------- ----------- ----------- $433,176 $ 25,408 $10,110 $ 97,034,740 $72,331,242 $45,571,772 $63,898,091 $46,794,725 $34,701,703 ======== ========= ======= ============ =========== =========== =========== =========== ===========
F-81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION AMERICAN FUNDS BOND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------- 2006 2005 2004 2006 (C) ----------- ----------- ----------- ------------------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)..................... $ (144,223) $ 15,976 $ (73,946) $ 984 Net realized gain (loss) on investments.......... 3,009,637 669,665 169,126 (909) Change in unrealized appreciation (depreciation) of investments................... 4,197,799 3,507,811 1,710,690 13,837 ----------- ----------- ----------- -------- Net increase (decrease) in net assets resulting from operations....................... 7,063,213 4,193,452 1,805,870 13,912 ----------- ----------- ----------- -------- From capital transactions: Payments received from policy owners............. 7,823,334 5,167,339 3,240,987 89,127 Transfers between investment divisions (including fixed account), net.................. 8,047,794 6,080,729 3,070,772 574,222 Transfers for contract benefits and terminations. (4,078,614) (2,417,794) (1,167,960) (25,984) Contract maintenance charges..................... (444,175) (320,403) (222,662) (7,101) ----------- ----------- ----------- -------- Net increase (decrease) in net assets resulting from capital transactions............. 11,348,339 8,509,871 4,921,137 630,264 ----------- ----------- ----------- -------- NET CHANGE IN NET ASSETS........................... 18,411,552 12,703,323 6,727,007 644,176 NET ASSETS - BEGINNING OF PERIOD............................................ 25,231,190 12,527,867 5,800,860 -- ----------- ----------- ----------- -------- NET ASSETS - END OF PERIOD......................... $43,642,742 $25,231,190 $12,527,867 $644,176 =========== =========== =========== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-82
T. ROWE PRICE MID-CAP GROWTH MFS RESEARCH INTERNATIONAL PIMCO TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ---------------------------------- ------------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $ (91,448) $ (62,726) $ (35,600) $ 50,995 $ (5,481) $ (17,381) $ 501,885 $ (167,275) $ 1,080,256 897,889 308,494 (21,255) 504,799 264,569 232,610 85,343 207,076 58,068 (173,792) 895,073 874,468 963,904 280,569 176,752 469,783 311,680 (439,697) ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 632,649 1,140,841 817,613 1,519,698 539,657 391,981 1,057,011 351,481 698,627 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 2,471,595 2,046,729 1,669,261 1,296,474 893,225 654,113 6,639,135 6,481,179 5,789,117 1,091,785 1,212,270 1,315,562 3,802,566 262,049 530,150 (231,899) 1,715,784 2,455,515 (1,496,131) (940,796) (604,570) (803,202) (364,173) (252,598) (3,387,681) (2,934,170) (2,238,890) (116,408) (116,429) (97,949) (70,083) (53,518) (40,034) (324,273) (370,173) (381,576) ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 1,950,841 2,201,774 2,282,304 4,225,755 737,583 891,631 2,695,282 4,892,620 5,624,166 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- 2,583,490 3,342,615 3,099,917 5,745,453 1,277,240 1,283,612 3,752,293 5,244,101 6,322,793 9,817,802 6,475,187 3,375,270 4,058,072 2,780,832 1,497,220 24,263,960 19,019,859 12,697,066 ----------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- $12,401,292 $9,817,802 $6,475,187 $9,803,525 $4,058,072 $2,780,832 $28,016,253 $24,263,960 $19,019,859 =========== ========== ========== ========== ========== ========== =========== =========== ===========
F-83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
RCM GLOBAL TECHNOLOGY INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (61,070) $ (50,588) $ (45,242) Net realized gain (loss) on investments................. 222,324 240,857 (31,448) Change in unrealized appreciation (depreciation) of investments............................................ 156,356 445,709 (200,859) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations............................................. 317,610 635,978 (277,549) ---------- ---------- ---------- From capital transactions: Payments received from policy owners.................... 1,514,309 1,643,816 1,896,573 Transfers between investment divisions (including fixed account), net.......................................... (174,207) (451,962) 570,609 Transfers for contract benefits and terminations........ (886,683) (773,840) (704,221) Contract maintenance charges............................ (72,151) (78,461) (117,065) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................... 381,268 339,553 1,645,896 ---------- ---------- ---------- NET CHANGE IN NET ASSETS.................................. 698,878 975,531 1,368,347 NET ASSETS - BEGINNING OF PERIOD.......................... 6,824,691 5,849,160 4,480,813 ---------- ---------- ---------- NET ASSETS - END OF PERIOD................................ $7,523,569 $6,824,691 $5,849,160 ========== ========== ==========
LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION ------------------------------------- 2006 2005 2004 ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ 1,051,283 $ 622,354 $ 384,601 Net realized gain (loss) on investments................. 93,973 255,890 380,023 Change in unrealized appreciation (depreciation) of investments............................................ 324,579 (722,955) 258,228 ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations............................................. 1,469,835 155,289 1,022,852 ----------- ----------- ----------- From capital transactions: Payments received from policy owners.................... 3,396,611 3,151,962 2,983,780 Transfers between investment divisions (including fixed account), net.......................................... 251,738 360,705 337,183 Transfers for contract benefits and terminations........ (2,112,390) (2,102,171) (1,886,757) Contract maintenance charges............................ (168,589) (176,300) (161,744) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................... 1,367,370 1,234,196 1,272,462 ----------- ----------- ----------- NET CHANGE IN NET ASSETS.................................. 2,837,205 1,389,485 2,295,314 NET ASSETS - BEGINNING OF PERIOD.......................... 16,531,209 15,141,724 12,846,410 ----------- ----------- ----------- NET ASSETS - END OF PERIOD................................ $19,368,414 $16,531,209 $15,141,724 =========== =========== ===========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-84
MET/AIM HARRIS OAKMARK LAZARD MID-CAP SMALL CAP GROWTH INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------- ---------------------------------- ----------------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- $ (11,480) $ (11,927) $ (12,732) $ (16,523) $ (11,067) $ (7,126) $ 223,306 $ (44,570) $ (14,172) 413,010 416,755 127,885 285,390 68,224 6,508 999,953 247,669 87,469 56,316 (198,731) 100,268 (33,826) 47,188 68,634 2,507,928 724,928 413,695 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 457,846 206,097 215,421 235,041 104,345 68,016 3,731,187 928,027 486,992 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 908,370 900,458 685,733 582,851 446,774 398,392 3,829,877 2,085,109 717,538 136,080 189,141 562,287 239,798 77,613 177,443 5,611,008 3,959,003 2,229,550 (467,249) (331,466) (273,310) (239,245) (159,651) (116,400) (1,529,961) (827,493) (233,164) (48,424) (54,363) (54,666) (28,878) (25,202) (27,544) (204,430) (133,999) (50,723) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 528,777 703,770 920,044 554,526 339,534 431,891 7,706,494 5,082,620 2,663,201 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- 986,623 909,867 1,135,465 789,567 443,879 499,907 11,437,681 6,010,647 3,150,193 3,034,264 2,124,397 988,932 1,587,237 1,143,358 643,451 9,973,856 3,963,209 813,016 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- $4,020,887 $3,034,264 $2,124,397 $2,376,804 $1,587,237 $1,143,358 $21,411,537 $9,973,856 $3,963,209 ========== ========== ========== ========== ========== ========== =========== ========== ==========
F-85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG MASON AGGRESSIVE GROWTH INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ (65,378) $ (52,753) $ (40,203) Net realized gain (loss) on investments...................... 615,655 97,170 40,466 Change in unrealized appreciation (depreciation) of investments................................................. (742,982) 756,884 408,503 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. (192,705) 801,301 408,766 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 1,626,695 1,636,045 1,751,040 Transfers between investment divisions (including fixed account), net............................................... (19,816) 62,227 96,192 Transfers for contract benefits and terminations............. (911,520) (749,000) (602,629) Contract maintenance charges................................. (81,217) (85,030) (82,692) ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 614,142 864,242 1,161,911 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 421,437 1,665,543 1,570,677 NET ASSETS - BEGINNING OF PERIOD............................... 7,322,996 5,657,453 4,086,776 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $7,744,433 $7,322,996 $5,657,453 ========== ========== ==========
LORD ABBETT GROWTH AND INCOME INVESTMENT DIVISION ---------------------------------- 2006 2005 2004 ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)................................. $ (21,761) $ (16,388) $ 3,490 Net realized gain (loss) on investments...................... 962,704 65,775 8,536 Change in unrealized appreciation (depreciation) of investments................................................. (295,172) 110,292 304,313 ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.................................................. 645,771 159,679 316,339 ---------- ---------- ---------- From capital transactions: Payments received from policy owners......................... 975,882 908,127 906,975 Transfers between investment divisions (including fixed account), net............................................... 189,576 (24,320) 46,230 Transfers for contract benefits and terminations............. (110,448) (137,531) (98,526) Contract maintenance charges................................. -- -- -- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................................ 1,055,010 746,276 854,679 ---------- ---------- ---------- NET CHANGE IN NET ASSETS....................................... 1,700,781 905,955 1,171,018 NET ASSETS - BEGINNING OF PERIOD............................... 4,160,587 3,254,632 2,083,614 ---------- ---------- ---------- NET ASSETS - END OF PERIOD..................................... $5,861,368 $4,160,587 $3,254,632 ========== ========== ==========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-86
NEUBERGER BERMAN LORD ABBETT THIRD AVENUE REAL ESTATE MID-CAP VALUE SMALL CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------- ------------------------- -------------------------- 2006 2005 2004 (D) 2006 2005 2004 (D) 2006 2005 2004 (D) ----------- ---------- ---------- ------- ------- -------- -------- ------- -------- $ 19,481 $ (40,104) $ 29,267 $ 19 $ 52 $ 1 $ (349) $ (51) $ 12 819,954 86,504 46,943 3,413 1,180 5 3,522 188 103 3,020,558 660,111 124,804 880 85 10 21,745 1,856 (54) ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 3,859,993 706,511 201,014 4,312 1,317 16 24,918 1,993 61 ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 3,735,060 2,008,005 228,551 3,267 1,127 234 55,993 7,110 2,238 5,998,130 3,582,147 1,619,564 5,000 30,132 -- 172,022 16,509 2,151 (1,746,498) (678,678) (65,198) (2,303) (518) (4) (6,209) (1,159) (43) (254,482) (187,747) (19,178) -- -- -- -- -- -- ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 7,732,210 4,723,727 1,763,739 5,964 30,741 230 221,806 22,460 4,346 ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ 11,592,203 5,430,238 1,964,753 10,276 32,058 246 246,724 24,453 4,407 7,394,991 1,964,753 -- 32,304 246 -- 28,860 4,407 -- ----------- ---------- ---------- ------- ------- ---- -------- ------- ------ $18,987,194 $7,394,991 $1,964,753 $42,580 $32,304 $246 $275,584 $28,860 $4,407 =========== ========== ========== ======= ======= ==== ======== ======= ======
F-87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
LEGG CYCLICAL MASON CYCLICAL GROWTH AND OPPENHEIMER CAPITAL VALUE GROWTH INCOME PIMCO INFLATION APPRECIATION EQUITY ETF ETF PROTECTED BOND INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION TRUST DIVISION DIVISION DIVISION ------------------ ---------- ---------- ---------- --------------- 2006 2005 (A) 2006 (C) 2006 (B) 2006 (B) 2006 (B) -------- -------- ---------- ---------- ---------- --------------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss)............................ $ (1,383) $ (199) $ (20,388) $ 1,562 $ 1,299 $ (463) Net realized gain (loss) on investments................. 7,447 1,542 98,987 1,770 1,197 1,472 Change in unrealized appreciation (depreciation) of investments............................................ 12,744 2,715 306,184 4,607 2,231 (1,429) -------- -------- ---------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations............................................. 18,808 4,058 384,783 7,939 4,727 (420) -------- -------- ---------- -------- -------- -------- From capital transactions: Payments received from policy owners.................... 117,398 12,067 765,241 9,903 6,299 30,639 Transfers between investment divisions (including fixed account), net.......................................... 123,969 108,334 4,793,005 162,517 108,357 134,189 Transfers for contract benefits and terminations........ (34,745) (5,960) (368,052) (3,472) (2,406) (33,233) Contract maintenance charges............................ (12,440) (2,189) (37,317) (572) (429) (1,447) -------- -------- ---------- -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions................................... 194,182 112,252 5,152,877 168,376 111,821 130,148 -------- -------- ---------- -------- -------- -------- NET CHANGE IN NET ASSETS.................................. 212,990 116,310 5,537,660 176,315 116,548 129,728 NET ASSETS - BEGINNING OF PERIOD.......................... 116,310 -- -- -- -- -- -------- -------- ---------- -------- -------- -------- NET ASSETS - END OF PERIOD................................ $329,300 $116,310 $5,537,660 $176,315 $116,548 $129,728 ======== ======== ========== ======== ======== ========
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-88
AMERICAN CENTURY VISTA DELAWARE SMALL CAP VALUE DREYFUS MIDCAP STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------------ -------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- -------- ---- -------- ---- ---- $ (81) $ (47) $-- $ (1,580) $ (358) $-- $ (148) $-- $-- 118 6 -- 27,452 8,228 -- 16,486 -- -- 1,653 961 -- 21,618 2,540 -- (13,109) -- -- ------- ------- --- -------- -------- --- -------- --- --- 1,690 920 -- 47,490 10,410 -- 3,229 -- -- ------- ------- --- -------- -------- --- -------- --- --- -- -- -- 5,729 6,852 -- -- -- -- 9,705 14,262 -- 342,518 121,033 -- 107,014 -- -- (1,051) (599) -- (11,599) 1,671 -- (19,475) -- -- -- -- -- -- -- -- -- -- -- ------- ------- --- -------- -------- --- -------- --- --- 8,654 13,663 -- 336,648 129,556 -- 87,539 -- -- ------- ------- --- -------- -------- --- -------- --- --- 10,344 14,583 -- 384,138 139,966 -- 90,768 -- -- 14,583 -- -- 139,966 -- -- -- -- -- ------- ------- --- -------- -------- --- -------- --- --- $24,927 $14,583 $-- $524,104 $139,966 $-- $ 90,768 $-- $-- ======= ======= === ======== ======== === ======== === ===
F-89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
DREYFUS EMERGING LEADERS INVESTMENT DIVISION ---------------------- 2006 2005 2004 ------- ------- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (70) $ (47) $-- Net realized gain (loss) on investments................................... 1,662 813 -- Change in unrealized appreciation (depreciation) of investments........... (791) 711 -- ------- ------- --- Net increase (decrease) in net assets resulting from operations........... 801 1,477 -- ------- ------- --- From capital transactions: Payments received from policy owners...................................... 511 -- -- Transfers between investment divisions (including fixed account), net..... -- 11,018 -- Transfers for contract benefits and terminations.......................... (255) (1,674) -- Contract maintenance charges.............................................. -- -- -- ------- ------- --- Net increase (decrease) in net assets resulting from capital transactions. 256 9,344 -- ------- ------- --- NET CHANGE IN NET ASSETS.................................................... 1,057 10,821 -- NET ASSETS - BEGINNING OF PERIOD............................................ 10,821 -- -- ------- ------- --- NET ASSETS - END OF PERIOD.................................................. $11,878 $10,821 $-- ======= ======= ===
DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION --------------------------- 2006 2005 2004 (D) -------- -------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ 390 $ (850) $ (4) Net realized gain (loss) on investments................................... 15,591 (4,878) 1,311 Change in unrealized appreciation (depreciation) of investments........... 67,169 13,060 (934) -------- -------- ------- Net increase (decrease) in net assets resulting from operations........... 83,150 7,332 373 -------- -------- ------- From capital transactions: Payments received from policy owners...................................... 66,631 19,214 2,238 Transfers between investment divisions (including fixed account), net..... 383,627 243,471 12,947 Transfers for contract benefits and terminations.......................... (5,453) (97,080) (18) Contract maintenance charges.............................................. -- -- -- -------- -------- ------- Net increase (decrease) in net assets resulting from capital transactions. 444,805 165,605 15,167 -------- -------- ------- NET CHANGE IN NET ASSETS.................................................... 527,955 172,937 15,540 NET ASSETS - BEGINNING OF PERIOD............................................ 188,477 15,540 -- -------- -------- ------- NET ASSETS - END OF PERIOD.................................................. $716,432 $188,477 $15,540 ======== ======== =======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-90
GOLDMAN SACHS GOLDMAN SACHS MFS MID CAP VALUE STRUCTURED SMALL CAP EQUITY HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- --------------------------- ------------------------- 2006 2005 2004 (D) 2006 2005 2004 2006 2005 2004 (D) -------- -------- -------- ------- ------- ---- ------- ------- -------- $ 1,899 $ 45 $ 66 $ 257 $ 94 $-- $ 4,046 $ 3,632 $ (87) 27,734 994 1,153 6,160 4,218 -- 1,254 128 69 (2,200) 223 (464) 1,891 (5,644) -- 2,298 (2,862) 3,152 -------- -------- ------- ------- ------- --- ------- ------- ------- 27,433 1,262 755 8,308 (1,332) -- 7,598 898 3,134 -------- -------- ------- ------- ------- --- ------- ------- ------- 35,499 3,107 -- 19,548 -- -- 14,794 2,055 -- 156,680 107,030 12,663 13,395 51,421 -- (7,401) 16,844 48,923 (2,292) (77,029) (1,142) (1,827) 77 -- (2,007) (1,736) (1,091) -- -- -- -- -- -- -- -- -- -------- -------- ------- ------- ------- --- ------- ------- ------- 189,887 33,108 11,521 31,116 51,498 -- 5,386 17,163 47,832 -------- -------- ------- ------- ------- --- ------- ------- ------- 217,320 34,370 12,276 39,424 50,166 -- 12,984 18,061 50,966 46,646 12,276 -- 50,166 -- -- 69,027 50,966 -- -------- -------- ------- ------- ------- --- ------- ------- ------- $263,966 $ 46,646 $12,276 $89,590 $50,166 $-- $82,011 $69,027 $50,966 ======== ======== ======= ======= ======= === ======= ======= =======
F-91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
MFS GLOBAL EQUITY VAN KAMPEN GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION ------------------ ---------------------- 2006 2005 2004 2006 2005 2004 ------- ---- ---- ------- ------- ---- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (38) $-- $-- $ 567 $ (12) $-- Net realized gain (loss) on investments................................... 100 -- -- (329) (1) -- Change in unrealized appreciation (depreciation) of investments........... 2,944 -- -- 121 124 -- ------- --- --- ------- ------- --- Net increase (decrease) in net assets resulting from operations........... 3,006 -- -- 359 111 -- ------- --- --- ------- ------- --- From capital transactions: Payments received from policy owners...................................... 11,259 -- -- 4,438 2,678 -- Transfers between investment divisions (including fixed account), net..... 13,359 -- -- (3,528) 10,908 -- Transfers for contract benefits and terminations.......................... (768) -- -- (72) (61) -- Contract maintenance charges.............................................. -- -- -- -- -- -- ------- --- --- ------- ------- --- Net increase (decrease) in net assets resulting from capital transactions. 23,850 -- -- 838 13,525 -- ------- --- --- ------- ------- --- NET CHANGE IN NET ASSETS.................................................... 26,856 -- -- 1,197 13,636 -- NET ASSETS - BEGINNING OF PERIOD............................................ -- -- -- 13,636 -- -- ------- --- --- ------- ------- --- NET ASSETS - END OF PERIOD.................................................. $26,856 $-- $-- $14,833 $13,636 $-- ======= === === ======= ======= ===
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-92
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE WELLS FARGO TOTAL RETURN BOND MONEY MARKET ADVANTAGE ASSET ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ---------------------- ------------------- -------------------------- 2006 2005 2004 2006 2005 2004 2006 2005 2004 ------- ------- ---- -------- ---- ---- ------- ---- ---- $ 1,478 $ 248 $-- $ 15,873 $-- $-- $ 99 $-- $-- (203) 238 -- -- -- -- 293 -- -- 969 16 -- -- -- -- 432 -- -- ------- ------- --- -------- --- --- ------- --- --- 2,244 502 -- 15,873 -- -- 824 -- -- ------- ------- --- -------- --- --- ------- --- --- 5,794 3,570 -- 465,461 -- -- 4,896 -- -- 36,582 13,581 -- 527,851 -- -- 5,994 -- -- (628) (454) -- (27,071) -- -- (168) -- -- -- -- -- -- -- -- -- -- -- ------- ------- --- -------- --- --- ------- --- --- 41,748 16,697 -- 966,241 -- -- 10,722 -- -- ------- ------- --- -------- --- --- ------- --- --- 43,992 17,199 -- 982,114 -- -- 11,546 -- -- 17,199 -- -- -- -- -- -- -- -- ------- ------- --- -------- --- --- ------- --- --- $61,191 $17,199 $-- $982,114 $-- $-- $11,546 $-- $-- ======= ======= === ======== === === ======= === ===
F-93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION ------------------------- ------------------------ 2006 2005 2004 (D) 2006 2005 2004 (D) -------- ------ -------- ------ ------- -------- INCREASE (DECREASE) IN NET ASSETS: From operations: Net investment income (loss).............................................. $ (243) $ (16) $ (1) $ 96 $ 82 $ (1) Net realized gain (loss) on investments................................... 5,393 (5) 6 104 25 10 Change in unrealized appreciation (depreciation) of investments........... 10,126 797 16 1,202 301 3 -------- ------ ------ ------ ------- ------ Net increase (decrease) in net assets resulting from operations........... 15,276 776 21 1,402 408 12 -------- ------ ------ ------ ------- ------ From capital transactions: Payments received from policy owners...................................... 73,440 4,434 2,238 -- 4,436 2,238 Transfers between investment divisions (including fixed account), net..... 106,314 (49) 2,151 -- 110 2,151 Transfers for contract benefits and terminations.......................... (2,821) (985) (75) (871) (1,013) (60) Contract maintenance charges.............................................. -- -- -- -- -- -- -------- ------ ------ ------ ------- ------ Net increase (decrease) in net assets resulting from capital transactions. 176,933 3,400 4,314 (871) 3,533 4,329 -------- ------ ------ ------ ------- ------ NET CHANGE IN NET ASSETS.................................................... 192,209 4,176 4,335 531 3,941 4,341 NET ASSETS - BEGINNING OF PERIOD............................................ 8,511 4,335 -- 8,282 4,341 -- -------- ------ ------ ------ ------- ------ NET ASSETS - END OF PERIOD.................................................. $200,720 $8,511 $4,335 $8,813 $ 8,282 $4,341 ======== ====== ====== ====== ======= ======
(a) For the Period May 1, 2005 thru December 31, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 The accompanying notes are an integral part of these financial statements. F-94 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006 1. BUSINESS Metropolitan Life Separate Account UL (the "Separate Account"), a Separate Account of Metropolitan Life Insurance Company ("Metropolitan Life"), was established by the Board of Directors of Metropolitan Life Insurance Company on December 13, 1988 to support Metropolitan Life's operations with respect to certain variable universal life insurance policies ("Policies"). Metropolitan Life is a wholly owned subsidiary of MetLife, Inc. ("MetLife"). The Separate Account was registered as a unit investment trust on January 5, 1990 under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York Insurance Department. The Separate Account supports six Policies: Flexible Premium Multifunded Life ("UL II"), MetLife Flexible Premium Variable Life ("MetFlex"), Group Variable Universal Life ("GVUL"), Flexible Premium Multifunded Life ("Equity Advantage VUL"), Variable Additional Insurance ("VAI") and Variable Additional Benefits Rider ("VABR"). The Separate Account is divided into investment divisions, each of which is treated as an individual separate account for financial reporting purposes. The Separate Account presently does not have assets invested in each of the investment divisions but each investment division is available as an investment option. Each investment division invests its assets exclusively in shares of corresponding portfolios, series or funds (with the same name) within the Metropolitan Fund, Janus Fund, AIM Funds, Franklin Fund, Alliance Fund, Fidelity Funds, American Fund, Met Investors Fund, American Century Fund, Delaware Fund, Dreyfus IP Fund, Dreyfus Fund, Goldman Sachs Fund, MFS Fund, Van Kampen Fund, or Wells Fargo Fund (collectively, the "Funds"). For convenience, the portfolios, series, and funds are referred to as "portfolios." The assets of the Separate Account are registered in the name of Metropolitan Life. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from Metropolitan Life's other assets and liabilities. The portion of the Separate Account's assets attributable to the variable universal life policies is not chargeable with liabilities arising out of any other business Metropolitan Life may conduct. The following investment divisions were available for investment as of December 31, 2006: BlackRock Large Cap Fidelity VIP Contrafund Investment Division Investment Division BlackRock Diversified Fidelity VIP Asset Investment Division Manager Growth Investment Division BlackRock Aggressive Fidelity VIP Investment Growth Investment Grade Bond Investment Division Division MetLife Stock Index Fidelity VIP Investment Division Equity-Income Investment Division FI International Stock American Funds Growth Investment Division Investment Division FI Mid Cap Opportunities American Funds Investment Division Growth-Income Investment Division T. Rowe Price Small Cap American Funds Global Growth Investment Small Capitalization Division* Investment Division Oppenheimer Global Equity American Funds Bond Investment Division Investment Division Harris Oakmark Large Cap T. Rowe Price Mid-Cap Value Investment Division Growth Investment Division* Neuberger Berman Mid Cap MFS Research Value Investment Division International Investment Division T. Rowe Price Large Cap Growth Investment PIMCO Total Return Division Investment Division Lehman Brothers Aggregate Bond Index Investment RCM Global Technology Division Investment Division Morgan Stanley EAFE Index Lord Abbett Bond Investment Division Debenture Investment Division Russell 2000 Index Lazard Mid-Cap Investment Investment Division Division Jennison Growth Met/AIM Small Cap Growth Investment Division Investment Division BlackRock Strategic Value Harris Oakmark Investment Division International Investment Division MetLife Mid Cap Stock Legg Mason Aggressive Index Investment Division Growth Investment Division* Franklin Templeton Small Cap Growth Investment Lord Abbett Growth and Division Income Investment Division BlackRock Large Cap Value Neuberger Berman Real Investment Division Estate Investment Division* Davis Venture Value Van Kampen Mid Cap Growth Investment Division Investment Division** Loomis Sayles Small Cap Lord Abbett Mid-Cap Value Investment Division Investment Division BlackRock Legacy Large Cap Growth Investment Third Avenue Small Cap Division Value Investment Division BlackRock Bond Income Oppenheimer Capital Investment Division Appreciation Investment Division FI Value Leaders Legg Mason Value Equity Investment Division Investment Division Harris Oakmark Focused Cyclical Growth ETF Value Investment Division Investment Division Western Asset Management Strategic Bond Cyclical Growth and Opportunities Investment Income ETF Investment Division Division Western Asset Management U.S. Government PIMCO Inflation Protected Investment Division Bond Investment Division F-95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONTINUED) BlackRock Money Market American Century Vista Investment Division Investment Division MFS Total Return Delaware Small Cap Value Investment Division* Investment Division MetLife Conservative Allocation Investment Dreyfus MidCap Stock Division Investment Division MetLife Conservative to Moderate Allocation Dreyfus Emerging Leaders Investment Division Investment Division MetLife Moderate Allocation Investment Dreyfus International Division Value Investment Division MetLife Moderate to Aggressive Allocation Goldman Sachs Mid Cap Investment Division Value Investment Division MetLife Aggressive Goldman Sachs Structured Allocation Investment Small Cap Equity Division Investment Division FI Large Cap Investment MFS High Income Division Investment Division Janus Aspen Large Cap Growth Investment MFS Global Equity Division Investment Division Janus Aspen Balanced MFS Value Investment Investment Division Division** Janus Aspen Forty MFS New Discovery Investment Division Investment Division** AIM V.I Core Equity Van Kampen Government Investment Division Investment Division AIM V.I. Government Wells Fargo Advantage VT Securities Investment Total Return Bond Division Investment Division AIM V.I. Global Real Wells Fargo Advantage VT Estate Investment Money Market Investment Division Division Franklin Templeton Wells Fargo Advantage VT Foreign Securities Asset Allocation Investment Division Investment Division Franklin Mutual Discovery Wells Fargo Advantage VT Securities Investment Large Company Core Division Investment Division** AllianceBernstein Global Wells Fargo Advantage VT Technology Investment Large Company Growth Division Investment Division AllianceBernstein U.S. Government/High Grade Wells Fargo Advantage VT Securities Investment Equity Income Investment Division** Division * These investment divisions within the Separate Account invest in two or more share classes within the underlying portfolios of the funds that may assess 12b-1 fees. ** These investment divisions had no net assets as of December 31, 2006. The operations of the investment divisions changed as follows during the years ended 2006, 2005 and 2004: For the year ended December 31, 2006: NAME CHANGES: OLD NAME NEW NAME -------- -------- Salomon Brothers Western Asset Management Strategic Bond Strategic Bond Opportunities Investment Opportunities Investment Division Division Salomon Brothers U.S. Western Asset Management Government Investment U.S Government Investment Division Division Goldman Sachs CORE Small Goldman Sachs Structured Cap Equity Investment Small Cap Equity Division Investment Division AIM V.I. Real Estate AIM V.I. Global Real Investment Division Estate Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Total Return Bond Total Return Bond Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Money Market Investment Money Market Investment Division Division Wells Fargo Advantage Wells Fargo Advantage VT Asset Allocation Asset Allocation Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Large Company Core Large Company Core Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Large Company Growth Large Company Growth Investment Division Investment Division Wells Fargo Advantage Wells Fargo Advantage VT Equity Income Investment Equity Income Investment Division Division Janus Aggressive Growth Legg Mason Aggressive Investment Division Growth Investment Division Lord Abbett Growth Opportunities Investment Van Kampen Mid Cap Growth Division Investment Division BlackRock Investment BlackRock Large Cap Trust Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- MFS Investors Trust Legg Mason Value Equity Portfolio Portfolio AIM V.I. Core Stock AIM V.I. Core Equity Portfolio Portfolio ADDITIONS: FI Large Cap Investment Division American Funds Bond Investment Division Legg Mason Value Equity Investment Division Cyclical Growth ETF Investment Division Cyclical Growth and Income ETF Investment Division PIMCO Inflation Protected Bond Investment Division F-96 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONTINUED) SUBSTITUTIONS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Franklin Templeton Growth Oppenheimer Global Equity Securities Portfolio Portfolio AllianceBernstein Growth Lord Abbett Growth and and Income Portfolio Income Portfolio Dreyfus VIF Appreciation T. Rowe Price Large Cap Portfolio Growth Portfolio Fidelity VIP Growth T. Rowe Price Large Cap Portfolio Growth Portfolio For the year ended December 31, 2005 NAME CHANGES: OLD NAME NEW NAME -------- -------- Met/AIM Mid Cap Core Equity Investment Lazard Mid Cap Investment Division Division Neuberger Berman Partners Mid Cap Value Investment Neuberger Berman Mid Cap Division Value Investment Division Janus Aspen Capital Appreciation Investment Janus Aspen Forty Division Investment Division Janus Aspen Growth Janus Aspen Large Cap Investment Division Growth Investment Division AllianceBernstein AllianceBernstein Global Technology Investment Technology Investment Division Division Scudder Global Equity Oppenheimer Global Equity Investment Division Investment Division Invesco VIF Core Equity AIM V.I. Core Stock Investment Division Investment Division Wells Fargo Total Return Wells Fargo Advantage Bond Investment Division Total Return Bond Investment Division Wells Fargo Money Market Wells Fargo Advantage Investment Division Money Market Investment Division Wells Fargo Asset Wells Fargo Advantage Allocation Investment Asset Allocation Division Investment Division Wells Fargo Growth Wells Fargo Advantage Investment Division Large Company Core Investment Division Wells Fargo Large Company Wells Fargo Advantage Growth Investment Large Company Growth Division Investment Division Wells Fargo Equity Income Wells Fargo Advantage Investment Division Equity Income Investment Division State Street Research Investment Trust BlackRock Investment Investment Division Trust Investment Division State Street Research Diversified Investment BlackRock Diversified Division Investment Division State Street Research Aggressive Growth BlackRock Aggressive Investment Division Growth Investment Division State Street Research Large Cap Value BlackRock Large Cap Value Investment Division Investment Division State Street Research Bond Income Investment BlackRock Bond Income Division Investment Division State Street Research Money Market Investment BlackRock Money Market Division Investment Division State Street Research BlackRock Legacy Large Large Cap Growth Cap Growth Investment Investment Division Division State Street Research Aurora Investment BlackRock Strategic Value Division Investment Division PIMCO PEA Innovation RCM Global Technology Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Met/Putnam Voyager Portfolio Jennison Growth Portfolio ADDITIONS: Jennison Growth Investment Division MetLife Conservative Allocation Investment Division MetLife Conservative to Moderate Allocation Investment Division MetLife Moderate Allocation Investment Division MetLife Moderate to Aggressive Allocation Investment Division MetLife Aggressive Allocation Investment Division Oppenheimer Capital Appreciation Investment Division F-97 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONCLUDED) For the year ended December 31, 2004 NAME CHANGES: OLD NAME NEW NAME -------- -------- Janus Mid Cap Investment FI Mid Cap Opportunities Division Investment Division Invesco Real Estate Opportunities Investment AIM Real Estate Division Investment Division PIMCO Innovation PIMCO PEA Innovation Investment Division Investment Division FI Structured Equity FI Value Leaders Investment Division Investment Division MERGERS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- FI Mid Cap Opportunities Portfolio Janus Mid Cap Portfolio ADDITIONS: MFS Total Return Dreyfus International Investment Division Value Investment Division Janus Aspen Forty Goldman Sachs Mid Cap Investment Division Value Investment Division AIM V.I. Government Goldman Sachs Structured Securities Investment Small Cap Equity Division Investment Division Franklin Mutual Discovery Securities Investment MFS High Income Division Investment Division AllianceBernstein U.S. Government/High Grade Securities Investment MFS Global Equity Division Investment Division Fidelity VIP Investment Grade Bond Investment MFS Value Investment Division Division Fidelity VIP Equity-Income Investment MFS New Discovery Division Investment Division Neuberger Berman Real Estate Investment Van Kampen Government Division Investment Division Lord Abbett Growth Opportunities Investment Wells Fargo Total Return Division Bond Investment Division Lord Abbett Mid-Cap Value Wells Fargo Money Market Investment Division Investment Division Third Avenue Small Cap Wells Fargo Asset Value Investment Division Allocation Investment Division American Century Vista Wells Fargo Large Company Investment Division Core Investment Division Delaware Small Cap Value Wells Fargo Large Company Investment Division Growth Investment Division Dreyfus MidCap Stock Wells Fargo Equity Income Investment Division Investment Divisions Dreyfus Emerging Leaders Investment Division SUBSTITUTIONS: OLD PORTFOLIO NEW PORTFOLIO ------------- ------------- Alger Equity Growth State Street Research Portfolio Large Cap Growth Portfolio Franklin Templeton Small T. Rowe Price Small Cap Cap Valuemark Portfolio Portfolio Alliance Premier Growth Janus Aggressive Growth Portfolio Portfolio Invesco High Yield Lord Abbett Bond Portfolio Debenture Portfolio 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements included herein have been provided in accordance with accounting principles generally accepted in the United States of America for variable universal life separate accounts registered as unit investment trusts. A. VALUATION OF INVESTMENTS Investments are made in the portfolios of the Funds and are valued at the reported net asset values of these portfolios. The investments of the portfolios are valued at fair value. Money market portfolio investments are valued utilizing the amortized cost method of valuation. Changes in fair values are recorded in the Statement of Operations. F-98 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) B. SECURITY TRANSACTIONS Purchases and sales are recorded on the trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the identified cost of the investment sold. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date. C. FEDERAL INCOME TAXES The operations of the Separate Account are included in the Federal income tax return of Metropolitan Life, which is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, Metropolitan Life does not expect to incur Federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the contracts. Accordingly, no charge is being made currently to the Separate Account for Federal income taxes. Metropolitan Life will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any Federal income taxes that would be attributable to the Policies. D. NET PREMIUMS Metropolitan Life deducts a sales load and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain Policies, Metropolitan Life also deducts a Federal income tax charge before amounts are allocated to the Separate Account. The Federal income tax charge is imposed in connection with certain policies to recover a portion of the Federal income tax adjustment attributable to policy acquisition expenses. E. USE OF ESTIMATES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. F. PREMIUM PAYMENTS Premium payments by Metropolitan Life are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus. G. RECLASSIFICATION In prior year Statement of Operations, the Separate Account reported dividend income and realized gain distributions collectively as dividend income. The realized gain distributions have been reclassified and now appear as a separate line item in the Statement of Operations for all periods presented. In the prior year financial statements, the realized gain distributions were included in the calculation of the investment income ratios. These distributions were appropriately excluded from the current year calculations and prior year periods have been adjusted to conform to the current year presentation. These reclassifications had no effect on the net assets of the investment divisions or unit values of the contracts. Certain amounts in the prior year financial statements have been reclassified to conform with the amounts in the current year financial statements. 3. EXPENSES AND RELATED PARTY TRANSACTIONS With respect to assets in the Separate Account that support certain Policies, Metropolitan Life deducts a charge from the assets of the Separate Account for the assumption of general administrative expenses and mortality and expense risks. This charge is equivalent to an effective annual rate of 0.45% of the average daily values of the assets in the Separate Account for GVUL policies, 0.90% for UL II & Equity Advantage VUL policies, 0.75% for VAI and VABR policies less than $250,000, and 0.50% for VAI and VABR policies $250,000 and greater. These charges result in the F-99 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 3. EXPENSES AND RELATED PARTY TRANSACTIONS -- (CONTINUED) reduction of unit values. A charge of 0.60% is assessed against the cash value of the assets in the Separate Account for MetFlex policies outstanding less than ten years. For Metflex policies that have been outstanding for greater than ten years, the charge is reduced to 0.30%. A charge of 0.48% and 0.40% is assessed against the cash value of the assets in the Separate Account for MetFlex C policies and 0.40% for MetFlex Executive policies, respectively. The charges result in the redemption of units. For a full explanation of product charges and associated product features and benefits, please refer to your product prospectus. 4. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and the proceeds from sales of investments for the year ended December 31, 2006 were as follows:
PURCHASES SALES ----------- ----------- BlackRock Large Cap Investment Division.................................. $11,467,983 $26,671,870 BlackRock Diversified Investment Division................................ 15,680,568 28,394,210 BlackRock Aggressive Growth Investment Division.......................... 4,494,902 12,643,730 MetLife Stock Index Investment Division.................................. 75,343,525 33,098,963 FI International Stock Investment Division............................... 6,093,150 4,067,917 FI Mid Cap Opportunities Investment Division............................. 8,064,969 13,208,656 T. Rowe Price Small Cap Growth Investment Division....................... 5,040,563 6,842,815 Oppenheimer Global Equity Investment Division............................ 5,090,140 2,731,827 Harris Oakmark Large Cap Value Investment Division....................... 4,961,515 4,533,285 Neuberger Berman Mid Cap Value Investment Division....................... 16,601,752 3,257,209 T. Rowe Price Large Cap Growth Investment Division....................... 5,611,464 3,796,948 Lehman Brothers Aggregate Bond Index Investment Division................. 14,653,710 4,654,122 Morgan Stanley EAFE Index Investment Division............................ 7,973,083 2,596,658 Russell 2000 Index Investment Division................................... 9,135,332 2,257,319 Jennison Growth Investment Division...................................... 1,310,797 681,638 BlackRock Strategic Value Investment Division............................ 23,570,106 5,388,213 MetLife Mid Cap Stock Index Investment Division.......................... 10,966,694 2,262,386 Franklin Templeton Small Cap Growth Investment Division.................. 1,373,244 356,294 BlackRock Large Cap Value Investment Division............................ 4,049,522 566,819 Davis Venture Value Investment Division.................................. 9,229,149 9,322,889 Loomis Sayles Small Cap Investment Division.............................. 4,302,530 718,737 BlackRock Legacy Large Cap Growth Investment Division.................... 1,507,602 9,175,754 MFS Investors Trust Investment Division (a).............................. 607,762 4,643,739 BlackRock Bond Income Investment Division................................ 11,031,995 11,964,605 FI Value Leaders Investment Division..................................... 2,434,815 294,720 Harris Oakmark Focused Value Investment Division......................... 10,589,353 2,994,506 Western Asset Management Strategic Bond Opportunities Investment Division 4,199,097 1,048,109 Western Asset Management U.S. Government Investment Division............. 2,526,072 607,230 BlackRock Money Market Investment Division............................... 42,614,216 11,326,838 MFS Total Return Investment Division..................................... 2,013,405 600,195 MetLife Conservative Allocation Investment Division...................... 865,072 508,594 MetLife Conservative to Moderate Allocation Investment Division.......... 1,667,586 447,361 MetLife Moderate Allocation Investment Division.......................... 8,480,026 1,046,734 MetLife Moderate to Aggressive Allocation Investment Division............ 10,898,067 214,108 MetLife Aggressive Allocation Investment Division........................ 3,531,254 1,233,052 FI Large Cap Investment Division (b)..................................... 103,282 45,909 Janus Aspen Large Cap Growth Investment Division......................... 773,477 463,142 Janus Aspen Balanced Investment Division................................. 279 334 Janus Aspen Forty Investment Division.................................... 107,128 3,852 AIM V.I. Core Stock Income Investment Division (a)....................... 1,017,764 1,268,370 AIM V.I. Core Equity Income Investment Division (b)...................... 294,892 3,224
F-100 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. PURCHASES AND SALES OF INVESTMENTS -- (CONTINUED)
PURCHASES SALES ------------ ------------ AIM V.I. Government Securities Investment Division............... $ 280 $ 850 AIM V.I. Global Real Estate Investment Division.................. 1,527,094 1,192,937 Franklin Templeton Foreign Securities Investment Division........ 1,078,375 1,243,592 Franklin Mutual Discovery Securities Investment Division......... 722,365 42,288 AllianceBernstein Global Technology Investment Division.......... 30,546 14,382 Fidelity VIP Contrafund Investment Division...................... 1,568,664 368,062 Fidelity VIP Asset Manager Growth Investment Division............ 263,490 56,619 Fidelity VIP Investment Grade Bond Investment Division........... 15,692 12,038 Fidelity VIP Equity-Income Investment Division................... 444,511 41,830 American Funds Growth Investment Division........................ 18,848,930 1,295,883 American Funds Growth-Income Investment Division................. 12,439,562 1,039,626 American Funds Global Small Capitalization Investment Division... 15,088,862 2,070,241 American Funds Bond Investment Division (b)...................... 675,070 43,822 T. Rowe Price Mid-Cap Growth Investment Division................. 3,559,488 1,335,976 MFS Research International Investment Division................... 5,017,601 321,985 PIMCO Total Return Investment Division........................... 4,967,727 1,759,942 RCM Global Technology Investment Division........................ 1,152,777 832,579 Lord Abbett Bond Debenture Investment Division................... 3,655,660 1,217,695 Lazard Mid-Cap Investment Division............................... 1,183,426 273,858 Met/AIM Small Cap Growth Investment Division..................... 927,830 122,502 Harris Oakmark International Investment Division................. 9,243,627 439,317 Legg Mason Aggressive Growth Investment Division................. 1,574,834 587,533 Lord Abbett Growth and Income Investment Division................ 5,490,350 4,453,922 Neuberger Berman Real Estate Investment Division................. 9,093,945 732,319 Van Kampen Mid Cap Growth Investment Division.................... 527 543 Lord Abbett Mid-Cap Value Investment Division.................... 14,758 5,292 Third Avenue Small Cap Value Investment Division................. 238,934 15,466 Oppenheimer Capital Appreciation Investment Division............. 311,122 116,992 Legg Mason Value Equity Investment Division (b).................. 5,402,976 190,823 Cyclical Growth EFT Investment Division (b)...................... 190,590 20,268 Cyclical Growth and Income ETF Investment Division (b)........... 129,590 16,469 PIMCO Inflation Protected Bond Investment Division (b)........... 334,773 205,088 American Century Vista Investment Division....................... 9,225 600 Delaware Small Cap Value Investment Division..................... 418,980 61,838 Dreyfus MidCap Stock Investment Division......................... 124,866 3,384 Dreyfus Emerging Leaders Investment Division..................... 2,226 345 Dreyfus International Value Investment Division.................. 482,219 29,709 Goldman Sachs Mid Cap Value Investment Division.................. 232,239 13,759 Goldman Sachs Structured Small Cap Equity Investment Division.... 39,596 1,938 MFS High Income Investment Division.............................. 101,581 92,148 MFS Global Equity Investment Division............................ 25,345 1,534 Van Kampen Government Investment Division........................ 11,755 10,351 Wells Fargo Advantage VT Total Return Bond Investment Division... 55,323 12,108 Wells Fargo Advantage VT Money Market Investment Division........ 1,010,945 28,743 Wells Fargo Advantage VT Asset Allocation Investment Division.... 15,711 4,889 Wells Fargo Advantage VT Large Company Growth Investment Division 235,927 59,242 Wells Fargo Advantage VT Equity Income Investment Division....... 149 901 ------------ ------------ Total............................................................ $458,237,905 $236,335,109 ============ ============
(a) For the period January 1, 2006 to April 30, 2006 (b) For the period May 1, 2006 to December 31, 2006 F-101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
BLACKROCK BLACKROCK BLACKROCK LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH METLIFE STOCK INVESTMENT INVESTMENT INVESTMENT INDEX INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------- ----------- ----------------- ---------------- Outstanding at December, 2005... 16,488,159 13,638,816 11,502,614 32,156,989 Activity during 2006: Issued........................ 5,827,504 5,196,699 3,534,643 14,883,687 Redeemed...................... (6,306,169) (5,738,789) (3,838,960) (13,433,448) ---------- ---------- ---------- ----------- Outstanding at December 31, 2006 16,009,494 13,096,726 11,198,297 33,607,228 ========== ========== ========== =========== Outstanding at December, 2004... 16,507,025 13,455,017 11,775,258 29,475,869 Activity during 2005: Issued........................ 3,207,492 2,906,692 1,944,636 8,538,465 Redeemed...................... (3,226,358) (2,722,893) (2,217,280) (5,857,345) ---------- ---------- ---------- ----------- Outstanding at December 31, 2005 16,488,159 13,638,816 11,502,614 32,156,989 ========== ========== ========== =========== Outstanding at December, 2003... 16,150,806 12,880,974 11,833,051 25,746,955 Activity during 2004: Issued........................ 3,924,235 3,355,335 2,392,708 9,695,680 Redeemed...................... (3,568,016) (2,781,292) (2,450,501) (5,966,766) ---------- ---------- ---------- ----------- Outstanding at December 31, 2004 16,507,025 13,455,017 11,775,258 29,475,869 ========== ========== ========== ===========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-102
FI FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE INTERNATIONAL OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH STOCK INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ------------- ---------------- ------------- --------------- ---------------- ---------------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 1,366,842 5,633,860 1,690,078 882,876 2,271,700 2,211,103 1,740,365 (1,248,970) (5,855,765) (1,880,129) (852,656) (2,258,368) (1,898,103) (1,667,047) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,412,213 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 ========== ========== ========== ========= ========== ========== ========== 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,772 681,133 3,117,992 928,886 507,092 1,297,280 1,131,537 992,846 (628,162) (2,881,655) (882,149) (393,736) (978,617) (654,171) (799,990) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 ========== ========== ========== ========= ========== ========== ========== 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 3,337,478 836,252 3,915,991 1,398,854 581,796 1,553,632 1,037,887 1,173,122 (1,078,946) (2,979,500) (1,244,173) (520,764) (846,601) (548,501) (1,155,828) ---------- ---------- ---------- --------- ---------- ---------- ---------- 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,772 ========== ========== ========== ========= ========== ========== ==========
