0001193125-13-151244.txt : 20130411 0001193125-13-151244.hdr.sgml : 20130411 20130411172809 ACCESSION NUMBER: 0001193125-13-151244 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20130411 DATE AS OF CHANGE: 20130411 EFFECTIVENESS DATE: 20130429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-147508 FILM NUMBER: 13756975 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125788717 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06025 FILM NUMBER: 13756976 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125788717 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 0000858997 S000004219 Metropolitan Life Separate Account UL C000058203 Equity Advantage VUL (MetLife) 485BPOS 1 d444537d485bpos.txt EQUITY ADVANTAGE VUL POST-EFFECTIVE AMENDMENT NO. 5 As filed with the Securities and Exchange Commission on April 11, 2013 Registration No. 333-147508 811-06025 -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-6 Registration Statement Under the Securities Act of 1933 [ ] Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 5 [X] Registration Statement Under the Investment Company Act of 1940 Amendment No. 60 [X] Metropolitan Life Separate Account UL (Exact Name of Registrant) Metropolitan Life Insurance Company (Name of Depositor) 200 Park Avenue New York, NY 10166 (Address of depositor's principal executive offices) --------------------- Ricardo A. Anzaldua, Esq. Executive Vice President and General Counsel Metropolitan Life Insurance Company 1095 Avenue of the Americas New York, NY 10036 (Name and address of agent for service) Copy to: Stephen E. Roth, Esquire Sutherland Asbill & Brennan LLP 1275 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2415 It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) [X] on April 29, 2013 pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) of Rule 485. [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Being Registered: Interests in Metropolitan Life Separate Account UL under certain Variable Universal Life Insurance Policies. EQUITY ADVANTAGE VUL Flexible Premium Variable Life Insurance Policies Issued by Metropolitan Life Separate Account UL of Metropolitan Life Insurance Company 200 Park Avenue New York, New York 10166 This prospectus offers individual flexible premium variable life insurance policies (the "Policies") issued by Metropolitan Life Insurance Company ("MetLife"). You allocate net premiums among the Investment Divisions of Metropolitan Life Separate Account UL (the "Separate Account"). Each Investment Division of the Separate Account invests in shares of one of the following "Portfolios": METROPOLITAN SERIES FUND--CLASS A Baillie Gifford International Stock Portfolio Barclays Aggregate Bond Index Portfolio BlackRock Bond Income Portfolio BlackRock Capital Appreciation Portfolio BlackRock Diversified Portfolio BlackRock Large Cap Value Portfolio Davis Venture Value Portfolio Frontier Mid Cap Growth Portfolio Jennison Growth Portfolio Loomis Sayles Small Cap Core Portfolio Loomis Sayles Small Cap Growth Portfolio Met/Artisan Mid Cap Value Portfolio MetLife Conservative Allocation Portfolio MetLife Conservative to Moderate Allocation Portfolio MetLife Mid Cap Stock Index Portfolio MetLife Moderate Allocation Portfolio MetLife Moderate to Aggressive Allocation Portfolio MetLife Stock Index Portfolio MFS(R) Total Return Portfolio MFS(R) Value Portfolio MSCI EAFE(R) Index Portfolio Neuberger Berman Genesis Portfolio Russell 2000(R) Index Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio Van Eck Global Natural Resources Portfolio Western Asset Management Strategic Bond Opportunities Portfolio Western Asset Management U.S. Government Portfolio MET INVESTORS SERIES TRUST--CLASS A (EXCEPT AS NOTED) AllianceBernstein Global Dynamic Allocation Portfolio--Class B American Funds(R) Balanced Allocation Portfolio--Class B American Funds(R) Growth Allocation Portfolio--Class B American Funds(R) Moderate Allocation Portfolio--Class B AQR Global Risk Balanced Portfolio--Class B BlackRock Global Tactical Strategies Portfolio--Class B BlackRock Large Cap Core Portfolio Clarion Global Real Estate Portfolio ClearBridge Aggressive Growth Portfolio Harris Oakmark International Portfolio Invesco Balanced-Risk Allocation Portfolio--Class B Invesco Small Cap Growth Portfolio Janus Forty Portfolio JPMorgan Global Active Allocation Portfolio--Class B JPMorgan Small Cap Value Portfolio Loomis Sayles Global Markets Portfolio Lord Abbett Bond Debenture Portfolio Lord Abbett Mid Cap Value Portfolio Met/Templeton International Bond Portfolio MetLife Aggressive Strategy Portfolio MetLife Balanced Plus Portfolio--Class B MetLife Growth Strategy Portfolio MetLife Multi-Index Targeted Risk Portfolio--Class B MFS(R) Emerging Markets Equity Portfolio MFS(R) Research International Portfolio Morgan Stanley Mid Cap Growth Portfolio Oppenheimer Global Equity Portfolio PIMCO Inflation Protected Bond Portfolio PIMCO Total Return Portfolio Pyramis Managed Risk Portfolio--Class B Schroders Global Multi-Asset Portfolio--Class B SSgA Growth and Income ETF Portfolio SSgA Growth ETF Portfolio T. Rowe Price Mid Cap Growth Portfolio AMERICAN FUNDS INSURANCE SERIES(R)--CLASS 2 American Funds Bond Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST--CLASS 2 Franklin Income Securities Fund Mutual Shares Securities Fund You may also allocate net premiums to our Fixed Account. Special limits may apply to Fixed Account transfers and withdrawals. You receive Fixed Account performance until 20 days after we apply your initial premium payment to the Policy. Thereafter, we invest the Policy's cash value according to your instructions. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE POLICIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. WE DO NOT GUARANTEE HOW ANY OF THE INVESTMENT DIVISIONS OR PORTFOLIOS WILL PERFORM. THE POLICIES AND THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. APRIL 29, 2013 TABLE OF CONTENTS
PAGE ---- SUMMARY OF BENEFITS AND RISKS........................................... A-4 Benefits of the Policy............................................... A-4 Risks of the Policy.................................................. A-5 Risks of the Portfolios.............................................. A-7 FEE TABLES.............................................................. A-7 Transaction Fees..................................................... A-7 Periodic Charges Other Than Portfolio Operating Expenses............. A-9 Annual Portfolio Operating Expenses.................................. A-11 HOW THE POLICY WORKS.................................................... A-15 THE COMPANY, THE SEPARATE ACCOUNT AND THE PORTFOLIOS.................... A-16 The Company.......................................................... A-16 The Separate Account................................................. A-16 The Portfolios....................................................... A-16 Share Classes of the Portfolios...................................... A-20 Certain Payments We Receive with Regard to the Portfolios............ A-20 Selection of the Portfolios.......................................... A-21 Voting Rights........................................................ A-21 Rights Reserved by MetLife........................................... A-22 THE POLICIES............................................................ A-22 Purchasing a Policy.................................................. A-22 Replacing Existing Insurance......................................... A-22 Policy Owner and Beneficiary......................................... A-23 24 Month Conversion Right............................................ A-23 Exchange Right....................................................... A-23 PREMIUMS................................................................ A-23 Flexible Premiums.................................................... A-23 Amount Provided for Investment under the Policy...................... A-24 Right to Examine Policy.............................................. A-25 Allocation of Net Premiums........................................... A-25 RECEIPT OF COMMUNICATIONS AND PAYMENTS AT METLIFE'S DESIGNATED OFFICE... A-26 Payment of Proceeds.................................................. A-27 CASH VALUE.............................................................. A-28 DEATH BENEFITS.......................................................... A-28 Death Proceeds Payable............................................... A-29 Change in Death Benefit Option....................................... A-30 Increase in Face Amount.............................................. A-30 Reduction in Face Amount............................................. A-30 SURRENDERS AND PARTIAL WITHDRAWALS...................................... A-31 Surrender............................................................ A-31 Partial Withdrawal................................................... A-31 TRANSFERS............................................................... A-33 Transfer Option...................................................... A-33 AUTOMATED INVESTMENT STRATEGIES......................................... A-36 LOANS................................................................... A-37
A-2
PAGE ---- LAPSE AND REINSTATEMENT................................................................. A-38 Lapse................................................................................ A-38 Reinstatement........................................................................ A-39 ADDITIONAL BENEFITS BY RIDER............................................................ A-39 THE FIXED ACCOUNT....................................................................... A-40 General Description.................................................................. A-40 Values and Benefits.................................................................. A-40 Policy Transactions.................................................................. A-40 CHARGES................................................................................. A-41 Deductions from Premiums............................................................. A-41 Surrender Charge..................................................................... A-42 Partial Withdrawal Charge............................................................ A-43 Transfer Charge...................................................................... A-43 Illustration of Benefits Charge...................................................... A-43 Monthly Deduction from Cash Value.................................................... A-43 Loan Interest Spread................................................................. A-45 Charges Against the Portfolios and the Investment Divisions of the Separate Account.. A-46 TAX CONSIDERATIONS...................................................................... A-46 Introduction......................................................................... A-46 Tax Status of the Policy............................................................. A-46 Tax Treatment of Policy Benefits..................................................... A-47 MetLife's Income Taxes............................................................... A-50 DISTRIBUTION OF THE POLICIES............................................................ A-50 LEGAL PROCEEDINGS....................................................................... A-53 RESTRICTIONS ON FINANCIAL TRANSACTIONS.................................................. A-53 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM........................................... A-53 FINANCIAL STATEMENTS.................................................................... A-53 GLOSSARY................................................................................ A-54 APPENDIX A: GUIDELINE PREMIUM TEST AND CASH VALUE ACCUMULATION TEST..................... A-55 APPENDIX B: ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES AND CASH SURRENDER VALUES...... A-56
A-3 SUMMARY OF BENEFITS AND RISKS This summary describes the Policy's important benefits and risks. The sections in the prospectus following this summary discuss the Policy in more detail. THE GLOSSARY AT THE END OF THE PROSPECTUS DEFINES CERTAIN WORDS AND PHRASES USED IN THIS PROSPECTUS. BENEFITS OF THE POLICY DEATH PROCEEDS. The Policy is designed to provide insurance protection. Upon receipt of satisfactory proof of the death of the insured, we pay death proceeds to the beneficiary of the Policy. Death proceeds generally equal the death benefit on the date of the insured's death plus any additional insurance provided by rider, less any outstanding loan and accrued loan interest. CHOICE OF DEATH BENEFIT OPTION. You may choose among three death benefit options: --a level death benefit that equals the Policy's face amount, --a variable death benefit that equals the Policy's face amount plus the Policy's cash value, and --a combination variable and level death benefit that equals the Policy's face amount plus the Policy's cash value until the insured attains age 65 and equals the Policy's face amount thereafter. The death benefit under any option could increase to satisfy Federal tax law requirements if the cash value reaches certain levels. After the first Policy year you may change your death benefit option, subject to our underwriting rules. A change in death benefit option may have tax consequences. PREMIUM FLEXIBILITY. You can make premium payments based on a schedule you determine, subject to some limits. You may change your payment schedule at any time or make a payment that does not correspond to your schedule. We can, however, limit or prohibit payments in some situations. RIGHT TO EXAMINE THE POLICY. During the first ten days following your receipt of the Policy, you have the right to return the Policy to us. If you exercise this right, we will refund the premiums you paid. INVESTMENT OPTIONS. You can allocate your net premiums and cash value among your choice of sixty-eight Investment Divisions in the Separate Account, each of which corresponds to a mutual fund portfolio, or "Portfolio." The Portfolios available under the Policy include several common stock funds, including funds which invest primarily in foreign securities, as well as bond funds, balanced funds, asset allocation funds and funds that invest in exchange-traded 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. PARTIAL WITHDRAWALS. You may withdraw cash surrender value from your Policy at any time after the first Policy anniversary. The minimum amount you may withdraw is $500. We reserve the right to limit partial withdrawals to no more than 90% of the Policy's cash surrender value. We may limit the number of partial withdrawals to 12 per Policy year or impose a processing charge of $25 for each partial withdrawal. Partial withdrawals may have tax consequences. TRANSFERS AND AUTOMATED INVESTMENT STRATEGIES. You may transfer your Policy's cash value among the Investment Divisions or between the Investment Divisions and the Fixed Account. The minimum amount you may transfer is $50, or if less, the total amount in the Investment Division or the Fixed Account. We may limit the number of transfers among the Investment Divisions and the Fixed Account to no more than four per Policy year. We may impose a processing charge of $25 for each transfer. We may also impose restrictions on "market timing" transfers. (See "Transfers" for additional information on such restrictions.) We offer five automated investment strategies that allow you to periodically transfer or reallocate your cash value among the Investment Divisions and the Fixed Account. (See "Automated Investment Strategies.") LOANS. You may borrow from the cash value of your Policy. The minimum amount you may borrow is $500. The maximum amount you may borrow is an amount equal to the Policy's cash value net of the Surrender Charge, reduced by monthly deductions and interest charges through the next Policy anniversary, increased by interest credits through the next Policy anniversary, less any existing Policy loans. We charge you a maximum annual A-4 interest rate of 4.0% for the first ten Policy years and 3.0% thereafter. We credit interest at an annual rate of at least 3.0% on amounts we hold as collateral to support your loan. Loans may have tax consequences. SURRENDERS. You may surrender the Policy for its cash surrender value at any time. Cash surrender value equals the cash value reduced by any Policy loan and accrued loan interest and by any applicable Surrender Charge. A surrender may have tax consequences. TAX BENEFITS. We anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. Accordingly, undistributed increases in cash value should not be taxable to you. As long as your Policy is not a modified endowment contract, partial withdrawals should be non-taxable until you have withdrawn an amount equal to your total investment in the Policy. However, different rules apply in the first fifteen Policy years, when distributions accompanied by benefit reductions may be taxable prior to a complete withdrawal of your investment in the Policy. Always confirm in advance the tax consequences of a particular withdrawal with a qualified tax adviser. Death benefits paid to your beneficiary should generally be free of Federal income tax. Death benefits may be subject to estate taxes. Under current Federal income tax law, the taxable portion of distributions from variable life policies is taxed at ordinary income tax rates and does not qualify for the reduced tax rate applicable to long-term capital gains and dividends. CONVERSION RIGHT. During the first two Policy years, you may convert the Policy to fixed benefit coverage by exchanging the Policy for a fixed benefit life insurance policy that we agree to, and that is issued by us or an affiliate that we name. We will make the exchange without evidence of insurability. SUPPLEMENTAL BENEFITS AND RIDERS. We offer a variety of riders that provide supplemental benefits under the Policy. We generally deduct any monthly charges for these riders as part of the Monthly Deduction. Your registered representative can help you determine whether any of these riders are suitable for you. 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 lapse, and the charges and deductions under the Policy. They will also 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. RISKS OF THE POLICY INVESTMENT RISK. If you invest your Policy's cash value in one or more of the Investment Divisions, then 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, this deduction will have an even greater impact on your Policy's cash value. It is possible to lose your full investment and your Policy could lapse without value, unless you pay additional premium. If you allocate cash value to the Fixed Account, then 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 should not be used as a short-term savings vehicle. If you surrender the Policy within the first ten Policy years (or within the first ten Policy 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 make a partial withdrawal from the Policy within the first ten Policy years (or the first ten Policy years following the face amount increase) if the partial withdrawal reduces the face amount (or the face amount increase). If you surrender the Policy in the first Policy year (or in the first year following a face amount increase) we will also deduct an amount equal to the remaining first year Coverage Expense Charges. 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 A-5 your Policy will lapse (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 lapse). RISK OF LAPSE. Your Policy may lapse 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 the monthly deduction, your Policy may enter a 62-day grace period. We will notify you that the Policy will lapse unless you make a sufficient payment of additional premium during the grace period. Your Policy generally will not lapse if you pay certain required premium amounts and you are therefore protected by a Guaranteed Minimum Death Benefit. If your Policy does lapse, your insurance coverage will terminate, although you will be given an opportunity to reinstate it. Lapse of a Policy on which there is an outstanding loan may have adverse tax consequences. TAX RISKS. We anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. However, the rules are not entirely clear if your Policy is issued on a substandard basis. The death benefit under the Policy will never be less than the minimum amount required for the Policy to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. If your Policy is not treated as a life insurance contract under Federal tax law, increases in the Policy's cash value will be taxed currently. Even if your Policy is treated as a life insurance contract for Federal tax purposes, it may become a modified endowment contract due to the payment of excess premiums or unnecessary premiums, due to a material change or due to a reduction in your death benefit. If your Policy becomes a modified endowment contract, surrenders, partial withdrawals and loans will be treated as a distribution of the earnings in the Policy and will be taxable as ordinary income to the extent thereof. In addition, if the Policy Owner is under age 59 1/2 at the time of the surrender, partial withdrawal or loan, the amount that is included in income will generally be subject to a 10% penalty tax. 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. However, different rules apply in the first fifteen Policy years, when distributions accompanied by benefit reductions may be taxable prior to a complete withdrawal of your investment in the Policy. Moreover, loans will generally not be treated as distributions prior to termination of your Policy, whether by lapse, surrender or exchange. Additionally, the tax consequences of loans outstanding after the tenth Policy year are uncertain. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. See "Tax Considerations." YOU SHOULD CONSULT A QUALIFIED TAX ADVISER FOR ASSISTANCE IN ALL POLICY-RELATED TAX MATTERS. 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 Investment Divisions and/or Fixed Account as collateral, and hold it in our Loan Account. This loan collateral does not participate in the investment experience of the Investment Divisions or receive any higher current interest rate credited to the Fixed Account. We also reduce the amount we pay on the insured's death by the amount of any outstanding loan and accrued loan interest. Your Policy may lapse if your outstanding loan and accrued loan interest reduce the cash surrender value to zero. If you surrender your Policy or your Policy lapses while there is an outstanding loan, there will generally be Federal income tax payable on the amount by which loans and partial withdrawals exceed the premiums paid. Since loans and partial withdrawals reduce your Policy's cash value, any remaining cash value may be insufficient to pay the income tax due. LIMITATIONS ON CASH VALUE IN THE FIXED ACCOUNT. Transfers to and from the Fixed Account must generally be in amounts of $50 or more. Partial withdrawals from the Fixed Account must be in amounts of $500 or more. The total amount of transfers and withdrawals from the Fixed Account in a Policy year may generally not exceed the greater of 25% of the Policy's cash surrender value in the Fixed Account at the beginning of the year, or the maximum transfer amount for the preceding Policy year. We may also limit the number of transfers and partial withdrawals and may impose a processing charge for transfers and partial withdrawals. We are not currently imposing the maximum limit on transfers and withdrawals from the Fixed Account, but we reserve the right to do so. It is important to note that if we impose the maximum limit on transfers and withdrawals from the Fixed Account, it could take a number of years to fully transfer or withdraw a current balance from the Fixed Account. You should keep this in mind when considering whether an allocation of cash value to the Fixed Account is consistent with your risk tolerance and time horizon. A-6 TAX LAW CHANGES. Tax laws, regulations, and interpretations have often been changed in the past and such changes continue to be proposed. To the 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 THE PORTFOLIOS A comprehensive discussion of the risks associated with each of the Portfolios can be found in the Portfolio prospectuses, which you can obtain by calling 1-800-638-5000. 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. The first table describes the fees and expenses that a Policy Owner will pay at the time he or she buys the Policy, surrenders the Policy or transfers cash value among accounts. If the amount of a charge varies depending on the Policy Owner's or the insured's individual characteristics (such as age, sex, or risk class), the tables below show the minimum and maximum charges we assess under the Policy across the range of all possible individual characteristics, as well as the charges for a specified typical Policy Owner or insured. THESE CHARGES MAY NOT BE REPRESENTATIVE OF THE CHARGES YOU WILL ACTUALLY PAY UNDER THE POLICY. Your Policy's specifications page will indicate the maximum charges applicable to your Policy, and more detailed information concerning your charges is available on request from our Designated Office. Also, before you purchase the Policy, we will provide you personalized illustrations of your future benefits under the Policy based on the insured's age and risk class, the death benefit option, face amount, planned periodic premiums and riders requested. TRANSACTION FEES
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE ------------------------------------------------------------------------------------------------------- Sales Charge Imposed on On payment of premium 2.25% of premiums paid 2.25% of each premium Premiums up to the Target Premium paid per Policy year/1/ ------------------------------------------------------------------------------------------------------- Premium Tax Imposed on On payment of premium 2.0% in all Policy years 2.0% in all Policy years Premiums ------------------------------------------------------------------------------------------------------- Federal Tax Imposed on On payment of premium 1.25% in all Policy years 1.25% in all Policy years Premiums -------------------------------------------------------------------------------------------------------
/1/The target premium varies based on individual characteristics, including the insured's issue age, risk class and except for unisex policies, sex. A-7
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE ----------------------------------------------------------------------------------------------------------------- Surrender Charge/1/ On surrender, lapse, or face amount reduction in the first ten Policy years (and, with respect to a face amount increase, in the first ten Policy years after the increase) MINIMUM AND In Policy year 1, $3.75 to In Policy year 1, $3.75 to MAXIMUM CHARGE $38.25 per $1,000 of base $38.25 per $1,000 of base Policy face amount/2/ Policy face amount/2/ CHARGE IN THE FIRST POLICY $14.00 per $1,000 of base $14.00 per $1,000 of base YEAR FOR A MALE INSURED, Policy face amount Policy face amount AGE 35, IN THE PREFERRED NONSMOKER RISK CLASS WITH A BASE POLICY FACE AMOUNT OF $350,000 ----------------------------------------------------------------------------------------------------------------- Transfer Charge/3/ On transfer of cash value Not currently charged $25 for each transfer among the Investment Divisions and to and from the Fixed Account ----------------------------------------------------------------------------------------------------------------- Partial Withdrawal Charge On partial withdrawal of Not currently charged $25 for each partial cash value withdrawal/4/ ----------------------------------------------------------------------------------------------------------------- Illustration of Benefits On provision of each Not currently charged $25 per illustration Charge illustration in excess of one per year -----------------------------------------------------------------------------------------------------------------
/1/The Surrender Charge varies based on individual characteristics, including the insured's issue age, risk class, sex (except for unisex policies), smoker status, and the Policy's face amount. The Surrender Charge may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the Surrender Charge and other charges that would apply for a particular insured by contacting your registered representative. /2/No Surrender Charge will apply on up to 10% of cash surrender value withdrawn each year. The Surrender Charge will remain level for one to three Policy years, and will then begin to decline on a monthly basis until it reaches zero in the last month of the tenth Policy year. The Surrender Charge applies to requested face amount reductions as well as to face amount reductions resulting from a change in death benefit option. /3/The Portfolios in which the Investment Divisions invest may impose a redemption fee on shares held for a relatively short period. /4/If imposed, the partial withdrawal charge would be in addition to any Surrender Charge that is imposed. A-8 The next table describes the fees and expenses that a Policy Owner will pay periodically during the time that he or she owns the Policy, not including Portfolio fees and expenses. PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE ----------------------------------------------------------------------------------------------------------------- Cost of Insurance/1/ MINIMUM AND Monthly $.01 to $83.33 per $1,000 $.02 to $83.33 per $1,000 MAXIMUM CHARGE of net amount at risk/2/ of net amount at risk/2/ CHARGE IN THE FIRST POLICY Monthly $.02 per $1,000 of net $.09 per $1,000 of net YEAR FOR A MALE INSURED, amount at risk amount at risk AGE 35, IN THE PREFERRED NONSMOKER RISK CLASS WITH A BASE POLICY FACE AMOUNT OF $350,000 ----------------------------------------------------------------------------------------------------------------- Policy Charge/3/ POLICY FACE AMOUNT LESS Monthly $12 in Policy year 1 $12 in Policy year 1 THAN $50,000 $9 in Policy years 2+ $9 in Policy years 2+ POLICY FACE AMOUNT OF Monthly $15 in Policy year 1 $15 in Policy year 1 $50,000 OR GREATER BUT $8 in Policy years 2+ $8 in Policy years 2+ LESS THAN $250,000 ----------------------------------------------------------------------------------------------------------------- Mortality and Expense Monthly .60% in Policy years 1-10 .80% in Policy years 1-10 Risk Charge (annual rate .35% in Policy years 11-19 .35% in Policy years 11-19 imposed on cash value in .20% in Policy years 20-29 .20% in Policy years 20-29 the Separate Account)/4/ .05% in Policy years 30+ .05% in Policy years 30+ ----------------------------------------------------------------------------------------------------------------- Coverage Expense Charge/5/ MINIMUM AND Monthly $.04 to $2.30 per $1,000 of $.04 to $2.30 per $1,000 MAXIMUM CHARGE base Policy face amount in of base Policy face first eight Policy years/6/ amount CHARGE FOR A MALE Monthly $.16 per $1,000 of base $.16 per $1,000 of base INSURED, AGE 35, IN THE Policy face amount in first Policy face amount PREFERRED NONSMOKER eight Policy years/6/ RISK CLASS WITH A BASE POLICY FACE AMOUNT OF $350,000 ----------------------------------------------------------------------------------------------------------------- Loan Interest Spread/7/ Annually (or on loan 1.00% of loan collateral in 1.00% of loan collateral in termination, if earlier) Policy years 1-10 Policy years 1-10 -----------------------------------------------------------------------------------------------------------------
/1/The cost of insurance charge varies based on individual characteristics, including the Policy's face amount and the insured's age, risk class and, except for unisex policies, sex. The cost of insurance charge may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the cost of insurance or other charges that would apply for a particular insured by contacting your registered representative. /2/The net amount at risk is the difference between the death benefit (generally discounted at the monthly equivalent of 3% per year) and the Policy's cash value. /3/No Policy Charge applies to Policies issued with face amounts equal to or greater than $250,000. /4/The Mortality and Expense Risk Charge depends on the Policy's net cash value. The percentages shown in the Current Amount Deducted column apply if the Policy's net cash value is less than an amount equal to five Target Premiums. The percentages decrease as the Policy's net cash value, measured as a multiple of Target Premiums increases. If the Policy's net A-9 cash value is equal to or greater than five but less than ten Target Premiums, the charge is 0.55% in Policy years 1-10, 0.30% in Policy years 11-19, 0.15% in Policy years 20-29 and 0.05% thereafter. If the Policy's cash value is equal to or greater than ten but less than 20 Target Premiums, the charge is 0.30% in Policy years 1-10, 0.15% in Policy years 11-19, 0.10% in Policy years 20-29 and 0.05% thereafter. If the Policy's net cash value is equal to 20 or more Target Premiums, the charge is 0.15% in Policy years 1-10, 0.10% in Policy years 11-19, and 0.05% thereafter. For cash value allocated to the Oppenheimer Global Equity Investment Division, we are waiving a portion of the Mortality and Expense Risk Charge equal to the amount by which the underlying Portfolio's expenses exceed 0.62%. /5/If you surrender the Policy in the first Policy year (or in the first year following a face amount increase) we will deduct from the surrender proceeds an amount equal to the Coverage Expense Charges due for the remainder of the first Policy year (or the first year following the face amount increase). If the Policy's face amount is reduced in the first year following a face amount increase, we will deduct from the cash value an amount equal to the Coverage Expense Charges due for the remainder of the first year following the face amount increase. /6/The Coverage Expense Charge is imposed in Policy years 1-8 and, with respect to a requested face amount increase, during the first eight years following the increase. /7/We charge interest on Policy loans at an effective rate of 4.0% per year in Policy years 1-10 and 3.0% thereafter. Cash value we hold as security for the loan ("loan collateral") earns interest at an effective rate of not less than 3.0% per year. The loan interest spread is the difference between these interest rates. CHARGES FOR OPTIONAL FEATURES (RIDERS):
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE ---------------------------------------------------------------------------------------------------------------- Guaranteed Survivor Income Benefit Rider MINIMUM AND Monthly $.01 to $1.08 per $1,000 $.01 to $83.33 per $1,000 MAXIMUM CHARGE of Eligible Death Benefit of Eligible Death Benefit CHARGE FOR A MALE Monthly $.02 per $1,000 of Eligible $.02 per $1,000 of Eligible INSURED, AGE 35, IN THE Death Benefit Death Benefit PREFERRED NONSMOKER RISK CLASS WITH AN ELIGIBLE DEATH BENEFIT OF $350,000 ---------------------------------------------------------------------------------------------------------------- Children's Term Monthly $.40 per $1,000 of rider $.40 per $1,000 of rider Insurance Rider face amount face amount ---------------------------------------------------------------------------------------------------------------- Waiver of Monthly Deduction Rider MINIMUM AND Monthly $.00 to $61.44 per $100 $.00 to $61.44 per $100 MAXIMUM CHARGE of Monthly Deduction of Monthly Deduction CHARGE IN THE FIRST POLICY Monthly $6.30 per $100 of $6.30 per $100 of YEAR FOR A MALE INSURED, Monthly Deduction Monthly Deduction AGE 35, IN THE STANDARD NONSMOKER RISK CLASS ---------------------------------------------------------------------------------------------------------------- Waiver of Specified Premium Rider MINIMUM AND Monthly $.00 to $21.75 per $100 $.00 to $21.75 per $100 MAXIMUM CHARGE of Specified Premium of Specified Premium CHARGE IN THE FIRST POLICY Monthly $3.00 per $100 of $3.00 per $100 of YEAR FOR A MALE INSURED, Specified Premium Specified Premium AGE 35, IN THE STANDARD NONSMOKER RISK CLASS ----------------------------------------------------------------------------------------------------------------
A-10
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE -------------------------------------------------------------------------------------------------------------- Options to Purchase Additional Insurance Coverage Rider MINIMUM AND Monthly $.02 to $.25 per $1,000 of $.02 to $.25 per $1,000 of MAXIMUM CHARGE Option amount Option amount CHARGE FOR A MALE Monthly $.03 per $1,000 of Option $.03 per $1,000 of Option INSURED, AGE 35, IN THE amount amount PREFERRED NONSMOKER RISK CLASS -------------------------------------------------------------------------------------------------------------- Accidental Death Benefit Rider MINIMUM AND Monthly $.00 to $.34 per $1,000 of $.00 to $83.33 per $1,000 MAXIMUM CHARGE rider face amount of rider face amount CHARGE IN THE FIRST POLICY Monthly $.05 per $1,000 of rider $.08 per $1,000 of rider YEAR FOR A MALE INSURED, face amount face amount AGE 35, IN THE PREFERRED NONSMOKER RISK CLASS -------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Death Benefit Rider MINIMUM AND Monthly $.03 to $.14 per $1,000 of $.03 to $83.33 per $1,000 MAXIMUM CHARGE net amount at risk of net amount at risk CHARGE FOR A MALE Monthly $.03 per $1,000 of net $.03 per $1,000 of net INSURED, AGE 35, IN THE amount at risk amount at risk PREFERRED NONSMOKER RISK CLASS -------------------------------------------------------------------------------------------------------------- Acceleration of Death At time of benefit Not currently charged One-time fee of $150 Benefit Rider payment -------------------------------------------------------------------------------------------------------------- Overloan Protection Rider At time of exercise One-time fee of 3.5% of One-time fee of 3.5% of Policy cash value Policy cash value --------------------------------------------------------------------------------------------------------------
ANNUAL PORTFOLIO OPERATING EXPENSES The next table describes the Portfolio fees and expenses that a Policy Owner may pay periodically during the time that he or she owns the Policy. The table shows the minimum and maximum total operating expenses charged by the Portfolios for the fiscal year ended December 31, 2012. Expenses of the Portfolios may be higher or lower in the future. More detail concerning each Portfolio's fees and expenses is contained in the table that follows and in the prospectus for each Portfolio.
MINIMUM MAXIMUM ------- ------- Total Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets, including management fees, distribution (12b-1) fees and other expenses). 0.28% 9.71%
A-11 The following table describes the annual operating expenses for each Portfolio for the year ended December 31, 2012, before and after applicable fee waivers and expense reimbursements: ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
DISTRIBUTION ACQUIRED TOTAL FEE WAIVER NET TOTAL AND/OR FUND FEES ANNUAL AND/OR ANNUAL MANAGEMENT SERVICE (12B-1) OTHER AND OPERATING EXPENSE OPERATING FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES ---------- --------------- -------- --------- --------- ------------- --------- METROPOLITAN SERIES FUND -- CLASS A Baillie Gifford International Stock Portfolio.................................. 0.81% -- 0.10% -- 0.91% 0.10% 0.81% Barclays Aggregate Bond Index Portfolio..... 0.25% -- 0.04% -- 0.29% 0.01% 0.28% BlackRock Bond Income Portfolio............. 0.32% -- 0.04% -- 0.36% 0.00% 0.36% BlackRock Capital Appreciation Portfolio.... 0.70% -- 0.03% -- 0.73% 0.01% 0.72% BlackRock Diversified Portfolio............. 0.46% -- 0.07% -- 0.53% -- 0.53% BlackRock Large Cap Value Portfolio......... 0.63% -- 0.03% -- 0.66% 0.03% 0.63% Davis Venture Value Portfolio............... 0.70% -- 0.03% -- 0.73% 0.05% 0.68% Frontier Mid Cap Growth Portfolio........... 0.73% -- 0.05% -- 0.78% 0.02% 0.76% Jennison Growth Portfolio................... 0.61% -- 0.03% -- 0.64% 0.07% 0.57% Loomis Sayles Small Cap Core Portfolio...... 0.90% -- 0.07% 0.10% 1.07% 0.08% 0.99% Loomis Sayles Small Cap Growth Portfolio.................................. 0.90% -- 0.06% -- 0.96% 0.09% 0.87% Met/Artisan Mid Cap Value Portfolio......... 0.81% -- 0.04% -- 0.85% -- 0.85% MetLife Conservative Allocation Portfolio... 0.09% -- 0.02% 0.54% 0.65% 0.01% 0.64% MetLife Conservative to Moderate Allocation Portfolio.................................. 0.07% -- 0.01% 0.58% 0.66% 0.00% 0.66% MetLife Mid Cap Stock Index Portfolio....... 0.25% -- 0.07% 0.02% 0.34% 0.00% 0.34% MetLife Moderate Allocation Portfolio....... 0.06% -- -- 0.63% 0.69% 0.00% 0.69% MetLife Moderate to Aggressive Allocation Portfolio.................................. 0.06% -- 0.01% 0.67% 0.74% 0.00% 0.74% MetLife Stock Index Portfolio............... 0.25% -- 0.03% -- 0.28% 0.01% 0.27% MFS(R) Total Return Portfolio............... 0.55% -- 0.05% -- 0.60% -- 0.60% MFS(R) Value Portfolio...................... 0.70% -- 0.03% -- 0.73% 0.13% 0.60% MSCI EAFE(R) Index Portfolio................ 0.30% -- 0.11% 0.01% 0.42% 0.00% 0.42% Neuberger Berman Genesis Portfolio.......... 0.82% -- 0.04% -- 0.86% 0.01% 0.85% Russell 2000(R) Index Portfolio............. 0.25% -- 0.08% 0.09% 0.42% 0.00% 0.42% T. Rowe Price Large Cap Growth Portfolio.................................. 0.60% -- 0.04% -- 0.64% 0.01% 0.63% T. Rowe Price Small Cap Growth Portfolio.................................. 0.49% -- 0.06% -- 0.55% -- 0.55% Van Eck Global Natural Resources Portfolio.................................. 0.78% -- 0.04% 0.02% 0.84% 0.01% 0.83% Western Asset Management Strategic Bond Opportunities Portfolio.................... 0.60% -- 0.05% -- 0.65% 0.04% 0.61% Western Asset Management U.S. Government Portfolio....................... 0.47% -- 0.03% -- 0.50% 0.02% 0.48% MET INVESTORS SERIES TRUST AllianceBernstein Global Dynamic Allocation Portfolio -- Class B....................... 0.62% 0.25% 0.04% 0.01% 0.92% 0.01% 0.91% American Funds(R) Balanced Allocation Portfolio -- Class B....................... 0.06% 0.25% 0.01% 0.38% 0.70% -- 0.70% American Funds(R) Growth Allocation Portfolio -- Class B....................... 0.07% 0.25% 0.01% 0.38% 0.71% -- 0.71% American Funds(R) Moderate Allocation Portfolio -- Class B....................... 0.06% 0.25% 0.01% 0.37% 0.69% -- 0.69%
A-12
DISTRIBUTION ACQUIRED TOTAL FEE WAIVER NET TOTAL AND/OR FUND FEES ANNUAL AND/OR ANNUAL MANAGEMENT SERVICE (12B-1) OTHER AND OPERATING EXPENSE OPERATING FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES ---------- --------------- -------- --------- --------- ------------- --------- AQR Global Risk Balanced Portfolio -- Class B...................................... 0.61% 0.25% 0.12% 0.06% 1.04% 0.01% 1.03% BlackRock Global Tactical Strategies Portfolio -- Class B......................... 0.66% 0.25% 0.02% 0.21% 1.14% 0.02% 1.12% BlackRock Large Cap Core Portfolio -- Class A...................................... 0.59% -- 0.05% -- 0.64% 0.01% 0.63% Clarion Global Real Estate Portfolio -- Class A...................................... 0.60% -- 0.06% -- 0.66% -- 0.66% ClearBridge Aggressive Growth Portfolio -- Class A...................................... 0.61% -- 0.03% -- 0.64% -- 0.64% Harris Oakmark International Portfolio -- Class A...................................... 0.77% -- 0.06% -- 0.83% 0.02% 0.81% Invesco Balanced-Risk Allocation Portfolio -- Class B...................................... 0.66% 0.25% 0.12% 0.06% 1.09% -- 1.09% Invesco Small Cap Growth Portfolio -- Class A...................................... 0.85% -- 0.02% -- 0.87% 0.01% 0.86% Janus Forty Portfolio -- Class A.............. 0.63% -- 0.03% -- 0.66% 0.01% 0.65% JPMorgan Global Active Allocation Portfolio -- Class B......................... 0.79% 0.25% 0.28% -- 1.32% 0.07% 1.25% JPMorgan Small Cap Value Portfolio -- Class A...................................... 0.78% -- 0.06% -- 0.84% 0.09% 0.75% Loomis Sayles Global Markets Portfolio -- Class A...................................... 0.70% -- 0.09% -- 0.79% -- 0.79% Lord Abbett Bond Debenture Portfolio -- Class A...................................... 0.51% -- 0.03% -- 0.54% -- 0.54% Lord Abbett Mid Cap Value Portfolio -- Class A...................................... 0.65% -- 0.04% 0.06% 0.75% 0.00% 0.75% Met/Templeton International Bond Portfolio -- Class A......................... 0.60% -- 0.13% -- 0.73% -- 0.73% MetLife Aggressive Strategy Portfolio -- Class A...................................... 0.09% -- 0.01% 0.72% 0.82% -- 0.82% MetLife Balanced Plus Portfolio -- Class B...................................... 0.25% 0.25% 0.01% 0.43% 0.94% 0.01% 0.93% MetLife Growth Strategy Portfolio -- Class A...................................... 0.06% -- -- 0.69% 0.75% -- 0.75% MetLife Multi-Index Targeted Risk Portfolio -- Class B......................... 0.18% 0.25% 9.02% 0.26% 9.71% 8.85% 0.86% MFS(R) Emerging Markets Equity Portfolio -- Class A...................................... 0.91% -- 0.16% -- 1.07% 0.02% 1.05% MFS(R) Research International Portfolio -- Class A...................................... 0.68% -- 0.07% -- 0.75% 0.05% 0.70% Morgan Stanley Mid Cap Growth Portfolio -- Class A......................... 0.65% -- 0.07% -- 0.72% 0.01% 0.71% Oppenheimer Global Equity Portfolio -- Class A...................................... 0.67% -- 0.09% -- 0.76% 0.02% 0.74% PIMCO Inflation Protected Bond Portfolio -- Class A...................................... 0.47% -- 0.11% -- 0.58% -- 0.58% PIMCO Total Return Portfolio -- Class A....... 0.48% -- 0.03% -- 0.51% -- 0.51% Pyramis(R) Managed Risk Portfolio -- Class B...................................... 0.45% 0.25% 0.27% 0.48% 1.45% 0.17% 1.28% Schroders Global Multi-Asset Portfolio -- Class B...................................... 0.67% 0.25% 0.32% 0.14% 1.38% 0.14% 1.24% SSgA Growth and Income ETF Portfolio -- Class A...................................... 0.31% -- 0.01% 0.24% 0.56% -- 0.56%
A-13
DISTRIBUTION ACQUIRED TOTAL FEE WAIVER NET TOTAL AND/OR FUND FEES ANNUAL AND/OR ANNUAL MANAGEMENT SERVICE (12B-1) OTHER AND OPERATING EXPENSE OPERATING FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES ---------- --------------- -------- --------- --------- ------------- --------- SSgA Growth ETF Portfolio -- Class A....... 0.32% -- 0.03% 0.25% 0.60% -- 0.60% T. Rowe Price Mid Cap Growth Portfolio -- Class A................................... 0.75% -- 0.03% -- 0.78% -- 0.78% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund................... 0.37% 0.25% 0.02% -- 0.64% -- 0.64% American Funds Global Small Capitalization Fund...................................... 0.71% 0.25% 0.04% -- 1.00% -- 1.00% American Funds Growth Fund................. 0.33% 0.25% 0.02% -- 0.60% -- 0.60% American Funds Growth-Income Fund.......... 0.27% 0.25% 0.02% -- 0.54% -- 0.54% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income Securities Fund............ 0.45% 0.25% 0.02% -- 0.72% -- 0.72% Mutual Shares Securities Fund.............. 0.60% 0.25% 0.11% -- 0.96% -- 0.96%
The information shown in the table above was provided by the Portfolios and we have not independently verified that information. Net Total Annual Operating Expenses shown in the table reflect any current fee waiver or expense reimbursement arrangement that will remain in effect for a period of at least one year from the date of the Portfolio's 2013 prospectus. "0.00%" in the Fee Waiver and/or Expense Reimbursement column indicates that there is such an arrangement in effect for the Portfolio, but that the expenses of the Portfolio are below the level that would trigger the waiver or reimbursement. Fee waiver and expense reimbursement arrangements with a duration of less than one year, or arrangements that may be terminated without the consent of the Portfolio's board of directors or trustees, are not shown. Certain Portfolios that have "Acquired Fund Fees and Expenses" are "funds of funds." A fund of funds invests substantially all of its assets in other underlying funds. Because the Portfolio invests in other funds, it will bear its pro rata portion of the operating expenses of those underlying funds, including the management fee. THE AMERICAN FUNDS INSURANCE SERIES AND THE FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST ARE NOT AFFILIATED WITH METROPOLITAN LIFE INSURANCE COMPANY. FOR INFORMATION CONCERNING COMPENSATION PAID FOR THE SALE OF THE POLICIES, SEE "DISTRIBUTION OF THE POLICIES." A-14 HOW THE POLICY WORKS [FLOW CHART] PREMIUM PAYMENTS - Flexible - Planned premium options - Guaranteed Minimum Death Benefit premium (5-year, 20-year, or to age 65) CHARGES FROM PREMIUM PAYMENTS - Sales Load: 2.25% up to Target Premium per Policy year (maximum 2.25% on all premiums) - Premium Tax Charge: 2.0% - Charge for Federal Taxes: 1.25% CASH VALUES - Net premium payments invested in your choice of Portfolio investments (after an initial period in the Fixed Account) or the Fixed Account - The cash value reflects investment experience, interest, premium payments, policy charges and any distributions from the Policy - We do not guarantee the cash value invested in the Portfolios - Any earnings you accumulate are generally free of any current income taxes - You may change the allocation of future net premiums at any time. You may transfer funds among Investment Divisions (and to the Fixed Account). Currently we do not limit the number of Investment Division transfers you can make in a Policy year (subject to restrictions we impose on frequent transfers). - We reserve the right to impose a $25 charge on each partial withdrawal and on each Investment Division transfer (including a transfer between an Investment Division and the Fixed Account) - We may limit the amount of transfers from (and in some cases to) the Fixed Account LOANS - You may borrow your cash value - Loan interest charge is 4.0% in Policy years 1-10 and 3.0% thereafter. - We transfer loaned funds out of the Fixed Account and the Investment Divisions into the Loan Account where we credit them with not less than 3.0% interest. RETIREMENT BENEFITS - Fixed settlement options are available for policy proceeds DEATH BENEFIT - Level, Variable and combined Level/Variable Death Benefit Options - Guaranteed not to be less than face amount (less any loan and loan interest) if the Guaranteed Minimum Death Benefit is in effect. - On or after age 121, under Options A and C, equal to the greater of (1) the face amount of the Policy as of the insured's age 121; and (2) 101% of the Policy's cash value. Under Option B, the face amount of the Policy as of the insured's age 121, plus the Policy's cash value. - Generally income tax free to named beneficiary; may be subject to estate tax. DAILY DEDUCTIONS FROM ASSETS OF THE SEPARATE ACCOUNT - Investment advisory fees and other expenses are deducted from the Portfolio values BEGINNING OF MONTH CHARGES - We deduct the cost of insurance protection (reflecting any substandard risk rating) from the cash value each month - Any Rider Charges - Policy Charge: $15.00 per month first year and $8.00 per month thereafter for Policies issued with face amounts of $50,000 or greater, but less than $250,000; $12.00 per month first year and $9.00 per month thereafter for Policies issued with face amounts of less than $50,000 - Coverage Expense Charge: Monthly charge imposed on base Policy face amount that applies during the first eight Policy years or during the first eight years following a face amount increase (in all years on a guaranteed basis). - Mortality and Expense Risk Charge applied against the cash value in the Separate Account at a maximum annual rate of .80% in Policy years 1-10; .35% in Policy years 11-19; .20% in Policy years 20-29; and .05% thereafter SURRENDER CHARGE - Applies on lapse, surrender, face amount reduction, or partial withdrawal or change in death benefit option that results in face reduction in first ten Policy years (or in the first ten Policy years following a face amount increase). Maximum charge applies in up to the first three Policy years. Thereafter, the charge decreases on a monthly basis over the remaining years of the surrender charge period. LIVING BENEFITS - If policyholder has elected and qualified for benefits for disability and becomes totally disabled, we will waive the monthly deduction or a specified amount of monthly premium during the period of disability up to certain limits. - You may surrender the Policy at any time for its cash surrender value - Deferred income taxes, including taxes on certain amounts borrowed, become payable upon surrender or lapse - Grace period for lapsing with no value is 62 days from the first date in which Monthly Deduction was not paid due to insufficient cash value - Subject to our rules, you may reinstate a lapsed Policy within three years of date of lapse if it has not been surrendered A-15 THE COMPANY, THE SEPARATE ACCOUNT AND THE PORTFOLIOS THE COMPANY Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our principal office is located at 200 Park Avenue, New York, New York 10166. MetLife is licensed to sell life insurance in all states and the District of Columbia, but we only offer the Policies in New York. We are obligated to pay all benefits under the Policies. THE SEPARATE ACCOUNT Metropolitan Life Separate Account UL is the funding vehicle for the Policies 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 or losses. Although we own the assets of the Separate Account, applicable law provides that the portion of the Separate Account assets equal to the reserves and other liabilities of the Separate Account may not be charged with liabilities that arise out of any other business we conduct. This means that the assets of the Separate Account are not available to meet the claims of our general creditors, and may only be used to support the cash values of the variable life insurance policies issued by the Separate Account. We are obligated to pay the death benefit under the Policy even if that amount exceeds the Policy's cash value in the Separate Account. The amount of the death benefit that exceeds the Policy's cash value in the Separate Account is paid from our general account. Death benefits paid from the general account are subject to the financial strength and claims-paying ability of the Company. For other life insurance policies and annuity contracts that we issue, we pay all amounts owed under the policies and contracts from the general account. MetLife is regulated as an insurance company under state law, which generally imposes restrictions on the amount and type of investments in the general account. However, there is no guarantee that we will be able to meet our claims-paying obligations. There are risks to purchasing any insurance product. The investment adviser to certain of the Portfolios offered with the Policy or with other variable life insurance policies issued through the Separate Account may be regulated as Commodity Pool Operators. While it does not concede that the Separate Account is a commodity pool, MetLife has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodities Exchange Act ("CEA"), and is not subject to registration or regulation as a pool operator under the CEA. THE PORTFOLIOS Each Investment Division of the Separate Account invests in a corresponding Portfolio. Each Portfolio is part of an open-end management investment company, more commonly known as a mutual fund, that serves as an investment vehicle for variable life insurance and variable annuity separate accounts of various insurance companies. The mutual funds that offer the Portfolios are the Metropolitan Series Fund, the Met Investors Series Trust, the American Funds Insurance Series and the Franklin Templeton Variable Insurance Products Trust. Each of these mutual funds has an investment adviser responsible for overall management of the fund. Some investment advisers have contracted with sub-advisers to make the day-to-day investment decisions for the Portfolios. The adviser, sub-adviser and investment objective of each Portfolio are as follows:
METROPOLITAN SERIES FUND ADVISER: METLIFE ADVISERS, LLC PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- Baillie Gifford International Stock Baillie Gifford Overseas Limited Long-term growth of capital. Portfolio Barclays Aggregate Bond Index MetLife Investment Management, To track the performance of the Portfolio (formerly Barclays LLC/1/ Barclays U.S. Aggregate Bond Capital Aggregate Bond Index Index. Portfolio)
A-16
PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- BlackRock Bond Income Portfolio BlackRock Advisors, LLC A competitive total return primarily from investing in fixed-income securities. BlackRock Capital Appreciation BlackRock Advisors, LLC Long-term growth of capital. Portfolio (formerly BlackRock Legacy Large Cap Growth Portfolio) BlackRock Diversified Portfolio BlackRock Advisors, LLC High total return while attempting to limit investment risk and preserve capital. BlackRock Large Cap Value Portfolio BlackRock Advisors, LLC Long-term growth of capital. Davis Venture Value Portfolio Davis Selected Advisers, L.P. Growth of capital. Frontier Mid Cap Growth Portfolio Frontier Capital Management Maximum capital appreciation. (formerly BlackRock Aggressive Company, LLC/2/ Growth Portfolio) Jennison Growth Portfolio Jennison Associates LLC Long-term growth of capital. Loomis Sayles Small Cap Core Loomis, Sayles & Company, L.P. Long-term capital growth from Portfolio investments in common stocks or other equity securities. Loomis Sayles Small Cap Growth Loomis Sayles & Company, L.P. Long-term capital growth. Portfolio Met/Artisan Mid Cap Value Portfolio Artisan Partners Limited Partnership Long-term capital growth. MetLife Conservative Allocation N/A A high level of current income, with Portfolio growth of capital as a secondary objective. MetLife Conservative to Moderate N/A A high total return in the form of Allocation Portfolio income and growth of capital, with a greater emphasis on income. MetLife Mid Cap Stock Index MetLife Investment Management, To track the performance of the Portfolio LLC/1/ Standard & Poor's MidCap 400(R) Composite Stock Price Index. MetLife Moderate Allocation N/A A balance between a high level of Portfolio current income and growth of capital, with a greater emphasis on growth of capital. MetLife Moderate to Aggressive N/A Growth of capital. Allocation Portfolio MetLife Stock Index Portfolio MetLife Investment Management, To track the performance of the LLC/1/ Standard & Poor's 500(R) Composite Stock Price Index. MFS(R) Total Return Portfolio Massachusetts Financial Services Favorable total return through Company investment in a diversified portfolio. MFS(R) Value Portfolio Massachusetts Financial Services Capital appreciation. Company MSCI EAFE(R) Index Portfolio MetLife Investment Management, To track the performance of the LLC/1/ MSCI EAFE(R) Index. Neuberger Berman Genesis Neuberger Berman Management High total return, consisting Portfolio LLC principally of capital appreciation.