F-103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
LEHMAN BROTHERS MORGAN STANLEY RUSSELL 2000 JENNISON AGGREGATE BOND EAFE INDEX INDEX GROWTH INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- -------------- ------------ ---------- Outstanding at December, 2005... 5,619,973 3,464,106 2,619,288 1,297,642 Activity during 2006: Issued........................ 3,458,933 2,413,387 1,598,139 1,435,002 Redeemed...................... (3,020,357) (2,084,948) (1,332,683) (1,375,854) ---------- ---------- ---------- ---------- Outstanding at December 31, 2006 6,058,549 3,792,545 2,884,744 1,356,790 ========== ========== ========== ========== Outstanding at December, 2004... 4,812,639 3,014,776 2,380,540 -- Activity during 2005: Issued........................ 1,885,856 1,268,548 809,404 1,299,954 Redeemed...................... (1,078,522) (819,218) (570,656) (2,312) ---------- ---------- ---------- ---------- Outstanding at December 31, 2005 5,619,973 3,464,106 2,619,288 1,297,642 ========== ========== ========== ========== Outstanding at December, 2003... 4,063,920 2,675,762 2,084,869 -- Activity during 2004: Issued........................ 2,029,620 1,731,659 1,029,824 -- Redeemed...................... (1,280,901) (1,392,645) (734,153) -- ---------- ---------- ---------- ---------- Outstanding at December 31, 2004 4,812,639 3,014,776 2,380,540 -- ========== ========== ========== ==========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-104
FRANKLIN BLACKROCK BLACKROCK BLACKROCK METLIFE MID CAP TEMPLETON SMALL LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE STRATEGIC VALUE STOCK INDEX CAP GROWTH VALUE VENTURE VALUE SMALL CAP CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION --------------- --------------- --------------- ---------- ------------- ------------- ------------ 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 2,369,030 1,900,659 358,131 614,025 934,602 62,838 396,179 (2,360,184) (1,616,392) (294,156) (401,224) (1,373,159) (24,543) (1,407,052) ---------- ---------- -------- -------- ---------- ------- ---------- 4,494,782 3,270,208 538,941 608,908 1,301,427 78,273 190,308 ========== ========== ======== ======== ========== ======= ========== 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 1,327,411 949,998 163,769 238,963 643,359 13,626 506,273 (1,005,489) (622,167) (128,927) (113,868) (269,331) (11,195) (156,106) ---------- ---------- -------- -------- ---------- ------- ---------- 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 ========== ========== ======== ======== ========== ======= ========== 3,371,798 2,338,101 328,803 102,570 1,321,574 30,184 721,385 1,705,456 1,211,510 240,018 263,903 446,367 16,531 210,673 (913,240) (891,501) (128,697) (95,461) (401,985) (9,168) (81,044) ---------- ---------- -------- -------- ---------- ------- ---------- 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 ========== ========== ======== ======== ========== ======= ==========
F-105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
MFS BLACKROCK FI VALUE HARRIS OAKMARK INVESTORS TRUST BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (A) DIVISION DIVISION DIVISION --------------- ----------- ---------- -------------- Outstanding at December, 2005..................... 425,864 5,010,744 248,972 182,165 Activity during 2006: Issued........................................... 418 2,023,116 471,583 130,546 Redeemed......................................... (426,282) (2,365,859) (326,720) (121,182) -------- ---------- -------- -------- Outstanding at December 31, 2006.................. -- 4,668,001 393,835 191,529 ======== ========== ======== ======== Outstanding at December, 2004..................... 366,699 4,716,266 101,071 153,755 Activity during 2005: Issued........................................... 159,329 1,284,065 221,903 71,513 Redeemed......................................... (100,164) (989,587) (74,002) (43,103) -------- ---------- -------- -------- Outstanding at December 31, 2005.................. 425,864 5,010,744 248,972 182,165 ======== ========== ======== ======== Outstanding at December, 2003..................... 185,958 5,516,605 48,986 115,343 Activity during 2004: Issued........................................... 271,608 1,298,199 78,162 73,501 Redeemed......................................... (90,867) (2,098,538) (26,077) (35,089) -------- ---------- -------- -------- Outstanding at December 31, 2004.................. 366,699 4,716,266 101,071 153,755 ======== ========== ======== ========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-106
WESTERN ASSET METLIFE MANAGEMENT WESTERN ASSET METLIFE CONSERVATIVE TO STRATEGIC BOND MANAGEMENT BLACKROCK MFS CONSERVATIVE MODERATE METLIFE MODERATE OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN ALLOCATION ALLOCATION ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION -------------- --------------- ------------ ------------ ------------ --------------- ---------------- 843,296 879,572 1,760,759 190,293 53,570 65,370 165,720 946,567 760,575 2,526,901 495,889 137,937 243,072 1,073,164 (790,924) (651,391) (711,901) (388,752) (147,379) (146,539) (463,746) -------- -------- --------- -------- -------- -------- --------- 998,939 988,756 3,575,759 297,430 44,128 161,903 775,138 ======== ======== ========= ======== ======== ======== ========= 595,935 705,185 1,880,485 69,569 -- -- -- 474,609 399,842 380,493 201,331 53,570 65,370 165,720 (227,248) (225,455) (500,219) (80,607) -- -- -- -------- -------- --------- -------- -------- -------- --------- 843,296 879,572 1,760,759 190,293 53,570 65,370 165,720 ======== ======== ========= ======== ======== ======== ========= 374,682 559,100 1,760,371 -- -- -- -- 412,201 424,585 965,141 78,820 -- -- -- (190,948) (278,500) (845,027) (9,251) -- -- -- -------- -------- --------- -------- -------- -------- --------- 595,935 705,185 1,880,485 69,569 -- -- -- ======== ======== ========= ======== ======== ======== =========
F-107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
METLIFE JANUS ASPEN METLIFE MODERATE AGGRESSIVE LARGE CAP TO AGGRESSIVE ALLOCATION FI LARGE CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) DIVISION ---------------- ---------- ------------ ----------- Outstanding at December, 2005..................... 249,839 49,908 -- 563,653 Activity during 2006: Issued........................................... 1,395,647 388,486 11,244 80,037 Redeemed......................................... (547,053) (213,120) (5,197) (48,639) --------- -------- ------ ------- Outstanding at December 31, 2006.................. 1,098,433 225,274 6,047 595,051 ========= ======== ====== ======= Outstanding at December, 2004..................... -- -- -- 509,009 Activity during 2005: Issued........................................... 249,839 49,908 -- 87,782 Redeemed......................................... -- -- -- (33,138) --------- -------- ------ ------- Outstanding at December 31, 2005.................. 249,839 49,908 -- 563,653 ========= ======== ====== ======= Outstanding at December, 2003..................... -- -- -- 435,309 Activity during 2004: Issued........................................... -- -- -- 109,707 Redeemed......................................... -- -- -- (36,007) --------- -------- ------ ------- Outstanding at December 31, 2004.................. -- -- -- 509,009 ========= ======== ====== =======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-108
AIM V.I. AIM V.I. FRANKLIN JANUS ASPEN JANUS ASPEN AIM V.I. AIM V.I. GOVERNMENT GLOBAL TEMPLETON BALANCED FORTY CORE STOCK CORE EQUITY SECURITIES REAL ESTATE FOREIGN SECURITIES INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (A) DIVISION (B) DIVISION DIVISION DIVISION ----------- ----------- ------------ ------------ ---------- ----------- ------------------ 187 -- 21,852 -- 769 63,997 488,477 20 8,253 124 25,387 -- 11,212 66,725 (28) (299) (21,976) (228) (78) (5,030) (83,483) --- ----- ------- ------ ----- ------- -------- 179 7,954 -- 25,159 691 70,179 471,719 === ===== ======= ====== ===== ======= ======== 22 -- 23,651 -- 420 54,709 444,204 171 -- 4,977 -- 1,092 25,913 97,898 (6) -- (6,776) -- (743) (16,625) (53,625) --- ----- ------- ------ ----- ------- -------- 187 -- 21,852 -- 769 63,997 488,477 === ===== ======= ====== ===== ======= ======== -- -- 18,859 -- -- 10,108 403,047 23 -- 5,644 -- 428 54,984 183,668 (1) -- (852) -- (8) (10,383) (142,511) --- ----- ------- ------ ----- ------- -------- 22 -- 23,651 -- 420 54,709 444,204 === ===== ======= ====== ===== ======= ========
F-109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
FRANKLIN MUTUAL FIDELITY VIP DISCOVERY ALLIANCEBERNSTEIN FIDELITY VIP ASSET MANAGER SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION --------------- ----------------- ------------ ------------- Outstanding at December, 2005..................... 9,138 8,553 74,414 80,752 Activity during 2006: Issued........................................... 47,509 6,356 104,221 26,178 Redeemed......................................... (1,767) (3,141) (27,231) (4,770) ------ ------ ------- ------- Outstanding at December 31, 2006.................. 54,880 11,768 151,404 102,160 ====== ====== ======= ======= Outstanding at December, 2004..................... -- 4,324 77,301 83,331 Activity during 2005: Issued........................................... 9,276 4,400 24,890 24,061 Redeemed......................................... (138) (171) (27,777) (26,640) ------ ------ ------- ------- Outstanding at December 31, 2005.................. 9,138 8,553 74,414 80,752 ====== ====== ======= ======= Outstanding at December, 2003..................... -- 10,005 97,404 53,872 Activity during 2004: Issued........................................... -- 1,377 19,035 37,333 Redeemed......................................... -- (7,058) (39,138) (7,874) ------ ------ ------- ------- Outstanding at December 31, 2004.................. -- 4,324 77,301 83,331 ====== ====== ======= =======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-110
FIDELITY VIP AMERICAN FUNDS INVESTMENT FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS T. ROWE PRICE GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME CAPITALIZATION BOND MID-CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION DIVISION DIVISION DIVISION DIVISION (B) DIVISION ------------ ------------- -------------- -------------- -------------- -------------- -------------- 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 1,406 30,655 867,857 919,357 1,590,658 77,194 1,200,709 (1,221) (1,894) (671,607) (726,327) (1,157,560) (13,780) (993,873) ------ ------- --------- --------- ---------- ------- --------- 3,341 30,951 1,094,384 1,228,077 1,521,701 63,414 1,338,870 ====== ======= ========= ========= ========== ======= ========= 1,268 928 656,749 811,401 676,191 -- 856,351 2,025 19,013 429,219 460,047 728,909 -- 562,461 (137) (17,751) (187,834) (236,401) (316,497) -- (286,778) ------ ------- --------- --------- ---------- ------- --------- 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 ====== ======= ========= ========= ========== ======= ========= -- -- 417,055 524,999 377,860 -- 526,964 1,268 928 378,500 469,450 517,429 -- 519,499 -- -- (138,806) (183,048) (219,098) -- (190,112) ------ ------- --------- --------- ---------- ------- --------- 1,268 928 656,749 811,401 676,191 -- 856,351 ====== ======= ========= ========= ========== ======= =========
F-111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------- ------------ ---------- -------------- Outstanding at December, 2005..................... 294,106 1,849,249 1,334,943 1,085,144 Activity during 2006: Issued........................................... 541,071 1,580,219 1,036,397 609,507 Redeemed......................................... (268,584) (1,390,083) (975,767) (531,845) -------- ---------- --------- --------- Outstanding at December 31, 2006.................. 566,593 2,039,385 1,395,573 1,162,806 ======== ========== ========= ========= Outstanding at December, 2004..................... 234,898 1,483,392 1,273,073 1,015,708 Activity during 2005: Issued........................................... 152,985 818,646 518,666 328,926 Redeemed......................................... (93,776) (452,789) (456,796) (259,490) -------- ---------- --------- --------- Outstanding at December 31, 2005.................. 294,106 1,849,249 1,334,943 1,085,144 ======== ========== ========= ========= Outstanding at December, 2003..................... 151,293 1,041,644 932,206 963,357 Activity during 2004: Issued........................................... 415,775 865,523 888,971 444,003 Redeemed......................................... (332,170) (423,775) (548,104) (391,652) -------- ---------- --------- --------- Outstanding at December 31, 2004.................. 234,898 1,483,392 1,273,073 1,015,708 ======== ========== ========= =========
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-112
LAZARD MET/AIM HARRIS OAKMARK LEGG MASON LORD ABBETT NEUBERGER BERMAN LORD ABBETT MID-CAP SMALL CAP GROWTH INTERNATIONAL AGGRESSIVE GROWTH GROWTH AND INCOME REAL ESTATE MID-CAP VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ---------------- -------------- ----------------- ----------------- ---------------- ------------- 226,296 129,221 636,793 844,525 342,402 503,432 2,543 244,858 152,658 1,213,847 564,765 529,241 1,259,740 710 (209,390) (111,085) (790,150) (500,364) (348,220) (823,708) (265) -------- -------- --------- -------- -------- --------- ----- 261,764 170,794 1,060,490 908,926 523,423 939,464 2,988 ======== ======== ========= ======== ======== ========= ===== 171,772 101,110 289,245 741,720 280,704 151,740 21 136,196 72,111 536,478 290,526 78,527 536,011 2,575 (81,672) (44,000) (188,930) (187,721) (16,829) (184,319) (53) -------- -------- --------- -------- -------- --------- ----- 226,296 129,221 636,793 844,525 342,402 503,432 2,543 ======== ======== ========= ======== ======== ========= ===== 91,521 60,439 71,528 582,357 199,532 -- -- 171,923 79,501 431,218 350,165 93,825 172,116 22 (91,672) (38,830) (213,501) (190,802) (12,653) (20,376) (1) -------- -------- --------- -------- -------- --------- ----- 171,772 101,110 289,245 741,720 280,704 151,740 21 ======== ======== ========= ======== ======== ========= =====
F-113 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONTINUED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
OPPENHEIMER THIRD AVENUE CAPITAL LEGG MASON SMALL CAP APPRECIATION VALUE EQUITY CYCLICAL GROWTH VALUE INVESTMENT INVESTMENT INVESTMENT ETF INVESTMENT DIVISION DIVISION DIVISION (B) DIVISION (B) ---------------- ------------ ------------ --------------- Outstanding at December, 2005..................... 2,073 10,588 -- -- Activity during 2006: Issued........................................... 16,123 48,969 548,298 18,885 Redeemed......................................... (702) (31,761) (57,410) (2,490) ------ ------- ------- ------ Outstanding at December 31, 2006.................. 17,494 27,796 490,888 16,395 ====== ======= ======= ====== Outstanding at December, 2004..................... 366 -- -- -- Activity during 2005: Issued........................................... 1,821 13,476 -- -- Redeemed......................................... (114) (2,888) -- -- ------ ------- ------- ------ Outstanding at December 31, 2005.................. 2,073 10,588 -- -- ====== ======= ======= ====== Outstanding at December, 2003..................... -- -- -- -- Activity during 2004: Issued........................................... 373 -- -- -- Redeemed......................................... (7) -- -- -- ------ ------- ------- ------ Outstanding at December 31, 2004.................. 366 -- -- -- ====== ======= ======= ======
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-114
DREYFUS CYCLICAL GROWTH PIMCO INFLATION DELAWARE DREYFUS EMERGING DREYFUS AND INCOME ETF PROTECTED BOND AMERICAN CENTURY SMALL CAP VALUE MIDCAP STOCK LEADERS INTERNATIONAL VALUE INVESTMENT INVESTMENT VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION (B) DIVISION DIVISION DIVISION DIVISION DIVISION --------------- --------------- ---------------- --------------- ------------ ---------- ------------------- -- -- 1,252 9,876 -- 916 14,559 12,571 33,652 761 25,950 8,296 43 32,872 (1,696) (20,930) (50) (3,915) (300) (28) (2,233) ------ ------- ----- ------ ----- --- ------- 10,875 12,722 1,963 31,911 7,996 931 45,198 ====== ======= ===== ====== ===== === ======= -- -- -- -- -- -- 1,371 -- -- 1,295 10,566 -- 940 25,402 -- -- (43) (690) -- (24) (12,214) ------ ------- ----- ------ ----- --- ------- -- -- 1,252 9,876 -- 916 14,559 ====== ======= ===== ====== ===== === ======= -- -- -- -- -- -- -- -- -- -- -- -- -- 1,371 -- -- -- -- -- -- -- ------ ------- ----- ------ ----- --- ------- -- -- -- -- -- -- 1,371 ====== ======= ===== ====== ===== === =======
F-115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS -- (CONCLUDED) The changes in units outstanding for the years ended December 31, 2006, 2005 and 2004 were as follows:
GOLDMAN SACHS GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------- ---------------- ---------- ---------- Outstanding at December, 2005..................... 3,769 4,239 6,238 -- Activity during 2006: Issued........................................... 15,229 2,659 8,397 1,849 Redeemed......................................... (637) (155) (7,897) (60) ------ ----- ------ ----- Outstanding at December 31, 2006.................. 18,362 6,743 6,738 1,789 ====== ===== ====== ===== Outstanding at December, 2004..................... 1,123 -- 4,700 -- Activity during 2005: Issued........................................... 9,745 4,244 1,719 -- Redeemed......................................... (7,099) (5) (181) -- ------ ----- ------ ----- Outstanding at December 31, 2005.................. 3,769 4,239 6,238 -- ====== ===== ====== ===== Outstanding at December, 2003..................... -- -- -- -- Activity during 2004: Issued........................................... 1,123 -- 4,700 -- Redeemed......................................... -- -- -- -- ------ ----- ------ ----- Outstanding at December 31, 2004.................. 1,123 -- 4,700 -- ====== ===== ====== =====
(a) For the Period January 1, 2006 thru April 30, 2006 (b) For the Period May 1, 2006 thru December 31, 2006 F-116
WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO VAN KAMPEN VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE GOVERNMENT TOTAL RETURN BOND MONEY MARKET ASSET ALLOCATION LARGE COMPANY EQUITY INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT GROWTH INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ----------------- ------------ ---------------- ----------------- ------------- 1,272 1,620 -- -- 772 727 701 4,733 93,909 1,099 18,861 -- (631) (800) (2,721) (192) (1,831) (74) ----- ----- ------ ----- ------ --- 1,342 5,553 91,188 907 17,802 653 ===== ===== ====== ===== ====== === -- -- -- -- 416 402 1,280 1,631 -- -- 464 422 (8) (11) -- -- (108) (97) ----- ----- ------ ----- ------ --- 1,272 1,620 -- -- 772 727 ===== ===== ====== ===== ====== === -- -- -- -- -- -- -- -- -- -- 424 410 -- -- -- -- (8) (8) ----- ----- ------ ----- ------ --- -- -- -- -- 416 402 ===== ===== ====== ===== ====== ===
F-117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
BLACKROCK BLACKROCK BLACKROCK METLIFE LARGE CAP DIVERSIFIED AGGRESSIVE GROWTH STOCK INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ----------------- ------------------ 2006 Units................................... 16,009,494 13,096,726 11,198,297 33,607,228 Unit Fair Value, Lowest to Highest (1).. $13.85 to $42.25 $14.57 to $36.86 $15.63 to $22.09 $12.80 to $38.04 Net Assets.............................. $435,896,815 $331,432,719 $228,717,595 $707,564,793 Investment Income Ratio to Net Assets (2).................................... 1.30% 2.44% 0.00% 1.97% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 12.10% to 14.15% 7.38% to 10.53% 5.76% to 6.75% 8.73% to 15.48% 2005 Units................................... 16,488,159 13,638,816 11,502,614 32,156,989 Unit Fair Value, Lowest to Highest (1).. $12.13 to $37.35 $13.18 to $33.65 $14.64 to $20.73 $11.08 to $33.24 Net Assets.............................. $401,557,280 $319,750,423 $222,219,970 $605,569,341 Investment Income Ratio to Net Assets (2).................................... 1.09% 1.57% 0.00% 1.56% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 2.67% to 3.59% 2.13% to 3.05% 9.72% to 10.70% 3.71% to 4.64% 2004 Units................................... 16,507,025 13,455,017 11,775,258 29,475,869 Unit Fair Value, Lowest to Highest (1).. $11.71 to $36.38 $12.79 to $32.95 $13.23 to $18.89 $10.59 to $32.05 Net Assets.............................. $399,816,513 $315,176,729 $207,749,362 $548,175,778 Investment Income Ratio to Net Assets (2).................................... 0.71% 1.83% 0.00% 0.83% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 9.87% to 10.86% 7.54% to 8.51% 11.97% to 12.98% 9.55% to 10.53% 2003 Units................................... 16,150,806 12,880,974 11,833,051 25,746,955 Unit Fair Value, Lowest to Highest (1).. $10.57 to $33.12 $11.79 to $30.64 $11.71 to $16.87 $9.58 to $29.26 Net Assets.............................. $367,087,301 $289,033,387 $187,268,373 $457,114,347 Investment Income Ratio to Net Assets (2).................................... 0.83% 3.73% 0.00% 1.65% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... 29.08% to 30.24% 19.48% to 20.56% 39.53% to 40.79% 27.06% to 28.20% 2002 Units................................... 15,059,725 12,267,711 11,447,188 22,139,983 Unit Fair Value, Lowest to Highest (1).. $8.11 to $25.66 $9.78 to $25.64 $8.32 to $12.09 $7.48 to $23.03 Net Assets.............................. $276,979,969 $238,020,353 $130,815,618 $326,227,963 Investment Income Ratio to Net Assets (2).................................... 0.54% 2.27% 0.00% 0.82% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... -27.00% to -26.00% -15.00% to -14.00% -29.00% -23.00% to -22.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-118
FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER T. ROWE PRICE FI INTERNATIONAL OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE BERMAN MID CAP LARGE CAP GROWTH STOCK INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT VALUE INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ------------------ ------------------ ------------------ ---------------- ----------------- 3,412,213 14,298,595 4,913,291 2,344,938 4,099,325 3,225,765 3,620,946 $15.68 to $21.90 $7.97 to $22.36 $15.76 to $17.80 $20.38 to $22.70 $14.65 to $18.40 $20.75 to $29.66 $10.63 to $16.09 $67,509,144 $271,463,672 $81,812,746 $48,944,535 $64,292,839 $77,735,349 $49,315,573 1.40% 0.01% 0.00% 2.49% 0.77% 0.48% 0.33% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 14.38% to 16.49% 10.85% to 28.32% 2.96% to 3.93% 11.00% to 16.59% 16.70% to 18.14% 10.46% to 11.46% 12.21% to 13.23% 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 3,547,628 $13.71 to $18.97 $7.12 to $20.08 $8.20 to $17.21 $17.48 to $19.47 $12.55 to $15.72 $18.79 to $26.61 $6.84 to $14.21 $56,855,714 $247,745,972 $80,632,046 $41,604,796 $54,445,434 $63,152,395 $41,950,019 0.60% 0.00% 0.00% 0.55% 0.70% 0.29% 0.54% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 16.95% to 18.00% 5.97% to 6.92% 10.02% to 11.01% 15.19% to 16.22% -2.26% to -1.38% 11.27% to 12.27% 4.12% to 6.59% 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 3,354,771 $11.67 to $16.22 $6.66 to $18.87 $7.41 to $15.57 $15.04 to $16.76 $12.79 to $16.08 $16.88 to $23.70 $6.47 to $13.33 $48,075,000 $229,326,208 $72,034,034 $34,182,477 $51,133,000 $47,215,000 $36,962,724 1.32% 0.53% 0.00% 1.52% 0.49% 0.23% 0.21% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 17.14% to 18.19% 16.15% to 17.19% 9.58% to 11.08% 15.38% to 16.42% 10.42% to 11.42% 21.81% to 22.91% 2.91% to 9.93% 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 3,337,477 $9.92 to $13.85 $5.69 to $16.17 $6.76 to $14.08 $12.92 to $14.39 $11.53 to $14.56 $13.86 to $19.29 $6.27 to $12.13 $43,984,289 $184,078,088 $63,188,807 $28,695,718 $37,503,629 $30,945,551 $33,816,692 0.65% 0.00% 0.00% 2.04% 0.00% 0.32% 0.11% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% 0.60% to 0.90% 26.90% to 28.04% 33.38% to 35.10% 37.24% to 40.87% 29.29% to 30.45% 24.38% to 25.49% 35.30% to 36.52% 29.64% to 32.78% 3,295,967 11,520,986 4,424,009 1,978,122 2,346,360 1,567,159 2,881,316 $7.78 to $10.91 $4.22 to $12.07 $4.93 to $10.04 $9.90 to $11.03 $9.23 to $11.71 $10.24 to $14.13 $4.72 to $9.27 $32,966,098 $119,019,575 $40,681,000 $20,475,933 $23,072,554 $18,285,822 $22,228,496 0.89% 0.00% 0.00% 1.68% 0.81% 0.10% 0.26% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -18.00% to -17.00% -30.00% to -29.00% -29.00% to -27.00% -17.00% to -16.00% -15.00% to -14.00% -10.00% -30.00% to 23.00%
F-119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
LEHMAN BROTHERS MORGAN STANLEY RUSSELL 2000 JENNISON AGGREGATE BOND EAFE INDEX INDEX GROWTH INDEX INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION (A) ---------------- ---------------- ------------------ ---------------- 2006 Units................................... 6,058,549 3,792,545 2,884,744 1,356,790 Unit Fair Value, Lowest to Highest (1).. $13.75 to $15.13 $13.02 to $17.67 $15.20 to $21.19 $5.81 to $12.52 Net Assets.............................. $90,417,327 $58,401,764 $55,288,989 $14,099,259 Investment Income Ratio to Net Assets (2).................................... 4.29% 1.70% 0.81% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... -0.88% to 4.15% 23.03% to 25.75% 12.11% to 17.99% 1.88% to 2.82% 2005 Units................................... 5,619,973 3,464,106 2,619,288 1,147,750 Unit Fair Value, Lowest to Highest (1).. $13.32 to $14.53 $10.45 to $14.05 $13.00 to $17.96 $5.65 to $12.19 Net Assets.............................. $80,547,413 $42,457,559 $42,636,846 $13,084,245 Investment Income Ratio to Net Assets (2).................................... 3.76% 1.59% 0.74% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 1.16% to 2.06% 12.24% to 13.24% 3.57% to 4.50% 20.77% to 21.49% 2004 Units................................... 4,812,639 3,014,776 2,380,540 -- Unit Fair Value, Lowest to Highest (1).. $13.17 to $14.23 $9.31 to $12.41 $12.55 to $17.19 $-- Net Assets.............................. $67,709,808 $32,551,579 $37,085,761 $-- Investment Income Ratio to Net Assets (2).................................... 3.00% 0.71% 0.44% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 3.17% to 4.10% 18.58% to 19.64% 16.71% to 17.77% -- 2003 Units................................... 4,063,920 2,675,762 2,084,869 -- Unit Fair Value, Lowest to Highest (1).. $12.77 to $13.67 $7.85 to $10.37 $10.75 to $14.59 $-- Net Assets.............................. $54,994,307 $24,290,177 $27,726,279 $-- Investment Income Ratio to Net Assets (2).................................... 5.25% 1.48% 0.63% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 2.71% to 3.63% 36.41% to 37.70% 44.77% to 46.07% -- 2002 Units................................... 4,147,462 2,043,759 1,614,358 -- Unit Fair Value, Lowest to Highest (1).. $12.43 to $13.19 $5.76 to $7.53 $7.43 to $9.99 $-- Net Assets.............................. $54,046,288 $13,496,072 $14,828,534 $-- Investment Income Ratio to Net Assets (2).................................... 2.81% 0.49% 0.54% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -- Total Return, Lowest to Highest (4)..... 9.00% to 10.00% -17.00% -21.00% to -20.00% 0.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-120
FRANKLIN BLACKROCK BLACKROCK BLACKROCK METLIFE MID CAP TEMPLETON SMALL LARGE CAP DAVIS LOOMIS SAYLES LEGACY LARGE STRATEGIC VALUE STOCK INDEX CAP GROWTH VALUE VENTURE VALUE SMALL CAP CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ------------------ ---------------- ---------------- ------------------ ----------------- --------------- 4,494,782 3,270,208 538,941 608,908 1,301,427 78,273 190,308 $21.68 to $23.68 $15.84 to $17.39 $11.33 to $11.92 $8.29 to $15.57 $13.90 to $40.33 $13.47 to $298.24 $8.29 to $12.45 $105,414,517 $56,090,136 $6,368,294 $9,397,259 $49,859,713 $12,333,660 $2,269,333 0.31% 1.19% 0.00% 1.17% 0.85% 0.00% 0.16% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 15.68% to 16.74% 9.11% to 10.09% 9.07% to 10.05% 18.29% to 19.30% 13.55% to 14.62% 15.64% to 16.72% 3.23% to 4.13% 4,485,936 2,985,941 474,966 396,107 1,739,984 39,978 1,201,181 $18.58 to $20.28 $14.39 to $15.80 $8.20 to $10.83 $12.63 to $13.05 $12.13 to $35.19 $11.54 to $255.61 $7.96 to $11.96 $90,122,911 $46,523,277 $5,108,051 $5,137,144 $43,993,114 $8,114,417 $10,109,046 0.00% 0.67% 0.00% 0.88% 0.65% 0.00% 0.39% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 3.23% to 4.15% 11.28% to 12.27% 3.72% to 10.71% 5.04% to 5.98% 9.32% to 10.30% 6.00% to 6.96% 6.05% to 7.00% 4,164,014 2,658,110 440,124 271,012 1,365,956 37,547 851,014 $17.84 to $19.48 $12.82 to $14.07 $10.01 to $10.35 $12.02 to $12.31 $11.00 to $31.91 $10.79 to $238.98 $7.44 to $11.17 $80,342,000 $36,885,384 $4,527,432 $3,320,893 $31,374,337 $6,406,000 $6,457,524 0.00% 0.48% 0.00% 0.00% 0.54% 0.00% 0.00% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 14.31% to 15.34% 15.01% to 16.05% 10.41% to 11.41% 12.39% to 13.40% 11.36% to 12.37% 15.31% to 16.35% 8.81% to 11.74% 3,371,798 2,338,101 328,803 102,570 1,321,574 30,184 721,385 $15.46 to $16.89 $11.04 to $12.13 $9.07 to $9.29 $10.70 to $10.86 $9.79 to $28.40 $9.27 to $205.39 $6.84 $56,539,662 $27,924,887 $3,038,000 $1,110,128 $24,429,495 $4,422,939 $4,933,432 0.00% 0.46% 0.00% 1.37% 0.37% 0.00% 0.06% 0.60% to 0.90% 0.60% to 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% to 0.90% 0.60% 48.80% to 50.14% 33.76% to 34.96% 43.64% to 44.93% 34.47% to 35.68% 29.70% to 30.87% 35.25% to 36.47% 35.15% 2,598,639 1,762,240 197,685 23,496 900,662 18,232 589,478 $10.30 to $11.25 $8.18 to $8.98 $6.31 to $6.41 $7.96 to $8.00 $7.48 to $21.70 $6.80 to $150.51 $5.06 $29,060,558 $15,567,957 $1,268,000 $188,913 $13,430,192 $2,408,393 $2,982,730 0.06% 0.35% 0.00% 0.92% 0.88% 0.11% 0.00% 0.50% to 0.90% 0.50% to 0.90% 0.90% 0.90% 0.50% to 0.90% 0.50% to 0.90% 0.60% -22.00% to -21.00% -16.00% to -15.00% -28.00% -20.00% -17.00% to -16.00% -22.00% -33.00%
F-121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
MFS BLACKROCK FI VALUE HARRIS OAKMARK INVESTORS TRUST BOND INCOME LEADERS FOCUSED VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION DIVISION DIVISION ------------------ ---------------- ------------------ ------------------ 2006 Units................................... -- 4,668,001 393,835 191,529 Unit Fair Value, Lowest to Highest (1).. $-- $14.39 to $29.48 $11.79 to $14.87 $290.84 to $305.98 Net Assets.............................. $-- $92,311,177 $5,778,898 $58,176,504 Investment Income Ratio to Net Assets (2).................................... 1.09% 5.74% 1.00% 0.30% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 17.49% to 21.04% -2.17% to 4.43% 10.97% to 11.91% 11.45% to 12.45% 2005 Units................................... 425,864 5,010,744 248,972 182,165 Unit Fair Value, Lowest to Highest (1).. $9.51 to $9.95 $13.78 to $28.49 $10.54 to $13.29 $260.95 to $272.09 Net Assets.............................. $4,216,736 $94,693,129 $3,262,874 $49,251,761 Investment Income Ratio to Net Assets (2).................................... 0.76% 3.93% 1.04% 0.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 6.32% to 7.27% 1.50% to 2.41% 9.71% to 10.69% 9.00% to 9.98% 2004 Units................................... 366,699 4,716,266 101,071 153,755 Unit Fair Value, Lowest to Highest (1).. $8.87 to $9.28 $13.46 to $28.07 $9.52 to $12.01 $239.40 to $247.40 Net Assets.............................. $3,387 $89,174,083 $1,190,557 $37,844,733 Investment Income Ratio to Net Assets (2).................................... 0.39% 4.09% 1.10% 0.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.48% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% Total Return, Lowest to Highest (4)..... 10.37% to 11.37% 3.50% to 4.43% 12.71% to 13.73% 8.95% to 9.93% 2003 Units................................... 185,957 5,516,605 48,986 115,343 Unit Fair Value, Lowest to Highest (1).. $7.96 to $8.33 $12.89 to $27.12 $8.37 to $10.56 $219.73 to $225.05 Net Assets.............................. $1,544 $96,719,590 $505,283 $25,865,638 Investment Income Ratio to Net Assets (2).................................... 0.25% 3.06% 0.52% 0.12% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.60% to 0.90% 0.60% to 0.90% 0.60% to .90% 0.90% Total Return, Lowest to Highest (4)..... 20.76% to 21.85% 4.91% to 5.85% 25.79% to 26.92% 31.47% to 32.66% 2002 Units................................... 103,733 5,564,010 11,904 76,067 Unit Fair Value, Lowest to Highest (1).. $6.54 to $6.84 $12.18 to $25.85 $6.59 to $8.32 $167.13 to $169.65 Net Assets.............................. $694 $93,157,932 $92,898 $12,878,533 Investment Income Ratio to Net Assets (2).................................... 0.72% 5.72% 0.89% 0.18% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.60% to 0.90% 0.60% to 0.90% 0.60% to .90% 0.90% Total Return, Lowest to Highest (4)..... -21.00% to -20.00% 7.00% to 8.00% -19.00% to -17.00% -10.00% to -9.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-122
WESTERN ASSET METLIFE MANAGEMENT WESTERN ASSET METLIFE CONSERVATIVE TO STRATEGIC BOND MANAGEMENT BLACKROCK MFS CONSERVATIVE MODERATE METLIFE MODERATE OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN ALLOCATION ALLOCATION ALLOCATION INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 998,939 988,756 3,575,759 297,430 44,128 161,903 775,138 $15.16 to $15.95 $13.62 to $14.33 $16.57 to $16.87 $12.47 to $12.77 $11.00 to $11.17 $11.51 to $11.68 $12.01 to $12.19 $15,802,133 $14,050,390 $59,328,821 $3,781,921 $492,252 $ 1,884,052 $9,406,274 4.79% 3.26% 4.81% 3.21% 2.90% 2.36% 1.48% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% 0.90% 0.90% 4.10% to 5.04% 3.25% to 4.19% 3.86% to 4.82% 11.19% to 12.18% 6.27% to 7.27% 8.80% to 9.74% 11.20% to 12.19% 843,296 879,572 1,760,759 190,293 11,372 54,464 133,610 $14.56 to $15.19 $13.19 to $13.75 $12.92 to $16.24 $11.21 to $11.68 $10.35 to $10.41 $10.58 to $10.64 $10.80 to $10.87 $12,708,706 $12,014,309 $28,027,973 $2,159,396 $118,225 $ 578,511 $1,449,435 3.01% 1.33% 2.78% 1.64% 0.63% 0.77% 0.83% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 0.90% 0.90% 0.90% 1.92% to 2.83% 0.82% to 1.72% 1.97% to 2.89% 2.20% to 7.66% 3.51% to 4.13% 5.80% to 6.43% 8.02% to 8.66% 595,935 705,185 1,880,485 69,569 -- -- -- $14.29 to $14.77 $13.08 to $13.52 $15.36 to $15.93 $10.85 to $11.04 $-- $-- $-- $8,742,547 $9,478,138 $29,162,123 $767,164 $-- $-- $-- 2.66% 1.25% 1.03% 0.00% -- -- -- 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% -- -- -- 5.66% to 6.61% 2.09% to 3.01% 0.08% to 0.99% 8.52%% to 10.39% -- -- -- 374,682 559,100 1,760,371 -- -- -- -- $13.52 to $13.85 $12.82 to $13.13 $15.21 to $15.92 $-- $-- $-- $-- $5,163,069 $7,304,902 $27,346,427 $-- $-- $-- $-- 1.70% 0.62% 0.78% -- -- -- -- 0.90% 0.90% 0.60% to 0.90% -- -- -- -- 11.62% to 12.62% 0.77% to 1.68% -0.09% to 0.81% -- -- -- -- 177,044 340,014 1,980,526 -- -- -- -- $12.12 to $12.30 $12.72 to $12.91 $13.09 to $15.93 $-- $-- $-- $-- $2,173,663 $4,365,410 $30,811,000 $-- $-- $-- $-- 6.33% 2.20% 1.57% -- -- -- -- 0.90% 0.90% 0.45% to 0.90% -- -- -- -- 9.00% to 10.00% 7.00% to 8.00% 0.00% to 1.00% -- -- -- --
F-123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
METLIFE MODERATE METLIFE TO AGGRESSIVE AGGRESSIVE ALLOCATION ALLOCATION FI LARGE CAP INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) ---------------- ---------------- ---------------- 2006 Units............................................................. 1,098,433 225,274 6,047 Unit Fair Value, Lowest to Highest (1)............................ $12.52 to $12.71 $12.89 to $13.08 $10.16 to $10.22 Net Assets........................................................ $ 13,918,465 $2,934,559 $61,685 Investment Income Ratio to Net Assets (2)......................... 1.07% 0.67% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% 0.90% 0.90% Total Return, Lowest to Highest (4)............................... 13.54% to 14.57% 15.05% to 16.04% 1.60% to 2.20% 2005 Units............................................................. 212,022 40,224 -- Unit Fair Value, Lowest to Highest (1)............................ $11.03 to $11.09 $11.20 to $11.27 $-- Net Assets........................................................ $ 2,349,403 $452,673 $-- Investment Income Ratio to Net Assets (2)......................... 0.77% 0.73% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% 0.90% -- Total Return, Lowest to Highest (4)............................... 10.28% to 10.94% 12.05% to 12.72% -- 2004 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2003 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2002 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $ -- $-- $-- Net Assets........................................................ $ -- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- --
JANUS ASPEN LARGE CAP GROWTH INVESTMENT DIVISION -------------- 2006 Units............................................................. 595,051 Unit Fair Value, Lowest to Highest (1)............................ $9.75 Net Assets........................................................ $5,801,609 Investment Income Ratio to Net Assets (2)......................... 0.49% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 11.38% 2005 Units............................................................. 563,653 Unit Fair Value, Lowest to Highest (1)............................ $8.75 Net Assets........................................................ $4,934,074 Investment Income Ratio to Net Assets (2)......................... 0.33% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 4.29% 2004 Units............................................................. 509,009 Unit Fair Value, Lowest to Highest (1)............................ $8.39 Net Assets........................................................ $4,276,635 Investment Income Ratio to Net Assets (2)......................... 0.15% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% Total Return, Lowest to Highest (4)............................... 4.52% 2003 Units............................................................. 435,309 Unit Fair Value, Lowest to Highest (1)............................ $8.03 Net Assets........................................................ $3,499,893 Investment Income Ratio to Net Assets (2)......................... 0.10% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.60% Total Return, Lowest to Highest (4)............................... 31.73% 2002 Units............................................................. 354,373 Unit Fair Value, Lowest to Highest (1)............................ $6.10 Net Assets........................................................ $2,163,422 Investment Income Ratio to Net Assets (2)......................... 0.03% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.60% Total Return, Lowest to Highest (4)............................... -27.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-124
AIM V.I. AIM V.I. FRANKLIN JANUS ASPEN JANUS AIM V.I. AIM V.I. GOVERNMENT GLOBAL TEMPLETON BALANCED FORTY CORE STOCK CORE EQUITY SECURITIES REAL ESTATE FOREIGN SECURITIES INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (A) DIVISION (B) DIVISION DIVISION DIVISION ----------- ---------- ------------ ------------ ---------- -------------- ------------------ 179 7,954 -- 25,159 691 70,179 471,719 $12.90 $14.00 $-- $15.30 $11.08 $39.37 $16.03 $2,311 $111,362 $-- $384,843 $7,657 $2,762,613 $7,566,317 1.92% 0.14% 1.13% 0.50% 3.54% 1.18% 1.35% 0.48% 0.48% 0.48% 0.48% 0.40% 0.40% to 0.60% 0.48% to 0.60% 10.41% 9.11% 30.58% 36.32% 3.28% 42.62% 21.69% 187 -- 21,852 -- 769 63,997 488,477 $11.68 $-- $10.53 $-- $10.73 $27.61 $13.17 $2,186 $-- $230,117 $-- $8,255 $1,747,819 $6,438,080 2.07% -- 0.42% -- 3.80% 1.18% 1.22% 0.60% -- 0.48% -- 0.40% 0.40% to 0.60% 0.48% to 0.60% 7.66% -- 3.79% -- 4.57% 15.46% 10.48% 22 -- 23,651 -- 420 54,709 444,204 $10.85 $-- $10.15 $-- $10.26 $23.91 $11.92 $237 $-- $239,919 $-- $4,310 $1,308,000 $5,300,000 3.38% -- 0.96% -- 1.40% 1.25% 1.12% 0.60% -- 0.48% -- 0.40% 0.40% to 0.60% 0.48% to 0.60% 8.52% -- 4.24% -- 2.60% 34.40% 18.87% -- -- 18,859 -- -- 10,108 403,047 $-- $-- $9.73 $-- $-- $17.79 $10.03 $-- $-- $184,406 $-- $-- $178,608 $4,053,532 -- -- 1.26% -- -- 1.49% 1.52% -- -- 0.60% -- -- 0.60% 0.60% -- -- 22.60% -- -- 38.82% 32.55% -- -- 15,365 -- -- 14,055 344,105 $-- $-- $7.94 $-- $-- $12.82 $7.57 $-- $-- $125,063 $-- $-- $179,233 $2,612,034 -- -- 1.74% -- -- 1.40% 2.03% -- -- 0.60% -- -- 0.60% 0.60% -- -- -19.00% -- -- -6.00% -18.00%
F-125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
FRANKLIN MUTUAL FIDELITY VIP DISCOVERY ALLIANCEBERNSTIEN FIDELITY VIP ASSET MANAGER SECURITIES GLOBAL TECHNOLOGY CONTRAFUND GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION DIVISION DIVISION --------------- ----------------- -------------- ------------- 2006 Units............................................................. 54,880 11,768 151,404 102,160 Unit Fair Value, Lowest to Highest (1)............................ $16.38 $5.36 $13.81 $9.40 Net Assets........................................................ $899,109 $63,091 $2,091,319 $958,076 Investment Income Ratio to Net Assets (2)......................... 0.99% 0.00% 1.15% 1.87% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.40% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... 23.03% 8.36% 11.57% 6.89% 2005 Units............................................................. 9,138 8,553 74,414 80,752 Unit Fair Value, Lowest to Highest (1)............................ $13.31 $4.95 $12.38 $8.79 Net Assets........................................................ $121,664 $42,308 $921,114 $708,401 Investment Income Ratio to Net Assets (2)......................... 1.34% 0.00% 0.21% 2.58% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.40% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... 15.97% 3.65% 16.85% 3.79% 2004 Units............................................................. -- 4,324 77,301 83,331 Unit Fair Value, Lowest to Highest (1)............................ $-- $4.77 $10.59 $8.47 Net Assets........................................................ $-- $20,636 $819 $704,000 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.21% 2.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.48% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)............................... -- 5.09% 15.34% 5.85% 2003 Units............................................................. -- 10,005 97,404 53,872 Unit Fair Value, Lowest to Highest (1)............................ $-- $4.54 $9.18 $8.00 Net Assets........................................................ $-- $45,595 $894 $432,629 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.15% 2.96% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)............................... -- 43.79% 28.35% 23.15% 2002 Units............................................................. -- 5,945 34,844 19,894 Unit Fair Value, Lowest to Highest (1)............................ $-- $3.16 $7.16 $6.50 Net Assets........................................................ $-- $18,230 $249 $130,875 Investment Income Ratio to Net Assets (2)......................... -- 0.00% 0.14% 3.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)............................... -- -42.00% -10.00% -18.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-126
FIDELITY VIP AMERICAN FUNDS INVESTMENT FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS T. ROWE PRICE GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME CAPITALIZATION BOND MID-CAP GROWTH INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (D) DIVISION (D) DIVISION DIVISION DIVISION DIVISION (C) DIVISION -------------- -------------- ------------------ ------------------ ------------------ ---------------- ---------------- 3,341 30,951 1,094,384 1,228,077 1,521,701 63,414 1,338,870 $11.10 $14.00 $84.90 to $89.32 $49.83 to $52.43 $27.56 to $28.99 $10.12 to $10.18 $8.84 to $13.92 $36,978 $433,176 $97,034,740 $63,898,091 $43,642,742 $644,176 $12,401,292 4.18% 3.96% 0.86% 1.68% 0.46% 0.87% 0.00% 0.40% to 0.48% 0.40% to 0.48% 0.90% 0.90% 0.90% 0.90% 0.60% to 0.90% 4.28% 20.07% 9.24% to 10.22% 14.17% to 15.21% 22.97% to 24.05% 1.20% to 1.80% 5.66% to 6.60% 3,156 2,190 898,134 1,035,047 1,088,603 -- 1,132,034 $10.64 $11.66 $77.72 to $81.04 $43.64 to $45.51 $22.41 to $23.37 $-- $8.37 to $13.11 $33,484 $25,408 $72,331,242 $46,794,725 $25,231,190 $-- $9,817,802 2.35% 1.05% 0.74% 1.44% 0.89% -- 0.00% 0.40% to 0.48% 0.40% to 0.48% 0.90% 0.90% 0.90% -- 0.60% to 0.90% 2.08% 5.76% 15.16% to 16.19% 4.89% to 5.83% 24.24% to 25.35% -- 13.85% to 14.87% 1,268 928 656,749 811,401 676,191 -- 856,351 $10.43 $11.02 $67.49 to $69.75 $41.61 to $43.00 $18.04 to $18.64 $-- $7.35 to $11.44 $13,121 $10,110 $45,571,772 $34,701,703 $12,527,867 $-- $6,475,187 0.00% 0.00% 0.20% 1.00% 0.00% -- 0.00% .40% .40% 0.90% 0.90% 0.90% -- 0.60% to 0.90% 4.27% 10.25% 11.49% to 12.50% 9.39% to 10.37% 19.80% to 20.88% -- 14.40% to 18.15% -- -- 417,055 524,999 377,860 -- 526,964 $-- $-- $60.53 to $62.00 $38.04 to $38.96 $15.06 to $15.42 $-- $6.28 to $6.43 $-- $-- $25,759,940 $20,368,911 $5,800,860 $-- $3,375,270 -- -- 0.13% 1.18% 0.49% -- 0.00% -- -- 0.90% 0.90% 0.90% -- 0.90% -- -- 35.59% to 36.81% 31.25% to 32.43% 52.16% to 53.53% -- 35.90% to 37.12% -- -- 221,157 286,757 202,753 -- 293,610 $-- $-- $44.64 to $45.32 $28.98 to $29.42 $9.90 to $10.05 $-- $4.62 to $4.69 $-- $-- $9,992,022 $8,407,501 $2,032,913 $-- $1,372,997 -- -- 0.05% 1.53% 0.81% -- 0.82% -- -- 0.90% 0.90% 0.90% -- 0.90% -- -- -25.00% to -24.00% -19.00% to -18.00% -20.00% to -19.00% -- -44.00%
F-127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- ---------------- 2006 Units................................... 566,593 2,039,385 1,395,573 1,162,806 Unit Fair Value, Lowest to Highest (1).. $15.30 to $17.63 $13.16 to $13.85 $5.16 to $5.43 $14.77 to $18.05 Net Assets.............................. $9,803,525 $28,016,253 $7,523,569 $19,368,414 Investment Income Ratio to Net Assets (2).................................... 1.59% 2.73% 0.00% 6.71% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to .90% Total Return, Lowest to Highest (4)..... 25.80% to 26.90% 3.85% to 4.81% 4.51% to 5.47% 1.42% to 9.34% 2005 Units................................... 294,107 1,849,249 1,334,943 1,085,144 Unit Fair Value, Lowest to Highest (1).. $12.09 to $13.89 $12.67 to $13.21 $4.94 to $5.15 $13.96 to $16.51 Net Assets.............................. $4,058,072 $24,263,960 $6,824,691 $16,531,209 Investment Income Ratio to Net Assets (2).................................... 0.63% 0.06% 0.00% 4.70% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to .90% Total Return, Lowest to Highest (4)..... 6.38% to 16.77% 1.55% to 2.46% 10.36% to 11.35% 0.90% to 1.81% 2004 Units................................... 234,898 1,483,392 1,273,073 1,015,708 Unit Fair Value, Lowest to Highest (1).. $11.51 to $11.90 $12.48 to $12.90 $4.47 to 4.62 $10.84 to $16.22 Net Assets.............................. $2,780,832 $19,019,859 $5,849,160 $15,192,966 Investment Income Ratio to Net Assets (2).................................... 0.00% 7.63% 0.00% 3.51% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)..... 18.65% to 19.72% 4.31% to 5.25% -5.13% to -4.28% 7.46% to 9.61% 2003 Units................................... 151,293 1,041,644 932,206 963,357 Unit Fair Value, Lowest to Highest (1).. $9.70 to $9.94 $11.96 to $12.25 $4.72 to $4.83 $9.21 to $14.95 Net Assets.............................. $1,497,220 $12,697,066 $4,480,813 $12,846,410 Investment Income Ratio to Net Assets (2).................................... 0.97% 1.48% 0.00% 1.85% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)..... 31.01% to 32.19% 3.59% to 4.52% 56.44% to 57.84% 17.17% to 25.04% 2002 Units................................... 95,230 533,674 415,928 812,767 Unit Fair Value, Lowest to Highest (1).. $7.41 to $7.52 $11.55 to $11.72 $3.01 to $3.06 $7.37 to $12.51 Net Assets.............................. $713,682 $6,213,682 $1,269,081 $9,072,240 Investment Income Ratio to Net Assets (2).................................... 0.25% 0.00% 0.00% 11.43% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......... 0.90% 0.90% 0.90% -2% to 0.90% Total Return, Lowest to Highest (4)..... -12.00% 9.00% to 10.00% -51.00% -1.00% to 1.00%
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-128
LEGG MASON LORD ABBETT NEUBERGER LORD ABBETT LAZARD MET/AIM HARRIS OAKMARK AGGRESSIVE GROWTH AND BERMAN REAL MID-CAP MID-CAP SMALL CAP GROWTH INTERNATIONAL GROWTH INCOME ESTATE VALUE INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ------------------ ---------------- ---------------- ---------------- ---------------- ---------------- -------------- 261,764 170,794 1,060,490 908,926 523,423 939,464 2,988 $14.85 to $15.48 $13.44 to $14.02 $19.54 to $20.37 $7.37 to $8.60 $11.20 $19.85 to $20.33 $14.25 $4,020,887 $2,376,804 $21,411,537 $7,744,433 $5,861,368 $18,987,194 $42,580 0.52% 0.00% 2.33% 0.00% 0.03% 1.01% 0.54% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.48% to 0.60% 6.62% to 14.86% 3.77% to 13.93% 28.05% to 29.18% -2.53% to -1.60% 18.05% 36.70% to 37.93% 12.16% 226,296 129,221 636,793 844,525 342,402 503,432 2,543 $11.78 to $13.48 $11.71 to $12.31 $15.26 to $15.77 $7.50 to $8.74 $9.49 to $12.19 $14.52 to $14.74 $12.71 $3,034,264 $1,587,237 $9,973,856 $7,322,996 $4,160,587 $7,394,991 $32,304 0.41% 0.00% 0.16% 0.00% 0.10% 0.00% 0.86% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.48% to 0.60% 7.44% to 8.40% 7.63% to 10.16% 13.47% to 14.48% 12.83% to 13.84% 3.68% to 4.62% 12.60% to 13.61% 8.05% 171,772 101,110 289,245 741,720 280,704 151,740 21 $12.14 to $12.43 $11.06 to $11.33 $13.45 to $13.77 $6.60 to $7.68 $9.15 to $11.65 $12.90 to $12.97 $11.76 $2,124,397 $1,143,358 $3,963,209 $5,657,453 $3,254,684 $1,964,753 $246 0.00% 0.00% 0.04% 0.00% 0.49% 3.30% 0.72% 0.90% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40% to 0.90% 0.60% 13.57% to 14.60% 5.78% to 6.73% 19.73% to 20.80% 7.85% to 8.82% 11.22% to 12.92% 28.97% to 29.74% 17.59% 91,521 60,439 71,528 582,357 199,532 -- -- $10.69 to $10.85 $10.46 to $10.62 $11.23 to $11.40 $6.10 to $7.06 $8.10 to $10.47 $-- $-- $988,932 $643,451 $813,505 $4,086,776 $2,083,614 $-- $-- 1.35% 0.00% 1.84% 0.00% 0.70% -- -- 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% -- -- 25.29% to 26.42% 37.84% to 39.08% 34.16% to 35.37% 23.37% to 29.93% 29.15% to 32.18% -- -- 29,655 15,245 17,743 389,441 150,344 -- -- $8.53 to $8.58 $7.59 to $7.63 $8.37 to $8.42 $4.94 to $5.43 $7.92 $-- $-- $252,980 $115,796 $149,970 $2,087,511 $1,191,135 $-- $-- 0.10% 0.00% 0.00% 0.00% 3.31% -- -- 0.90% 0.90% 0.90% 0.60% to 0.90% 0.60% -- -- -15.00% to -14.00% -24.00% -16.00% -31.00% -22.00% -- --
F-129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES -- (CONTINUED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
OPPENHEIMER THIRD AVENUE CAPITAL LEGG MASON SMALLCAP APPRECIATION VALUE EQUITY VALUE INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION (B) ---------------- ---------------- ---------------- 2006 Units............................................................. 17,494 27,796 490,888 Unit Fair Value, Lowest to Highest (1)............................ $15.75 $11.70 to $11.87 $10.73 to $12.11 Net Assets........................................................ $275,584 $329,300 $5,537,660 Investment Income Ratio to Net Assets (2)......................... 0.11% 0.26% 0.16% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.48% to 0.60% 0.90% 0.48% to 0.90% Total Return, Lowest to Highest (4)............................... 13.11% 6.88% to 7.78% 7.73% to 27.65% 2005 Units............................................................. 2,073 10,588 -- Unit Fair Value, Lowest to Highest (1)............................ $13.92 $10.95 to $11.01 $-- Net Assets........................................................ $28,860 $116,310 $-- Investment Income Ratio to Net Assets (2)......................... 0.00% 0.13% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.60% 0.90% -- Total Return, Lowest to Highest (4)............................... 15.48% 9.21% to 9.86% -- 2004 Units............................................................. 366 -- -- Unit Fair Value, Lowest to Highest (1)............................ $12.06 $-- $-- Net Assets........................................................ $4,407 $-- $-- Investment Income Ratio to Net Assets (2)......................... 0.55% -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% -- -- Total Return, Lowest to Highest (4)............................... 20.58% -- -- 2003 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- Net Assets........................................................ $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- 2002 Units............................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- Net Assets........................................................ $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- Total Return, Lowest to Highest (4)............................... -- -- --
CYCLICAL GROWTH ETF INVESTMENT DIVISION (B) ---------------- 2006 Units............................................................. 16,395 Unit Fair Value, Lowest to Highest (1)............................ $10.71 to $10.77 Net Assets........................................................ $176,315 Investment Income Ratio to Net Assets (2)......................... 2.52% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.90% Total Return, Lowest to Highest (4)............................... 7.10% to 7.70% 2005 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2004 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2003 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... -- 2002 Units............................................................. -- Unit Fair Value, Lowest to Highest (1)............................ $-- Net Assets........................................................ $-- Investment Income Ratio to Net Assets (2)......................... -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- Total Return, Lowest to Highest (4)............................... --
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-130
DREYFUS CYCLICAL GROWTH PIMCO INFLATION DELAWARE DREYFUS EMERGING DREYFUS AND INCOME ETF PROTECTED BOND AMERICAN CENTURY SMALL CAP VALUE MID CAP STOCK LEADERS INTERNATIONAL VALUE INVESTMENT INVESTMENT VISTA INVESTMENT INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION (B) DIVISION (B) DIVISION DIVISION DIVISION DIVISION DIVISION ---------------- ---------------- ---------------- --------------- ------------- ---------- ------------------- 10,875 12,722 1,963 31,911 7,996 931 45,198 $10.67 to $10.73 $10.14 to $10.20 $12.70 $16.42 $11.35 $12.76 $15.85 $116,548 $129,728 $24,927 $524,104 $90,768 $11,878 $716,432 3.14% 0.00% 0.00% 0.02% 0.20% 0.00% 0.54% 0.90% 0.90% 0.40% 0.48% 0.48% 0.60% 0.40% to 0.48% 6.70% to 7.30% 1.40% to 2.00% 9.03% 15.86% -8.96% 8.05% 22.35% -- -- 1,252 9,876 -- 916 14,559 $-- $-- $11.65 $14.17 $-- $11.81 $12.95 $-- $-- $14,583 $139,966 $-- $10,821 $188,477 -- -- 0.00% 0.26% -- 0.00% 0.00% -- -- 0.40% 0.48% -- 0.60% 0.40% to 0.48% -- -- 8.13% 17.85% -- 4.75% 11.69% -- -- -- -- -- -- 1,371 $-- $-- $-- $-- $-- $-- $11.60 $-- $-- $-- $-- $-- $-- $15,540 -- -- -- -- -- -- 0.00% -- -- -- -- -- -- 0.40% -- -- -- -- -- -- 15.99% -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
F-131 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONCLUDED) 6. UNIT VALUES -- (CONCLUDED) The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively, or lesser time period if applicable.
GOLDMAN SACHS GOLDMAN SACHS STRUCTURED MFS HIGH MFS GLOBAL MID CAP VALUE SMALL CAP EQUITY INCOME EQUITY INVESTMENT INVESTMENT INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION -------------- ---------------- -------------- -------------- 2006 Units............................................................. 18,362 6,743 6,738 1,789 Unit Fair Value, Lowest to Highest (1)............................ $14.38 $13.29 $12.17 $15.01 Net Assets........................................................ $263,966 $89,590 $82,011 $26,856 Investment Income Ratio to Net Assets (2)......................... 1.82% 0.87% 5.42% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.48% 0.40% to 0.48% 0.40% to 0.48% Total Return, Lowest to Highest (4)............................... 16.17% 12.30% 9.98% 24.04% 2005 Units............................................................. 3,769 4,239 6,238 -- Unit Fair Value, Lowest to Highest (1)............................ $12.38 $11.83 $11.07 $-- Net Assets........................................................ $46,646 $50,166 $69,027 $-- Investment Income Ratio to Net Assets (2)......................... 0.91% 0.45% 11.32% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% 0.48% 0.40% to 0.48% -- Total Return, Lowest to Highest (4)............................... 12.83% 6.07% 2.05% -- 2004 Units............................................................. 1,123 $-- 4,700 -- Unit Fair Value, Lowest to Highest (1)............................ $10.97 $-- $10.84 $-- Net Assets........................................................ $12,276 -- $51 $-- Investment Income Ratio to Net Assets (2)......................... 1.17% -- 0.00% -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% to 0.48% -- 0.48% -- Total Return, Lowest to Highest (4)............................... 9.71% -- 8.43% -- 2003 Units............................................................. -- -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- $-- Net Assets........................................................ $-- $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- -- 2002 Units............................................................. -- -- -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- $-- $-- Net Assets........................................................ $-- $-- $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- -- -- Total Return, Lowest to Highest (4)............................... -- -- -- --
(1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owner's cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 thru April 30, 2005 (b) For the Period January 1, 2006 thru April 30, 2006 (c) For the Period May 1, 2006 thru December 31, 2006 (d) For the Period May 3, 2004 thru December 31, 2004 F-132
WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO VAN KAMPEN ADVANTAGE VT ADVANTAGE VT ADVANTAGE ADVANTAGE ADVANTAGE GOVERNMENT TOTAL RETURN BOND MONEY MARKET ASSET ALLOCATION LARGE COMPANY EQUITY INCOME INVESTMENT INVESTMENT INVESTMENT INVESTMENT GROWTH INVESTMENT INVESTMENT DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION ---------- ----------------- ------------ ---------------- ----------------- ------------- 1,342 5,553 91,188 907 17,802 653 $11.06 $11.02 $10.77 $12.73 $11.28 $13.49 $14,833 $61,191 $982,114 $11,546 $200,720 $8,813 4.52% 4.43% 2.41% 0.99% 0.00% 1.55% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 3.14% 3.79% 4.39% 12.11% 2.39% 18.51% 1,272 1,620 -- -- 772 727 $10.72 $10.62 $-- $-- $11.02 $11.38 $13,636 $17,199 $-- $-- $8,511 $8,282 0.00% 3.06% -- -- 0.23% 1.79% 0.40% 0.40% -- -- 0.40% 0.40% 3.28% 1.90% -- -- 5.70% 5.38% -- -- -- -- 416 402 $-- $-- $-- $-- $10.42 $10.80 $-- $-- $-- $-- $4,335 $4,341 -- -- -- -- 0.00% 0.00% -- -- -- -- 0.40% 0.40% -- -- -- -- 4.23% 8.03% -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
F-133 Equity Advantage VUL and ULII FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICIES Metropolitan Life Separate Account UL Issued by Metropolitan Life Insurance Company STATEMENT OF ADDITIONAL INFORMATION (PART B) April 30, 2007 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to (a) for Equity Advantage VUL Policies, the prospectus dated April 30, 2007 and (b) for ULII Policies the prospectus dated May 1, 2003, as supplemented, and should be read in conjunction therewith. A copy of the prospectus for Equity Advantage VUL and the prospectus for ULII may be obtained by writing to MetLife, P.O. Box 543, Warwick, RI 02887-0543. SAI-1 TABLE OF CONTENTS The Company and the Separate Account............. SAI-3 Distribution of the Policies..................... SAI-3 Commissions on Equity Advantage VUL Policies.. SAI-3 Commissions on ULII Policies.................. SAI-3 Income Plans..................................... SAI-3 Potential Conflicts of Interest.................. SAI-4 Limits to MetLife's Right to Challenge the Policy SAI-4 Misstatement of Age or Sex....................... SAI-4 Reports.......................................... SAI-4 Personalized Illustrations....................... SAI-5 Independent Registered Public Accounting Firm.... SAI-6 Financial Statements............................. SAI-6
SAI-2 THE COMPANY AND THE SEPARATE ACCOUNT MetLife is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. Our main office is located at 200 Park Avenue, New York, New York 10166. MetLife was formed under the laws of New York State in 1868. MetLife, Inc., through its subsidiaries and affiliates, provides insurance and other financial services to individual and group customers. We established the Separate Account under New York law on December 13, 1988. The Separate Account receives premium payments from the Policies described in the Prospectus and other variable life insurance policies that we issue. We have registered the Separate Account as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). DISTRIBUTION OF THE POLICIES On or about May 1, 2007, it is anticipated that MetLife Investors Distribution Company ("MLIDC") will become the principal underwriter and distributor of the Policies. MLIDC, which is our affiliate, is registered under the Securities Exchange Act of 1934 (the "34 Act") as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (the "NASD"). The Policies are sold through licensed life insurance sales representatives who are associated with MetLife Securities, Inc. ("MSI"), our affiliate, or with our other affiliated broker-dealers, New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. MSI and our other affiliated broker-dealers are registered with the SEC as broker-dealers under the 34 Act and are also members of the NASD. The Policies may also be sold through licensed life insurance sales representatives associated with unaffiliated broker-dealers with which MLIDC enters into a selling agreement. We offer the Policies to the public on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering. Commissions on Equity Advantage VUL Policies Commissions paid in 2004, 2005, and 2006 totaled $33,469,648, $34,187,841 and $68,233,751 respectively. The calculation of maximum commissions payable for the Equity Advantage VUL Policies is described in the prospectus. Commissions on ULII Policies Commissions paid in 2004, 2005 and 2006 totaled $1,844,532, $1,637,208 and $2,224,038 respectively. The calculation of maximum commissions payable for the ULII Policies is described in the prospectus for ULII. INCOME PLANS Generally, you can receive the Policy's insurance proceeds, amounts payable at the Final Date or amounts paid upon surrender under an income plan instead of in a lump sum. Before you choose an income plan you should consider: . The tax consequences associated with the Policy proceeds, which can vary considerably, depending on whether a plan is chosen. You or your beneficiary should consult with a qualified tax adviser about tax consequences. . That your Policy will terminate at the time you commence an income plan and you will receive a new contract, which describes the terms of the income plan. You should carefully review the terms of the new contract, because it contains important information about the terms and conditions of the income plan. SAI-3 . The rates of return that we credit under these plans are not based on the performance of any of the Portfolios. Generally, we currently make the following income plans available: . Interest income . Installment Income for a Stated Period . Installment Income for . Single Life a Stated Amount Income-Guaranteed Payment Period . Joint and Survivor . Single Life Life Income Income-Guaranteed Return POTENTIAL CONFLICTS OF INTEREST The Portfolio's Boards of Trustees monitor events to identify conflicts that may arise from the sale of Portfolio shares to variable life and variable annuity separate accounts of affiliated and, if applicable, unaffiliated insurance companies and qualified plans. Conflicts could result from changes in state insurance law or Federal income tax law, changes in investment management of a Portfolio, or differences in voting instructions given by variable life and variable annuity contract owners and qualified plans, if applicable. If there is a material conflict, the Board of Trustees will determine what action should be taken, including the removal of the affected Investment Division from the Portfolio(s), if necessary. If we believe any Portfolio action is insufficient, we will consider taking other action to protect Policy Owners. There could, however, be unavoidable delays or interruptions of operations of the Separate Account that we may be unable to remedy. LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY We will not contest your Policy after two Policy years from issue or reinstatement (excluding riders added later). We will not contest an increase in a death benefit after it has been in effect for two years. MISSTATEMENT OF AGE OR SEX We will adjust benefits to reflect the correct age and sex of the insured, if this information is not correct in the Policy application. REPORTS Generally, you will promptly receive statements confirming your significant transactions such as: . Change in specified face amount. . Change in death benefit options. . Changes in guarantees. . Transfers among investment divisions (including those through Automated Investment Strategies, which are confirmed quarterly). . Partial withdrawals. . Loan amounts you request. . Loan repayments and premium payments. If your premium payments are made through preauthorized checking arrangement or another systematic payment method, we will not send you any confirmation in addition to the one you receive from your bank or employer. SAI-4 We will also send you an annual statement within 30 days after a Policy year. The statement will summarize the year's transactions and include information on: . Deductions and charges. . Status of the death benefit. . Cash and cash surrender values. . Amounts in the investment divisions and Fixed Account. . Status of Policy loans. . Automatic loans to pay interest. . Information on your modified endowment contract status (if applicable). We will also send you a Fund's annual and semi-annual reports to shareholders. PERFORMANCE DATA We may provide information concerning the historical investment experience of the investment divisions, including average annual net rates of return for periods of one, three, five, and ten years, as well as average annual net rates of return and total net rates of return since inception of the Portfolios. These net rates of return represent past performance and are not an indication of future performance. Cost of insurance, sales, premium tax, and mortality and expense risk charges, which can significantly reduce the return to the Policy Owner, are not reflected in these rates. The rates of return reflect only the fees and expenses of the underlying Portfolios. The net rates of return show performance from the inception of the Portfolios, which in some instances, may precede the inception date of the corresponding investment division. PERSONALIZED ILLUSTRATIONS We may provide personalized illustrations showing how the Policies work based on assumptions about investment returns and the Policy Owner's and/or insured's characteristics. The illustrations are intended to show how the death benefit, cash surrender value, and cash value could vary over an extended period of time assuming hypothetical gross rates of return (i.e., investment income and capital gains and losses, realized or unrealized) for the Separate Account equal to specified constant after-tax rates of return. One of the gross rates of return will be 0%. Gross rates of return do not reflect the deduction of any charges and expenses. The illustrations will be based on specified assumptions, such as face amount, premium payments, insured, underwriting class, and death benefit option. Illustrations will disclose the specific assumptions upon which they are based. Values will be given based on guaranteed mortality and expense risk and other charges and may also be based on current mortality and expense risk and other charges. The illustrated death benefit, cash surrender value, and cash value for a hypothetical Policy would be different, either higher or lower, from the amounts shown in the illustration if the actual gross rates of return averaged the gross rates of return upon which the illustration is based, but varied above and below the average during the period, or if premiums were paid in other amounts or at other than annual intervals. For example, as a result of variations in actual returns, additional premium payments beyond those illustrated may be necessary to maintain the Policy in force for the periods shown or to realize the Policy values shown in particular illustrations even if the average rate of return is realized. Illustrations may also show the internal rate of return on the cash surrender value and the death benefit. The internal rate of return on the cash surrender value is equivalent to an interest rate (after taxes) at which an amount equal to the illustrated premiums could have been invested outside the Policy to arrive at the cash surrender value of the Policy. The internal rate of return on the death SAI-5 benefit is equivalent to an interest rate (after taxes) at which an amount equal to the illustrated premiums could have been invested outside the Policy to arrive at the death benefit of the Policy. Illustrations may also show values based on the historical performance of the investment divisions of the Separate Account. FEDERAL TAX MATTERS If the Portfolio shares are sold directly to tax-qualified retirement plans that later lose their tax-qualified status or to non-qualified plans, the separate accounts investing in the Portfolio may fail the diversification requirements of Sections 817(h) of the Internal Revenue Code, which could have adverse tax consequences for variable Policy owners, including losing the benefit of tax deferral. Additional information regarding federal tax matters is included in the prospectus. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The consolidated financial statements of Metropolitan Life Insurance Company (the "Company") (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the change in the method of accounting for defined benefit pension and other postretirement plans, and for certain non-traditional long duration contracts and separate accounts as required by new accounting guidance which the Company adopted on December 31, 2006, and January 1, 2004, respectively), included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. FINANCIAL STATEMENTS The financial statements of MetLife are attached to this Statement of Additional Information. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. SAI-6 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE ---- Report of Independent Registered Public Accounting Firm................. F-1 Financial Statements at December 31, 2006 and 2005 and for the years ended December 31, 2006, 2005 and 2004: Consolidated Balance Sheets........................................... F-2 Consolidated Statements of Income..................................... F-3 Consolidated Statements of Stockholder's Equity....................... F-4 Consolidated Statements of Cash Flows................................. F-5 Notes to Consolidated Financial Statements............................ F-7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Metropolitan Life Insurance Company: We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2006 and 2005, and the related consolidated statements of income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2006. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Metropolitan Life Insurance Company and subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, the Company changed its method of accounting for defined benefit pension and other postretirement plans and for certain non- traditional long duration contracts and separate accounts as required by accounting guidance which the Company adopted on December 31, 2006 and January 1, 2004, respectively. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP New York, New York April 2, 2007 F-1 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2006 AND 2005 (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
2006 2005 -------- -------- ASSETS Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $157,673 and $141,929, respectively).............................................. $162,385 $147,897 Trading securities, at fair value (cost: $548 and $373, respectively).............................................. 563 373 Equity securities available-for-sale, at estimated fair value (cost: $3,000 and $1,989, respectively).................... 3,487 2,217 Mortgage and consumer loans................................... 35,939 33,094 Policy loans.................................................. 8,587 8,412 Real estate and real estate joint ventures held-for- investment................................................. 4,485 3,778 Real estate held-for-sale..................................... -- 309 Other limited partnership interests........................... 3,670 3,256 Short-term investments........................................ 1,244 883 Other invested assets......................................... 6,960 5,839 -------- -------- Total investments.......................................... 227,320 206,058 Cash and cash equivalents....................................... 1,455 1,787 Accrued investment income....................................... 2,328 2,030 Premiums and other receivables.................................. 9,707 6,678 Deferred policy acquisition costs and value of business acquired...................................................... 12,043 11,438 Other assets.................................................... 6,240 6,183 Separate account assets......................................... 80,965 73,152 -------- -------- Total assets............................................... $340,058 $307,326 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES: Future policy benefits........................................ $ 96,599 $ 94,372 Policyholder account balances................................. 80,498 72,793 Other policyholder funds...................................... 7,372 6,918 Policyholder dividends payable................................ 957 915 Policyholder dividend obligation.............................. 1,063 1,607 Short-term debt............................................... 833 453 Long-term debt................................................ 3,219 2,562 Junior subordinated debt securities........................... 399 399 Shares subject to mandatory redemption........................ 278 278 Current income tax payable.................................... 781 444 Deferred income tax liability................................. 2,453 2,729 Payables for collateral under securities loaned and other transactions............................................... 32,119 21,009 Other liabilities............................................. 13,330 11,228 Separate account liabilities.................................. 80,965 73,152 -------- -------- Total liabilities.......................................... 320,866 288,859 -------- -------- CONTINGENCIES, COMMITMENTS AND GUARANTEES (NOTE 14) STOCKHOLDER'S EQUITY: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding at December 31, 2006 and 2005.................................... 5 5 Additional paid-in capital...................................... 14,343 13,808 Retained earnings............................................... 3,812 2,749 Accumulated other comprehensive income.......................... 1,032 1,905 -------- -------- Total stockholder's equity.................................... 19,192 18,467 -------- -------- Total liabilities and stockholder's equity.................... $340,058 $307,326 ======== ========
See accompanying notes to consolidated financial statements. F-2 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (IN MILLIONS)
2006 2005 2004 ------- ------- ------- REVENUES Premiums............................................... $20,284 $19,256 $17,437 Universal life and investment-type product policy fees................................................. 2,183 1,948 2,009 Net investment income.................................. 12,307 11,729 10,795 Other revenues......................................... 890 820 862 Net investment gains (losses).......................... (827) 179 282 ------- ------- ------- Total revenues....................................... 34,837 33,932 31,385 ------- ------- ------- EXPENSES Policyholder benefits and claims....................... 21,137 20,445 18,736 Interest credited to policyholder account balances..... 3,247 2,596 2,357 Policyholder dividends................................. 1,671 1,647 1,636 Other expenses......................................... 6,314 5,717 5,583 ------- ------- ------- Total expenses....................................... 32,369 30,405 28,312 ------- ------- ------- Income from continuing operations before provision for income tax........................................... 2,468 3,527 3,073 Provision for income tax............................... 640 1,098 868 ------- ------- ------- Income (loss) from continuing operations............... 1,828 2,429 2,205 Income (loss) from discontinued operations, net of income tax........................................... 98 824 86 ------- ------- ------- Income before cumulative effect of a change in accounting, net of income tax........................ 1,926 3,253 2,291 Cumulative effect of a change in accounting, net of income tax........................................... -- -- (52) ------- ------- ------- Net income............................................. $ 1,926 $ 3,253 $ 2,239 ======= ======= =======
See accompanying notes to consolidated financial statements. F-3 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (IN MILLIONS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) PARENT'S ----------------------------------- INTEREST IN NET PREFERRED UNREALIZED FOREIGN DEFINED STOCK ADDITIONAL INVESTMENT CURRENCY BENEFIT OF A COMMON PAID-IN RETAINED GAINS TRANSLATION PLANS SUBSIDIARY STOCK CAPITAL EARNINGS (LOSSES) ADJUSTMENT ADJUSTMENT TOTAL ----------- ------ ---------- -------- ---------- ----------- ---------- ------- Balance at January 1, 2004................ $ 93 $5 $13,730 $ 1,261 $2,405 $107 $(128) $17,473 Contribution of preferred stock by Holding Company to subsidiary and retirement thereof.................. (93) (93) Issuance of shares -- by subsidiary....... 4 4 Issuance of stock options -- by subsidiary.............................. 2 2 Capital contribution from the Holding Company................................. 94 94 Return of capital to the Holding Company.. (3) (3) Dividends on preferred stock.............. (7) (7) Dividends on common stock................. (797) (797) Comprehensive income (loss): Net income.............................. 2,239 2,239 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... (77) (77) Unrealized investment gains (losses), net of related offsets and income tax................................ 19 19 Cumulative effect of a change in accounting, net of income tax...... 61 61 Foreign currency translation adjustments, net of income tax..... 79 79 Additional minimum pension liability adjustment, net of income tax......................... (2) (2) ------- Other comprehensive income (loss).... 80 ------- Comprehensive income (loss)............. 2,319 ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2004.............. -- 5 13,827 2,696 2,408 186 (130) 18,992 Treasury stock transactions, net -- by subsidiary.............................. (15) (15) Issuance of stock options -- by subsidiary.............................. (4) (4) Dividends on common stock................. (3,200) (3,200) Comprehensive income (loss): Net income.............................. 3,253 3,253 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... 184 184 Unrealized investment gains (losses), net of related offsets and income tax................................ (783) (783) Foreign currency translation adjustments, net of income tax..... (49) (49) Additional minimum pension liability adjustment, net of income tax......................... 89 89 ------- Other comprehensive income (loss).... (559) ------- Comprehensive income (loss)............. 2,694 ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2005.............. -- 5 13,808 2,749 1,809 137 (41) 18,467 Treasury stock transactions, net -- by subsidiary.............................. 12 12 Excess tax benefits related to stock-based compensation............................ 34 34 Capital contribution from Holding Company -- See Notes 2 and 16........... 489 489 Dividends on common stock................. (863) (863) Comprehensive income (loss): Net income.............................. 1,926 1,926 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income tax......................... (20) (20) Unrealized investment gains (losses), net of related offsets and income tax................................ (93) (93) Foreign currency translation adjustments, net of income tax..... 7 7 Additional minimum pension liability adjustment, net of income tax......................... (18) (18) ------- Other comprehensive income (loss)......... (124) ------- Comprehensive income (loss)............. 1,802 ------- Adoption of SFAS 158, net of income tax................................ (749) (749) ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2006.............. $ -- $5 $14,343 $ 3,812 $1,696 $144 $(808) $19,192 ==== == ======= ======= ====== ==== ===== =======
See accompanying notes to consolidated financial statements. F-4 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (IN MILLIONS)
2006 2005 2004 -------- --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income............................................. $ 1,926 $ 3,253 $ 2,239 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expenses............... 308 299 344 Amortization of premiums and accretion of discounts associated with investments, net.................. (467) (203) (15) (Gains) losses from sales of investments and businesses, net................................... 687 (1,379) (289) Equity earnings of real estate joint ventures and other limited partnership interests............... (376) (399) (167) Interest credited to policyholder account balances... 3,247 2,596 2,357 Universal life and investment-type product policy fees.............................................. (2,183) (1,948) (2,009) Change in accrued investment income.................. (295) (24) (67) Change in premiums and other receivables............. (3,565) (734) 460 Change in deferred policy acquisition costs, net..... (672) (504) (752) Change in insurance-related liabilities.............. 3,743 3,794 3,829 Change in trading securities......................... (196) (375) -- Change in income tax payable......................... 144 147 (101) Change in other assets............................... 772 (236) (385) Change in other liabilities.......................... 1,109 1,878 1,279 Other, net........................................... (37) 24 29 -------- --------- -------- Net cash provided by operating activities.............. 4,145 6,189 6,752 -------- --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Sales, maturities and repayments of: Fixed maturity securities............................ 73,351 118,459 78,494 Equity securities.................................... 858 777 1,587 Mortgage and consumer loans.......................... 7,632 7,890 3,961 Real estate and real estate joint ventures........... 847 1,922 436 Other limited partnership interests.................. 1,253 953 800 Purchases of: Fixed maturity securities............................ (90,163) (119,375) (83,243) Equity securities.................................... (731) (1,057) (2,107) Mortgage and consumer loans.......................... (10,535) (9,473) (8,639) Real estate and real estate joint ventures........... (1,069) (1,323) (737) Other limited partnership interests.................. (1,551) (1,012) (893) Net change in short-term investments................... (362) 409 215 Purchases of subsidiaries, net of cash received of $0, $0 and $0, respectively.............................. (193) -- -- Proceeds from sales of businesses, net of cash disposed of $0, $43 and $7, respectively...................... 48 260 18 Net change in policy loans............................. (176) (156) (77) Net change in other invested assets.................... (1,084) (598) (379) Net change in property, equipment and leasehold improvements......................................... (109) (114) 17 Other, net............................................. (4) (69) 7 -------- --------- -------- Net cash used in investing activities.................. $(21,988) $ (2,507) $(10,540) -------- --------- --------
See accompanying notes to consolidated financial statements. F-5 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (IN MILLIONS)
2006 2005 2004 -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Policyholder account balances: Deposits.......................................... $ 37,411 $ 30,008 $ 28,347 Withdrawals....................................... (31,366) (26,732) (22,804) Net change in payables for collateral under securities loaned and other transactions.......... 11,110 (4,221) 1,166 Net change in short-term debt........................ 380 (992) (2,072) Long-term debt issued................................ 858 1,216 28 Long-term debt repaid................................ (112) (794) (38) Capital contribution from the Holding Company........ 93 -- -- Junior subordinated debt securities issued........... -- 399 -- Dividends on preferred stock......................... -- -- (7) Dividends on common stock............................ (863) (3,200) (797) Other, net........................................... -- (7) -- -------- -------- -------- Net cash provided by (used in) financing activities.... 17,511 (4,323) 3,823 -------- -------- -------- Change in cash and cash equivalents.................... (332) (641) 35 Cash and cash equivalents, beginning of year........... 1,787 2,428 2,393 -------- -------- -------- CASH AND CASH EQUIVALENTS, END OF YEAR................. $ 1,455 $ 1,787 $ 2,428 ======== ======== ======== Cash and cash equivalents, subsidiaries held-for-sale, beginning of year.................................... $ -- $ 58 $ 57 ======== ======== ======== CASH AND CASH EQUIVALENTS, SUBSIDIARIES HELD-FOR-SALE, END OF YEAR.......................................... $ -- $ -- $ 58 ======== ======== ======== Cash and cash equivalents, from continuing operations, beginning of year.................................... $ 1,787 $ 2,370 $ 2,336 ======== ======== ======== CASH AND CASH EQUIVALENTS, FROM CONTINUING OPERATIONS, END OF YEAR.......................................... $ 1,455 $ 1,787 $ 2,370 ======== ======== ======== Supplemental disclosures of cash flow information: Net cash paid during the year for: Interest.......................................... $ 256 $ 203 $ 140 ======== ======== ======== Income tax........................................ $ 197 $ 1,385 $ 950 ======== ======== ======== Non-cash transactions during the year: Business dispositions: Assets disposed................................. $ -- $ 366 $ 42 Less: liabilities disposed...................... -- 269 17 -------- -------- -------- Net assets disposed............................. $ -- $ 97 $ 25 Plus: equity securities received................ -- 43 -- Less: cash disposed............................. -- 43 7 ======== ======== ======== Business disposition, net of cash disposed...... $ -- $ 97 $ 18 ======== ======== ======== Contribution of equity securities to MetLife Foundation...................................... $ -- $ 1 $ 50 ======== ======== ======== Purchase money mortgage on real estate sale....... $ -- $ -- $ 2 ======== ======== ======== Real estate acquired in satisfaction of debt...... $ 6 $ 1 $ 7 ======== ======== ======== Transfer from funds withheld at interest to fixed maturity securities............................. $ -- $ -- $ 606 ======== ======== ======== Contribution of other intangible assets, net of income tax...................................... $ 377 $ -- $ -- ======== ======== ======== Excess of net assets over purchase price for subsidiary...................................... $ 19 $ -- $ -- ======== ======== ========
-------- See Note 8 for non-cash reinsurance transactions. See accompanying notes to consolidated financial statements. F-6 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS Metropolitan Life Insurance Company ("Metropolitan Life") and its subsidiaries (collectively the "Company") is a leading provider of insurance and other financial services with operations throughout the United States. The Company offers life insurance and annuities to individuals, as well as group insurance, reinsurance and retirement & savings products and services to corporations and other institutions. Metropolitan Life is a wholly-owned subsidiary of MetLife, Inc. (the "Holding Company"). Outside of the United States, the Company has direct insurance operations in Canada. BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of (i) Metropolitan Life and its subsidiaries; (ii) partnerships and joint ventures in which the Company has control; and (iii) variable interest entities ("VIEs") for which the Company is deemed to be the primary beneficiary. Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item. See Note 9. Assets, liabilities, revenues, and expenses of the general account for 2005 and 2004 include amounts related to certain separate accounts previously reported in separate account assets and liabilities. See "Adoption of New Accounting Pronouncements." Intercompany accounts and transactions have been eliminated. The Company uses the equity method of accounting for investments in equity securities in which it has more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint ventures and partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint ventures and partnership's operations. Minority interest related to consolidated entities included in other liabilities was $1.5 billion and $1.4 billion at December 31, 2006 and 2005, respectively. Certain amounts in the prior year periods' consolidated financial statements have been reclassified to conform with the 2006 presentation. Since the Company is a member of a controlled group of affiliate companies, its results may not be indicative of those of a stand-alone entity. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements. The most critical estimates include those used in determining: (i) the fair value of investments in the absence of quoted market values; (ii) investment impairments; (iii) the recognition of income on certain investments; (iv) the application of the consolidation rules to certain investments; (v) the fair value of and accounting for derivatives; (vi) the capitalization and amortization of deferred policy acquisition costs ("DAC") and the establishment and amortization of value of business acquired ("VOBA"); F-7 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (vii) the liability for future policyholder benefits; (viii) accounting for income taxes and the valuation of deferred tax assets; (ix) accounting for reinsurance transactions; (x) accounting for employee benefit plans; and (xi) the liability for litigation and regulatory matters. A description of such critical estimates is incorporated within the discussion of the related accounting policies which follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's businesses and operations. Actual results could differ from these estimates. Investments The Company's principal investments are in fixed maturity and equity securities, mortgage and consumer loans, policy loans, real estate, real estate joint ventures and other limited partnerships, short-term investments, and other invested assets. The accounting policies related to each are as follows: Fixed Maturity and Equity Securities. The Company's fixed maturity and equity securities are classified as available-for-sale, except for trading securities, and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income or loss, net of policyholder related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales of securities are determined on a specific identification basis. Interest income on fixed maturity securities is recorded when earned using an effective yield method giving effect to amortization of premiums and accretion of discounts. Dividends on equity securities are recorded when declared. These dividends and interest income are recorded as part of net investment income. Included within fixed maturity securities are loan-backed securities including mortgage-backed and asset-backed securities. Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and asset-backed securities are obtained from broker-dealer survey values or internal estimates. For credit-sensitive mortgage-backed and asset-backed securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other mortgage-backed and asset- backed securities, the effective yield is recalculated on a retrospective basis. The cost of fixed maturity and equity securities is adjusted for impairments in value deemed to be other-than-temporary in the period in which the determination is made. These impairments are included within net investment gains (losses) and the cost basis of the fixed maturity and equity securities is reduced accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in fair value. The Company's review of its fixed maturity and equity securities for impairments includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%; (ii) securities where the estimated fair value had declined and remained below cost or F-8 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) amortized cost by 20% or more for less than six months; and (iii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for six months or greater. Additionally, management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the market value has been below cost or amortized cost; (ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; (vi) the Company's ability and intent to hold the security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost or amortized cost (See also Note 3); (vii) unfavorable changes in forecasted cash flows on asset-backed securities; and (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies. The Company purchases and receives beneficial interests in special purpose entities ("SPEs"), which enhance the Company's total return on its investment portfolio principally by providing equity-based returns on debt securities. These investments are generally made through structured notes and similar instruments (collectively, "Structured Investment Transactions"). The Company has not guaranteed the performance, liquidity or obligations of the SPEs and its exposure to loss is limited to its carrying value of the beneficial interests in the SPEs. The Company does not consolidate the SPEs as it has determined it is not the primary beneficiary. These Structured Investment Transactions are included in fixed maturity securities and their income is generally recognized using the retrospective interest method. Impairments of these investments are included in net investment gains (losses). Trading Securities. The Company's trading securities portfolio, principally consisting of fixed maturity and equity securities, supports investment strategies that involve the active and frequent purchase and sale of securities and the execution of short sale agreements and supports asset and liability matching strategies for certain insurance products. Trading securities and short sale agreement liabilities are recorded at fair value with subsequent changes in fair value recognized in net investment income. Related dividends and investment income are also included in net investment income. Securities Lending. Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% of the fair value of the securities loaned. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company's securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions are reported as investment income and investment expense, respectively, within net investment income. Mortgage and Consumer Loans. Mortgage and consumer loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. Interest income, amortization of premiums and discounts, and prepayment fees are reported in net investment income. Loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Valuation allowances are established for the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan's original effective interest rate, the value of the loan's collateral if the loan is in the F-9 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) process of foreclosure or otherwise collateral dependent, or the loan's market value if the loan is being sold. The Company also establishes allowances for loan losses when a loss contingency exists for pools of loans with similar characteristics, such as mortgage loans based on similar property types or loan to value risk factors. A loss contingency exists when the likelihood that a future event will occur is probable based on past events. Interest income earned on impaired loans is accrued on the principal amount of the loan based on the loan's contractual interest rate. However, interest ceases to be accrued for loans on which interest is generally more than 60 days past due and/or where the collection of interest is not considered probable. Cash receipts on such impaired loans are recorded as a reduction of the recorded investment. Gains and losses from the sale of loans and changes in valuation allowances are reported in net investment gains (losses). Policy Loans. Policy loans are stated at unpaid principal balances. Interest income on such loans is recorded as earned using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy's anniversary date. Real Estate. Real estate held-for-investment, including related improvements, is stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company classifies a property as held-for-sale if it commits to a plan to sell a property within one year and actively markets the property in its current condition for a price that is reasonable in comparison to its fair value. The Company classifies the results of operations and the gain or loss on sale of a property that either has been disposed of or classified as held-for-sale as discontinued operations, if the ongoing operations of the property will be eliminated from the ongoing operations of the Company and if the Company will not have any significant continuing involvement in the operations of the property after the sale. Real estate held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs. Real estate is not depreciated while it is classified as held-for-sale. The Company periodically reviews its properties held-for-investment for impairment and tests properties for recoverability whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable and the carrying value of the property exceeds its fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their fair value, with the impairment loss included in net investment gains (losses). Impairment losses are based upon the estimated fair value of real estate, which is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks. Real estate acquired upon foreclosure of commercial and agricultural mortgage loans is recorded at the lower of estimated fair value or the carrying value of the mortgage loan at the date of foreclosure. Real Estate Joint Ventures and Other Limited Partnership Interests. The Company uses the equity method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint ventures and partnership's operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint ventures and the partnership's operations. In addition to the investees performing regular evaluations for the impairment of underlying investments, the Company routinely evaluates its investments in real estate joint ventures and limited partnerships for impairments. For its cost method investments it follows an impairment analysis which is similar to the process followed for its fixed maturity and equity securities as described previously. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. When an other-than-temporary impairment is deemed to have occurred, the Company records a realized capital loss within net investment gains (losses) to record the investment at its fair value. F-10 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Short-term Investments. Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition and are stated at amortized cost, which approximates fair value. Other Invested Assets. Other invested assets consist principally of leveraged leases and funds withheld at interest. The leveraged leases are recorded net of non-recourse debt. The Company participates in lease transactions which are diversified by industry, asset type and geographic area. The Company recognizes income on the leveraged leases by applying the leveraged lease's estimated rate of return to the net investment in the lease. The Company regularly reviews residual values and impairs them to expected values as needed. Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. For agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets supporting the reinsured policies, and equal to the net statutory reserves, are withheld and continue to be legally owned by the ceding companies. The Company records a funds withheld receivable rather than the underlying investments. The Company recognizes interest on funds withheld at rates defined by the treaty terms which may be contractually specified or directly related to the investment portfolio and records it in net investment income. Other invested assets also include stand-alone derivatives with positive fair values and the fair value of embedded derivatives related to funds withheld and modified coinsurance contracts. Estimates and Uncertainties. The Company's investments are exposed to three primary sources of risk: credit, interest rate and market valuation. The financial statement risks, stemming from such investment risks, are those associated with the recognition of impairments, the recognition of income on certain investments, and the determination of fair values. The determination of the amount of allowances and impairments, as applicable, are described above by investment type. The determination of such allowances and impairments is highly subjective and is based upon the Company's periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. Management updates it evaluations regularly and reflects changes in allowances and impairments in operations as such evaluations are revised. The recognition of income on certain investments (e.g. loan-backed securities including mortgage-backed and asset-backed securities, certain investment transactions, trading securities, etc.) is dependent upon market conditions, which could result in prepayments and changes in amounts to be earned. The fair values of publicly held fixed maturity securities and publicly held equity securities are based on quoted market prices or estimates from independent pricing services. However, in cases where quoted market prices are not available, such as for private fixed maturity securities, fair values are estimated using present value or valuation techniques. The determination of fair values is based on: (i) valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the circumstances. The fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Factors considered in estimating fair value include: coupon rate, maturity, estimated duration, call provisions, sinking fund requirements, credit rating, industry sector of the issuer, and quoted market prices of comparable securities. The use of different methodologies and assumptions may have a material effect on the estimated fair value amounts. Additionally, when the Company enters into certain Structured Investment Transactions, real estate joint ventures and other limited partnerships for which the Company may be deemed to be the primary beneficiary under Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46(r), Consolidation of F-11 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Variable Interest Entities -- An Interpretation of ARB No. 51, it may be required to consolidate such investments. The accounting rules for the determination of the primary beneficiary are complex and require evaluation of the contractual rights and obligations associated with each party involved in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party. The use of different methodologies and assumptions as to the timing and amount of impairments, recognition of income and the determination of the fair value of investments may have a material effect on the amounts presented within the consolidated financial statements. Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage the risk associated with variability in cash flows or changes in fair values related to the Company's financial instruments. The Company also uses derivative instruments to hedge its currency exposure associated with net investments in certain foreign operations. To a lesser extent, the Company uses credit derivatives to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance contracts that have embedded derivatives. Freestanding derivatives are carried on the Company's consolidated balance sheet either as assets within other invested assets or as liabilities within other liabilities at fair value as determined by quoted market prices or through the use of pricing models. The determination of fair value, when quoted market values are not available, is based on valuation methodologies and assumptions deemed appropriate under the circumstances. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, market volatility, and liquidity. Values can also be affected by changes in estimates and assumptions used in pricing models. Such assumptions include estimates of volatility, interest rates, foreign currency exchange rates, other financial indices and credit ratings. Essential to the analysis of the fair value is risk of counterparty default. The use of different assumptions may have a material effect on the estimated derivative fair value amounts as well as the amount of reported net income. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting pursuant to Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), as amended, changes in the fair value of the derivative are reported in net investment gains (losses), in policyholder benefits and claims for economic hedges of liabilities embedded in certain variable annuity products offered by the Company or in net investment income for economic hedges of equity method investments in joint ventures. The fluctuations in fair value of derivatives which have not been designated for hedge accounting can result in significant volatility in net income. To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (i) a hedge of the fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value hedge"); (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow hedge"); or (iii) a hedge of a net investment in a foreign operation. In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. Assessments and F-12 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) measurement of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The accounting for derivatives is complex and interpretations of the primary accounting standards continue to evolve in practice. Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under these accounting standards. If it was determined that hedge accounting designations were not appropriately applied, reported net income could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the appropriate accounting treatment may result in a differing impact on the consolidated financial statements of the Company from that previously reported. Under a fair value hedge, changes in the fair value of the hedging derivative, including amounts measured as ineffectiveness, and changes in the fair value of the hedged item related to the designated risk being hedged, are reported within net investment gains (losses). The fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of income within interest income or interest expense to match the location of the hedged item. Under a cash flow hedge, changes in the fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of stockholder's equity, and the deferred gains or losses on the derivative are reclassified into the consolidated statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. Changes in the fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of income within interest income or interest expense to match the location of the hedged item. In a hedge of a net investment in a foreign operation, changes in the fair value of the hedging derivative that are measured as effective are reported within other comprehensive income (loss) consistent with the translation adjustment for the hedged net investment in the foreign operation. Changes in the fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; (iv) a hedged firm commitment no longer meets the definition of a firm commitment; or (v) the derivative is de- designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the fair value or cash flows of a hedged item, the derivative continues to be carried on the consolidated balance sheet at its fair value, with changes in fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the consolidated statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur by the end of the specified time period or the hedged item no longer meets the definition of a firm commitment, the derivative continues to be carried on the consolidated balance sheet at its fair value, with changes in fair value recognized currently in net investment gains (losses). Any asset or liability associated with a recognized firm commitment is derecognized from the consolidated balance sheet, and recorded currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income F-13 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (loss) pursuant to the cash flow hedge of a forecasted transaction are recognized immediately in net investment gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its fair value on the consolidated balance sheet, with changes in its fair value recognized in the current period as net investment gains (losses). The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated under SFAS 133. If the instrument would not be accounted for in its entirety at fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried on the consolidated balance sheet at fair value with the host contract and changes in their fair value are reported currently in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at fair value, with changes in fair value recognized in the current period in net investment gains (losses). Additionally, the Company may elect to carry an entire contract on the balance sheet at fair value, with changes in fair value recognized in the current period in net investment gains (losses) if that contract contains an embedded derivative that requires bifurcation. There is a risk that embedded derivatives requiring bifurcation may not be identified and reported at fair value in the consolidated financial statements and that their related changes in fair value could materially affect reported net income. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using either the straight-line or sum-of-the-years- digits method over the estimated useful lives of the assets, as appropriate. The estimated life for company occupied real estate property is generally 40 years. Estimated lives generally range from five to ten years for leasehold improvements and three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1.1 billion at both December 31, 2006 and 2005. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $538 million and $445 million at December 31, 2006 and 2005, respectively. Related depreciation and amortization expense was $101 million, $94 million and $93 million for the years ended December 31, 2006, 2005 and 2004, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $1.0 billion and $877 million at December 31, 2006 and 2005, respectively. Accumulated amortization of capitalized software was $664 million and $584 million at December 31, 2006 and 2005, respectively. Related amortization expense was $93 million, $97 million and $126 million for the years ended December 31, 2006, 2005 and 2004, respectively. F-14 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Deferred Policy Acquisition Costs and Value of Business Acquired The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that vary with and relate to the production of new business are deferred as DAC. Such costs consist principally of commissions and agency and policy issue expenses. VOBA is an intangible asset that reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the business in- force at the acquisition date. VOBA is based on actuarially determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns and other factors. Actual experience on the purchased business may vary from these projections. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated in the financial statements for reporting purposes. DAC related to internally replaced contracts are generally expensed at the date of replacement. DAC and VOBA on life insurance or investment-type contracts are amortized in proportion to gross premiums, gross margins or gross profits, depending on the type of contract as described below. The Company amortizes DAC and VOBA related to non-participating and non- dividend-paying traditional contracts (term insurance, non-participating whole life insurance, non-medical health insurance, and traditional group life insurance) over the entire premium paying period in proportion to the present value of actual historic and expected future gross premiums. The present value of expected premiums is based upon the premium requirement of each policy and assumptions for mortality, morbidity, persistency, and investment returns at policy issuance, or policy acquisition, as it relates to VOBA, that include provisions for adverse deviation and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. The Company amortizes DAC and VOBA related to participating, dividend- paying traditional contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties, and certain economic variables, such as inflation. For participating contracts (dividend paying traditional contracts within the closed block) future gross margins are also dependent upon changes in the policyholder dividend obligation. Of these factors, the Company anticipates that investment returns, expenses, persistency, and other factor changes and policyholder dividend scales are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. The Company amortizes DAC and VOBA related to fixed and variable universal life contracts and fixed and variable deferred annuity contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer F-15 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the business, creditworthiness of reinsurance counterparties, the effect of any hedges used, and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, and persistency are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long- term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these changes and only changes the assumption when its long-term expectation changes. The Company also reviews periodically other long-term assumptions underlying the projections of estimated gross margins and profits. These include investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Sales Inducements The Company has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. Goodwill Goodwill is the excess of cost over the fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the "reporting unit" level. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, goodwill within Corporate & Other is allocated to reporting units within the Company's business segments. If the carrying value of a reporting unit's goodwill exceeds its fair value, the excess is recognized as an impairment and recorded as a charge against net income. The fair values of the reporting units F-16 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) are determined using a market multiple, a discounted cash flow model, or a cost approach. The critical estimates necessary in determining fair value are projected earnings, comparative market multiples and the discount rate. Liability for Future Policy Benefits and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, traditional annuities and non- medical health insurance. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policy lapse, renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. Utilizing these assumptions, liabilities are established on a block of business basis. Future policy benefit liabilities for participating traditional life insurance policies are equal to the aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non- forfeiture interest rate, ranging from 3% to 7% and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends. Future policy benefits for non-participating traditional life insurance policies are equal to the aggregate of the present value of future benefit payments and related expenses less the present value of future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rates for the aggregate future policy benefit liabilities range from 5% to 7%. Participating business represented approximately 9% and 10% of the Company's life insurance in-force, and 76% and 86% of the number of life insurance policies in-force, at December 31, 2006 and 2005, respectively. Participating policies represented approximately 34% and 33%, 35% and 34%, and 37% and 37% of gross and net life insurance premiums for the years ended December 31, 2006, 2005 and 2004, respectively. The percentages indicated are calculated excluding the business of the reinsurance segment. Future policy benefit liabilities for individual and group traditional fixed annuities after annuitization are equal to the present value of expected future payments. Interest rates used in establishing such liabilities range from 3% to 11%. Future policy benefit liabilities for non-medical health insurance are calculated using the net level premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rates used in establishing such liabilities range from 3% to 7%. Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rates used in establishing such liabilities range from 3% to 8%. Liabilities for unpaid claims are estimated based upon the Company's historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. F-17 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company establishes future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts and secondary and paid up guarantees relating to certain life policies as follows: - Annuity guaranteed death benefit ("GMDB") liabilities are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the GMDB liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility are consistent with the historical experience of the Standard & Poor's 500 Index ("S&P"). The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. - Guaranteed income benefit ("GMIB") liabilities are determined by estimating the expected value of the income benefits in excess of the projected account balance at any future date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for estimating the GMIB liabilities are consistent with those used for estimating the GMDB liabilities. In addition, the calculation of guaranteed annuitization benefit liabilities incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. - Liabilities for universal and variable life secondary guarantees and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balances, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the secondary and paid up guarantee liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of investment performance and volatility for variable products are consistent with historical S&P experience. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company establishes policyholder account balances ("PAB") for guaranteed minimum benefit riders relating to certain variable annuity products as follows: - Guaranteed minimum withdrawal benefit riders ("GMWB") guarantee the contractholder a return of their purchase payment via partial withdrawals, even if the account value is reduced to zero, provided that the contractholder's cumulative withdrawals in a contract year do not exceed a certain limit. The initial guaranteed withdrawal amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMWB is an embedded derivative, which is measured at fair value separately from the host variable annuity product. - Guaranteed minimum accumulation benefit riders ("GMAB") provide the contractholder, after a specified period of time determined at the time of issuance of the variable annuity contract, with a minimum accumulation of their purchase payments even if the account value is reduced to zero. The initial guaranteed accumulation amount is equal to the initial benefit base as defined in the contract (typically, the initial purchase payments plus applicable bonus amounts). The GMAB is also an embedded derivative, which is measured at fair value separately from the host variable annuity product. F-18 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - For both GMWB and GMAB, the initial benefit base is increased by additional purchase payments made within a certain time period and decreases by benefits paid and/or withdrawal amounts. After a specified period of time, the benefit base may also increase as a result of an optional reset as defined in the contract. - The fair values of the GMWB and GMAB riders are calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. In measuring the fair value of GMWBs and GMABs, the Company attributes a portion of the fees collected from the policyholder equal to the present value of expected future guaranteed minimum withdrawal and accumulation benefits (at inception). The changes in fair value are reported in net investment gains (losses). Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. These riders may be more costly than expected in volatile or declining markets, causing an increase in liabilities for future policy benefits, negatively affecting net income. The Company periodically reviews its estimates of actuarial liabilities for future policy benefits and compares them with its actual experience. Differences between actual experience and the assumptions used in pricing these policies, guarantees and riders and in the establishment of the related liabilities result in variances in profit and could result in losses. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. PABs relate to investment-type contracts and universal life-type policies. Investment-type contracts principally include traditional individual fixed annuities in the accumulation phase and non-variable group annuity contracts. PABs are equal to (i) policy account values, which consist of an accumulation of gross premium payments; (ii) credited interest, ranging from 2% to 10%, less expenses, mortality charges, and withdrawals; and (iii) fair value adjustments relating to business combinations. Other Policyholder Funds Other policyholder funds include policy and contract claims, unearned revenue liabilities, premiums received in advance, policyholder dividends due and unpaid, and policyholder dividends left on deposit. The liability for policy and contract claims generally relates to incurred but not reported death, disability, long-term care and dental claims as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from actuarial analyses of historical patterns of claims and claims development for each line of business. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits and margins, similar to DAC. Such amortization is recorded in universal life and investment-type product policy fees. The Company accounts for the prepayment of premiums on its group life and health contracts as premium received in advance and applies the cash received to premiums when due. Also included in other policyholder funds are policyholder dividends due and unpaid on participating policies and policyholder dividends left on deposit. Such liabilities are presented at amounts contractually due to policyholders. F-19 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Recognition of Insurance Revenue and Related Benefits Premiums related to traditional life and annuity policies with life contingencies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided against such revenues to recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to PABs. Revenues from such contracts consist of amounts assessed against PABs for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged to operations include interest credited and benefit claims incurred in excess of related PABs. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. Other Revenues Other revenues include advisory fees, broker-dealer commissions and fees, and administrative service fees. Such fees and commissions are recognized in the period in which services are performed. Other revenues also include changes in account value relating to corporate-owned life insurance ("COLI"). Under certain COLI contracts, if the Company reports certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject to market value adjustment, which could result in a reduction of the account value. Policyholder Dividends Policyholder dividends are approved annually by Metropolitan Life and its insurance subsidiaries' boards of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the appropriate level of statutory surplus to be retained by the insurance subsidiaries. Income Taxes The Company joins with the Holding Company and its includable life insurance and non-life insurance subsidiaries in filing a consolidated U.S. federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Company participates in a tax sharing agreement with the Holding Company. Under the agreement, current income tax expense (benefit) is computed on a separate return basis and provides that members shall make payments (receive reimbursement) to (from) the Holding Company to the extent that their incomes (losses and other credits) contribute to (reduce) the consolidated income tax expense. The consolidating companies are reimbursed for net operating losses or other tax attributes they have generated when utilized in the consolidated return. The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. F-20 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established as well as the amount of such allowances. When making such determination, consideration is given to, among other things, the following: (i) future taxable income exclusive of reversing temporary differences and carryforwards; (ii) future reversals of existing taxable temporary differences; (iii) taxable income in prior carryback years; and (iv) tax planning strategies. The Company may be required to change its provision for income taxes in certain circumstances. Examples of such circumstances include when the ultimate deductibility of certain items is challenged by taxing authorities (See also Note 13) or when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, future events such as changes in tax legislation could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax. Reinsurance The Company enters into reinsurance transactions as both a provider and a purchaser of reinsurance for its life insurance products. For each of its reinsurance contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the contract. The net cost of reinsurance is recorded as an adjustment to DAC and recognized as a component of other expenses on a basis consistent with the way the acquisition costs on the underlying reinsured contracts would be recognized. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums and ceded (assumed) future policy benefit liabilities are established. For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums and are reflected as a component of premiums and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts paid (received) in excess of (which do not exceed) the related insurance liabilities ceded (assumed) are recognized immediately as a loss. Any gains on such retroactive contracts are deferred and recorded in other liabilities. The gains are amortized primarily using the recovery method. F-21 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The assumptions used to account for both long and short-duration reinsurance contracts are consistent with those used for the underlying contracts. Ceded policyholder and contract related liabilities, other than those currently due, are reported gross on the balance sheet. Amounts currently recoverable under reinsurance contracts are included in premiums and other receivables and amounts currently payable are included in other liabilities. Such assets and liabilities relating to reinsurance contracts with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance contract. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance contracts and are net of reinsurance ceded. If the Company determines that a reinsurance contract does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the contract as a deposit, net of related expenses. Deposits received are included in other liabilities and deposits made are included within other assets. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenue or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenue or other expenses, as appropriate. Amounts received from reinsurers for policy administration are reported in other revenues. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed previously. Separate Accounts Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if (i) such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; (iii) investments are directed by the contractholder; and (iv) all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets meeting such criteria at their fair value. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the consolidated statements of income. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Separate accounts not meeting the above criteria are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses. Employee Benefit Plans The Company sponsors and administers various qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees and sales representatives who meet F-22 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) specified eligibility requirements of the sponsor and its participating affiliates. A December 31 measurement date is used for all the Company's defined benefit pension and other postretirement benefit plans. Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay as well as earnings credits, determined annually based upon the average annual rate of interest on 30-year Treasury securities, for each account balance. As of December 31, 2006, virtually all the obligations are calculated using the traditional formula. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired participants. Participants that were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company, may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement medical benefits. Participants hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. SFAS No. 87, Employers' Accounting for Pensions ("SFAS 87"), as amended, established the accounting for pension plan obligations. Under SFAS 87, the projected pension benefit obligation ("PBO") is defined as the actuarially calculated present value of vested and non-vested pension benefits accrued based on future salary levels. The accumulated pension benefit obligation ("ABO") is the actuarial present value of vested and non-vested pension benefits accrued based on current salary levels. Obligations, both PBO and ABO, of the defined benefit pension plans are determined using a variety of actuarial assumptions, from which actual results may vary, as described below. SFAS No. 106, Employers' Accounting for Postretirement Benefits Other than Pensions ("SFAS 106"), as amended, established the accounting for expected postretirement plan benefit obligations ("EPBO") which represents the actuarial present value of all other postretirement benefits expected to be paid after retirement to employees and their dependents. Unlike for pensions, the EPBO is not recorded in the financial statements but is used in measuring the periodic expense. The accumulated postretirement plan benefit obligations ("APBO") represents the actuarial present value of future other postretirement benefits attributed to employee services rendered through a particular date and is the valuation basis upon which liabilities are established. The APBO is determined using a variety of actuarial assumptions, from which actual results may vary, as described below. Prior to December 31, 2006, the funded status of the pension and other postretirement plans, which is the difference between the fair value of plan assets and the PBO for pension plans and the APBO for other postretirement plans (collectively, the "Benefit Obligations"), were offset by the unrecognized actuarial gains or losses, prior service cost and transition obligations to determine prepaid or accrued benefit cost, as applicable. The net amount was recorded as a prepaid or accrued benefit cost, as applicable. Further, for pension plans, if the ABO exceeded the fair value of the plan assets, that excess was recorded as an additional minimum pension liability with a corresponding intangible asset. Recognition of the intangible asset was limited to the amount of any unrecognized prior service cost. Any additional minimum pension liability in excess of the allowable intangible asset was charged, net of income tax, to accumulated other comprehensive income. As described more fully in "Adoption of New Accounting Pronouncements", effective December 31, 2006, the Company adopted SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans -- an amendment of FASB Statements No. 87, 88, 106, and SFAS No. 132(r) ("SFAS 158"). Effective with the adoption of SFAS 158 on December 31, 2006, the Company recognizes the funded status of the Benefit Obligations for each of its plans on the consolidated balance sheet. The actuarial gains or losses, prior service costs and credits, and the remaining net transition asset or obligation that had not yet been included in net periodic benefit costs as of December 31, 2006 are now charged, net of income tax, to accumulated other F-23 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) comprehensive income. Additionally, these changes eliminated the additional minimum pension liability provisions of SFAS 87. Net periodic benefit cost is determined using management estimates and actuarial assumptions to derive service cost, interest cost, and expected return on plan assets for a particular year. Net periodic benefit cost also includes the applicable amortization of any prior service cost (credit) arising from the increase (decrease) in prior years' benefit costs due to plan amendments or initiation of new plans. These costs are amortized into net periodic benefit cost over the expected service years of employees whose benefits are affected by such plan amendments. Actual experience related to plan assets and/or the benefit obligations may differ from that originally assumed when determining net periodic benefit cost for a particular period, resulting in gains or losses. To the extent such aggregate gains or losses exceed 10 percent of the greater of the benefit obligations or the market-related asset value of the plans, they are amortized into net periodic benefit cost over the expected service years of employees expected to receive benefits under the plans. The obligations and expenses associated with these plans require an extensive use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases, healthcare cost trend rates, as well as assumptions regarding participant demographics such as rate and age of retirements, withdrawal rates and mortality. Management, in consultation with its external consulting actuarial firm, determines these assumptions based upon a variety of factors such as historical performance of the plan and its assets, currently available market and industry data, and expected benefit payout streams. The assumptions used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in participant demographics. These differences may have a significant effect on the Company's consolidated financial statements and liquidity. The Company also sponsors defined contribution savings and investment plans ("SIP") for substantially all employees under which a portion of participant contributions are matched. Applicable matching contributions are made each payroll period. Accordingly, the Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as earned to the SIP trust, no liability for matching contributions is recognized in the consolidated balance sheets. Stock-Based Compensation Stock-based compensation recognized in the Company's consolidated results of operations is allocated from the Holding Company. The accounting policies described below represent those that the Holding Company applies in determining such allocated expense. Stock-based compensation grants prior to January 1, 2003 were accounted for using the intrinsic value method prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), and related interpretations. Compensation expense, if any, was recorded based upon the excess of the quoted market price at grant date over the amount the employee was required to pay to acquire the stock. Under the provisions of APB 25, there was no compensation expense resulting from the issuance of stock options as the exercise price was equivalent to the fair market value at the date of grant. Compensation expense was recognized under the Long-Term Performance Compensation Plan ("LTPCP"), as described more fully in Note 16. Stock-based awards granted after December 31, 2002, but prior to January 1, 2006, were accounted for on a prospective basis using the fair value accounting method prescribed by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), as amended by SFAS No. 148, Accounting for Stock-Based Compensation -- Transition and Disclosure ("SFAS 148"). The fair value method of SFAS 123 required compensation expense to be measured based on the fair value of the equity instrument at the grant or award date. Stock-based compensation was accrued over the vesting period of the grant or award, including grants or awards to F-24 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) retirement-eligible employees. As required by SFAS 148, the Company discloses the pro forma impact as if the stock options granted prior to January 1, 2003 had been accounted for using the fair value provisions of SFAS 123 rather than the intrinsic value method prescribed by APB 25. See Note 16. Effective January 1, 2006, the Holding Company adopted, using the modified prospective transition method, SFAS No. 123 (revised 2004), Share-Based Payment ("SFAS 123(r)"), which replaces SFAS 123 and supersedes APB 25. The adoption of SFAS 123(r) did not have a significant impact on the Company's financial position or results of operations. SFAS 123(r) requires that the cost of all stock-based transactions be measured at fair value and recognized over the period during which a grantee is required to provide goods or services in exchange for the award. Although the terms of the Holding Company's stock-based plans do not accelerate vesting upon retirement, or the attainment of retirement eligibility, the requisite service period subsequent to attaining such eligibility is considered nonsubstantive. Accordingly, the Company recognizes compensation expense related to stock-based awards over the shorter of the requisite service period or the period to attainment of retirement eligibility. SFAS 123(r) also requires an estimation of future forfeitures of stock-based awards to be incorporated into the determination of compensation expense when recognizing expense over the requisite service period. Foreign Currency Balance sheet accounts of foreign operations are translated at the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing during the year. The local currencies of foreign operations are the functional currencies unless the local economy is highly inflationary. Translation adjustments are charged or credited directly to other comprehensive income or loss. Gains and losses from foreign currency transactions are reported as net investment gains (losses) in the period in which they occur. Discontinued Operations The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's consolidated financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected in the Company's consolidated financial statements. It is possible that an adverse outcome in certain of the Company's litigation and regulatory investigations, or the use of different assumptions in the determination of amounts recorded, could have a material effect upon the Company's consolidated net income or cash flows in particular quarterly or annual periods. F-25 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Defined Benefit and Other Postretirement Plans Effective December 31, 2006, the Company adopted SFAS 158. The pronouncement revises financial reporting standards for defined benefit pension and other postretirement plans by requiring the: (i) recognition in the statement of financial position of the funded status of defined benefit plans measured as the difference between the fair value of plan assets and the benefit obligation, which is the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement plans; (ii) recognition as an adjustment to accumulated other comprehensive income (loss), net of income tax, those amounts of actuarial gains and losses, prior service costs and credits, and net asset or obligation at transition that have not yet been included in net periodic benefit costs as of the end of the year of adoption; (iii) recognition of subsequent changes in funded status as a component of other comprehensive income; (iv) measurement of benefit plan assets and obligations as of the date of the statement of financial position; and (v) disclosure of additional information about the effects on the employer's statement of financial position. The adoption of SFAS 158 resulted in a reduction of $749 million, net of income tax, to accumulated other comprehensive income, which is included as a component of total consolidated stockholder's equity. As the Company's measurement date for its pension and other postretirement benefit plans is already December 31 there is no impact of adoption due to changes in measurement date. See also Summary of "Significant Accounting Policies and Critical Accounting Estimates" and Note 15. Stock Compensation Plans As described previously, effective January 1, 2006, the Holding Company adopted SFAS 123(r) including supplemental application guidance issued by the SEC in Staff Accounting Bulletin ("SAB") No. 107, Share-Based Payment ("SAB 107") -- using the modified prospective transition method. In accordance with the modified prospective transition method, results for prior periods have not been restated. SFAS 123(r) requires that the cost of all stock-based transactions be measured at fair value and recognized over the period during which a grantee is required to provide goods or services in exchange for the award. The Holding Company had previously adopted the fair value method of accounting for stock-based awards as prescribed by SFAS 123 on a prospective basis effective January 1, 2003, and prior to January 1, 2003, accounted for its stock-based awards to employees under the intrinsic value method prescribed by APB 25. The Holding Company did not modify the substantive terms of any existing awards prior to adoption of SFAS 123(r). Under the modified prospective transition method, compensation expense recognized during the year ended December 31, 2006 includes: (a) compensation expense for all stock-based awards granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation expense for all stock- based awards granted beginning January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(r). The adoption of SFAS 123(r) did not have a significant impact on the Company's financial position or results of operations as all stock-based awards accounted for under the intrinsic value method prescribed by APB 25 had vested prior to the adoption date and the Company, in conjunction with the Holding Company, had adopted the fair value recognition provisions of SFAS 123 on January 1, 2003. As required by SFAS 148, and F-26 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) carried forward in the provisions of SFAS 123(r), the Company discloses the pro forma impact as if stock-based awards accounted for under APB 25 had been accounted for under the fair value method in Note 16. SFAS 123 allowed forfeitures of stock-based awards to be recognized as a reduction of compensation expense in the period in which the forfeiture occurred. Upon adoption of SFAS 123(r), the Holding Company changed its policy and now incorporates an estimate of future forfeitures into the determination of compensation expense when recognizing expense over the requisite service period. The impact of this change in accounting policy was not significant to the Company's consolidated financial position or results of operations for the year ended December 31, 2006. Additionally, for awards granted after adoption, the Holding Company changed its policy from recognizing expense for stock-based awards over the requisite service period to recognizing such expense over the shorter of the requisite service period or the period to attainment of retirement-eligibility. The pro forma impact of this change in expense recognition policy for stock- based compensation is detailed in Note 16. Prior to the adoption of SFAS 123(r), the Company presented tax benefits of deductions resulting from the exercise of stock options within operating cash flows in the consolidated statements of cash flows. SFAS 123(r) requires tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options be classified and reported as a financing cash inflow upon adoption of SFAS 123(r). Derivative Financial Instruments The Company has adopted guidance relating to derivative financial instruments as follows: - Effective January 1, 2006, the Company adopted prospectively SFAS No. 155, Accounting for Certain Hybrid Instruments ("SFAS 155"). SFAS 155 amends SFAS 133 and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS 140"). SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole, eliminating the need to bifurcate the derivative from its host, if the holder elects to account for the whole instrument on a fair value basis. In addition, among other changes, SFAS 155: (i) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (ii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (iii) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (iv) amends SFAS 140 to eliminate the prohibition on a qualifying special-purpose entity ("QSPE") from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial interest. The adoption of SFAS 155 did not have a material impact on the Company's consolidated financial statements. - Effective October 1, 2006, the Company adopted SFAS 133 Implementation Issue No. B40, Embedded Derivatives: Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets ("Issue B40"). Issue B40 clarifies that a securitized interest in prepayable financial assets is not subject to the conditions in paragraph 13(b) of SFAS 133, if it meets both of the following criteria: (i) the right to accelerate the settlement if the securitized interest cannot be controlled by the investor; and (ii) the securitized interest itself does not contain an embedded derivative (including an interest rate-related F-27 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) derivative) for which bifurcation would be required other than an embedded derivative that results solely from the embedded call options in the underlying financial assets. The adoption of Issue B40 did not have a material impact on the Company's consolidated financial statements. - Effective January 1, 2006, the Company adopted prospectively SFAS 133 Implementation Issue No. B38, Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option ("Issue B38") and SFAS 133 Implementation Issue No. B39, Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor ("Issue B39"). Issue B38 clarifies that the potential settlement of a debtor's obligation to a creditor occurring upon exercise of a put or call option meets the net settlement criteria of SFAS 133. Issue B39 clarifies that an embedded call option, in which the underlying is an interest rate or interest rate index, that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower) and the investor will recover substantially all of its initial net investment. The adoption of Issues B38 and B39 did not have a material impact on the Company's consolidated financial statements. Other Pronouncements Effective November 15, 2006, the Company adopted SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108"). SAB 108 provides guidance on how prior year misstatements should be considered when quantifying misstatements in current year financial statements for purposes of assessing materiality. SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when relevant quantitative and qualitative factors are considered, is material. SAB 108 permits companies to initially apply its provisions by either restating prior financial statements or recording a cumulative effect adjustment to the carrying values of assets and liabilities as of January 1, 2006 with an offsetting adjustment to retained earnings for errors that were previously deemed immaterial but are material under the guidance in SAB 108. The adoption of SAB 108 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted prospectively Emerging Issues Task Force ("EITF") Issue No. 05-7, Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related Issues ("EITF 05- 7"). EITF 05-7 provides guidance on whether a modification of conversion options embedded in debt results in an extinguishment of that debt. In certain situations, companies may change the terms of an embedded conversion option as part of a debt modification. The EITF concluded that the change in the fair value of an embedded conversion option upon modification should be included in the analysis of EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt Instruments, to determine whether a modification or extinguishment has occurred and that a change in the fair value of a conversion option should be recognized upon the modification as a discount (or premium) associated with the debt, and an increase (or decrease) in additional paid-in capital. The adoption of EITF 05-7 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted EITF Issue No. 05-8, Income Tax Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature ("EITF 05-8"). EITF 05-8 concludes that: (i) the issuance of convertible debt with a beneficial conversion feature results in a basis difference that should be accounted for as a temporary difference; and (ii) the establishment of the deferred tax liability for the basis difference should result in an adjustment to additional paid-in capital. EITF 05-8 was applied retrospectively for all instruments with a beneficial conversion feature accounted for in accordance with EITF Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable F-28 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Conversion Ratios, and EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments. The adoption of EITF 05-8 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2006, the Company adopted SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"). SFAS 154 requires retrospective application to prior periods' financial statements for a voluntary change in accounting principle unless it is deemed impracticable. It also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non- financial assets be accounted for as a change in accounting estimate rather than a change in accounting principle. The adoption of SFAS 154 did not have a material impact on the Company's consolidated financial statements. In June 2005, the EITF reached consensus on Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights ("EITF 04-5"). EITF 04-5 provides a framework for determining whether a general partner controls and should consolidate a limited partnership or a similar entity in light of certain rights held by the limited partners. The consensus also provides additional guidance on substantive rights. EITF 04-5 was effective after June 29, 2005 for all newly formed partnerships and for any pre- existing limited partnerships that modified their partnership agreements after that date. For all other limited partnerships, EITF 04-5 required adoption by January 1, 2006 through a cumulative effect of a change in accounting principle recorded in opening equity or applied retrospectively by adjusting prior period financial statements. The adoption of the provisions of EITF 04-5 did not have a material impact on the Company's consolidated financial statements. Effective November 9, 2005, the Company prospectively adopted the guidance in FASB Staff Position ("FSP") No. FAS 140-2, Clarification of the Application of Paragraphs 40(b) and 40(c) of FAS 140 ("FSP 140-2"). FSP 140-2 clarified certain criteria relating to derivatives and beneficial interests when considering whether an entity qualifies as a QSPE. Under FSP 140-2, the criteria must only be met at the date the QSPE issues beneficial interests or when a derivative financial instrument needs to be replaced upon the occurrence of a specified event outside the control of the transferor. The adoption of FSP 140-2 did not have a material impact on the Company's consolidated financial statements. Effective July 1, 2005, the Company adopted SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 ("SFAS 153"). SFAS 153 amended prior guidance to eliminate the exception for nonmonetary exchanges of similar productive assets and replaced it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS 153 were required to be applied prospectively for fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on the Company's consolidated financial statements. Effective July 1, 2005, the Company adopted EITF Issue No. 05-6, Determining the Amortization Period for Leasehold Improvements ("EITF 05-6"). EITF 05-6 provides guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. As required by EITF 05-6, the Company adopted this guidance on a prospective basis which had no material impact on the Company's consolidated financial statements. In June 2005, the FASB completed its review of EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides accounting guidance regarding the determination of when an impairment of debt and marketable equity securities and investments accounted for under the cost method should be considered other-than- temporary and recognized in income. EITF 03-1 also requires certain quantitative and qualitative disclosures for debt and marketable equity securities classified as available-for-sale or held-to-maturity under SFAS No. 115, Accounting for Certain F-29 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Investments in Debt and Equity Securities, that are impaired at the balance sheet date but for which an other-than-temporary impairment has not been recognized. The FASB decided not to provide additional guidance on the meaning of other-than-temporary impairment but has issued FSP Nos. FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments ("FSP 115-1"), which nullifies the accounting guidance on the determination of whether an investment is other-than-temporarily impaired as set forth in EITF 03-1. As required by FSP 115-1, the Company adopted this guidance on a prospective basis, which had no material impact on the Company's consolidated financial statements, and has provided the required disclosures. Effective July 1, 2004, the Company prospectively adopted FSP No. FAS 106- 2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("FSP 106-2"). FSP 106-2 provides accounting guidance to employers that sponsor postretirement health care plans that provide prescription drug benefits. The Company began receiving subsidies on prescription drug benefits during 2006 under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Prescription Drug Act") based on the Company's determination that the prescription drug benefits offered under certain postretirement plans are actuarially equivalent to the benefits offered under Medicare Part D. The postretirement benefit plan assets and accumulated benefit obligation were remeasured to determine the effect of the expected subsidies on net periodic postretirement benefit cost. As a result, the accumulated postretirement benefit obligation was reduced by $213 million at July 1, 2004. See also Note 15. Effective July 1, 2004, the Company adopted EITF Issue No. 03-16, Accounting for Investments in Limited Liability Companies ("EITF 03-16"). EITF 03-16 provides guidance regarding whether a limited liability company should be viewed as similar to a corporation or similar to a partnership for purposes of determining whether a noncontrolling investment should be accounted for using the cost method or the equity method of accounting. EITF 03-16 did not have a material impact on the Company's consolidated financial statements. Effective January 1, 2004, the Company adopted Statement of Position ("SOP") 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP 03-1"), as interpreted by a Technical Practice Aid ("TPA"), issued by the American Institute of Certified Public Accountants ("AICPA") and FSP No. FAS 97-1, Situations in Which Paragraphs 17(b) and 20 of FASB Statement No 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, Permit or Require Accrual of an Unearned Revenue Liability. SOP 03-1 provides guidance on: (i) the classification and valuation of long-duration contract liabilities; (ii) the accounting for sales inducements; and (iii) separate account presentation and valuation. As a result of the adoption of SOP 03-1, effective January 1, 2004, the Company decreased the liability for future policyholder benefits for changes in the methodology relating to various guaranteed death and annuitization benefits and for determining liabilities for certain universal life insurance contracts by $8 million, which was reported as a cumulative effect of a change in accounting. This amount is net of corresponding changes in DAC, including VOBA and unearned revenue liability, under certain variable annuity and life contracts and income tax. Certain other contracts sold by the Company provide for a return through periodic crediting rates, surrender adjustments or termination adjustments based on the total return of a contractually referenced pool of assets owned by the Company. To the extent that such contracts are not accounted for as derivatives under the provisions of SFAS 133 and not already credited to the contract account balance, under SOP 03-1 the change relating to the fair value of the referenced pool of assets is recorded as a liability with the change in the liability recorded as policyholder benefits and claims. Prior to the adoption of SOP 03-1, the Company recorded the change in such liability as other comprehensive income. At adoption, this change decreased net income and increased other comprehensive income by $33 million, net of income tax, which were recorded as cumulative effects of changes in accounting. Effective with the adoption of SOP 03-1, costs associated with enhanced or bonus crediting rates to contractholders must be deferred and amortized over the life F-30 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) of the related contract using assumptions consistent with the amortization of DAC. Since the Company followed a similar approach prior to adoption of SOP 03- 1, the provisions of SOP 03-1 relating to sales inducements had no significant impact on the Company's consolidated financial statements. In accordance with SOP 03-1's guidance for the reporting of certain separate accounts, at adoption, the Company also reclassified $1.7 billion of separate account assets to general account investments and $1.7 billion of separate account liabilities to future policy benefits and PABs. This reclassification decreased net income and increased other comprehensive income by $27 million, net of income tax, which were reported as cumulative effects of changes in accounting. As a result of the adoption of SOP 03-1, the Company recorded a cumulative effect of a change in accounting of $52 million, net of income tax of $27 million, for the year ended December 31, 2004. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS In February 2007, the FASB issued SFAS No. 159, the Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits all entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings. The fair value option will generally be applied on an instrument-by-instrument basis and is generally an irrevocable election. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is evaluating which eligible financial instruments, if any, it will elect to account for at fair value under SFAS 159 and the related impact on the Company's consolidated financial statements. In December 2006, the FASB issued FSP EITF 00-19-2, Accounting for Registration Payment Arrangements ("FSP EITF 00-19-2"). FSP EITF 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement should be separately recognized and measured in accordance with SFAS No. 5, Accounting for Contingencies. FSP EITF 00-19-2 is effective immediately for registration payment arrangements and the financial instruments subject to those arrangements that are entered into or modified subsequent to December 21, 2006. For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to December 21, 2006, the guidance in the FSP is effective for fiscal years beginning after December 15, 2006. The Company does not expect FSP EITF 00-19-2 to have a material impact on the Company's consolidated financial statements. In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value in GAAP and requires enhanced disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements. The pronouncement is effective for fiscal years beginning after November 15, 2007. The guidance in SFAS 157 will be applied prospectively with the exception of: (i) block discounts of financial instruments; and (ii) certain financial and hybrid instruments measured at initial recognition under SFAS 133 which is to be applied retrospectively as of the beginning of initial adoption (a limited form of retrospective application). The Company is currently evaluating the impact of SFAS 157 on the Company's consolidated financial statements. Implementation of SFAS 157 will require additional disclosures in the Company's consolidated financial statements. In July 2006, the FASB issued FSP No. FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction ("FSP 13-2"). FSP 13-2 amends SFAS No. 13, Accounting for Leases, to require that a lessor review the projected timing of income tax cash flows generated by a leveraged lease annually or more frequently if events or circumstances indicate that a change in timing has occurred or is projected to occur. In addition, FSP 13-2 requires that the change in the net investment balance resulting from the recalculation be recognized as a gain or loss from continuing operations in the same line item in which leveraged lease income is recognized in the year in which the assumption is changed. The guidance in FSP 13-2 is effective for fiscal years beginning after December 15, 2006. F-31 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company does not expect FSP 13-2 to have a material impact on the Company's consolidated financial statements. In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. FIN 48 will also require significant additional disclosures. FIN 48 is effective for fiscal years beginning after December 15, 2006. Based upon the Company's preliminary evaluation work, the Company expects to recognize a reduction to the January 1, 2007 balance of retained earnings of between $10 million and $30 million. In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets -- an amendment of FASB Statement No. 140 ("SFAS 156"). Among other requirements, SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations. SFAS 156 will be applied prospectively and is effective for fiscal years beginning after September 15, 2006. The Company does not expect SFAS 156 to have a material impact on the Company's consolidated financial statements. In September 2005, the AICPA issued SOP 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts ("SOP 05-1"). SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long- Duration Contracts and for Realized Gains and Losses from the Sale of Investments. SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. It is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. In addition, in February 2007 related TPAs were issued by the AICPA to provide further clarification of SOP 05-1. The TPAs are effective concurrently with the adoption of the SOP. Based on the Company's interpretation of SOP 05-1 and related TPAs, the adoption of SOP 05-1 will result in a reduction to DAC and VOBA relating primarily to the Company's group life and health insurance contracts that contain certain rate reset provisions. The Company estimates that the adoption of SOP 05-1 as of January 1, 2007 will result in a cumulative effect adjustment of between $180 million and $220 million, net of income tax, which will be recorded as a reduction to retained earnings. In addition, the Company estimates that accelerated DAC and VOBA amortization will reduce 2007 net income by approximately $15 million to $30 million, net of income tax. 2. ACQUISITIONS AND DISPOSITIONS On October 20, 2006, the Holding Company sold its subsidiary, Citicorp Life Insurance Company and its subsidiary, First Citicorp Life Insurance Company (collectively, "CLIC") to the Company for $135 million in cash consideration. The net assets of CLIC acquired by the Company were $154 million. The excess of the net assets of CLIC received over the purchase price resulted in an increase of $19 million in additional paid-in capital. In connection with the sale and merger of CLIC, the Holding Company contributed $17 million to the Company. See Note 16. F-32 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) On September 30, 2006, the Company acquired MetLife Retirement Services LLC ("MRS") (formerly, CitiStreet Retirement Services LLC), and its subsidiaries from an affiliate, Metropolitan Tower Life Insurance Company ("MTL") for approximately $58 million in cash consideration settled in the fourth quarter of 2006. The assets acquired are principally comprised of $52 million related to the value of customer relationships acquired ("VOCRA"). On July 1, 2005, the Holding Company completed the acquisition of The Travelers Insurance Company, excluding certain assets, most significantly, Primerica, from Citigroup Inc. ("Citigroup"), and substantially all of Citigroup's international insurance business (collectively, "Travelers"). On September 30, 2006, the Company received a capital contribution from the Holding Company of $377 million in the form of intangible assets related to the value of distribution agreements ("VODA") of $389 million, net of deferred income tax of $12 million, for which the Company receives the benefit. The VODA originated through the Holding Company's acquisition of Travelers and was transferred at its amortized cost basis. See Notes 7 and 16. Newbury Insurance Company, Limited which was sold to the Holding Company and New England Pension and Annuity Company which was sold to MTL, both in 2004, are included in the accompanying consolidated financial statements until the respective dates of sale. See Note 19 for information on the disposition of P.T. Sejahtera ("MetLife Indonesia") and SSRM Holdings, Inc. ("SSRM"). 3. INVESTMENTS FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized gain and loss, and estimated fair value of the Company's fixed maturity and equity securities, the percentage that each sector represents by the total fixed maturity securities holdings and by the total equity securities holdings at:
DECEMBER 31, 2006 ------------------------------------------------ GROSS COST OR UNREALIZED AMORTIZED --------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ------ ------ ---------- ----- (IN MILLIONS) U.S. corporate securities.................. $ 51,003 $1,829 $ 492 $ 52,340 32.2% Residential mortgage-backed securities..... 34,617 312 204 34,725 21.4 Foreign corporate securities............... 23,599 1,618 226 24,991 15.4 U.S. Treasury/agency securities............ 20,662 944 108 21,498 13.2 Commercial mortgage-backed securities...... 11,794 164 72 11,886 7.3 Asset-backed securities.................... 9,369 55 41 9,383 5.8 Foreign government securities.............. 4,653 1,001 12 5,642 3.5 State and political subdivision securities............................... 1,743 27 12 1,758 1.1 Other fixed maturity securities............ 233 6 77 162 0.1 -------- ------ ------ -------- ----- Total fixed maturity securities.......... $157,673 $5,956 $1,244 $162,385 100.0% ======== ====== ====== ======== ===== Common stock............................... $ 1,454 $ 457 $ 14 $ 1,897 54.4% Non-redeemable preferred stock............. 1,546 59 15 1,590 45.6 -------- ------ ------ -------- ----- Total equity securities.................. $ 3,000 $ 516 $ 29 $ 3,487 100.0% ======== ====== ====== ======== =====
F-33 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2005 ------------------------------------------------ GROSS COST OR UNREALIZED AMORTIZED --------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ------ ------ ---------- ----- (IN MILLIONS) U.S. corporate securities.................. $ 48,056 $2,507 $ 358 $ 50,205 33.9% Residential mortgage-backed securities..... 30,213 315 292 30,236 20.4 Foreign corporate securities............... 22,922 1,625 258 24,289 16.4 U.S. Treasury/agency securities............ 17,858 1,333 18 19,173 13.0 Commercial mortgage-backed securities...... 10,793 194 102 10,885 7.4 Asset-backed securities.................... 6,412 74 29 6,457 4.4 Foreign government securities.............. 4,734 999 10 5,723 3.9 State and political subdivision securities............................... 738 21 10 749 0.5 Other fixed maturity securities............ 203 10 33 180 0.1 -------- ------ ------ -------- ----- Total fixed maturity securities.......... $141,929 $7,078 $1,110 $147,897 100.0% ======== ====== ====== ======== ===== Common stock............................... $ 1,616 $ 229 $ 25 $ 1,820 82.1% Non-redeemable preferred stock............. 373 27 3 397 17.9 -------- ------ ------ -------- ----- Total equity securities.................. $ 1,989 $ 256 $ 28 $ 2,217 100.0% ======== ====== ====== ======== =====
The Company held foreign currency derivatives with notional amounts of $7.3 billion and $4.9 billion to hedge the exchange rate risk associated with foreign denominated fixed maturity securities at December 31, 2006 and 2005, respectively. Excluding investments in U.S. Treasury securities and obligations of U.S. government corporations and agencies, the Company is not exposed to any significant concentration of credit risk in its fixed maturity securities portfolio. The Company held fixed maturity securities at estimated fair values that were below investment grade or not rated by an independent rating agency that totaled $12.0 billion and $10.2 billion at December 31, 2006 and 2005, respectively. These securities had a net unrealized gain of $534 million and $388 million at December 31, 2006 and 2005, respectively. Non-income producing fixed maturity securities were $10 million at both December 31, 2006 and 2005. Unrealized gains (losses) associated with non-income producing fixed maturity securities were $3 million and $1 million at December 31, 2006 and 2005, respectively. F-34 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The cost or amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), are shown below:
DECEMBER 31, ----------------------------------------------- 2006 2005 ---------------------- ---------------------- COST OR COST OR AMORTIZED ESTIMATED AMORTIZED ESTIMATED COST FAIR VALUE COST FAIR VALUE --------- ---------- --------- ---------- (IN MILLIONS) Due in one year or less................. $ 4,531 $ 4,616 $ 4,271 $ 4,320 Due after one year through five years... 28,494 29,095 20,419 20,899 Due after five years through ten years.. 25,535 26,071 29,365 30,335 Due after ten years..................... 43,333 46,609 40,456 44,765 -------- -------- -------- -------- Subtotal.............................. 101,893 106,391 94,511 100,319 Mortgage-backed, commercial mortgage- backed and other asset-backed securities............................ 55,780 55,994 47,418 47,578 -------- -------- -------- -------- Total fixed maturity securities....... $157,673 $162,385 $141,929 $147,897 ======== ======== ======== ========
Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity. Actual maturities may differ from contractual maturities due to the exercise of prepayment options. Sales or disposals of fixed maturity and equity securities classified as available-for-sale are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Proceeds......................................... $57,861 $97,347 $53,639 Gross investment gains........................... $ 387 $ 623 $ 792 Gross investment losses.......................... $ (855) $ (956) $ (468)
F-35 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the estimated fair values and gross unrealized loss of the Company's fixed maturity securities (aggregated by sector) and equity securities in an unrealized loss position, aggregated by length of time that the securities have been in a continuous unrealized loss position at:
DECEMBER 31, 2006 --------------------------------------------------------------------------- EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ----------------------- ----------------------- ----------------------- GROSS GROSS GROSS ESTIMATED UNREALIZED ESTIMATED UNREALIZED ESTIMATED UNREALIZED FAIR VALUE LOSS FAIR VALUE LOSS FAIR VALUE LOSS ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities..... $11,033 $152 $ 8,162 $340 $19,195 $ 492 Residential mortgage-backed securities.................. 10,108 52 8,329 152 18,437 204 Foreign corporate securities.. 4,319 61 4,411 165 8,730 226 U.S. Treasury/agency securities.................. 9,075 99 377 9 9,452 108 Commercial mortgage-backed securities.................. 3,799 21 2,058 51 5,857 72 Asset-backed securities....... 3,184 27 662 14 3,846 41 Foreign government securities.................. 409 6 242 6 651 12 State and political subdivision securities...... 217 9 104 3 321 12 Other fixed maturity securities.................. 122 77 -- -- 122 77 ------- ---- ------- ---- ------- ------ Total fixed maturity securities............... $42,266 $504 $24,345 $740 $66,611 $1,244 ======= ==== ======= ==== ======= ====== Equity securities............. $ 613 $ 17 $ 287 $ 12 $ 900 $ 29 ======= ==== ======= ==== ======= ====== Total number of securities in an unrealized loss position.................... 4,134 2,129 6,263 ======= ======= =======
F-36 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2005 --------------------------------------------------------------------------- EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ----------------------- ----------------------- ----------------------- GROSS GROSS GROSS ESTIMATED UNREALIZED ESTIMATED UNREALIZED ESTIMATED UNREALIZED FAIR VALUE LOSS FAIR VALUE LOSS FAIR VALUE LOSS ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities..... $12,171 $275 $2,295 $ 83 $14,466 $ 358 Residential mortgage-backed securities.................. 18,839 267 884 25 19,723 292 Foreign corporate securities.. 6,995 200 1,621 58 8,616 258 U.S. Treasury/agency securities.................. 2,856 16 107 2 2,963 18 Commercial mortgage-backed securities.................. 5,323 89 401 13 5,724 102 Asset-backed securities....... 2,289 21 239 8 2,528 29 Foreign government securities.................. 429 9 161 1 590 10 State and political subdivision securities...... 327 10 -- -- 327 10 Other fixed maturity securities.................. -- 29 38 4 38 33 ------- ---- ------ ---- ------- ------ Total fixed maturity securities............... $49,229 $916 $5,746 $194 $54,975 $1,110 ======= ==== ====== ==== ======= ====== Equity securities............. $ 409 $ 24 $ 57 $ 4 $ 466 $ 28 ======= ==== ====== ==== ======= ====== Total number of securities in an unrealized loss position.................... 3,607 675 4,282 ======= ====== =======
AGING OF GROSS UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized loss and number of securities for fixed maturity securities and equity securities, where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:
DECEMBER 31, 2006 ------------------------------------------------------------ COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSSES SECURITIES ------------------ ------------------ ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------ --------- ------ --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) Less than six months............ $32,410 $25 $ 346 $ 7 3,112 62 Six months or greater but less than nine months.............. 1,657 3 28 1 300 1 Nine months or greater but less than twelve months............ 9,305 -- 139 -- 659 -- Twelve months or greater........ 25,356 28 746 6 2,123 6 ------- --- ------ --- ----- -- Total......................... $68,728 $56 $1,259 $14 6,194 69 ======= === ====== === ===== ==
F-37 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2005 ------------------------------------------------------------ COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSSES SECURITIES ------------------ ------------------ ------------------ LESS THAN 20% OR LESS THAN 20% OR LESS THAN 20% OR 20% MORE 20% MORE 20% MORE --------- ------ --------- ------ --------- ------ (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) Less than six months............ $43,966 $68 $ 732 $18 2,827 89 Six months or greater but less than nine months.............. 2,666 4 82 2 268 7 Nine months or greater but less than twelve months............ 3,874 -- 106 -- 415 1 Twelve months or greater........ 5,980 21 193 5 668 7 ------- --- ------ --- ----- --- Total......................... $56,486 $93 $1,113 $25 4,178 104 ======= === ====== === ===== ===
At December 31, 2006 and 2005, $1.3 billion and $1.1 billion, respectively, of unrealized losses related to securities with an unrealized loss position of less than 20% of cost or amortized cost, which represented 2% of the cost or amortized cost of such securities. At December 31, 2006, $14 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or amortized cost, which represented 25% of the cost or amortized cost of such securities. Of such unrealized losses of $14 million, $7 million related to securities that were in an unrealized loss position for a period of less than six months. At December 31, 2005, $25 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or amortized cost, which represented 27% of the cost or amortized cost of such securities. Of such unrealized losses of $25 million, $18 million related to securities that were in an unrealized loss position for a period of less than six months. The Company held four fixed maturity securities and equity securities each with a gross unrealized loss at December 31, 2006 each greater than $10 million. These securities represented 7%, or $95 million in the aggregate, of the gross unrealized loss on fixed maturity securities and equity securities. There were no securities with a gross unrealized loss greater than $10 million at December 31, 2005. F-38 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2006 and 2005, the Company had $1.3 billion and $1.1 billion, respectively, of gross unrealized loss related to its fixed maturity and equity securities. These securities are concentrated, calculated as a percentage of gross unrealized loss, as follows:
DECEMBER 31, ----------- 2006 2005 ---- ---- SECTOR: U.S. corporate securities.................................. 39% 31% Residential mortgage-backed securities..................... 16 26 Foreign corporate securities............................... 18 23 U.S. Treasury/agency securities............................ 8 2 Commercial mortgage-backed securities...................... 6 9 Other...................................................... 13 9 --- --- Total................................................... 100% 100% === === INDUSTRY: Industrial................................................. 24% 25% Mortgage-backed............................................ 22 35 Utility.................................................... 12 8 Government................................................. 9 3 Finance.................................................... 7 7 Other...................................................... 26 22 --- --- Total................................................... 100% 100% === ===
As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its investment holdings in accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. One of the criteria which the Company considers in its other-than-temporary impairment analysis is its intent and ability to hold securities for a period of time sufficient to allow for the recovery of their value to an amount equal to or greater than cost or amortized cost. The Company's intent and ability to hold securities considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security and that security is not expected to recover prior to the expected time of sale, the security will be deemed other-than- temporarily impaired in the period that the sale decision was made and an other- than-temporary impairment loss will be recognized. Based upon the Company's current evaluation of the securities in accordance with its impairment policy, the cause of the decline being principally attributable to the general rise in rates during the holding period, and the Company's current intent and ability to hold the fixed maturity and equity securities with unrealized losses for a period of time sufficient for them to recover, the Company has concluded that the aforementioned securities are not other-than-temporarily impaired. F-39 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SECURITIES LENDING The Company participates in a securities lending program whereby blocks of securities, which are included in fixed maturity and equity securities, are loaned to third parties, primarily major brokerage firms. The Company requires a minimum of 102% of the fair value of the loaned securities to be separately maintained as collateral for the loans. Securities with a cost or amortized cost of $30.1 billion and $19.5 billion and an estimated fair value of $31.0 billion and $20.4 billion were on loan under the program at December 31, 2006 and 2005, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $32.0 billion and $21.0 billion at December 31, 2006 and 2005, respectively. Security collateral of $17 million and $33 million on deposit from customers in connection with the securities lending transactions at December 31, 2006 and 2005, respectively, may not be sold or repledged and is not reflected in the consolidated financial statements. ASSETS ON DEPOSIT AND HELD IN TRUST The Company had investment assets on deposit with regulatory agencies with a fair market value of $1.2 billion and $1.5 billion at December 31, 2006 and 2005, respectively, consisting primarily of fixed maturity and equity securities. Company securities held in trust to satisfy collateral requirements had an amortized cost of $2.3 billion and $1.5 billion at December 31, 2006 and 2005, respectively, consisting primarily of fixed maturity and equity securities. MORTGAGE AND CONSUMER LOANS Mortgage and consumer loans are categorized as follows:
DECEMBER 31, ------------------------------------- 2006 2005 ----------------- ----------------- AMOUNT PERCENT AMOUNT PERCENT ------- ------- ------- ------- (IN MILLIONS) Commercial mortgage loans................... $28,369 78% $26,574 80% Agricultural mortgage loans................. 7,527 21 6,242 19 Consumer loans.............................. 203 1 427 1 ------- --- ------- --- Subtotal.................................. 36,099 100% 33,243 100% === === Less: Valuation allowances.................. 160 149 ------- ------- Mortgage and consumer loans............... $35,939 $33,094 ======= =======
Mortgage loans are collateralized by properties primarily located in the United States. At December 31, 2006, 19%, 7% and 6% of the value of the Company's mortgage and consumer loans were located in California, New York and Texas, respectively. Generally, the Company, as the lender, only loans up to 75% of the purchase price of the underlying real estate. Of the mortgage loans held at December 31, 2006 and 2005, $0 and $781 million, respectively, of the loans granted, were in connection with Metropolitan Insurance and Annuity Company's ("MIAC"), a related party, purchase of real estate from the Company in 2001 and 2003. MIAC was merged into MTL, also a related party, in 2004. In 2006, MTL sold Peter Cooper Village and Stuyvesant Town real estate properties located in New York City, to a third party for $5.4 billion. Concurrent with the sale, MTL repaid the related $770 million mortgage, including accrued interest, it owed to the Company. In 2005, MTL sold its 200 Park Avenue real estate property located in New York City, to a third party for $1.72 billion. Concurrent with the sale, MTL repaid the related $690 million mortgage, including accrued interest, it owed the Company. F-40 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Certain of the Company's real estate joint ventures have mortgage loans with the Company. The carrying values of such mortgages were $372 million and $379 million at December 31, 2006 and 2005, respectively. Information regarding loan valuation allowances for mortgage and consumer loans is as follows:
YEARS ENDED DECEMBER 31, ------------------ 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Balance at January 1,.................................. $149 $154 $126 Additions.............................................. 28 43 56 Deductions............................................. (17) (48) (28) ---- ---- ---- Balance at December 31,................................ $160 $149 $154 ==== ==== ====
A portion of the Company's mortgage and consumer loans was impaired and consists of the following:
DECEMBER 31, ----------- 2006 2005 ---- ---- (IN MILLIONS) Impaired loans with valuation allowances..................... $371 $11 Impaired loans without valuation allowances.................. 39 86 ---- --- Subtotal................................................... 410 97 Less: Valuation allowances on impaired loans................. 20 2 ---- --- Impaired loans............................................. $390 $95 ==== ===
The average investment in impaired loans was $145 million, $152 million and $376 million for the years ended December 31, 2006, 2005 and 2004, respectively. Interest income on impaired loans was $1 million, $6 million and $25 million for the years ended December 31, 2006, 2005 and 2004, respectively. The investment in restructured loans was $9 million and $37 million at December 31, 2006 and 2005, respectively. Interest income of $1 million, $2 million and $9 million was recognized on restructured loans for the years ended December 31, 2006, 2005 and 2004, respectively. Gross interest income that would have been recorded in accordance with the original terms of such loans amounted to $1 million, $3 million and $11 million for the years ended December 31, 2006, 2005 and 2004, respectively. Mortgage and consumer loans with scheduled payments of 90 days or more past due on which interest is still accruing, had an amortized cost of $7 million and $17 million at December 31, 2006 and 2005, respectively. Mortgage and consumer loans on which interest is no longer accrued had an amortized cost of $35 million and $0 at December 31, 2006 and 2005, respectively. Mortgage and consumer loans in foreclosure had an amortized cost of $30 million and $7 million at December 31, 2006 and 2005, respectively. F-41 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) REAL ESTATE AND REAL ESTATE JOINT VENTURES Real estate and real estate joint ventures consisted of the following:
DECEMBER 31, ---------------- 2006 2005 ------- ------ (IN MILLIONS) Real estate.............................................. $ 4,297 $4,187 Accumulated depreciation................................. (1,140) (962) ------- ------ Net real estate.......................................... 3,157 3,225 Real estate joint ventures............................... 1,328 862 ------- ------ Real estate and real estate joint ventures............. $ 4,485 $4,087 ======= ======
The components of real estate and real estate joint ventures are as follows:
DECEMBER 31, --------------- 2006 2005 ------ ------ (IN MILLIONS) Real estate and real estate joint ventures held-for- investment.............................................. $4,485 $3,778 Real estate held-for-sale................................. -- 309 ------ ------ Real estate and real estate joint ventures.............. $4,485 $4,087 ====== ======
Related depreciation expense was $110 million, $120 million and $162 million for the years ended December 31, 2006, 2005 and 2004, respectively. These amounts include $3 million, $17 million and $45 million of depreciation expense related to discontinued operations for the years ended December 31, 2006, 2005 and 2004, respectively. Real estate and real estate joint ventures held-for-sale recognized impairments of $8 million, $5 million and $13 million for the years ended December 31, 2006, 2005 and 2004, respectively. The carrying value of non-income producing real estate and real estate joint ventures was $8 million and $30 million at December 31, 2006 and 2005, respectively. The Company owned real estate acquired in satisfaction of debt of less than $1 million at both December 31, 2006 and 2005. Real estate and real estate joint ventures were categorized as follows:
DECEMBER 31, ----------------------------------- 2006 2005 ---------------- ---------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- (IN MILLIONS) Office........................................ $2,335 52% $2,529 62% Apartments.................................... 737 17 447 11 Retail........................................ 534 12 612 15 Real estate investment funds.................. 307 7 45 1 Industrial.................................... 291 6 276 7 Development joint ventures.................... 169 4 -- -- Land.......................................... 50 1 40 1 Other......................................... 62 1 138 3 ------ --- ------ --- Total....................................... $4,485 100% $4,087 100% ====== === ====== ===
F-42 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company's real estate holdings are primarily located in the United States. At December 31, 2006, 26%, 16% and 16% of the Company's real estate holdings were located in New York, California and Texas, respectively. LEVERAGED LEASES Investment in leveraged leases, included in other invested assets, consisted of the following:
DECEMBER 31, --------------- 2006 2005 ------ ------ (IN MILLIONS) Rental receivables, net................................... $1,055 $ 991 Estimated residual values................................. 887 735 ------ ------ Subtotal................................................ 1,942 1,726 Unearned income........................................... (694) (645) ------ ------ Investment in leveraged leases.......................... $1,248 $1,081 ====== ======
The Company's deferred income tax liability related to leveraged leases was $670 million and $679 million at December 31, 2006 and 2005, respectively. The rental receivables set forth are generally due in periodic installments. The payment periods generally range from one to 15 years, but in certain circumstances are as long as 30 years. The components of net income from investment in leveraged leases are as follows:
YEARS ENDED DECEMBER 31, ------------------ 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Income from investment in leveraged leases (included in net investment income).................................... $ 51 $ 54 $26 Income tax expense on leveraged leases.................. (18) (19) (9) ---- ---- --- Net income from leveraged leases........................ $ 33 $ 35 $17 ==== ==== ===
FUNDS WITHHELD AT INTEREST Funds withheld at interest, included in other invested assets, were $4.0 billion and $3.5 billion at December 31, 2006 and 2005, respectively. F-43 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET INVESTMENT INCOME The components of net investment income are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Fixed maturity securities........................ $ 9,551 $ 8,588 $ 8,085 Equity securities................................ 58 53 65 Mortgage and consumer loans...................... 2,315 2,246 1,957 Policy loans..................................... 495 497 492 Real estate and real estate joint ventures....... 750 545 436 Other limited partnership interests.............. 705 676 324 Cash, cash equivalents and short-term investments.................................... 201 113 64 Other............................................ 465 381 179 ------- ------- ------- Total investment income........................ 14,540 13,099 11,602 Less: Investment expenses........................ 2,233 1,370 807 ------- ------- ------- Net investment income.......................... $12,307 $11,729 $10,795 ======= ======= =======
For the years ended December 31, 2006, 2005 and 2004, affiliated investment income of $20 million, $16 million and $14 million, respectively, related to fixed maturity securities and $112 million, $189 million and $117 million, respectively, related to mortgage and consumer loans, are included in the table above. In the fourth quarter of 2006, MTL sold its Peter Cooper Village and Stuyvesant Town properties for $5.4 billion. Upon the closing of the transaction, MTL repaid the mortgage of $770 million, including accrued interest, held by the Company on these properties and paid a prepayment fee of $68 million which was recognized as affiliated investment income. In the second quarter of 2005, MTL sold its 200 Park Avenue real estate property located in New York City, to a third party for $1.72 billion. Concurrent with the sale, MTL repaid the related $690 million mortgage, including accrued interest, it owed to the Company. Based on the terms of the loan agreement, the Company also received a $120 million prepayment fee from MTL, which was recognized as affiliated investment income when received. F-44 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET INVESTMENT GAINS (LOSSES) The components of net investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, --------------------- 2006 2005 2004 ----- ----- ----- (IN MILLIONS) Fixed maturity securities............................ $(572) $(518) $ 81 Equity securities.................................... 67 121 150 Mortgage and consumer loans.......................... (16) 31 54 Real estate and real estate joint ventures........... 38 7 5 Other limited partnership interests.................. 2 43 53 Derivatives.......................................... (458) 410 (232) Other................................................ 112 85 171 ----- ----- ----- Net investment gains (losses)...................... $(827) $ 179 $ 282 ===== ===== =====
For the years ended December 31, 2006, 2005 and 2004, affiliated investment gains (losses) of ($20) million, $28 million and $15 million, respectively, are included within Other in the table above. The Company periodically disposes of fixed maturity and equity securities at a loss. Generally, such losses are insignificant in amount or in relation to the cost basis of the investment, are attributable to declines in fair value occurring in the period of the disposition or are as a result of management's decision to sell securities based on current conditions or the Company's need to shift the portfolio to maintain its portfolio management objectives. Losses from fixed maturity and equity securities deemed other-than- temporarily impaired, included within net investment gains (losses), were $37 million, $64 million and $93 million for the years ended December 31, 2006, 2005 and 2004, respectively. F-45 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET UNREALIZED INVESTMENT GAINS (LOSSES) The components of net unrealized investment gains (losses), included in accumulated other comprehensive income, are as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Fixed maturity securities........................ $ 4,685 $ 5,972 $ 8,571 Equity securities................................ 483 225 270 Derivatives...................................... (238) (207) (494) Minority interest................................ (159) (171) (103) Other............................................ -- (82) 34 ------- ------- ------- Subtotal....................................... 4,771 5,737 8,278 ------- ------- ------- Amounts allocated from: Future policy benefit loss recognition......... (806) (1,259) (1,953) DAC and VOBA................................... (239) (148) (407) Policyholder dividend obligation............... (1,062) (1,492) (2,119) ------- ------- ------- Subtotal.................................... (2,107) (2,899) (4,479) ------- ------- ------- Deferred income tax......................... (968) (1,029) (1,391) ------- ------- ------- Subtotal............................... (3,075) (3,928) (5,870) ------- ------- ------- Net unrealized investment gains (losses)......... $ 1,696 $ 1,809 $ 2,408 ======= ======= =======
The changes in net unrealized investment gains (losses) are as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2006 2005 2004 ------ ------- ------ (IN MILLIONS) Balance, January 1,................................ $1,809 $ 2,408 $2,405 Unrealized investment gains (losses) during the year............................................. (966) (2,556) 281 Unrealized investment gains (losses) of subsidiaries at the date of sale..................................... -- 15 -- Unrealized investment gains (losses) relating to: Future policy benefit gains (losses) recognition................................... 453 694 (500) DAC and VOBA..................................... (91) 259 88 Participating contracts.......................... -- -- 117 Policyholder dividend obligation................. 430 627 11 Deferred income tax.............................. 61 362 6 ------ ------- ------ Balance, December 31, ............................. $1,696 $ 1,809 $2,408 ====== ======= ====== Net change in unrealized investment gains (losses)......................................... $ (113) $ (599) $ 3 ====== ======= ======
TRADING SECURITIES During 2005, the Company established a trading securities portfolio to support investment strategies that involve the active and frequent purchase and sale of securities, the execution of short sale agreements and asset F-46 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) and liability matching strategies for certain insurance products. Trading securities and short sale agreement liabilities are recorded at fair value with subsequent changes in fair value recognized in net investment income related to fixed maturity securities. At December 31, 2006 and 2005, trading securities were $563 million and $373 million, respectively, and liabilities associated with the short sale agreements in the trading securities portfolio, which were included in other liabilities, were $387 million and $271 million, respectively. The Company had pledged $614 million and $375 million of its assets, primarily consisting of trading securities, as collateral to secure the liabilities associated with the short sale agreements in the trading securities portfolio for the years ended December 31, 2006 and 2005, respectively. During the years ended December 31, 2006 and 2005, interest and dividends earned on trading securities in addition to the net realized and unrealized gains (losses) recognized on the trading securities and the related short sale agreement liabilities totaled $32 million and ($3) million, respectively. Changes in the fair value of such trading securities and short sale agreement liabilities, totaled $3 million and less than $1 million for the years ended December 31, 2006 and 2005, respectively. The Company did not hold any trading securities during the year ended December 31, 2004. STRUCTURED INVESTMENT TRANSACTIONS The Company invests in structured notes and similar type instruments, which generally provide equity-based returns on debt securities. The carrying value of such investments, included in fixed maturity securities, was $354 million and $362 million at December 31, 2006 and 2005, respectively. The related net investment income recognized was $43 million, $28 million and $44 million for the years ended December 31, 2006, 2005 and 2004, respectively. VARIABLE INTEREST ENTITIES The following table presents the total assets of and maximum exposure to loss relating to VIEs for which the Company has concluded that: (i) it is the primary beneficiary and which are consolidated in the Company's consolidated financial statements at December 31, 2006; and (ii) it holds significant variable interests but it is not the primary beneficiary and which have not been consolidated:
DECEMBER 31, 2006 ------------------------------------------------- PRIMARY BENEFICIARY NOT PRIMARY BENEFICIARY ----------------------- ----------------------- MAXIMUM MAXIMUM TOTAL EXPOSURE TO TOTAL EXPOSURE TO ASSETS(1) LOSS(2) ASSETS(1) LOSS(2) --------- ----------- --------- ----------- (IN MILLIONS) Asset-backed securitizations and collateralized debt obligations....... $ -- $-- $ 1,909 $ 207 Real estate joint ventures(3)........... 53 45 269 6 Other limited partnership interests(4).. 84 3 19,152 1,478 Other investments(5).................... -- -- 20,620 1,452 ---- --- ------- ------ Total................................. $137 $48 $41,950 $3,143 ==== === ======= ======
-------- (1) The assets of the asset-backed securitizations and collateralized debt obligations are reflected at fair value at December 31, 2006. The assets of the real estate joint ventures, other limited partnership interests and other investments are reflected at the carrying amounts at which such assets would have been reflected on the Company's balance sheet had the Company consolidated the VIE from the date of its initial investment in the entity. F-47 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (2) The maximum exposure to loss of the asset-backed securitizations and collateralized debt obligations is equal to the carrying amounts of retained interests. In addition, the Company provides collateral management services for certain of these structures for which it collects a management fee. The maximum exposure to loss relating to real estate joint ventures, other limited partnership interests and other investments is equal to the carrying amounts plus any unfunded commitments, reduced by amounts guaranteed by other partners. (3) Real estate joint ventures include partnerships and other ventures which engage in the acquisition, development, management and disposal of real estate investments. (4) Other limited partnership interests include partnerships established for the purpose of investing in public and private debt and equity securities, as well as limited partnerships. (5) Other investments include securities that are not asset-backed securitizations or collateralized debt obligations. 4. DERIVATIVE FINANCIAL INSTRUMENTS TYPES OF DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the notional amounts and current market or fair value of derivative financial instruments held at:
DECEMBER 31, 2006 DECEMBER 31, 2005 ------------------------------- ------------------------------- CURRENT MARKET OR CURRENT MARKET OR FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Interest rate swaps............ $17,865 $207 $ 79 $12,857 $294 $ 12 Interest rate floors........... 25,955 193 -- 6,515 80 -- Interest rate caps............. 19,754 119 -- 24,970 224 -- Financial futures.............. 6,824 52 19 63 1 -- Foreign currency swaps......... 14,952 287 1,102 9,256 74 852 Foreign currency forwards...... 1,204 22 4 2,333 26 41 Options........................ 1 1 -- 221 2 2 Financial forwards............. 2,900 12 24 2,446 13 1 Credit default swaps........... 5,023 4 16 4,789 11 9 Synthetic GICs................. 3,739 -- -- 5,477 -- -- Other.......................... 250 56 -- 250 9 -- ------- ---- ------ ------- ---- ---- Total........................ $98,467 $953 $1,244 $69,177 $734 $917 ======= ==== ====== ======= ==== ====
The above table does not include notional values for equity financial forwards. At both December 31, 2006 and 2005, the Company owned 132,000 equity financial forwards. Market values of equity financial forwards are included in financial forwards in the preceding table. F-48 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the notional amounts of derivative financial instruments by maturity at December 31, 2006:
REMAINING LIFE -------------------------------------------------------- AFTER AFTER ONE YEAR FIVE YEARS ONE YEAR THROUGH THROUGH AFTER TEN OR LESS FIVE YEARS TEN YEARS YEARS TOTAL -------- ---------- ---------- --------- ------- (IN MILLIONS) Interest rate swaps............... $ 754 $10,427 $ 3,478 $3,206 $17,865 Interest rate floors.............. -- 7,068 18,887 -- 25,955 Interest rate caps................ 2,770 16,984 -- -- 19,754 Financial futures................. 6,824 -- -- -- 6,824 Foreign currency swaps............ 493 7,125 6,015 1,319 14,952 Foreign currency forwards......... 1,204 -- -- -- 1,204 Options........................... -- -- 1 -- 1 Financial forwards................ -- -- -- 2,900 2,900 Credit default swaps.............. 487 4,330 206 -- 5,023 Synthetic GICs.................... 3,427 312 -- -- 3,739 Other............................. -- 250 -- -- 250 ------- ------- ------- ------ ------- Total........................... $15,959 $46,496 $28,587 $7,425 $98,467 ======= ======= ======= ====== =======
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. In a basis swap, both legs of the swap are floating with each based on a different index. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each due date. Basis swaps are included in interest rate swaps in the preceding table. Interest rate caps and floors are used by the Company primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In exchange-traded interest rate (Treasury and swap) and equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate and equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, and to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance. The value of F-49 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) interest rate futures is substantially impacted by changes in interest rates and they can be used to modify or hedge existing interest rate risk. Exchange-traded equity futures are used primarily to hedge liabilities embedded in certain variable annuity products offered by the Company. Foreign currency derivatives, including foreign currency swaps, foreign currency forwards and currency option contracts, are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. The Company also uses foreign currency forwards and swaps to hedge the foreign currency risk associated with certain of its net investments in foreign operations. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a forward exchange rate calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at the specified future date. The Company enters into currency option contracts that give it the right, but not the obligation, to sell the foreign currency amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on differentials in the foreign exchange rate and the strike price. Currency option contracts are included in options in the preceding table. Swaptions are used by the Company primarily to sell, or monetize, embedded call options in its fixed rate liabilities. A swaption is an option to enter into a swap with an effective date equal to the exercise date of the embedded call and a maturity date equal to the maturity date of the underlying liability. The Company receives a premium for entering into the swaption. Swaptions are included in options in the preceding table. Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Equity index options are included in options in the preceding table. The Company enters into financial forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. Equity variance swaps are included in financial forwards in the preceding table. Swap spread locks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spread locks are forward starting swaps where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. Swap spread locks are included in financial forwards in the preceding table. Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified intervals, to pay a premium to insure credit risk. If a credit F-50 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) event, as defined by the contract, occurs, generally the contract will require the swap to be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and usually a U.S. Treasury or Agency security. A synthetic guaranteed interest contract ("GIC") is a contract that simulates the performance of a traditional GIC through the use of financial instruments. Under a synthetic GIC, the policyholder owns the underlying assets. The Company guarantees a rate return on those assets for a premium. Total rate of return swaps ("TRRs") are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and LIBOR, calculated by reference to an agreed notional principal amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. TRRs can be used as hedges or to synthetically create investments and are included in the other classification in the preceding table. HEDGING The following table presents the notional amounts and fair value of derivatives by type of hedge designation at:
DECEMBER 31, 2006 DECEMBER 31, 2005 ------------------------------- ------------------------------- FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Fair value..................... $ 7,890 $290 $ 84 $ 4,419 $ 50 $104 Cash flow...................... 2,656 33 149 6,233 29 437 Foreign operations............. 489 -- 39 834 2 37 Non-qualifying................. 87,432 630 972 57,691 653 339 ------- ---- ------ ------- ---- ---- Total........................ $98,467 $953 $1,244 $69,177 $734 $917 ======= ==== ====== ======= ==== ====
The following table presents the settlement payments recorded in income for the:
YEARS ENDED DECEMBER 31, ------------------- 2006 2005 2004 ---- ---- ----- (IN MILLIONS) Qualifying hedges: Net investment income............................... $ 48 $ 42 $(144) Interest credited to policyholder account balances.. (26) 17 45 Non-qualifying hedges: Net investment gains (losses)....................... 225 86 51 ---- ---- ----- Total............................................ $247 $145 $ (48) ==== ==== =====
FAIR VALUE HEDGES The Company designates and accounts for the following as fair value hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert fixed rate investments to floating rate investments; F-51 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments and liabilities; and (iii) interest rate futures to hedge against changes in value of fixed rate securities. The Company recognized net investment gains (losses) representing the ineffective portion of all fair value hedges as follows:
YEARS ENDED DECEMBER 31, -------------------- 2006 2005 2004 ----- ----- ---- (IN MILLIONS) Changes in the fair value of derivatives............. $ 278 $(118) $ 64 Changes in the fair value of the items hedged........ (278) 116 (49) ----- ----- ---- Net ineffectiveness of fair value hedging activities......................................... $ -- $ (2) $ 15 ===== ===== ====
All components of each derivative's gain or loss were included in the assessment of hedge ineffectiveness. There were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge. CASH FLOW HEDGES The Company designates and accounts for the following as cash flow hedges, when they have met the requirements of SFAS 133: (i) interest rate swaps to convert floating rate investments to fixed rate investments; (ii) interest rate swaps to convert floating rate liabilities into fixed rate liabilities; (iii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities; and (iv) financial forwards to buy and sell securities. For the year ended December 31, 2006, the Company recognized no net investment gains (losses) as the ineffective portion of all cash flow hedges. For the years ended December 31, 2005 and 2004, the Company recognized net investment gains (losses) of ($21) million and ($31) million, respectively, which represent the ineffective portion of all cash flow hedges. All components of each derivative's gain or loss were included in the assessment of hedge ineffectiveness. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or in the additional time period permitted by SFAS 133. The net amounts reclassified into net investment gains (losses) for the years ended December 31, 2006, 2005 and 2004 related to such discontinued cash flow hedges were $3 million, $42 million and $29 million, respectively. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments for the years ended December 31, 2006, 2005 and 2004. The following table presents the components of other comprehensive income (loss), before income tax, related to cash flow hedges:
YEARS ENDED DECEMBER 31, --------------------- 2006 2005 2004 ----- ----- ----- (IN MILLIONS) Other comprehensive income (loss) balance at January 1,................................................. $(207) $(447) $(385) Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges............................................. (44) 196 (98) Amounts reclassified to net investment gains (losses)........................................... (1) 44 41 Amounts reclassified to net investment income........ 15 2 2 Amortization of transition adjustment................ (1) (2) (7) ----- ----- ----- Other comprehensive income (loss) balance at December 31,................................................ $(238) $(207) $(447) ===== ===== =====