A-17
PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- Russell 2000(R) Index Portfolio MetLife Investment Management, To track the performance of the LLC/1/ Russell 2000(R) Index. T. Rowe Price Large Cap Growth T. Rowe Price Associates, Inc. Long-term growth of capital and, Portfolio secondarily, dividend income. T. Rowe Price Small Cap Growth T. Rowe Price Associates, Inc. Long-term capital growth. Portfolio Van Eck Global Natural Resources Van Eck Associates Corporation Long-term capital appreciation with Portfolio income as a secondary consideration. Western Asset Management Western Asset Management To maximize total return consistent Strategic Bond Opportunities Company with preservation of capital. Portfolio Western Asset Management U.S. Western Asset Management To maximize total return consistent Government Portfolio Company with preservation of capital and maintenance of liquidity. MET INVESTORS SERIES TRUST ADVISER: METLIFE ADVISERS, LLC PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- AllianceBernstein Global Dynamic AllianceBernstein L.P. Seeks capital appreciation and Allocation Portfolio current income. American Funds(R) Balanced N/A A balance between a high level of Allocation Portfolio current income and growth of capital, with a greater emphasis on growth of capital. American Funds(R) Growth Allocation N/A Growth of capital. Portfolio American Funds(R) Moderate N/A A high total return in the form of Allocation Portfolio income and growth of capital, with a greater emphasis on income. AQR Global Risk Balanced Portfolio AQR Capital Management, LLC Seeks total return. BlackRock Global Tactical Strategies BlackRock Financial Management, Seeks capital appreciation and Portfolio Inc. current income. BlackRock Large Cap Core Portfolio BlackRock Advisors, LLC Long-term capital growth. Clarion Global Real Estate Portfolio CBRE Clarion Securities LLC Total return through investment in real estate securities, emphasizing both capital appreciation and current income. ClearBridge Aggressive Growth ClearBridge Investments, LLC Capital appreciation. Portfolio (formerly Legg Mason (formerly ClearBridge Advisors, ClearBridge Aggressive Growth LLC) Portfolio) Harris Oakmark International Harris Associates L.P. Long-term capital appreciation. Portfolio Invesco Balanced-Risk Allocation Invesco Advisers, Inc. Seeks total return. Portfolio Invesco Small Cap Growth Portfolio Invesco Advisers, Inc. Long-term growth of capital. Janus Forty Portfolio Janus Capital Management LLC Capital appreciation. JPMorgan Global Active Allocation J.P. Morgan Investment Seeks capital appreciation and Portfolio Management Inc. current income.
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PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- JPMorgan Small Cap Value Portfolio J.P. Morgan Investment Long-term capital growth. (formerly Dreman Small Cap Management Inc./3/ Value Portfolio) Loomis Sayles Global Markets Loomis Sayles & Company, L.P. High total investment return Portfolio through a combination of capital appreciation and income. Lord Abbett Bond Debenture Lord, Abbett & Co. LLC High current income and the Portfolio opportunity for capital appreciation to produce a high total return. Lord Abbett Mid Cap Value Portfolio Lord, Abbett & Co. LLC Capital appreciation through investments, primarily in equity securities, which are believed to be undervalued in the marketplace. Met/Templeton International Bond Franklin Advisers, Inc. Current income with capital Portfolio appreciation and growth of income. MetLife Aggressive Strategy N/A Growth of capital. Portfolio MetLife Balanced Plus Portfolio Pacific Investment Management A balance between a high level of Company LLC current income and growth of capital, with a greater emphasis on growth of capital. MetLife Growth Strategy Portfolio N/A Growth of capital. MetLife Multi-Index Targeted Risk N/A Seeks a balance between growth of Portfolio capital and current income, with a greater emphasis on growth of capital. MFS(R) Emerging Markets Equity Massachusetts Financial Services Capital appreciation. Portfolio Company MFS(R) Research International Massachusetts Financial Services Capital appreciation. Portfolio Company Morgan Stanley Mid Cap Growth Morgan Stanley Investment Capital appreciation. Portfolio Management Inc. Oppenheimer Global Equity Portfolio OppenheimerFunds, Inc. Capital appreciation. PIMCO Inflation Protected Bond Pacific Investment Management Maximum real return, consistent Portfolio Company LLC with preservation of capital and prudent investment management. PIMCO Total Return Portfolio Pacific Investment Management Maximum total return, consistent Company LLC with the preservation of capital and prudent investment management. Pyramis Managed Risk Portfolio Pyramis Global Advisors, LLC Seeks total return. Schroders Global Multi-Asset Schroder Investment Management Seeks capital appreciation and Portfolio North America Inc. current income. SSgA Growth and Income ETF SSgA Funds Management, Inc. Growth of capital and income. Portfolio SSgA Growth ETF Portfolio SSgA Funds Management, Inc. Growth of capital. T. Rowe Price Mid Cap Growth T. Rowe Price Associates, Inc. Long-term growth of capital. Portfolio
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AMERICAN FUNDS INSURANCE SERIES(R) ADVISER: CAPITAL RESEARCH AND MANAGEMENT COMPANY PORTFOLIO SUB-ADVISER INVESTMENT OBJECTIVE --------- ----------- -------------------- American Funds Bond Fund N/A As high a level of current income as is consistent with the preservation of capital. American Funds Global Small N/A Long-term growth of capital. Capitalization Fund American Funds Growth Fund N/A Growth of capital. American Funds Growth-Income N/A Long-term growth of capital and Fund income. FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST PORTFOLIO ADVISER INVESTMENT OBJECTIVE --------- ------- -------------------- Franklin Income Securities Fund Franklin Advisers, Inc. Seeks to maximize income while maintaining prospects for capital appreciation. Mutual Shares Securities Fund Franklin Mutual Advisers, LLC Seeks capital appreciation, with income as a secondary goal.
---------- /1/Formerly MetLife Investment Advisors Company, LLC. /2/Prior to January 7, 2013, BlackRock Advisors, LLC was the sub-adviser to the Portfolio. /3/Prior to April 29, 2013, Dreman Value Management, LLC was the sub-adviser to the Portfolio. FOR MORE INFORMATION REGARDING THE PORTFOLIOS AND THEIR INVESTMENT ADVISERS AND SUB-ADVISERS, SEE THE PORTFOLIO PROSPECTUSES AND THEIR STATEMENTS OF ADDITIONAL INFORMATION, WHICH YOU CAN OBTAIN BY CALLING 1-800-638-5000. The Portfolios' investment objectives may not be met. The investment objectives and policies of certain Portfolios are similar to the investment objectives and policies of other funds that may be managed by the same investment adviser or sub-adviser. The investment results of the Portfolios may be higher or lower than the results of these funds. There is no assurance, and no representation is made, that the investment results of any of the Portfolios will be comparable to the investment results of any other fund. SHARE CLASSES OF THE PORTFOLIOS The Portfolios offer various classes of shares, each of which has a different level of expenses. The prospectuses for the Portfolios may provide information for share classes that are not available through the Policy. When you consult the prospectus for any Portfolio, you should be careful to refer to only the information regarding the class of shares that is available through the Policy. For the Metropolitan Series Fund, we offer Class A shares only; for the Met Investors Series Trust, we offer Class A and Class B shares; and for the American Funds Insurance Series and the Franklin Templeton Variable Insurance Products Trust, we offer Class 2 shares only. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS An investment adviser (other than our affiliate MetLife Advisers, 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 for expenses for certain administrative, marketing and support services with respect to the Policies and, in our role as intermediary, with respect to the Portfolios. We and our 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 Portfolio 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 subadvisers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser (other than our A-20 affiliate MetLife Advisers, LLC) or subadviser 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 of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or subadviser (or their affiliates) 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 adviser MetLife Advisers, LLC, which is formed as a "limited liability company." Our ownership interests in MetLife Advisers, LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from the Portfolios. We will benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to the adviser. (See "Fee Tables--Annual Portfolio Operating Expenses" for information on the management fees paid by the Portfolios and the Statement of Additional Information for the Portfolios for information on the management fees paid by the adviser to the subadvisers.) Certain Portfolios have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. A Portfolio's 12b-1 Plan, if any, is described in more detail in the Portfolio's prospectus. (See "Fee Tables--Annual Portfolio Expenses" and "Distribution of the Policies.") Any payments we receive pursuant to those 12b-1 Plans are paid to us or our Distributor. Payments under a Portfolio's 12b-1 Plan decrease the Portfolio's investment return. For specific information on the amounts we may receive on account of your investment in the Portfolios, you may call 1-800-638-5000. SELECTION OF THE PORTFOLIOS We select the Portfolios offered through the Policy based on a number of criteria, including asset class coverage, the strength of the adviser's or subadviser'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 subadviser is one of our affiliates or whether the Portfolio, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates. For additional information on these arrangements, see "Certain Payments We Receive with Regard to the Portfolios" above. 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. We may include Portfolios based on recommendations from selling firms. In some cases, the selling firms may receive payments from the Portfolios they recommend and may benefit accordingly from the allocation of cash value to such Portfolios. WE DO NOT PROVIDE ANY INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR PORTFOLIO. YOU BEAR THE RISK OF ANY DECLINE IN THE CASH VALUE OF YOUR POLICY RESULTING FROM THE PERFORMANCE OF THE PORTFOLIOS YOU HAVE CHOSEN. We make certain payments to American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series. (See "Distribution of the Policies.") VOTING RIGHTS We own the Portfolio shares held in the Separate Account and have the right to vote those shares at meetings of the Portfolio shareholders. However, to the extent required by Federal securities law, we will give you, as Policy Owner, the right to instruct us how to vote the shares that are attributable to your Policy. We will determine, as of the record date, if you are entitled to give voting instructions and the number of shares to which you have a right of instruction. If we do not receive timely instructions from you, we will vote your shares for, against, or withhold from voting on, any proposition in the same proportion as the shares held in that Investment Division for all policies for which we have received voting instructions. The effect of this proportional voting is that a small number of Policy Owners may control the outcome of a vote. A-21 We will vote Portfolio shares held by our general account (or any unregistered separate account for which voting privileges were not extended) in the same proportion as the total of (i) shares for which voting instructions were received and (ii) shares that are voted in proportion to such voting instructions. We may disregard voting instructions for changes in the investment policy, investment adviser or principal underwriter of a Portfolio if required by state insurance law, or if we (i) reasonably disapprove of the changes and (ii) in the case of a change in investment policy or investment adviser, make a good faith determination that the proposed change is prohibited by state authorities or inconsistent with an Investment Division's investment objectives. If we do disregard voting instructions, the next semi-annual report to Policy Owners will include a summary of that action and the reasons for it. RIGHTS RESERVED BY METLIFE We and our affiliates may change the voting procedures and vote Portfolio shares without Policy Owner instructions, if the securities laws change. We also reserve the right: (1) to add Investment Divisions; (2) to combine Investment Divisions; (3) to substitute shares of another registered open-end management investment company, which may have different fees and expenses, for shares of a Portfolio; (4) to substitute or close an Investment Division to allocations of premium payments or cash value or both, and to existing investments or the investment of future premiums, or both, for any class of Policy or Policy Owner, at any time in our sole discretion; (5) to operate the Separate Account as a management investment company under the Investment Company Act of 1940 or in any other form; (6) to deregister the Separate Account under the Investment Company Act of 1940; (7) to combine it with other Separate Accounts; and (8) to transfer assets supporting the Policies from one Investment Division to another or from the Separate Account to other Separate Accounts, or to transfer assets to our general account as permitted by applicable law. We will exercise these rights in accordance with applicable law, including approval of Policy Owners if required. We will notify you if exercise of any of these rights would result in a material change in the Separate Account or its investments. We will not make any changes without receiving any necessary approval of the SEC and the New York Insurance Department. We will notify you of any changes. THE POLICIES PURCHASING A POLICY To purchase a Policy, you must submit a completed application and an initial premium to us at our Designated Office. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The minimum face amount for the base Policy is $50,000 unless we consent to a lower amount. For Policies acquired through a pension or profit sharing plan qualified under Section 401 of the Internal Revenue Code of 1986, the minimum face amount is $25,000. The Policies are available for insureds age 85 or younger. We can provide you with details as to our underwriting standards when you apply for a Policy. We reserve the right to modify our minimum face amount and underwriting requirements at any time. We must receive evidence of insurability that satisfies our underwriting standards before we will issue a Policy. We reserve the right to reject an application for any reason permitted by law. We offer other variable life insurance policies that have different death benefits, Policy features, and optional programs. However, these other policies also have different charges that would affect your Investment Division performance and cash values. To obtain more information about these other policies, including their eligibility requirements, contact our Designated Office or your registered representative. REPLACING EXISTING INSURANCE It may not be in your best interest to surrender, lapse, 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 A-22 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 may not issue the Policy until we have received an initial premium from your existing insurance company, the issuance of the Policy may be delayed. POLICY OWNER AND BENEFICIARY The Policy Owner is named in the application but may be changed from time to time. While the insured is living and the Policy is in force, the Policy Owner may exercise all the rights and options described in the Policy, subject to the terms of any beneficiary designation or assignment of the Policy. These rights include selecting and changing the beneficiary, changing the owner, changing the face amount of the Policy and assigning the Policy. At the death of the Policy Owner who is not the insured, his or her estate will become the Policy Owner unless a successor Policy Owner has been named. The Policy Owner's rights (except for rights to payment of benefits) terminate at the death of the insured. The beneficiary is also named in the application. You may change the beneficiary at any time before the death of the insured, unless the beneficiary designation is irrevocable. The beneficiary has no rights under the Policy until the death of the insured and must survive the insured in order to receive the death proceeds. If no named beneficiary survives the insured, we pay proceeds to the Policy Owner. A change of Policy Owner or beneficiary is subject to all payments made and actions taken by us under the Policy before we receive a signed change form. You can contact your registered representative or our Designated Office for the procedure to follow. You may assign (transfer) your rights in the Policy to someone else. An absolute assignment of the Policy is a change of Policy Owner and beneficiary to the assignee. A collateral assignment of the Policy does not change the Policy Owner or beneficiary, but their rights will be subject to the terms of the assignment. Assignments are subject to all payments made and actions taken by us under the Policy before we receive a signed copy of the assignment form. We are not responsible for determining whether or not an assignment is valid. Changing the Policy Owner or assigning the Policy may have tax consequences. (See "Tax Considerations" below.) 24 MONTH CONVERSION RIGHT GENERAL RIGHT. Generally, during the first two Policy years, or in the event of a material change in the investment policy of the Separate Account, you may convert the Policy to fixed benefit coverage by exchanging the Policy for a fixed benefit life insurance policy agreed to by us and issued by us or an affiliate that we name PROVIDED THAT you repay any Policy loans and loan interest, and the Policy has not lapsed. We make the exchange without evidence of insurability. The new policy will have the same base Policy face amount as that being exchanged. The new policy will have the same issue age, risk class and Policy Date as the variable life Policy had. Contact our Designated Office or your registered representative for more specific information about the 24 Month Conversion Right. The exchange may result in a cost or credit to you. On the exchange, you may need to make an immediate premium payment on the new policy in order to keep it in force. EXCHANGE RIGHT At least once each year you have the option to transfer all of your cash value to the Fixed Account and apply the cash surrender value to a new policy issued by us or an affiliate which provides paid-up insurance. Paid-up insurance is permanent insurance with no further premiums due. The face amount of the new policy of paid-up insurance may be less than the face amount of the Policy. PREMIUMS FLEXIBLE PREMIUMS Subject to the limits described below, you choose the amount and frequency of premium payments. You select a Planned Premium schedule, which consists of a first-year premium amount and an amount for subsequent A-23 premium payments. This schedule appears in your Policy. YOUR PLANNED PREMIUMS WILL NOT NECESSARILY KEEP YOUR POLICY IN FORCE. You may skip Planned Premium payments or make additional payments. Additional payments could be subject to underwriting. No payment can be less than $50, except with our consent. You can pay Planned Premiums on an annual, semi-annual or quarterly schedule, or on a monthly schedule if payments are drawn directly from your checking account under our pre-authorized checking arrangement. We will send premium notices for annual, semi-annual or quarterly Planned Premiums. You may make payments by check or through our pre-authorized checking arrangement. You can change your Planned Premium schedule by sending your request to us at our Designated Office. You may not make premium payments on or after the Policy anniversary when the insured reaches age 121, except for premiums required during the grace period. If any payments under the Policy exceed the "7-pay limit" under Federal tax law, your Policy will become a modified endowment contract and you may have more adverse tax consequences with respect to certain distributions than would otherwise be the case if premium payments did not exceed the "7-pay limit." The amount of your "7-pay limit" is shown in your Policy illustration and in your annual Policy statement. If you make a payment that exceeds the "7-pay limit" we will notify you and give you an opportunity to receive a refund of the excess premium to prevent your Policy from becoming a modified endowment contract. (See "Tax Considerations.") In addition, if you have selected the guideline premium test, Federal tax law limits the amount of premiums that you can pay under the Policy. You need our consent if, because of tax law requirements, a payment would increase the Policy's death benefit by more than it would increase cash value. We may require evidence of insurability before accepting the payment. We allocate net payments to your Policy's Investment Divisions as of the date we receive the payments at our Designated Office (or at our Administrative Office in Tampa, Florida), if they are received before the close of regular trading on the New York Stock Exchange. Payments received after that time, or on a day that the New York Stock Exchange is not open, will be allocated to your Policy's Investment Divisions on the next day that the New York Stock Exchange is open. (See "Receipt of Communications and Payments at MetLife's Designated Office.") Under our current processing, we treat any payment received by us as a premium payment unless it is clearly marked as a loan repayment. AMOUNT PROVIDED FOR INVESTMENT UNDER THE POLICY INVESTMENT START DATE. Your initial net premium is credited with Fixed Account interest as of the investment start date. The investment start date is the later of the Policy Date and the date we first receive a premium payment for the Policy at our Designated Office. (See "Receipt of Communications and Payments at MetLife's Designated Office.") PREMIUM WITH APPLICATION. If you make a premium payment with the application, unless you request otherwise, the Policy Date is the date the policy application is approved. Monthly Deductions begin on the Policy Date. You may only make one premium payment with the application. The minimum amount you must pay is set forth in the application. If we decline an application, we refund the premium payment made. If you make a premium payment with the application, we will cover the insured under a temporary insurance agreement beginning on the later of the date the application is signed or on the date of any required medical examination. (See "Death Benefits.") PREMIUM ON DELIVERY. If you pay the initial premium upon delivery of the Policy, unless you request otherwise, the Policy Date and the investment start date are the date your premium payment is received at our Designated Office. Monthly Deductions begin on the Policy Date. BACKDATING. We may sometimes backdate a Policy, if you request, by assigning a Policy Date earlier than the date the Policy application is approved. You may wish to backdate so that you can obtain lower cost of insurance rates, based on a younger insurance age. For a backdated Policy, you must also pay the minimum premiums due for the period between the Policy Date and the investment start date. As of the investment start date, we allocate the net premiums to the Policy, adjusted for monthly Policy charges. For a backdated Policy, the investment start date is the later of the date the policy application is approved and the date your premium is received at our Designated Office. A-24 RIGHT TO EXAMINE POLICY You may cancel the Policy within ten days after you receive it. You may return the Policy to our Designated Office (see "Receipt of Communications and Payments at MetLife's Designated Office") or your registered representative. Insurance coverage ends as soon as you return the Policy (determined by postmark, if the Policy is mailed). If you cancel the Policy, we refund any premiums paid. ALLOCATION OF NET PREMIUMS We allocate your initial net premium to the Fixed Account as of the investment start date. We will hold your initial net premium in the Fixed Account for twenty days, and then we make the allocation among the Investment Divisions as you choose. You may allocate any whole percentage to an Investment Division. You make the initial premium allocation when you apply for a Policy. You can change the allocation of future premiums at any time thereafter. The change will be effective for premiums applied on or after the date when we receive your request. You may request the change by telephone, by written request (which may be telecopied to us) or over the Internet. (See "Receipt of Communications and Payments at MetLife's Designated Office.") When we allocate net premiums to your Policy's Investment Divisions, we convert them into accumulation units of the Investment Divisions. We determine the number of accumulation units by dividing the dollar amount of the net premium by the accumulation unit value. For your initial premium, we use the accumulation unit value on the investment start date. For subsequent premiums, we use the accumulation unit value next determined after receipt of the payment. (See "Cash Value.") A-25 RECEIPT OF COMMUNICATIONS AND PAYMENTS AT METLIFE'S DESIGNATED OFFICE We will treat your request for a Policy transaction, or your submission of a payment, as received by us if we receive a request conforming to our administrative procedures or a payment at our Designated Office before the close of regular trading on the New York Stock Exchange on that day (usually 4:00 p.m. Eastern Time). If we receive it after that time, 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 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 Designated Office for premium payments is printed on the billing statement we mail to you. If you do not have your billing statement you may call us at 1-800-638-5000 to obtain the address. The address to use depends on whether you purchase the Policy through a registered representative of one of our affiliates MetLife Securities, Inc. and New England Securities Corporation, or through another registered representative. If you purchase the Policy through a registered representative of one of these two affiliates, premium payments should be mailed to MetLife, P.O. Box 371351, Pittsburgh, PA 15250-7351. If your representative is not registered with one of these two affiliates, premium payments should be mailed to MetLife, P.O. Box 371862, Pittsburgh, PA 15250-7862. The Designated Office for other transactions is as follows: Payment Inquiries and MetLife Correspondence P.O. Box 354 Warwick, RI 02887-0354 Beneficiary and MetLife Ownership Changes P.O. Box 313 Warwick, RI 02887-0313 Surrenders, Loans, MetLife Withdrawals and P.O. Box 543 Investment Division Transfers Warwick, RI 02887-0543 Cancellations (Right to Examine Policy MetLife Period) Free Look Unit 500 Schoolhouse Road Johnstown, PA 15904 Death Claims MetLife P.O. Box 353 Warwick, RI 02887-0353 Investment Division Transfers and Other (800) 638-5000 Telephone Transactions and Inquiries
You may request a cash value transfer or reallocation of future premiums by written request (which may be telecopied) to us, by telephoning us or over the Internet (subject to our restrictions on "market timing" transfers). To request a transfer or reallocation by telephone, you should contact your registered representative or contact us at 1-800-638-5000. To request a transfer over the Internet, you may log on to our website at www.metlife.com. We use reasonable procedures to confirm that instructions communicated by telephone, facsimile or Internet are genuine. Any telephone, facsimile or Internet instructions that we reasonably believe to be genuine are your responsibility, including losses arising from any errors in the communication of instructions. However, because telephone and Internet 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 or Internet instructions, or that you have authorized any such person to act for you. Telephone, facsimile, and computer systems (including the Internet) may not always be available. Any telephone, facsimile or computer system, whether it is yours, your service provider's, your registered 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 A-26 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. If you send your premium payments or transaction requests to an address other than the one we have designated for receipt of such payments or requests, we may return the premium payment to you, or there may be a delay in applying the premium payment or transaction to your Policy. PAYMENT OF PROCEEDS We ordinarily pay any cash surrender value, loan value or death benefit proceeds from the Investment Divisions within seven days after we receive a request, or satisfactory proof of death of the insured (and any other information we need to pay the death proceeds). (See "Receipt of Communications and Payments at MetLife's Designated Office.") However, we may delay payment (except when a loan is made to pay a premium to us) or transfers from the Investment Divisions: (i) if the New York Stock Exchange is closed for other than weekends or holidays, or if trading on the New York Stock Exchange is restricted as determined by the SEC, (ii) if the SEC by order permits postponement or determines that an emergency exists that makes payments or Investment Division transfers impractical, or (iii) at any other time when the Portfolios or the Separate Account have the legal right to suspend payment. We may withhold payment of surrender, withdrawal or loan proceeds if any portion of those proceeds would be derived from a Policy Owner's check that has not yet cleared (I.E., that could still be dishonored by your banking institution). We may use telephone, facsimile, Internet or other means of communications to verify that payment from the Policy Owner's check 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. We will pay the proceeds in one sum, including either by check, by placing the amount in an account that earns interest, or by any other method of payment that provides the beneficiary with immediate and full access to the proceeds, or under other settlement options that we may make available. None of these options vary with the investment performance of the Separate Account. More detailed information concerning settlement options is available in the Statement of Information and on request from our Designated Office. We will pay interest on the proceeds as required by applicable state law. Unless otherwise requested and subject to state law, the Policy's death proceeds will generally be paid to the beneficiary through a settlement option called the Total Control Account. The Total Control Account is an interest-bearing account through which the beneficiary has immediate and full access to the proceeds, with unlimited draft writing privileges. We credit interest to the account at a rate that will not be less than a guaranteed minimum annual effective rate. You may also elect to have any Policy surrender proceeds paid into a Total Control Account established for you. Assets backing the Total Control Accounts are maintained in our general account and are subject to the claims of our creditors. We will bear the investment experience of such assets; however, regardless of the investment experience of such assets, the interest credited to the Total Control Account will never fall below the applicable guaranteed minimum annual effective rate. Because we bear the investment experience of the assets backing the Total Control Accounts, we may receive a profit from these assets. The Total Control Account is not insured by the FDIC or any other governmental agency. Every state has unclaimed property laws which generally declare life insurance policies to be abandoned after a period of inactivity of three to five years from the date any death benefit is due and payable. For example, if the payment of a death benefit has been triggered, and after a thorough search, we are still unable to locate the beneficiary of the death benefit, the death benefit will be paid to the abandoned property division or unclaimed property office of the state in which the beneficiary or the policy owner last resided, as shown on our books and records. ("Escheatment" is the formal, legal name for this process.) However, the state is obligated to pay the death benefit (without interest) if your beneficiary steps forward to claim it with the proper documentation. To prevent your Policy's death benefit from being paid to the state's abandoned or unclaimed property office, it is important that you update your beneficiary designation--including complete names and complete address--if and as they change. You should contact our Designated Office in order to make a change to your beneficiary designation. (See "Receipt of Communications and Payments at MetLife's Designated Office.") A-27 CASH VALUE Your Policy's total cash value includes its cash value in the Separate Account and in the Fixed Account. If you have a Policy loan, the cash value also includes the amount we hold in the Loan Account as a result of the loan. The cash value reflects: --net premium payments --the net investment experience of the Policy's Investment Divisions --interest credited to cash value in the Fixed Account --interest credited to amounts held in the Loan Account for a Policy loan --the death benefit option you choose --Policy charges --partial withdrawals --transfers among the Investment Divisions and the Fixed Account. The Policy's total cash value in the Separate Account equals the number of accumulation units credited in each Investment Division multiplied by that Investment Division's accumulation unit value. We convert any premium, interest earned on loan cash value, or cash value allocated to an Investment Division into accumulation units of the Investment Division. Surrenders, partial withdrawals, Policy loans, transfers and charges deducted from the cash value reduce the number of accumulation units credited in an Investment Division. We determine the number of accumulation units by dividing the dollar amount of the transaction by the Investment Division's accumulation unit value next determined following the transaction. (In the case of an initial premium, we use the accumulation unit value on the investment start date). The accumulation unit value of an Investment Division depends on the net investment experience of its corresponding Portfolio and reflects fees and expenses of the Portfolio. We determine the accumulation unit value as of the close of regular trading on the New York Stock Exchange on each day that the Exchange is open for trading by multiplying the most recent accumulation unit value by the net investment factor ("NIF") for that day (see below). The NIF for an Investment Division reflects: --the change in net asset value per share of the corresponding Portfolio (as of the close of regular trading on the Exchange) from its last value, --the amount of dividends or other distributions from the Portfolio since the last determination of net asset value per share, and --any deductions for taxes that we make from the Separate Account. The NIF can be greater or less than one. DEATH BENEFITS If the insured dies while the Policy is in force, we pay a death benefit to the beneficiary. Coverage under the Policy generally begins when you pay the initial premium. If you make a premium payment with the application, we will cover the insured under a temporary insurance agreement for a limited time that begins on the later of the date we receive the premium payment or the date of any required medical examination. Temporary coverage is not available for proposed insureds who have received medical treatment for, or been diagnosed as having, certain conditions or diseases specified in the temporary insurance agreement. The maximum temporary coverage is the lesser of the amount of insurance applied for and $1,000,000. DEATH BENEFIT OPTIONS. When you apply for a Policy, you must choose among three death benefit options. If you fail to select a death benefit option in the application, we will seek the required information from you. A-28 The Option A death benefit is equal to the face amount of the Policy. The Option A death benefit is fixed, subject to increases required by the Internal Revenue Code of 1986 (the "Code"). The Option B death benefit is equal to the face amount of the Policy, plus the Policy's cash value, if any. The Option B death benefit is also subject to increases required by the Code. The Option C death benefit (available if the insured is age 60 or younger) is equal to the face amount of the Policy plus the Policy's cash value until the insured attains age 65, at which time we will increase the Policy's face amount by the amount of the Policy's cash value and thereafter the death benefit will remain level, at the increased face amount, subject to increases required by the Code. CHOICE OF TAX TEST. The Internal Revenue Code requires the Policy's death benefit to be not less than an amount defined in the Code. As a result, if the cash value grows to certain levels, the death benefit increases to satisfy tax law requirements. When you apply for your Policy, you select which tax test will apply to the death benefit. You will choose between: (1) the guideline premium test, and (2) the cash value accumulation test. The test you choose at issue cannot be changed. Under the GUIDELINE PREMIUM TEST, the amount of premium that can be paid is subject to tax law limits. Additionally, the death benefit will not be less than the cash value times the guideline premium factor. See Appendix A. Under the CASH VALUE ACCUMULATION TEST, the death benefit will not be less than the cash value times the net single premium factor set by the Code. Net single premium factors are based on the age, smoking status, risk class and sex of the insured at the time of the calculation. Sample net single premium factors appear in Appendix A. If cash value growth in the later Policy years is your main objective, the guideline premium test may be the appropriate choice because it does not require as high a death benefit as the cash value accumulation test, and therefore cost of insurance charges may be lower once the Policy's death benefit is subject to increases required by the Code. If you select the cash value accumulation test, you can generally make a higher amount of premium payments for any given face amount, and a higher death benefit may result in the long term. If cash value growth in the early Policy years is your main objective, the cash value accumulation test may be the appropriate choice because it allows you to invest more premiums in the Policy for each dollar of death benefit. AGE 121. The death benefit payable under Option A or Option C on or after the insured's attained age 121 will be the greater of: --101% of the cash value on the date of death, or --the face amount of the base Policy on the Policy anniversary at the insured's attained age 121. The death benefit payable under Option B on or after the insured's attained age 121 will be the face amount of the base Policy on the Policy anniversary at the insured's attained age 121, plus the cash value on the date of death. The tax consequences of keeping the Policy in force beyond the insured's attained age 121 are unclear. DEATH PROCEEDS PAYABLE The death proceeds we pay are equal to the death benefit on the date of the insured's death, reduced by any outstanding loan and accrued loan interest on that date. If death occurs during the grace period, we reduce the proceeds by the amount of unpaid Monthly Deductions. (See "Lapse and Reinstatement.") We increase the death proceeds (1) by any rider benefits payable and (2) by any cost of insurance charge made for a period beyond the date of death. Riders that can have an effect on the amount of death proceeds payable are the Accelerated Death Benefit Rider, the Accidental Death Benefit Rider and the Options to Purchase Additional Insurance Coverage Rider. (See "Additional Benefits by Rider.") We may adjust the death proceeds if the insured's age or sex was misstated in the application, if death results from the insured's suicide within two years from the Policy's date of issue, or if a rider limits the death benefit. A-29 SUICIDE. If the insured commits suicide within two years from the date of issue, the death benefit will be limited to premiums paid less any partial withdrawals, less any loan and loan interest outstanding on the date of death. If the insured commits suicide within two years after the effective date of an increase in face amount, the death benefit for such increase will be limited to the Monthly Deductions for the increase. CHANGE IN DEATH BENEFIT OPTION After the first Policy year you may change your death benefit option, subject to our underwriting rules, by written request to our Designated Office. The change will be effective on the monthly anniversary on or following the date we approve your request. We may require proof of insurability. A change in death benefit option may have tax consequences. If you change from Option A (or from Option C after the insured's attained age 65) to Option B (or to Option C on or before the insured's attained age 60), we reduce the Policy's face amount if necessary so that the death benefit is the same immediately before and after the change. A face amount reduction below $50,000 requires our consent. If we reduce the face amount, we will first reduce any prior increases in face amount that you applied for, in the reverse order in which the increases occurred, then any remaining initial face amount, and then any increase in face amount from a prior change in death benefit option, but not below the Policy minimum. A partial withdrawal of cash value may be necessary to meet Federal tax law limits on the amount of premiums that you can pay into the Policy. A Surrender Charge may apply to a Policy face amount reduction or partial withdrawal that reduces the face amount on a change from Option A (or from Option C after the insured's attained age 65) to Option B (or to Option C on or before the insured's attained age 60). (See "Surrender Charge.") In addition, if the face amount reduction occurs within 12 months after a face amount increase, we will deduct a proportionate part of the Coverage Expense Charges due with respect to the face amount increase for the remainder of the 12-month period. If you change from Option B (or from Option C on or before the insured's attained age 65) to Option A, we increase the Policy's face amount, if necessary, so that the death benefit is the same immediately before and after the change. The increase in face amount is not subject to the Coverage Expense Charge and will not be subject to any Surrender Charge. INCREASE IN FACE AMOUNT You may increase the Policy's face amount. We require satisfactory evidence of insurability, and the insured's attained age must be 85 or less. The minimum amount of increase permitted is $5,000. The increase is effective on the monthly anniversary on or next following our approval of your request. Requests for face amount increases should be submitted to our Designated Office. An increase in face amount may have tax consequences. The face amount increase will have its own Target Premium, as well as its own Surrender Charge, current cost of insurance rates, Coverage Expense Charge, and Right to Examine Policy and suicide and contestability periods as if it were a new Policy. (See "Surrender Charge", "Monthly Deduction from Cash Value", "Partial Withdrawal" and "Reduction in Face Amount.") When calculating the monthly cost of insurance charge, we attribute the Policy's cash value first to any remaining initial face amount (including any increase in face amount from a prior change in death benefit option), then to any face amount increases in the order in which they were issued, for purposes of determining the net amount at risk. We reserve the right to (i) restrict certain Policy changes, such as death benefit increases, or (ii) require the issuance of a new Policy in connection with such Policy changes if we deem it administratively necessary or prudent to do so in order to comply with applicable law, including applicable Federal income tax law. REDUCTION IN FACE AMOUNT After the first Policy year, you may reduce the face amount of your Policy without receiving a distribution of any Policy cash value. If you reduce the face amount of your Policy, we deduct any Surrender Charge that applies from the Policy's cash value in proportion to the amount of the face amount reduction. If the face amount of your Policy is reduced in the first year following a face amount increase, we will also deduct a proportionate part of the Coverage Expense Charges due for the remainder of the first year following the face amount increase. A-30 A face amount reduction will decrease the Policy's death benefit unless we are increasing the death benefit to satisfy Federal income tax laws, in which case a face amount reduction will not decrease the death benefit unless we deduct a Surrender Charge from the cash value. A reduction in face amount in this situation may not be advisable. The amount of any face reduction must be at least $5,000, and the face amount remaining after a reduction must meet our minimum face amount requirements for issue, except with our consent. If you choose to reduce your Policy's face amount, unless you request otherwise, we will first decrease any prior increases in base Policy face amount that you applied for, in the reverse order in which the increases occurred, then any remaining initial base Policy face amount, and then any increase in face amount from a prior change in death benefit option. A reduction in face amount reduces the Federal tax law limits on the amount of premiums that you can pay under the Policy under the guideline premium test. In these cases, a portion of the Policy's cash value may have to be paid to you to comply with Federal tax law. A face amount reduction takes effect on the monthly anniversary on or next following the date we receive your request. You can contact your registered representative or the Designated Office for information on face amount reduction procedures. A reduction in the face amount of a Policy may create a modified endowment contract or have other adverse tax consequences. If you are contemplating a reduction in face amount, you should consult your tax adviser regarding the tax consequences of the transaction. (See "Tax Considerations.") SURRENDERS AND PARTIAL WITHDRAWALS SURRENDER You may surrender the Policy for its cash surrender value at any time while the insured is living. We determine the cash surrender value as of the date when we receive the surrender request. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The cash surrender value equals the cash value reduced by any Policy loan and accrued interest and by any applicable Surrender Charge. (See "Surrender Charge.") If you surrender the Policy in the first Policy year (or in the first year following a face amount increase), we will also deduct an amount equal to the remaining first year Coverage Expense Charges. We reserve the right to also deduct an amount equal to the remaining first year Policy Charges. If you surrender the Policy, coverage will terminate on the monthly anniversary on or next following the date of surrender. If the insured dies on or after the surrender date, but before the termination date, we will reverse the surrender and will pay the Policy's death benefit to the beneficiary, but we will deduct from the death proceeds an amount equal to the cash surrender value paid to you. You may apply all or part of the surrender proceeds to a payment option. Once a Policy is surrendered, all coverage and benefits cease and cannot be reinstated. A surrender may result in adverse tax consequences. (See "Tax Considerations" below.) The Policies are designed to be long-term investments. As a result, you should be aware that if you surrender your Policy in the first Policy year, the Surrender Charge is likely to exceed the cash value of your Policy and you will receive no proceeds upon surrender. PARTIAL WITHDRAWAL After the first Policy anniversary you may withdraw a portion of the Policy's cash surrender value. A partial withdrawal reduces the Policy's death benefit and may reduce the Policy's face amount if necessary so that the amount at risk under the Policy will not increase. A partial withdrawal may also reduce rider benefits. The minimum amount of a partial withdrawal request must be $500. We have the right to limit partial withdrawals to no more than 90% of the cash surrender value. In addition, a partial withdrawal will be limited by any restriction that we currently impose on withdrawals from the Fixed A-31 Account. (See "The Fixed Account.") Currently, we permit partial withdrawals equal to the lesser of 100% of the Policy's cash surrender value in the Separate Account as of the beginning of the year, or the maximum amount that can be withdrawn without causing the Policy's face amount to fall below the minimum permitted. (However, we may allow the face amount to fall below the minimum if the Policy has been in force for at least 15 years and the insured's attained age is greater than 55.) You may not make a partial withdrawal that would reduce your cash surrender value to less than the amount of two monthly deductions. We have the right to limit partial withdrawals to 12 per Policy year. Currently we do not limit the number of partial withdrawals. We reserve the right to impose a charge of $25 on each partial withdrawal. If a partial withdrawal reduces your Policy's face amount, the amount of the Surrender Charge that will be deducted from your cash value is an amount that is proportional to the amount of the face reduction. The amount deducted will reduce the remaining Surrender Charge payable under the Policy. No Surrender Charge will apply on up to 10% of the cash surrender value withdrawn each year, measured as a percentage of each withdrawal. EXAMPLE. The following example assumes that a Policy Owner withdraws, in the first month of the second Policy year, 20% of the cash surrender value of a Policy. The insured under the Policy is assumed to be the representative insured shown in the fee table on page A-8 of the prospectus. As shown in the fee table, the Surrender Charge for that insured is $14.00 per $1,000 of Policy face amount. The Policy is assumed to have the other characteristics shown below: Face Amount:............. $ 350,000 Death Benefit Option:.... Option A -- Level Cash Value:.............. $ 12,000 Surrender Charge:........ $ - 4,900 ($ 14.00 x $350,000/1,000) ------------------ Cash Surrender Value:.... $ 7,100 x 20% ------------------ Withdrawal Amount:....... $ 1,420
The first 10% of cash surrender value, or $710, can be withdrawn free of Surrender Charge. The remaining $710 withdrawn is subject to a portion of the Policy's Surrender Charge -- based on the ratio that such excess withdrawal amount bears to the Policy's face amount less the Surrender Charge, as shown in the formula below: Withdrawal Amount in Excess of Free Withdrawal ---------------------------------- Surrender Charge Surrender Charge x Face Amount less Surrender Charge = On Withdrawal $710 ---------------------------------- $4,900 x $350,000 - $4,900 = $10
Because the Policy has a level death benefit, the withdrawal will cause a dollar for dollar reduction in the Policy's face amount, so that the cash value and the face amount will both be reduced by the $1,420 withdrawal and by the $10 Surrender Charge. A-32 The effect of the withdrawal on the Policy would be as follows: Face Amount before Withdrawal................ $350,000 Withdrawal.................................. - 1,420 Surrender Charge on Withdrawal.............. - 10 -------- Face Amount after Withdrawal................. $348,570 Surrender Charge before Withdrawal........... $ 4,900 Surrender Charge on Withdrawal.............. - 10 -------- Surrender Charge after Withdrawal............ $ 4,890 Cash Value before Withdrawal................. $ 12,000 Withdrawal.................................. - 1,420 Surrender Charge on Withdrawal.............. - 10 -------- Cash Value after Withdrawal.................. $ 10,570 Surrender Charge after Withdrawal............ - 4,890 -------- Cash Surrender Value after Withdrawal........ $ 5,680
Any face amount reduction resulting from a partial withdrawal will reduce the face amount in the following order: any prior increases in base Policy face amount that you applied for, in the reverse order in which the increases occurred; any remaining initial face amount; and then any face amount increases resulting from a change in death benefit option, down to the required minimum. A partial withdrawal reduces the cash value in the Investment Divisions of the Separate Account and the Fixed Account in the same proportion that the cash value in each bears to the Policy's total unloaned cash value. We determine the amount of cash surrender value paid upon a partial withdrawal as of the date when we receive a request. You can contact your registered representative or our Designated Office for information on partial withdrawal procedures. (See "Receipt of Communications and Payments at MetLife's Designated Office.") A reduction in the death benefit as a result of a partial withdrawal may create a modified endowment contract or have other adverse tax consequences. If you are contemplating a partial withdrawal, you should consult your tax adviser regarding the tax consequences. (See "Tax Considerations.") TRANSFERS TRANSFER OPTION You may transfer your Policy's cash value between and among the Investment Divisions and the Fixed Account. Your right to transfer begins 20 days after we apply your initial premium to the Policy. We reserve the right to limit transfers to four per Policy year and to impose a charge of $25 per transfer. Currently we do not limit the number of transfers per Policy year or impose a charge on transfers. We treat all transfer requests made at the same time as a single request. The transfer is effective as of the date when we receive the transfer request, if the request is received before the close of regular trading on the New York Stock Exchange. Transfer requests received after that time, or on a day that the New York Stock Exchange is not open, will be effective on the next day that the New York Stock Exchange is open. (See "Receipt of Communications and Payments at MetLife's Designated Office.") For special rules regarding transfers involving the Fixed Account, see "The Fixed Account". RESTRICTIONS ON FREQUENT TRANSFERS. 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"). Frequent transfers involving arbitrage trading 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). A-33 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 Baillie Gifford International Stock Portfolio, Loomis Sayles Global Markets Portfolio, Loomis Sayles Small Cap Core Portfolio, Loomis Sayles Small Cap Growth Portfolio, MSCI EAFE Index Portfolio, Neuberger Berman Genesis Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000 Index Portfolio, Western Asset Management Strategic Bond Opportunities Portfolio, T. Rowe Price Small Cap Growth Portfolio, Van Eck Global Natural Resources Portfolio, Clarion Global Real Estate Portfolio, JPMorgan Small Cap Value Portfolio, Harris Oakmark International Portfolio, Lord Abbett Bond Debenture Portfolio, Invesco Small Cap Growth Portfolio, Met/Templeton International Bond Portfolio, MFS Emerging Markets Equity Portfolio, MFS Research International Portfolio and American Funds Global Small Capitalization Fund--the "Monitored Portfolios") and we monitor transfer activity in those Monitored Portfolios. In addition, as described below, we 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. 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 frequent transfer 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 frequent transfer policies, procedures and restrictions (described below), and transfer restrictions may be imposed upon a violation of either monitoring policy. Our policies and procedures may result in transfer restrictions being applied to deter frequent transfers. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, we require future transfer requests to or from any Monitored 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. A first occurrence will result in the imposition of this restriction for a six-month period; a second occurrence will result in the permanent imposition of the restriction. Transfers made under an Automated Investment Strategy are not treated as transfers when we monitor the frequency of transfers. 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 arbitrage trading 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 also may 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 frequent transfers in any Portfolio and there are no arrangements in place to permit any Policy Owner to engage in frequent transfers; we apply our policies and procedures without exception, waiver, or special arrangement. A-34 The Portfolios may have adopted their own policies and procedures with respect to frequent transfers in 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 transfer 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 transfer 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 products. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance products and/or individual retirement plan participants. The omnibus nature of these orders may limit the Portfolios in their ability to apply their frequent transfer 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 frequent trading, 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 frequent transfers (even if an entire omnibus order is rejected due to the frequent transfers of a single Policy Owner). You should read the Portfolio prospectuses for more details. RESTRICTIONS ON LARGE TRANSFERS. Large transfers may 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. We do not monitor for large transfers to or from Portfolios except where the portfolio manager of a particular underlying Portfolio has brought large transfer activity to our attention for investigation on a case-by-case basis. For example, some portfolio managers have asked us to monitor for "block transfers" where transfer requests have been submitted on behalf of multiple Policy Owners by a third party such as an investment adviser. When we detect such large trades, we may impose restrictions similar to those described above where future transfer requests from that third party must be submitted either (i) in writing with an original signature or (ii) by telephone prior to 10:00 a.m. A first occurrence will result in the imposition of this restriction for a six-month period; a second occurrence will result in the permanent imposition of the restriction. In addition to the foregoing, your right to make transfers is subject to limitations or modifications by us if we determine, in our sole opinion, that the exercise of the right by one or more owners with interests in the Investment Divisions is, or would be, to the disadvantage of other owners. Restrictions may be applied in any manner reasonably designed to prevent any use of the transfer right that we consider to be to the disadvantage of other owners. A limitation or modification could be applied to transfers to and from one or more of the Investment Divisions and could include, but is not limited to: (1) the requirement of a minimum time period between each transfer; (2) not accepting a transfer request from a third party acting under authorization on behalf of more than one owner; (3) limiting the dollar amount that may be transferred by an owner between Investment Divisions at any one time; or (4) requiring that a transfer request be provided in writing and signed by the owner. A-35 AUTOMATED INVESTMENT STRATEGIES You can choose one of five automated investment strategies. You can change or cancel your choice at any time. EQUITY GENERATOR(R). The Equity Generator allows you to transfer the interest earned in the Fixed Account to any one of the Investment Divisions on each monthly anniversary. The interest earned in the month must be at least $20 in order for the transfer to take place. If less than $20 is earned, no transfer will occur, and the interest not transferred cannot be counted towards the next month's minimum. ALLOCATOR/SM/. The Allocator allows you to systematically transfer cash value from the Fixed Account or any one Investment Division (the "source fund") to any number of Investment Divisions. The transfers will take place on each monthly anniversary. You can choose to transfer a specified dollar amount (1) for a specified number of months, or (2) until the source fund is depleted. In either case, you must select a dollar amount that would allow transfers to continue for at least three months. ENHANCED DOLLAR COST AVERAGER. With the Enhanced Dollar Cost Averager, cash value is transferred from the EDCA fixed account to the Investment Divisions monthly. You elect the EDCA at issue and select the total amount of cash value to be transferred. The cash value earmarked for the strategy is held in the EDCA fixed account where it may be credited with a rate of interest that is higher than the Fixed Account's current crediting rate. The amount transferred each month to the Investment Divisions equals the total amount earmarked for the strategy divided by 12. REBALANCER(R). The Rebalancer allows your Policy's cash value to be automatically redistributed on a quarterly basis among the Investment Divisions and the Fixed Account in accordance with the allocation percentages you have selected. INDEX SELECTOR(R). The Index Selector allows you to choose one of five asset allocation models which are designed to correlate to various risk tolerance levels. Based on your selection, we allocate 100% of your cash value among the five Investment Divisions that invest in the five index Portfolios available under the Policy (the Barclays Aggregate Bond Index, MSCI EAFE Index, MetLife Stock Index, MetLife Mid Cap Stock Index and Russell 2000 Index Portfolios) and the Fixed Account. On a quarterly basis, we will redistribute your cash value among these Investment Divisions and the Fixed Account in order to return your cash value to the original allocation percentages. If you change your allocation of net premiums the Index Selector strategy, including the rebalancing feature, will be terminated. We will continue to 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 using this strategy over time if your risk tolerance, time horizon or financial situation changes. The asset allocation models used in Index Selector may change from time to time. If you are interested in an updated model, please contact your registered representative. You may not elect Index Selector unless you purchase the Policy through a registered representative of one of our affiliated broker-dealers MetLife Securities, Inc. and New England Securities Corporation. However, ask your registered representative how you might design a similar investment strategy using Rebalancer. These automated investment strategies allow you to take advantage of investment fluctuations, but none assures a profit nor protects against a loss. Because certain strategies involve continuous investment in securities regardless of fluctuating price levels of such securities, you should consider your financial ability to continue purchases through periods of fluctuating price levels. We reserve the right to modify or terminate any of the automated investment strategies for any reason, including, without limitation, a change in regulatory requirements applicable to such programs. For more information about the automated investment strategies, please contact your registered representative. A-36 LOANS You may borrow from your Policy at any time. The maximum amount you may borrow, calculated as of the date of the loan, is the greater of 75% of the Policy's cash surrender value or: --the Policy's cash value, less --any Policy loan balance, less --loan interest due to the next Policy anniversary, less --the most recent Monthly Deduction times the number of months to the next Policy anniversary, less --any Surrender Charge, plus --interest credited on the cash value at the guaranteed interest rate to the next Policy anniversary. The minimum loan amount is $500. We make the loan as of the date when we receive a loan request. (See "Receipt of Communications and Payments at MetLife's Designated Office.") You may increase your risk of lapse if you take a loan. You should contact our Designated Office or your registered representative for information on loan procedures. A Policy loan reduces the Policy's cash value in the Investment Divisions by the amount of the loan. A loan repayment increases the cash value in the Investment Divisions by the amount of the repayment. We attribute Policy loans to the Investment Divisions and the Fixed Account in proportion to the cash value in each. We transfer cash value equal to the amount of the loan from the Investment Divisions and the Fixed Account to the Loan Account (which is part of our general account). You may repay all or part of your loan at any time while the insured is still alive. When you make a loan repayment, we transfer an amount of cash value equal to the repayment from the Loan Account to the Divisions of the Separate Account and to the Fixed Account in proportion to the cash value in each. (See "Receipt of Communications and Payments at MetLife's Designated Office.") We guarantee that the interest rate charged on Policy loans will not be more than 4.0% per year in Policy years 1-10 and 3.0% per year thereafter. Policy loan interest is due and payable annually on each Policy anniversary. If not paid when due, we add the interest accrued to the loan amount, and we transfer an amount of cash value equal to the unpaid interest from the Investment Divisions and the Fixed Account to the Loan Account in the same manner as a new loan. Cash value in the Loan Account earns interest at not less than 3.0% per year and is transferred on each Policy anniversary to the Investment Divisions and to the Fixed Account in proportion to the cash value in each. The interest credited will also be transferred: (1) when you take a new loan; (2) when you make a full or partial loan repayment; and (3) when the Policy enters the grace period. The amount taken from the Policy's Investment Divisions 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 repaid. In addition, we reduce any proceeds payable under a Policy by the amount of any outstanding loan plus accrued interest. If a Policy loan is outstanding, it may be better to repay the loan than to pay a premium, because the payment is subject to sales and premium tax charges, and the loan repayment is not subject to charges. (See "Deductions from Premiums.") If you want us to treat a payment as a loan repayment, it should be clearly marked as such. A loan that is taken from, or secured by, a Policy may have tax consequences. Although the issue is not free from doubt, we believe that a loan from or secured by a Policy that is not classified as a modified endowment contract should generally not be treated as a taxable distribution. Nevertheless, the tax consequences associated with loans outstanding after the tenth Policy year are uncertain. A tax adviser should be consulted when considering a loan. A-37 LAPSE AND REINSTATEMENT LAPSE In general, in any month that your Policy's cash surrender value is not large enough to cover a Monthly Deduction, your Policy will be in default, and may lapse. However, you can prevent your Policy from lapsing, regardless of the amount of your cash surrender value, if the premiums you pay are sufficient to keep the Guaranteed Minimum Death Benefit ("GMDB") in effect. The base Policy offers, at no additional charge, a five-year GMDB, a 20-year GMDB and a GMDB that lasts until the insured's age 65. For an additional charge, you can add a Policy rider at issue that provides a GMDB to age 85 or a GMDB to age 121. All Policies are issued with a GMDB, which guarantees that the Policy will remain in force for at least five years if the required Guaranteed Minimum Death Benefit Monthly Premiums ("GMDB Monthly Premiums") are paid when due. The five-year GMDB Monthly Premium is set forth in your Policy. It is the minimum initial periodic premium you can pay into the Policy. Policies will be issued with the 20-year GMDB or the GMDB to age 65 to eligible Policy Owners who elect either of these GMDBs at issue. The GMDB Monthly Premium varies depending on the guarantee period, the insured's age, sex (except for unisex policies), smoking status and risk class, the Policy's face amount and the death benefit option chosen. The GMDB Monthly Premium may change in the event that any of the following events occur: an increase or decrease in the base Policy face amount; adding, deleting or changing a rider; a change in death benefit option or the insured's risk class; or a misstatement of the insured's age or sex in the Policy application. On each monthly anniversary we test the Policy to determine if the cumulative premiums you have paid, less any partial withdrawals or outstanding loans you have taken, equal or exceed the sum of the GMDB Monthly Premiums due to date for the GMDB you selected. If you meet this test, the GMDB you selected will be in effect. However, even if you have not elected the 20-year GMDB or the GMDB to age 65, if the amount of premiums you pay into the Policy for each Policy month since the Policy Date is sufficient to meet the requirements of the 20-year GMDB or the GMDB to age 65, in your third annual statement we will notify you that the applicable GMDB is in effect. Conversely, if you have elected the 20-year GMDB or the GMDB to age 65 and your premium payments are insufficient to satisfy the GMDB Monthly Premium requirements, we will notify you that your GMDB will be reduced to the five-year GMDB, the GMDB to age 65, or the 20-year GMDB, as applicable, unless you pay sufficient premiums within 62 days to meet the requirements of the GMDB you originally selected. If, during the first five Policy years, you fail to pay sufficient premiums to keep the five-year GMDB in effect, we will notify you that the GMDB will terminate within 62 days if you fail to pay the required Monthly Premiums. If the guarantee provided by the GMDB terminates, the Policy will continue in force for as long as there is cash surrender value sufficient to pay the Monthly Deduction. If the GMDB terminates, you may reinstate it within nine months provided the Policy remains in force. In order to reinstate the GMDB, you must pay sufficient premiums to satisfy the cumulative premium requirement for the applicable GMDB (five-year, 20-year or to age 65) at the time of reinstatement. If the GMDB is in effect and the Policy's cash surrender value is insufficient to cover the Monthly Deduction, the Policy will not lapse. We will take the Monthly Deduction from the Policy's cash value until the cash value has been reduced to zero. At that point, future Monthly Deductions will be waived for as long as the GMDB is in effect. If the GMDB is not in effect and the cash surrender value is insufficient to pay the Monthly Deduction, the Policy will enter a 62-day grace period during which you will have an opportunity to pay a premium sufficient to keep the Policy in force. The minimum amount you must pay is the lesser of three Monthly Deductions or, if applicable, the amount necessary to reinstate the GMDB. We will tell you the amount due. If you fail to pay this amount before the end of the grace period, the Policy will terminate. Your Policy may also lapse if Policy loans plus accrued interest exceed the Policy's cash value less the Surrender Charge. Your Policy may be protected against lapse in these circumstances if it has been in force for 15 years, the insured has attained age 75, and the other requirements for coverage under the Overloan Protection Rider are met. If your Policy is not so protected, we will notify you that the Policy is going to terminate. The Policy terminates without value unless you make a sufficient payment within the later of 62 days from the monthly anniversary immediately before the date when the excess loan occurs or 31 days after we mail the notice. If the Policy lapses with a loan outstanding, adverse tax consequences may result. (See "Tax Considerations" below.) A-38 REINSTATEMENT If your Policy has lapsed, you may reinstate it within three years after the date of lapse if the insured has not attained age 121. If more than three years have passed, you need our consent to reinstate. Reinstatement in all cases requires payment of certain charges described in the Policy and usually requires evidence of insurability that is satisfactory to us. If the Policy lapses and is reinstated during the first five Policy years, only the five-year GMDB will be reinstated. If the Policy lapses after the first five Policy years, the GMDB will terminate and cannot be reinstated. Under no circumstances can the GMDB provided by Policy rider be reinstated following a Policy lapse. If we deducted a Surrender Charge on lapse, we credit it back to the Policy's cash value on reinstatement. The Surrender Charge on the date of reinstatement is the same as it was on the date of lapse. When we determine the Surrender Charge and other charges except cost of insurance and the Policy loan interest rate, we do not count the amount of time that a Policy was lapsed. ADDITIONAL BENEFITS BY RIDER You can add additional benefits to the Policy by rider, subject to our underwriting and issuance standards. These additional benefits usually require an additional charge as part of the Monthly Deduction from cash value. The rider benefits available with the Policy provide fixed benefits that do not vary with the investment experience of the Separate Account. There is no limit on the number of riders you can elect to add to your Policy at issue. However, you may not elect both the Waiver of Monthly Deduction Rider and the Waiver of Specified Premium Rider. The following riders, some of which have been described previously, are available: CHILDREN'S TERM INSURANCE RIDER, which provides term insurance on the lives of children of the insured. WAIVER OF MONTHLY DEDUCTION RIDER, which provides for waiver of Monthly Deductions in the event of the disability of the insured. WAIVER OF SPECIFIED PREMIUM RIDER, which provides for waiver of a specified amount of monthly premium in the event of the disability of the insured. OPTIONS TO PURCHASE ADDITIONAL INSURANCE COVERAGE RIDER, which allows the Owner to purchase additional coverage on the insured without providing evidence of insurability. ACCELERATION OF DEATH BENEFIT RIDER, which allows a Policy Owner to accelerate payment of all or part of the Policy's death benefit if the insured is terminally ill. In calculating the Accelerated Death Benefit, we assume that death occurs one year from the date of claim and we discount the future death benefit using an interest rate not to exceed the greater of (1) the current yield on 90-day Treasury bills, and (2) the maximum policy loan interest rate under the Policy. The Policy Owner must accelerate at least $50,000 (or 25% of the death benefit, if less), but not more than the greater of $250,000 or 10% of the death benefit. As an example, if a Policy Owner accelerated the death benefit of a Policy with a face amount of $1,000,000, the maximum amount that could be accelerated would be $250,000. Assuming an interest rate of 6%, the present value of the benefit would be $235,849. If we exercised our reserved right to impose a $150 processing fee, the benefit payable would be $235,849 less $150, or $235,699. GUARANTEED SURVIVOR INCOME BENEFIT RIDER, which provides the beneficiary with the option of exchanging the Policy's death benefit for enhanced monthly income payments for life. ACCIDENTAL DEATH BENEFIT RIDER, which provides for the payment of an additional death benefit in the event of the insured's death by accident. GUARANTEED MINIMUM DEATH BENEFIT RIDER, which provides for a guaranteed death benefit until the insured's age 85 or the insured's age 121. OVERLOAN PROTECTION RIDER, which provides protection from Policy lapse due to an excess Policy loan. Riders in addition to those listed above may be made available. You should consult your registered representative regarding the availability of riders. A-39 THE FIXED ACCOUNT You may allocate net premiums and transfer cash value to the Fixed Account, which is part of MetLife's general account. Because of exemptive and exclusionary provisions in the Federal securities laws, interests in the Fixed Account are not registered under the Securities Act of 1933. Neither the Fixed Account nor the general account is registered as an investment company under the Investment Company Act of 1940. Therefore, neither the Fixed Account, the general account nor any interests therein are generally subject to the provisions of these Acts, and the SEC does not review Fixed Account disclosure. This disclosure may, however, be subject to certain provisions of the Federal securities laws on the accuracy and completeness of prospectuses. GENERAL DESCRIPTION Our general account includes all of our assets except assets in the Separate Account or in our other separate accounts. We decide how to invest our general account assets. Fixed Account allocations do not share in the actual investment experience of the general account. Instead, we guarantee that the Fixed Account will credit interest at an annual effective rate of at least 3%. We may or may not credit interest at a higher rate. We declare the current interest rate for the Fixed Account periodically. The Fixed Account earns interest daily. VALUES AND BENEFITS Cash value in the Fixed Account increases from net premiums allocated and transfers to the Fixed Account and Fixed Account interest, and decreases from loans, partial withdrawals made from the Fixed Account, charges and transfers from the Fixed Account. We deduct charges from the Fixed Account and the Policy's Investment Divisions in proportion to the amount of cash value in each. (See "Monthly Deduction from Cash Value.") A Policy's total cash value includes cash value in the Separate Account, the Fixed Account, and any cash value held in the Loan Account due to a Policy loan. Cash value in the Fixed Account is included in the calculation of the Policy's death benefit in the same manner as the cash value in the Separate Account. (See "Death Benefits.") POLICY TRANSACTIONS Except as described below, the Fixed Account has the same rights and limitations regarding premium allocations, transfers, loans, surrenders and partial withdrawals as the Separate Account. The following special rules apply to the Fixed Account. Twenty days after we apply the initial premium to the Policy you may transfer cash value from the Fixed Account to the Separate Account. The amount of any transfer must be at least $50, unless the balance remaining would be less than $50, in which case you may withdraw or transfer the entire Fixed Account cash value. After the first Policy year you may withdraw cash value from the Fixed Account. The amount of any partial withdrawal, net of applicable Surrender Charges, must be at least $500. No amount may be withdrawn from the Fixed Account that would result in there being insufficient cash value to meet any Surrender Charges that would be payable immediately following the withdrawal upon the surrender of the remaining cash value in the Policy. We reserve the right to only allow transfers and withdrawals from the Fixed Account during the 30-day period that follows the Policy anniversary. The total amount of transfers and withdrawals in a Policy year may not exceed the greater of (a) 25% of the Policy's cash surrender value in the Fixed Account at the beginning of the Policy year, (b) the previous Policy year's maximum allowable withdrawal amount and (c) 100% of the cash surrender value in the Fixed Account if withdrawing the greater of (a) and (b) would result in a Fixed Account balance of $50 or less. We are not currently imposing the maximum limit on transfers and withdrawals from the Fixed Account, but we reserve the right to do so. There is currently no transaction charge for partial withdrawals or transfers. We reserve the right to limit partial withdrawals to 12 and transfers to four in a Policy year and to impose a charge of $25 for each partial withdrawal or transfer. We may revoke or modify the privilege of transferring amounts to the Fixed Account at any time. We may also modify the privilege of transferring amounts from the Fixed Account at any time. Partial withdrawals will result in the imposition of any applicable Surrender Charges. A-40 Unless you request otherwise, a Policy loan reduces the Policy's cash value in the Investment Divisions and the Fixed Account proportionately. We allocate all loan repayments in the same proportion that the cash value in each Investment Division and the Fixed Account bears to the Policy's total unloaned cash value. The amount transferred from the Policy's Investment Divisions and the Fixed Account as a result of a loan earns interest at an effective rate of at least 3% per year, which we credit to the Policy's cash value in the Investment Divisions and the Fixed Account in proportion to the Policy's cash value in each on the day it is credited. We take partial withdrawals from the Policy's Investment Divisions and the Fixed Account in the same proportion that the cash value in each account bears to the Policy's total unloaned cash value. We can delay transfers, surrenders, withdrawals and Policy loans from the Fixed Account for up to six months. We will not delay loans to pay premiums on policies issued by us. CHARGES We make certain charges and deductions under the Policy. These charges and deductions compensate us for: (1) services and benefits we provide; (2) costs and expenses we incur; and (3) 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 insurance charges we may deduct are insufficient to meet our actual claims because the insureds die sooner than we estimate . that the cost of providing the services and benefits under the Policies exceed the charges we deduct The amount of a charge may not necessarily correspond to the costs of the services or benefits that are implied by the name of the charge or that are associated with the particular Policy. For example, the sales charge and Surrender Charge may not fully cover all of our sales and distribution expenses, and we may use proceeds from other charges, including the Mortality and Expense Risk Charge and the cost of insurance charge, to help cover those expenses. We may profit from certain Policy charges. DEDUCTIONS FROM PREMIUMS Prior to the allocation of a premium, we deduct a percentage of your premium payment. We credit the remaining amount (the net premium) to your cash value according to your allocation instructions. The deductions we make from each premium payment are the sales charge, the premium tax charge, and the federal tax charge. SALES CHARGE. We deduct a 2.25% sales charge from each premium payment. Currently, the sales charge is only deducted from premium payments that are less than or equal to the Target Premium. A-41 PREMIUM TAX CHARGE. We deduct 2.0% from each premium for premium taxes and administrative expenses. Premium taxes vary from state to state, but we deduct a flat 2.0%, which is based on an average of such taxes. Administrative expenses covered by this charge include those related to premium tax and certain other state filings. FEDERAL TAX CHARGE. We deduct 1.25% from each premium for our Federal income tax liability related to premiums. EXAMPLE: The following chart shows the net amount that we would allocate to the Policy assuming a premium payment of $4,000 (and a Target Premium of $2,000). NET PREMIUM PREMIUM ------- ------- $4,000 $4,000 -175 (5.5% x $2,000) + (3.25% x $2,000) = total sales, premium tax and Federal tax charges ------ $3,825 Net Premium
SURRENDER CHARGE If, during the first ten Policy years, or during the first ten Policy years following a face amount increase, you surrender or lapse your Policy, reduce the face amount, or make a partial withdrawal or change in death benefit option that reduces the face amount, then we will deduct a Surrender Charge from the cash value. The maximum Surrender Charge is shown in your Policy. No Surrender Charge will apply on up to 10% of the cash surrender value withdrawn each year. The Surrender Charge depends on the face amount of your Policy and the issue age, sex (except for unisex policies), risk class and smoker status of the insured. The Surrender Charge will remain level for up to three Policy years, or for up to three years after a face amount increase, and will then decline on a monthly basis until it reaches zero at the end of the tenth Policy year (or the tenth year following the face amount increase). The table below shows the maximum Surrender Charge that applies if the lapse, surrender or face amount reduction occurs at any time in the first Policy year, and in the last month of each Policy year thereafter.
FOR POLICIES WHICH THE MAXIMUM ARE SURRENDERED, SURRENDER CHARGE LAPSED OR PER $1,000 OF BASE REDUCED DURING POLICY FACE AMOUNT ------------------ ------------------ Entire Policy Year 1 $38.25 Last Month of Policy Year 2 35.81 3 32.56 4 31.74 5 29.84 6 27.13 7 24.42 8 18.99 9 9.50 10 0.00
In the case of a face amount reduction or a partial withdrawal or change in death benefit option that results in a face amount reduction, we deduct any Surrender Charge that applies from the Policy's remaining cash value in an amount that is proportional to the amount of the Policy's face amount surrendered. (See "Reduction in Face Amount," "Partial Withdrawal" and "Change in Death Benefit Option.") If you surrender the Policy (or a face amount increase) in the first Policy year (or in the first year following the face amount increase) we will deduct from the surrender proceeds an amount equal to the remaining first year Coverage Expense Charges. We reserve the right to also deduct an amount equal to the remaining first year Policy Charges. If you reduce the face amount of your Policy in the first year following a face amount increase, we will A-42 deduct from your cash value a proportionate amount of the remaining first year Coverage Expense Charges, based on the ratio of the face amount reduction to the Policy's original face amount. The Surrender Charge reduces the Policy's cash value in the Investment Divisions and the Fixed Account in proportion to the amount of the Policy's cash value in each. However, if you designate the accounts from which a partial withdrawal is to be taken, the charge will be deducted proportionately from the cash value of the designated accounts. PARTIAL WITHDRAWAL CHARGE We reserve the right to impose a processing charge on each partial withdrawal. If imposed, this charge would compensate us for administrative costs in generating the withdrawn payment and in making all calculations that may be required because of the partial withdrawal. TRANSFER CHARGE We reserve the right to impose a processing charge on each transfer between Investment Divisions or between an Investment Division and the Fixed Account to compensate us for the costs of processing these transfers. Transfers under one of our Automated Investment Strategies do not count as transfers for the purpose of assessing this charge. ILLUSTRATION OF BENEFITS CHARGE We reserve the right to impose a charge for each illustration of Policy benefits that you request in excess of one per year. If imposed, this charge would compensate us for the cost of preparing and delivering the illustration to you. MONTHLY DEDUCTION FROM CASH VALUE On the first day of each Policy month, starting with the Policy Date, we deduct the "Monthly Deduction" from your cash value. --If your Policy is protected against lapse by a Guaranteed Minimum Death Benefit, we make the Monthly Deduction each month regardless of the amount of your cash surrender value. If your cash surrender value is insufficient to pay the Monthly Deduction in any month, your Policy will not lapse, but the shortfall will, in effect, cause your cash surrender value to have a negative balance. (See "Lapse and Reinstatement.") --If a Guaranteed Minimum Death Benefit is not in effect, and the cash surrender value is not large enough to cover the entire Monthly Deduction, we will make the deduction to the extent cash value is available, but the Policy will be in default, and it may lapse. (See "Lapse and Reinstatement.") There is no Monthly Deduction on or after the Policy anniversary when the insured attains age 121. The Monthly Deduction reduces the cash value in each Investment Division and in the Fixed Account (and, if applicable, in the EDCA account) in proportion to the cash value in each. However, you may request that we charge the Monthly Deduction to a specific Investment Division or to the Fixed Account. If, in any month, the designated account has insufficient cash value to cover the Monthly Deduction, we will first reduce the designated account cash value to zero and then charge the remaining Monthly Deduction to all Investment Divisions and, if applicable, the Fixed Account, in proportion to the cash value in each. The Monthly Deduction includes the following charges: POLICY CHARGE. The Policy Charge is equal to $15.00 per month in the first Policy year and $8.00 per month thereafter. The Policy Charge is $12 per month in the first Policy year and $9 per month thereafter for Policies issued with face amounts of less than $50,000. No Policy Charge applies to Policies issued with face amounts equal to or greater than $250,000. The Policy Charge compensates us for administrative costs such as record keeping, processing death benefit claims and policy changes, preparing and mailing reports, and overhead costs. A-43 COVERAGE EXPENSE CHARGE. We impose a monthly charge for the costs of underwriting, issuing (including sales commissions), and administering the Policy or the face amount increase. The monthly charge is imposed on the base Policy face amount and varies by the base Policy's face amount and duration, and by the insured's issue age, smoking status, risk class (at the time the Policy or a face amount increase is issued), and, except for unisex Policies, the insured's sex. Currently, we only impose the Coverage Expense Charge during the first eight Policy years, and during the first eight Policy years following a requested face amount increase. MONTHLY CHARGES FOR THE COST OF INSURANCE. This charge covers the cost of providing insurance protection under your Policy. The cost of insurance charge for a Policy month is equal to the "amount at risk" under the Policy, multiplied by the cost of insurance rate for that Policy month. We determine the amount at risk on the first day of the Policy month. The amount at risk is the amount by which the death benefit (generally discounted at the monthly equivalent of 3% per year) exceeds the Policy's cash value. The amount at risk is affected by investment performance, loans, premium payments, fees and charges, partial withdrawals and face amount reductions. The guaranteed cost of insurance rates for a Policy depend on the insured's --smoking status --risk class --attained age --sex (if the Policy is sex-based). The current cost of insurance rates will depend on the above factors, plus --the insured's age at issue (and at the time of any face amount increase) --the Policy year (and the year of any face amount increase) --the Policy's face amount. We guarantee that the rates for underwritten Policies will not be higher than rates based on --the 2001 Commissioners Standard Ordinary Mortality Tables (the "2001 CSO Tables") with smoker/ nonsmoker modifications, for Policies issued on non-juvenile insureds (age 18 and above at issue), adjusted for substandard ratings or flat extras, if applicable --the 2001 CSO Aggregate Tables (Nonsmoker Tables for attained age 16 and older), for Policies issued on juvenile insureds (below age 18 at issue). The actual rates we use may be lower than the maximum rates, depending on our expectations about our future mortality and expense experience, lapse rates, taxes and investment earnings. We review the adequacy of our cost of insurance rates and other non-guaranteed charges periodically and may adjust them. Any change will apply prospectively. The risk classes we use are --for Policies issued on non-juvenile insureds: preferred smoker, standard smoker, rated smoker, elite nonsmoker, preferred nonsmoker, standard nonsmoker, and rated nonsmoker. --for Policies issued on juvenile insureds: standard and rated (with our consent). Rated Policies have higher cost of insurance deductions. We base the guaranteed maximum mortality charges for substandard ratings on multiples of the 2001 CSO Tables. The following standard or better smoker and non-smoker classes are available for underwritten Policies: --elite nonsmoker for Policies with face amounts of $250,000 or more where the issue age is 18 through 80; --preferred smoker and preferred nonsmoker for Policies with face amounts of $100,000 or more where the issue age is 18 through 80; A-44 --standard smoker and standard nonsmoker for Policies with face amounts of $50,000 or more ($25,000 for pension plans) where the issue age is 18 through 85. The elite nonsmoker class generally offers the best current cost of insurance rates, and the preferred classes generally offer better current cost of insurance rates than the standard classes. Cost of insurance rates are generally lower for nonsmokers than for smokers and generally lower for females than for males. Within a given risk class, cost of insurance rates are generally lower for insureds with lower issue ages. For Policies sold in connection with some employee benefit plans, cost of insurance rates (and Policy values and benefits) do not vary based on the sex of the insured. We may offer Policies on a guaranteed issue basis to certain group or sponsored arrangements. We issue these Policies up to predetermined face amount limits. Because we issue these Policies based on minimal underwriting information, they may present a greater mortality cost to us than Policies issued in a standard class. Therefore, these Policies will be issued with a risk class of standard smoker or standard nonsmoker, but will be subject to an additional flat extra charge. However, the overall cost of insurance deduction for a Policy issued on a guaranteed issue basis will not exceed the maximum cost of insurance deduction imposed under fully underwritten Policies. CHARGES FOR ADDITIONAL BENEFITS. We charge for the cost of any additional rider benefits as described in the rider form. MORTALITY AND EXPENSE RISK CHARGE. We impose a monthly charge for our mortality and expense risks. The mortality risk we assume is that insureds may live for shorter periods of time than we estimated. The expense risk is that our costs of issuing and administering the Policies may be more than we estimated. The charge is imposed on the cash value in the Separate Account, but the rate we charge is determined by the cash value in the Separate Account and the Fixed Account. The rate is determined on each monthly anniversary and varies based on the Policy year and the Policy's net cash value in relation to the Policy's Target Premium. As shown in the table below, the rate declines as the Policy's net cash value and the Policy years increase. The charge is guaranteed not to exceed 0.80% in Policy years 1-10, 0.35% in Policy years 11-19, 0.20% in Policy years 20-29 and 0.05% thereafter.
CHARGE APPLIED TO CASH VALUE IN POLICY YEAR NET CASH VALUE SEPARATE ACCOUNT ---------------------------------------------------------- < 5 target premiums 0.60% 1 - 10 5 but < 10 target premiums 0.55% 10 but < 20 target premiums 0.30% 20 target premiums or more 0.15% ---------------------------------------------------------- < 5 target premiums 0.35% 11 - 19 5 but < 10 target premiums 0.30% 10 but < 20 target premiums 0.15% 20 target premiums or more 0.10% ---------------------------------------------------------- < 5 target premiums 0.20% 5 but < 10 target premiums 0.15% 20 - 29 10 but < 20 target premiums 0.10% 20 target premiums or more 0.05% ---------------------------------------------------------- 30+ 0.05% ----------------------------------------------------------
LOAN INTEREST SPREAD We charge you interest on a loan at a maximum effective rate of 4.0% per year in Policy years 1-10 and 3.0% per year thereafter, compounded daily. We also credit interest on the amount we take from the Policy's accounts as a result of the loan at a minimum annual effective rate of 3% per year, compounded daily. As a result, the loan interest spread will never be more than 1.00%. A-45 CHARGES AGAINST THE PORTFOLIOS AND THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT CHARGES FOR INCOME TAXES. We currently do not charge the Separate Account for income taxes, but in the future we may make such a charge, if appropriate. We have the right to make a charge for any taxes imposed on the Policies in the future. (See "MetLife's Income Taxes.") PORTFOLIO EXPENSES. There are daily charges against the Portfolio assets for investment advisory services and fund operating expenses. These are described in the Fee Table as well as in the Portfolio prospectuses. TAX CONSIDERATIONS INTRODUCTION The following summary provides a general description of the Federal income tax considerations associated with the Policy and does not purport to be complete or to cover all tax situations. The summary does not address state, local or foreign tax issues related to the Policy. This discussion is not intended as tax advice. Counsel or other competent tax advisers should be consulted for more complete information. This discussion is based upon our understanding of the present Federal income tax laws. No representation is made as to the likelihood of continuation of the present Federal income tax laws or as to how they may be interpreted by the Internal Revenue Service. IRS CIRCULAR 230 NOTICE: The tax information contained herein 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 Policy Owner should seek tax advice based on the Policy Owner's particular circumstances from an independent tax adviser. TAX STATUS OF THE POLICY In order to qualify as a life insurance contract for Federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under Federal tax law, a Policy must satisfy certain requirements which are set forth in the Internal Revenue Code. Guidance as to how these requirements are to be applied is limited. Nevertheless, we anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. However, if your Policy is issued on a substandard basis, there is additional uncertainty. Moreover, if you elect the Acceleration of Death Benefit Rider, the tax qualification consequences associated with continuing the Policy after a distribution is made under the rider are unclear. We may take appropriate steps to bring the Policy into compliance with applicable requirements, and we reserve the right to restrict Policy transactions in order to do so. The insurance proceeds payable on the death of the insured will never be less than the minimum amount required for the Policy to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. 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. 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 the owner of the Separate Account assets. 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. In addition, the Code requires that the investments of the Separate Account be "adequately diversified" in order for the Policies to be treated as life insurance contracts for Federal income tax purposes. It is intended that the Separate Account, through the Portfolios, will satisfy these diversification requirements. If Portfolio shares are sold directly to either non-qualified plans or to tax-qualified retirement plans that later lose their tax qualified status, there could be adverse consequences under the diversification rules. The following discussion assumes that the Policy will qualify as a life insurance contract for Federal income tax purposes. A-46 TAX TREATMENT OF POLICY BENEFITS IN GENERAL. The death benefit under a Policy should generally be excludible from the gross income of the beneficiary for Federal income tax purposes. In the case of employer-owned life insurance as defined in Section 101(j), the amount of the death benefit 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 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. The death benefit will also be taxable in the case of a transfer-for-value unless certain exceptions apply. Generally, the Policy Owner will not be deemed to be in constructive receipt of the Policy cash value until there is a distribution or a deemed distribution. When distributions from a Policy occur, or when loans are taken from or secured by a Policy, the tax consequences depend on whether the Policy is classified as a modified endowment contract ("MEC"). MODIFIED ENDOWMENT CONTRACTS. Under the Internal Revenue Code, certain life insurance contracts are classified as modified endowment contracts, with less favorable income tax treatment than other life insurance contracts. Due to the Policy's flexibility with respect to premium payments and benefits, each Policy's circumstances will determine whether the Policy is a MEC. In general a Policy will be classified as a modified endowment contract if the amount of premiums paid into the Policy causes the Policy to fail the "7-pay test." A Policy will fail the 7-pay test if at any time in the first seven Policy years, the amount paid into the Policy exceeds the sum of the level premiums that would have been paid at that point under a Policy that provided for paid-up future benefits after the payment of seven level annual payments. If there is a reduction in the benefits under the Policy during the first seven Policy years, for example, as a result of a partial withdrawal, the 7-pay test will have to be reapplied as if the Policy had originally been issued at the reduced face amount. If there is a "material change" in the Policy's benefits or other terms, even after the first seven Policy years, the Policy may have to be retested as if it were a newly issued Policy. A material change can occur, for example, when there is an increase in the death benefit which is due to the payment of an unnecessary premium. Unnecessary premiums are premiums paid into the Policy which are not needed in order to provide a death benefit equal to the lowest death benefit that was payable in the first seven Policy years. To prevent your Policy from becoming a modified endowment contract, it may be necessary to limit premium payments or to limit reductions in benefits. A current or prospective Policy Owner should consult a tax adviser to determine whether a Policy transaction will cause the Policy to be classified as a modified endowment contract. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS. Policies classified as modified endowment contracts are subject to the following tax rules: (1) All distributions other than death benefits, including distributions upon surrender and withdrawals, from a modified endowment contract will be treated first as distributions of gain taxable as ordinary income and as tax-free recovery of the Policy Owner's investment in the Policy only after all gain has been distributed. (2) Loans taken from or secured by a Policy classified as a modified endowment contract are treated as distributions and taxed accordingly. (3) A 10 percent additional income tax is imposed on the amount subject to tax except where the distribution or loan is made when the Policy Owner has attained age 59 1/2 or is disabled, or where the distribution is part of a series of substantially equal periodic payments for the life (or life expectancy) of the Policy Owner or the joint lives (or joint life expectancies) of the Policy Owner and the Policy Owner's beneficiary. A-47 If a Policy becomes a modified endowment contract, distributions 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. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS. Distributions other than death benefits from a Policy that is not classified as a modified endowment contract are generally treated first as a recovery of the Policy Owner's investment in the Policy and only after the recovery of all investment in the Policy as taxable income. However, certain distributions which must be made in order to enable the Policy to continue to qualify as a life insurance contract for Federal income tax purposes if Policy benefits are reduced during the first 15 Policy years may be treated in whole or in part as ordinary income subject to tax. Loans from or secured by a Policy that is not a modified endowment contract are generally not treated as distributions. However, the tax consequences associated with Policy loans that are outstanding after the first ten Policy years are less clear and a tax adviser should be consulted about such loans. Finally, neither distributions from nor loans from or secured by a Policy that is not a modified endowment contract are subject to the 10 percent additional income tax. INVESTMENT IN THE POLICY. Your investment in the Policy is generally your aggregate premiums. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free. POLICY LOANS. In general, interest on a Policy loan will not be deductible. If a Policy loan is outstanding when a Policy is canceled or lapses, the amount of the outstanding indebtedness will be added to the amount distributed and will be taxed accordingly. A loan may also be taxed when a Policy is exchanged. Before taking out a Policy loan, you should consult a tax adviser as to the tax consequences. MULTIPLE POLICIES. All modified endowment contracts that are issued by MetLife (or its affiliates) to the same Policy Owner during any calendar year are treated as one modified endowment contract for purposes of determining the amount includible in the Policy Owner's income when a taxable distribution occurs. 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 NONRESIDENT ALIENS AND FOREIGN CORPORATIONS. Policy Owners 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, Policy Owners may be subject to state and/or municipal taxes and taxes that may be imposed by the Policy Owner's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding taxation with respect to a purchase of the Policy. ACCELERATION OF DEATH BENEFIT RIDER. Payments received under the Acceleration of Death Benefit Rider should be excludable from the gross income of the beneficiary except in certain business contexts. However, you should consult a qualified tax adviser about the consequences of adding this rider to a Policy or requesting payment under this rider. OVERLOAN PROTECTION RIDER. If you are contemplating the purchase of the Policy with the Overloan Protection Rider, you should be aware that the tax consequences of the Overloan Protection Rider have not been ruled on by the IRS or the courts. It is possible that the IRS could assert that the outstanding loan balance should be treated as a taxable distribution when the Overloan Protection Rider causes the Policy to be converted into a fixed Policy. You should consult a tax adviser as to the tax risks associated with the Overloan Protection Rider. ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES. The transfer of the Policy or the designation of a beneficiary may have Federal, state, and/or local transfer and inheritance tax consequences, including the A-48 imposition of gift, estate, and generation-skipping transfer taxes. When the insured dies, the death proceeds will generally be includable in the Policy Owner's estate for purposes of the Federal estate tax if the Policy Owner was the insured, if the insured possessed incidents of ownership in the Policy at the time of death, or if the insured made a gift transfer of the Policy within three years of death. If the Policy Owner was not the insured, the fair market value of the Policy would be included in the Policy Owner's estate upon the Policy Owner's death. Moreover, under certain circumstances, the Internal Revenue Code may impose a "generation-skipping transfer tax" when all or part of a life insurance policy is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Policy Owner. Regulations issued under the Internal Revenue Code may require us to deduct the tax from your Policy, or from any applicable payment, and pay it directly to the IRS. Qualified tax advisers should be consulted concerning the estate and gift tax consequences of Policy ownership and distributions under Federal, state and local law. The individual situation of each Policy Owner or beneficiary will determine the extent, if any, to which Federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of Federal, state and local estate, inheritance, generation-skipping and other taxes. In general, current rules provide for a $5 million estate, gift and generation-skipping transfer tax exemption (as indexed for inflation) and a top tax rate of 40 percent. The complexity of the tax law, along with uncertainty as to how it might be modified in 2010 and in coming years, underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios. OTHER POLICY OWNER TAX MATTERS. The application of certain tax rules after age 100 is not entirely clear. The tax consequences of continuing the Policy beyond the insured's attained age 121 are also unclear. You should consult a tax adviser if you intend to keep the Policy in force beyond the insured's attained age 121. If a trustee under a pension or profit-sharing plan, or similar deferred compensation arrangement, owns a Policy, the Federal, state and estate tax consequences could differ. The amounts of life insurance that may be purchased on behalf of a participant in a pension or profit-sharing plan are limited. Providing excessive life insurance coverage in a retirement plan will have adverse tax consequences. The inclusion of riders, such as waiver of premium riders, may also have adverse tax consequences. Therefore, it is important to discuss with your tax adviser the suitability of the Policy, including the suitability of coverage amounts and Policy riders, before any purchase by a retirement plan. Any proposed distribution or sale of a Policy by a retirement plan will also need to be discussed with a tax adviser. The current cost of insurance for the net amount at risk is treated as a "current fringe benefit" and must be included annually in the plan participant's gross income. If the plan participant dies while covered by the plan and the Policy proceeds are paid to the participant's beneficiary, then the excess of the death benefit over the cash value is not income taxable. However, the cash value will generally be taxable to the extent it exceeds the participant's cost basis in the Policy. Policies owned under these types of plans may be subject to restrictions under the Employee Retirement Income Security Act of 1974 ("ERISA"). You should consult a qualified adviser regarding ERISA. Department of Labor ("DOL") regulations impose requirements for participant loans under retirement plans covered by ERISA. Plan loans must also satisfy tax requirements to be treated as nontaxable. Plan loan requirements and provisions may differ from the Policy loan provisions. Failure of plan loans to comply with the requirements and provisions of the DOL regulations and of tax law may result in adverse tax consequences and/or adverse consequences under ERISA. Plan fiduciaries and participants should consult a qualified adviser before requesting a loan under a Policy held in connection with a retirement plan. 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. 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. In recent years, moreover, Congress has adopted new rules relating to life insurance owned by businesses. Any business contemplating the purchase of a new Policy or a change in an existing Policy should consult a tax adviser. A-49 Ownership of the Policy by a corporation, trust or other non-natural person could jeopardize some (or all) of such entity's interest deduction under Internal Revenue Code Section 264, even where such entity's indebtedness is in no way connected to the Policy. In addition, under Section 264(f)(5), if a business (other than a sole proprietorship) is directly or indirectly a beneficiary of the Policy, the Policy could be treated as held by the business for purposes of the Section 264(f) entity-holder rules. Therefore, it would be advisable to consult with a qualified tax adviser before any non-natural person is made an owner or holder of the Policy, or before a business (other than a sole proprietorship) is made a beneficiary of the Policy. GUIDANCE ON SPLIT DOLLAR PLANS. The IRS has issued guidance on split dollar insurance plans. A tax adviser 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 Policy is part of an equity split dollar arrangement taxed under the economic benefit regime, there is a risk that some portion of the Policy cash value may be taxed prior to any Policy distribution. 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. In addition, 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 split-dollar life insurance arrangements for directors and executive officers of such companies, since such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. 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. ALTERNATIVE MINIMUM TAX. There may also be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if the Policy Owner is subject to that tax. POSSIBLE TAX LAW CHANGES. Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Policy could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Policy. FOREIGN TAX CREDITS. To the extent permitted under Federal tax law, we may claim the benefit of certain foreign tax credits attributable to taxes paid by certain Portfolios to foreign jurisdictions. METLIFE'S INCOME TAXES Under current Federal income tax law, MetLife is not taxed on the Separate Account's operations. Thus, currently we do not deduct a charge from the Separate Account for Federal income taxes. We reserve the right to charge the Separate Account for any future Federal income taxes we may incur. Under current laws in several states, 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. DISTRIBUTION OF THE POLICIES We have entered into a distribution agreement with our affiliate, MetLife Investors Distribution Company ("Distributor"), for the distribution of the Policies. We and Distributor have entered into selling agreements with other affiliated and unaffiliated broker-dealers ("selling firms") for the sale of the Policies through their registered representatives. Our affiliated broker-dealers are MetLife Securities, Inc. ("MSI"), New England Securities Corporation ("NES"), Tower Square Securities, Inc. and Walnut Street Securities, Inc. Distributor, MSI, NES and our other affiliated selling firms are registered with the SEC as broker-dealers under the Securities Exchange Act of 1934 and are members of the Financial Industry Regulatory Authority ("FINRA"). FINRA provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org. An investor brochure that includes information describing FINRA BrokerCheck is available through the Hotline or on-line. A-50 COMMISSIONS AND OTHER CASH COMPENSATION All selling firms receive commissions. The portion of the commission payments that selling firms pass on to their sales representatives is determined in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. A selling firm or a sales representative of a selling firm may receive different compensation for selling one product over another and/or may be inclined to favor one product provider over another due to differing compensation rates. MSI and NES sales representatives receive cash payments for the products they sell and service based on a "gross dealer concession" model. The cash payment is equal to a percentage of the gross dealer concession amount described below. The percentage is determined based on a formula that takes into consideration the amount of proprietary products the sales representative sells and services. Proprietary products are products issued by us or an affiliate. Because sales of proprietary products are a factor in determining the percentage of the gross dealer concession amount to which MSI and NES sales representative are entitled, these sales representatives have an incentive to favor sale of the Policy over similar products issued by non-affiliates. In the first Policy year, the gross dealer concession amount for the Policies is 117% of premiums paid up to the Commissionable Target Premium, and 5.0% of premiums paid in excess of the Commissionable Target Premium. In Policy years 2 through 10, the gross dealer concession amount is 8.0% of all premiums paid, and in Policy years 11 and thereafter the gross dealer concession amount is 2.0% of all premiums. Commissionable Target Premium is generally the Target Premium as defined in the Glossary, excluding the portions associated with flat extras and certain riders, and is generally equal to or less than the Target Premium. Sales representatives of affiliated selling firms and their managers may be eligible for various cash benefits that we may provide jointly with affiliated selling firms. Ask your sales representative for further information about what your sales representative and the selling firm for which he or she works may receive in connection with your purchase of the Policy. Sales representatives of our affiliates and their Managers may also be eligible for cash compensation such as bonuses, equity awards (for example, 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 insurance and non-insurance benefits. The amount of this cash compensation is based primarily on the amount of proprietary products sold. Proprietary products are products issued by us and our affiliates. Sales representatives of certain affiliates must meet a minimum level of sales of proprietary products in order to maintain their agent status with the company and in order to be eligible for most of the cash compensation listed above. Managers may be eligible for additional cash compensation based on the performance (with emphasis on the sale of proprietary products) of the sales representatives that the Manager supervises. Managers may pay a portion of their cash compensation to their sales representatives. Receipt of the cash compensation described above may provide our sales representatives and their Managers, and the sales representatives and Managers of our affiliates, with an incentive to favor the sale of the Policies over similar products issued by non-affiliates. The maximum commissions paid for sale of the Policies through unaffiliated selling firms, and through our affiliated selling firms Walnut Street Securities, Inc. and Tower Square Securities, Inc. are as follows: 99% of premiums paid up to the Commissionable Target Premium, and 5.0% of premiums paid in excess of Commissionable Target Premium in Policy year 1; 13.0% of all premiums paid in Policy years 2 through 10; and 2.0% of all premiums paid thereafter. In addition, commissions are payable based on the cash value of the Policies in the following amounts: 0.10% in Policy years 2 through 10; 0.08% in Policy years 11 through 20; and 0.06% thereafter. Commissionable Target Premium is generally the Target Premium as defined in the Glossary, excluding the portions associated with flat extras and certain riders, and is generally equal to or less than the Target Premium. We and/or distributor may also make bonus payments to selling firms. The maximum amount of these bonus payments are as follows: 9.0% of premiums paid up to the Commissionable Target Premium and 2.0% of premiums paid in excess of the Commissionable Target Premium in Policy year 1; 19.75% of premiums paid up to the Commissionable Target Premium and 0.25% of premiums paid in excess of the Commissionable Target Premium paid in Policy year 2; and 0.25% of all premiums paid thereafter. Ask your sales representative for further information about what your sales representative and the selling firm for which he or she works may receive in connection with your purchase of the Policy. A-51 NON-CASH COMPENSATION 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 the Policies. These services may include the recruitment and training of personnel, production of promotional literature, and similar services. OTHER PAYMENTS We and Distributor may enter into preferred distribution arrangements with selected selling firms under which we 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, the amount of which depends on cumulative periodic (usually quarterly) sales of our insurance products (including the Policies) and may also depend on meeting thresholds in the sale of certain of our insurance products (other than the Policies). They may also include payments we make to cover the cost of marketing or other support services provided for or by registered representatives who may sell our products. Introduction fees are payments to selling firms in connection with the addition of these variable products to the selling firm'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 selling firms' 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 selling firms' sales representatives. These preferred distribution arrangements are not offered to all selling firms. The terms of any particular agreement governing compensation may vary among selling firms and the amounts may be significant. Distributor has entered into preferred distribution arrangements with our affiliated broker-dealers, Walnut Street Securities Inc. and Tower Square Securities, Inc. and with the unaffiliated selling firms listed in the Statement of Additional Information. We and Distributor may enter into similar arrangements with our other affiliates, MetLife Securities, Inc. and New England Securities Corporation. The prospect of receiving, or the receipt of, additional compensation as described above may provide selling firms 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 selling firm 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 selling firm for which he or she works may receive in connection with your purchase of a Policy. We also pay amounts to Distributor that may be used for its operating and other expenses, including the following sales expenses: compensation and bonuses for Distributor's management team, advertising expenses, and other expenses of distributing the Policies. Distributor's management team may also be eligible for non-cash compensation items that we may provide jointly with Distributor. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, merchandise and similar items. We pay American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series, a percentage of all premiums allocated to the American Funds Bond Fund, the American Funds Global Small Capitalization Fund, the American Funds Growth Fund, and the American Funds Growth-Income Fund, as well as a percentage of all premiums allocated to the American Funds Balanced Allocation Portfolio, the American Funds Growth Allocation Portfolio and the American Funds Moderate Allocation Portfolio, for the services it provides in marketing the Funds' shares in connection with the Policies. Each of these Funds makes payments to Distributor under their distribution plans in consideration of services provided and expenses incurred by Distributor in distributing their shares. These payments currently equal 0.25% of Separate Account assets invested in the particular Portfolio. (See "Fee Tables--Annual Portfolio Operating Expenses" and the Portfolio prospectuses.) Commissions and other incentives or payments described above are not charged directly to Policy Owners or the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy. A-52 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 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 Applicable laws designed to counter terrorism and prevent money laundering might, in certain circumstances, require us to reject a premium payment and/or block or "freeze" your Policy. 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 and financial highlights comprising each of the Investment Divisions of Metropolitan Life Separate Account UL (the "Separate Account") included in this Prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the financial statements and financial highlights and includes an explanatory paragraph referring to changes in the Separate Account's method of accounting for certain mortality and expense risk charges assessed through a redemption of units). Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is Two World Financial Center, New York, New York 10281-1414. FINANCIAL STATEMENTS You may find the financial statements of MetLife in the Statement of Additional Information. MetLife's financial statements should be considered only as bearing on our ability to meet our obligations under the Policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account. A-53 GLOSSARY AGE. The age of an insured refers to the insured's age at his or her nearest birthday. ATTAINED AGE. The insured's issue age plus the number of completed Policy years. BASE POLICY. The Policy without riders. CASH SURRENDER VALUE. The amount you receive if you surrender the Policy. It is equal to the Policy's cash value reduced by any Surrender Charge that would apply on surrender and by any outstanding Policy loan and accrued interest. CASH VALUE. A Policy's cash value includes the amount of its cash value held in the Separate Account, the amount held in the Fixed Account, if there is an outstanding Policy loan, the amount of its cash value held in the Loan Account, and any amount held in the EDCA account. FIXED ACCOUNT. The Fixed Account is a part of our general account to which you may allocate net premiums. It provides guarantees of principal and interest. INVESTMENT DIVISION. A sub-account of the Separate Account that invests in shares of an open-ended management investment company or other pools of investment assets. INVESTMENT START DATE. This is the later of the Policy Date and the date we first receive a premium payment for the Policy. ISSUE AGE. The age of the insured as of his or her birthday nearest to the Policy Date. LOAN ACCOUNT. The account to which cash value from the Separate and/or Fixed Accounts is transferred when a Policy loan is taken. NET CASH VALUE. The Policy's cash value less any outstanding loans and accrued loan interest. PLANNED PREMIUM. The Planned Premium is the premium payment schedule you choose to help meet your future goals under the Policy. The Planned Premium consists of a first-year premium amount and an amount for premium payments in subsequent Policy years. It is subject to certain limits under the Policy. POLICY DATE. The date on which coverage under the Policy and Monthly Deductions begin. If you make a premium payment with the application, unless you request otherwise, the Policy Date is generally the date the Policy application is approved. If you choose to pay the initial premium upon delivery of the Policy, unless you request otherwise, the Policy Date is generally the date on which we receive your initial payment. PREMIUMS. Premiums include all payments under the Policy, whether a Planned Premium or an unscheduled payment. SEPARATE ACCOUNT. Metropolitan Life Separate Account UL, a separate account established by MetLife to receive and invest premiums paid under the Policies and certain other variable life insurance policies, and to provide variable benefits. TARGET PREMIUM. We use the Target Premium to determine the amount of Mortality and Expense Risk Charge imposed on the Separate Account and the amount of Sales Charge imposed on premium payments. The Target Premium varies by issue age, sex, smoking status and any flat extras and substandard rating of the insured, and the Policy's base face amount, with additional amounts for most riders. YOU. "You" refers to the Policy Owner. A-54 APPENDIX A GUIDELINE PREMIUM TEST AND CASH VALUE ACCUMULATION TEST In order to meet the Internal Revenue Code's definition of life insurance, the Policies provide that the death benefit will not be less than what is required by the "guideline premium test" under Section 7702(a)(2) of the Internal Revenue Code, or the "cash value accumulation test" under Section 7702(a)(1) of the Internal Revenue Code, as selected by you when the Policy is issued. The test you choose at issue will be used for the life of the Policy. (See "Death Benefits.") For the guideline premium test, the table below shows the percentage of the Policy's cash value that is used to determine the death benefit.
AGE OF AGE OF INSURED AT START OF PERCENTAGE OF INSURED AT START OF PERCENTAGE OF THE POLICY YEAR CASH VALUE THE POLICY YEAR CASH VALUE ------------------- ------------- ------------------- ------------- 0 through 40 250 61 128 41 243 62 126 42 236 63 124 43 229 64 122 44 222 65 120 45 215 66 119 46 209 67 118 47 203 68 117 48 197 69 116 49 191 70 115 50 185 71 113 51 178 72 111 52 171 73 109 53 164 74 107 54 157 75 through 90 105 55 150 91 104 56 146 92 103 57 142 93 102 58 138 94 through 121 101 59 134 60 130
For the cash value accumulation test, sample net single premium factors for selected ages of male and female insureds, in a standard or better nonsmoker risk class, are listed below.
NET SINGLE PREMIUM FACTOR ------------------ AGE MALE FEMALE --- ------- ------- 30....................... 5.82979 6.59918 40....................... 4.11359 4.63373 50....................... 2.93292 3.28706 60....................... 2.14246 2.40697 70....................... 1.64028 1.82665 80....................... 1.32530 1.44515 90....................... 1.15724 1.22113 100...................... 1.08417 1.10646 120...................... 1.02597 1.02597
A-55 APPENDIX B ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES AND CASH SURRENDER VALUES The tables in Appendix B 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 face amount of $350,000 for a male aged 35. The insured is assumed to be in the preferred nonsmoker risk class. The tables assume no rider benefits and assume that no allocations are made to the Fixed Account. Values are first given based on current Policy charges and then based on guaranteed Policy charges. (See "Charges.") 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 at unisex rates. 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, 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, premium tax and federal tax charge; and (ii) a Monthly Deduction (consisting of a Coverage Expense Charge, a Mortality and Expense Risk Charge, and a charge for the cost of insurance) from the cash value on the first day of each Policy month. The cash surrender values reflect a Surrender Charge deducted from the cash value upon surrender, face reduction or lapse during the first ten Policy years. (See "Charges.") The illustrations reflect an arithmetic average of the gross investment advisory fees and operating expenses of the Portfolios, at an annual rate of .88% of the average daily net assets of the Portfolios. This average does not reflect expense subsidies by the investment advisers of certain Portfolios. The gross rates of return used in the illustrations do not reflect the deductions of the fees 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 experience at constant annual rates of -.88%, 5.07% and 9.04%, respectively. If you request, we will furnish a personalized illustration reflecting the proposed insured's age, sex, risk class, and the face amount or premium payment schedule requested. Because these and other assumptions will differ, the values shown in the personalized illustrations can differ very substantially from those shown in the tables. 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. A-56 MALE ISSUE AGE 35 $2,500 ANNUAL PREMIUM FOR PREFERRED NONSMOKER RISK CLASS $350,000 FACE AMOUNT OPTION A DEATH BENEFIT THE ILLUSTRATION IS BASED ON CURRENT POLICY CHARGES.
DEATH BENEFIT CASH SURRENDER VALUE CASH VALUE ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL END OF GROSS ANNUAL RATE OF RETURN OF GROSS ANNUAL RATE OF RETURN OF GROSS ANNUAL RATE OF RETURN OF POLICY ------------------------------- ------------------------------ ------------------------------ YEAR 0% 6% 10% 0% 6% 10% 0% 6% 10% ------ -- -- --- -- -- --- -- -- --- 1 $350,000 $ 350,000 $ 350,000 $ 0 $ 0 $ 0 $ 1,570 $ 1,686 $ 1,763 2 350,000 350,000 350,000 0 0 0 3,087 3,415 3,642 3 350,000 350,000 350,000 0 289 746 4,551 5,190 5,646 4 350,000 350,000 350,000 1,714 2,763 3,538 5,961 7,010 7,785 5 350,000 350,000 350,000 3,721 5,281 6,473 7,315 8,875 10,067 6 350,000 350,000 350,000 5,341 7,515 9,232 8,608 10,782 12,499 7 350,000 350,000 350,000 6,901 9,791 12,152 9,841 12,731 15,092 8 350,000 350,000 350,000 8,729 12,440 15,585 11,016 14,727 17,872 9 350,000 350,000 350,000 11,677 16,346 20,428 12,821 17,490 21,572 10 350,000 350,000 350,000 14,562 20,340 25,548 14,562 20,340 25,548 15 350,000 350,000 350,000 22,894 36,833 51,663 22,894 36,833 51,663 20 350,000 350,000 350,000 30,031 57,271 91,289 30,031 57,271 91,289 25 350,000 350,000 350,000 35,466 82,152 151,564 35,466 82,152 151,564 30 350,000 350,000 350,000 37,840 111,772 243,832 37,840 111,772 243,832 35 350,000 350,000 448,873 35,263 146,462 386,960 35,263 146,462 386,960 40 350,000 350,000 648,878 25,853 188,170 606,428 25,853 188,170 606,428 45 350,000 350,000 989,793 75 237,374 942,660 75 237,374 942,660 50 350,000 1,520,370 296,130 1,447,972 296,130 1,447,972 55 397,843 2,300,255 378,898 2,190,719 378,898 2,190,719 60 492,436 3,347,296 487,561 3,314,155 487,561 3,314,155 65 636,414 5,110,214 630,112 5,059,618 630,112 5,059,618 70 817,152 7,780,915 809,061 7,703,876 809,061 7,703,876 75 1,042,081 11,802,550 1,031,764 11,685,693 1,031,764 11,685,693 80 1,317,171 17,786,781 1,304,130 17,610,674 1,304,130 17,610,674 85 1,645,665 26,544,892 1,629,371 26,282,071 1,629,371 26,282,071 86 1,719,289 28,741,219 1,702,266 28,456,652 1,702,266 28,456,652
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 A POLICY OWNER, AND THE INVESTMENT EXPERIENCE OF THE POLICY'S INVESTMENT DIVISIONS. THE DEATH BENEFIT, CASH VALUE AND CASH SURRENDER VALUE 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 REPRESENTATIONS 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. A-57 MALE ISSUE AGE 35 $2,500 ANNUAL PREMIUM FOR PREFERRED NONSMOKER RISK CLASS $350,000 FACE AMOUNT OPTION A DEATH BENEFIT THIS ILLUSTRATION IS BASED ON GUARANTEED POLICY CHARGES.
DEATH BENEFIT CASH SURRENDER VALUE ASSUMING CASH VALUE ASSUMING HYPOTHETICAL HYPOTHETICAL ASSUMING HYPOTHETICAL GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL END OF RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF POLICY ----------------------------- --------------------------- --------------------------- YEAR 0% 6% 10% 0% 6% 10% 0% 6% 10% ------ -- -- --- -- -- --- -- -- --- 1 $350,000 $350,000 $ 350,000 $ 0 $ 0 $ 0 $ 1,262 $ 1,368 $ 1,438 2 350,000 350,000 350,000 0 0 0 2,484 2,774 2,974 3 350,000 350,000 350,000 0 0 0 3,670 4,223 4,620 4 350,000 350,000 350,000 560 1,457 2,122 4,807 5,704 6,369 5 350,000 350,000 350,000 2,305 3,628 4,642 5,899 7,222 8,236 6 350,000 350,000 350,000 3,676 5,507 6,959 6,943 8,774 10,226 7 350,000 350,000 350,000 4,991 7,413 9,399 7,932 10,354 12,340 8 350,000 350,000 350,000 6,567 9,664 12,290 8,854 11,951 14,577 9 350,000 350,000 350,000 8,562 12,416 15,799 9,706 13,560 16,943 10 350,000 350,000 350,000 10,478 15,172 19,437 10,478 15,172 19,437 15 350,000 350,000 350,000 13,416 23,745 34,986 13,416 23,745 34,986 20 350,000 350,000 350,000 14,137 32,435 56,574 14,137 32,435 56,574 25 350,000 350,000 350,000 10,313 38,944 85,719 10,313 38,944 85,719 30 350,000 350,000 39,633 125,094 39,633 125,094 35 350,000 350,000 27,244 180,474 27,244 180,474 40 350,000 264,554 264,554 45 426,806 406,482 406,482 50 653,359 622,247 622,247 55 978,713 932,108 932,108 60 1,409,769 1,395,811 1,395,811 65 2,140,480 2,119,287 2,119,287 70 3,221,111 3,189,219 3,189,219 75 4,795,371 4,747,892 4,747,892 80 7,039,205 6,969,510 6,969,510 85 10,306,209 10,204,168 10,204,168 86 11,122,309 11,012,187 11,012,187
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 A POLICY OWNER, AND THE INVESTMENT EXPERIENCE OF THE POLICY'S INVESTMENT DIVISIONS. THE DEATH BENEFIT, CASH VALUE AND CASH SURRENDER VALUE 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 REPRESENTATIONS 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. A-58 Additional information about the Policy and the Separate Account can be found in the Statement of Additional Information, which is available online at our website www.metlife.com. You may also obtain a copy of the Statement of Additional Information, without charge, by calling our TeleService Center at 1-800-638-5000. You may also obtain, without charge, a personalized illustration of death benefits, cash surrender values and cash values by calling your registered representative. For Investment Division transfers and premium reallocations, for current information about your Policy values, 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 us at 1-800-638-5000. 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 202-551-8090. The Statement of Additional Information, reports and other information about the Separate Account are available on the SEC Internet site at 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 100 F Street, NE, Washington, DC 20549-0102. File No. 811-06025 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policy Owners of Metropolitan Life Separate Account UL and Board of Directors of Metropolitan Life Insurance Company We have audited the accompanying statements of assets and liabilities of Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company (the "Company") comprising each of the individual Investment Divisions listed in Note 2.A. as of December 31, 2012, the related statements of operations and changes in net assets for the respective stated periods in the three years then ended, and the financial highlights in Note 9 for the respective stated periods in the five years then ended. These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of investments owned as of December 31, 2012, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Investment Divisions constituting the Separate Account of the Company as of December 31, 2012, the results of their operations and changes in their net assets for the respective stated periods in the three years then ended, and the financial highlights for the respective stated periods in the five years then ended, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 5 to the financial statements, the Investment Divisions constituting the Separate Account of the Company elected to change their accounting method for certain mortality and expense risk charges which are assessed through the redemption of units, and have applied this change retrospectively to all periods presented. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 28, 2013 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2012
ALLIANCEBERNSTEIN GLOBAL ALLIANCEBERNSTEIN ALLIANCEBERNSTEIN AMERICAN THEMATIC GROWTH INTERMEDIATE BOND INTERNATIONAL VALUE CENTURY VP VISTA INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 61,855 $ 103,300 $ 156 $ 4,105 Due from Metropolitan Life Insurance Company.................. 1 -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 61,856 103,300 156 4,105 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- -- -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 61,856 $ 103,300 $ 156 $ 4,105 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 1 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
AMERICAN FUNDS AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS BOND CAPITALIZATION GROWTH GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............. $ 5,420,310 $ 59,237,807 $ 130,921,222 $ 79,614,718 Due from Metropolitan Life Insurance Company................... -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets...................... 5,420,310 59,237,807 130,921,222 79,614,718 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- 1 -- 1 ------------------- ------------------- ------------------- ------------------- Total Liabilities................. -- 1 -- 1 ------------------- ------------------- ------------------- ------------------- NET ASSETS............................... $ 5,420,310 $ 59,237,806 $ 130,921,222 $ 79,614,717 =================== =================== =================== =================== AMERICAN FUNDS U.S. AMERICAN FUNDS AMERICAN FUNDS GOVERNMENT/AAA- DREYFUS VIF HIGH-INCOME BOND INTERNATIONAL RATED SECURITIES INTERNATIONAL VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............. $ 57,231 $ 552,054 $ 45,192 $ 205,134 Due from Metropolitan Life Insurance Company................... -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets...................... 57,231 552,054 45,192 205,134 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- 1 -- 1 ------------------- ------------------- ------------------- ------------------- Total Liabilities................. -- 1 -- 1 ------------------- ------------------- ------------------- ------------------- NET ASSETS............................... $ 57,231 $ 552,053 $ 45,192 $ 205,133 =================== =================== =================== =================== FIDELITY VIP ASSET FIDELITY VIP MANAGER: GROWTH CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ASSETS: Investments at fair value............. $ 1,966,232 $ 2,343,024 Due from Metropolitan Life Insurance Company................... -- -- -------------------- ------------------- Total Assets...................... 1,966,232 2,343,024 -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- 2 -------------------- ------------------- Total Liabilities................. -- 2 -------------------- ------------------- NET ASSETS............................... $ 1,966,232 $ 2,343,022 ==================== ===================
The accompanying notes are an integral part of these financial statements. 2 The accompanying notes are an integral part of these financial statements. 3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP EQUITY-INCOME FREEDOM 2010 FREEDOM 2020 FREEDOM 2030 INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 62,291 $ 39,638 $ 764,725 $ 42,834 Due from Metropolitan Life Insurance Company.................. -- -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets..................... 62,291 39,638 764,725 42,834 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- 1 -- -------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- -- 1 -- -------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 62,291 $ 39,638 $ 764,724 $ 42,834 ==================== =================== =================== =================== FIDELITY VIP FIDELITY VIP FIDELITY VIP INVESTMENT FREEDOM 2050 HIGH INCOME GRADE BOND FIDELITY VIP MID CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- --------------------- ASSETS: Investments at fair value............ $ 17,855 $ 165,146 $ 2,285,792 $ 748,919 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- --------------------- Total Assets..................... 17,855 165,146 2,285,792 748,919 ------------------- ------------------- ------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 56 -- -- -- ------------------- ------------------- ------------------- --------------------- Total Liabilities................ 56 -- -- -- ------------------- ------------------- ------------------- --------------------- NET ASSETS.............................. $ 17,799 $ 165,146 $ 2,285,792 $ 748,919 =================== =================== =================== ===================== FTVIPT MUTUAL GLOBAL FTVIPT TEMPLETON DISCOVERY SECURITIES FOREIGN SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ASSETS: Investments at fair value............ $ 803,177 $ 3,962,470 Due from Metropolitan Life Insurance Company.................. -- -- -------------------- ------------------- Total Assets..................... 803,177 3,962,470 -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 -- -------------------- ------------------- Total Liabilities................ 1 -- -------------------- ------------------- NET ASSETS.............................. $ 803,176 $ 3,962,470 ==================== ===================
The accompanying notes are an integral part of these financial statements. 4 The accompanying notes are an integral part of these financial statements. 5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
FTVIPT GOLDMAN SACHS TEMPLETON GLOBAL GOLDMAN SACHS STRUCTURED INVESCO V.I. BOND SECURITIES MID-CAP VALUE SMALL CAP EQUITY GLOBAL REAL ESTATE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 442,101 $ 258,154 $ 26,317 $ 2,614,724 Due from Metropolitan Life Insurance Company.................. -- -- -- 12 ------------------- ------------------- ------------------- ------------------- Total Assets..................... 442,101 258,154 26,317 2,614,736 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- -- -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 442,101 $ 258,154 $ 26,317 $ 2,614,736 =================== =================== =================== =================== INVESCO V.I. INVESCO V.I. GOVERNMENT INVESCO V.I. VAN KAMPEN JANUS ASPEN SECURITIES INTERNATIONAL GROWTH COMSTOCK BALANCED INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 311 $ 6,506,156 $ 237,306 $ 1,100,550 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- -------------------- ------------------- ------------------- Total Assets..................... 311 6,506,156 237,306 1,100,550 ------------------- -------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- 4 -- 1 ------------------- -------------------- ------------------- ------------------- Total Liabilities................ -- 4 -- 1 ------------------- -------------------- ------------------- ------------------- NET ASSETS.............................. $ 311 $ 6,506,152 $ 237,306 $ 1,100,549 =================== ==================== =================== =================== JANUS ASPEN FORTY JANUS ASPEN JANUS INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 887,851 $ 971,678 Due from Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Assets..................... 887,851 971,678 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 4 1 ------------------- ------------------- Total Liabilities................ 4 1 ------------------- ------------------- NET ASSETS.............................. $ 887,847 $ 971,677 =================== ===================
The accompanying notes are an integral part of these financial statements. 6 The accompanying notes are an integral part of these financial statements. 7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MFS VIT MFS VIT MFS VIT JANUS ASPEN OVERSEAS GLOBAL EQUITY HIGH INCOME NEW DISCOVERY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 441,943 $ 135,428 $ 161,268 $ 171,983 Due from Metropolitan Life Insurance Company.................. -- -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets..................... 441,943 135,428 161,268 171,983 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 -- 1 -- -------------------- ------------------- ------------------- ------------------- Total Liabilities................ 1 -- 1 -- -------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 441,942 $ 135,428 $ 161,267 $ 171,983 ==================== =================== =================== =================== MIST ALLIANCEBERNSTEIN MIST MIST MFS VIT GLOBAL DYNAMIC AMERICAN FUNDS AMERICAN FUNDS VALUE ALLOCATION BALANCED ALLOCATION GROWTH ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 17,162 $ 7,098 $ 631,423 $ 926,978 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 17,162 7,098 631,423 926,978 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- -- -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 17,162 $ 7,098 $ 631,423 $ 926,978 =================== =================== =================== =================== MIST MIST AMERICAN FUNDS AQR GLOBAL MODERATE ALLOCATION RISK BALANCED INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 587,686 $ 24,784 Due from Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Assets..................... 587,686 24,784 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Liabilities................ -- -- ------------------- ------------------- NET ASSETS.............................. $ 587,686 $ 24,784 =================== ===================
The accompanying notes are an integral part of these financial statements. 8 The accompanying notes are an integral part of these financial statements. 9 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MIST BLACKROCK GLOBAL TACTICAL MIST BLACKROCK MIST CLARION MIST DREMAN STRATEGIES LARGE CAP CORE GLOBAL REAL ESTATE SMALL CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 39,078 $ 307,558,831 $ 26,083,320 $ 38,553 Due from Metropolitan Life Insurance Company.................. -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets..................... 39,078 307,558,831 26,083,320 38,553 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- 6 2 -- -------------------- -------------------- -------------------- -------------------- Total Liabilities................ -- 6 2 -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 39,078 $ 307,558,825 $ 26,083,318 $ 38,553 ==================== ==================== ==================== ==================== MIST MIST INVESCO HARRIS OAKMARK BALANCED-RISK MIST INVESCO INTERNATIONAL ALLOCATION SMALL CAP GROWTH MIST JANUS FORTY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 33,602,696 $ 7,513 $ 4,616,669 $ 15,566,776 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 33,602,696 7,513 4,616,669 15,566,776 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 -- 1 -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ 1 -- 1 -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 33,602,695 $ 7,513 $ 4,616,668 $ 15,566,776 =================== =================== =================== =================== MIST JPMORGAN MIST LEGG GLOBAL ACTIVE MASON CLEARBRIDGE ALLOCATION AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 18,883 $ 14,226,385 Due from Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Assets..................... 18,883 14,226,385 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Liabilities................ -- -- ------------------- ------------------- NET ASSETS.............................. $ 18,883 $ 14,226,385 =================== ===================
The accompanying notes are an integral part of these financial statements. 10 The accompanying notes are an integral part of these financial statements. 11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MIST LORD ABBETT MIST LORD ABBETT MIST MET/FRANKLIN MIST MET/FRANKLIN BOND DEBENTURE MID CAP VALUE INCOME MUTUAL SHARES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 28,515,095 $ 74,894,972 $ 340,094 $ 118,548 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 28,515,095 74,894,972 340,094 118,548 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- 2,052 -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- 2,052 -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 28,515,095 $ 74,892,920 $ 340,094 $ 118,548 =================== =================== =================== =================== MIST MET/FRANKLIN TEMPLETON FOUNDING MIST MET/TEMPLETON MIST MET/TEMPLETON MIST METLIFE STRATEGY GROWTH INTERNATIONAL BOND AGGRESSIVE STRATEGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 320,390 $ 67,807 $ 2,605 $ 15,142,597 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 320,390 67,807 2,605 15,142,597 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- -- 1 ------------------- ------------------- ------------------- ------------------- Total Liabilities................ -- -- -- 1 ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 320,390 $ 67,807 $ 2,605 $ 15,142,596 =================== =================== =================== =================== MIST METLIFE MIST MFS EMERGING BALANCED PLUS MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 45,933 $ 88,957 Due from Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Assets..................... 45,933 88,957 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Liabilities................ -- -- ------------------- ------------------- NET ASSETS.............................. $ 45,933 $ 88,957 =================== ===================
The accompanying notes are an integral part of these financial statements. 12 The accompanying notes are an integral part of these financial statements. 13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MIST MIST MIST MFS RESEARCH MORGAN STANLEY PIMCO INFLATION INTERNATIONAL MIST MLA MID CAP MID CAP GROWTH PROTECTED BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............. $ 15,720,816 $ 5,197,740 $ 186,491,113 $ 13,671,560 Due from Metropolitan Life Insurance Company................... -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Assets...................... 15,720,816 5,197,740 186,491,113 13,671,560 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... 3 1 2 -- ------------------- ------------------- -------------------- ------------------- Total Liabilities................. 3 1 2 -- ------------------- ------------------- -------------------- ------------------- NET ASSETS............................... $ 15,720,813 $ 5,197,739 $ 186,491,111 $ 13,671,560 =================== =================== ==================== =================== MIST PIMCO MIST RCM MIST SCHRODERS TOTAL RETURN MIST PIONEER FUND TECHNOLOGY GLOBAL MULTI-ASSET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............. $ 50,485,894 $ 194,666 $ 13,932,280 $ 5,752 Due from Metropolitan Life Insurance Company................... -- -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets...................... 50,485,894 194,666 13,932,280 5,752 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... 1 2 -- -- -------------------- ------------------- ------------------- ------------------- Total Liabilities................. 1 2 -- -- -------------------- ------------------- ------------------- ------------------- NET ASSETS............................... $ 50,485,893 $ 194,664 $ 13,932,280 $ 5,752 ==================== =================== =================== =================== MIST SSGA GROWTH MIST SSGA AND INCOME ETF GROWTH ETF INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ASSETS: Investments at fair value............. $ 6,167,640 $ 4,244,488 Due from Metropolitan Life Insurance Company................... -- -- -------------------- ------------------- Total Assets...................... 6,167,640 4,244,488 -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- -- -------------------- ------------------- Total Liabilities................. -- -- -------------------- ------------------- NET ASSETS............................... $ 6,167,640 $ 4,244,488 ==================== ===================
The accompanying notes are an integral part of these financial statements. 14 The accompanying notes are an integral part of these financial statements. 15 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MIST T. ROWE PRICE MIST T. ROWE PRICE MIST THIRD AVENUE MSF BAILLIE GIFFORD LARGE CAP VALUE MID CAP GROWTH SMALL CAP VALUE INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 1,320,516 $ 21,145,655 $ 881,725 $ 40,399,667 Due from Metropolitan Life Insurance Company.................. -- -- 12 -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 1,320,516 21,145,655 881,737 40,399,667 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 -- -- 2 ------------------- ------------------- ------------------- ------------------- Total Liabilities................ 1 -- -- 2 ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 1,320,515 $ 21,145,655 $ 881,737 $ 40,399,665 =================== =================== =================== =================== MSF BARCLAYS CAPITAL MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK AGGREGATE BOND INDEX AGGRESSIVE GROWTH BOND INCOME DIVERSIFIED INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 116,415,572 $ 190,699,487 $ 85,513,328 $ 266,981,790 Due from Metropolitan Life Insurance Company.................. -- -- -- -- -------------------- ------------------- -------------------- ------------------- Total Assets..................... 116,415,572 190,699,487 85,513,328 266,981,790 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 15 11 3 7 -------------------- ------------------- -------------------- ------------------- Total Liabilities................ 15 11 3 7 -------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 116,415,557 $ 190,699,476 $ 85,513,325 $ 266,981,783 ==================== =================== ==================== =================== MSF BLACKROCK MSF BLACKROCK LEGACY LARGE CAP LARGE CAP VALUE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 14,290,950 $ 14,012,103 Due from Metropolitan Life Insurance Company.................. -- -- ------------------- ------------------- Total Assets..................... 14,290,950 14,012,103 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- 4 ------------------- ------------------- Total Liabilities................ -- 4 ------------------- ------------------- NET ASSETS.............................. $ 14,290,950 $ 14,012,099 =================== ===================
The accompanying notes are an integral part of these financial statements. 16 The accompanying notes are an integral part of these financial statements. 17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MSF BLACKROCK MSF DAVIS MSF FI MSF JENNISON MONEY MARKET VENTURE VALUE VALUE LEADERS GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............. $ 23,274,455 $ 58,219,353 $ 6,748,157 $ 17,774,610 Due from Metropolitan Life Insurance Company................... -- -- -- 1 ------------------- ------------------- ------------------- ------------------- Total Assets...................... 23,274,455 58,219,353 6,748,157 17,774,611 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... 1 1 -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................. 1 1 -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS............................... $ 23,274,454 $ 58,219,352 $ 6,748,157 $ 17,774,611 =================== =================== =================== =================== MSF METLIFE MSF LOOMIS SAYLES MSF LOOMIS SAYLES MSF MET/ARTISAN CONSERVATIVE SMALL CAP CORE SMALL CAP GROWTH MID CAP VALUE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............. $ 18,836,597 $ 8,095,037 $ 50,145,783 $ 5,385,935 Due from Metropolitan Life Insurance Company................... -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets...................... 18,836,597 8,095,037 50,145,783 5,385,935 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- NET ASSETS............................... $ 18,836,597 $ 8,095,037 $ 50,145,783 $ 5,385,935 =================== =================== =================== =================== MSF METLIFE CONSERVATIVE TO MSF METLIFE MODERATE ALLOCATION MID CAP STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............. $ 8,676,631 $ 69,807,817 Due from Metropolitan Life Insurance Company................... -- -- ------------------- ------------------- Total Assets...................... 8,676,631 69,807,817 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... 1 -- ------------------- ------------------- Total Liabilities................. 1 -- ------------------- ------------------- NET ASSETS............................... $ 8,676,630 $ 69,807,817 =================== ===================
The accompanying notes are an integral part of these financial statements. 18 The accompanying notes are an integral part of these financial statements. 19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MSF METLIFE MSF METLIFE MODERATE TO MSF METLIFE MSF MFS MODERATE ALLOCATION AGGRESSIVE ALLOCATION STOCK INDEX TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 45,401,739 $ 77,039,719 $ 739,806,268 $ 8,143,438 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- --------------------- ------------------- ------------------- Total Assets..................... 45,401,739 77,039,719 739,806,268 8,143,438 ------------------- --------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 -- 37 2 ------------------- --------------------- ------------------- ------------------- Total Liabilities................ 1 -- 37 2 ------------------- --------------------- ------------------- ------------------- NET ASSETS.............................. $ 45,401,738 $ 77,039,719 $ 739,806,231 $ 8,143,436 =================== ===================== =================== =================== MSF MSCI MSF NEUBERGER MSF OPPENHEIMER MSF MFS VALUE EAFE INDEX BERMAN GENESIS GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 57,891,428 $ 68,221,823 $ 82,409,607 $ 41,848,254 Due from Metropolitan Life Insurance Company.................. -- 62 -- 85 ------------------- ------------------- ------------------- ------------------- Total Assets..................... 57,891,428 68,221,885 82,409,607 41,848,339 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 3 -- 1 -- ------------------- ------------------- ------------------- ------------------- Total Liabilities................ 3 -- 1 -- ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 57,891,425 $ 68,221,885 $ 82,409,606 $ 41,848,339 =================== =================== =================== =================== MSF RUSSELL 2000 MSF T. ROWE PRICE INDEX LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value............ $ 55,930,593 $ 49,402,477 Due from Metropolitan Life Insurance Company.................. 7 -- ------------------- ------------------- Total Assets..................... 55,930,600 49,402,477 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- 12 ------------------- ------------------- Total Liabilities................ -- 12 ------------------- ------------------- NET ASSETS.............................. $ 55,930,600 $ 49,402,465 =================== ===================
The accompanying notes are an integral part of these financial statements. 20 The accompanying notes are an integral part of these financial statements. 21 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2012
MSF WESTERN MSF VAN ECK ASSET MANAGEMENT MSF WESTERN MSF T. ROWE PRICE GLOBAL NATURAL STRATEGIC BOND ASSET MANAGEMENT SMALL CAP GROWTH RESOURCES OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value........... $ 93,411,022 $ 53,423 $ 25,456,036 $ 16,622,548 Due from Metropolitan Life Insurance Company................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets.................... 93,411,022 53,423 25,456,036 16,622,548 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................. 14 -- 1 -- ------------------- ------------------- ------------------- ------------------- Total Liabilities............... 14 -- 1 -- ------------------- ------------------- ------------------- ------------------- NET ASSETS............................. $ 93,411,008 $ 53,423 $ 25,456,035 $ 16,622,548 =================== =================== =================== =================== PIMCO VIT PIMCO VIT LONG-TERM U.S. PIMCO VIT PIONEER VCT ALL ASSET GOVERNMENT LOW DURATION EMERGING MARKETS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value........... $ 131,919 $ 30,103 $ 986,718 $ 673,074 Due from Metropolitan Life Insurance Company................. -- 5 -- 5 ------------------- ------------------- ------------------- ------------------- Total Assets.................... 131,919 30,108 986,718 673,079 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................. -- -- 1,204 -- ------------------- ------------------- ------------------- ------------------- Total Liabilities............... -- -- 1,204 -- ------------------- ------------------- ------------------- ------------------- NET ASSETS............................. $ 131,919 $ 30,108 $ 985,514 $ 673,079 =================== =================== =================== =================== PIONEER VCT MID CAP VALUE ROYCE MICRO-CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: Investments at fair value........... $ 153,545 $ 372,006 Due from Metropolitan Life Insurance Company................. -- -- ------------------- ------------------- Total Assets.................... 153,545 372,006 ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................. -- -- ------------------- ------------------- Total Liabilities............... -- -- ------------------- ------------------- NET ASSETS............................. $ 153,545 $ 372,006 =================== ===================
The accompanying notes are an integral part of these financial statements. 22 The accompanying notes are an integral part of these financial statements. 23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2012
UIF EMERGING UIF EMERGING WELLS FARGO VT ROYCE SMALL-CAP MARKETS DEBT MARKETS EQUITY TOTAL RETURN BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 541,873 $ 1,182,599 $ 1,033,944 $ 489,407 Due from Metropolitan Life Insurance Company.................. -- -- -- -- ------------------- ------------------- ------------------- ------------------- Total Assets..................... 541,873 1,182,599 1,033,944 489,407 ------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. 1 1 -- 347 ------------------- ------------------- ------------------- ------------------- Total Liabilities................ 1 1 -- 347 ------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 541,872 $ 1,182,598 $ 1,033,944 $ 489,060 =================== =================== =================== ===================
The accompanying notes are an integral part of these financial statements. 24 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
ALLIANCEBERNSTEIN GLOBAL THEMATIC GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ -- $ 18,192 $ 1,486 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... -- -- -- ------------------ ------------------- ------------------ Net investment income (loss)........................ -- 18,192 1,486 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (1,307,724) (40,514) 8,379 ------------------ ------------------- ------------------ Net realized gains (losses)......................... (1,307,724) (40,514) 8,379 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 1,419,031 (1,444,286) 1,480 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 111,307 (1,484,800) 9,859 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 111,307 $ (1,466,608) $ 11,345 ================== =================== ================== ALLIANCEBERNSTEIN INTERMEDIATE BOND INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 2,404 $ 2,097 $ 2,177 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... -- -- -- ------------------ ------------------- ------------------ Net investment income (loss)........................ 2,404 2,097 2,177 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 1,744 170 -- Realized gains (losses) on sale of investments.......... 43 14 2,172 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 1,787 184 2,172 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... (188) 563 (1,393) ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 1,599 747 779 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 4,003 $ 2,844 $ 2,956 ================== =================== ================== ALLIANCEBERNSTEIN INTERNATIONAL VALUE INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 (a) ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 2 $ 7 $ 31 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... -- 167 -- ------------------- ------------------ ------------------- Net investment income (loss)........................ 2 (160) 31 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (1) 175 1 ------------------- ------------------ ------------------- Net realized gains (losses)......................... (1) 175 1 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 17 (129) 88 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 16 46 89 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 18 $ (114) $ 120 =================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 26 The accompanying notes are an integral part of these financial statements. 27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN CENTURY VP VISTA INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ -- $ -- $ -- ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... -- -- -- ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 328 5,995 12,351 ------------------- ------------------ ------------------ Net realized gains (losses)........................ 328 5,995 12,351 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 873 (8,184) (1,947) ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 1,201 (2,189) 10,404 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 1,201 $ (2,189) $ 10,404 =================== ================== ================== AMERICAN FUNDS BOND INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 133,110 $ 140,691 $ 126,810 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... 9,169 8,171 7,622 ------------------ ------------------ ------------------- Net investment income (loss)....................... 123,941 132,520 119,188 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 27,506 10,695 (8,911) ------------------ ------------------ ------------------- Net realized gains (losses)........................ 27,506 10,695 (8,911) ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... 108,693 121,054 122,161 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 136,199 131,749 113,250 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 260,140 $ 264,269 $ 232,438 ================== ================== =================== AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 761,809 $ 817,781 $ 1,031,490 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 80,276 90,481 91,513 ------------------ ------------------ ------------------ Net investment income (loss)....................... 681,533 727,300 939,977 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (342,892) (68,423) (386,466) ------------------ ------------------ ------------------ Net realized gains (losses)........................ (342,892) (68,423) (386,466) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 9,028,936 (13,188,181) 11,810,164 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 8,686,044 (13,256,604) 11,423,698 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 9,367,577 $ (12,529,304) $ 12,363,675 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 28 The accompanying notes are an integral part of these financial statements. 29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN FUNDS GROWTH INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- --------------- --------------- INVESTMENT INCOME: Dividends....................................................... $ 1,013,020 $ 771,098 $ 832,401 ---------------- --------------- --------------- EXPENSES: Mortality and expense risk charges.............................. 133,202 141,089 132,325 ---------------- --------------- --------------- Net investment income (loss)................................ 879,818 630,009 700,076 ---------------- --------------- --------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... -- -- -- Realized gains (losses) on sale of investments.................. 1,170,827 658,869 (328,082) ---------------- --------------- --------------- Net realized gains (losses)................................. 1,170,827 658,869 (328,082) ---------------- --------------- --------------- Change in unrealized gains (losses) on investments.............. 18,556,699 (6,628,058) 19,817,938 ---------------- --------------- --------------- Net realized and changes in unrealized gains (losses) on investments................................................ 19,727,526 (5,969,189) 19,489,856 ---------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations............................................... $ 20,607,344 $ (5,339,180) $ 20,189,932 ================ =============== =============== AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- --------------- --------------- INVESTMENT INCOME: Dividends....................................................... $ 1,253,842 $ 1,148,376 $ 1,018,183 ---------------- --------------- --------------- EXPENSES: Mortality and expense risk charges.............................. 78,704 77,416 75,054 ---------------- --------------- --------------- Net investment income (loss)................................ 1,175,138 1,070,960 943,129 ---------------- --------------- --------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... -- -- -- Realized gains (losses) on sale of investments.................. 300,932 (58,726) (336,443) ---------------- --------------- --------------- Net realized gains (losses)................................. 300,932 (58,726) (336,443) ---------------- --------------- --------------- Change in unrealized gains (losses) on investments.............. 10,629,027 (2,428,568) 6,948,053 ---------------- --------------- --------------- Net realized and changes in unrealized gains (losses) on investments................................................ 10,929,959 (2,487,294) 6,611,610 ---------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations............................................... $ 12,105,097 $ (1,416,334) $ 7,554,739 ================ =============== =============== AMERICAN FUNDS HIGH-INCOME BOND INVESTMENT DIVISION ------------------- 2012 (b) ------------------- INVESTMENT INCOME: Dividends....................................................... $ 3,203 ------------------- EXPENSES: Mortality and expense risk charges.............................. -- ------------------- Net investment income (loss)................................ 3,203 ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... -- Realized gains (losses) on sale of investments.................. 6 ------------------- Net realized gains (losses)................................. 6 ------------------- Change in unrealized gains (losses) on investments.............. (677) ------------------- Net realized and changes in unrealized gains (losses) on investments................................................ (671) ------------------- Net increase (decrease) in net assets resulting from operations............................................... $ 2,532 =================== AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends....................................................... $ 7,535 $ 10,736 $ 13,328 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges.............................. -- -- -- ---------------- ---------------- ---------------- Net investment income (loss)................................ 7,535 10,736 13,328 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... -- -- -- Realized gains (losses) on sale of investments.................. (1,402) (605) (608) ---------------- ---------------- ---------------- Net realized gains (losses)................................. (1,402) (605) (608) ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments.............. 82,398 (108,507) 46,566 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................ 80,996 (109,112) 45,958 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............................................... $ 88,531 $ (98,376) $ 59,286 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 30 The accompanying notes are an integral part of these financial statements. 31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 440 $ 773 $ 683 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 440 773 683 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 1,252 1,111 193 Realized gains (losses) on sale of investments........ 258 509 450 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 1,510 1,620 643 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... (1,126) 885 1,804 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 384 2,505 2,447 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 824 $ 3,278 $ 3,130 ================== ================== ================== DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 4,882 $ 4,085 $ 3,367 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 4,882 4,085 3,367 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ (1,011) (960) (14,086) ------------------ ------------------ ------------------ Net realized gains (losses)....................... (1,011) (960) (14,086) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 18,857 (45,726) 19,382 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 17,846 (46,686) 5,296 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 22,728 $ (42,601) $ 8,663 ================== ================== ================== FIDELITY VIP ASSET MANAGER: GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 24,972 $ 23,605 $ 19,264 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 24,972 23,605 19,264 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 7,043 3,056 5,857 Realized gains (losses) on sale of investments........ 28,654 71,204 31,417 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 35,697 74,260 37,274 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 172,026 (205,700) 201,872 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 207,723 (131,440) 239,146 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 232,695 $ (107,835) $ 258,410 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 32 The accompanying notes are an integral part of these financial statements. 33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP CONTRAFUND INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 28,837 $ 20,916 $ 27,427 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... 28,837 20,916 27,427 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- 1,114 Realized gains (losses) on sale of investments......... 38,806 12,745 (218,742) ------------------- ------------------ ------------------ Net realized gains (losses)........................ 38,806 12,745 (217,628) ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 288,092 (98,141) 648,547 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 326,898 (85,396) 430,919 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 355,735 $ (64,480) $ 458,346 =================== ================== ================== FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends.............................................. $ 1,836 $ 637 $ 3,327 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------- ------------------ Net investment income (loss)....................... 1,836 637 3,327 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 2,863 -- -- Realized gains (losses) on sale of investments......... 376 2,625 (5,418) ------------------ ------------------- ------------------ Net realized gains (losses)........................ 3,239 2,625 (5,418) ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments..... (1,146) (8,921) 31,745 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 2,093 (6,296) 26,327 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 3,929 $ (5,659) $ 29,654 ================== =================== ================== FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 733 $ 726 $ 654 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... 169 150 109 ------------------ ------------------ ------------------- Net investment income (loss)....................... 564 576 545 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 535 176 470 Realized gains (losses) on sale of investments......... 98 1,305 67 ------------------ ------------------ ------------------- Net realized gains (losses)........................ 633 1,481 537 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... 2,707 (2,344) 2,036 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 3,340 (863) 2,573 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 3,904 $ (287) $ 3,118 ================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 34 The accompanying notes are an integral part of these financial statements. 35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP FREEDOM 2020 INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------ INVESTMENT INCOME: Dividends................................................ $ 15,185 $ 15,422 $ 15,231 ------------------- ------------------- ------------------ EXPENSES: Mortality and expense risk charges....................... 280 374 350 ------------------- ------------------- ------------------ Net investment income (loss)......................... 14,905 15,048 14,881 ------------------- ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. 8,838 2,671 5,440 Realized gains (losses) on sale of investments........... 5,799 10,134 2,838 ------------------- ------------------- ------------------ Net realized gains (losses).......................... 14,637 12,805 8,278 ------------------- ------------------- ------------------ Change in unrealized gains (losses) on investments....... 62,352 (33,543) 70,032 ------------------- ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments......................................... 76,989 (20,738) 78,310 ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations........................................ $ 91,894 $ (5,690) $ 93,191 =================== =================== ================== FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION ----------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends................................................ $ 881 $ 1,232 $ 2,018 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges....................... 216 214 133 ------------------- ------------------- ------------------- Net investment income (loss)......................... 665 1,018 1,885 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. 425 172 680 Realized gains (losses) on sale of investments........... 2,855 11,751 710 ------------------- ------------------- ------------------- Net realized gains (losses).......................... 3,280 11,923 1,390 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments....... 3,591 (12,843) 11,839 ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments......................................... 6,871 (920) 13,229 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations........................................ $ 7,536 $ 98 $ 15,114 =================== =================== =================== FIDELITY VIP FREEDOM 2050 INVESTMENT DIVISION ----------------------------------------- 2012 2011 (c) ------------------ ------------------- INVESTMENT INCOME: Dividends................................................ $ 360 $ 288 ------------------ ------------------- EXPENSES: Mortality and expense risk charges....................... 77 60 ------------------ ------------------- Net investment income (loss)......................... 283 (60) ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. 2,132 1,383 Realized gains (losses) on sale of investments........... 28 (5,037) ------------------ ------------------- Net realized gains (losses).......................... 2,160 (3,654) ------------------ ------------------- Change in unrealized gains (losses) on investments....... 199 1,450 ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments......................................... 2,359 (2,204) ------------------ ------------------- Net increase (decrease) in net assets resulting from operations........................................ $ 2,642 $ (1,976) ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 36 The accompanying notes are an integral part of these financial statements. 37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP HIGH INCOME INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 9,229 $ 2,953 $ 340 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 9,229 2,953 340 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 67 13 (227) ------------------ ------------------ ------------------ Net realized gains (losses)........................ 67 13 (227) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... (1,277) (1,768) 801 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... (1,210) (1,755) 574 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 8,019 $ 1,198 $ 914 ================== ================== ================== FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 37,562 $ 54,637 $ 18,206 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 37,562 54,637 18,206 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 48,616 24,253 5,814 Realized gains (losses) on sale of investments......... 33,058 (3,064) 17,651 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 81,674 21,189 23,465 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... (8,975) 1,742 (13,312) ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 72,699 22,931 10,153 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 110,261 $ 77,568 $ 28,359 ================== ================== ================== FIDELITY VIP MID CAP INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 2,865 $ 150 $ 502 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 2,865 150 502 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 59,448 1,181 1,027 Realized gains (losses) on sale of investments......... 8,193 10,846 2,077 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 67,641 12,027 3,104 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 20,392 (60,535) 83,723 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 88,033 (48,508) 86,827 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 90,898 $ (48,358) $ 87,329 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 38 The accompanying notes are an integral part of these financial statements. 39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FTVIPT MUTUAL GLOBAL DISCOVERY SECURITIES INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 21,682 $ 22,691 $ 10,103 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... 21,682 22,691 10,103 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 43,771 22,139 -- Realized gains (losses) on sale of investments......... 5,837 (20,210) (4,189) ------------------- ------------------ ------------------ Net realized gains (losses)........................ 49,608 1,929 (4,189) ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 33,439 (59,670) 81,592 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 83,047 (57,741) 77,403 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 104,729 $ (35,050) $ 87,506 =================== ================== ================== FTVIPT TEMPLETON FOREIGN SECURITIES INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 115,174 $ 89,150 $ 164,170 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------- Net investment income (loss)....................... 115,174 89,150 164,170 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (16,852) 253,750 (50,450) ------------------ ------------------ ------------------- Net realized gains (losses)........................ (16,852) 253,750 (50,450) ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... 501,451 (552,735) 614,425 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 484,599 (298,985) 563,975 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 599,773 $ (209,835) $ 728,145 ================== ================== =================== FTVIPT TEMPLETON GLOBAL BOND SECURITIES INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 24,244 $ 10,824 $ 60 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 24,244 10,824 60 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 590 1,216 10 Realized gains (losses) on sale of investments......... (238) (12,515) 4,591 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 352 (11,299) 4,601 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 26,566 (11,949) (171) ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 26,918 (23,248) 4,430 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 51,162 $ (12,424) $ 4,490 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 40 The accompanying notes are an integral part of these financial statements. 41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 2,932 $ 2,221 $ 2,264 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 2,932 2,221 2,264 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ (683) (27,627) (13,608) ------------------ ------------------ ------------------ Net realized gains (losses)....................... (683) (27,627) (13,608) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 45,178 1,030 84,633 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 44,495 (26,597) 71,025 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 47,427 $ (24,376) $ 73,289 ================== ================== ================== GOLDMAN SACHS STRUCTURED SMALL CAP EQUITY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 308 $ 424 $ 254 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 308 424 254 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 5,427 175 (7,335) ------------------ ------------------ ------------------ Net realized gains (losses)....................... 5,427 175 (7,335) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... (629) (255) 18,632 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 4,798 (80) 11,297 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 5,106 $ 344 $ 11,551 ================== ================== ================== INVESCO V.I. GLOBAL REAL ESTATE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 10,832 $ 72,431 $ 71,976 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 10,832 72,431 71,976 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ (24,321) (158,339) (130,047) ------------------ ------------------ ------------------ Net realized gains (losses)....................... (24,321) (158,339) (130,047) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 481,388 (44,519) 289,353 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 457,067 (202,858) 159,306 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 467,899 $ (130,427) $ 231,282 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 42 The accompanying notes are an integral part of these financial statements. 43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
INVESCO V.I. GOVERNMENT SECURITIES INVESTMENT DIVISION ----------------------------------------- 2012 2011 (d) ------------------ ------------------- INVESTMENT INCOME: Dividends.................................................. $ -- $ -- ------------------ ------------------- EXPENSES: Mortality and expense risk charges......................... -- -- ------------------ ------------------- Net investment income (loss)........................... -- -- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions................................ -- -- Realized gains (losses) on sale of investments............. 1,308 1,389 ------------------ ------------------- Net realized gains (losses)............................ 1,308 1,389 ------------------ ------------------- Change in unrealized gains (losses) on investments......... (1,335) 1,336 ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments............................................... (27) 2,725 ------------------ ------------------- Net increase (decrease) in net assets resulting from operations................................................ $ (27) $ 2,725 ================== =================== INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends.................................................. $ 90,329 $ 3,660 $ 4,364 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges......................... -- -- -- ------------------- ------------------ ------------------- Net investment income (loss)........................... 90,329 3,660 4,364 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions................................ -- -- -- Realized gains (losses) on sale of investments............. 18,589 3,888 1,465 ------------------- ------------------ ------------------- Net realized gains (losses)............................ 18,589 3,888 1,465 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments......... 685,032 (28,330) 26,537 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments............................................... 703,621 (24,442) 28,002 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations................................................ $ 793,950 $ (20,782) $ 32,366 =================== ================== =================== INVESCO V.I. VAN KAMPEN COMSTOCK INVESTMENT DIVISION ----------------------------------------------------------------- 2012 2011 2010 (e) ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends.................................................. $ 3,483 $ 489 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges......................... -- -- -- ------------------- ------------------- ------------------- Net investment income (loss)........................... 3,483 489 -- ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions................................ -- -- -- Realized gains (losses) on sale of investments............. 1,338 (127) 53 ------------------- ------------------- ------------------- Net realized gains (losses)............................ 1,338 (127) 53 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments......... 32,459 (6,181) 45 ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments............................................... 33,797 (6,308) 98 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................................ $ 37,280 $ (5,819) $ 98 =================== =================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 44 The accompanying notes are an integral part of these financial statements. 45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