F-52 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2006, $52 million of the deferred net loss on derivatives accumulated in other comprehensive income (loss) is expected to be reclassified to earnings during the year ending December 31, 2007. HEDGES OF NET INVESTMENTS IN FOREIGN OPERATIONS The Company uses forward exchange contracts, foreign currency swaps, options and non-derivative financial instruments to hedge portions of its net investments in foreign operations against adverse movements in exchange rates. The Company measures ineffectiveness on the forward exchange contracts based upon the change in forward rates. There was no ineffectiveness recorded for the years ended December 31, 2006, 2005 and 2004. The Company's consolidated statements of stockholder's equity for the years ended December 31, 2006, 2005 and 2004 include losses of $7 million, $27 million and $47 million, respectively, related to foreign currency contracts and non- derivative financial instruments used to hedge its net investments in foreign operations. At December 31, 2006 and 2005, the cumulative foreign currency translation loss recorded in accumulated other comprehensive income related to these hedges was $91 million and $84 million, respectively. When net investments in foreign operations are sold or substantially liquidated, the amounts in accumulated other comprehensive income are reclassified to the consolidated statements of income, while a pro rata portion will be reclassified upon partial sale of the net investments in foreign operations. NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING The Company enters into the following derivatives that do not qualify for hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest rate swaps, purchased caps and floors, and interest rate futures to economically hedge its exposure to interest rate volatility; (ii) foreign currency forwards, swaps and option contracts to economically hedge its exposure to adverse movements in exchange rates; (iii) swaptions to sell embedded call options in fixed rate liabilities; (iv) credit default swaps to minimize its exposure to adverse movements in credit; (v) credit default swaps to diversify credit risk exposure to certain portfolios; (vi) equity futures, equity index options, interest rate futures and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (vii) swap spread locks to economically hedge invested assets against the risk of changes in credit spreads; (viii) financial forwards to buy and sell securities; (ix) GICs to synthetically create traditional GICs; (x) credit default swaps and TRRs to synthetically create investments; and (xi) basis swaps to better match the cash flows of assets and related liabilities. For the years ended December 31, 2006, 2005 and 2004, the Company recognized as net investment gains (losses), excluding embedded derivatives, changes in fair value of ($701) million, $372 million and ($141) million, respectively, related to derivatives that do not qualify for hedge accounting. EMBEDDED DERIVATIVES The Company has certain embedded derivatives which are required to be separated from their host contracts and accounted for as derivatives. These host contracts include guaranteed minimum withdrawal contracts, guaranteed minimum accumulation contracts and modified coinsurance contracts. The fair value of the Company's embedded derivative assets was $57 million and $50 million at December 31, 2006 and 2005, respectively. The fair value of the Company's embedded derivative liabilities was $113 million and $10 million at December 31, 2006 and 2005, respectively. The amounts recorded and included in net investment gains (losses) during the years ended December 31, 2006, 2005 and 2004 were gains (losses) of $12 million, $29 million and $34 million, respectively. F-53 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CREDIT RISK The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company's derivative contracts is limited to the fair value at the reporting date. The credit exposure of the Company's derivative transactions is represented by the fair value of contracts with a net positive fair value at the reporting date. The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. As of December 31, 2006 and 2005, the Company was obligated to return cash collateral under its control of $94 million and $34 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. As of December 31, 2006 and 2005, the Company had also accepted collateral consisting of various securities with a fair market value of $16 million and $0, respectively, which are held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but as of December 31, 2006 and 2005, none of the collateral had been sold or repledged. As of December 31, 2006 and 2005, the Company provided collateral of $80 million and $0, respectively, which is included in fixed maturity securities in the consolidated balance sheets. In addition, the Company has exchange traded futures, which require the pledging of collateral. As of December 31, 2006 and 2005, the Company pledged collateral of $23 million and $15 million, respectively, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. F-54 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 5. DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED Information regarding DAC and VOBA is as follows:
DAC VOBA TOTAL ------- ---- ------- (IN MILLIONS) Balance at January 1, 2004......................... $ 9,390 $836 $10,226 Capitalizations.................................. 1,817 -- 1,817 ------- ---- ------- Subtotal.................................... 11,207 836 12,043 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)................. 5 1 6 Unrealized investment gains (losses).......... (12) (76) (88) Other expenses................................ 1,058 81 1,139 ------- ---- ------- Total amortization.......................... 1,051 6 1,057 ------- ---- ------- Less: Dispositions and other..................... (99) 23 (76) ------- ---- ------- Balance at December 31, 2004....................... 10,255 807 11,062 Capitalizations.................................. 1,619 -- 1,619 ------- ---- ------- Subtotal.................................... 11,874 807 12,681 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)................. 13 2 15 Unrealized investment gains (losses).......... (244) (15) (259) Other expenses................................ 1,304 66 1,370 ------- ---- ------- Total amortization.......................... 1,073 53 1,126 ------- ---- ------- Less: Dispositions and other..................... 120 (3) 117 ------- ---- ------- Balance at December 31, 2005....................... 10,681 757 11,438 Capitalizations.................................. 1,677 -- 1,677 ------- ---- ------- Subtotal.................................... 12,358 757 13,115 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)................. (136) (2) (138) Unrealized investment gains (losses).......... 105 (14) 91 Other expenses................................ 1,248 (21) 1,227 ------- ---- ------- Total amortization.......................... 1,217 (37) 1,180 ------- ---- ------- Less: Dispositions and other..................... (85) (23) (108) ------- ---- ------- Balance at December 31, 2006....................... $11,226 $817 $12,043 ======= ==== =======
The estimated future amortization expense allocated to other expenses for the next five years for VOBA is $67 million in 2007, $69 million in 2008, $66 million in 2009, $40 million in 2010, and $43 million in 2011. Amortization of VOBA and DAC is related to (i) investment gains and losses and the impact of such gains and losses on the amount of the amortization; (ii) unrealized investment gains and losses to provide information regarding the amount that would have been amortized if such gains and losses had been recognized; and F-55 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (iii) other expenses to provide amounts related to the gross margins or profits originating from transactions other than investment gains and losses. 6. GOODWILL Goodwill is the excess of cost over the fair value of net assets acquired. Information regarding goodwill is as follows:
DECEMBER 31, ----------- 2006 2005 ---- ---- (IN MILLIONS) Balance at January 1,....................................... $200 $217 Acquisitions................................................ 2 1 Dispositions and other, net................................. -- (18) ---- ---- Balance at December 31,..................................... $202 $200 ==== ====
7. INSURANCE VALUE OF DISTRIBUTION AGREEMENTS AND CUSTOMER RELATIONSHIPS ACQUIRED VODA and VOCRA, which are reported within other assets in the consolidated balance sheet, were $439 million, net of amortization accumulation of $2 million, at December 31, 2006 due to the VODA of $389 million contributed by the Holding Company and the VOCRA of $52 million acquired from MRS. Amortization expense for the year ended December 31, 2006 was $2 million. See Notes 2 and 16. The value of the other identifiable intangibles discussed above reflects the estimated fair value of Citigroup/Travelers distribution agreement and customer relationships acquired at the original acquisition date and will be amortized in relation to the expected economic benefits of the agreement. The weighted average amortization period of the other intangible assets is 16 years. If actual experience under the distribution agreements or with customer relationships differs from expectations, the amortization of these intangibles will be adjusted to reflect actual experience. The use of discount rates was necessary to establish the fair value of the other identifiable intangible assets. In selecting the appropriate discount rates, management considered its weighted average cost of capital as well as the weighted average cost of capital required by market participants. A discounted rate of 11.5% was used to value these intangible assets. The estimated future amortization expense allocated to other expenses for the next five years for VODA and VOCRA is $8 million in 2007, $12 million in 2008, $15 million in 2009, $18 million in 2010 and $21 million in 2011. F-56 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SALES INDUCEMENTS Information regarding deferred sales inducements, which are reported in other assets, is as follows:
YEARS ENDED DECEMBER 31, ---------------------- 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Balance at January 1,.................................. $ 95 $75 $52 Capitalization......................................... 31 29 29 Amortization........................................... (5) (9) (6) ---- --- --- Balance at December 31, ............................... $121 $95 $75 ==== === ===
SEPARATE ACCOUNTS Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $64.5 billion and $57.4 billion at December 31, 2006 and 2005, respectively, for which the policyholder assumes all investment risk, and separate accounts with a minimum return or account value for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $16.5 billion and $15.7 billion at December 31, 2006 and 2005, respectively. The latter category consisted primarily of Met Managed GICs and participating close-out contracts. The average interest rates credited on these contracts were 4.7% and 4.5% at December 31, 2006 and 2005, respectively. Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges) are reflected in the Company's revenues as universal life and investment-type product policy fees and totaled $1.2 billion, $1.1 billion and $998 million for the years ended December 31, 2006, 2005 and 2004, respectively. The Company's proportional interest in separate accounts is included in the consolidated balance sheets as follows:
DECEMBER 31, ----------- 2006 2005 ---- ---- (IN MILLIONS) Fixed maturity securities.................................... $ 5 $-- Equity securities............................................ $35 $30 Cash and cash equivalents.................................... $ 1 $ 1
For the years ended December 31, 2006, 2005 and 2004, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. OBLIGATIONS UNDER GUARANTEED INTEREST CONTRACT PROGRAM The Company issues fixed and floating rate obligations under its GIC program which are denominated in either U.S. dollars or foreign currencies. During the years ended December 31, 2006, 2005 and 2004, the Company issued $5.2 billion, $4.0 billion and $4.0 billion, respectively, and repaid $1.5 billion, $1.1 billion and $150 million, respectively, of GICs under this program. Accordingly, at December 31, 2006 and 2005, GICs outstanding, which are included in policyholder account balances, were $16.8 billion and $12.1 billion, respectively. During the years ended December 31, 2006, 2005 and 2004, interest credited on the contracts, which are included in interest credited to policyholder account balances, was $673 million, $384 million and $142 million, respectively. F-57 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) LIABILITIES FOR UNPAID CLAIMS AND CLAIM EXPENSES Information regarding the liabilities for unpaid claims and claim expenses relating to group accident and non-medical health policies and contracts, which are reported in future policy benefits and other policyholder funds, is as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Balance at January 1, ........................... $ 4,191 $ 3,847 $ 3,560 Less: Reinsurance recoverables................. (295) (292) (289) ------- ------- ------- Net balance at January 1, ....................... 3,896 3,555 3,271 ------- ------- ------- Incurred related to: Current year................................... 2,997 2,791 2,491 Prior years.................................... (28) (41) (9) ------- ------- ------- 2,969 2,750 2,482 ------- ------- ------- Paid related to: Current year................................... (1,814) (1,667) (1,519) Prior years.................................... (819) (742) (679) ------- ------- ------- (2,633) (2,409) (2,198) ------- ------- ------- Net Balance at December 31, ..................... 4,232 3,896 3,555 Add: Reinsurance recoverables.................. 268 295 292 ------- ------- ------- Balance at December 31,.......................... $ 4,500 $ 4,191 $ 3,847 ======= ======= =======
As a result of changes in estimates of insured events in the prior years, the claims and claim adjustment expenses decreased by $28 million in 2006 due to improved loss ratio liabilities for non-medical health claim liabilities and improved claims management. In 2005, the claims and claim adjustment expenses decreased by $41 million due to a refinement in the estimation methodology for non-medical health long- term care claim liabilities, improved loss ratio liabilities for non-medical health claim liabilities and improved claims management. In 2004, the claims and claim adjustment expenses decreased by $9 million due to improved loss ratios in non-medical health claim liabilities and improved claims management. GUARANTEES The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than total deposits made to the contract less any partial withdrawals ("return of net deposits"); and (ii) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial withdrawals plus a minimum return ("anniversary contract value" or "minimum return"). The Company also issues annuity contracts that apply a lower rate of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize ("two tier annuities"). These guarantees include benefits that are payable in the event of death or at annuitization. The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid up benefit. F-58 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts is as follows:
DECEMBER 31, --------------------------------------------------------------- 2006 2005 ------------------------------ ------------------------------ IN THE AT IN THE AT EVENT OF DEATH ANNUITIZATION EVENT OF DEATH ANNUITIZATION -------------- ------------- -------------- ------------- (IN MILLIONS) ANNUITY CONTRACTS(1) RETURN OF NET DEPOSITS Separate account value.............. $ 3,233 N/A $ 2,527 N/A Net amount at risk(2)............... $ --(3) N/A $ 1(3) N/A Average attained age of contractholders.................. 59 years N/A 58 years N/A ANNIVERSARY CONTRACT VALUE OR MINIMUM RETURN Separate account value.............. $ 34,362 $ 5,273 $ 31,646 $ 3,847 Net amount at risk(2)............... $ 354(3) $ 16(4) $ 521(3) $ 17(4) Average attained age of contractholders.................. 61 years 57 years 60 years 57 years TWO TIER ANNUITIES General account value............... N/A $ 296 N/A $ 229 Net amount at risk(2)............... N/A $ 53(5) N/A $ 36(5) Average attained age of contractholders.................. N/A 58 years N/A 58 years
DECEMBER 31, ------------------------------------------------------- 2005 ------------------------- 2006 ------------------------- SECONDARY PAID UP SECONDARY PAID UP GUARANTEES GUARANTEES GUARANTEES GUARANTEES ---------- ---------- ---------- ---------- (IN MILLIONS) UNIVERSAL AND VARIABLE LIFE CONTRACTS(1) Account value (general and separate account)................................ $ 6,094 $ 1,770 $ 5,413 $ 1,680 Net amount at risk(2)..................... $ 101,431(3) $ 14,500(3) $ 98,907(3) $ 15,633(3) Average attained age of policyholders..... 46 years 53 years 45 years 52 years
-------- (1) The Company's annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) The net amount at risk is based on the direct amount at risk (excluding reinsurance). (3) The net amount at risk for guarantees of amounts in the event of death is defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (4) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. (5) The net amount at risk for two tier annuities is based on the excess of the upper tier, adjusted for a profit margin, less the lower tier. F-59 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life contracts is as follows:
UNIVERSAL AND VARIABLE ANNUITY CONTRACTS LIFE CONTRACTS ------------------------------ ----------------------- GUARANTEED GUARANTEED ANNUITIZATION SECONDARY PAID UP DEATH BENEFITS BENEFITS GUARANTEES GUARANTEES TOTAL -------------- ------------- ---------- ---------- ----- (IN MILLIONS) Balance at January 1, 2004..... $ 8 $16 $ 6 $ 6 $ 36 Incurred guaranteed benefits... 4 (9) 4 1 -- Paid guaranteed benefits....... (6) -- (4) -- (10) --- --- --- --- ---- Balance at December 31, 2004... 6 7 6 7 26 Incurred guaranteed benefits... 4 -- 3 3 10 Paid guaranteed benefits....... (2) -- (1) -- (3) --- --- --- --- ---- Balance at December 31, 2005... 8 7 8 10 33 Incurred guaranteed benefits... 1 -- 1 (1) 1 Paid guaranteed benefits....... (3) -- -- -- (3) --- --- --- --- ---- Balance at December 31, 2006... $ 6 $ 7 $ 9 $ 9 $ 31 === === === === ====
Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows:
DECEMBER 31, ----------------- 2006 2005 ------- ------- (IN MILLIONS) Mutual Fund Groupings Equity................................................ $23,510 $21,143 Bond.................................................. 2,757 2,606 Balanced.............................................. 1,125 1,074 Money Market.......................................... 220 206 Specialty............................................. 522 229 ------- ------- Total.............................................. $28,134 $25,258 ======= =======
8. REINSURANCE The Company's life insurance operations participate in reinsurance activities in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. The Company has historically reinsured the mortality risk on new individual life insurance policies primarily on an excess of retention basis or a quota share basis. Until 2005, the Company reinsured up to 90% of the mortality risk for all new individual life insurance policies that it wrote through its various franchises. This practice was initiated by the different franchises for different products starting at various points in time between 1992 and 2000. During 2005, the Company changed its retention practices for certain individual life insurance. Amounts reinsured in prior years remain reinsured under the original reinsurance; however, under the new retention guidelines, the Company reinsures up to 90% of the mortality risk in excess of $1 million for most new individual life insurance policies that it writes through its various franchises and for certain individual life policies the retention limits remained unchanged. On a case by case basis, the Company may retain up to $25 million per life on single life individual policies and $30 million per life on survivorship individual policies and reinsure 100% of amounts in F-60 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) excess of the Company's retention limits. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. In addition, the Company reinsures a significant portion of the mortality risk on its individual universal life policies issued since 1983. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specific characteristics. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. The Company routinely reinsures certain classes of risks in order to limit its exposure to particular travel, avocation and lifestyle hazards. The Company has exposure to catastrophes, which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance arrangements to provide greater diversification of risk and minimize exposure to larger risks. The Company had also protected itself through the purchase of combination risk coverage. This reinsurance coverage pooled risks from several lines of business and included individual and group life claims in excess of $2 million per policy. This combination risk coverage was commuted during 2005. The Company reinsures its business through a diversified group of reinsurers. No single unaffiliated reinsurer has a material obligation to the Company nor is the Company's business substantially dependent upon any reinsurance contracts. The Company is contingently liable with respect to ceded reinsurance should any reinsurer be unable to meet its obligations under these agreements. In the Reinsurance Segment, Reinsurance Group of America, Incorporated ("RGA") retains a maximum of $6 million of coverage per individual life with respect to its assumed reinsurance business. The amounts in the consolidated statements of income are presented net of reinsurance ceded. Information regarding the effect of reinsurance is as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Direct premiums.................................. $16,960 $16,466 $15,347 Reinsurance assumed.............................. 5,569 5,046 4,348 Reinsurance ceded................................ (2,245) (2,256) (2,258) ------- ------- ------- Net premiums..................................... $20,284 $19,256 $17,437 ======= ======= ======= Reinsurance recoverables netted against policyholder benefits and claims............... $ 1,552 $ 1,495 $ 1,626 ======= ======= =======
Reinsurance recoverables, included in premiums and other receivables, were $5.2 billion and $3.8 billion at December 31, 2006 and 2005, respectively, including $1.2 billion and $1.3 billion, respectively, relating to reinsurance of long-term GICs and structured settlement lump sum contracts accounted for as a financing transaction, and $1.4 billion at December 31, 2006, relating to the reinsurance of investment-type contracts held by small market defined contribution plans. Reinsurance and ceded commissions payables, included in other liabilities, were $202 million and $263 million at December 31, 2006 and 2005, respectively. Included in premiums and other receivables are reinsurance due from Exeter Reassurance Company, Ltd., Texas Life Insurance Company ("TLIC''), First MetLife Investors Insurance Company, MetLife Insurance Company of Connecticut ("MICC"), MetLife Investors USA Insurance Company ("MLI USA"), and MetLife Investors Insurance Company, all of which are related parties, of $1.7 billion and $1.4 billion at December 31, 2006 and 2005, respectively. Included in future policy benefits, other policyholder funds, policyholder account balances, and other liabilities are reinsurance liabilities assumed from TLIC, MTL, First MetLife Investors Group, Inc., MetLife Investors Insurance Company, Exeter Reassurance Company, Ltd., MLI USA, and MICC related parties of F-61 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $422 million, $278 million, $361 million and $4.5 billion at December 31, 2006. Included in future policy benefits, other policyholder funds, policyholder account balances, and other liabilities are reinsurance liabilities assumed from MTL, First MetLife Investors Insurance Company, MetLife Investors Insurance Company, MLI USA, MICC, Exeter Reassurance Company, Ltd. and TLIC, all of which are related parties, of $1.2 billion, $268 million, $389 million and $3.1 billion at December 31, 2005. On December 1, 2006, TLIC, an affiliate of the Company recaptured business previously ceded under a 2002 reinsurance treaty with the Company. The agreement required the Company to assume, on a co-insurance basis, certain structured settlement business from TLIC. The Company will transfer cash in the amount of $984 million, which represents the fair value of the returned future policy benefits. As a result of this transaction, the Company recognized an expense of $184 million. Effective January 1, 2005, a subsidiary of the Company, General American Life Insurance Company ("General American") entered into a reinsurance agreement to cede an in force block of business to MLI USA, an affiliate. This agreement covered certain term and universal life policies issued by General American on and after January 1, 2000 through December 31, 2004. This agreement also covers certain term and universal life policies issued on or after January 1, 2005. Under this agreement, General American transferred $797 million of liabilities and $411 million in assets to MLI USA related to the policies in-force as of December 31, 2004. As a result of the transfer of assets, General American recognized a realized gain of $19 million, net of income taxes. General American also received and deferred 100% of a $386 million ceding commission resulting in no gain or loss on the transfer of the in-force business as of January 1, 2005. For the policies issued on or after January 1, 2005, General American ceded premiums and related fees of $119 million and $192 million, respectively, and ceded benefits and related costs of $98 million and $143 million, respectively, for the years ended December 31, 2006 and 2005. Reinsurance recoverables, included in premiums and other receivables, related to this reinsurance agreement as of December 31, 2006 and 2005 were $1.0 billion and $932 million, respectively. For the years ended December 31, 2006, 2005 and 2004, reinsurance ceded and assumed include affiliated transactions of $508 million, $529 million and $466 million, respectively. For the years ended December 31, 2006 and 2005, premiums, policyholder benefits and claims, and commission expenses include assumed related party transactions of $42 million, $86 million and $30 million, and $37 million, $108 million and $137 million, respectively. 9. CLOSED BLOCK On April 7, 2000 (the "Demutualization Date"), Metropolitan Life converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance (the "Superintendent") approving Metropolitan Life's plan of reorganization, as amended (the "Plan"). On the Demutualization Date, Metropolitan Life established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent F-62 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the effective date of the demutualization (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block is greater than the expected cumulative earnings of the closed block, the Company will pay the excess of the actual cumulative earnings of the closed block over the expected cumulative earnings to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block is less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings. F-63 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the closed block liabilities and assets designated to the closed block is as follows:
DECEMBER 31, ----------------- 2006 2005 ------- ------- (IN MILLIONS) CLOSED BLOCK LIABILITIES Future policy benefits.................................. $43,089 $42,759 Other policyholder funds................................ 282 257 Policyholder dividends payable.......................... 701 693 Policyholder dividend obligation........................ 1,063 1,607 Payables for collateral under securities loaned and other transactions.................................... 6,483 4,289 Other liabilities....................................... 192 200 ------- ------- Total closed block liabilities..................... 51,810 49,805 ------- ------- ASSETS DESIGNATED TO THE CLOSED BLOCK Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $30,286 and $27,892, respectively)...................................... 31,255 29,270 Trading securities, at fair value (cost: $0 and $3, respectively)...................................... -- 3 Equity securities available-for-sale, at fair value (cost: $1,184 and $1,180, respectively)........... 1,484 1,341 Mortgage loans on real estate......................... 7,848 7,790 Policy loans.......................................... 4,212 4,148 Real estate and real estate joint ventures held-for- investment......................................... 242 227 Short-term investments................................ 62 41 Other invested assets................................. 644 250 ------- ------- Total investments.................................. 45,747 43,070 Cash and cash equivalents............................... 255 512 Accrued investment income............................... 517 506 Deferred income tax assets.............................. 754 902 Premiums and other receivables.......................... 156 270 ------- ------- Total assets designated to the closed block........ 47,429 45,260 ------- ------- Excess of closed block liabilities over assets designated to the closed block........................ 4,381 4,545 ------- ------- Amounts included in accumulated other comprehensive income (loss): Unrealized investment gains (losses), net of deferred income tax of $457 and $554, respectively......... 812 985 Unrealized gains (losses) on derivative instruments, net of deferred income tax of ($18) and ($17), respectively....................................... (32) (31) Allocated to policyholder dividend obligation, net of deferred income tax benefit of ($381) and ($538), respectively....................................... (681) (954) ------- ------- Total amounts included in accumulated other comprehensive income (loss)..................... 99 -- ------- ------- Maximum future earnings to be recognized from closed block assets and liabilities......................... $ 4,480 $ 4,545 ======= =======
F-64 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Information regarding the closed block policyholder dividend obligation is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2006 2005 2004 ------ ------ ------ (IN MILLIONS) Balance at January 1,............................... $1,607 $2,243 $2,130 Impact on revenues, net of expenses and income tax.. (114) (9) 124 Change in unrealized investment and derivative gains (losses).......................................... (430) (627) (11) ------ ------ ------ Balance at December 31,............................. $1,063 $1,607 $2,243 ====== ====== ======
Information regarding the closed block revenues and expenses is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2006 2005 2004 ------ ------ ------ (IN MILLIONS) REVENUES Premiums............................................ $2,959 $3,062 $3,156 Net investment income and other revenues............ 2,355 2,382 2,504 Net investment gains (losses)....................... (130) 10 (19) ------ ------ ------ Total revenues.................................... 5,184 5,454 5,641 ------ ------ ------ EXPENSES Policyholder benefits and claims.................... 3,474 3,478 3,480 Policyholder dividends.............................. 1,479 1,465 1,458 Change in policyholder dividend obligation.......... (114) (9) 124 Other expenses...................................... 247 263 275 ------ ------ ------ Total expenses.................................... 5,086 5,197 5,337 ------ ------ ------ Revenues, net of expenses before income tax......... 98 257 304 Income tax.......................................... 34 90 109 ------ ------ ------ Revenues, net of expenses and income tax from continuing operations............................. 64 167 195 Revenues, net of expenses and income tax from discontinued operations........................... 1 -- -- ------ ------ ------ Revenues, net of expenses and income taxes and discontinued operations........................... $ 65 $ 167 $ 195 ====== ====== ======
The change in the maximum future earnings of the closed block is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2006 2005 2004 ------ ------ ------ (IN MILLIONS) Balance at December 31, ............................ $4,480 $4,545 $4,712 Balance at January 1, .............................. 4,545 4,712 4,907 ------ ------ ------ Change during year.................................. $ (65) $ (167) $ (195) ====== ====== ======
Metropolitan Life charges the closed block with federal income taxes, state and local premium taxes, and other additive state or local taxes, as well as investment management expenses relating to the closed block as F-65 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) provided in the Plan. Metropolitan Life also charges the closed block for expenses of maintaining the policies included in the closed block. 10. LONG-TERM AND SHORT-TERM DEBT Long-term and short-term debt outstanding is as follows:
INTEREST RATES ---------------------- DECEMBER 31, WEIGHTED --------------- RANGE AVERAGE MATURITY 2006 2005 ----------- -------- --------- ------ ------ (IN MILLIONS) Senior notes.................... 6.19%-6.75% 6.30% 2011-2036 $1,050 $ 300 Surplus notes -- affiliated..... 5.00% 5.00% 2007 800 800 Surplus notes................... 7.63%-7.88% 7.76% 2015-2025 697 696 Capital notes -- affiliated..... 7.13% 7.13% 2032-2033 500 500 Fixed rate notes................ 5.76%-6.47% 5.95% 2007-2011 107 102 Other notes with varying interest rates................ 4.45%-4.50% 4.47% 2010-2012 3 93 Capital lease obligations....... 62 71 ------ ------ Total long-term debt............ 3,219 2,562 Total short-term debt........... 833 453 ------ ------ Total......................... $4,052 $3,015 ====== ======
The aggregate maturities of long-term debt as of December 31, 2006 for the next five years are $840 million in 2007, $12 million in 2008, $13 million in 2009, $52 million in 2010, $229 million in 2011 and $2,073 million thereafter. Collateralized debt, which consists of capital lease obligations, ranks highest in priority, followed by unsecured senior debt which consists of senior notes, fixed rate notes and other notes with varying interest rates, followed by subordinated debt which consists of junior subordinated debentures. Payments of interest and principal on the Company's surplus notes, may be made only with the prior approval of the insurance department of the state of domicile. SENIOR NOTES RGA repaid a $100 million 7.25% senior note which matured on April 1, 2006. On June 28, 2006, Timberlake Financial L.L.C., ("Timberlake"), a subsidiary of RGA, completed an offering of $850 million of Series A Floating Rate Insured Notes due June 2036, which is included in the Company's long-term debt. Interest on the notes will accrue at an annual rate of 1-month LIBOR plus a base margin, payable monthly. The notes represent senior, secured indebtedness of Timberlake Financial, L.L.C. with no recourse to RGA or its other subsidiaries. Up to $150 million of additional notes may be offered in the future. The proceeds of the offering provide long-term collateral to support Regulation XXX statutory reserves on 1.5 million term life insurance policies with guaranteed level premium periods reinsured by RGA Reinsurance Company, a U.S. subsidiary of RGA. Issuance costs associated with the offering of the notes of $13 million have been capitalized, are included in other assets, and will be amortized using the effective interest method over the period from the issuance date of the notes until their maturity. F-66 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SURPLUS NOTES Metropolitan Life repaid a $250 million, 7% surplus note which matured on November 1, 2005. On December 22, 2005, the Company issued an $800 million, 5% surplus note to the Holding Company which matures on December 31, 2007. SHORT-TERM DEBT During the years ended December 31, 2006 and 2005, the Company's short-term debt consisted of commercial paper with a weighted average interest rate of 5.1% and 3.3%, respectively. The average daily balance of commercial paper outstanding was $768 million and $944 million during the years ended December 31, 2006 and 2005, respectively. The commercial paper was outstanding for an average of 53 days and 47 days during the years ended December 31, 2006 and 2005, respectively. INTEREST EXPENSE Interest expense related to the Company's indebtedness included in other expenses was $244 million, $187 million and $201 million for the years ended December 31, 2006, 2005 and 2004, respectively, and does not include interest expense on junior subordinated debt securities. See Note 11. CREDIT FACILITIES AND LETTERS OF CREDIT Credit Facilities. The Company maintains committed and unsecured credit facilities aggregating $3.7 billion as of December 31, 2006. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements. The facilities can be used for general corporate purposes and at December 31, 2006, $3.0 billion of the facilities also served as back-up lines of credit for the Company's commercial paper programs. Information on these facilities as of December 31, 2006 is as follows:
COMPANY METLIFE, INC. LETTERS OF LETTERS OF CREDIT CREDIT UNUSED BORROWER(S) EXPIRATION CAPACITY ISSUANCES ISSUANCES DRAWDOWNS COMMITMENTS ------------------------------- ---------- -------- ---------- ------------- --------- ----------- (IN MILLIONS) MetLife, Inc. and MetLife Funding, Inc. ............... April 2009 $1,500(1) $138 $349 $ -- $1,013 MetLife, Inc. and MetLife Funding, Inc. ............... April 2010 1,500(1) -- 483 -- 1,017 Reinsurance Group of America, Incorporated................. May 2007 29 -- -- 29 -- Reinsurance Group of America, Incorporated................. September 2010 600 315 -- 50 235 Reinsurance Group of America, Incorporated................. March 2011 39 -- -- 28 11 ------ ---- ---- ---- ------ Total........................ $3,668 $453 $832 $107 $2,276 ====== ==== ==== ==== ======
-------- (1) These facilities serve as back up lines of credit for the Company's commercial paper programs. Letters of Credit. At December 31, 2006, the Company had outstanding $637 million in letters of credit from various banks, of which $453 million were part of committed credit facilities. Since commitments associated with letters of credit and financing arrangements may expire unused, these amounts do not necessarily reflect the Company's actual future cash funding requirements. 11. JUNIOR SUBORDINATED DEBENTURES On December 8, 2005, RGA issued junior subordinated debentures with a face amount of $400 million. Interest is payable semi-annually at a fixed rate of 6.75% up to but not including the scheduled redemption date. The securities may be redeemed (i) in whole or in part, at any time on or after December 15, 2015 at their principal amount plus accrued and unpaid interest to the date of redemption, or (ii) in whole or in part, prior to F-67 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) December 15, 2015 at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, a make-whole price. In the event the junior subordinated debentures are not redeemed on or before the scheduled redemption date of December 15, 2015, interest on these junior subordinated debentures will accrue at an annual rate of three-month LIBOR plus a margin equal to 2.665%, payable quarterly in arrears. The final maturity of the debentures is December 15, 2065. RGA has the right to, and in certain circumstances the requirement to, defer interest payments on the debentures for a period up to ten years. Interest compounds during periods of deferral. Issuance costs associated with the offering of the junior subordinated debentures of $6 million have been capitalized, are included in other assets, and will be amortized using the effective interest method over the period from the issuance date of the junior subordinated debentures until their scheduled redemption. Interest expense on the junior subordinated debentures was $27 million and $2 million for the years ended December 31, 2006 and 2005, respectively. 12. SHARES SUBJECT TO MANDATORY REDEMPTION AND COMPANY-OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY TRUSTS GenAmerica Capital I. In June 1997, GenAmerica Corporation ("GenAmerica") issued $125 million of 8.525% capital securities through a wholly-owned subsidiary trust, GenAmerica Capital I. GenAmerica has fully and unconditionally guaranteed, on a subordinated basis, the obligation of the trust under the capital securities and is obligated to mandatorily redeem the securities on June 30, 2027. GenAmerica may prepay the securities any time after June 30, 2007. Capital securities outstanding were $119 million, net of unamortized discounts of $6 million at both December 31, 2006 and 2005. Interest expense on these instruments is included in other expenses and was $11 million for each of the years ended December 31, 2006, 2005 and 2004. RGA Capital Trust I. In December 2001, RGA, through its wholly-owned trust, RGA Capital Trust I (the "Trust"), issued 4,500,000 Preferred Income Equity Redeemable Securities ("PIERS") Units. Each PIERS unit consists of: (i) a preferred security issued by the Trust, having a stated liquidation amount of $50 per unit, representing an undivided beneficial ownership interest in the assets of the Trust, which consist solely of junior subordinated debentures issued by RGA which have a principal amount at maturity of $50 and a stated maturity of March 18, 2051; and (ii) a warrant to purchase, at any time prior to December 15, 2050, 1.2508 shares of RGA stock at an exercise price of $50. The fair market value of the warrant on the issuance date was $14.87 and is detachable from the preferred security. RGA fully and unconditionally guarantees, on a subordinated basis, the obligations of the Trust under the preferred securities. The preferred securities and subordinated debentures were issued at a discount (original issue discount) to the face or liquidation value of $14.87 per security. The securities will accrete to their $50 face/liquidation value over the life of the security on a level yield basis. The weighted average effective interest rate on the preferred securities and the subordinated debentures is 8.25% per annum. Capital securities outstanding were $159 million, net of unamortized discounts of $66 million at both December 31, 2006 and 2005. F-68 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 13. INCOME TAX The provision for income tax from continuing operations is as follows:
YEARS ENDED DECEMBER 31, -------------------- 2006 2005 2004 ---- ------ ---- (IN MILLIONS) Current: Federal............................................. $496 $ 833 $812 State and local..................................... 5 64 45 Foreign............................................. 20 21 5 ---- ------ ---- Subtotal............................................ 521 918 862 ---- ------ ---- Deferred: Federal............................................. $100 $ 169 $ 13 State and local..................................... 19 11 (7) Foreign............................................. -- -- -- ---- ------ ---- Subtotal............................................ 119 180 6 ---- ------ ---- Provision for income tax.............................. $640 $1,098 $868 ==== ====== ====
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations is as follows:
YEARS ENDED DECEMBER 31, ----------------------- 2006 2005 2004 ----- ------ ------ (IN MILLIONS) Tax provision at U.S. statutory rate................ $ 864 $1,234 $1,076 Tax effect of: Tax-exempt investment income...................... (167) (84) (69) State and local income tax........................ 19 33 17 Prior year tax.................................... (26) (20) (104) Foreign operations, net of foreign income tax..... (23) (25) (25) Other, net........................................ (27) (40) (27) ----- ------ ------ Provision for income tax............................ $ 640 $1,098 $ 868 ===== ====== ======
The Company is under continuous examination by the Internal Revenue Service ("IRS") and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction. In 2004, the Company recorded an adjustment of $91 million for the settlement of all federal income tax issues relating to the IRS's audit of the Company's tax returns for the years 1997-1999. Such settlement is reflected in the current year tax expense as an adjustment to prior year tax. The Company also received $22 million in interest on such settlements and incurred an $8 million tax expense on such settlement for a total impact to net income of $105 million. The current IRS examination covers the years 2000-2002 and the Company expects it to be completed in 2007. The Company regularly assesses the likelihood of additional assessments in each taxing jurisdiction resulting from current and subsequent years' examinations. Liabilities for income tax have been established for future income tax assessments when it is probable there will be future assessments and the amount thereof can be reasonably estimated. Once established, liabilities for uncertain tax positions are adjusted only when there is more information available or when an event occurs necessitating a change to the liabilities. The Company believes that the resolution of income tax matters for open F-69 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) years will not have a material effect on its consolidated financial statements although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period. Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following:
DECEMBER 31, --------------- 2006 2005 ------ ------ (IN MILLIONS) Deferred income tax assets: Policyholder liabilities and receivables................ $2,122 $2,477 Net operating loss carryforwards........................ 788 574 Employee benefits....................................... 440 23 Capital loss carryforwards.............................. -- 59 Tax credit carryforwards................................ -- 100 Litigation-related...................................... 62 62 Other................................................... 32 42 ------ ------ 3,444 3,337 Less: Valuation allowance............................... 11 9 ------ ------ 3,433 3,328 ------ ------ Deferred income tax liabilities: Investments............................................. 1,475 1,802 DAC..................................................... 3,441 3,134 Net unrealized investment gains......................... 968 1,029 Other................................................... 2 92 ------ ------ 5,886 6,057 ------ ------ Net deferred income tax liability......................... $2,453 $2,729 ====== ======
Domestic net operating loss carryforwards amount to $2.2 billion at December 31, 2006 and will expire beginning in 2016. Foreign net operating loss carryforwards amount to $50 million at December 31, 2006 and were generated in various foreign countries with expiration periods of five years to infinity. The Company has recorded a valuation allowance related to tax benefits of certain foreign net operating loss carryforwards. The valuation allowance reflects management's assessment, based on available information, that it is more likely than not that the deferred income tax asset for certain foreign net operating loss carryforwards will not be realized. The tax benefit will be recognized when management believes that it is more likely than not that these deferred income tax assets are realizable. In 2006, the Company recorded $2 million of additional deferred income tax valuation allowance related to certain foreign net operating loss carryforwards. 14. CONTINGENCIES, COMMITMENTS, AND GUARANTEES CONTINGENCIES LITIGATION The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the assertion of monetary damages or other relief. F-70 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrate to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Thus, unless stated below, the specific monetary relief sought is not noted. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be inherently impossible to ascertain with any degree of certainty. Inherent uncertainties can include how fact finders will view individually and in their totality documentary evidence, the credibility and effectiveness of witnesses' testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. On a quarterly and yearly basis, the Company reviews relevant information with respect to liabilities for litigation and contingencies to be reflected in the Company's consolidated financial statements. The review includes senior legal and financial personnel. Unless stated below, estimates of possible additional losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of December 31, 2006. Demutualization Actions Several lawsuits were brought in 2000 challenging the fairness of Metropolitan Life's plan of reorganization, as amended and the adequacy and accuracy of Metropolitan Life's disclosure to policyholders regarding the Plan. These actions discussed below named as defendants some or all of Metropolitan Life, the Holding Company, the individual directors, the Superintendent and the underwriters for MetLife, Inc.'s initial public offering, Goldman Sachs & Company and Credit Suisse First Boston. Metropolitan Life, the Holding Company, and the individual directors believe they have meritorious defenses to the plaintiffs' claims and are contesting vigorously all of the plaintiffs' claims in these actions. Fiala, et al. v. Metropolitan Life Ins. Co., et al. (Sup. Ct., N.Y. County, filed March 17, 2000). Another putative class action filed in New York State court in Kings County has been consolidated with this action. The plaintiffs in the consolidated state court class actions seek compensatory relief and punitive damages. In 2003, the trial court granted the defendants' motions to dismiss these two putative class actions. In 2004, the appellate court modified the trial court's order by reinstating certain claims against Metropolitan Life, the Holding Company and the individual directors. Plaintiffs in these actions have filed a consolidated amended complaint. On January 30, 2007, the trial court signed an order certifying a litigation class for plaintiffs' claim that defendants violated section 7312 of the New York Insurance Law, but denying plaintiffs' motion to certify a litigation class with respect to a common law fraud claim. The January 30, 2007 order implemented the trial court's May 2, 2006 memorandum deciding plaintiffs' class certification motion. Defendants have filed a notice of appeal from this decision. Meloy, et al. v. Superintendent of Ins., et al. ( Sup. Ct., N.Y. County, filed April 14, 2000). Five persons brought a proceeding under Article 78 of New York's Civil Practice Law and Rules challenging the Opinion and Decision of the Superintendent who approved the Plan. In this proceeding, petitioners sought to vacate the Superintendent's Opinion and Decision and enjoin him from granting final approval of the Plan. On F-71 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) November 10, 2005, the trial court granted respondents' motions to dismiss this proceeding. On March 15, 2007, the appellate court dismissed petitioners' appeal. In re MetLife Demutualization Litig. (E.D.N.Y., filed April 18, 2000). In this class action against Metropolitan Life and the Holding Company, plaintiffs served a second consolidated amended complaint in 2004. Plaintiffs assert violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the Plan, claiming that the Policyholder Information Booklets failed to disclose certain material facts and contained certain material misstatements. They seek rescission and compensatory damages. On June 22, 2004, the court denied the defendants' motion to dismiss the claim of violation of the Securities Exchange Act of 1934. The court had previously denied defendants' motion to dismiss the claim for violation of the Securities Act of 1933. In 2004, the court reaffirmed its earlier decision denying defendants' motion for summary judgment as premature. On July 19, 2005, this federal trial court certified this lawsuit as a class action against Metropolitan Life and the Holding Company. Fotia, et al. v. MetLife, Inc., et al. (Ont. Super. Ct., filed April 3, 2001). This lawsuit was filed in Ontario, Canada on behalf of a proposed class of certain former Canadian policyholders against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance Company of Canada. Plaintiffs' allegations concern the way that their policies were treated in connection with the demutualization of Metropolitan Life; they seek damages, declarations, and other non-pecuniary relief. Asbestos-Related Claims Metropolitan Life is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos- containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life's employees during the period from the 1920's through approximately the 1950's and allege that Metropolitan Life learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury, and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life. Metropolitan Life employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling litigation under appropriate circumstances. Claims asserted against Metropolitan Life have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life's defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life owed no duty to the plaintiffs -- it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs did not rely on any actions of Metropolitan Life; (iii) Metropolitan Life's conduct was not the cause of the plaintiffs' injuries; (iv) that plaintiffs' exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. Since 2002, trial courts in California, Utah, Georgia, New York, Texas, and Ohio have granted motions dismissing claims against Metropolitan Life. Some courts have denied Metropolitan Life's motions to dismiss. There can be no assurance that Metropolitan Life will receive favorable decisions on motions in the future. While most cases brought to date F-72 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) have settled, Metropolitan Life intends to continue to defend aggressively against claims based on asbestos exposure. The approximate total number of asbestos personal injury claims pending against Metropolitan Life as of the dates indicated, the approximate number of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos personal injury claims during those years are set forth in the following table:
AT OR FOR THE YEARS ENDED DECEMBER 31, ----------------------------- 2006 2005 2004 ------- -------- -------- (IN MILLIONS, EXCEPT NUMBER OF CLAIMS) Asbestos personal injury claims at year end (approximate)................................. 87,070 100,250 108,000 Number of new claims during the year (approximate)................................. 7,870 18,500 23,900 Settlement payments during the year(1).......... $ 35.5 $ 74.3 $ 85.5