JANUS ASPEN BALANCED INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INVESTMENT INCOME: Dividends............................................. $ 27,163 $ 44,376 $ 54,166 ------------------ ----------------- ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ----------------- ------------------ Net investment income (loss)..................... 27,163 44,376 54,166 ------------------ ----------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 74,896 108,835 -- Realized gains (losses) on sale of investments........ 40,351 29,077 26,581 ------------------ ----------------- ------------------ Net realized gains (losses)...................... 115,247 137,912 26,581 ------------------ ----------------- ------------------ Change in unrealized gains (losses) on investments.... 25,664 (161,867) 90,252 ------------------ ----------------- ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 140,911 (23,955) 116,833 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 168,074 $ 20,421 $ 170,999 ================== ================= ================== JANUS ASPEN FORTY INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ----------------- INVESTMENT INCOME: Dividends............................................. $ 5,152 $ 2,325 $ 2,433 ------------------ ------------------ ----------------- EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ----------------- Net investment income (loss)..................... 5,152 2,325 2,433 ------------------ ------------------ ----------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 38,660 43,353 14,051 ------------------ ------------------ ----------------- Net realized gains (losses)...................... 38,660 43,353 14,051 ------------------ ------------------ ----------------- Change in unrealized gains (losses) on investments.... 126,343 (117,114) 47,707 ------------------ ------------------ ----------------- Net realized and changes in unrealized gains (losses) on investments..................................... 165,003 (73,761) 61,758 ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations.................................... $ 170,155 $ (71,436) $ 64,191 ================== ================== ================= JANUS ASPEN JANUS INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INVESTMENT INCOME: Dividends............................................. $ 5,213 $ 5,397 $ 73,809 ------------------ ----------------- ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ----------------- ------------------ Net investment income (loss)..................... 5,213 5,397 73,809 ------------------ ----------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 15,799 -- -- Realized gains (losses) on sale of investments........ 13,270 1,561,413 52,158 ------------------ ----------------- ------------------ Net realized gains (losses)...................... 29,069 1,561,413 52,158 ------------------ ----------------- ------------------ Change in unrealized gains (losses) on investments.... 122,884 (1,416,036) 848,330 ------------------ ----------------- ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 151,953 145,377 900,488 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 157,166 $ 150,774 $ 974,297 ================== ================= ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 46 The accompanying notes are an integral part of these financial statements. 47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
JANUS ASPEN OVERSEAS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 2,519 $ 1,291 $ 1,609 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 2,519 1,291 1,609 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 43,521 3,396 -- Realized gains (losses) on sale of investments........ (7,156) (93,767) 4,218 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 36,365 (90,371) 4,218 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 8,927 (214,175) 62,994 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 45,292 (304,546) 67,212 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 47,811 $ (303,255) $ 68,821 ================== ================== ================== MFS VIT GLOBAL EQUITY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 61 $ 575 $ 1,232 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 61 575 1,232 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 154 -- -- Realized gains (losses) on sale of investments........ 274 12,787 183 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 428 12,787 183 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 6,795 (16,173) 19,523 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 7,223 (3,386) 19,706 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 7,284 $ (2,811) $ 20,938 ================== ================== ================== MFS VIT HIGH INCOME INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 10,779 $ 12,069 $ 8,657 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 10,779 12,069 8,657 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 2,215 361 680 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 2,215 361 680 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 6,400 (7,343) 7,331 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 8,615 (6,982) 8,011 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 19,394 $ 5,087 $ 16,668 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 48 The accompanying notes are an integral part of these financial statements. 49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MFS VIT NEW DISCOVERY INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends....................................................... $ -- $ -- $ -- ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges.............................. -- -- -- ---------------- ---------------- ---------------- Net investment income (loss)................................ -- -- -- ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... 15,912 17,326 -- Realized gains (losses) on sale of investments.................. 264 772 544 ---------------- ---------------- ---------------- Net realized gains (losses)................................. 16,176 18,098 544 ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments.............. 11,186 (32,906) 28,843 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................ 27,362 (14,808) 29,387 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............................................... $ 27,362 $ (14,808) $ 29,387 ================ ================ ================ MFS VIT VALUE INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends....................................................... $ 668 $ 999 $ 969 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges.............................. -- -- -- ---------------- ---------------- ---------------- Net investment income (loss)................................ 668 999 969 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... 355 318 -- Realized gains (losses) on sale of investments.................. 3,188 (10,004) (552) ---------------- ---------------- ---------------- Net realized gains (losses)................................. 3,543 (9,686) (552) ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments.............. 2,241 6,173 7,585 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................ 5,784 (3,513) 7,033 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............................................... $ 6,452 $ (2,514) $ 8,002 ================ ================ ================ MIST ALLIANCEBERNSTEIN GLOBAL DYNAMIC ALLOCATION INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INVESTMENT INCOME: Dividends....................................................... $ -- ------------------- EXPENSES: Mortality and expense risk charges.............................. -- ------------------- Net investment income (loss)................................ -- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... -- Realized gains (losses) on sale of investments.................. -- ------------------- Net realized gains (losses)................................. -- ------------------- Change in unrealized gains (losses) on investments.............. 163 ------------------- Net realized and changes in unrealized gains (losses) on investments................................................ 163 ------------------- Net increase (decrease) in net assets resulting from operations............................................... $ 163 =================== MIST AMERICAN FUNDS BALANCED ALLOCATION INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends....................................................... $ 10,680 $ 6,635 $ 3,146 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges.............................. -- -- -- ---------------- ---------------- ---------------- Net investment income (loss)................................ 10,680 6,635 3,146 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions..................................... 5,437 248 117 Realized gains (losses) on sale of investments.................. 3,875 6,046 1,705 ---------------- ---------------- ---------------- Net realized gains (losses)................................. 9,312 6,294 1,822 ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments.............. 50,640 (23,258) 26,193 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................ 59,952 (16,964) 28,015 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............................................... $ 70,632 $ (10,329) $ 31,161 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 50 The accompanying notes are an integral part of these financial statements. 51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 13,384 $ 10,815 $ 2,434 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 13,384 10,815 2,434 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 16,384 9,254 5,990 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 16,384 9,254 5,990 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 96,877 (58,738) 79,550 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 113,261 (49,484) 85,540 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 126,645 $ (38,669) $ 87,974 ================== ================== ================== MIST AMERICAN FUNDS MODERATE ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 10,434 $ 5,453 $ 2,501 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 10,434 5,453 2,501 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 5,798 1,467 -- Realized gains (losses) on sale of investments........ 5,301 1,917 646 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 11,099 3,384 646 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 29,635 (7,233) 16,902 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 40,734 (3,849) 17,548 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 51,168 $ 1,604 $ 20,049 ================== ================== ================== MIST MIST BLACKROCK AQR GLOBAL GLOBAL TACTICAL RISK BALANCED STRATEGIES INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- 2012 (f) 2012 (f) ------------------- ------------------- INVESTMENT INCOME: Dividends............................................. $ -- $ -- ------------------- ------------------- EXPENSES: Mortality and expense risk charges.................... -- -- ------------------- ------------------- Net investment income (loss)...................... -- -- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- Realized gains (losses) on sale of investments........ (28) 51 ------------------- ------------------- Net realized gains (losses)....................... (28) 51 ------------------- ------------------- Change in unrealized gains (losses) on investments.... 375 878 ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments...................................... 347 929 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations..................................... $ 347 $ 929 =================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 52 The accompanying notes are an integral part of these financial statements. 53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST BLACKROCK LARGE CAP CORE INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 3,715,688 $ 3,462,386 $ 3,848,840 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 1,609,817 1,619,434 1,530,546 ------------------- ------------------ ------------------- Net investment income (loss)........................ 2,105,871 1,842,952 2,318,294 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (3,353,915) (4,542,808) (7,248,214) ------------------- ------------------ ------------------- Net realized gains (losses)......................... (3,353,915) (4,542,808) (7,248,214) ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 38,395,441 3,050,880 38,497,976 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 35,041,526 (1,491,928) 31,249,762 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 37,147,397 $ 351,024 $ 33,568,056 =================== ================== =================== MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 496,469 $ 847,944 $ 1,558,222 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 26,819 25,697 24,584 ------------------- ------------------ ------------------- Net investment income (loss)........................ 469,650 822,247 1,533,638 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (282,095) (421,589) (571,095) ------------------- ------------------ ------------------- Net realized gains (losses)......................... (282,095) (421,589) (571,095) ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 4,988,577 (1,500,208) 1,969,823 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 4,706,482 (1,921,797) 1,398,728 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 5,176,132 $ (1,099,550) $ 2,932,366 =================== ================== =================== MIST DREMAN SMALL CAP VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 358 $ 472 $ 172 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... -- -- -- ------------------ ------------------- ------------------ Net investment income (loss)........................ 358 472 172 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 3,130 1,124 403 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 3,130 1,124 403 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 1,696 (4,058) 3,392 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 4,826 (2,934) 3,795 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 5,184 $ (2,462) $ 3,967 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 54 The accompanying notes are an integral part of these financial statements. 55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends........................................................ $ 542,318 $ 8,423 $ 576,287 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges............................... 44,596 46,783 44,461 ---------------- ---------------- ---------------- Net investment income (loss)................................. 497,722 (38,360) 531,826 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions...................................... -- -- -- Realized gains (losses) on sale of investments................... (140,345) (114,036) (312,283) ---------------- ---------------- ---------------- Net realized gains (losses).................................. (140,345) (114,036) (312,283) ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments............... 7,474,599 (4,256,535) 4,235,035 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................. 7,334,254 (4,370,571) 3,922,752 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................ $ 7,831,976 $ (4,408,931) $ 4,454,578 ================ ================ ================ MIST INVESCO BALANCED-RISK ALLOCATION INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INVESTMENT INCOME: Dividends........................................................ $ 23 ------------------- EXPENSES: Mortality and expense risk charges............................... -- ------------------- Net investment income (loss)................................. 23 ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions...................................... 83 Realized gains (losses) on sale of investments................... -- ------------------- Net realized gains (losses).................................. 83 ------------------- Change in unrealized gains (losses) on investments............... (2) ------------------- Net realized and changes in unrealized gains (losses) on investments................................................. 81 ------------------- Net increase (decrease) in net assets resulting from operations................................................ $ 104 =================== MIST INVESCO SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends........................................................ $ -- $ -- ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges............................... 5,823 5,378 4,411 ---------------- ---------------- ---------------- Net investment income (loss)................................. (5,823) (5,378) (4,411) ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions...................................... 273,441 -- -- Realized gains (losses) on sale of investments................... 154,730 169,309 (15,371) ---------------- ---------------- ---------------- Net realized gains (losses).................................. 428,171 169,309 (15,371) ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments............... 331,488 (192,641) 887,599 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................. 759,659 (23,332) 872,228 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................ $ 753,836 $ (28,710) $ 867,817 ================ ================ ================ MIST JANUS FORTY INVESTMENT DIVISION ------------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends........................................................ $ 62,437 $ 249,768 $ 219,796 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges............................... 18,962 18,401 17,488 ---------------- ---------------- ---------------- Net investment income (loss)................................. 43,475 231,367 202,308 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions...................................... -- -- -- Realized gains (losses) on sale of investments................... 176,627 2,199 (41,591) ---------------- ---------------- ---------------- Net realized gains (losses).................................. 176,627 2,199 (41,591) ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments............... 2,618,525 (1,278,619) 1,120,682 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments................................................. 2,795,152 (1,276,420) 1,079,091 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................ $ 2,838,627 $ (1,045,053) $ 1,281,399 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 56 The accompanying notes are an integral part of these financial statements. 57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST JPMORGAN GLOBAL ACTIVE ALLOCATION MIST LEGG MASON CLEARBRIDGE AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------------------------------------------------- 2012 (f) 2012 2011 2010 ------------------- ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.......................... $ 68 $ 28,628 $ 8,681 $ 4,315 ------------------- ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges. -- 8,213 6,297 3,923 ------------------- ------------------ ------------------ ------------------- Net investment income (loss)... 68 20,415 2,384 392 ------------------- ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........ 117 -- -- -- Realized gains (losses) on sale of investments...................... (10) 171,678 93,448 (57,251) ------------------- ------------------ ------------------ ------------------- Net realized gains (losses).... 107 171,678 93,448 (57,251) ------------------- ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments................... 152 2,107,124 (217,464) 1,583,027 ------------------- ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments...................... 259 2,278,802 (124,016) 1,525,776 ------------------- ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations. $ 327 $ 2,299,217 $ (121,632) $ 1,526,168 =================== ================== ================== =================== MIST LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.......................... $ 1,984,542 $ 1,568,618 $ 1,718,530 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges. 61,482 59,503 58,096 ------------------- ------------------ ------------------ Net investment income (loss)... 1,923,060 1,509,115 1,660,434 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........ -- -- -- Realized gains (losses) on sale of investments...................... 218,347 583,376 240,525 ------------------- ------------------ ------------------ Net realized gains (losses).... 218,347 583,376 240,525 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments................... 1,167,280 (863,576) 1,315,427 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................... 1,385,627 (280,200) 1,555,952 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations. $ 3,308,687 $ 1,228,915 $ 3,216,386 =================== ================== ================== MIST LORD ABBETT MID CAP VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.......................... $ 457 $ 603 $ 568 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges. 49,296 -- -- ------------------- ------------------ ------------------ Net investment income (loss)... (48,839) 603 568 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........ -- -- -- Realized gains (losses) on sale of investments...................... (82,924) 818 3,236 ------------------- ------------------ ------------------ Net realized gains (losses).... (82,924) 818 3,236 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments................... 2,481,449 (5,510) 19,769 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................... 2,398,525 (4,692) 23,005 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations. $ 2,349,686 $ (4,089) $ 23,573 =================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 58 The accompanying notes are an integral part of these financial statements. 59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MET/FRANKLIN INCOME INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 13,809 $ 8,323 $ 3,216 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... 13,809 8,323 3,216 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 5,724 5,005 433 Realized gains (losses) on sale of investments......... 414 700 390 ------------------- ------------------ ------------------ Net realized gains (losses)........................ 6,138 5,705 823 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 16,385 (8,507) 10,272 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 22,523 (2,802) 11,095 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 36,332 $ 5,521 $ 14,311 =================== ================== ================== MIST MET/FRANKLIN MUTUAL SHARES INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 766 $ 1,982 $ -- ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------- Net investment income (loss)....................... 766 1,982 -- ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 16,722 3,716 577 Realized gains (losses) on sale of investments......... (414) 386 106 ------------------ ------------------ ------------------- Net realized gains (losses)........................ 16,308 4,102 683 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... (3,910) (6,478) 4,077 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 12,398 (2,376) 4,760 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 13,164 $ (394) $ 4,760 ================== ================== =================== MIST MET/FRANKLIN TEMPLETON FOUNDING STRATEGY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 12,419 $ 5,031 $ -- ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 12,419 5,031 -- ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 4,799 255 1 Realized gains (losses) on sale of investments......... 3,522 2,035 1,545 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 8,321 2,290 1,546 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 24,847 (10,599) 23,230 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 33,168 (8,309) 24,776 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 45,587 $ (3,278) $ 24,776 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 60 The accompanying notes are an integral part of these financial statements. 61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MET/TEMPLETON GROWTH INVESTMENT DIVISION ----------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends................................................ $ 964 $ 792 $ 305 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges....................... -- -- -- ------------------- ------------------- ------------------- Net investment income (loss)......................... 964 792 305 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. 1,985 -- -- Realized gains (losses) on sale of investments........... 1,619 371 125 ------------------- ------------------- ------------------- Net realized gains (losses).......................... 3,604 371 125 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments....... 8,197 (5,463) 3,904 ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments......................................... 11,801 (5,092) 4,029 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations........................................ $ 12,765 $ (4,300) $ 4,334 =================== =================== =================== MIST MET/TEMPLETON INTERNATIONAL BOND MIST METLIFE AGGRESSIVE STRATEGY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------------------ 2012 (f) 2012 2011 (d) ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends................................................ $ -- $ 118,210 $ -- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges....................... -- 12,011 8,047 ------------------- ------------------- ------------------- Net investment income (loss)......................... -- 106,199 (8,047) ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. -- -- -- Realized gains (losses) on sale of investments........... 21 (55,023) (117,896) ------------------- ------------------- ------------------- Net realized gains (losses).......................... 21 (55,023) (117,896) ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments....... 47 2,084,613 (1,834,063) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments......................................... 68 2,029,590 (1,951,959) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations........................................ $ 68 $ 2,135,789 $ (1,960,006) =================== =================== =================== MIST METLIFE BALANCED PLUS MIST MFS EMERGING MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------------------ 2012 (f) 2012 2011 (d) ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends................................................ $ -- $ 1,167 $ -- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges....................... -- -- -- ------------------- ------------------- ------------------- Net investment income (loss)......................... -- 1,167 -- ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.............................. -- -- -- Realized gains (losses) on sale of investments........... 119 (1,470) (70) ------------------- ------------------- ------------------- Net realized gains (losses).......................... 119 (1,470) (70) ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments....... 1,691 9,361 (3,209) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments......................................... 1,810 7,891 (3,279) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations........................................ $ 1,810 $ 9,058 $ (3,279) =================== =================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 62 The accompanying notes are an integral part of these financial statements. 63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 282,245 $ 285,362 $ 240,942 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 16,065 17,373 18,326 ------------------- ------------------ ------------------- Net investment income (loss)........................ 266,180 267,989 222,616 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (345,224) (233,782) (545,005) ------------------- ------------------ ------------------- Net realized gains (losses)......................... (345,224) (233,782) (545,005) ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 2,185,121 (1,480,693) 1,743,808 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 1,839,897 (1,714,475) 1,198,803 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 2,106,077 $ (1,446,486) $ 1,421,419 =================== ================== =================== MIST MLA MID CAP INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 33,412 $ 51,406 $ 51,856 ------------------- ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 7,238 7,973 7,607 ------------------- ------------------- ------------------ Net investment income (loss)........................ 26,174 43,433 44,249 ------------------- ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (28,631) (15,584) (93,933) ------------------- ------------------- ------------------ Net realized gains (losses)......................... (28,631) (15,584) (93,933) ------------------- ------------------- ------------------ Change in unrealized gains (losses) on investments...... 296,637 (320,660) 1,108,654 ------------------- ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 268,006 (336,244) 1,014,721 ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 294,180 $ (292,811) $ 1,058,970 =================== =================== ================== MIST MORGAN STANLEY MID CAP GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ -- $ 1,490,199 $ 28 ------------------- ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 579,825 623,473 375,105 ------------------- ------------------- ------------------ Net investment income (loss)........................ (579,825) 866,726 (375,077) ------------------- ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- 5,251,936 -- Realized gains (losses) on sale of investments.......... 1,677,793 2,604,216 336,382 ------------------- ------------------- ------------------ Net realized gains (losses)......................... 1,677,793 7,856,152 336,382 ------------------- ------------------- ------------------ Change in unrealized gains (losses) on investments...... 15,368,250 (21,552,444) 31,775,159 ------------------- ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 17,046,043 (13,696,292) 32,111,541 ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 16,466,218 $ (12,829,566) $ 31,736,464 =================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 64 The accompanying notes are an integral part of these financial statements. 65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 395,503 $ 165,169 $ 210,729 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 26,003 18,173 15,399 ------------------- ------------------ ------------------ Net investment income (loss)....................... 369,500 146,996 195,330 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 725,803 424,271 220,376 Realized gains (losses) on sale of investments......... 75,075 100,776 60,903 ------------------- ------------------ ------------------ Net realized gains (losses)........................ 800,878 525,047 281,279 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... (101,684) 331,187 130,473 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 699,194 856,234 411,752 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 1,068,694 $ 1,003,230 $ 607,082 =================== ================== ================== MIST PIMCO TOTAL RETURN INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 1,636,863 $ 1,344,247 $ 1,634,551 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... 66,690 62,517 59,740 ------------------ ------------------ ------------------- Net investment income (loss)....................... 1,570,173 1,281,730 1,574,811 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- 1,446,133 236,060 Realized gains (losses) on sale of investments......... 347,234 187,988 238,435 ------------------ ------------------ ------------------- Net realized gains (losses)........................ 347,234 1,634,121 474,495 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... 2,519,869 (1,410,547) 1,426,113 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 2,867,103 223,574 1,900,608 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 4,437,276 $ 1,505,304 $ 3,475,419 ================== ================== =================== MIST PIONEER FUND INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 2,902 $ 2,289 $ 1,987 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 2,902 2,289 1,987 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 1,266 21,102 6,067 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 1,266 21,102 6,067 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 14,560 (30,602) 25,716 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 15,826 (9,500) 31,783 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 18,728 $ (7,211) $ 33,770 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 66 The accompanying notes are an integral part of these financial statements. 67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST RCM TECHNOLOGY INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- --------------- ---------------- INVESTMENT INCOME: Dividends...................................................... $ -- $ -- ---------------- --------------- ---------------- EXPENSES: Mortality and expense risk charges............................. 19,709 21,877 19,473 ---------------- --------------- ---------------- Net investment income (loss)............................... (19,709) (21,877) (19,473) ---------------- --------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.................................... 1,637,998 -- -- Realized gains (losses) on sale of investments................. 179,920 512,571 (54,192) ---------------- --------------- ---------------- Net realized gains (losses)................................ 1,817,918 512,571 (54,192) ---------------- --------------- ---------------- Change in unrealized gains (losses) on investments............. (166,446) (1,944,446) 3,551,862 ---------------- --------------- ---------------- Net realized and changes in unrealized gains (losses) on investments............................................... 1,651,472 (1,431,875) 3,497,670 ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. $ 1,631,763 $ (1,453,752) $ 3,478,197 ================ =============== ================ MIST SCHRODERS GLOBAL MULTI-ASSET INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INVESTMENT INCOME: Dividends...................................................... $ 42 ------------------- EXPENSES: Mortality and expense risk charges............................. -- ------------------- Net investment income (loss)............................... 42 ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.................................... 94 Realized gains (losses) on sale of investments................. 9 ------------------- Net realized gains (losses)................................ 103 ------------------- Change in unrealized gains (losses) on investments............. (23) ------------------- Net realized and changes in unrealized gains (losses) on investments............................................... 80 ------------------- Net increase (decrease) in net assets resulting from operations.............................................. $ 122 =================== MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- --------------- --------------- INVESTMENT INCOME: Dividends...................................................... $ 133,958 $ 74,234 $ 35,130 ---------------- --------------- --------------- EXPENSES: Mortality and expense risk charges............................. 7,748 6,908 4,952 ---------------- --------------- --------------- Net investment income (loss)............................... 126,210 67,326 30,178 ---------------- --------------- --------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.................................... 114,627 74,142 115 Realized gains (losses) on sale of investments................. 53,987 49,491 16,043 ---------------- --------------- --------------- Net realized gains (losses)................................ 168,614 123,633 16,158 ---------------- --------------- --------------- Change in unrealized gains (losses) on investments............. 365,606 (151,325) 322,318 ---------------- --------------- --------------- Net realized and changes in unrealized gains (losses) on investments............................................... 534,220 (27,692) 338,476 ---------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations.............................................. $ 660,430 $ 39,634 $ 368,654 ================ =============== =============== MIST SSGA GROWTH ETF INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- ---------------- ---------------- INVESTMENT INCOME: Dividends...................................................... $ 80,502 $ 57,479 $ 34,185 ---------------- ---------------- ---------------- EXPENSES: Mortality and expense risk charges............................. 5,984 5,126 4,127 ---------------- ---------------- ---------------- Net investment income (loss)............................... 74,518 52,353 30,058 ---------------- ---------------- ---------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.................................... 134,987 -- -- Realized gains (losses) on sale of investments................. 42,712 63,035 12,378 ---------------- ---------------- ---------------- Net realized gains (losses)................................ 177,699 63,035 12,378 ---------------- ---------------- ---------------- Change in unrealized gains (losses) on investments............. 279,360 (183,850) 271,601 ---------------- ---------------- ---------------- Net realized and changes in unrealized gains (losses) on investments............................................... 457,059 (120,815) 283,979 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. $ 531,577 $ (68,462) $ 314,037 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 68 The accompanying notes are an integral part of these financial statements. 69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST T. ROWE PRICE LARGE CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 19,582 $ 9,481 $ 65,246 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 19,582 9,481 65,246 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ (1,403) (435,260) (79,021) ------------------ ------------------ ------------------ Net realized gains (losses)....................... (1,403) (435,260) (79,021) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 181,043 577,510 921,874 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 179,640 142,250 842,853 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 199,222 $ 151,731 $ 908,099 ================== ================== ================== MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................. $ -- $ -- ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges.................... 29,751 30,563 25,378 ------------------ ------------------- ------------------ Net investment income (loss)...................... (29,751) (30,563) (25,378) ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 2,679,802 560,152 -- Realized gains (losses) on sale of investments........ (50,793) 312,619 131,367 ------------------ ------------------- ------------------ Net realized gains (losses)....................... 2,629,009 872,771 131,367 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments.... 206,878 (1,837,318) 4,580,355 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 2,835,887 (964,547) 4,711,722 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 2,806,136 $ (995,110) $ 4,686,344 ================== =================== ================== MIST THIRD AVENUE SMALL CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ -- $ 9,414 $ 12,822 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... -- 9,414 12,822 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 12,071 86,881 42,370 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 12,071 86,881 42,370 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 129,525 (240,493) 198,929 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 141,596 (153,612) 241,299 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 141,596 $ (144,198) $ 254,121 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 70 The accompanying notes are an integral part of these financial statements. 71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 525,164 $ 753,948 $ 672,423 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 183,754 207,499 217,625 ------------------ ------------------- ------------------ Net investment income (loss)........................ 341,410 546,449 454,798 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (1,190,404) (808,593) (1,030,425) ------------------ ------------------- ------------------ Net realized gains (losses)......................... (1,190,404) (808,593) (1,030,425) ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 7,502,480 (8,900,342) 3,370,719 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 6,312,076 (9,708,935) 2,340,294 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 6,653,486 $ (9,162,486) $ 2,795,092 ================== =================== ================== MSF BARCLAYS CAPITAL AGGREGATE BOND INDEX INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 4,275,027 $ 3,919,750 $ 4,039,520 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 43,939 43,935 44,066 ------------------ ------------------ ------------------- Net investment income (loss)........................ 4,231,088 3,875,815 3,995,454 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 604,720 843,640 613,564 ------------------ ------------------ ------------------- Net realized gains (losses)......................... 604,720 843,640 613,564 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments...... (447,969) 3,276,276 1,607,603 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 156,751 4,119,916 2,221,167 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 4,387,839 $ 7,995,731 $ 6,216,621 ================== ================== =================== MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ -- $ 597,164 $ 125,813 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 1,258,555 1,298,633 1,237,626 ------------------ ------------------- ------------------ Net investment income (loss)........................ (1,258,555) (701,469) (1,111,813) ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 2,892,428 2,544,325 451,106 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 2,892,428 2,544,325 451,106 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 17,096,166 (8,863,059) 26,312,677 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 19,988,594 (6,318,734) 26,763,783 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 18,730,039 $ (7,020,203) $ 25,651,970 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 72 The accompanying notes are an integral part of these financial statements. 73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BLACKROCK BOND INCOME INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 2,288,505 $ 3,304,583 $ 3,345,493 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 317,038 318,184 328,215 ------------------ ------------------ ------------------ Net investment income (loss)....................... 1,971,467 2,986,399 3,017,278 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 551,492 -- -- Realized gains (losses) on sale of investments......... 354,078 132,024 24,746 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 905,570 132,024 24,746 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 2,995,775 1,930,533 3,372,816 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 3,901,345 2,062,557 3,397,562 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 5,872,812 $ 5,048,956 $ 6,414,840 ================== ================== ================== MSF BLACKROCK DIVERSIFIED INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 6,071,412 $ 6,407,012 $ 4,856,230 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 1,471,028 1,472,691 1,451,372 ------------------ ------------------ ------------------ Net investment income (loss)....................... 4,600,384 4,934,321 3,404,858 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 1,094,116 (191,522) (1,951,136) ------------------ ------------------ ------------------ Net realized gains (losses)........................ 1,094,116 (191,522) (1,951,136) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 23,691,349 3,658,514 20,635,275 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 24,785,465 3,466,992 18,684,139 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 29,385,849 $ 8,401,313 $ 22,088,997 ================== ================== ================== MSF BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 229,106 $ 149,056 $ 122,314 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 19,727 19,323 18,112 ------------------ ------------------ ------------------ Net investment income (loss)....................... 209,379 129,733 104,202 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 2,231,565 -- -- Realized gains (losses) on sale of investments......... (224,253) (80,782) (263,466) ------------------ ------------------ ------------------ Net realized gains (losses)........................ 2,007,312 (80,782) (263,466) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... (358,711) 254,349 1,265,453 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 1,648,601 173,567 1,001,987 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 1,857,980 $ 303,300 $ 1,106,189 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 74 The accompanying notes are an integral part of these financial statements. 75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BLACKROCK LEGACY LARGE CAP GROWTH INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 41,947 $ 14,560 $ 14,175 ------------------- ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 8,390 7,908 7,064 ------------------- ------------------- ------------------ Net investment income (loss)........................ 33,557 6,652 7,111 ------------------- ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 261,278 137,813 75,641 ------------------- ------------------- ------------------ Net realized gains (losses)......................... 261,278 137,813 75,641 ------------------- ------------------- ------------------ Change in unrealized gains (losses) on investments...... 1,344,869 (879,158) 1,107,022 ------------------- ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 1,606,147 (741,345) 1,182,663 ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 1,639,704 $ (734,693) $ 1,189,774 =================== =================== ================== MSF BLACKROCK MONEY MARKET INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ -- $ -- $ 3,600 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 48,731 47,046 54,598 ------------------- ------------------ ------------------- Net investment income (loss)........................ (48,731) (47,046) (50,998) ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... -- -- -- ------------------- ------------------ ------------------- Net realized gains (losses)......................... -- -- -- ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... -- -- -- ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ -- -- -- ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ (48,731) $ (47,046) $ (50,998) =================== ================== =================== MSF DAVIS VENTURE VALUE INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 475,355 $ 648,127 $ 534,093 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 49,148 53,389 55,117 ------------------- ------------------ ------------------- Net investment income (loss)........................ 426,207 594,738 478,976 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 549,533 492,146 191,969 ------------------- ------------------ ------------------- Net realized gains (losses)......................... 549,533 492,146 191,969 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 5,763,493 (3,392,027) 5,562,556 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 6,313,026 (2,899,881) 5,754,525 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 6,739,233 $ (2,305,143) $ 6,233,501 =================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 76 The accompanying notes are an integral part of these financial statements. 77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF FI VALUE LEADERS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 78,407 $ 70,725 $ 90,469 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 7,422 7,565 7,339 ------------------ ------------------ ------------------ Net investment income (loss)....................... 70,985 63,160 83,130 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (88,358) (99,840) (145,291) ------------------ ------------------ ------------------ Net realized gains (losses)........................ (88,358) (99,840) (145,291) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 950,530 (347,209) 885,079 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 862,172 (447,049) 739,788 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 933,157 $ (383,889) $ 822,918 ================== ================== ================== MSF JENNISON GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends.............................................. $ 37,925 $ 42,021 $ 82,750 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges..................... 9,820 6,458 5,787 ------------------ ------------------ ------------------- Net investment income (loss)....................... 28,105 35,563 76,963 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 2,671,966 -- -- Realized gains (losses) on sale of investments......... 139,207 251,119 17,747 ------------------ ------------------ ------------------- Net realized gains (losses)........................ 2,811,173 251,119 17,747 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments..... (683,735) (215,551) 1,535,759 ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 2,127,438 35,568 1,553,506 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 2,155,543 $ 71,131 $ 1,630,469 ================== ================== =================== MSF LOOMIS SAYLES SMALL CAP CORE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ -- $ 20,207 $ 14,765 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 18,930 18,819 16,451 ------------------- ------------------ ------------------ Net investment income (loss)....................... (18,930) 1,388 (1,686) ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 452,678 -- -- Realized gains (losses) on sale of investments......... 282,308 258,722 (55,224) ------------------- ------------------ ------------------ Net realized gains (losses)........................ 734,986 258,722 (55,224) ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 1,736,369 (166,265) 4,065,140 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 2,471,355 92,457 4,009,916 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 2,452,425 $ 93,845 $ 4,008,230 =================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 78 The accompanying notes are an integral part of these financial statements. 79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ -- $ -- $ -- ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... 7,211 7,268 5,276 ------------------ ------------------ ------------------ Net investment income (loss)..................... (7,211) (7,268) (5,276) ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 192,524 104,198 (47,680) ------------------ ------------------ ------------------ Net realized gains (losses)...................... 192,524 104,198 (47,680) ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 678,535 121,090 1,843,398 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 871,059 225,288 1,795,718 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 863,848 $ 218,020 $ 1,790,442 ================== ================== ================== MSF MET/ARTISAN MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ----------------- ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 483,287 $ 455,060 $ 314,548 ----------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... 46,626 47,224 44,707 ----------------- ------------------ ------------------ Net investment income (loss)..................... 436,661 407,836 269,841 ----------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ (286,700) (412,007) (887,093) ----------------- ------------------ ------------------ Net realized gains (losses)...................... (286,700) (412,007) (887,093) ----------------- ------------------ ------------------ Change in unrealized gains (losses) on investments.... 5,263,295 3,096,938 6,661,231 ----------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 4,976,595 2,684,931 5,774,138 ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 5,413,256 $ 3,092,767 $ 6,043,979 ================= ================== ================== MSF METLIFE CONSERVATIVE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ----------------- INVESTMENT INCOME: Dividends............................................. $ 148,047 $ 98,787 $ 102,209 ------------------ ------------------ ----------------- EXPENSES: Mortality and expense risk charges.................... 9,352 8,004 5,151 ------------------ ------------------ ----------------- Net investment income (loss)..................... 138,695 90,783 97,058 ------------------ ------------------ ----------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 114,982 -- -- Realized gains (losses) on sale of investments........ 59,284 77,218 46,459 ------------------ ------------------ ----------------- Net realized gains (losses)...................... 174,266 77,218 46,459 ------------------ ------------------ ----------------- Change in unrealized gains (losses) on investments.... 123,869 (37,275) 119,161 ------------------ ------------------ ----------------- Net realized and changes in unrealized gains (losses) on investments..................................... 298,135 39,943 165,620 ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations.................................... $ 436,830 $ 130,726 $ 262,678 ================== ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 80 The accompanying notes are an integral part of these financial statements. 81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF METLIFE CONSERVATIVE TO MODERATE ALLOCATION INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 219,743 $ 156,398 $ 193,442 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 14,684 13,340 11,465 ------------------ ------------------- ------------------ Net investment income (loss)........................ 205,059 143,058 181,977 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 21,976 -- -- Realized gains (losses) on sale of investments.......... 59,559 135,436 32,319 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 81,535 135,436 32,319 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 541,162 (210,123) 421,073 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 622,697 (74,687) 453,392 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 827,756 $ 68,371 $ 635,369 ================== =================== ================== MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 662,912 $ 593,088 $ 562,548 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 51,493 51,561 46,237 ------------------ ------------------- ------------------ Net investment income (loss)........................ 611,419 541,527 516,311 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 2,787,031 2,722,599 70,909 Realized gains (losses) on sale of investments.......... 830,830 678,616 177,461 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 3,617,861 3,401,215 248,370 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 6,545,785 (4,954,472) 12,893,844 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 10,163,646 (1,553,257) 13,142,214 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 10,775,065 $ (1,011,730) $ 13,658,525 ================== =================== ================== MSF METLIFE MODERATE ALLOCATION INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 1,056,014 $ 669,982 $ 877,469 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 72,676 67,625 55,021 ------------------ ------------------- ------------------ Net investment income (loss)........................ 983,338 602,357 822,448 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 307,411 234,474 17,779 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 307,411 234,474 17,779 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 3,912,908 (1,362,402) 3,378,733 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 4,220,319 (1,127,928) 3,396,512 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 5,203,657 $ (525,571) $ 4,218,960 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 82 The accompanying notes are an integral part of these financial statements. 83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF METLIFE MODERATE TO AGGRESSIVE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INVESTMENT INCOME: Dividends............................................. $ 1,528,175 $ 1,073,341 $ 1,283,219 ------------------ ----------------- ------------------ EXPENSES: Mortality and expense risk charges.................... 75,645 72,954 65,961 ------------------ ----------------- ------------------ Net investment income (loss)..................... 1,452,530 1,000,387 1,217,258 ------------------ ----------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 342,924 112,005 (102,509) ------------------ ----------------- ------------------ Net realized gains (losses)...................... 342,924 112,005 (102,509) ------------------ ----------------- ------------------ Change in unrealized gains (losses) on investments.... 8,619,633 (3,772,324) 7,116,457 ------------------ ----------------- ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 8,962,557 (3,660,319) 7,013,948 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 10,415,087 $ (2,659,932) $ 8,231,206 ================== ================= ================== MSF METLIFE STOCK INDEX INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 ----------------- ------------------ ----------------- INVESTMENT INCOME: Dividends............................................. $ 12,674,264 $ 11,182,368 $ 10,671,016 ----------------- ------------------ ----------------- EXPENSES: Mortality and expense risk charges.................... 1,725,734 1,662,241 2,062,810 ----------------- ------------------ ----------------- Net investment income (loss)..................... 10,948,530 9,520,127 8,608,206 ----------------- ------------------ ----------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 5,087,401 4,115,111 -- Realized gains (losses) on sale of investments........ 3,743,076 (324,668) (5,405,568) ----------------- ------------------ ----------------- Net realized gains (losses)...................... 8,830,477 3,790,443 (5,405,568) ----------------- ------------------ ----------------- Change in unrealized gains (losses) on investments.... 82,239,455 (2,093,968) 82,259,608 ----------------- ------------------ ----------------- Net realized and changes in unrealized gains (losses) on investments..................................... 91,069,932 1,696,475 76,854,040 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations.................................... $ 102,018,462 $ 11,216,602 $ 85,462,246 ================= ================== ================= MSF MFS TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INVESTMENT INCOME: Dividends............................................. $ 220,676 $ 208,852 $ 217,114 ------------------ ----------------- ------------------ EXPENSES: Mortality and expense risk charges.................... 6,627 6,289 6,194 ------------------ ----------------- ------------------ Net investment income (loss)..................... 214,049 202,563 210,920 ------------------ ----------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- -- Realized gains (losses) on sale of investments........ 32,260 (29,847) (99,947) ------------------ ----------------- ------------------ Net realized gains (losses)...................... 32,260 (29,847) (99,947) ------------------ ----------------- ------------------ Change in unrealized gains (losses) on investments.... 595,278 (11,189) 568,242 ------------------ ----------------- ------------------ Net realized and changes in unrealized gains (losses) on investments..................................... 627,538 (41,036) 468,295 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations.................................... $ 841,587 $ 161,527 $ 679,215 ================== ================= ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 84 The accompanying notes are an integral part of these financial statements. 85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF MFS VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends.............................................. $ 1,079,462 $ 836,589 $ 713,180 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges..................... 47,838 46,802 46,357 ------------------ ------------------- ------------------ Net investment income (loss)....................... 1,031,624 789,787 666,823 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 768,644 -- -- Realized gains (losses) on sale of investments......... 200,451 (44,982) (425,864) ------------------ ------------------- ------------------ Net realized gains (losses)........................ 969,095 (44,982) (425,864) ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments..... 6,505,435 (346,891) 5,358,513 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 7,474,530 (391,873) 4,932,649 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 8,506,154 $ 397,914 $ 5,599,472 ================== =================== ================== MSF MSCI EAFE INDEX INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 1,993,048 $ 1,549,893 $ 1,568,147 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... 34,978 37,419 36,554 ------------------- ------------------ ------------------ Net investment income (loss)....................... 1,958,070 1,512,474 1,531,593 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (63,228) 137,025 (236,046) ------------------- ------------------ ------------------ Net realized gains (losses)........................ (63,228) 137,025 (236,046) ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 9,143,347 (9,604,700) 3,674,685 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 9,080,119 (9,467,675) 3,438,639 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 11,038,189 $ (7,955,201) $ 4,970,232 =================== ================== ================== MSF NEUBERGER BERMAN GENESIS INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends.............................................. $ 297,555 $ 596,562 $ 353,007 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges..................... 75,540 76,321 68,779 ------------------ ------------------- ------------------ Net investment income (loss)....................... 222,015 520,241 284,228 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (730,868) (976,828) (2,085,738) ------------------ ------------------- ------------------ Net realized gains (losses)........................ (730,868) (976,828) (2,085,738) ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments..... 8,168,095 4,961,322 15,927,942 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 7,437,227 3,984,494 13,842,204 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 7,659,242 $ 4,504,735 $ 14,126,432 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 86 The accompanying notes are an integral part of these financial statements. 87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 648,196 $ 845,569 $ 612,821 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 117,470 126,057 123,628 ------------------ ------------------- ------------------ Net investment income (loss)........................ 530,726 719,512 489,193 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 700,180 892,248 362,727 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 700,180 892,248 362,727 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 6,406,670 (5,213,727) 5,192,068 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 7,106,850 (4,321,479) 5,554,795 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 7,637,576 $ (3,601,967) $ 6,043,988 ================== =================== ================== MSF RUSSELL 2000 INDEX INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ 623,816 $ 561,526 $ 547,888 ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 39,701 40,338 37,116 ------------------ ------------------- ------------------ Net investment income (loss)........................ 584,115 521,188 510,772 ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 721,576 734,988 (66,857) ------------------ ------------------- ------------------ Net realized gains (losses)......................... 721,576 734,988 (66,857) ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 6,793,518 (3,300,203) 11,828,973 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 7,515,094 (2,565,215) 11,762,116 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 8,099,209 $ (2,044,027) $ 12,272,888 ================== =================== ================== MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 58,548 $ 38,643 $ 113,187 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 23,330 20,886 18,842 ------------------- ------------------ ------------------- Net investment income (loss)........................ 35,218 17,757 94,345 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 996,117 908,859 253,453 ------------------- ------------------ ------------------- Net realized gains (losses)......................... 996,117 908,859 253,453 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 6,924,755 (1,383,140) 6,370,252 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 7,920,872 (474,281) 6,623,705 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 7,956,090 $ (456,524) $ 6,718,050 =================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 88 The accompanying notes are an integral part of these financial statements. 89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INVESTMENT INCOME: Dividends............................................... $ -- $ -- $ -- ------------------ ------------------- ------------------ EXPENSES: Mortality and expense risk charges...................... 304,065 301,663 258,469 ------------------ ------------------- ------------------ Net investment income (loss)........................ (304,065) (301,663) (258,469) ------------------ ------------------- ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 9,066,425 -- -- Realized gains (losses) on sale of investments.......... 2,397,895 2,332,511 562,971 ------------------ ------------------- ------------------ Net realized gains (losses)......................... 11,464,320 2,332,511 562,971 ------------------ ------------------- ------------------ Change in unrealized gains (losses) on investments...... 2,263,900 (846,789) 22,601,563 ------------------ ------------------- ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ 13,728,220 1,485,722 23,164,534 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ 13,424,155 $ 1,184,059 $ 22,906,065 ================== =================== ================== MSF VAN ECK GLOBAL NATURAL RESOURCES INVESTMENT DIVISION ---------------------------------------- 2012 2011 (d) ------------------ ------------------ INVESTMENT INCOME: Dividends............................................... $ -- $ -- ------------------ ------------------ EXPENSES: Mortality and expense risk charges...................... -- -- ------------------ ------------------ Net investment income (loss)........................ -- -- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 2,613 -- Realized gains (losses) on sale of investments.......... (729) (45) ------------------ ------------------ Net realized gains (losses)......................... 1,884 (45) ------------------ ------------------ Change in unrealized gains (losses) on investments...... (2,269) (2,198) ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments........................................ (385) (2,243) ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... $ (385) $ (2,243) ================== ================== MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ---------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................... $ 891,838 $ 1,209,466 $ 1,333,421 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges...................... 32,820 31,783 27,993 ------------------- ------------------ ------------------- Net investment income (loss)........................ 859,018 1,177,683 1,305,428 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... 204,230 144,847 71,403 ------------------- ------------------ ------------------- Net realized gains (losses)......................... 204,230 144,847 71,403 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments...... 1,584,984 64,600 1,196,007 ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments........................................ 1,789,214 209,447 1,267,410 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... $ 2,648,232 $ 1,387,130 $ 2,572,838 =================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 90 The accompanying notes are an integral part of these financial statements. 91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 348,936 $ 248,608 $ 448,826 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... 18,045 18,708 18,946 ------------------ ------------------ ------------------ Net investment income (loss)...................... 330,891 229,900 429,880 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- 570,575 47,316 Realized gains (losses) on sale of investments........ 19,763 (5,603) 1,727 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 19,763 564,972 49,043 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 185,906 82,587 435,726 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 205,669 647,559 484,769 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 536,560 $ 877,459 $ 914,649 ================== ================== ================== PIMCO VIT LONG-TERM U.S. PIMCO VIT ALL ASSET GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------------- ------------------- 2012 2011 (d) 2012 (g) ------------------ ------------------ ------------------- INVESTMENT INCOME: Dividends............................................. $ 6,301 $ 2,796 $ 232 ------------------ ------------------ ------------------- EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------- Net investment income (loss)...................... 6,301 2,796 232 ------------------ ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- 2,934 Realized gains (losses) on sale of investments........ 190 -- (2) ------------------ ------------------ ------------------- Net realized gains (losses)....................... 190 -- 2,932 ------------------ ------------------ ------------------- Change in unrealized gains (losses) on investments.... 8,832 (1,176) (2,899) ------------------ ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments...................................... 9,022 (1,176) 33 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations..................................... $ 15,323 $ 1,620 $ 265 ================== ================== =================== PIMCO VIT LOW DURATION INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 18,366 $ 13,732 $ 12,187 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 18,366 13,732 12,187 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... -- -- 2,469 Realized gains (losses) on sale of investments........ 1,749 618 260 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 1,749 618 2,729 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 34,493 (6,243) 23,685 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 36,242 (5,625) 26,414 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 54,608 $ 8,107 $ 38,601 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 92 The accompanying notes are an integral part of these financial statements. 93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
PIONEER VCT EMERGING MARKETS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 1,600 $ -- $ 3,039 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 1,600 -- 3,039 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 23,672 -- -- Realized gains (losses) on sale of investments......... (1,297) 121,447 75,682 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 22,375 121,447 75,682 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 20,209 (327,299) 68,690 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 42,584 (205,852) 144,372 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 44,184 $ (205,852) $ 147,411 ================== ================== ================== PIONEER VCT MID CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 1,561 $ 1,190 $ 801 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 1,561 1,190 801 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... 595 580 313 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 595 580 313 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 12,468 (11,556) 14,039 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 13,063 (10,976) 14,352 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 14,624 $ (9,786) $ 15,153 ================== ================== ================== ROYCE MICRO-CAP INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 (a) ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ -- $ 8,331 $ 5,659 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... -- 8,331 5,659 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 8,060 -- -- Realized gains (losses) on sale of investments......... 1,017 1,545 197 ------------------- ------------------ ------------------ Net realized gains (losses)........................ 9,077 1,545 197 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 15,667 (52,132) 61,964 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 24,744 (50,587) 62,161 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 24,744 $ (42,256) $ 67,820 =================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 94 The accompanying notes are an integral part of these financial statements. 95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
ROYCE SMALL-CAP INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 586 $ 3,804 $ 425 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... 586 3,804 425 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ 13,477 -- -- Realized gains (losses) on sale of investments......... 22,187 18,080 2,111 ------------------ ------------------ ------------------ Net realized gains (losses)........................ 35,664 18,080 2,111 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 34,489 (64,398) 63,066 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 70,153 (46,318) 65,177 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 70,739 $ (42,514) $ 65,602 ================== ================== ================== UIF EMERGING MARKETS DEBT INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ 16,821 $ 7,775 $ 318 ------------------- ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------- ------------------ ------------------ Net investment income (loss)....................... 16,821 7,775 318 ------------------- ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- 2,422 -- Realized gains (losses) on sale of investments......... 2,466 392 87 ------------------- ------------------ ------------------ Net realized gains (losses)........................ 2,466 2,814 87 ------------------- ------------------ ------------------ Change in unrealized gains (losses) on investments..... 89,788 79 318 ------------------- ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 92,254 2,893 405 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 109,075 $ 10,668 $ 723 =================== ================== ================== UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends.............................................. $ -- $ 1,515 $ 758 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges..................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)....................... -- 1,515 758 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................ -- -- -- Realized gains (losses) on sale of investments......... (26) 4,478 899 ------------------ ------------------ ------------------ Net realized gains (losses)........................ (26) 4,478 899 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments..... 139,206 (99,779) 38,992 ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments....................................... 139,180 (95,301) 39,891 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... $ 139,180 $ (93,786) $ 40,649 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 96 The accompanying notes are an integral part of these financial statements. 97 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
WELLS FARGO VT TOTAL RETURN BOND INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INVESTMENT INCOME: Dividends............................................. $ 4,369 $ 18,903 $ 29,774 ------------------ ------------------ ------------------ EXPENSES: Mortality and expense risk charges.................... -- -- -- ------------------ ------------------ ------------------ Net investment income (loss)...................... 4,369 18,903 29,774 ------------------ ------------------ ------------------ NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........................... 6,160 30,313 23,602 Realized gains (losses) on sale of investments........ 1,595 15,483 10,857 ------------------ ------------------ ------------------ Net realized gains (losses)....................... 7,755 45,796 34,459 ------------------ ------------------ ------------------ Change in unrealized gains (losses) on investments.... 5,968 (7,169) (12,496) ------------------ ------------------ ------------------ Net realized and changes in unrealized gains (losses) on investments...................................... 13,723 38,627 21,963 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... $ 18,092 $ 57,530 $ 51,737 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 98 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
ALLIANCEBERNSTEIN GLOBAL THEMATIC GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ -- $ 18,192 $ 1,486 Net realized gains (losses).............................. (1,307,724) (40,514) 8,379 Change in unrealized gains (losses) on investments....... 1,419,031 (1,444,286) 1,480 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 111,307 (1,466,608) 11,345 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 4,561 6,425 1,269 Net transfers (including fixed account).................. (4,345,166) 5,890,970 (20,468) Policy charges........................................... (2,096) (229,188) (2,162) Transfers for policy benefits and terminations........... (445) (27,392) -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (4,343,146) 5,640,815 (21,361) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. (4,231,839) 4,174,207 (10,016) NET ASSETS: Beginning of year........................................ 4,293,695 119,488 129,504 ------------------ ------------------ ------------------ End of year.............................................. $ 61,856 $ 4,293,695 $ 119,488 ================== ================== ================== ALLIANCEBERNSTEIN INTERMEDIATE BOND INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 2,404 $ 2,097 $ 2,177 Net realized gains (losses).............................. 1,787 184 2,172 Change in unrealized gains (losses) on investments....... (188) 563 (1,393) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 4,003 2,844 2,956 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 8,926 2,678 3,570 Net transfers (including fixed account).................. 44,909 -- 9,880 Policy charges........................................... (1,818) (1,493) (1,194) Transfers for policy benefits and terminations........... (6) (8) (255) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 52,011 1,177 12,001 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 56,014 4,021 14,957 NET ASSETS: Beginning of year........................................ 47,286 43,265 28,308 ------------------ ------------------ ------------------ End of year.............................................. $ 103,300 $ 47,286 $ 43,265 ================== ================== ================== ALLIANCEBERNSTEIN INTERNATIONAL VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 (a) ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 2 $ (160) $ 31 Net realized gains (losses).............................. (1) 175 1 Change in unrealized gains (losses) on investments....... 17 (129) 88 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 18 (114) 120 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. -- 268 -- Net transfers (including fixed account).................. 2 (1,225) 1,252 Policy charges........................................... (5) (24) (15) Transfers for policy benefits and terminations........... -- (121) -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (3) (1,102) 1,237 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 15 (1,216) 1,357 NET ASSETS: Beginning of year........................................ 141 1,357 -- ------------------ ------------------ ------------------ End of year.............................................. $ 156 $ 141 $ 1,357 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 100 The accompanying notes are an integral part of these financial statements. 101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN CENTURY VP VISTA INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ -- $ -- $ -- Net realized gains (losses)............................... 328 5,995 12,351 Change in unrealized gains (losses) on investments........ 873 (8,184) (1,947) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 1,201 (2,189) 10,404 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. -- 11,044 13,202 Net transfers (including fixed account)................... 870 (72,025) (83,499) Policy charges............................................ (954) (2,331) (3,069) Transfers for policy benefits and terminations............ (5,666) -- (9,338) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (5,750) (63,312) (82,704) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... (4,549) (65,501) (72,300) NET ASSETS: Beginning of year......................................... 8,654 74,155 146,455 ------------------ ------------------ ------------------ End of year............................................... $ 4,105 $ 8,654 $ 74,155 ================== ================== ================== AMERICAN FUNDS BOND INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 123,941 $ 132,520 $ 119,188 Net realized gains (losses)............................... 27,506 10,695 (8,911) Change in unrealized gains (losses) on investments........ 108,693 121,054 122,161 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 260,140 264,269 232,438 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 681,465 678,665 724,857 Net transfers (including fixed account)................... 491,460 53,187 320,665 Policy charges............................................ (388,415) (360,088) (355,054) Transfers for policy benefits and terminations............ (359,799) (265,605) (318,517) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 424,711 106,159 371,951 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 684,851 370,428 604,389 NET ASSETS: Beginning of year......................................... 4,735,459 4,365,031 3,760,642 ------------------ ------------------ ------------------ End of year............................................... $ 5,420,310 $ 4,735,459 $ 4,365,031 ================== ================== ================== AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 681,533 $ 727,300 $ 939,977 Net realized gains (losses)............................... (342,892) (68,423) (386,466) Change in unrealized gains (losses) on investments........ 9,028,936 (13,188,181) 11,810,164 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 9,367,577 (12,529,304) 12,363,675 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 6,754,997 7,605,640 8,529,505 Net transfers (including fixed account)................... (1,743,129) (1,805,503) (976,366) Policy charges............................................ (3,801,507) (4,142,061) (4,451,588) Transfers for policy benefits and terminations............ (3,815,121) (4,059,136) (4,114,157) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (2,604,760) (2,401,060) (1,012,606) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 6,762,817 (14,930,364) 11,351,069 NET ASSETS: Beginning of year......................................... 52,474,989 67,405,353 56,054,284 ------------------ ------------------ ------------------ End of year............................................... $ 59,237,806 $ 52,474,989 $ 67,405,353 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 102 The accompanying notes are an integral part of these financial statements. 103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN FUNDS GROWTH INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 879,818 $ 630,009 $ 700,076 Net realized gains (losses)...................................... 1,170,827 658,869 (328,082) Change in unrealized gains (losses) on investments............... 18,556,699 (6,628,058) 19,817,938 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 20,607,344 (5,339,180) 20,189,932 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 13,860,300 15,130,932 16,677,167 Net transfers (including fixed account).......................... (3,812,042) (1,178,160) (1,005,842) Policy charges................................................... (8,845,036) (9,007,053) (9,003,630) Transfers for policy benefits and terminations................... (9,088,854) (8,844,884) (8,617,264) ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... (7,885,632) (3,899,165) (1,949,569) ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... 12,721,712 (9,238,345) 18,240,363 NET ASSETS: Beginning of year................................................ 118,199,510 127,437,855 109,197,492 ---------------- ---------------- ---------------- End of year...................................................... $ 130,921,222 $ 118,199,510 $ 127,437,855 ================ ================ ================ AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 1,175,138 $ 1,070,960 $ 943,129 Net realized gains (losses)...................................... 300,932 (58,726) (336,443) Change in unrealized gains (losses) on investments............... 10,629,027 (2,428,568) 6,948,053 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 12,105,097 (1,416,334) 7,554,739 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 8,728,377 9,556,841 10,334,758 Net transfers (including fixed account).......................... (1,135,580) (457,407) (240,405) Policy charges................................................... (5,615,768) (5,547,870) (5,606,668) Transfers for policy benefits and terminations................... (5,724,226) (4,739,607) (4,718,644) ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... (3,747,197) (1,188,043) (230,959) ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... 8,357,900 (2,604,377) 7,323,780 NET ASSETS: Beginning of year................................................ 71,256,817 73,861,194 66,537,414 ---------------- ---------------- ---------------- End of year...................................................... $ 79,614,717 $ 71,256,817 $ 73,861,194 ================ ================ ================ AMERICAN FUNDS HIGH-INCOME BOND INVESTMENT DIVISION ------------------- 2012 (b) ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 3,203 Net realized gains (losses)...................................... 6 Change in unrealized gains (losses) on investments............... (677) ------------------- Net increase (decrease) in net assets resulting from operations.............................................. 2,532 ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... -- Net transfers (including fixed account).......................... 54,888 Policy charges................................................... (181) Transfers for policy benefits and terminations................... (8) ------------------- Net increase (decrease) in net assets resulting from policy transactions..................................... 54,699 ------------------- Net increase (decrease) in net assets.......................... 57,231 NET ASSETS: Beginning of year................................................ -- ------------------- End of year...................................................... $ 57,231 =================== AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 7,535 $ 10,736 $ 13,328 Net realized gains (losses)...................................... (1,402) (605) (608) Change in unrealized gains (losses) on investments............... 82,398 (108,507) 46,566 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 88,531 (98,376) 59,286 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 46,649 4,120 196,875 Net transfers (including fixed account).......................... (25,495) (89,752) 113,293 Policy charges................................................... (12,774) (18,135) (17,235) Transfers for policy benefits and terminations................... (69,569) (82,771) (7,938) ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... (61,189) (186,538) 284,995 ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... 27,342 (284,914) 344,281 NET ASSETS: Beginning of year................................................ 524,711 809,625 465,344 ---------------- ---------------- ---------------- End of year...................................................... $ 552,053 $ 524,711 $ 809,625 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 104 The accompanying notes are an integral part of these financial statements. 105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 440 $ 773 $ 683 Net realized gains (losses)............................... 1,510 1,620 643 Change in unrealized gains (losses) on investments........ (1,126) 885 1,804 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... 824 3,278 3,130 ------------------ ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 6,275 18,071 7,825 Net transfers (including fixed account)................... -- (2,592) (50,106) Policy charges............................................ (1,867) (9,064) (10,685) Transfers for policy benefits and terminations............ (5,579) (1,984) (2,565) ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (1,171) 4,431 (55,531) ------------------ ------------------- ------------------ Net increase (decrease) in net assets................... (347) 7,709 (52,401) NET ASSETS: Beginning of year......................................... 45,539 37,830 90,231 ------------------ ------------------- ------------------ End of year............................................... $ 45,192 $ 45,539 $ 37,830 ================== =================== ================== DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 4,882 $ 4,085 $ 3,367 Net realized gains (losses)............................... (1,011) (960) (14,086) Change in unrealized gains (losses) on investments........ 18,857 (45,726) 19,382 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 22,728 (42,601) 8,663 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 895 1,458 955 Net transfers (including fixed account)................... 6 (1,532) (65,938) Policy charges............................................ (2,557) (3,962) (3,958) Transfers for policy benefits and terminations............ -- (766) -- ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (1,656) (4,802) (68,941) ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 21,072 (47,403) (60,278) NET ASSETS: Beginning of year......................................... 184,061 231,464 291,742 ------------------- ------------------ ------------------ End of year............................................... $ 205,133 $ 184,061 $ 231,464 =================== ================== ================== FIDELITY VIP ASSET MANAGER: GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 24,972 $ 23,605 $ 19,264 Net realized gains (losses)............................... 35,697 74,260 37,274 Change in unrealized gains (losses) on investments........ 172,026 (205,700) 201,872 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... 232,695 (107,835) 258,410 ------------------ ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 122,067 182,388 168,558 Net transfers (including fixed account)................... 249,730 (79,369) (53,668) Policy charges............................................ (68,776) (78,031) (69,353) Transfers for policy benefits and terminations............ -- (392,245) (120,774) ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 303,021 (367,257) (75,237) ------------------ ------------------- ------------------ Net increase (decrease) in net assets................... 535,716 (475,092) 183,173 NET ASSETS: Beginning of year......................................... 1,430,516 1,905,608 1,722,435 ------------------ ------------------- ------------------ End of year............................................... $ 1,966,232 $ 1,430,516 $ 1,905,608 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 106 The accompanying notes are an integral part of these financial statements. 107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP CONTRAFUND INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 28,837 $ 20,916 $ 27,427 Net realized gains (losses).............................. 38,806 12,745 (217,628) Change in unrealized gains (losses) on investments....... 288,092 (98,141) 648,547 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 355,735 (64,480) 458,346 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 127,751 206,289 166,923 Net transfers (including fixed account).................. (78,043) (243,464) (1,821,221) Policy charges........................................... (99,800) (104,834) (104,054) Transfers for policy benefits and terminations........... (114,270) (319,235) (10,806) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (164,362) (461,244) (1,769,158) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 191,373 (525,724) (1,310,812) NET ASSETS: Beginning of year........................................ 2,151,649 2,677,373 3,988,185 ------------------ ------------------ ------------------ End of year.............................................. $ 2,343,022 $ 2,151,649 $ 2,677,373 ================== ================== ================== FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 1,836 $ 637 $ 3,327 Net realized gains (losses).............................. 3,239 2,625 (5,418) Change in unrealized gains (losses) on investments....... (1,146) (8,921) 31,745 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 3,929 (5,659) 29,654 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 1,366 26,285 37,251 Net transfers (including fixed account).................. 39,024 (55,376) (103,500) Policy charges........................................... (617) (4,868) (6,481) Transfers for policy benefits and terminations........... -- (144,483) -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 39,773 (178,442) (72,730) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 43,702 (184,101) (43,076) NET ASSETS: Beginning of year........................................ 18,589 202,690 245,766 ------------------ ------------------ ------------------ End of year.............................................. $ 62,291 $ 18,589 $ 202,690 ================== ================== ================== FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ----------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 564 $ 576 $ 545 Net realized gains (losses).............................. 633 1,481 537 Change in unrealized gains (losses) on investments....... 2,707 (2,344) 2,036 ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 3,904 (287) 3,118 ----------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 2,629 2,823 2,793 Net transfers (including fixed account).................. 210 884 12,520 Policy charges........................................... -- -- -- Transfers for policy benefits and terminations........... (1,249) (1,136) (1,119) ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 1,590 2,571 14,194 ----------------- ------------------ ------------------ Net increase (decrease) in net assets.................. 5,494 2,284 17,312 NET ASSETS: Beginning of year........................................ 34,144 31,860 14,548 ----------------- ------------------ ------------------ End of year.............................................. $ 39,638 $ 34,144 $ 31,860 ================= ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 108 The accompanying notes are an integral part of these financial statements. 109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP FREEDOM 2020 INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ----------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 14,905 $ 15,048 $ 14,881 Net realized gains (losses).............................. 14,637 12,805 8,278 Change in unrealized gains (losses) on investments....... 62,352 (33,543) 70,032 ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 91,894 (5,690) 93,191 ----------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 13,429 12,681 10,953 Net transfers (including fixed account).................. (20,603) 33,211 1,108 Policy charges........................................... (10,886) (10,197) (9,499) Transfers for policy benefits and terminations........... (8,824) (68,993) (5,562) ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (26,884) (33,298) (3,000) ----------------- ------------------ ------------------ Net increase (decrease) in net assets.................. 65,010 (38,988) 90,191 NET ASSETS: Beginning of year........................................ 699,714 738,702 648,511 ----------------- ------------------ ------------------ End of year.............................................. $ 764,724 $ 699,714 $ 738,702 ================= ================== ================== FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 665 $ 1,018 $ 1,885 Net realized gains (losses).............................. 3,280 11,923 1,390 Change in unrealized gains (losses) on investments....... 3,591 (12,843) 11,839 ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations...................................... 7,536 98 15,114 ------------------ ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............. 1,320 2,634 3,169 Net transfers (including fixed account).................. (21,760) (51,129) 62,506 Policy charges........................................... -- (455) (1,273) Transfers for policy benefits and terminations........... (1,232) (2,369) (3,063) ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................. (21,672) (51,319) 61,339 ------------------ ------------------ ----------------- Net increase (decrease) in net assets.................. (14,136) (51,221) 76,453 NET ASSETS: Beginning of year........................................ 56,970 108,191 31,738 ------------------ ------------------ ----------------- End of year.............................................. $ 42,834 $ 56,970 $ 108,191 ================== ================== ================= FIDELITY VIP FREEDOM 2050 INVESTMENT DIVISION ---------------------------------------- 2012 2011 (c) ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 283 $ 228 Net realized gains (losses).............................. 2,160 (3,654) Change in unrealized gains (losses) on investments....... 199 1,450 ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 2,642 (1,976) ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. -- -- Net transfers (including fixed account).................. -- 17,414 Policy charges........................................... -- -- Transfers for policy benefits and terminations........... (281) -- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (281) 17,414 ------------------ ------------------ Net increase (decrease) in net assets.................. 2,361 15,438 NET ASSETS: Beginning of year........................................ 15,438 -- ------------------ ------------------ End of year.............................................. $ 17,799 $ 15,438 ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 110 The accompanying notes are an integral part of these financial statements. 111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FIDELITY VIP HIGH INCOME INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 9,229 $ 2,953 $ 340 Net realized gains (losses)............................. 67 13 (227) Change in unrealized gains (losses) on investments...... (1,277) (1,768) 801 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 8,019 1,198 914 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 1,301 3,335 -- Net transfers (including fixed account)................. 115,054 34,562 (36,834) Policy charges.......................................... (2,451) (357) (282) Transfers for policy benefits and terminations.......... -- (80) (148) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 113,904 37,460 (37,264) ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 121,923 38,658 (36,350) NET ASSETS: Beginning of year....................................... 43,223 4,565 40,915 ------------------ ----------------- ------------------ End of year............................................. $ 165,146 $ 43,223 $ 4,565 ================== ================= ================== FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 37,562 $ 54,637 $ 18,206 Net realized gains (losses)............................. 81,674 21,189 23,465 Change in unrealized gains (losses) on investments...... (8,975) 1,742 (13,312) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... 110,261 77,568 28,359 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 829 1,122 829 Net transfers (including fixed account)................. 464,291 1,150,764 281,430 Policy charges.......................................... (27,932) (16,946) (9,224) Transfers for policy benefits and terminations.......... (9,509) -- -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 427,679 1,134,940 273,035 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................. 537,940 1,212,508 301,394 NET ASSETS: Beginning of year....................................... 1,747,852 535,344 233,950 ------------------ ------------------ ------------------ End of year............................................. $ 2,285,792 $ 1,747,852 $ 535,344 ================== ================== ================== FIDELITY VIP MID CAP INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 2,865 $ 150 $ 502 Net realized gains (losses)............................. 67,641 12,027 3,104 Change in unrealized gains (losses) on investments...... 20,392 (60,535) 83,723 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... 90,898 (48,358) 87,329 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 78,618 5,952 95,232 Net transfers (including fixed account)................. 25,075 253,173 77,140 Policy charges.......................................... (15,222) (11,223) (9,033) Transfers for policy benefits and terminations.......... (44,408) (47,617) (4,506) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 44,063 200,285 158,833 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................. 134,961 151,927 246,162 NET ASSETS: Beginning of year....................................... 613,958 462,031 215,869 ------------------ ------------------ ------------------ End of year............................................. $ 748,919 $ 613,958 $ 462,031 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 112 The accompanying notes are an integral part of these financial statements. 113 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
FTVIPT MUTUAL GLOBAL DISCOVERY SECURITIES INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 21,682 $ 22,691 $ 10,103 Net realized gains (losses).............................. 49,608 1,929 (4,189) Change in unrealized gains (losses) on investments....... 33,439 (59,670) 81,592 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 104,729 (35,050) 87,506 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 83,607 53,641 97,464 Net transfers (including fixed account).................. (97,388) 113,146 (79,267) Policy charges........................................... (22,528) (24,225) (20,745) Transfers for policy benefits and terminations........... (49,079) (291,009) (141) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (85,388) (148,447) (2,689) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 19,341 (183,497) 84,817 NET ASSETS: Beginning of year........................................ 783,835 967,332 882,515 ------------------ ------------------ ------------------ End of year.............................................. $ 803,176 $ 783,835 $ 967,332 ================== ================== ================== FTVIPT TEMPLETON FOREIGN SECURITIES INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 115,174 $ 89,150 $ 164,170 Net realized gains (losses).............................. (16,852) 253,750 (50,450) Change in unrealized gains (losses) on investments....... 501,451 (552,735) 614,425 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 599,773 (209,835) 728,145 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 303,212 379,032 834,212 Net transfers (including fixed account).................. 178,098 (5,636,582) 220,184 Policy charges........................................... (140,398) (243,478) (404,941) Transfers for policy benefits and terminations........... -- (512,046) (68,047) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 340,912 (6,013,074) 581,408 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 940,685 (6,222,909) 1,309,553 NET ASSETS: Beginning of year........................................ 3,021,785 9,244,694 7,935,141 ------------------ ------------------ ------------------ End of year.............................................. $ 3,962,470 $ 3,021,785 $ 9,244,694 ================== ================== ================== FTVIPT TEMPLETON GLOBAL BOND SECURITIES INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 24,244 $ 10,824 $ 60 Net realized gains (losses).............................. 352 (11,299) 4,601 Change in unrealized gains (losses) on investments....... 26,566 (11,949) (171) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 51,162 (12,424) 4,490 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 41,308 38,191 9,303 Net transfers (including fixed account).................. 73,730 482,861 (9,428) Policy charges........................................... (10,633) (7,628) (825) Transfers for policy benefits and terminations........... (2,811) (215,383) (3,516) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 101,594 298,041 (4,466) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 152,756 285,617 24 NET ASSETS: Beginning of year........................................ 289,345 3,728 3,704 ------------------ ------------------ ------------------ End of year.............................................. $ 442,101 $ 289,345 $ 3,728 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 114 The accompanying notes are an integral part of these financial statements. 115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 2,932 $ 2,221 $ 2,264 Net realized gains (losses)............................... (683) (27,627) (13,608) Change in unrealized gains (losses) on investments........ 45,178 1,030 84,633 ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations....................................... 47,427 (24,376) 73,289 ------------------- ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. -- -- -- Net transfers (including fixed account)................... -- -- (23,223) Policy charges............................................ (8,787) (9,130) (9,204) Transfers for policy benefits and terminations............ (48,734) (65,335) (2,114) ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (57,521) (74,465) (34,541) ------------------- ------------------- ------------------ Net increase (decrease) in net assets................... (10,094) (98,841) 38,748 NET ASSETS: Beginning of year......................................... 268,248 367,089 328,341 ------------------- ------------------- ------------------ End of year............................................... $ 258,154 $ 268,248 $ 367,089 =================== =================== ================== GOLDMAN SACHS STRUCTURED SMALL CAP EQUITY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 308 $ 424 $ 254 Net realized gains (losses)............................... 5,427 175 (7,335) Change in unrealized gains (losses) on investments........ (629) (255) 18,632 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 5,106 344 11,551 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 4,965 468 4,077 Net transfers (including fixed account)................... (32,037) -- (33,283) Policy charges............................................ (1,976) (1,804) (1,601) Transfers for policy benefits and terminations............ -- (1) -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (29,048) (1,337) (30,807) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... (23,942) (993) (19,256) NET ASSETS: Beginning of year......................................... 50,259 51,252 70,508 ------------------ ------------------ ------------------ End of year............................................... $ 26,317 $ 50,259 $ 51,252 ================== ================== ================== INVESCO V.I. GLOBAL REAL ESTATE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 10,832 $ 72,431 $ 71,976 Net realized gains (losses)............................... (24,321) (158,339) (130,047) Change in unrealized gains (losses) on investments........ 481,388 (44,519) 289,353 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 467,899 (130,427) 231,282 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 92,394 18,821 3,708 Net transfers (including fixed account)................... 676,565 131,727 (63,773) Policy charges............................................ (68,963) (66,134) (53,968) Transfers for policy benefits and terminations............ (43,803) (60,454) (26,660) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 656,193 23,960 (140,693) ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 1,124,092 (106,467) 90,589 NET ASSETS: Beginning of year......................................... 1,490,644 1,597,111 1,506,522 ------------------- ------------------ ------------------ End of year............................................... $ 2,614,736 $ 1,490,644 $ 1,597,111 =================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 116 The accompanying notes are an integral part of these financial statements. 117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
INVESCO V.I. GOVERNMENT SECURITIES INVESTMENT DIVISION --------------------------------------- 2012 2011 (d) ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................................... $ -- $ -- Net realized gains (losses)....................................... 1,308 1,389 Change in unrealized gains (losses) on investments................ (1,335) 1,336 ------------------ ----------------- Net increase (decrease) in net assets resulting from operations............................................... (27) 2,725 ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners...................... -- -- Net transfers (including fixed account)........................... (21,034) 19,885 Policy charges.................................................... (119) (1,119) Transfers for policy benefits and terminations.................... -- -- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions...................................... (21,153) 18,766 ------------------ ----------------- Net increase (decrease) in net assets........................... (21,180) 21,491 NET ASSETS: Beginning of year................................................. 21,491 -- ------------------ ----------------- End of year....................................................... $ 311 $ 21,491 ================== ================= INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................................... $ 90,329 $ 3,660 $ 4,364 Net realized gains (losses)....................................... 18,589 3,888 1,465 Change in unrealized gains (losses) on investments................ 685,032 (28,330) 26,537 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations............................................... 793,950 (20,782) 32,366 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners...................... 1,064,864 3,175 43,890 Net transfers (including fixed account)........................... 4,933,992 (26,489) 184,805 Policy charges.................................................... (310,061) (6,987) (5,205) Transfers for policy benefits and terminations.................... -- (197,921) (1,805) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions...................................... 5,688,795 (228,222) 221,685 ------------------ ----------------- ------------------ Net increase (decrease) in net assets........................... 6,482,745 (249,004) 254,051 NET ASSETS: Beginning of year................................................. 23,407 272,411 18,360 ------------------ ----------------- ------------------ End of year....................................................... $ 6,506,152 $ 23,407 $ 272,411 ================== ================= ================== INVESCO V.I. VAN KAMPEN COMSTOCK INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 (e) ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................................... $ 3,483 $ 489 $ -- Net realized gains (losses)....................................... 1,338 (127) 53 Change in unrealized gains (losses) on investments................ 32,459 (6,181) 45 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations............................................... 37,280 (5,819) 98 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners...................... 26,415 18,211 -- Net transfers (including fixed account)........................... (11,358) 148,276 31,986 Policy charges.................................................... (5,093) (2,690) -- Transfers for policy benefits and terminations.................... -- -- -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions...................................... 9,964 163,797 31,986 ------------------ ------------------ ------------------ Net increase (decrease) in net assets........................... 47,244 157,978 32,084 NET ASSETS: Beginning of year................................................. 190,062 32,084 -- ------------------ ------------------ ------------------ End of year....................................................... $ 237,306 $ 190,062 $ 32,084 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 118 The accompanying notes are an integral part of these financial statements. 119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
JANUS ASPEN BALANCED INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 27,163 $ 44,376 $ 54,166 Net realized gains (losses).............................. 115,247 137,912 26,581 Change in unrealized gains (losses) on investments....... 25,664 (161,867) 90,252 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 168,074 20,421 170,999 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 153,325 105,004 500,783 Net transfers (including fixed account).................. (463,753) (679,101) 426,734 Policy charges........................................... (37,906) (57,528) (54,051) Transfers for policy benefits and terminations........... (58,979) (575,867) (8,070) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (407,313) (1,207,492) 865,396 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. (239,239) (1,187,071) 1,036,395 NET ASSETS: Beginning of year........................................ 1,339,788 2,526,859 1,490,464 ------------------ ------------------ ------------------ End of year.............................................. $ 1,100,549 $ 1,339,788 $ 2,526,859 ================== ================== ================== JANUS ASPEN FORTY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 5,152 $ 2,325 $ 2,433 Net realized gains (losses).............................. 38,660 43,353 14,051 Change in unrealized gains (losses) on investments....... 126,343 (117,114) 47,707 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 170,155 (71,436) 64,191 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 86,108 58,591 190,160 Net transfers (including fixed account).................. (41,907) (237,596) 46,953 Policy charges........................................... (29,645) (30,157) (32,843) Transfers for policy benefits and terminations........... -- (229,034) (6,634) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 14,556 (438,196) 197,636 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 184,711 (509,632) 261,827 NET ASSETS: Beginning of year........................................ 703,136 1,212,768 950,941 ------------------ ------------------ ------------------ End of year.............................................. $ 887,847 $ 703,136 $ 1,212,768 ================== ================== ================== JANUS ASPEN JANUS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 5,213 $ 5,397 $ 73,809 Net realized gains (losses).............................. 29,069 1,561,413 52,158 Change in unrealized gains (losses) on investments....... 122,884 (1,416,036) 848,330 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 157,166 150,774 974,297 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 19,037 6,403 635,005 Net transfers (including fixed account).................. (14,200) (6,850,158) (58,773) Policy charges........................................... (41,868) (89,176) (348,978) Transfers for policy benefits and terminations........... (6,552) (191,751) -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (43,583) (7,124,682) 227,254 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 113,583 (6,973,908) 1,201,551 NET ASSETS: Beginning of year........................................ 858,094 7,832,002 6,630,451 ------------------ ------------------ ------------------ End of year.............................................. $ 971,677 $ 858,094 $ 7,832,002 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 120 The accompanying notes are an integral part of these financial statements. 121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