-------- (1) Settlement payments represent payments made by Metropolitan Life during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life's attorneys' fees and expenses and do not reflect amounts received from insurance carriers. In 2003, Metropolitan Life received approximately 58,750 new claims, ending the year with a total of approximately 111,700 claims, and paid approximately $84.2 million for settlements reached in 2003 and prior years. The number of asbestos cases that may be brought or the aggregate amount of any liability that Metropolitan Life may ultimately incur is uncertain. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life's recorded asbestos liability is based on Metropolitan Life's estimation of the following elements, as informed by the facts presently known to it, its understanding of current law, and its past experiences: (i) the reasonably probable and estimable liability for asbestos claims already asserted against Metropolitan Life including claims settled but not yet paid; (ii) the reasonably probable and estimable liability for asbestos claims not yet asserted against Metropolitan Life, but which Metropolitan Life believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life's analysis of the adequacy of its liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to defend claims. Metropolitan Life regularly re-evaluates its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants, and the jurisdictions in which claims are pending. As previously disclosed, in 2002 Metropolitan Life increased its recorded liability for asbestos-related claims by $402 million from approximately $820 million to $1,225 million. Metropolitan Life regularly re-evaluates its exposure from asbestos litigation and has updated its liability analysis for asbestos-related claims through December 31, 2006. The ability of Metropolitan Life to estimate its ultimate asbestos exposure is subject to considerable uncertainty and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict with any certainty the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction F-73 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts. The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company's judgment, there is a future point after which losses cease to be reasonably probable and estimable. It is reasonably possible that the Company's total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on the Company's consolidated financial position. During 1998, Metropolitan Life paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance policies for asbestos-related claims provide for recovery of losses up to $1.5 billion, which is in excess of a $400 million self-insured retention. The asbestos- related policies are also subject to annual and per-claim sublimits. Amounts are recoverable under the policies annually with respect to claims paid during the prior calendar year. Although amounts paid by Metropolitan Life in any given year that may be recoverable in the next calendar year under the policies will be reflected as a reduction in the Company's operating cash flows for the year in which they are paid, management believes that the payments will not have a material adverse effect on the Company's liquidity. Each asbestos-related policy contains an experience fund and a reference fund that provides for payments to Metropolitan Life at the commutation date if the reference fund is greater than zero at commutation or pro rata reductions from time to time in the loss reimbursements to Metropolitan Life if the cumulative return on the reference fund is less than the return specified in the experience fund. The return in the reference fund is tied to performance of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A claim with respect to the prior year was made under the excess insurance policies in each of 2003, 2004, 2005 and 2006 for the amounts paid with respect to asbestos litigation in excess of the retention. As the performance of the indices impacts the return in the reference fund, it is possible that loss reimbursements to the Company and the recoverable amount with respect to later periods may be less than the amount of the recorded losses. Foregone loss reimbursements may be recovered upon commutation depending upon future performance of the reference fund. If at some point in the future, the Company believes the liability for probable and reasonably estimable losses for asbestos-related claims should be increased, an expense would be recorded and the insurance recoverable would be adjusted subject to the terms, conditions and limits of the excess insurance policies. Portions of the change in the insurance recoverable would be recorded as a deferred gain and amortized into income over the estimated remaining settlement period of the insurance policies. The foregone loss reimbursements were approximately $8.3 million with respect to 2002 claims, $15.5 million with respect to 2003 claims, $15.1 million with respect to 2004 claims, $12.7 million with respect to 2005 claims, and estimated to be approximately $5.0 million with respect to 2006 claims and are estimated, as of December 31, 2006, to be approximately $72.2 million in the aggregate, including future years. Sales Practices Claims Over the past several years, Metropolitan Life, New England Mutual Life Insurance Company ("New England Mutual"), New England Life Insurance Company ("NELICO") and General American Life Insurance Company ("General American"), have faced numerous claims, including class action lawsuits, alleging improper marketing and sales of individual life insurance policies or annuities. In addition, claims have been brought relating to the sale of mutual funds and other products. F-74 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) As of December 31, 2006, there were approximately 280 sales practices litigation matters pending against Metropolitan Life; approximately 41 sales practices litigation matters pending against New England Mutual, New England Life Insurance Company, and New England Securities Corporation (collectively, "New England"); and approximately 37 sales practices litigation matters pending against General American. Metropolitan Life, New England, and General American, continue to vigorously defend against the claims in these matters. Some sales practices claims have been resolved through settlement, others have been won by dispositive motions or have gone to trial. Most of the current cases seek substantial damages, including in some cases punitive and treble damages and attorneys' fees. Additional litigation relating to the Company's marketing and sales of individual life insurance, mutual funds and other products may be commenced in the future. Two putative class action lawsuits involving sales practices claims were filed against Metropolitan Life in Canada. In Jacynthe Evoy-Larouche v. Metropolitan Life Ins. Co. (Que. Super. Ct., filed March 1998), plaintiff alleges misrepresentations regarding dividends and future payments for life insurance policies and seeks unspecified damages. In Ace Quan v. Metropolitan Life Ins. Co. (Ont. Gen. Div., filed April 1997), plaintiff alleges breach of contract and negligent misrepresentations relating to, among other things, life insurance premium payments and seeks damages, including punitive damages. By agreement of the parties, Metropolitan Life has not yet filed a response in this action. Regulatory authorities in a small number of states have had investigations or inquiries relating to Metropolitan Life's, New England's, or General American's sales of individual life insurance policies or annuities or other products. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief. The Company may continue to resolve investigations in a similar manner. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices claims against Metropolitan Life, New England, and General American. Regulatory Matters and Related Litigation Regulatory bodies have contacted the Company and have requested information relating to market timing and late trading of mutual funds and variable insurance products and, generally, the marketing of products. The Company believes that many of these inquiries are similar to those made to many financial services companies as part of industry-wide investigations by various regulatory agencies. The SEC has commenced an investigation with respect to market timing and late trading in a limited number of privately-placed variable insurance contracts that were sold through General American. As previously reported, in May 2004, General American received a Wells Notice stating that the SEC staff is considering recommending that the SEC bring a civil action alleging violations of the U.S. securities laws against General American. Under the SEC procedures, General American can avail itself of the opportunity to respond to the SEC staff before it makes a formal recommendation regarding whether any action alleging violations of the U.S. securities laws should be considered. General American has responded to the Wells Notice. The Company is fully cooperating with regard to these information requests and investigations. The Company at the present time is not aware of any systemic problems with respect to such matters that may have a material adverse effect on the Company's consolidated financial position. In December 2006, Metropolitan Life resolved a previously disclosed investigation by the Office of the Attorney General of the State of New York related to payments to intermediaries in the marketing and sale of group life and disability, group long-term care and group accidental death and dismemberment insurance and related matters. In the settlement, Metropolitan Life did not admit liability as to any issue of fact or law. Among other things, Metropolitan Life has agreed to certain business reforms relating to compensation of producers of group insurance, compensation disclosures to group insurance clients and the adoption of related standards of conduct, some of which it had implemented following the commencement of the investigation. Metropolitan Life has paid a fine and has made a payment to a restitution fund. It is the opinion of management that F-75 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Metropolitan Life's resolution of this matter will not adversely affect its business. The Holding Company and/or subsidiaries have received subpoenas and/or other discovery requests from regulators, state attorneys general or other governmental authorities in other states, including Connecticut, Massachusetts, California, Florida and Ohio seeking, among other things, information and documents regarding contingent commission payments to brokers, the Holding Company's and/or subsidiaries' awareness of any "sham" bids for business, bids and quotes that the Holding Company and/or subsidiaries submitted to potential customers, incentive agreements entered into with brokers, or compensation paid to intermediaries. The Holding Company and/or subsidiaries also have received a subpoena from the Office of the U.S. Attorney for the Southern District of California asking for documents regarding the insurance broker, Universal Life Resources. The Holding Company and/or subsidiaries continue to cooperate fully with these inquiries and are responding to the subpoenas and other discovery requests. Approximately sixteen broker-related lawsuits in which the Holding Company and/or subsidiaries were named as a defendant were filed. Voluntary dismissals and consolidations have reduced the number of pending actions to two: The People of the State of California, by and through John Garamendi, Ins. Commissioner of the State of California v. MetLife, Inc., et al. (Cal. Super. Ct., County of San Diego, filed November 18, 2004). The California Insurance Commissioner filed suit against Metropolitan Life and other non-affiliated companies alleging that the defendants violated certain provisions of the California Insurance Code. This action seeks injunctive relief relating to compensation disclosures. In Re Ins. Brokerage Antitrust Litig. (D. N.J., filed in February 24, 2005). In this multi-district proceeding, plaintiffs have filed an amended class action complaint consolidating the claims from separate actions that had been filed in or transferred to the District of New Jersey in 2004 and 2005. The consolidated amended complaint alleges that the Holding Company, Metropolitan Life, several non-affiliated insurance companies and several insurance brokers violated RICO, ERISA, and antitrust laws and committed other misconduct in the context of providing insurance to employee benefit plans and to persons who participate in such employee benefit plans. Plaintiffs seek to represent classes of employers that established employee benefit plans and persons who participated in such employee benefit plans. A motion for class certification has been filed. A motion to dismiss has not been fully decided. Plaintiffs in several other actions have voluntarily dismissed their claims. The Holding Company and/or subsidiaries are vigorously defending against the claims in these matters. In February 2006, the Company learned that the SEC commenced a formal investigation of New England Securities ("NES") in connection with the suitability of its sales of variable universal life insurance policies. The Company believes that others in the insurance industry are the subject of similar investigations by the SEC. NES is cooperating fully with the SEC. Other Litigation Roberts, et al. v. Tishman Speyer Properties, et al. (Sup. Ct., N.Y. County, filed January 22, 2007). This lawsuit was filed by a putative class of "market rate" tenants at Stuyvesant Town and Peter Cooper Village against parties including Metropolitan Tower Life Insurance Company and Metropolitan Insurance and Annuity Company. Metropolitan Life was initially a named defendant but the action has been discontinued as to Metropolitan Life since it did not own the properties during the time period in question. This group of tenants claims that the MetLife entities, and since the sale of the properties, Tishman Speyer as current owner, improperly charged market rents when only lower regulated rents were permitted. The allegations are based on the impact of so- called J-51 tax abatements. The lawsuit seeks declaratory relief and damages. A second purported class action, originally titled Carroll v. Tishman Speyer Properties, et. al (Sup. Ct., N.Y. County, filed February 14, 2007), was filed against the same defendants alleging similar claims as in the Roberts case, and in addition includes a claim of unjust enrichment and purported violation of New York General Business Law F-76 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Section 349. The Carroll action was consolidated into the Roberts action, and the MetLife entities are vigorously defending against these claims. Brubaker, et al. v. Metropolitan Life Ins. Co., et al. (D.C. Cir, filed October 20, 2000). Plaintiffs, in this putative class action lawsuit, allege that they were denied certain ad hoc pension increases awarded to retirees under the Metropolitan Life retirement plan. The ad hoc pension increases were awarded only to retirees (i.e., individuals who were entitled to an immediate retirement benefit upon their termination of employment) and not available to individuals like these plaintiffs whose employment, or whose spouses' employment, had terminated before they became eligible for an immediate retirement benefit. The plaintiffs seek to represent a class consisting of former Metropolitan Life employees, or their surviving spouses, who are receiving deferred vested annuity payments under the retirement plan and who were allegedly eligible to receive the ad hoc pension increases. In September 2005, Metropolitan Life's motion for summary judgment was granted. Plaintiffs' motion for reconsideration was denied. Plaintiffs appealed to the United States Court of Appeals for the District of Columbia Circuit. The court heard oral argument on March 15, 2007. The American Dental Association, et al. v. MetLife Inc., et al. (S.D. Fla., filed May 19, 2003). The American Dental Association and three individual providers have sued the Holding Company, Metropolitan Life, and other non- affiliated insurance companies in a putative class action lawsuit. The plaintiffs purport to represent a nationwide class of in-network providers who allege that their claims are being wrongfully reduced by downcoding, bundling, and the improper use and programming of software. The complaint alleges federal racketeering and various state law theories of liability. The district court has granted in part and denied in part Metropolitan Life's and the Holding Company's motion to dismiss. Metropolitan Life and the Holding Company have filed another motion to dismiss. The court has issued a tag-along order, related to a medical managed care trial, which stays the lawsuit indefinitely. Thomas, et al. v. Metropolitan Life Ins. Co., et al. (W.D. Okla., filed January 31, 2007). A putative class action complaint was filed against Metropolitan Life, MetLife Securities, Inc. and MetLife Investment Advisors Company, LLC. Plaintiff asserts legal theories of violations of the federal securities laws and violations of state laws with respect to the sale of certain proprietary products (as opposed to non-proprietary products) by the Company's agency distribution group. Plaintiff seeks rescission, compensatory damages, interest, punitive damages and attorneys' fees and expenses. The Company intends to vigorously defend against the claims in this matter. Metropolitan Life also has been named as a defendant in a number of silicosis, welding and mixed dust cases in various states. The Company intends to vigorously defend against the claims in these matters. Summary Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed above and those otherwise provided for in the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses, except as noted above in connection with specific matters. In some of the matters referred to above, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's consolidated financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending F-77 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. INSOLVENCY ASSESSMENTS Most of the jurisdictions in which the Company is admitted to transact business require life insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed life insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments are as follows:
DECEMBER 31, ----------- 2006 2005 ---- ---- (IN MILLIONS) Other Assets: Premium tax offset for future undiscounted assessments..... $28 $28 Premium tax offsets currently available for paid assessments............................................. 5 6 --- --- $33 $34 === === Liability: Insolvency assessments..................................... $49 $48 === ===
Assessments levied against the Company were $1 million for both the years ended December 31, 2006 and 2005. For the year ended December 31, 2004, the assessment was $1 million less a refund of $2 million related to prior years assessments. IMPACT OF HURRICANES On August 29, 2005, Hurricane Katrina made landfall in the states of Louisiana, Mississippi and Alabama, causing catastrophic damage to these coastal regions. The Company's cumulative gross losses were $21 million at December 31, 2005. During the year ended December 31, 2005, the Company recognized total net losses, related to the catastrophe of $14 million, net of income tax and reinsurance recoverables and including reinstatement premiums and other reinsurance-related premium adjustments. There were no additional losses recognized for the year ended December 31, 2006. Additional hurricane-related losses may be recorded in future periods as claims are received from insureds and claims to reinsurers are processed. Reinsurance recoveries are dependent upon the continued creditworthiness of the reinsurers, which may be affected by their other reinsured losses in connection with Hurricanes Katrina and otherwise. In addition, lawsuits, including purported class actions, have been filed in Louisiana, Mississippi and Alabama challenging denial of claims for damages caused to property during Hurricane Katrina. The Company is a named party in some of these lawsuits. In addition, rulings in cases in which the Company is not a party may affect interpretation of its policies. The Company intends to vigorously defend these matters. However, any adverse rulings could result in an increase in the Company's hurricane-related claim exposure and losses. Based on information known by management, it does not believe that additional claim losses resulting from Hurricane Katrina will have a material adverse impact on the Company's consolidated financial statements. F-78 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) COMMITMENTS LEASES In accordance with industry practice, certain of the Company's income from lease agreements with retail tenants are contingent upon the level of the tenants' sales revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office space, data processing and other equipment. Future minimum rental and sublease income, and minimum gross rental payments relating to these lease agreements are as follows:
GROSS RENTAL SUBLEASE RENTAL INCOME INCOME PAYMENTS ------ -------- -------- (IN MILLIONS) 2007............................................... $326 $20 $ 177 2008............................................... $276 $18 $ 148 2009............................................... $224 $10 $ 158 2010............................................... $184 $ 5 $ 149 2011............................................... $155 $ 5 $ 124 Thereafter......................................... $564 $10 $1,180
COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded commitments were $2.4 billion and $2.0 billion at December 31, 2006 and 2005, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years. MORTGAGE LOAN COMMITMENTS The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.3 billion and $2.6 billion at December 31, 2006 and 2005, respectively. COMMITMENTS TO FUND BANK CREDIT FACILITIES AND BRIDGE LOANS The Company commits to lend funds under bank credit facilities and bridge loans. The amounts of these unfunded commitments were $1.7 billion and $323 million at December 31, 2006 and 2005, respectively. OTHER COMMITMENTS Metropolitan Life is a member of the Federal Home Loan Bank of New York (the "FHLB of NY") and holds $136 million of common stock of the FHLB of NY, which is included in equity securities on the Company's consolidated balance sheet. Metropolitan Life had no funding agreements with the FHLB of NY at December 31, 2006 or 2005. On December 12, 2005, RGA repurchased 1.6 million shares of its outstanding common stock at an aggregate price of $76 million under an accelerated share repurchase agreement with a major bank. The bank borrowed the stock sold to RGA from third parties and purchased the shares in the open market over the subsequent few months to return to the lenders. RGA would either pay or receive an amount based on the actual amount paid by the bank to purchase the shares. These repurchases resulted in an increase in the Company's ownership percentage of RGA to approximately 53% at December 31, 2005 from approximately 52% at December 31, 2004. In February 2006, the final purchase price was determined, resulting in a cash settlement F-79 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) substantially equal to the aggregate cost. RGA recorded the initial repurchase of shares as treasury stock and recorded the amount received as an adjustment to the cost of the treasury stock. At December 31, 2006, the Company's ownership was approximately 53% of RGA. GUARANTEES In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities, and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $800 million, with a cumulative maximum of $1.5 billion, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. During the year ended December 31, 2006, the Company did not record any additional liabilities for indemnities, guarantees and commitments. In the fourth quarter of 2006, the Company eliminated $4 million of a liability that was previously recorded with respect to indemnities provided in connection with a certain disposition. The Company had no liability for indemnities, guarantees and commitments at December 31, 2006. The Company's recorded liabilities at December 31, 2005 for indemnities, guarantees and commitments were $4 million. In connection with synthetically created investment transactions, the Company writes credit default swap obligations requiring payment of principal due in exchange for the referenced credit obligation, depending on the nature or occurrence of specified credit events for the referenced entities. In the event of a specified credit event, the Company's maximum amount at risk, assuming the value of the referenced credits becomes worthless, was $342 million at December 31, 2006. The credit default swaps expire at various times during the next ten years. 15. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Company sponsors and administers various qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees and sales representatives who meet specified eligibility requirements of the sponsor and its participating affiliates. Participating affiliates have no legal obligation for benefits under the pension plans; however, participating affiliates are allocated a proportionate share of net expense related to the plans. Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional F-80 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) accounts which credit participants with benefits equal to a percentage of eligible pay as well as earnings credits, determined annually based upon the average annual rate of interest on 30-year U.S. Treasury securities, for each account balance. As of December 31, 2006, virtually all of the plans' benefit obligations have been calculated using the traditional formula. The non- qualified pension plans provide supplemental benefits, in excess of amounts permitted by governmental agencies, to certain executive level employees. The Company's proportionate share of net pension expense related to the pension plans was $161 million or 90% for the year ended December 31, 2006. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. The other postretirement plans cover eligible employees of the sponsor and its participating affiliates who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company or its participating affiliates, may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total cost of postretirement medical benefits. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. Participating affiliates have no legal obligation for benefits under these other postretirement plans; however, participating affiliates are allocated a proportionate share of net expense related to the postretirement plan. The Company's proportionate share of net expense related to the postretirement plan was $49 million or 86% for the year ended December 31, 2006. Other postretirement plans are sponsored and administered by subsidiaries of the Company. As described more fully in Note 1, effective December 31, 2006, the Company adopted SFAS 158. The adoption of SFAS 158 required the recognition of the funded status of defined benefit pension and other postretirement plans and eliminated the additional minimum pension liability provision of SFAS 87. The Company's additional minimum pension liability was $78 million, and the intangible asset was $12 million, at December 31, 2005. The excess of the additional minimum pension liability over the intangible asset of $66 million, $41 million, net of income tax, was recorded as a reduction of accumulated other comprehensive income. At December 31, 2006, immediately prior to adopting SFAS 158, the Company's additional minimum pension liability was $92 million. The additional minimum pension liability of $59 million, net of income tax of $33 million, was recorded as a reduction of accumulated other comprehensive income. The change in the additional minimum pension liability of $18 million, net of income tax, was reflected as a component of comprehensive income for the year ended December 31, 2006. Upon adoption of SFAS 158, the Company eliminated the additional minimum pension liability and recognized as an adjustment to accumulated other comprehensive income, net of income tax, those amounts of actuarial gains and losses, prior service costs and credits, and the remaining net transition asset or obligation that had not yet been included in net periodic benefit F-81 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) cost at the date of adoption. The following table summarizes the adjustments to the December 31, 2006 consolidated balance sheet as a result of recognizing the funded status of the defined benefit plans:
DECEMBER 31, 2006 ---------------------------------------------------- MINIMUM PRE PENSION ADOPTION OF POST SFAS 158 LIABILITY SFAS 158 SFAS 158 BALANCE SHEET CAPTION ADJUSTMENTS ADJUSTMENT ADJUSTMENTS ADJUSTMENTS --------------------- ----------- ---------- ----------- ----------- (IN MILLIONS) Other assets: Prepaid pension benefit cost..................................... $1,878 $ -- $ (999) $ 879 Other assets: Intangible asset............. $ 12 (12) -- $ -- Other liabilities: Accrued pension benefit cost..................................... $ (482) (14) (79) $ (575) Other liabilities: Accrued postretirement benefit cost............................. $ (696) -- (100) $ (796) ---- ------- Accumulated other comprehensive income (loss), before income tax: Defined benefit plans...................... $ (66) (26) (1,178) $(1,270) Minority interest.......................... -- 8 Deferred income tax........................ 8 421 ---- ------- Accumulated other comprehensive income (loss), net of income tax: Defined benefit plans...................... $ (41) $(18) $ (749) $ (808) ==== =======
A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. F-82 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OBLIGATIONS, FUNDED STATUS AND NET PERIODIC BENEFIT COSTS
DECEMBER 31, ---------------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS --------------- ---------------- 2006 2005 2006 2005 ------ ------ ------ ------- (IN MILLIONS) Change in benefit obligation: Benefit obligation at beginning of year......... $5,717 $5,481 $2,160 $ 1,962 Service cost.................................. 158 141 35 36 Interest cost................................. 330 315 116 120 Plan participants' contributions.............. -- -- 29 28 Acquisitions and divestitures................. (3) -- -- 1 Net acturial (gains) losses................... 15 90 (1) 168 Change in benefits............................ (2) -- (143) 3 Prescription drug subsidy..................... -- -- 10 -- Benefits paid................................. (319) (310) (151) (158) ------ ------ ------ ------- Benefit obligation at end of year............... 5,896 5,717 2,055 2,160 ------ ------ ------ ------- Change in plan assets: Fair value of plan assets at beginning of year.. 5,471 5,351 1,091 1,059 Actual return on plan assets.................. 715 397 103 61 Divestitures.................................. (3) -- -- -- Employer contribution......................... 385 33 1 1 Benefits paid................................. (319) (310) (26) (30) ------ ------ ------ ------- Fair value of plan assets at end of year........ 6,249 5,471 1,169 1,091 ------ ------ ------ ------- Funded status at end of year.................... $ 353 (246) $ (886) (1,069) ====== ====== Unrecognized net acturial (gains) losses...... 1,526 376 Unrecognized prior service cost (credit)...... 52 (123) ------ ------- Net prepaid (accrued) benefit cost recognized... $1,332 $ (816) ====== ======= Components of net amount recognized: Qualified plan prepaid pension cost........... $1,691 $ -- Non-qualified plan accrued pension cost....... (359) (816) ------ ------- Net prepaid (accrued) benefit cost recognized................................. 1,332 (816) Intangible assets............................. 12 -- Additional minimum pension liability.......... (78) -- ------ ------- Net amount recognized.................... $1,266 $ (816) ====== ======= Amounts recognized in the consolidated balance sheet consist of: Other assets.................................. $ 935 $1,703 $ -- $ -- Other liabilities............................. (582) (437) (886) (816) ------ ------ ------ ------- Net amount recognized.................... $ 353 $1,266 $ (886) $ (816) ====== ====== ====== ======= Accumulated other comprehensive (income) loss: Net actuarial (gains) losses.................. $1,126 $ -- $ 328 $ -- Prior service cost (credit)................... 39 -- (230) -- Additional minimum pension liability.......... -- 66 -- -- ------ ------ ------ ------- Accumulated other comprehensive (income) loss:.................................... $1,165 $ 66 $ 98 $ -- ====== ====== ====== =======
F-83 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The aggregate projected benefit obligation and aggregate fair value of plan assets for the pension plans were as follows:
DECEMBER 31, ------------------------------------------------- NON-QUALIFIED QUALIFIED PLAN PLAN TOTAL --------------- ------------- --------------- 2006 2005 2006 2005 2006 2005 ------ ------ ----- ----- ------ ------ (IN MILLIONS) Aggregate fair value of plan assets (principally Company contracts)...................... $6,249 $5,471 $ -- $ -- $6,249 $5,471 Aggregate projected benefit obligation...................... 5,318 5,209 578 508 5,896 5,717 ------ ------ ----- ----- ------ ------ Over (under) funded............... $ 931 $ 262 $(578) $(508) $ 353 $ (246) ====== ====== ===== ===== ====== ======
The accumulated benefit obligation for all defined benefit pension plans was $5,457 million and $5,308 million at December 31, 2006 and 2005, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:
DECEMBER 31, ----------- 2006 2005 ---- ---- (IN MILLIONS) Projected benefit obligation................................ $578 $530 Accumulated benefit obligation.............................. $497 $442 Fair value of plan assets................................... $ -- $ 16
Information for pension and other postretirement plans with a projected benefit obligation in excess of plan assets is as follows:
DECEMBER 31, ----------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS ----------- --------------- 2006 2005 2006 2005 ---- ---- ------ ------ (IN MILLIONS) Projected benefit obligation.................... $603 $530 $2,055 $2,160 Fair value of plan assets....................... $ 22 $ 16 $1,169 $1,091
The components of net periodic benefit cost recognized in net income were as follows:
YEARS ENDED DECEMBER 31, ------------------------------------------ OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------- ------------------ 2006 2005 2004 2006 2005 2004 ----- ----- ----- ---- ---- ---- (IN MILLIONS) Service cost......................... $ 158 $ 141 $ 128 $ 35 $ 36 $ 31 Interest cost........................ 330 315 308 116 120 118 Expected return on plan assets....... (448) (443) (425) (79) (78) (77) Amortization of net acturial (gains) losses............................. 128 116 102 22 14 7 Amortization of prior service cost (credit)........................... 10 16 16 (37) (18) (19) ----- ----- ----- ---- ---- ---- Net periodic benefit cost............ $ 178 $ 145 $ 129 $ 57 $ 74 $ 60 ===== ===== ===== ==== ==== ====
F-84 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The estimated net actuarial losses and prior service cost for the pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year are $54 million and $12 million, respectively. The estimated net actuarial losses and prior service credit for the other postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year are $14 million and $36 million, respectively. As discussed more fully in Note 1, the Company adopted the guidance in FSP 106-2 to account for future subsidies to be received under the Prescription Drug Act. The Company began receiving these subsidies during 2006. The APBO was remeasured effective July 1, 2004 in order to determine the effect of the expected subsidies on net periodic other postretirement benefit cost. As a result, the APBO was reduced by $213 million at July 1, 2004. A summary of the reduction to the APBO and related reduction to the components of net periodic other postretirement benefit cost is as follows:
DECEMBER 31, ------------------ 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Cumulative reduction in benefit obligation: Beginning of year.................................... $298 $230 $ -- Service cost......................................... 6 6 3 Interest cost........................................ 19 16 6 Net actuarial gains (losses)......................... 15 46 221 Prescription drug subsidy............................ (10) -- -- ---- ---- ---- End of year....................................... $328 $298 $230 ==== ==== ====
YEARS ENDED DECEMBER 31, ------------------ 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Reduction in net periodic benefit cost: Service cost........................................... $ 6 $ 6 $ 3 Interest cost.......................................... 19 16 6 Amortization of net actuarial gains (losses)........... 30 23 8 --- --- --- Total reduction in net periodic benefit cost........ $55 $45 $17 === === ===
The Company received subsidies of $8 million for prescription claims processed from January 1, 2006 through September 30, 2006 and expects to receive an additional $2 million in 2007 for prescription claims processed October 1, 2006 through December 31, 2006. ASSUMPTIONS Assumptions used in determining benefit obligations were as follows:
DECEMBER 31, ----------------------------- OTHER PENSION POSTRETIRE- BENEFITS MENT BENEFITS ------------- ------------- 2006 2005 2006 2005 ----- ----- ----- ----- Weighted average discount rate................ 6.00% 5.80% 6.00% 5.79% Rate of compensation increase................. 4%-8% 4%-8% N/A N/A
F-85 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Assumptions used in determining net periodic benefit cost were as follows:
DECEMBER 31, --------------------------------------------- OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------- --------------------- 2006 2005 2004 2006 2005 2004 ----- ----- ----- ----- ----- ----- Weighted average discount rate... 5.80% 5.85% 6.10% 5.79% 5.83% 6.74% Weighted average expected rate of return on plan assets.......... 8.25% 8.49% 8.49% 7.42% 7.50% 7.91% Rate of compensation increase.... 4%-8% 4%-8% 4%-8% N/A N/A N/A
The discount rate is based on the yield of a hypothetical portfolio constructed of bonds rated AA or better by Moody's Investors Services available on the valuation date measured on a yield to worst basis, which would provide the necessary future cash flows to pay the aggregate projected benefit obligation when due. The expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long- term historical returns of the plan assets by sector, adjusted for the Company's long-term expectations on the performance of the markets. While the precise expected return derived using this approach will fluctuate from year to year, the Company's policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. The weighted average expected return on plan assets for use in that plan's valuation in 2007 is currently anticipated to be 8.25% for pension benefits and postretirement medical benefits and 6.25% for postretirement life benefits. The assumed healthcare cost trend rates used in measuring the APBO and net periodic benefit cost were as follows:
DECEMBER 31, -------------------------------------------------- 2006 2005 ----------------------- ------------------------ Pre-Medicare eligible claims...... 9.0% down to 5% in 2014 9.5% down to 5% in 2014 Medicare eligible claims.......... 11% down to 5% in 2018 11.5% down to 5% in 2018
Assumed healthcare cost trend rates may have a significant effect on the amounts reported for healthcare plans. A one-percentage point change in assumed healthcare cost trend rates would have the following effects:
ONE PERCENT ONE PERCENT INCREASE DECREASE ----------- ----------- (IN MILLIONS) Effect on total of service and interest cost components.......................................... $ 14 $ (12) Effect of accumulated postretirement benefit obligation.......................................... $176 $(147)
PLAN ASSETS The Company has issued group annuity and life insurance contracts supporting approximately 98% of all pension and other postretirement benefit plans assets. The account values of the group annuity and life insurance contracts issued by the Company and held as assets of the pension and other postretirement benefit plans were $7,321 million and $6,471 million as of December 31, 2006 and 2005, respectively. The majority of such account values are held in separate accounts established by the Company. Total revenue from these contracts recognized in the consolidated statements of income was $29 million, $28 million and $28 million for the years ended December 31, 2006, 2005 and 2004, respectively, and includes policy charges, net investment income from investments backing the contracts and F-86 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) administrative fees. Total investment income, including realized and unrealized gains and losses, credited to the account balances was $818 million, $460 million and $519 million for the years ended December 31, 2006, 2005 and 2004, respectively. The terms of these contracts are consistent in all material respects with those the Company offers to unaffiliated parties that are similarly situated. The weighted-average allocations of pension plan and other postretirement benefit plan assets were as follows:
DECEMBER 31, ------------------------------- OTHER POSTRETIRE- PENSION MENT BENEFITS BENEFITS ------------- ------------- 2006 2005 2006 2005 ---- ---- ---- ---- ASSET CATEGORY Equity securities................................. 42% 47% 37% 42% Fixed maturity securities......................... 42% 37% 57% 53% Other (Real Estate and Alternative Investments)... 16% 16% 6% 5% --- --- --- --- Total........................................... 100% 100% 100% 100% === === === ===
The weighted-average target allocations of pension plan and other postretirement benefit plan assets for 2007 is as follows:
OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS -------- -------------- ASSET CATEGORY Equity securities.................................... 30%-65% 30%-45% Fixed maturity securities............................ 20%-70% 45%-70% Other (Real Estate and Alternative Investments)...... 0%-25% 0%-10%
Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through adequate asset diversification. Adjustments are made to target allocations based on an assessment of the impact of economic factors and market conditions. CASH FLOWS It is the Company's practice to make contributions to the qualified pension plans to comply with minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, and/or to maintain a fully funded ABO. In accordance with such practice, no contributions were required for the years ended December 31, 2006 or 2005. No contributions will be required for 2007. The Company elected to make discretionary contributions to the qualified pension plans of $335 million during the year ended December 31, 2006. No contributions were made during the year ended December 31, 2005. The Company expects to make additional discretionary contributions of $145 million in 2007. Benefit payments due under the non-qualified pension plans are funded from the Company's general assets as they become due under the provision of the plans. These payments totaled $35 million and $33 million for the years ended December 31, 2006 and 2005, respectively. These payments are expected to be at approximately the same level in 2007. Other postretirement benefits represent a non-vested, non-guaranteed obligation of the Company and current regulations do not require specific funding levels for these benefits. While the Company has partially funded such plans in advance, it has been the Company's practice to use its general assets to pay claims as they F-87 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) come due in lieu of utilizing plan assets. These payments totaled $151 million and $158 million for the years ended December 31, 2006 and 2005, respectively. The Company expects to make contributions up to $131 million, based upon expected gross benefit payments, towards the other postretirement plan obligations in 2007. As noted previously, the Company expects to receive subsidies under the Prescription Drug Act to partially offset such payments. Gross benefit payments for the next ten years, which reflect expected future service where appropriate, and gross subsidies to be received under the Prescription Drug Act are expected to be as follows:
OTHER POSTRETIREMENT BENEFITS -------------------------------- PENSION PRESCRIPTION DRUG BENEFITS GROSS SUBSIDIES NET -------- ----- ----------------- ---- (IN MILLIONS) 2007....................................... $ 335 $131 $(14) $117 2008....................................... $ 346 $135 $(14) $121 2009....................................... $ 364 $141 $(15) $126 2010....................................... $ 370 $146 $(16) $130 2011....................................... $ 383 $152 $(16) $136 2012-2016.................................. $2,136 $824 $(98) $726
SAVINGS AND INVESTMENT PLANS The Company sponsors savings and investment plans for substantially all employees under which a portion of employee contributions are matched. The Company contributed $73 million, $70 million and $60 million for the years ended December 31, 2006, 2005 and 2004, respectively. 16. EQUITY CAPITAL CONTRIBUTIONS On October 20, 2006, the Holding Company contributed $17 million to the Company in connection with the sale and merger of CLIC. See Note 2. On September 30, 2006, the Holding Company contributed $377 million to the Company in the form of intangible assets. See Note 2. On May 1, 2006, General American, an indirect insurance subsidiary of the Company, sold its wholly-owned insurance subsidiary, Paragon Life Insurance Company ("Paragon"), to its ultimate parent, the Holding Company. Immediately following the sale, the Holding Company merged Paragon, an affiliate of the Company, with and into the Company. In connection with the transaction, the Holding Company contributed $76 million to the Company. PARENT'S INTEREST IN PREFERRED STOCK OF A SUBSIDIARY On December 21, 2004, the Holding Company contributed the 93,402 Preferred Shares to a subsidiary of the Company. The subsidiary of the Company retired the shares and recorded a contribution of capital of $93 million from MetLife, Inc. F-88 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) DIVIDEND RESTRICTIONS The table below sets forth the dividends permitted to be paid to the Holding Company without insurance regulatory approval and dividends paid to the Holding Company:
2005 2006 2007 ----------------------- ----------------------- ------------- PERMITTED W/O PERMITTED W/O PERMITTED W/O COMPANY APPROVAL(1) PAID(2) APPROVAL(1) PAID(2) APPROVAL(3) ------- ------------- ------- ------------- ------- ------------- (IN MILLIONS) Metropolitan Life............ $880 $3,200 $863 $863 $919
-------- (1) Reflects dividend amounts paid during the relevant year without prior regulatory approval. (2) Includes amounts paid including those requiring regulatory approval. (3) Reflects dividend amounts that may be paid during 2007 without prior regulatory approval. If paid before a specified date during 2007, some or all of such dividend amounts may require regulatory approval. Under New York State Insurance Law, Metropolitan Life is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to the Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life will be permitted to pay a cash dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent does not disapprove the distribution within 30 days of its filing. Under New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its shareholders. The New York State Department of Insurance (the "Department") has established informal guidelines for such determinations. The guidelines, among other things, focus on the insurer's overall financial condition and profitability under statutory accounting practices. Stockholder dividends or other distributions proposed to be paid by NELICO to its parent, Metropolitan Life, must be approved by the Massachusetts Commissioner of Insurance (the "Commissioner") if such dividends or distributions, together with other dividends or distributions made within the preceding calendar year, exceed the greater of (i) 10% of NELICO's statutory surplus as of the immediately preceding calendar year or (ii) NELICO's statutory net gain from operations for the immediately preceding calendar year. In addition, dividends cannot be paid from a source other than statutory unassigned funds surplus without prior approval of the Commissioner. Since NELICO's statutory unassigned funds surplus is less than zero, NELICO cannot pay any dividends without prior approval of the Commissioner. NELICO paid no common stockholder dividends for the years ended December 31, 2006, 2005 and 2004. For the years ended December 31, 2006, 2005 and 2004, Metropolitan Life received dividends from subsidiaries of $34 million, $77 million and $14 million, respectively. STOCK-BASED COMPENSATION PLANS Overview As described more fully in Note 1, effective January 1, 2006, in conjunction with the Holding Company, the Company adopted SFAS 123(r), using the modified prospective transition method. The adoption of SFAS 123(r) did not have a significant impact on the Company's consolidated financial position or consolidated results of operations. The stock-based compensation expense recognized by the Company is related to awards under incentive plans of the Holding Company, as described herein. F-89 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Description of Plans The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the "Stock Incentive Plan"), authorized the granting of awards in the form of options to buy shares of Holding Company common stock ("Stock Options") that either qualify as incentive Stock Options under Section 422A of the Internal Revenue Code or are non-qualified. Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan, as amended (the "2005 Stock Plan"), awards granted may be in the form of Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, Performance Shares or Performance Share Units, Cash-Based Awards, and Stock-Based Awards (each as defined in the 2005 Stock Plan). The Stock Incentive Plan, 2005 Stock Plan, and the LTPCP, as described below, are hereinafter collectively referred to as the "Incentive Plans." The aggregate number of shares of Holding Company common stock reserved for issuance under the 2005 Stock Plan and the LTPCP is 68,000,000, plus those shares available but not utilized under the Stock Incentive Plan and those shares utilized under the Stock Incentive Plan that are recovered due to forfeiture of Stock Options. Additional shares of Holding Company common stock carried forward from the Stock Incentive Plan and available for issuance under the 2005 Stock Plan were 12,423,881 as of December 31, 2006. Each share issued under the 2005 Stock Plan in connection with a Stock Option or Stock Appreciation Right reduces the number of shares remaining for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than Stock Options or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. As of December 31, 2006, the aggregate number of shares of Holding Company common stock remaining available for issuance pursuant to the 2005 Stock Plan was 66,712,241. Stock Option exercises and other stock-based awards to employees settled in shares are satisfied through the issuance of shares held in treasury by the Holding Company. The Company does not issue any of its own shares in satisfaction of stock-based compensation awards to employees. The Holding Company allocated 90%, 92% and 91% of stock-based compensation to the Company for the years ended December 31, 2006, 2005 and 2004, respectively. This allocation represents substantially all stock-based compensation recognized in the Company's consolidated results of operations. Accordingly, the discussion herein addresses the Holding Company's practices for recognizing expense for awards under the Incentive Plans. Underlying awards are expressed in their entirety with related expense amounts representing the resulting allocation to the Company. Compensation expense related to awards under the Incentive Plans is recognized based on the number of awards expected to vest, which represents the awards granted less expected forfeitures over the life of the award, as estimated at the date of grant. Unless a material deviation from the assumed rate is observed during the term in which the awards are expensed, any adjustment necessary to reflect differences in actual experience is recognized in the period the award becomes payable or exercisable. Compensation expense of $130 million, $112 million and $82 million, and income tax benefits of $46 million, $39 million and $29 million, related to the Incentive Plans was allocated to the Company for the years ended December 31, 2006, 2005 and 2004, respectively. Compensation expense is principally related to the issuance of Stock Options, Performance Shares and LTPCP arrangements. Stock Options All Stock Options granted had an exercise price equal to the closing price of the Holding Company's stock as reported on the New York Stock Exchange on the date of grant, and have a maximum term of ten years. Certain Stock Options granted under the Stock Incentive Plan and the 2005 Stock Plan have or will become exercisable over a three year period commencing with the date of grant, while other Stock Options have or will become exercisable three years after the date of grant. F-90 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) A summary of the activity related to Stock Options for the year ended December 31, 2006 is presented below. The aggregate intrinsic value was computed using the Holding Company's closing share price on December 29, 2006 of $59.01 and December 30, 2005 of $49.00, as applicable.