JANUS ASPEN OVERSEAS INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 2,519 $ 1,291 $ 1,609 Net realized gains (losses)............................. 36,365 (90,371) 4,218 Change in unrealized gains (losses) on investments...... 8,927 (214,175) 62,994 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... 47,811 (303,255) 68,821 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 72,495 17,337 61,601 Net transfers (including fixed account)................. (60) 362,799 175,192 Policy charges.......................................... (20,490) (57,215) (7,851) Transfers for policy benefits and terminations.......... (1,949) (51,382) (4,005) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 49,996 271,539 224,937 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................. 97,807 (31,716) 293,758 NET ASSETS: Beginning of year....................................... 344,135 375,851 82,093 ------------------ ------------------ ------------------ End of year............................................. $ 441,942 $ 344,135 $ 375,851 ================== ================== ================== MFS VIT GLOBAL EQUITY INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 61 $ 575 $ 1,232 Net realized gains (losses)............................. 428 12,787 183 Change in unrealized gains (losses) on investments...... 6,795 (16,173) 19,523 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 7,284 (2,811) 20,938 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 2,223 10,718 28,453 Net transfers (including fixed account)................. 121,236 (180,476) 103,015 Policy charges.......................................... (579) (1,554) (2,958) Transfers for policy benefits and terminations.......... (150) (47,257) (1,538) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 122,730 (218,569) 126,972 ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 130,014 (221,380) 147,910 NET ASSETS: Beginning of year....................................... 5,414 226,794 78,884 ------------------ ----------------- ------------------ End of year............................................. $ 135,428 $ 5,414 $ 226,794 ================== ================= ================== MFS VIT HIGH INCOME INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 ----------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 10,779 $ 12,069 $ 8,657 Net realized gains (losses)............................. 2,215 361 680 Change in unrealized gains (losses) on investments...... 6,400 (7,343) 7,331 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations..................................... 19,394 5,087 16,668 ----------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ -- -- -- Net transfers (including fixed account)................. 9,417 -- (706) Policy charges.......................................... (2,141) (1,863) (1,750) Transfers for policy benefits and terminations.......... (714) (22) -- ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................ 6,562 (1,885) (2,456) ----------------- ------------------ ----------------- Net increase (decrease) in net assets................. 25,956 3,202 14,212 NET ASSETS: Beginning of year....................................... 135,311 132,109 117,897 ----------------- ------------------ ----------------- End of year............................................. $ 161,267 $ 135,311 $ 132,109 ================= ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 122 The accompanying notes are an integral part of these financial statements. 123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MFS VIT NEW DISCOVERY INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ -- $ -- $ -- Net realized gains (losses)...................................... 16,176 18,098 544 Change in unrealized gains (losses) on investments............... 11,186 (32,906) 28,843 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 27,362 (14,808) 29,387 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 25,604 6,694 8,926 Net transfers (including fixed account).......................... 1,556 5 94,362 Policy charges................................................... (4,934) (4,419) (2,781) Transfers for policy benefits and terminations................... -- -- -- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... 22,226 2,280 100,507 ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... 49,588 (12,528) 129,894 NET ASSETS: Beginning of year................................................ 122,395 134,923 5,029 ---------------- ---------------- ---------------- End of year...................................................... $ 171,983 $ 122,395 $ 134,923 ================ ================ ================ MFS VIT VALUE INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 668 $ 999 $ 969 Net realized gains (losses)...................................... 3,543 (9,686) (552) Change in unrealized gains (losses) on investments............... 2,241 6,173 7,585 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 6,452 (2,514) 8,002 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... -- -- -- Net transfers (including fixed account).......................... -- -- -- Policy charges................................................... (2,417) (2,722) (2,906) Transfers for policy benefits and terminations................... (31,172) (29,560) (2) ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... (33,589) (32,282) (2,908) ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... (27,137) (34,796) 5,094 NET ASSETS: Beginning of year................................................ 44,299 79,095 74,001 ---------------- ---------------- ---------------- End of year...................................................... $ 17,162 $ 44,299 $ 79,095 ================ ================ ================ MIST ALLIANCEBERNSTEIN GLOBAL DYNAMIC ALLOCATION INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ -- Net realized gains (losses)...................................... -- Change in unrealized gains (losses) on investments............... 163 ------------------- Net increase (decrease) in net assets resulting from operations.............................................. 163 ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 1,541 Net transfers (including fixed account).......................... 5,907 Policy charges................................................... (513) Transfers for policy benefits and terminations................... -- ------------------- Net increase (decrease) in net assets resulting from policy transactions..................................... 6,935 ------------------- Net increase (decrease) in net assets.......................... 7,098 NET ASSETS: Beginning of year................................................ -- ------------------- End of year...................................................... $ 7,098 =================== MIST AMERICAN FUNDS BALANCED ALLOCATION INVESTMENT DIVISION ---------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)..................................... $ 10,680 $ 6,635 $ 3,146 Net realized gains (losses)...................................... 9,312 6,294 1,822 Change in unrealized gains (losses) on investments............... 50,640 (23,258) 26,193 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations.............................................. 70,632 (10,329) 31,161 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners..................... 95,603 100,111 105,391 Net transfers (including fixed account).......................... 9,483 36,239 89,836 Policy charges................................................... (41,140) (32,003) (11,710) Transfers for policy benefits and terminations................... (19,150) (5,429) -- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions..................................... 44,796 98,918 183,517 ---------------- ---------------- ---------------- Net increase (decrease) in net assets.......................... 115,428 88,589 214,678 NET ASSETS: Beginning of year................................................ 515,995 427,406 212,728 ---------------- ---------------- ---------------- End of year...................................................... $ 631,423 $ 515,995 $ 427,406 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 124 The accompanying notes are an integral part of these financial statements. 125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 13,384 $ 10,815 $ 2,434 Net realized gains (losses).............................. 16,384 9,254 5,990 Change in unrealized gains (losses) on investments....... 96,877 (58,738) 79,550 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 126,645 (38,669) 87,974 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 256,426 267,061 355,048 Net transfers (including fixed account).................. 39,236 31,086 223,657 Policy charges........................................... (109,463) (124,905) (93,195) Transfers for policy benefits and terminations........... (167,111) (59,628) (2,170) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 19,088 113,614 483,340 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 145,733 74,945 571,314 NET ASSETS: Beginning of year........................................ 781,245 706,300 134,986 ------------------ ------------------ ------------------ End of year.............................................. $ 926,978 $ 781,245 $ 706,300 ================== ================== ================== MIST AMERICAN FUNDS MODERATE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 10,434 $ 5,453 $ 2,501 Net realized gains (losses).............................. 11,099 3,384 646 Change in unrealized gains (losses) on investments....... 29,635 (7,233) 16,902 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 51,168 1,604 20,049 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 224,194 153,402 103,657 Net transfers (including fixed account).................. 22,347 57,534 70,020 Policy charges........................................... (81,784) (55,936) (37,265) Transfers for policy benefits and terminations........... (29,845) (5,092) (2,260) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 134,912 149,908 134,152 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 186,080 151,512 154,201 NET ASSETS: Beginning of year........................................ 401,606 250,094 95,893 ------------------ ------------------ ------------------ End of year.............................................. $ 587,686 $ 401,606 $ 250,094 ================== ================== ================== MIST AQR MIST BLACKROCK GLOBAL RISK GLOBAL TACTICAL BALANCED STRATEGIES INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- 2012 (f) 2012 (f) ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ -- $ -- Net realized gains (losses).............................. (28) 51 Change in unrealized gains (losses) on investments....... 375 878 ------------------- ------------------- Net increase (decrease) in net assets resulting from operations...................................... 347 929 ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners............. 2,706 5,304 Net transfers (including fixed account).................. 22,769 34,552 Policy charges........................................... (1,026) (1,705) Transfers for policy benefits and terminations........... (12) (2) ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions............................. 24,437 38,149 ------------------- ------------------- Net increase (decrease) in net assets.................. 24,784 39,078 NET ASSETS: Beginning of year........................................ -- -- ------------------- ------------------- End of year.............................................. $ 24,784 $ 39,078 =================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 126 The accompanying notes are an integral part of these financial statements. 127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST BLACKROCK LARGE CAP CORE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 2,105,871 $ 1,842,952 $ 2,318,294 Net realized gains (losses).............................. (3,353,915) (4,542,808) (7,248,214) Change in unrealized gains (losses) on investments....... 38,395,441 3,050,880 38,497,976 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 37,147,397 351,024 33,568,056 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 30,263,186 32,085,988 34,809,861 Net transfers (including fixed account).................. (3,536,610) (2,768,320) (2,767,361) Policy charges........................................... (25,681,797) (26,055,182) (26,462,547) Transfers for policy benefits and terminations........... (22,249,090) (21,487,307) (21,236,249) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (21,204,311) (18,224,821) (15,656,296) ------------------ ----------------- ------------------ Net increase (decrease) in net assets.................. 15,943,086 (17,873,797) 17,911,760 NET ASSETS: Beginning of year........................................ 291,615,739 309,489,536 291,577,776 ------------------ ----------------- ------------------ End of year.............................................. $ 307,558,825 $ 291,615,739 $ 309,489,536 ================== ================= ================== MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 469,650 $ 822,247 $ 1,533,638 Net realized gains (losses).............................. (282,095) (421,589) (571,095) Change in unrealized gains (losses) on investments....... 4,988,577 (1,500,208) 1,969,823 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 5,176,132 (1,099,550) 2,932,366 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 2,592,509 2,829,699 3,115,895 Net transfers (including fixed account).................. 1,803,836 (266,335) (6,843) Policy charges........................................... (1,523,067) (1,472,266) (1,472,706) Transfers for policy benefits and terminations........... (1,526,479) (1,591,725) (1,474,613) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 1,346,799 (500,627) 161,733 ------------------ ----------------- ------------------ Net increase (decrease) in net assets.................. 6,522,931 (1,600,177) 3,094,099 NET ASSETS: Beginning of year........................................ 19,560,387 21,160,564 18,066,465 ------------------ ----------------- ------------------ End of year.............................................. $ 26,083,318 $ 19,560,387 $ 21,160,564 ================== ================= ================== MIST DREMAN SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 358 $ 472 $ 172 Net realized gains (losses).............................. 3,130 1,124 403 Change in unrealized gains (losses) on investments....... 1,696 (4,058) 3,392 ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations...................................... 5,184 (2,462) 3,967 ------------------ ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............. 11,572 8,977 2,082 Net transfers (including fixed account).................. (1,795) 6,064 6,849 Policy charges........................................... (6,279) (4,130) (2,545) Transfers for policy benefits and terminations........... (6,067) -- -- ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................. (2,569) 10,911 6,386 ------------------ ------------------ ----------------- Net increase (decrease) in net assets.................. 2,615 8,449 10,353 NET ASSETS: Beginning of year........................................ 35,938 27,489 17,136 ------------------ ------------------ ----------------- End of year.............................................. $ 38,553 $ 35,938 $ 27,489 ================== ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 128 The accompanying notes are an integral part of these financial statements. 129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................................... $ 497,722 $ (38,360) $ 531,826 Net realized gains (losses)........................................ (140,345) (114,036) (312,283) Change in unrealized gains (losses) on investments................. 7,474,599 (4,256,535) 4,235,035 ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................ 7,831,976 (4,408,931) 4,454,578 ---------------- ----------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners....................... 3,418,984 3,837,373 4,074,673 Net transfers (including fixed account)............................ (782,470) 133,438 669,473 Policy charges..................................................... (1,876,193) (1,940,266) (1,984,772) Transfers for policy benefits and terminations..................... (2,206,344) (1,949,570) (2,128,605) ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions....................................... (1,446,023) 80,975 630,769 ---------------- ----------------- ---------------- Net increase (decrease) in net assets............................ 6,385,953 (4,327,956) 5,085,347 NET ASSETS: Beginning of year.................................................. 27,216,742 31,544,698 26,459,351 ---------------- ----------------- ---------------- End of year........................................................ $ 33,602,695 $ 27,216,742 $ 31,544,698 ================ ================= ================ MIST INVESCO BALANCED-RISK ALLOCATION INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................................... $ 23 Net realized gains (losses)........................................ 83 Change in unrealized gains (losses) on investments................. (2) ------------------- Net increase (decrease) in net assets resulting from operations................................................ 104 ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners....................... 1,603 Net transfers (including fixed account)............................ 6,312 Policy charges..................................................... (506) Transfers for policy benefits and terminations..................... -- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................................... 7,409 ------------------- Net increase (decrease) in net assets............................ 7,513 NET ASSETS: Beginning of year.................................................. -- ------------------- End of year........................................................ $ 7,513 =================== MIST INVESCO SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................................... $ (5,823) $ (5,378) $ (4,411) Net realized gains (losses)........................................ 428,171 169,309 (15,371) Change in unrealized gains (losses) on investments................. 331,488 (192,641) 887,599 ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations................................................ 753,836 (28,710) 867,817 ----------------- ---------------- ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners....................... 443,063 453,004 471,774 Net transfers (including fixed account)............................ (437,534) 42,346 164,724 Policy charges..................................................... (265,168) (262,281) (242,532) Transfers for policy benefits and terminations..................... (290,496) (261,290) (184,521) ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from policy transactions....................................... (550,135) (28,221) 209,445 ----------------- ---------------- ----------------- Net increase (decrease) in net assets............................ 203,701 (56,931) 1,077,262 NET ASSETS: Beginning of year.................................................. 4,412,967 4,469,898 3,392,636 ----------------- ---------------- ----------------- End of year........................................................ $ 4,616,668 $ 4,412,967 $ 4,469,898 ================= ================ ================= MIST JANUS FORTY INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................................... $ 43,475 $ 231,367 $ 202,308 Net realized gains (losses)........................................ 176,627 2,199 (41,591) Change in unrealized gains (losses) on investments................. 2,618,525 (1,278,619) 1,120,682 ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................ 2,838,627 (1,045,053) 1,281,399 ---------------- ---------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners....................... 1,848,830 2,050,382 2,241,409 Net transfers (including fixed account)............................ 554,060 (1,014,538) 410,883 Policy charges..................................................... (1,037,840) (966,083) (991,073) Transfers for policy benefits and terminations..................... (1,121,178) (795,086) (788,374) ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions....................................... 243,872 (725,325) 872,845 ---------------- ---------------- ---------------- Net increase (decrease) in net assets............................ 3,082,499 (1,770,378) 2,154,244 NET ASSETS: Beginning of year.................................................. 12,484,277 14,254,655 12,100,411 ---------------- ---------------- ---------------- End of year........................................................ $ 15,566,776 $ 12,484,277 $ 14,254,655 ================ ================ ================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 130 The accompanying notes are an integral part of these financial statements. 131 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST JPMORGAN GLOBAL ACTIVE ALLOCATION MIST LEGG MASON CLEARBRIDGE AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------------------------------------- 2012 (f) 2012 2011 2010 ------------------- ------------------ ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).......... $ 68 $ 20,415 $ 2,384 $ 392 Net realized gains (losses)........... 107 171,678 93,448 (57,251) Change in unrealized gains (losses) on investments...................... 152 2,107,124 (217,464) 1,583,027 ------------------- ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations......... 327 2,299,217 (121,632) 1,526,168 ------------------- ------------------ ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners....................... 1,977 1,437,587 1,318,130 897,883 Net transfers (including fixed account) 17,364 70,510 5,034,717 (116,646) Policy charges........................ (785) (965,403) (807,741) (544,125) Transfers for policy benefits and terminations........................ -- (981,320) (890,256) (464,163) ------------------- ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions 18,556 (438,626) 4,654,850 (227,051) ------------------- ------------------ ------------------ ----------------- Net increase (decrease) in net assets 18,883 1,860,591 4,533,218 1,299,117 NET ASSETS: Beginning of year..................... -- 12,365,794 7,832,576 6,533,459 ------------------- ------------------ ------------------ ----------------- End of year........................... $ 18,883 $ 14,226,385 $ 12,365,794 $ 7,832,576 =================== ================== ================== ================= MIST LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).......... $ 1,923,060 $ 1,509,115 $ 1,660,434 Net realized gains (losses)........... 218,347 583,376 240,525 Change in unrealized gains (losses) on investments...................... 1,167,280 (863,576) 1,315,427 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations......... 3,308,687 1,228,915 3,216,386 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners....................... 2,367,942 2,158,065 2,523,009 Net transfers (including fixed account) 308,984 (2,168,860) (548,415) Policy charges........................ (1,678,880) (1,640,766) (1,768,086) Transfers for policy benefits and terminations........................ (1,522,631) (1,520,091) (1,782,906) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions (524,585) (3,171,652) (1,576,398) ------------------ ------------------ ------------------ Net increase (decrease) in net assets 2,784,102 (1,942,737) 1,639,988 NET ASSETS: Beginning of year..................... 25,730,993 27,673,730 26,033,742 ------------------ ------------------ ------------------ End of year........................... $ 28,515,095 $ 25,730,993 $ 27,673,730 ================== ================== ================== MIST LORD ABBETT MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ----------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).......... $ (48,839) $ 603 $ 568 Net realized gains (losses)........... (82,924) 818 3,236 Change in unrealized gains (losses) on investments...................... 2,481,449 (5,510) 19,769 ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations......... 2,349,686 (4,089) 23,573 ----------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners....................... 4,895,051 5,506 6,334 Net transfers (including fixed account) 74,538,068 11,792 (18,047) Policy charges........................ (3,428,791) (3,541) (4,191) Transfers for policy benefits and terminations........................ (3,581,952) -- -- ----------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions 72,422,376 13,757 (15,904) ----------------- ------------------ ------------------ Net increase (decrease) in net assets 74,772,062 9,668 7,669 NET ASSETS: Beginning of year..................... 120,858 111,190 103,521 ----------------- ------------------ ------------------ End of year........................... $ 74,892,920 $ 120,858 $ 111,190 ================= ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 132 The accompanying notes are an integral part of these financial statements. 133 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MET/FRANKLIN INCOME INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 13,809 $ 8,323 $ 3,216 Net realized gains (losses)............................. 6,138 5,705 823 Change in unrealized gains (losses) on investments...... 16,385 (8,507) 10,272 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 36,332 5,521 14,311 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 63,058 44,198 28,894 Net transfers (including fixed account)................. 32,509 67,493 66,675 Policy charges.......................................... (28,891) (23,591) (12,613) Transfers for policy benefits and terminations.......... (397) (7,430) (1,480) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 66,279 80,670 81,476 ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 102,611 86,191 95,787 NET ASSETS: Beginning of year....................................... 237,483 151,292 55,505 ------------------ ----------------- ------------------ End of year............................................. $ 340,094 $ 237,483 $ 151,292 ================== ================= ================== MIST MET/FRANKLIN MUTUAL SHARES INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 766 $ 1,982 $ -- Net realized gains (losses)............................. 16,308 4,102 683 Change in unrealized gains (losses) on investments...... (3,910) (6,478) 4,077 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 13,164 (394) 4,760 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 25,120 18,290 13,024 Net transfers (including fixed account)................. 13,414 18,465 22,360 Policy charges.......................................... (12,687) (9,290) (6,571) Transfers for policy benefits and terminations.......... (376) (4,200) (811) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 25,471 23,265 28,002 ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 38,635 22,871 32,762 NET ASSETS: Beginning of year....................................... 79,913 57,042 24,280 ------------------ ----------------- ------------------ End of year............................................. $ 118,548 $ 79,913 $ 57,042 ================== ================= ================== MIST MET/FRANKLIN TEMPLETON FOUNDING STRATEGY INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 ----------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 12,419 $ 5,031 $ -- Net realized gains (losses)............................. 8,321 2,290 1,546 Change in unrealized gains (losses) on investments...... 24,847 (10,599) 23,230 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations..................................... 45,587 (3,278) 24,776 ----------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ 27,214 25,042 25,504 Net transfers (including fixed account)................. (17,678) 2,199 21,917 Policy charges.......................................... (10,138) (8,412) (6,972) Transfers for policy benefits and terminations.......... (407) (19) -- ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................ (1,009) 18,810 40,449 ----------------- ------------------ ----------------- Net increase (decrease) in net assets................. 44,578 15,532 65,225 NET ASSETS: Beginning of year....................................... 275,812 260,280 195,055 ----------------- ------------------ ----------------- End of year............................................. $ 320,390 $ 275,812 $ 260,280 ================= ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 134 The accompanying notes are an integral part of these financial statements. 135 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MET/TEMPLETON GROWTH INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 964 $ 792 $ 305 Net realized gains (losses).............................. 3,604 371 125 Change in unrealized gains (losses) on investments....... 8,197 (5,463) 3,904 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 12,765 (4,300) 4,334 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 18,145 18,937 18,420 Net transfers (including fixed account).................. (9,508) 2,912 12,049 Policy charges........................................... (6,328) (6,419) (5,335) Transfers for policy benefits and terminations........... (793) (6,096) (173) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 1,516 9,334 24,961 ------------------ ----------------- ------------------ Net increase (decrease) in net assets.................. 14,281 5,034 29,295 NET ASSETS: Beginning of year........................................ 53,526 48,492 19,197 ------------------ ----------------- ------------------ End of year.............................................. $ 67,807 $ 53,526 $ 48,492 ================== ================= ================== MIST MET/TEMPLETON INTERNATIONAL BOND MIST METLIFE AGGRESSIVE STRATEGY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------------------------- 2012 (f) 2012 2011 (d) ------------------- ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ -- $ 106,199 $ (8,047) Net realized gains (losses).............................. 21 (55,023) (117,896) Change in unrealized gains (losses) on investments....... 47 2,084,613 (1,834,063) ------------------- ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 68 2,135,789 (1,960,006) ------------------- ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 772 2,523,168 1,640,701 Net transfers (including fixed account).................. 2,031 (222,009) 14,330,838 Policy charges........................................... (254) (1,016,618) (680,441) Transfers for policy benefits and terminations........... (12) (750,395) (858,431) ------------------- ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 2,537 534,146 14,432,667 ------------------- ----------------- ------------------ Net increase (decrease) in net assets.................. 2,605 2,669,935 12,472,661 NET ASSETS: Beginning of year........................................ -- 12,472,661 -- ------------------- ----------------- ------------------ End of year.............................................. $ 2,605 $ 15,142,596 $ 12,472,661 =================== ================= ================== MIST METLIFE BALANCED PLUS MIST MFS EMERGING MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------------------------- 2012 (f) 2012 2011 (d) ------------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ -- $ 1,167 $ -- Net realized gains (losses).............................. 119 (1,470) (70) Change in unrealized gains (losses) on investments....... 1,691 9,361 (3,209) ------------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations...................................... 1,810 9,058 (3,279) ------------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............. 2,506 18,431 3,938 Net transfers (including fixed account).................. 42,755 46,229 23,265 Policy charges........................................... (1,138) (6,816) (911) Transfers for policy benefits and terminations........... -- (895) (63) ------------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................. 44,123 56,949 26,229 ------------------- ------------------ ----------------- Net increase (decrease) in net assets.................. 45,933 66,007 22,950 NET ASSETS: Beginning of year........................................ -- 22,950 -- ------------------- ------------------ ----------------- End of year.............................................. $ 45,933 $ 88,957 $ 22,950 =================== ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 136 The accompanying notes are an integral part of these financial statements. 137 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 266,180 $ 267,989 $ 222,616 Net realized gains (losses).............................. (345,224) (233,782) (545,005) Change in unrealized gains (losses) on investments....... 2,185,121 (1,480,693) 1,743,808 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 2,106,077 (1,446,486) 1,421,419 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 1,458,020 1,640,050 1,870,809 Net transfers (including fixed account).................. 1,660,976 51,977 (766,625) Policy charges........................................... (839,930) (858,974) (890,996) Transfers for policy benefits and terminations........... (841,229) (1,130,486) (892,543) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 1,437,837 (297,433) (679,355) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 3,543,914 (1,743,919) 742,064 NET ASSETS: Beginning of year........................................ 12,176,899 13,920,818 13,178,754 ------------------ ------------------ ------------------ End of year.............................................. $ 15,720,813 $ 12,176,899 $ 13,920,818 ================== ================== ================== MIST MLA MID CAP INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 26,174 $ 43,433 $ 44,249 Net realized gains (losses).............................. (28,631) (15,584) (93,933) Change in unrealized gains (losses) on investments....... 296,637 (320,660) 1,108,654 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 294,180 (292,811) 1,058,970 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 620,922 665,125 700,574 Net transfers (including fixed account).................. (187,706) 304,589 24,219 Policy charges........................................... (364,656) (382,010) (380,767) Transfers for policy benefits and terminations........... (442,679) (602,339) (387,630) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (374,119) (14,635) (43,604) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. (79,939) (307,446) 1,015,366 NET ASSETS: Beginning of year........................................ 5,277,678 5,585,124 4,569,758 ------------------ ------------------ ------------------ End of year.............................................. $ 5,197,739 $ 5,277,678 $ 5,585,124 ================== ================== ================== MIST MORGAN STANLEY MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ (579,825) $ 866,726 $ (375,077) Net realized gains (losses).............................. 1,677,793 7,856,152 336,382 Change in unrealized gains (losses) on investments....... 15,368,250 (21,552,444) 31,775,159 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 16,466,218 (12,829,566) 31,736,464 ------------------ ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 21,032,275 22,486,193 16,409,129 Net transfers (including fixed account).................. (1,255,442) (4,111,245) 174,856,480 Policy charges........................................... (14,401,148) (15,255,941) (10,113,246) Transfers for policy benefits and terminations........... (13,701,209) (15,693,955) (9,440,323) ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (8,325,524) (12,574,948) 171,712,040 ------------------ ------------------- ------------------ Net increase (decrease) in net assets.................. 8,140,694 (25,404,514) 203,448,504 NET ASSETS: Beginning of year........................................ 178,350,417 203,754,931 306,427 ------------------ ------------------- ------------------ End of year.............................................. $ 186,491,111 $ 178,350,417 $ 203,754,931 ================== =================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 138 The accompanying notes are an integral part of these financial statements. 139 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 369,500 $ 146,996 $ 195,330 Net realized gains (losses)............................. 800,878 525,047 281,279 Change in unrealized gains (losses) on investments...... (101,684) 331,187 130,473 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 1,068,694 1,003,230 607,082 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 1,385,490 1,244,015 1,208,996 Net transfers (including fixed account)................. 2,478,586 671,186 587,680 Policy charges.......................................... (865,472) (683,641) (626,248) Transfers for policy benefits and terminations.......... (915,239) (527,827) (699,416) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 2,083,365 703,733 471,012 ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 3,152,059 1,706,963 1,078,094 NET ASSETS: Beginning of year....................................... 10,519,501 8,812,538 7,734,444 ------------------ ----------------- ------------------ End of year............................................. $ 13,671,560 $ 10,519,501 $ 8,812,538 ================== ================= ================== MIST PIMCO TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 ----------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 1,570,173 $ 1,281,730 $ 1,574,811 Net realized gains (losses)............................. 347,234 1,634,121 474,495 Change in unrealized gains (losses) on investments...... 2,519,869 (1,410,547) 1,426,113 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations..................................... 4,437,276 1,505,304 3,475,419 ----------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ 4,797,851 5,110,970 5,334,220 Net transfers (including fixed account)................. 1,382,335 1,024,517 3,101,158 Policy charges.......................................... (3,598,862) (3,416,996) (3,436,516) Transfers for policy benefits and terminations.......... (3,664,586) (3,694,178) (3,692,336) ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................ (1,083,262) (975,687) 1,306,526 ----------------- ------------------ ----------------- Net increase (decrease) in net assets................. 3,354,014 529,617 4,781,945 NET ASSETS: Beginning of year....................................... 47,131,879 46,602,262 41,820,317 ----------------- ------------------ ----------------- End of year............................................. $ 50,485,893 $ 47,131,879 $ 46,602,262 ================= ================== ================= MIST PIONEER FUND INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 2,902 $ 2,289 $ 1,987 Net realized gains (losses)............................. 1,266 21,102 6,067 Change in unrealized gains (losses) on investments...... 14,560 (30,602) 25,716 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 18,728 (7,211) 33,770 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 4,118 5,551 4,871 Net transfers (including fixed account)................. 15 (1,284) (26,206) Policy charges.......................................... (4,551) (4,647) (5,711) Transfers for policy benefits and terminations.......... -- (61,915) -- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ (418) (62,295) (27,046) ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 18,310 (69,506) 6,724 NET ASSETS: Beginning of year....................................... 176,354 245,860 239,136 ------------------ ----------------- ------------------ End of year............................................. $ 194,664 $ 176,354 $ 245,860 ================== ================= ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 140 The accompanying notes are an integral part of these financial statements. 141 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST RCM TECHNOLOGY INVESTMENT DIVISION ----------------------------------------------------- 2012 2011 2010 ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................................ $ (19,709) $ (21,877) $ (19,473) Net realized gains (losses)......................................... 1,817,918 512,571 (54,192) Change in unrealized gains (losses) on investments.................. (166,446) (1,944,446) 3,551,862 ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations................................................. 1,631,763 (1,453,752) 3,478,197 ---------------- ----------------- ---------------- POLICY TRANSACTIONS: Premium payments received from policy owners........................ 1,416,829 1,591,820 1,602,041 Net transfers (including fixed account)............................. (338,762) (740,109) 7,146 Policy charges...................................................... (971,378) (1,067,941) (1,050,386) Transfers for policy benefits and terminations...................... (1,022,707) (1,227,369) (1,144,160) ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from policy transactions........................................ (916,018) (1,443,599) (585,359) ---------------- ----------------- ---------------- Net increase (decrease) in net assets............................. 715,745 (2,897,351) 2,892,838 NET ASSETS: Beginning of year................................................... 13,216,535 16,113,886 13,221,048 ---------------- ----------------- ---------------- End of year......................................................... $ 13,932,280 $ 13,216,535 $ 16,113,886 ================ ================= ================ MIST SCHRODERS GLOBAL MULTI-ASSET INVESTMENT DIVISION ------------------- 2012 (f) ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................................ $ 42 Net realized gains (losses)......................................... 103 Change in unrealized gains (losses) on investments.................. (23) ------------------- Net increase (decrease) in net assets resulting from operations................................................. 122 ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........................ 792 Net transfers (including fixed account)............................. 5,247 Policy charges...................................................... (409) Transfers for policy benefits and terminations...................... -- ------------------- Net increase (decrease) in net assets resulting from policy transactions........................................ 5,630 ------------------- Net increase (decrease) in net assets............................. 5,752 NET ASSETS: Beginning of year................................................... -- ------------------- End of year......................................................... $ 5,752 =================== MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................................ $ 126,210 $ 67,326 $ 30,178 Net realized gains (losses)......................................... 168,614 123,633 16,158 Change in unrealized gains (losses) on investments.................. 365,606 (151,325) 322,318 ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations................................................. 660,430 39,634 368,654 ---------------- ----------------- ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners........................ 646,514 610,076 471,109 Net transfers (including fixed account)............................. 942,683 653,921 1,821,735 Policy charges...................................................... (351,822) (275,433) (206,111) Transfers for policy benefits and terminations...................... (341,292) (235,978) (217,589) ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from policy transactions........................................ 896,083 752,586 1,869,144 ---------------- ----------------- ----------------- Net increase (decrease) in net assets............................. 1,556,513 792,220 2,237,798 NET ASSETS: Beginning of year................................................... 4,611,127 3,818,907 1,581,109 ---------------- ----------------- ----------------- End of year......................................................... $ 6,167,640 $ 4,611,127 $ 3,818,907 ================ ================= ================= MIST SSGA GROWTH ETF INVESTMENT DIVISION ------------------------------------------------------ 2012 2011 2010 ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................................ $ 74,518 $ 52,353 $ 30,058 Net realized gains (losses)......................................... 177,699 63,035 12,378 Change in unrealized gains (losses) on investments.................. 279,360 (183,850) 271,601 ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations................................................. 531,577 (68,462) 314,037 ----------------- ---------------- ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners........................ 510,609 473,918 426,740 Net transfers (including fixed account)............................. 331,103 671,574 479,704 Policy charges...................................................... (237,442) (208,531) (158,620) Transfers for policy benefits and terminations...................... (200,877) (238,362) (171,487) ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from policy transactions........................................ 403,393 698,599 576,337 ----------------- ---------------- ----------------- Net increase (decrease) in net assets............................. 934,970 630,137 890,374 NET ASSETS: Beginning of year................................................... 3,309,518 2,679,381 1,789,007 ----------------- ---------------- ----------------- End of year......................................................... $ 4,244,488 $ 3,309,518 $ 2,679,381 ================= ================ =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 142 The accompanying notes are an integral part of these financial statements. 143 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MIST T. ROWE PRICE LARGE CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 19,582 $ 9,481 $ 65,246 Net realized gains (losses)............................... (1,403) (435,260) (79,021) Change in unrealized gains (losses) on investments........ 181,043 577,510 921,874 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 199,222 151,731 908,099 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 7,131 4,938 427,886 Net transfers (including fixed account)................... 49,898 (4,150,820) (66,707) Policy charges............................................ (17,285) (46,340) (201,169) Transfers for policy benefits and terminations............ (5) (1,102,016) (7,059) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 39,739 (5,294,238) 152,951 ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 238,961 (5,142,507) 1,061,050 NET ASSETS: Beginning of year......................................... 1,081,554 6,224,061 5,163,011 ------------------- ------------------ ------------------ End of year............................................... $ 1,320,515 $ 1,081,554 $ 6,224,061 =================== ================== ================== MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ (29,751) $ (30,563) $ (25,378) Net realized gains (losses)............................... 2,629,009 872,771 131,367 Change in unrealized gains (losses) on investments........ 206,878 (1,837,318) 4,580,355 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 2,806,136 (995,110) 4,686,344 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,915,712 2,194,867 2,269,288 Net transfers (including fixed account)................... (5,662,939) 5,978,566 264,028 Policy charges............................................ (1,349,872) (1,564,864) (1,309,355) Transfers for policy benefits and terminations............ (1,768,009) (1,643,740) (1,448,078) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (6,865,108) 4,964,829 (224,117) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... (4,058,972) 3,969,719 4,462,227 NET ASSETS: Beginning of year......................................... 25,204,627 21,234,908 16,772,681 ------------------ ------------------ ------------------ End of year............................................... $ 21,145,655 $ 25,204,627 $ 21,234,908 ================== ================== ================== MIST THIRD AVENUE SMALL CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ -- $ 9,414 $ 12,822 Net realized gains (losses)............................... 12,071 86,881 42,370 Change in unrealized gains (losses) on investments........ 129,525 (240,493) 198,929 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 141,596 (144,198) 254,121 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 66,068 28,968 152,265 Net transfers (including fixed account)................... (58,431) (400,494) 298,003 Policy charges............................................ (25,818) (28,620) (29,425) Transfers for policy benefits and terminations............ (47,729) (225,194) (369) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (65,910) (625,340) 420,474 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 75,686 (769,538) 674,595 NET ASSETS: Beginning of year......................................... 806,051 1,575,589 900,994 ------------------ ------------------ ------------------ End of year............................................... $ 881,737 $ 806,051 $ 1,575,589 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 144 The accompanying notes are an integral part of these financial statements. 145 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 341,410 $ 546,449 $ 454,798 Net realized gains (losses).............................. (1,190,404) (808,593) (1,030,425) Change in unrealized gains (losses) on investments....... 7,502,480 (8,900,342) 3,370,719 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 6,653,486 (9,162,486) 2,795,092 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 4,637,990 4,892,915 5,258,777 Net transfers (including fixed account).................. (1,376,713) 100,755 (592,663) Policy charges........................................... (2,907,524) (3,147,651) (3,370,345) Transfers for policy benefits and terminations........... (2,527,135) (2,530,848) (3,487,847) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (2,173,382) (684,829) (2,192,078) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 4,480,104 (9,847,315) 603,014 NET ASSETS: Beginning of year........................................ 35,919,561 45,766,876 45,163,862 ------------------ ------------------ ------------------ End of year.............................................. $ 40,399,665 $ 35,919,561 $ 45,766,876 ================== ================== ================== MSF BARCLAYS CAPITAL AGGREGATE BOND INDEX INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 4,231,088 $ 3,875,815 $ 3,995,454 Net realized gains (losses).............................. 604,720 843,640 613,564 Change in unrealized gains (losses) on investments....... (447,969) 3,276,276 1,607,603 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 4,387,839 7,995,731 6,216,621 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 12,468,986 12,546,475 13,651,933 Net transfers (including fixed account).................. 7,067,547 (5,035,008) 4,296,224 Policy charges........................................... (8,609,472) (8,528,408) (8,696,729) Transfers for policy benefits and terminations........... (7,662,930) (12,699,958) (7,334,933) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 3,264,131 (13,716,899) 1,916,495 ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 7,651,970 (5,721,168) 8,133,116 NET ASSETS: Beginning of year........................................ 108,763,587 114,484,755 106,351,639 ------------------ ------------------ ------------------ End of year.............................................. $ 116,415,557 $ 108,763,587 $ 114,484,755 ================== ================== ================== MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ (1,258,555) $ (701,469) $ (1,111,813) Net realized gains (losses).............................. 2,892,428 2,544,325 451,106 Change in unrealized gains (losses) on investments....... 17,096,166 (8,863,059) 26,312,677 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations...................................... 18,730,039 (7,020,203) 25,651,970 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 17,178,798 17,102,384 18,632,365 Net transfers (including fixed account).................. (3,218,712) 3,214,026 (3,158,688) Policy charges........................................... (13,834,330) (14,177,756) (14,307,761) Transfers for policy benefits and terminations........... (13,147,114) (14,269,181) (14,208,996) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. (13,021,358) (8,130,527) (13,043,080) ------------------ ------------------ ------------------ Net increase (decrease) in net assets.................. 5,708,681 (15,150,730) 12,608,890 NET ASSETS: Beginning of year........................................ 184,990,795 200,141,525 187,532,635 ------------------ ------------------ ------------------ End of year.............................................. $ 190,699,476 $ 184,990,795 $ 200,141,525 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 146 The accompanying notes are an integral part of these financial statements. 147 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BLACKROCK BOND INCOME INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 1,971,467 $ 2,986,399 $ 3,017,278 Net realized gains (losses)............................... 905,570 132,024 24,746 Change in unrealized gains (losses) on investments........ 2,995,775 1,930,533 3,372,816 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 5,872,812 5,048,956 6,414,840 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 7,520,502 7,828,777 8,520,413 Net transfers (including fixed account)................... 238,363 (1,265,327) 406,620 Policy charges............................................ (6,492,283) (6,574,083) (6,951,509) Transfers for policy benefits and terminations............ (5,691,274) (5,835,954) (5,946,761) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (4,424,692) (5,846,587) (3,971,237) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 1,448,120 (797,631) 2,443,603 NET ASSETS: Beginning of year......................................... 84,065,205 84,862,836 82,419,233 ------------------ ------------------ ------------------ End of year............................................... $ 85,513,325 $ 84,065,205 $ 84,862,836 ================== ================== ================== MSF BLACKROCK DIVERSIFIED INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 4,600,384 $ 4,934,321 $ 3,404,858 Net realized gains (losses)............................... 1,094,116 (191,522) (1,951,136) Change in unrealized gains (losses) on investments........ 23,691,349 3,658,514 20,635,275 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 29,385,849 8,401,313 22,088,997 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 26,242,636 27,879,758 29,469,771 Net transfers (including fixed account)................... (1,486,565) (878,239) (2,059,076) Policy charges............................................ (23,779,226) (23,910,845) (24,452,759) Transfers for policy benefits and terminations............ (18,935,103) (19,040,111) (19,336,433) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (17,958,258) (15,949,437) (16,378,497) ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 11,427,591 (7,548,124) 5,710,500 NET ASSETS: Beginning of year......................................... 255,554,192 263,102,316 257,391,816 ------------------- ------------------ ------------------ End of year............................................... $ 266,981,783 $ 255,554,192 $ 263,102,316 =================== ================== ================== MSF BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 209,379 $ 129,733 $ 104,202 Net realized gains (losses)............................... 2,007,312 (80,782) (263,466) Change in unrealized gains (losses) on investments........ (358,711) 254,349 1,265,453 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 1,857,980 303,300 1,106,189 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,824,774 1,997,147 2,157,901 Net transfers (including fixed account)................... (541,800) 22,211 (183,197) Policy charges............................................ (986,361) (953,175) (948,186) Transfers for policy benefits and terminations............ (1,176,695) (955,568) (957,459) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (880,082) 110,615 69,059 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 977,898 413,915 1,175,248 NET ASSETS: Beginning of year......................................... 13,313,052 12,899,137 11,723,889 ------------------ ------------------ ------------------ End of year............................................... $ 14,290,950 $ 13,313,052 $ 12,899,137 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 148 The accompanying notes are an integral part of these financial statements. 149 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF BLACKROCK LEGACY LARGE CAP GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 33,557 $ 6,652 $ 7,111 Net realized gains (losses)............................... 261,278 137,813 75,641 Change in unrealized gains (losses) on investments........ 1,344,869 (879,158) 1,107,022 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 1,639,704 (734,693) 1,189,774 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 2,048,562 1,133,989 1,127,304 Net transfers (including fixed account)................... 4,185,125 1,403,176 39,075 Policy charges............................................ (887,196) (567,701) (545,713) Transfers for policy benefits and terminations............ (341,906) (1,189,484) (438,412) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 5,004,585 779,980 182,254 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 6,644,289 45,287 1,372,028 NET ASSETS: Beginning of year......................................... 7,367,810 7,322,523 5,950,495 ------------------ ------------------ ------------------ End of year............................................... $ 14,012,099 $ 7,367,810 $ 7,322,523 ================== ================== ================== MSF BLACKROCK MONEY MARKET INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ (48,731) $ (47,046) $ (50,998) Net realized gains (losses)............................... -- -- -- Change in unrealized gains (losses) on investments........ -- -- -- ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... (48,731) (47,046) (50,998) ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,122,876 6,905,158 14,816,043 Net transfers (including fixed account)................... 4,792,952 (10,656,392) (13,160,154) Policy charges............................................ (709,203) (1,223,525) (1,590,193) Transfers for policy benefits and terminations............ (2,666,648) (4,013,323) (5,424,880) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 2,539,977 (8,988,082) (5,359,184) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 2,491,246 (9,035,128) (5,410,182) NET ASSETS: Beginning of year......................................... 20,783,208 29,818,336 35,228,518 ------------------ ------------------ ------------------ End of year............................................... $ 23,274,454 $ 20,783,208 $ 29,818,336 ================== ================== ================== MSF DAVIS VENTURE VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 426,207 $ 594,738 $ 478,976 Net realized gains (losses)............................... 549,533 492,146 191,969 Change in unrealized gains (losses) on investments........ 5,763,493 (3,392,027) 5,562,556 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 6,739,233 (2,305,143) 6,233,501 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 6,480,032 7,273,891 8,027,444 Net transfers (including fixed account)................... (813,439) 33,336 (908,212) Policy charges............................................ (3,889,505) (4,125,791) (4,273,615) Transfers for policy benefits and terminations............ (3,947,761) (5,136,119) (3,941,742) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (2,170,673) (1,954,683) (1,096,125) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 4,568,560 (4,259,826) 5,137,376 NET ASSETS: Beginning of year......................................... 53,650,792 57,910,618 52,773,242 ------------------ ------------------ ------------------ End of year............................................... $ 58,219,352 $ 53,650,792 $ 57,910,618 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 150 The accompanying notes are an integral part of these financial statements. 151 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF FI VALUE LEADERS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 70,985 $ 63,160 $ 83,130 Net realized gains (losses)............................... (88,358) (99,840) (145,291) Change in unrealized gains (losses) on investments........ 950,530 (347,209) 885,079 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 933,157 (383,889) 822,918 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 820,292 906,978 997,133 Net transfers (including fixed account)................... (147,091) 107,098 41,388 Policy charges............................................ (482,886) (480,838) (492,127) Transfers for policy benefits and terminations............ (441,144) (572,452) (361,541) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (250,829) (39,214) 184,853 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 682,328 (423,103) 1,007,771 NET ASSETS: Beginning of year......................................... 6,065,829 6,488,932 5,481,161 ------------------ ------------------ ------------------ End of year............................................... $ 6,748,157 $ 6,065,829 $ 6,488,932 ================== ================== ================== MSF JENNISON GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 28,105 $ 35,563 $ 76,963 Net realized gains (losses)............................... 2,811,173 251,119 17,747 Change in unrealized gains (losses) on investments........ (683,735) (215,551) 1,535,759 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 2,155,543 71,131 1,630,469 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,531,550 1,444,160 1,601,194 Net transfers (including fixed account)................... 2,297,949 (43,841) 598,866 Policy charges............................................ (1,167,566) (1,041,433) (1,057,353) Transfers for policy benefits and terminations............ (1,209,351) (1,671,932) (838,122) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 1,452,582 (1,313,046) 304,585 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 3,608,125 (1,241,915) 1,935,054 NET ASSETS: Beginning of year......................................... 14,166,486 15,408,401 13,473,347 ------------------ ------------------ ------------------ End of year............................................... $ 17,774,611 $ 14,166,486 $ 15,408,401 ================== ================== ================== MSF LOOMIS SAYLES SMALL CAP CORE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ (18,930) $ 1,388 $ (1,686) Net realized gains (losses)............................... 734,986 258,722 (55,224) Change in unrealized gains (losses) on investments........ 1,736,369 (166,265) 4,065,140 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 2,452,425 93,845 4,008,230 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,746,601 1,937,235 2,076,395 Net transfers (including fixed account)................... (297,817) (342,656) (491,792) Policy charges............................................ (1,178,997) (1,184,554) (1,136,246) Transfers for policy benefits and terminations............ (1,329,599) (1,342,670) (999,217) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (1,059,812) (932,645) (550,860) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 1,392,613 (838,800) 3,457,370 NET ASSETS: Beginning of year......................................... 17,443,984 18,282,784 14,825,414 ------------------ ------------------ ------------------ End of year............................................... $ 18,836,597 $ 17,443,984 $ 18,282,784 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 152 The accompanying notes are an integral part of these financial statements. 153 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ (7,211) $ (7,268) $ (5,276) Net realized gains (losses)............................... 192,524 104,198 (47,680) Change in unrealized gains (losses) on investments........ 678,535 121,090 1,843,398 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 863,848 218,020 1,790,442 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 809,473 919,698 919,140 Net transfers (including fixed account)................... (560,400) 627,796 81,273 Policy charges............................................ (544,759) (543,214) (467,534) Transfers for policy benefits and terminations............ (652,904) (472,962) (486,248) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (948,590) 531,318 46,631 ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... (84,742) 749,338 1,837,073 NET ASSETS: Beginning of year......................................... 8,179,779 7,430,441 5,593,368 ------------------- ------------------ ------------------ End of year............................................... $ 8,095,037 $ 8,179,779 $ 7,430,441 =================== ================== ================== MSF MET/ARTISAN MID CAP VALUE INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 436,661 $ 407,836 $ 269,841 Net realized gains (losses)............................... (286,700) (412,007) (887,093) Change in unrealized gains (losses) on investments........ 5,263,295 3,096,938 6,661,231 ------------------ ------------------- ------------------- Net increase (decrease) in net assets resulting from operations....................................... 5,413,256 3,092,767 6,043,979 ------------------ ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners.............. 5,235,295 5,738,107 6,389,633 Net transfers (including fixed account)................... (939,024) (545,207) (144,561) Policy charges............................................ (3,448,574) (3,492,122) (3,452,818) Transfers for policy benefits and terminations............ (3,304,159) (4,205,697) (3,307,007) ------------------ ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions.............................. (2,456,462) (2,504,919) (514,753) ------------------ ------------------- ------------------- Net increase (decrease) in net assets................... 2,956,794 587,848 5,529,226 NET ASSETS: Beginning of year......................................... 47,188,989 46,601,141 41,071,915 ------------------ ------------------- ------------------- End of year............................................... $ 50,145,783 $ 47,188,989 $ 46,601,141 ================== =================== =================== MSF METLIFE CONSERVATIVE ALLOCATION INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 138,695 $ 90,783 $ 97,058 Net realized gains (losses)............................... 174,266 77,218 46,459 Change in unrealized gains (losses) on investments........ 123,869 (37,275) 119,161 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... 436,830 130,726 262,678 ------------------ ------------------ ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners.............. 568,235 485,812 467,696 Net transfers (including fixed account)................... 1,144,105 943,856 1,892,409 Policy charges............................................ (430,185) (382,404) (312,969) Transfers for policy benefits and terminations............ (704,305) (843,231) (461,555) ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from policy transactions.............................. 577,850 204,033 1,585,581 ------------------ ------------------ ------------------- Net increase (decrease) in net assets................... 1,014,680 334,759 1,848,259 NET ASSETS: Beginning of year......................................... 4,371,255 4,036,496 2,188,237 ------------------ ------------------ ------------------- End of year............................................... $ 5,385,935 $ 4,371,255 $ 4,036,496 ================== ================== ===================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 154 The accompanying notes are an integral part of these financial statements. 155 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF METLIFE CONSERVATIVE TO MODERATE ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 205,059 $ 143,058 $ 181,977 Net realized gains (losses)............................... 81,535 135,436 32,319 Change in unrealized gains (losses) on investments........ 541,162 (210,123) 421,073 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 827,756 68,371 635,369 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 1,481,933 968,450 1,013,491 Net transfers (including fixed account)................... 843,570 (142,377) 1,079,782 Policy charges............................................ (736,496) (655,066) (608,098) Transfers for policy benefits and terminations............ (304,695) (600,517) (457,386) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 1,284,312 (429,510) 1,027,789 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 2,112,068 (361,139) 1,663,158 NET ASSETS: Beginning of year......................................... 6,564,562 6,925,701 5,262,543 ------------------ ------------------ ------------------ End of year............................................... $ 8,676,630 $ 6,564,562 $ 6,925,701 ================== ================== ================== MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 611,419 $ 541,527 $ 516,311 Net realized gains (losses)............................... 