WEIGHTED WEIGHTED AVERAGE NUMBER OF AVERAGE REMAINING SHARES UNDER EXERCISE PRICE CONTRACTUAL AGGREGATE OPTION PER SHARE TERM INTRINSIC VALUE ------------ -------------- ----------- --------------- (YEARS) (IN MILLIONS) Outstanding at January 1, ........ 24,304,315 $31.83 6.69 $417 ====== ==== ==== Granted......................... 3,758,955 $50.21 Exercised....................... (2,754,390) $30.00 Cancelled/Expired............... (153,494) $32.04 Forfeited....................... (341,403) $37.14 ---------- Outstanding at December 31, ...... 24,813,983 $34.69 6.58 $604 ========== ====== ==== ==== Aggregate number of stock options expected to vest at December 31, 2006............................ 24,312,689 $34.49 6.54 $596 ========== ====== ==== ==== Exercisable, December 31, 2006.... 16,957,320 $30.66 5.72 $481 ========== ====== ==== ====
Prior to January 1, 2005, the Black-Scholes model was used to determine the fair value of Stock Options granted and recognized in the financial statements or as reported in the pro forma disclosure which follows. The fair value of Stock Options issued on or after January 1, 2005 was estimated on the date of grant using a binomial lattice model. The Holding Company made this change because lattice models produce more accurate option values due to the ability to incorporate assumptions about grantee exercise behavior resulting from changes in the price of the underlying shares. In addition, lattice models allow for changes in critical assumptions over the life of the option in comparison to closed-form models like Black-Scholes, which require single-value assumptions at the time of grant. The Holding Company used daily historical volatility since the inception of trading when calculating Stock Option values using the Black-Scholes model. In conjunction with the change to the binomial lattice model, the Holding Company began estimating expected future volatility based upon an analysis of historical prices of the Holding Company's common stock and call options on that common stock traded on the open market. The Holding Company uses a weighted-average of the implied volatility for publicly traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of the Holding Company's common stock. The Holding Company chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the underlying shares rather than on daily price movements. The risk-free rate is based on observed interest rates for instruments with maturities similar to the expected term of the Stock Options. Whereas the Black- Scholes model requires a single spot rate for instruments with a term matching the expected life of the option at the valuation date, the binomial lattice model allows for the use of different rates for each year over the contractual term of the option. The table below presents the full range of imputed forward rates for U.S. Treasury Strips that was used in the binomial lattice model over the contractual term of all Stock Options granted in the period. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the valuation date and held constant over the life of the Stock Option. F-91 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Use of the Black-Scholes model requires an input of the expected life of the Stock Options, or the average number of years before Stock Options will be exercised or expired. The Holding Company estimated expected life using the historical average years to exercise or cancellation and average remaining years outstanding for vested Stock Options. Alternatively, the binomial model used by the Holding Company incorporates the contractual term of the Stock Options and then considers expected exercise behavior and a post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination of employment, to derive an expected life. The post-vesting termination rate is determined from actual historical exercise and expiration activity under the Incentive Plans. Exercise behavior in the binomial lattice model used by the Holding Company is expressed using an exercise multiple, which reflects the ratio of exercise price to the strike price of Stock Options granted at which holders of the Stock Options are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The following weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, were used to determine the fair value of Stock Options issued during the:
YEARS ENDED DECEMBER 31, ---------------------------------- 2006 2005 2004 ----------- ----------- ------ Dividend yield.............................. 1.04% 1.19% 0.70% Risk-free rate of return.................... 4.17%-4.96% 3.34%-5.41% 3.69% Expected volatility......................... 22.00% 23.24% 34.85% Exercise multiple........................... 1.52 1.48 N/A Post-vesting termination rate............... 4.09% 5.19% N/A Contractual term (years).................... 10 10 10 Expected Life (years)....................... 6 6 6 Weighted average exercise price of stock options granted........................... $50.21 $38.70 $35.28 Weighted average fair value of stock options granted................................... $13.84 $10.09 $13.25
Compensation expense related to Stock Option awards expected to vest and granted prior to January 1, 2006 is recognized ratably over the requisite service period, which equals the vesting term. Compensation expense related to Stock Option awards expected to vest and granted on or after January 1, 2006 is recognized ratably over the requisite service period or the period to retirement eligibility, if shorter. Compensation expense of $51 million, $47 million and $37 million related to Stock Options was allocated to the Company for the years ended December 31, 2006, 2005 and 2004, respectively. Had compensation expense for grants awarded prior to January 1, 2003 been determined based on the fair value at the date of grant rather than the intrinsic value method, the Company's earnings would have been reduced to the following pro forma amounts for the following:
YEARS ENDED DECEMBER 31, --------------- 2005 2004 ------ ------ (IN MILLIONS) Net income................................................ $3,253 $2,239 Add: Stock option-based employee compensation expense included in reported net income, net of income tax..... 30 24 Deduct: Total stock option-based employee compensation determined under fair value based method for all awards, net of income tax............................... (32) (42) ------ ------ Pro forma net income...................................... $3,251 $2,221 ====== ======
F-92 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) As of December 31, 2006, the Holding Company had $41 million of total unrecognized compensation costs related to Stock Options. It is expected that these costs will be recognized over a weighted average period of 1.67 years. The Company's allocated portion of Stock Option expense is 91%. This allocated percentage of Stock Option expense is not expected to significantly change. Performance Shares Beginning in 2005, the Holding Company awarded certain members of management Performance Shares under (and as defined in) the 2005 Stock Plan. Participants are awarded an initial target number of Performance Shares with the final number of Performance Shares payable being determined by the product of the initial target multiplied by a factor of 0.0 to 2.0. The factor applied is based on measurements of the Holding Company's performance with respect to: (i) the change in annual net operating earnings per share, as defined; and (ii) the proportionate total shareholder return, as defined, with reference to the three- year performance period relative to other companies in the S&P Insurance Index with reference to the same three-year period. Performance Share awards will normally vest in their entirety at the end of the three-year performance period (subject to certain contingencies) and will be payable entirely in shares of the Holding Company's common stock. The following is a summary of Performance Share activity for the year ended December 31, 2006:
WEIGHTED AVERAGE PERFORMANCE GRANT DATE SHARES FAIR VALUE ----------- ---------- Outstanding at January 1, 2006........................ 1,029,700 $36.87 Granted............................................. 884,875 $48.43 Forfeited........................................... (65,000) $41.37 --------- Outstanding at December 31, 2006...................... 1,849,575 $42.24 ========= Performance Shares expected to vest at December 31, 2006................................................ 1,820,742 $42.16 =========
Performance Share amounts above represent aggregate initial target awards and do not reflect potential increases or decreases resulting from the final performance factor to be determined at the end of the respective performance period. None of the Performance Shares vested during the year ended December 31, 2006. Performance Share awards are accounted for as equity awards but are not credited with dividend-equivalents for actual dividends paid on the Holding Company's common stock during the performance period. Accordingly, the fair value of Performance Shares is based upon the closing price of the Holding Company's common stock on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. Compensation expense related to initial Performance Shares granted prior to January 1, 2006 and expected to vest is recognized ratably during the performance period. Compensation expense related to initial Performance Shares granted on or after January 1, 2006 and expected to vest is recognized ratably over the performance period or the period to retirement eligibility, if shorter. Performance Shares expected to vest and the related compensation expenses may be further adjusted by the performance factor most likely to be achieved, as estimated by management, at the end of the performance period. Compensation expense of $67 million and $22 million, related to Performance Shares was allocated to the Company for the years ended December 31, 2006 and 2005, respectively. As of December 31, 2006, the Holding Company had $59 million of total unrecognized compensation costs related to Performance Share awards. It is expected that these costs will be recognized over a weighted average F-93 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) period of 1.59 years. The Company's allocated portion of Performance Share expense was 90%. This allocated percentage of Performance Share expense is not expected to significantly change. Long-Term Performance Compensation Plan Prior to January 1, 2005, the Holding Company granted stock-based compensation to certain members of management under the LTPCP. Each participant was assigned a target compensation amount (an "Opportunity Award") at the inception of the performance period with the final compensation amount determined based on the total shareholder return on the Holding Company's common stock over the three-year performance period, subject to limited further adjustment approved by the Holding Company's Board of Directors. Payments on the Opportunity Awards are normally payable in their entirety (subject to certain contingencies) at the end of the three-year performance period, and may be paid in whole or in part with shares of the Holding Company's common stock, as approved by the Holding Company's Board of Directors. There were no new grants under the LTPCP during the years ended December 31, 2006 and 2005. A portion of each Opportunity Award under the LTPCP is expected to be settled in shares of the Holding Company's common stock while the remainder will be settled in cash. The portion of the Opportunity Award expected to be settled in shares of the Holding Company's common stock is accounted for as an equity award with the fair value of the award determined based upon the closing price of the Holding Company's common stock on the date of grant. The compensation expense associated with the equity award, based upon the grant date fair value, is recognized into expense ratably over the respective three-year performance period. The portion of the Opportunity Award expected to be settled in cash is accounted for as a liability and is remeasured using the closing price of the Holding Company's common stock on the final day of each subsequent reporting period during the three-year performance period. Compensation expense of $12 million, $43 million and $45 million, related to LTPCP Opportunity Awards was allocated to the Company the years ended December 31, 2006, 2005 and 2004, respectively. The Holding Company had LTPCP Opportunity Awards with an aggregate fair value of $41 million outstanding at December 31, 2006, all of which has been recognized. The Company's allocated portion of LTPCP expense is 90%. This allocated percentage of LTPCP expense is not expected to significantly change. STATUTORY EQUITY AND INCOME Each insurance company's state of domicile imposes minimum risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. Each of the Company's U.S. insurance subsidiaries exceeded the minimum RBC requirements for all periods presented herein. The NAIC adopted the Codification of Statutory Accounting Principles ("Codification") in 2001. Codification was intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by the various state insurance departments may impact the effect of Codification on the statutory capital and surplus of Metropolitan Life and its insurance subsidiaries. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a different basis. F-94 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Statutory net income of Metropolitan Life, a New York domiciled insurer, was $1.0 billion, $2.2 billion and $2.6 billion for the years ended December 31, 2006, 2005 and 2004, respectively. Statutory capital and surplus, as filed with the Department, was $9.2 billion and $8.8 billion at December 31, 2006 and 2005, respectively. Due to the mergers of Paragon and CLIC with Metropolitan Life, the 2005 statutory net income and statutory capital and surplus balances were adjusted. OTHER COMPREHENSIVE INCOME (LOSS) The following table sets forth the reclassification adjustments required for the years ended December 31, 2006, 2005 and 2004 in other comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other comprehensive income (loss) in the current or prior year:
YEARS ENDED DECEMBER 31, ----------------------- 2006 2005 2004 ----- ------- ----- (IN MILLIONS) Holding gains (losses) on investments arising during the year.......................................... $(926) $(2,611) $ 795 Income tax effect of holding gains (losses)......... 324 984 (281) Reclassification adjustments: Recognized holding (gains) losses included in current year income............................ 403 241 (511) Amortization of premiums and accretion of discounts associated with investments.......... (443) (186) (3) Income tax effect................................. 14 (21) 185 Allocation of holding losses on investments relating to other policyholder amounts..................... 792 1,580 (284) Income tax effect of allocation of holding losses to other policyholder amounts.............................. (277) (596) 102 Unrealized investment gains of subsidiary at date of sale.............................................. -- 15 -- Deferred income tax on unrealized investment gains of subsidiary at date of sale................................... -- (5) -- ----- ------- ----- Net unrealized investment gains (losses)............ (113) (599) 3 ----- ------- ----- Foreign currency translation adjustments arising during the year................................... 7 (54) 79 Foreign currency translation adjustments of subsidiary at due date of sale................... -- 5 -- ----- ------- ----- Foreign currency translation adjustment............. 7 (49) 79 Minimum pension liability adjustment................ (18) 89 (2) ----- ------- ----- Other comprehensive income (loss)................... $(124) $ (559) $ 80 ===== ======= =====
F-95 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 17. OTHER EXPENSES Information on other expenses is as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2006 2005 2004 ------- ------- ------- (IN MILLIONS) Compensation..................................... $ 2,187 $ 2,284 $ 2,242 Commissions...................................... 1,701 1,334 1,782 Interest and debt issue cost..................... 332 245 183 Amortization of DAC and VOBA..................... 1,089 1,385 1,145 Capitalization of DAC............................ (1,677) (1,619) (1,817) Rent, net of sublease income..................... 201 227 216 Minority interest................................ 249 181 168 Insurance tax.................................... 527 417 343 Other............................................ 1,705 1,263 1,321 ------- ------- ------- Total other expenses........................... $ 6,314 $ 5,717 $ 5,583 ======= ======= =======
As discussed in Note 8, the Company recognized an expense related to the recapture of a reinsurance treaty by an affiliate for the year ended December 31, 2006. For the year ended December 31, 2005, the Company entered into a reinsurance agreement with an affiliate and it received a ceding commission which is included in the table above. 18. BUSINESS SEGMENT INFORMATION The Company is a leading provider of insurance and other financial services with operations throughout the United States and Canada. The Company's business is divided into three operating segments: Institutional, Individual and Reinsurance, as well as Corporate & Other. These segments are managed separately because they either provide different products and services, require different strategies or have different technology requirements. In connection with the Travelers acquisition by the Holding Company, management has utilized its economic capital model to evaluate the deployment of capital based upon the unique and specific nature of the risks inherent in the Company's existing and newly acquired businesses and has adjusted such allocations based upon this model. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in Company's businesses. As a part of the economic capital process, a portion of net investment income is credited to the segments based on the level of allocated equity. Institutional offers a broad range of group insurance and retirement & savings products and services, including group life insurance, non-medical health insurance, such as short and long-term disability, long-term care, and dental insurance, and other insurance products and services. Individual offers a wide variety of protection and asset accumulation products, including life insurance, annuities and mutual funds. Through the Company's majority-owned subsidiary, RGA, the Reinsurance segment provides reinsurance of life and annuity policies in North America and various international markets. Additionally, reinsurance of critical illness policies is provided in select international markets. Corporate & Other contains the excess capital not allocated to the business segments, various start-up entities and run-off entities, the Company's ancillary international operations consisting of the Company's Canadian branch and a joint venture in China, as well as interest expense related to the majority of the Company's outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes the elimination of all intersegment amounts, which generally relate to F-96 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) intersegment loans, which bear interest rates commensurate with related borrowings, as well as intersegment transactions. Additionally, the Company's asset management business, including amounts reported as discontinued operations, is included in the results of operations for Corporate & Other. See Note 19 for disclosures regarding discontinued operations, including real estate. Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2006, 2005 and 2004. The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany sales, which are eliminated in consolidation. The Company allocates equity to each segment based upon the economic capital model that allows the Company to effectively manage its capital. The Company evaluates the performance of each segment based upon net income excluding net investment gains (losses), net of income tax, adjustments related to net investment gains (losses), net of income tax, the impact from the cumulative effect of changes in accounting, net of income tax and discontinued operations, other than discontinued real estate, net of income tax. The Company allocates certain non-recurring items, such as expenses associated with certain legal proceedings, to Corporate & Other.
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2006 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER TOTAL ------------------------------------ ------------- ---------- ----------- ----------- -------- (IN MILLIONS) STATEMENT OF INCOME: Premiums............................ $ 11,801 $ 4,129 $ 4,348 $ 6 $ 20,284 Universal life and investment-type product policy fees............... 750 1,433 -- -- 2,183 Net investment income............... 5,817 5,481 732 277 12,307 Other revenues...................... 677 114 66 33 890 Net investment gains (losses)....... (348) (394) 7 (92) (827) Policyholder benefits and claims.... 12,918 4,712 3,490 17 21,137 Interest credited to policyholder account balances.................. 1,944 1,049 254 -- 3,247 Policyholder dividends.............. -- 1,669 -- 2 1,671 Other expenses...................... 2,483 2,213 1,227 391 6,314 -------- -------- ------- ------- -------- Income (loss) from continuing operations before provision (benefit) for income tax......... 1,352 1,120 182 (186) 2,468 Provision (benefit) for income tax.. 446 400 64 (270) 640 Income (loss) from discontinued operations, net of income tax..... 41 18 -- 39 98 Cumulative effect of a change in accounting, net of income tax..... -- -- -- -- -- -------- -------- ------- ------- -------- Net income.......................... $ 947 $ 738 $ 118 $ 123 $ 1,926 ======== ======== ======= ======= ======== BALANCE SHEET: Total assets........................ $157,673 $150,617 $18,818 $12,950 $340,058 DAC and VOBA........................ $ 1,205 $ 7,677 $ 3,152 $ 9 $ 12,043 Separate account assets............. $ 44,546 $ 36,403 $ 16 $ -- $ 80,965 Policyholder liabilities............ $ 86,359 $ 86,473 $13,332 $ 325 $186,489 Separate account liabilities........ $ 44,546 $ 36,403 $ 16 $ -- $ 80,965
F-97 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2005 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER TOTAL ------------------------------------ ------------- ---------- ----------- ----------- -------- (IN MILLIONS) STATEMENT OF INCOME: Premiums............................ $ 11,271 $ 4,113 $ 3,869 $ 3 $ 19,256 Universal life and investment-type product policy fees............... 753 1,193 -- 2 1,948 Net investment income............... 5,232 5,555 606 336 11,729 Other revenues...................... 642 92 58 28 820 Net investment gains (losses)....... 76 83 22 (2) 179 Policyholder benefits and claims.... 12,448 4,823 3,206 (32) 20,445 Interest credited to policyholder account balances.................. 1,347 1,029 220 -- 2,596 Policyholder dividends.............. 1 1,644 -- 2 1,647 Other expenses...................... 2,199 2,173 991 354 5,717 -------- -------- ------- ------- -------- Income (loss) from continuing operations before provision (benefit) for income tax......... 1,979 1,367 138 43 3,527 Provision (benefit) for income tax.. 662 487 46 (97) 1,098 Income (loss) from discontinued operations, net of income tax..... 174 296 -- 354 824 Cumulative effect of a change in accounting, net of income tax..... -- -- -- -- -- -------- -------- ------- ------- -------- Net income.......................... $ 1,491 $ 1,176 $ 92 $ 494 $ 3,253 ======== ======== ======= ======= ======== BALANCE SHEET: Total assets........................ $139,680 $140,413 $16,049 $11,184 $307,326 DAC and VOBA........................ $ 1,098 $ 7,513 $ 2,815 $ 12 $ 11,438 Separate account assets............. $ 42,063 $ 31,075 $ 14 $ -- $ 73,152 Policyholder liabilities............ $ 78,011 $ 86,565 $11,751 $ 278 $176,605 Separate account liabilities........ $ 42,063 $ 31,075 $ 14 $ -- $ 73,152
F-98 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CORPORATE & FOR THE YEAR ENDED DECEMBER 31, 2004 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER TOTAL ------------------------------------ ------------- ---------- ----------- ----------- ------- (IN MILLIONS) STATEMENT OF INCOME: Premiums............................. $10,037 $4,046 $3,348 $ 6 $17,437 Universal life and investment-type product policy fees................ 710 1,299 -- -- 2,009 Net investment income................ 4,564 5,348 538 345 10,795 Other revenues....................... 654 131 56 21 862 Net investment gains (losses)........ 162 85 59 (24) 282 Policyholder benefits and claims..... 11,172 4,836 2,694 34 18,736 Interest credited to policyholder account balances................... 1,014 1,131 212 -- 2,357 Policyholder dividends............... -- 1,634 1 1 1,636 Other expenses....................... 1,972 2,348 957 306 5,583 ------- ------ ------ ----- ------- Income (loss) from continuing operations before provision (benefit) for income tax........... 1,969 960 137 7 3,073 Provision (benefit) for income tax... 671 312 46 (161) 868 Income (loss) from discontinued operations, net of income tax...... 28 25 -- 33 86 Cumulative effect of a change in accounting, net of income tax...... (59) 9 -- (2) (52) ------- ------ ------ ----- ------- Net income........................... $ 1,267 $ 682 $ 91 $ 199 $ 2,239 ======= ====== ====== ===== =======
Net investment income and net investment gains (losses) are based upon the actual results of each segment's specifically identifiable asset portfolio adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company's product pricing. Revenues derived from any customer did not exceed 10% of consolidated revenues for the years ended December 31, 2006, 2005 and 2004. Revenues from U.S. operations were $33.0 billion, $32.4 billion and $29.5 billion for the years ended December 31, 2006, 2005 and 2004, respectively, which represented 95%, 95% and 94%, respectively, of consolidated revenues. 19. DISCONTINUED OPERATIONS REAL ESTATE The Company actively manages its real estate portfolio with the objective of maximizing earnings through selective acquisitions and dispositions. Income related to real estate classified as held-for-sale or sold is presented in discontinued operations. These assets are carried at the lower of depreciated cost or fair value less expected disposition costs. F-99 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following information presents the components of income from discontinued real estate operations:
YEARS ENDED DECEMBER 31, --------------------- 2006 2005 2004 ---- ------ ----- (IN MILLIONS) Investment income.................................... $ 26 $ 134 $ 227 Investment expense................................... (15) (73) (139) Net investment gains................................. 91 961 27 ---- ------ ----- Total revenues..................................... 102 1,022 115 Provision for income tax............................. 36 366 39 ---- ------ ----- Income from discontinued operations, net of income tax............................................. $ 66 $ 656 $ 76 ==== ====== =====
There was no real estate classified as held-for-sale at December 31, 2006. The carrying value of real estate related to discontinued operations was $309 million at December 31, 2005. The following table presents the discontinued real estate operations by segment:
YEARS ENDED DECEMBER 31, ---------------------- 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Net investment income Institutional........................................ $ 6 $ 28 $37 Individual........................................... 4 20 30 Corporate & Other.................................... 1 13 21 --- ---- --- Total net investment income....................... $11 $ 61 $88 === ==== === Net investment gains (losses) Institutional........................................ $58 $242 $ 9 Individual........................................... 23 443 4 Corporate & Other.................................... 10 276 14 --- ---- --- Total net investment gains (losses)............... $91 $961 $27 === ==== ===
In the second quarter of 2005, the Company sold its One Madison Avenue property in Manhattan, New York for $918 million resulting in a gain, net of income tax, of $431 million. Net investment income on One Madison Avenue was $13 million and $44 million, respectively, for the years ended December 31, 2005 and 2004. OPERATIONS On September 29, 2005, the Company completed the sale of MetLife Indonesia to a third party, resulting in a gain upon disposal of $10 million, net of income tax. As a result of this sale, the Company recognized income (loss) from discontinued operations of $5 million and ($9) million, net of income tax, for the years ended December 31, 2005 and 2004, respectively. The Company reclassified the operations of MetLife Indonesia into discontinued operations for all years presented. F-100 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the amounts related to the operations of MetLife Indonesia that have been combined with the discontinued real estate operations in the consolidated statements of income:
YEARS ENDED DECEMBER 31, ------------------- 2005 2004 ------- ------- (IN MILLIONS) Revenues............................................... $ 5 $ 5 Expenses............................................... 10 14 --- --- Income before provision for income tax................. (5) (9) Provision for income tax............................... -- -- --- --- Loss from discontinued operations, net of income tax............................................... (5) (9) Net investment gain, net of income tax................. 10 -- --- --- Income (loss) from discontinued operations, net of income tax........................................ $ 5 $(9) === ===
On January 31, 2005, the Company completed the sale of SSRM to a third party for $328 million in cash and stock. As a result of the sale of SSRM, the Company recognized income from discontinued operations of $157 million, net of income tax, comprised of a realized gain of $165 million, net of income tax, and an operating expense related to a lease abandonment of $8 million, net of income tax. Under the terms of the sale agreement, MetLife will have an opportunity to receive additional payments based on, among other things, certain revenue retention and growth measures. The purchase price is also subject to reduction over five years, depending on retention of certain Company-related business. Also under the terms of such agreement, the Company had the opportunity to receive additional consideration for the retention of certain customers for a specific period in 2005. Upon finalization of the computation, the Company received payments of $30 million, net of income tax, in the second quarter of 2006 and $12 million, net of income tax, in the fourth quarter of 2005 due to the retention of these specific customer accounts. In the fourth quarter of 2006, the Company eliminated $4 million of a liability that was previously recorded with respect to the indemnities provided in connection with the sale of SSRM, resulting in a benefit to the Company of $2 million, net of income tax. The Company believes that future payments relating to these indemnities are not probable. The Company reported the operations of SSRM in discontinued operations. Additionally, the sale of SSRM resulted in the elimination of the Company's Asset Management segment. The Company's discontinued operations for the year ended December 31, 2005 included expenses of $6 million, net of income tax, related to the sale of SSRM. F-101 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The operations of SSRM include affiliated revenues of $5 million and $59 million for the years ended December 31, 2005 and 2004, respectively, related to asset management services provided by SSRM to the Company that have not been eliminated from discontinued operations as these transactions continued after the sale of SSRM. The following table presents the amounts related to operations of SSRM that have been combined with the discontinued real estate operations in the consolidated statements of income:
YEARS ENDED DECEMBER 31, ---------------------- 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Revenues.............................................. $-- $ 19 $328 Expenses.............................................. -- 38 296 --- ---- ---- Income before provision for income tax................ -- (19) 32 Provision for income tax.............................. -- (5) 13 --- ---- ---- Income (loss) from discontinued operations, net of income tax....................................... -- (14) 19 Net investment gain, net of income tax................ 32 177 -- --- ---- ---- Income from discontinued operations, net of income tax.............................................. $32 $163 $ 19 === ==== ====
F-102 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 20. FAIR VALUE INFORMATION The estimated fair value of financial instruments have been determined by using available market information and the valuation methodologies described below. Considerable judgment is often required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein may not necessarily be indicative of amounts that could be realized in a current market exchange. The use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Amounts related to the Company's financial instruments are as follows:
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- (IN MILLIONS) DECEMBER 31, 2006 Assets: Fixed maturity securities..................... $162,385 $162,385 Trading securities............................ $ 563 $ 563 Equity securities............................. $ 3,487 $ 3,487 Mortgage and consumer loans................... $ 35,939 $ 36,184 Policy loans.................................. $ 8,587 $ 8,587 Short-term investments........................ $ 1,244 $ 1,244 Cash and cash equivalents..................... $ 1,455 $ 1,455 Accrued investment income..................... $ 2,328 $ 2,328 Mortgage loan commitments..................... $3,290 $ -- $ -- Commitments to fund bank credit facilities and bridge loans............................... $1,662 $ -- $ -- Liabilities: Policyholder account balances................. $ 69,198 $ 66,965 Short-term debt............................... $ 833 $ 833 Long-term debt................................ $ 3,219 $ 3,364 Junior subordinated debt securities........... $ 399 $ 400 Shares subject to mandatory redemption........ $ 278 $ 357 Payables for collateral under securities loaned and other transactions.............. $ 32,119 $ 32,119
F-103 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- (IN MILLIONS) DECEMBER 31, 2005 Assets: Fixed maturity securities..................... $147,897 $147,897 Trading securities............................ $ 373 $ 373 Equity securities............................. $ 2,217 $ 2,217 Mortgage and consumer loans................... $ 33,094 $ 33,710 Policy loans.................................. $ 8,412 $ 8,412 Short-term investments........................ $ 883 $ 883 Cash and cash equivalents..................... $ 1,787 $ 1,787 Accrued investment income..................... $ 2,030 $ 2,030 Mortgage loan commitments..................... $2,603 $ -- $ (3) Commitments to bank credit facilities and bridge loans............................... $ 323 $ -- $ -- Liabilities: Policyholder account balances................. $ 61,700 $ 60,749 Short-term debt............................... $ 453 $ 453 Long-term debt................................ $ 2,562 $ 2,840 Junior subordinated debt securities........... $ 399 $ 406 Shares subject to mandatory redemption........ $ 278 $ 362 Payables for collateral under securities loaned and other transactions.............. $ 21,009 $ 21,009
The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows: FIXED MATURITY SECURITIES, TRADING SECURITIES AND EQUITY SECURITIES The fair values of publicly held fixed maturity securities and publicly held equity securities are based on quoted market prices or estimates from independent pricing services. However, in cases where quoted market prices are not available, such as for private fixed maturity securities, fair values are estimated using present value or valuation techniques. The determination of fair values is based on: (i) valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the circumstances. The fair value estimates based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Factors considered in estimating fair value include; coupon rate, maturity, estimated duration, call provisions, sinking fund requirements, credit rating, industry sector of the issuer, and quoted market prices of comparable securities. MORTGAGE AND CONSUMER LOANS, MORTGAGE LOAN COMMITMENTS, AND COMMITMENTS TO FUND BANK CREDIT FACILITIES AND BRIDGE LOANS Fair values for mortgage and consumer loans are estimated by discounting expected future cash flows, using current interest rates for similar loans with similar credit risk. For mortgage loan commitments and commitments to fund bank credit facilities and bridge loans, the estimated fair value is the net premium or discount of the commitments. F-104 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) POLICY LOANS The carrying values for policy loans approximate fair value. CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The carrying values for cash and cash equivalents and short-term investments approximated fair values due to the short-term maturities of these instruments. ACCRUED INVESTMENT INCOME The carrying value for accrued investment income approximates fair value. POLICYHOLDER ACCOUNT BALANCES The fair value of PABs which have final contractual maturities are estimated by discounting expected future cash flows based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the agreements being valued. The fair value of PABs without final contractual maturities are assumed to equal their current net surrender value. SHORT-TERM AND LONG-TERM DEBT, JUNIOR SUBORDINATED DEBT SECURITIES AND SHARES SUBJECT TO MANDATORY REDEMPTION The fair values of short-term and long-term debt, junior subordinated debt securities, and shares subject to mandatory redemption are determined by discounting expected future cash flows using risk rates currently available for debt with similar terms and remaining maturities. PAYABLES FOR COLLATERAL UNDER SECURITIES LOANED AND OTHER TRANSACTIONS The carrying value for payables for collateral under securities loaned and other transactions approximates fair value. DERIVATIVE FINANCIAL INSTRUMENTS The fair value of derivative financial instruments, including financial futures, financial forwards, interest rate, credit default and foreign currency swaps, foreign currency forwards, caps, floors, and options are based upon quotations obtained from dealers or other reliable sources. See Note 4 for derivative fair value disclosures. 21. RELATED PARTIES MetLife Group, Incorporated, a wholly owned subsidiary of the Holding Company, was formed as a personnel services company to provide personnel, as needed, to support the activities of the Company. Charges for these services were approximately $1.9 billion, $1.9 billion and $1.7 billion in 2006, 2005 and 2004, respectively. As of December 31, 2006 and 2005, the Company held $222 million and $103 million, respectively, of assets in the Metropolitan Money Market Pool, an affiliated partnership. These amounts are recorded as short-term investments on the consolidated balance sheets of the Company. Net investment income from these invested assets was $10 million, $6 million and $4 million for the years ended December 31, 2006, 2005 and 2004, respectively. The MetLife Intermediate Income Pool (the "MIIP") was formed as a New York general partnership consisting solely of U.S. domestic insurance companies owned directly or indirectly by MetLife, Inc. and F-105 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of MetLife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) is managed by Metropolitan Life. Each partner's investment in the MIIP represents such partner's pro rata ownership interest in the pool. The affiliated companies' ownership interests in the pooled money market securities held by the MIIP was $210 million and $198 million as of December 31, 2006 and 2005 respectively. Net investment income allocated to affiliates from the MIIP was $8 million, $7 million, and $9 million for the years ended December 31, 2006, 2005 and 2004, respectively. In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Assets transferred to and from affiliates are as follows:
YEARS ENDED DECEMBER 31, ------------------ 2006 2005 2004 ---- ---- ---- (IN MILLIONS) Fair market value of assets transferred to affiliates.. $ 97 $762 $382 Amortized cost of assets transferred to affiliates..... $ 99 $723 $367 Net investment gains (losses) recognized on transfers.. $ (2) $ 39 $ 15 Fair market value of assets transferred from affiliates........................................... $307 $691 $849
See Notes 3 and 8 for additional related party transactions. 22. SUBSEQUENT EVENTS On March 9, 2007, RGA issued $300 million of 10-year senior notes with a fixed rate of 5.625%, payable semiannually. RGA expects to use the net proceeds of the offering to repay $50 million of indebtedness under a bank credit facility and for general corporate purposes. F-106