3,617,861 3,401,215 248,370 Change in unrealized gains (losses) on investments........ 6,545,785 (4,954,472) 12,893,844 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 10,775,065 (1,011,730) 13,658,525 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 6,251,227 6,663,417 7,250,885 Net transfers (including fixed account)................... (874,909) 550,217 173,240 Policy charges............................................ (4,370,955) (4,391,491) (4,343,511) Transfers for policy benefits and terminations............ (4,820,226) (4,758,860) (4,634,928) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (3,814,863) (1,936,717) (1,554,314) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 6,960,202 (2,948,447) 12,104,211 NET ASSETS: Beginning of year......................................... 62,847,615 65,796,062 53,691,851 ------------------ ------------------ ------------------ End of year............................................... $ 69,807,817 $ 62,847,615 $ 65,796,062 ================== ================== ================== MSF METLIFE MODERATE ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 983,338 $ 602,357 $ 822,448 Net realized gains (losses)............................... 307,411 234,474 17,779 Change in unrealized gains (losses) on investments........ 3,912,908 (1,362,402) 3,378,733 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 5,203,657 (525,571) 4,218,960 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 5,386,770 5,784,576 5,949,225 Net transfers (including fixed account)................... 1,630,562 3,395,270 3,305,318 Policy charges............................................ (3,268,135) (3,141,873) (3,007,922) Transfers for policy benefits and terminations............ (3,139,425) (3,138,424) (2,041,425) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 609,772 2,899,549 4,205,196 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 5,813,429 2,373,978 8,424,156 NET ASSETS: Beginning of year......................................... 39,588,309 37,214,331 28,790,175 ------------------ ------------------ ------------------ End of year............................................... $ 45,401,738 $ 39,588,309 $ 37,214,331 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 156 The accompanying notes are an integral part of these financial statements. 157 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF METLIFE MODERATE TO AGGRESSIVE ALLOCATION INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 1,452,530 $ 1,000,387 $ 1,217,258 Net realized gains (losses)............................... 342,924 112,005 (102,509) Change in unrealized gains (losses) on investments........ 8,619,633 (3,772,324) 7,116,457 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 10,415,087 (2,659,932) 8,231,206 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 10,953,737 12,078,791 13,837,630 Net transfers (including fixed account)................... (395,131) 1,724,329 655,595 Policy charges............................................ (5,381,249) (5,360,003) (5,520,921) Transfers for policy benefits and terminations............ (4,722,972) (4,677,007) (4,588,662) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 454,385 3,766,110 4,383,642 ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 10,869,472 1,106,178 12,614,848 NET ASSETS: Beginning of year......................................... 66,170,247 65,064,069 52,449,221 ------------------- ------------------ ------------------ End of year............................................... $ 77,039,719 $ 66,170,247 $ 65,064,069 =================== ================== ================== MSF METLIFE STOCK INDEX INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 10,948,530 $ 9,520,127 $ 8,608,206 Net realized gains (losses)............................... 8,830,477 3,790,443 (5,405,568) Change in unrealized gains (losses) on investments........ 82,239,455 (2,093,968) 82,259,608 ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from operations....................................... 102,018,462 11,216,602 85,462,246 ------------------ ------------------ ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners.............. 78,256,067 80,842,256 86,739,358 Net transfers (including fixed account)................... (12,171,521) (3,601,844) (12,182,904) Policy charges............................................ (45,906,276) (44,463,278) (44,666,653) Transfers for policy benefits and terminations............ (51,016,668) (47,119,534) (41,307,628) ------------------ ------------------ ------------------- Net increase (decrease) in net assets resulting from policy transactions.............................. (30,838,398) (14,342,400) (11,417,827) ------------------ ------------------ ------------------- Net increase (decrease) in net assets................... 71,180,064 (3,125,798) 74,044,419 NET ASSETS: Beginning of year......................................... 668,626,167 671,751,965 597,707,546 ------------------ ------------------ ------------------- End of year............................................... $ 739,806,231 $ 668,626,167 $ 671,751,965 ================== ================== =================== MSF MFS TOTAL RETURN INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 214,049 $ 202,563 $ 210,920 Net realized gains (losses)............................... 32,260 (29,847) (99,947) Change in unrealized gains (losses) on investments........ 595,278 (11,189) 568,242 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 841,587 161,527 679,215 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 920,793 1,027,479 952,924 Net transfers (including fixed account)................... 252,642 (126,958) (93,026) Policy charges............................................ (606,480) (606,881) (587,009) Transfers for policy benefits and terminations............ (627,444) (801,101) (377,989) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (60,489) (507,461) (105,100) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 781,098 (345,934) 574,115 NET ASSETS: Beginning of year......................................... 7,362,338 7,708,272 7,134,157 ------------------ ------------------ ------------------ End of year............................................... $ 8,143,436 $ 7,362,338 $ 7,708,272 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 158 The accompanying notes are an integral part of these financial statements. 159 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF MFS VALUE INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 1,031,624 $ 789,787 $ 666,823 Net realized gains (losses)............................... 969,095 (44,982) (425,864) Change in unrealized gains (losses) on investments........ 6,505,435 (346,891) 5,358,513 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 8,506,154 397,914 5,599,472 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 5,745,674 6,217,602 6,966,530 Net transfers (including fixed account)................... (975,483) 423,365 37,691 Policy charges............................................ (3,989,183) (3,874,897) (3,954,096) Transfers for policy benefits and terminations............ (3,759,106) (4,853,465) (3,962,238) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (2,978,098) (2,087,395) (912,113) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 5,528,056 (1,689,481) 4,687,359 NET ASSETS: Beginning of year......................................... 52,363,369 54,052,850 49,365,491 ------------------ ------------------ ------------------ End of year............................................... $ 57,891,425 $ 52,363,369 $ 54,052,850 ================== ================== ================== MSF MSCI EAFE INDEX INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 1,958,070 $ 1,512,474 $ 1,531,593 Net realized gains (losses)............................... (63,228) 137,025 (236,046) Change in unrealized gains (losses) on investments........ 9,143,347 (9,604,700) 3,674,685 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 11,038,189 (7,955,201) 4,970,232 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 6,997,903 7,277,374 7,898,110 Net transfers (including fixed account)................... (1,236,350) 3,903,398 2,327,295 Policy charges............................................ (4,297,245) (4,316,752) (4,373,289) Transfers for policy benefits and terminations............ (4,040,162) (4,517,098) (4,368,376) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (2,575,854) 2,346,922 1,483,740 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 8,462,335 (5,608,279) 6,453,972 NET ASSETS: Beginning of year......................................... 59,759,550 65,367,829 58,913,857 ------------------ ------------------ ------------------ End of year............................................... $ 68,221,885 $ 59,759,550 $ 65,367,829 ================== ================== ================== MSF NEUBERGER BERMAN GENESIS INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 222,015 $ 520,241 $ 284,228 Net realized gains (losses)............................... (730,868) (976,828) (2,085,738) Change in unrealized gains (losses) on investments........ 8,168,095 4,961,322 15,927,942 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 7,659,242 4,504,735 14,126,432 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 8,263,575 8,942,665 9,951,447 Net transfers (including fixed account)................... (1,257,789) (1,072,904) (1,640,139) Policy charges............................................ (5,820,066) (5,900,591) (5,699,690) Transfers for policy benefits and terminations............ (5,714,422) (5,912,935) (5,453,013) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (4,528,702) (3,943,765) (2,841,395) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 3,130,540 560,970 11,285,037 NET ASSETS: Beginning of year......................................... 79,279,066 78,718,096 67,433,059 ------------------ ------------------ ------------------ End of year............................................... $ 82,409,606 $ 79,279,066 $ 78,718,096 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 160 The accompanying notes are an integral part of these financial statements. 161 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 530,726 $ 719,512 $ 489,193 Net realized gains (losses)............................... 700,180 892,248 362,727 Change in unrealized gains (losses) on investments........ 6,406,670 (5,213,727) 5,192,068 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 7,637,576 (3,601,967) 6,043,988 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 3,535,071 3,587,418 3,921,178 Net transfers (including fixed account)................... (1,749,487) (166,778) 130,181 Policy charges............................................ (2,384,677) (2,520,905) (2,623,144) Transfers for policy benefits and terminations............ (2,687,363) (3,507,119) (2,648,050) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (3,286,456) (2,607,384) (1,219,835) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 4,351,120 (6,209,351) 4,824,153 NET ASSETS: Beginning of year......................................... 37,497,219 43,706,570 38,882,417 ------------------ ------------------ ------------------ End of year............................................... $ 41,848,339 $ 37,497,219 $ 43,706,570 ================== ================== ================== MSF RUSSELL 2000 INDEX INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 584,115 $ 521,188 $ 510,772 Net realized gains (losses)............................... 721,576 734,988 (66,857) Change in unrealized gains (losses) on investments........ 6,793,518 (3,300,203) 11,828,973 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 8,099,209 (2,044,027) 12,272,888 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 5,255,166 5,547,834 6,030,913 Net transfers (including fixed account)................... (1,271,073) 238,532 (1,459,730) Policy charges............................................ (3,472,278) (3,520,009) (3,529,721) Transfers for policy benefits and terminations............ (3,852,208) (5,646,773) (3,961,411) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (3,340,393) (3,380,416) (2,919,949) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 4,758,816 (5,424,443) 9,352,939 NET ASSETS: Beginning of year......................................... 51,171,784 56,596,227 47,243,288 ------------------ ------------------ ------------------ End of year............................................... $ 55,930,600 $ 51,171,784 $ 56,596,227 ================== ================== ================== MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 35,218 $ 17,757 $ 94,345 Net realized gains (losses)............................... 996,117 908,859 253,453 Change in unrealized gains (losses) on investments........ 6,924,755 (1,383,140) 6,370,252 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 7,956,090 (456,524) 6,718,050 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 3,933,872 4,270,409 4,102,715 Net transfers (including fixed account)................... 1,360,962 162,723 (1,629,305) Policy charges............................................ (3,253,193) (3,125,126) (3,094,462) Transfers for policy benefits and terminations............ (2,912,602) (4,309,233) (2,842,508) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (870,961) (3,001,227) (3,463,560) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 7,085,129 (3,457,751) 3,254,490 NET ASSETS: Beginning of year......................................... 42,317,336 45,775,087 42,520,597 ------------------ ------------------ ------------------ End of year............................................... $ 49,402,465 $ 42,317,336 $ 45,775,087 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 162 The accompanying notes are an integral part of these financial statements. 163 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ (304,065) $ (301,663) $ (258,469) Net realized gains (losses)............................... 11,464,320 2,332,511 562,971 Change in unrealized gains (losses) on investments........ 2,263,900 (846,789) 22,601,563 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 13,424,155 1,184,059 22,906,065 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 7,087,296 6,244,277 6,679,778 Net transfers (including fixed account)................... (2,999,440) 3,733,237 (365,817) Policy charges............................................ (5,536,576) (5,439,543) (4,980,465) Transfers for policy benefits and terminations............ (5,390,198) (6,901,125) (5,044,716) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (6,838,918) (2,363,154) (3,711,220) ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 6,585,237 (1,179,095) 19,194,845 NET ASSETS: Beginning of year......................................... 86,825,771 88,004,866 68,810,021 ------------------ ------------------ ------------------ End of year............................................... $ 93,411,008 $ 86,825,771 $ 88,004,866 ================== ================== ================== MSF VAN ECK GLOBAL NATURAL RESOURCES INVESTMENT DIVISION ----------------------------------------- 2012 2011 (d) ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ -- $ -- Net realized gains (losses)............................... 1,884 (45) Change in unrealized gains (losses) on investments........ (2,269) (2,198) ------------------- ------------------- Net increase (decrease) in net assets resulting from operations....................................... (385) (2,243) ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners.............. 16,626 3,321 Net transfers (including fixed account)................... 29,151 12,824 Policy charges............................................ (5,086) (710) Transfers for policy benefits and terminations............ (62) (13) ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions.............................. 40,629 15,422 ------------------- ------------------- Net increase (decrease) in net assets................... 40,244 13,179 NET ASSETS: Beginning of year......................................... 13,179 -- ------------------- ------------------- End of year............................................... $ 53,423 $ 13,179 =================== =================== MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION --------------------------------------------------------------- 2012 2011 2010 ------------------- ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 859,018 $ 1,177,683 $ 1,305,428 Net realized gains (losses)............................... 204,230 144,847 71,403 Change in unrealized gains (losses) on investments........ 1,584,984 64,600 1,196,007 ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 2,648,232 1,387,130 2,572,838 ------------------- ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 2,376,193 2,593,403 2,832,832 Net transfers (including fixed account)................... 559,734 (646,114) 1,156,919 Policy charges............................................ (1,697,175) (1,707,630) (1,738,340) Transfers for policy benefits and terminations............ (1,967,837) (1,876,403) (1,617,829) ------------------- ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. (729,085) (1,636,744) 633,582 ------------------- ------------------ ------------------ Net increase (decrease) in net assets................... 1,919,147 (249,614) 3,206,420 NET ASSETS: Beginning of year......................................... 23,536,888 23,786,502 20,580,082 ------------------- ------------------ ------------------ End of year............................................... $ 25,456,035 $ 23,536,888 $ 23,786,502 =================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 164 The accompanying notes are an integral part of these financial statements. 165 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 330,891 $ 229,900 $ 429,880 Net realized gains (losses)............................. 19,763 564,972 49,043 Change in unrealized gains (losses) on investments...... 185,906 82,587 435,726 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 536,560 877,459 914,649 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 1,850,612 2,130,621 2,331,803 Net transfers (including fixed account)................. 271,627 (428,475) (168,918) Policy charges.......................................... (1,308,474) (1,367,530) (1,428,018) Transfers for policy benefits and terminations.......... (1,163,575) (1,409,928) (1,375,135) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ (349,810) (1,075,312) (640,268) ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 186,750 (197,853) 274,381 NET ASSETS: Beginning of year....................................... 16,435,798 16,633,651 16,359,270 ------------------ ----------------- ------------------ End of year............................................. $ 16,622,548 $ 16,435,798 $ 16,633,651 ================== ================= ================== PIMCO VIT LONG-TERM U.S. PIMCO VIT ALL ASSET GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------------- ------------------- 2012 2011 (d) 2012 (g) ------------------ ----------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 6,301 $ 2,796 $ 232 Net realized gains (losses)............................. 190 -- 2,932 Change in unrealized gains (losses) on investments...... 8,832 (1,176) (2,899) ------------------ ----------------- ------------------- Net increase (decrease) in net assets resulting from operations..................................... 15,323 1,620 265 ------------------ ----------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ -- 8,337 -- Net transfers (including fixed account)................. 24,949 86,523 29,939 Policy charges.......................................... (4,485) (342) (96) Transfers for policy benefits and terminations.......... (6) -- -- ------------------ ----------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions............................ 20,458 94,518 29,843 ------------------ ----------------- ------------------- Net increase (decrease) in net assets................. 35,781 96,138 30,108 NET ASSETS: Beginning of year....................................... 96,138 -- -- ------------------ ----------------- ------------------- End of year............................................. $ 131,919 $ 96,138 $ 30,108 ================== ================= =================== PIMCO VIT LOW DURATION INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 ----------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 18,366 $ 13,732 $ 12,187 Net realized gains (losses)............................. 1,749 618 2,729 Change in unrealized gains (losses) on investments...... 34,493 (6,243) 23,685 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations..................................... 54,608 8,107 38,601 ----------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ 33,008 43,028 -- Net transfers (including fixed account)................. (5,071) 153,678 32 Policy charges.......................................... (42,837) (21,336) (10,848) Transfers for policy benefits and terminations.......... (202) -- -- ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................ (15,102) 175,370 (10,816) ----------------- ------------------ ----------------- Net increase (decrease) in net assets................. 39,506 183,477 27,785 NET ASSETS: Beginning of year....................................... 946,008 762,531 734,746 ----------------- ------------------ ----------------- End of year............................................. $ 985,514 $ 946,008 $ 762,531 ================= ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 166 The accompanying notes are an integral part of these financial statements. 167 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
PIONEER VCT EMERGING MARKETS INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 1,600 $ -- $ 3,039 Net realized gains (losses)............................. 22,375 121,447 75,682 Change in unrealized gains (losses) on investments...... 20,209 (327,299) 68,690 ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations..................................... 44,184 (205,852) 147,411 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 83,715 104,589 102,565 Net transfers (including fixed account)................. 166,019 193,458 72,459 Policy charges.......................................... (22,137) (25,931) (27,778) Transfers for policy benefits and terminations.......... -- (649,132) (82,614) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 227,597 (377,016) 64,632 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................. 271,781 (582,868) 212,043 NET ASSETS: Beginning of year....................................... 401,298 984,166 772,123 ------------------ ------------------ ------------------ End of year............................................. $ 673,079 $ 401,298 $ 984,166 ================== ================== ================== PIONEER VCT MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ 1,561 $ 1,190 $ 801 Net realized gains (losses)............................. 595 580 313 Change in unrealized gains (losses) on investments...... 12,468 (11,556) 14,039 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations..................................... 14,624 (9,786) 15,153 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............ 8,995 -- 7,217 Net transfers (including fixed account)................. 1,893 51,112 59,471 Policy charges.......................................... (6,747) (6,021) (3,748) Transfers for policy benefits and terminations.......... -- (3) (18) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................ 4,141 45,088 62,922 ------------------ ----------------- ------------------ Net increase (decrease) in net assets................. 18,765 35,302 78,075 NET ASSETS: Beginning of year....................................... 134,780 99,478 21,403 ------------------ ----------------- ------------------ End of year............................................. $ 153,545 $ 134,780 $ 99,478 ================== ================= ================== ROYCE MICRO-CAP INVESTMENT DIVISION ------------------------------------------------------------ 2012 2011 2010 (a) ----------------- ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................ $ -- $ 8,331 $ 5,659 Net realized gains (losses)............................. 9,077 1,545 197 Change in unrealized gains (losses) on investments...... 15,667 (52,132) 61,964 ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from operations..................................... 24,744 (42,256) 67,820 ----------------- ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............ 49,620 4,792 53,592 Net transfers (including fixed account)................. -- 7,703 236,555 Policy charges.......................................... (7,913) (8,474) (4,842) Transfers for policy benefits and terminations.......... (4,908) (11) (4,416) ----------------- ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................ 36,799 4,010 280,889 ----------------- ------------------ ----------------- Net increase (decrease) in net assets................. 61,543 (38,246) 348,709 NET ASSETS: Beginning of year....................................... 310,463 348,709 -- ----------------- ------------------ ----------------- End of year............................................. $ 372,006 $ 310,463 $ 348,709 ================= ================== =================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 168 The accompanying notes are an integral part of these financial statements. 169 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
ROYCE SMALL-CAP INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 586 $ 3,804 $ 425 Net realized gains (losses).............................. 35,664 18,080 2,111 Change in unrealized gains (losses) on investments....... 34,489 (64,398) 63,066 ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from operations...................................... 70,739 (42,514) 65,602 ------------------ ------------------ ----------------- POLICY TRANSACTIONS: Premium payments received from policy owners............. 8,995 4,584 22,886 Net transfers (including fixed account).................. (281,935) 740,973 257,401 Policy charges........................................... (10,669) (19,814) (8,157) Transfers for policy benefits and terminations........... -- (321,629) (3,061) ------------------ ------------------ ----------------- Net increase (decrease) in net assets resulting from policy transactions............................. (283,609) 404,114 269,069 ------------------ ------------------ ----------------- Net increase (decrease) in net assets.................. (212,870) 361,600 334,671 NET ASSETS: Beginning of year........................................ 754,742 393,142 58,471 ------------------ ------------------ ----------------- End of year.............................................. $ 541,872 $ 754,742 $ 393,142 ================== ================== ================= UIF EMERGING MARKETS DEBT INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ 16,821 $ 7,775 $ 318 Net realized gains (losses).............................. 2,466 2,814 87 Change in unrealized gains (losses) on investments....... 89,788 79 318 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 109,075 10,668 723 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 64,771 2,057 2,057 Net transfers (including fixed account).................. 599,117 408,567 -- Policy charges........................................... (10,880) (4,269) (1,095) Transfers for policy benefits and terminations........... (483) (3,368) (89) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 652,525 402,987 873 ------------------ ----------------- ------------------ Net increase (decrease) in net assets.................. 761,600 413,655 1,596 NET ASSETS: Beginning of year........................................ 420,998 7,343 5,747 ------------------ ----------------- ------------------ End of year.............................................. $ 1,182,598 $ 420,998 $ 7,343 ================== ================= ================== UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------------- 2012 2011 2010 ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................. $ -- $ 1,515 $ 758 Net realized gains (losses).............................. (26) 4,478 899 Change in unrealized gains (losses) on investments....... 139,206 (99,779) 38,992 ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations...................................... 139,180 (93,786) 40,649 ------------------ ----------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners............. 70,772 2,923 2,451 Net transfers (including fixed account).................. 302,018 444,567 157,781 Policy charges........................................... (17,053) (11,985) (7,467) Transfers for policy benefits and terminations........... (361) -- (1,388) ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions............................. 355,376 435,505 151,377 ------------------ ----------------- ------------------ Net increase (decrease) in net assets.................. 494,556 341,719 192,026 NET ASSETS: Beginning of year........................................ 539,388 197,669 5,643 ------------------ ----------------- ------------------ End of year.............................................. $ 1,033,944 $ 539,388 $ 197,669 ================== ================= ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 170 The accompanying notes are an integral part of these financial statements. 171 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
WELLS FARGO VT TOTAL RETURN BOND INVESTMENT DIVISION -------------------------------------------------------------- 2012 2011 2010 ------------------ ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss).............................. $ 4,369 $ 18,903 $ 29,774 Net realized gains (losses)............................... 7,755 45,796 34,459 Change in unrealized gains (losses) on investments........ 5,968 (7,169) (12,496) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from operations....................................... 18,092 57,530 51,737 ------------------ ------------------ ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners.............. 45,280 66,775 158,432 Net transfers (including fixed account)................... 301,563 (413,486) 386,034 Policy charges............................................ (11,089) (19,736) (22,616) Transfers for policy benefits and terminations............ -- (637,284) (26,909) ------------------ ------------------ ------------------ Net increase (decrease) in net assets resulting from policy transactions.............................. 335,754 (1,003,731) 494,941 ------------------ ------------------ ------------------ Net increase (decrease) in net assets................... 353,846 (946,201) 546,678 NET ASSETS: Beginning of year......................................... 135,214 1,081,415 534,737 ------------------ ------------------ ------------------ End of year............................................... $ 489,060 $ 135,214 $ 1,081,415 ================== ================== ==================
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. The accompanying notes are an integral part of these financial statements. 172 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION Metropolitan Life Separate Account UL (the "Separate Account"), a separate account of Metropolitan Life Insurance Company (the "Company"), was established by the Company's Board of Directors on December 13, 1988 to support operations of the Company with respect to certain variable life insurance policies (the "Policies"). The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York State Department of Financial Services. The Separate Account is divided into Investment Divisions, each of which is treated as an individual accounting entity for financial reporting purposes. Each Investment Division invests in shares of the corresponding fund, portfolio, or series (with the same name) of registered investment management companies (the "Trusts"), which are presented below: AllianceBernstein Variable Products Series Fund, Inc. Janus Aspen Series ("Janus Aspen") ("AllianceBernstein") Legg Mason Partners Variable Equity Trust American Century Variable Portfolios, Inc. ("American ("LMPVET") Century VP") Met Investors Series Trust ("MIST")* American Funds Insurance Series ("American Funds") Metropolitan Series Fund ("MSF")* Dreyfus Variable Investment Fund ("Dreyfus VIF") MFS Variable Insurance Trust ("MFS VIT") Fidelity Variable Insurance Products ("Fidelity VIP") Oppenheimer Variable Account Funds ("Oppenheimer VA") Franklin Templeton Variable Insurance Products Trust PIMCO Variable Insurance Trust ("PIMCO VIT") ("FTVIPT") Pioneer Variable Contracts Trust ("Pioneer VCT") Goldman Sachs Variable Insurance Trust ("Goldman Putnam Variable Trust ("Putnam VT") Sachs") Royce Capital Fund ("Royce") AIM Variable Insurance Funds (Invesco Variable The Universal Institutional Funds, Inc. ("UIF") Insurance Funds) ("Invesco V.I.") Wells Fargo Variable Trust ("Wells Fargo VT")
*See Note 6 for a discussion of additional information on related party transactions. The assets of each of the Investment Divisions of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Policies is not chargeable with liabilities arising out of any other business the Company may conduct. 2. LIST OF INVESTMENT DIVISIONS A. Premium payments, less any applicable charges, applied to the Separate Account are invested in one or more Investment Divisions in accordance with the selection made by the policy owner. The following Investment Divisions had net assets as of December 31, 2012: AllianceBernstein Global Thematic Growth Investment American Funds High-Income Bond Investment Division Division AllianceBernstein Intermediate Bond Investment American Funds International Investment Division Division American Funds U.S. Government/AAA-Rated AllianceBernstein International Value Investment Securities Investment Division Division Dreyfus VIF International Value Investment Division American Century VP Vista Investment Division Fidelity VIP Asset Manager: Growth Investment American Funds Bond Investment Division Division American Funds Global Small Capitalization Fidelity VIP Contrafund Investment Division Investment Division Fidelity VIP Equity-Income Investment Division American Funds Growth Investment Division Fidelity VIP Freedom 2010 Investment Division American Funds Growth-Income Investment Division Fidelity VIP Freedom 2020 Investment Division
173 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF INVESTMENT DIVISIONS -- (CONTINUED) Fidelity VIP Freedom 2030 Investment Division MIST Legg Mason ClearBridge Aggressive Growth Fidelity VIP Freedom 2050 Investment Division Investment Division Fidelity VIP High Income Investment Division MIST Lord Abbett Bond Debenture Investment Fidelity VIP Investment Grade Bond Investment Division Division Fidelity VIP Mid Cap Investment Division MIST Lord Abbett Mid Cap Value Investment Division FTVIPT Mutual Global Discovery Securities MIST Met/Franklin Income Investment Division Investment Division MIST Met/Franklin Mutual Shares Investment Division FTVIPT Templeton Foreign Securities Investment MIST Met/Franklin Templeton Founding Strategy Division Investment Division FTVIPT Templeton Global Bond Securities Investment MIST Met/Templeton Growth Investment Division Division MIST Met/Templeton International Bond Investment Goldman Sachs Mid-Cap Value Investment Division Division (b) Goldman Sachs Structured Small Cap Equity MIST MetLife Aggressive Strategy Investment Investment Division Division (a) Invesco V.I. Global Real Estate Investment Division MIST MetLife Balanced Plus Investment Division (b) Invesco V.I. Government Securities Investment MIST MFS Emerging Markets Equity Investment Division Division Invesco V.I. International Growth Investment Division MIST MFS Research International Investment Invesco V.I. Van Kampen Comstock Investment Division Division (a) Janus Aspen Balanced Investment Division MIST MLA Mid Cap Investment Division (a) Janus Aspen Forty Investment Division MIST Morgan Stanley Mid Cap Growth Investment Janus Aspen Janus Investment Division Division Janus Aspen Overseas Investment Division MIST PIMCO Inflation Protected Bond Investment MFS VIT Global Equity Investment Division Division MFS VIT High Income Investment Division MIST PIMCO Total Return Investment Division MFS VIT New Discovery Investment Division MIST Pioneer Fund Investment Division MFS VIT Value Investment Division MIST RCM Technology Investment Division MIST AllianceBernstein Global Dynamic Allocation MIST Schroders Global Multi-Asset Investment Investment Division (b) Division (b) MIST American Funds Balanced Allocation MIST SSgA Growth and Income ETF Investment Investment Division Division MIST American Funds Growth Allocation Investment MIST SSgA Growth ETF Investment Division Division MIST T. Rowe Price Large Cap Value Investment MIST American Funds Moderate Allocation Division Investment Division MIST T. Rowe Price Mid Cap Growth Investment MIST AQR Global Risk Balanced Investment Division (a) Division (b) MIST Third Avenue Small Cap Value Investment MIST BlackRock Global Tactical Strategies Investment Division Division (b) MSF Baillie Gifford International Stock Investment MIST BlackRock Large Cap Core Investment Division Division MIST Clarion Global Real Estate Investment Division (a) MSF Barclays Capital Aggregate Bond Index MIST Dreman Small Cap Value Investment Division Investment Division MIST Harris Oakmark International Investment Division MSF BlackRock Aggressive Growth Investment MIST Invesco Balanced-Risk Allocation Investment Division Division (b) MSF BlackRock Bond Income Investment Division MIST Invesco Small Cap Growth Investment Division (a) MSF BlackRock Diversified Investment Division MIST Janus Forty Investment Division MSF BlackRock Large Cap Value Investment Division MIST JPMorgan Global Active Allocation Investment MSF BlackRock Diversified Investment Division Division (b) MSF BlackRock Large Cap Value Investment Division
174 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF INVESTMENT DIVISIONS -- (CONCLUDED) MSF BlackRock Legacy Large Cap Growth Investment MSF Neuberger Berman Genesis Investment Division Division MSF Oppenheimer Global Equity Investment Division MSF BlackRock Money Market Investment Division MSF Russell 2000 Index Investment Division MSF Davis Venture Value Investment Division MSF T. Rowe Price Large Cap Growth Investment MSF FI Value Leaders Investment Division Division MSF Jennison Growth Investment Division MSF T. Rowe Price Small Cap Growth Investment MSF Loomis Sayles Small Cap Core Investment Division Division MSF Van Eck Global Natural Resources Investment MSF Loomis Sayles Small Cap Growth Investment Division Division MSF Western Asset Management Strategic Bond MSF Met/Artisan Mid Cap Value Investment Opportunities Investment Division Division (a) MSF Western Asset Management U.S. Government MSF MetLife Conservative Allocation Investment Investment Division Division (a) PIMCO VIT All Asset Investment Division MSF MetLife Conservative to Moderate Allocation PIMCO VIT Long-Term U.S. Government Investment Investment Division (a) Division MSF MetLife Mid Cap Stock Index Investment PIMCO VIT Low Duration Investment Division Division Pioneer VCT Emerging Markets Investment Division MSF MetLife Moderate Allocation Investment Pioneer VCT Mid Cap Value Investment Division Division (a) Royce Micro-Cap Investment Division MSF MetLife Moderate to Aggressive Allocation Royce Small-Cap Investment Division Investment Division (a) UIF Emerging Markets Debt Investment Division MSF MetLife Stock Index Investment Division UIF Emerging Markets Equity Investment Division MSF MFS Total Return Investment Division (a) Wells Fargo VT Total Return Bond Investment MSF MFS Value Investment Division Division MSF MSCI EAFE Index Investment Division
(a) This Investment Division invests in two or more share classes within the underlying fund, portfolio, or series of the Trusts. (b) This Investment Division began operations during the year ended December 31, 2012. B. The following Investment Divisions had no net assets as of December 31, 2012: Fidelity VIP Freedom 2015 Investment Division Oppenheimer VA Main Street Small- & Mid-Cap Fidelity VIP Freedom 2025 Investment Division Investment Division Fidelity VIP Freedom 2040 Investment Division Putnam VT International Value Investment Division Janus Aspen Enterprise Investment Division LMPVET Investment Counsel Variable Social Awareness Investment Division
3. PORTFOLIO CHANGES The following Investment Divisions ceased operations during the year ended December 31, 2012: MIST Oppenheimer Capital Appreciation Investment Division MSF Lord Abbett Mid Cap Value Sub-Account 175 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. PORTFOLIO CHANGES -- (CONCLUDED) The operations of the Investment Divisions were affected by the following changes that occurred during the year ended December 31, 2012: NAME CHANGES: Former Name New Name (MIST) Lazard Mid Cap Portfolio (MIST) MLA Mid Cap Portfolio (MIST) Rainer Large Cap Equity Portfolio (MIST) Jennison Large Cap Equity Portfolio (MSF) Artio International Stock Portfolio (MSF) Baillie Gifford International Stock Portfolio (MSF) Morgan Stanley EAFE Index Portfolio (MSF) MSCI EAFE Index Portfolio (MSF) Neuberger Berman Mid Cap Value Portfolio (MSF) Lord Abbett Mid Cap Value Portfolio
MERGERS: Former Portfolio New Portfolio (MIST) Oppenheimer Capital Appreciation Portfolio (MSF) Jennison Growth Portfolio (MSF) Lord Abbett Mid Cap Value Portfolio (MIST) Lord Abbett Mid Cap Value Portfolio
4. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable for variable life separate accounts registered as unit investment trusts. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. SECURITY VALUATION An Investment Division's investment in shares of a fund, portfolio, or series of the Trusts is valued at fair value based on the closing net asset value ("NAV") or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Investment Divisions. The Separate Account defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Separate Account prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Separate Account has categorized its assets based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets that the Separate Account has the ability to access. Level 2 Observable inputs other than quoted prices in Level 1 that are observable either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market or prices for similar instruments. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets, representing the Separate Account's own assumptions about the assumptions a market participant would use in valuing the asset, and based on the best information available. 176 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONCLUDED) SECURITY VALUATION -- (CONCLUDED) Each Investment Division invests in shares of open-end mutual funds which calculate a daily NAV based on the fair value of the underlying securities in their portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily NAV as reported by the Trusts at the close of each business day. On that basis, the inputs used to value all shares held by the Separate Account, which are measured at fair value on a recurring basis, are classified as Level 2. There were no transfers between Level 1 and Level 2, and no activity in Level 3 during the year. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Policies. Accordingly, no charge is currently being made to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Policies. PREMIUM PAYMENTS The Company deducts a sales charge for certain policies and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain Policies, the Company also deducts a federal income tax charge before amounts are allocated to the Separate Account. This 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. Net premiums are reported as premium payments received from policy owners on the statements of changes in net assets of the applicable Investment Divisions and are credited as accumulation units. NET TRANSFERS Funds transferred by the policy owner into or out of Investment Divisions within the Separate Account or into or out of the fixed account (an investment option in the Company's general account) are recorded on a net basis as net transfers in the statements of changes in net assets of the applicable Investment Divisions. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS Effective January 1, 2012, the Separate Account adopted new guidance regarding fair value measurements that establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards. Some of the amendments clarify the Financial Accounting Standards Board's intent on the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The adoption did not have an impact on the Separate Account's financial statements. Effective January 1, 2010, the Separate Account adopted new guidance that requires new disclosures about significant transfers in and/or out of Levels 1 and 2 of the fair value hierarchy and activity in Level 3. In addition, this guidance provides clarification of existing disclosure requirements about the level of disaggregation and inputs and valuation techniques. The adoption of this guidance did not have an impact on the Separate Account's financial statements. 177 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGE IN ACCOUNTING METHOD PRESENTATION OF MORTALITY AND EXPENSE RISK CHARGES Previously, mortality and expense risk charges ("M&E") for all Polices were reported as "Mortality and expense risk charges" in the Statements of Operations. Although M&E charges are generally assessed through the reduction in unit values, certain Policies assess their M&E charges through the redemption of units. The Investment Divisions changed their accounting method to report M&E charges assessed through the redemption of units as "Policy charges" in the Statements of Changes in Net Assets. This method is preferable as it results in these M&E charges being reported based on how they are assessed, which is consistent with the classification of other Policy fees and industry practice. This change had no effect on the net assets of the Investment Divisions or unit values of the Policies. This change has been applied retrospectively to all periods presented. The impact by affected Investment Division was to decrease "Mortality and expense risk charges" in the Statements of Operations and to increase "Policy charges" in the Statements of Changes in Net Assets by the following amounts.
FOR THE YEARS ENDED DECEMBER 31, -------------------------------- FUND NAME 2011 ($) 2010 ($) ------------- -------------- AllianceBernstein Global Thematic Growth Investment Division................................ 162,987 310 AllianceBernstein Intermediate Bond Investment Division..................................... 183 139 AllianceBernstein International Value Investment Division................................... (111) 2 American Century VP Vista Investment Division............................................... 305 519 American Funds Bond Investment Division..................................................... 26,971 24,755 American Funds Global Small Capitalization Investment Division.............................. 402,822 401,930 American Funds Growth Investment Division................................................... 887,833 821,615 American Funds Growth-Income Investment Division............................................ 517,187 489,440 American Funds International Investment Division............................................ 9,756 9,546 American Funds U.S. Government/AAA-Rated Securities Investment Division..................... 601 596 Dreyfus VIF International Value Investment Division......................................... 798 876 Fidelity VIP Asset Manager: Growth Investment Division...................................... 11,005 11,265 Fidelity VIP Contrafund Investment Division................................................. 10,858 17,497 Fidelity VIP Equity-Income Investment Division.............................................. 749 838 Fidelity VIP Freedom 2020 Investment Division............................................... 2,367 2,201 Fidelity VIP Freedom 2030 Investment Division............................................... 86 231 Fidelity VIP High Income Investment Division................................................ 27 30 Fidelity VIP Investment Grade Bond Investment Division...................................... 6,449 4,314 Fidelity VIP Mid Cap Investment Division.................................................... 5,725 5,209 FTVIPT Mutual Global Discovery Securities Investment Division............................... 3,892 2,866 FTVIPT Templeton Foreign Securities Investment Division..................................... 111,353 239,041 FTVIPT Templeton Global Bond Securities Investment Division................................. 1,067 89 Goldman Sachs Mid-Cap Value Investment Division............................................. 1,289 1,356 Goldman Sachs Structured Small Cap Equity Investment Division............................... 173 154 Invesco V.I. Global Real Estate Investment Division......................................... 49,508 39,431 Invesco V.I. Government Securities Investment Division...................................... 120 -- Invesco V.I. International Growth Investment Division....................................... 1,400 783 Invesco V.I. Van Kampen Comstock Investment Division........................................ 423 -- Janus Aspen Balanced Investment Division.................................................... 25,576 23,474 Janus Aspen Forty Investment Division....................................................... 15,960 16,448 Janus Aspen Janus Investment Division....................................................... 36,978 226,951 Janus Aspen Overseas Investment Division.................................................... 29,472 817 MFS VIT Global Equity Investment Division................................................... 361 598 MFS VIT High Income Investment Division..................................................... 491 457 MFS VIT New Discovery Investment Division................................................... 555 340 MFS VIT Value Investment Division........................................................... 285 293 MIST BlackRock Large Cap Core Investment Division........................................... 681,593 702,685 MIST Clarion Global Real Estate Investment Division......................................... 153,514 141,671 MIST Dreman Small Cap Value Investment Division............................................. 255 220 MIST Harris Oakmark International Investment Division....................................... 196,322 188,515 MIST Invesco Small Cap Growth Investment Division........................................... 31,155 26,096 MIST Janus Forty Investment Division........................................................ 81,711 82,335
178 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGE IN ACCOUNTING METHOD -- (CONTINUED) PRESENTATION OF MORTALITY AND EXPENSE RISK CHARGES -- (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, --------------------------------- FUND NAME 2011 ($) 2010 ($) -------------- --------------- MIST Legg Mason ClearBridge Aggressive Growth Investment Division........................... 82,685 54,030 MIST Lord Abbett Bond Debenture Investment Division......................................... 152,892 258,188 MIST Lord Abbett Mid Cap Value Investment Division.......................................... 437 369 MIST MetLife Aggressive Strategy Investment Division........................................ 68,960 -- MIST MFS Emerging Markets Equity Investment Division........................................ 788 -- MIST MFS Research International Investment Division......................................... 91,183 88,383 MIST MLA Mid Cap Investment Division........................................................ 36,387 32,814 MIST Morgan Stanley Mid Cap Growth Investment Division...................................... 850,520 582,516 MIST PIMCO Inflation Protected Bond Investment Division..................................... 51,801 48,656 MIST PIMCO Total Return Investment Division................................................. 306,218 301,175 MIST Pioneer Fund Investment Division....................................................... 770 982 MIST RCM Technology Investment Division..................................................... 103,151 91,702 MIST SSgA Growth and Income ETF Investment Division......................................... 25,918 17,885 MIST SSgA Growth ETF Investment Division.................................................... 21,198 13,776 MIST T. Rowe Price Large Cap Value Investment Division...................................... 24,068 134,790 MIST T. Rowe Price Mid Cap Growth Investment Division....................................... 283,741 124,744 MIST Third Avenue Small Cap Value Investment Division....................................... 10,152 11,741 MSF Baillie Gifford International Stock Investment Division................................. 135,375 142,564 MSF Barclays Capital Aggregate Bond Index Investment Division............................... 867,344 860,534 MSF BlackRock Aggressive Growth Investment Division......................................... 529,383 379,415 MSF BlackRock Bond Income Investment Division............................................... 334,130 347,328 MSF BlackRock Diversified Investment Division............................................... 846,392 751,518 MSF BlackRock Large Cap Value Investment Division........................................... 86,087 77,167 MSF BlackRock Legacy Large Cap Growth Investment Division................................... 53,272 45,881 MSF BlackRock Money Market Investment Division.............................................. 114,103 249,908 MSF Davis Venture Value Investment Division................................................. 383,886 389,641 MSF FI Value Leaders Investment Division.................................................... 44,051 40,816 MSF Jennison Growth Investment Division..................................................... 102,546 110,567 MSF Loomis Sayles Small Cap Core Investment Division........................................ 118,325 110,919 MSF Loomis Sayles Small Cap Growth Investment Division...................................... 58,648 46,479 MSF Met/Artisan Mid Cap Value Investment Division........................................... 347,417 317,586 MSF MetLife Conservative Allocation Investment Division..................................... 22,199 16,791 MSF MetLife Conservative to Moderate Allocation Investment Division......................... 40,173 35,091 MSF MetLife Mid Cap Stock Index Investment Division......................................... 448,943 427,389 MSF MetLife Moderate Allocation Investment Division......................................... 236,948 209,528 MSF MetLife Moderate to Aggressive Allocation Investment Division........................... 494,267 420,334 MSF MetLife Stock Index Investment Division................................................. 3,199,191 2,799,860 MSF MFS Total Return Investment Division.................................................... 106,396 80,437 MSF MFS Value Investment Division........................................................... 422,424 411,227 MSF MSCI EAFE Index Investment Division..................................................... 515,481 487,987 MSF Neuberger Berman Genesis Investment Division............................................ 587,519 559,608 MSF Oppenheimer Global Equity Investment Division........................................... 178,758 173,573 MSF Russell 2000 Index Investment Division.................................................. 349,641 341,067 MSF T. Rowe Price Large Cap Growth Investment Division...................................... 334,052 354,830 MSF T. Rowe Price Small Cap Growth Investment Division...................................... 666,351 511,433 MSF Van Eck Global Natural Resources Investment Division.................................... 609 -- MSF Western Asset Management Strategic Bond Opportunities Investment Division............... 160,797 154,138 MSF Western Asset Management U.S. Government Investment Division............................ 113,254 115,268 PIMCO VIT All Asset Investment Division..................................................... 22 -- PIMCO VIT Low Duration Investment Division.................................................. 2,905 2,779 Pioneer VCT Emerging Markets Investment Division............................................ 12,310 13,622 Pioneer VCT Mid Cap Value Investment Division............................................... 550 297 Royce Micro-Cap Investment Division......................................................... 1,375 619 Royce Small-Cap Investment Division......................................................... 6,407 1,285
179 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGE IN ACCOUNTING METHOD -- (CONCLUDED) PRESENTATION OF MORTALITY AND EXPENSE RISK CHARGES -- (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31, -------------------------------- FUND NAME 2011 ($) 2010 ($) -------------- -------------- UIF Emerging Markets Debt Investment Division............................................... 1,372 31 UIF Emerging Markets Equity Investment Division............................................. 2,182 520 Wells Fargo VT Total Return Bond Investment Division........................................ 6,364 6,709
6. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charge paid to the Company, is an asset-based charge and assessed through a daily reduction in unit values, which is recorded as an expense in the accompanying statements of operations of the applicable Investment Divisions: Mortality and Expense Risk -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is the risk that expenses incurred in issuing and administering the Policies will exceed the amounts realized from the administrative charges assessed against the Policies. The table below represents the range of effective annual rates for the charge for the year ended December 31, 2012: --------------------------------------------------------------------------------------------------------------- Mortality and Expense Risk 0.00% - 0.90% ---------------------------------------------------------------------------------------------------------------
The above referenced charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular policy. For some Policies, a mortality and expense risk charge ranging from 0.30% to 0.90% is assessed through the redemption of units on a monthly basis and recorded as policy charges in the statements of changes in net assets of the applicable Investment Divisions. Other policy charges that are assessed through the redemption of units generally include: Cost of Insurance ("COI") charges, administrative charges, a policy fee, and charges for benefits provided by rider, if any. The COI charge is the primary charge under the policy for the death benefit provided by the Company which may vary by policy based on underwriting criteria. Administrative charges range from $0 to $15 and are assessed monthly. For some Policies, a surrender charge is imposed if the policy is partially or fully surrendered within the specified surrender charge period that ranges from $3.75 to $38.25 for every $1,000 of the policy face amount. Surrender charges for other Policies are equal to the lesser of the maximum surrender charge premium or the premiums actually paid in the first two policy years. For these policies, in the first policy year, the maximum surrender charge premium is 75% of the smoker federal guideline premium for the policy, assuming a level death benefit for the policy and any riders; and in the second and later policy years, it is 100% of the smoker federal guideline premium for the policy, assuming a level death benefit for the policy and any riders. The surrender charge cannot exceed 100% of the cumulative premiums paid in the first two policy years. If the policy is surrendered in the first two policy years, the Company will deduct 100% of the surrender charge, determined as described above. After the second policy year, the percentage the Company deducts declines until it reaches 0% at the end of the 15th policy year. Most policies offer optional benefits that can be added to the policy by rider. The charge for riders that provide life insurance benefits can range from $0.01 to $83.33 per $1,000 of coverage and the charge for riders providing benefits in the event of disability can range from $0.00 to $61.44 per $100 of the benefit provided. The above referenced charges are paid to the Company and are recorded as policy charges in the accompanying statements of changes in net assets of the applicable Investment Divisions for the years ended December 31, 2012, 2011 and 2010. MetLife Advisers, LLC, which acts in the capacity of investment adviser to the portfolios of the MIST and MSF Trusts, is an affiliate of the Company. 180 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, ------------------------------ ------------------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ------------- -------------- ------------------------------------------------- 2012 2012 2012 2011 2010 ------------- -------------- -------------- -------------- -------------- AllianceBernstein Global Thematic Growth Investment Division......... 3,767 71,642 3,785 5,924,276 64,878 AllianceBernstein Intermediate Bond Investment Division......... 8,488 102,645 57,983 4,944 44,107 AllianceBernstein International Value Investment Division......... 12 179 2 1,511 1,284(a) American Century VP Vista Investment Division......... 236 3,853 1,774 16,251 60,206 American Funds Bond Investment Division......... 485,256 5,262,880 1,312,217 969,816 1,139,102 American Funds Global Small Capitalization Investment Division......... 2,982,770 60,143,479 3,115,383 3,778,860 4,775,557 American Funds Growth Investment Division......... 2,165,777 110,745,930 3,746,471 5,600,915 6,233,209 American Funds Growth-Income Investment Division......... 2,081,975 71,702,222 2,947,311 3,518,169 4,134,198 American Funds High-Income Bond Investment Division......... 5,189 57,908 58,091(b) -- -- American Funds International Investment Division.................... 31,331 525,723 53,707 16,165 390,086 American Funds U.S. Government/AAA-Rated Securities Investment Division.................... 3,578 44,566 7,935 24,616 8,716 Dreyfus VIF International Value Investment Division.................... 20,889 264,546 5,777 5,544 7,776 Fidelity VIP Asset Manager: Growth Investment Division.................... 130,734 1,695,641 564,188 201,611 350,953 Fidelity VIP Contrafund Investment Division......... 88,886 2,080,901 256,811 386,193 618,817 Fidelity VIP Equity-Income Investment Division......... 3,135 63,113 51,762 65,604 83,560 Fidelity VIP Freedom 2010 Investment Division......... 3,555 36,402 3,999 16,905 16,287 Fidelity VIP Freedom 2020 Investment Division......... 68,218 527,202 38,622 64,043 32,723 Fidelity VIP Freedom 2030 Investment Division......... 3,937 36,903 2,517 33,098 106,748 Fidelity VIP Freedom 2050 Investment Division......... 1,331 16,206 2,492 44,388(c) -- FOR THE YEAR ENDED DECEMBER 31, ------------------------------------------------ PROCEEDS FROM SALES ($) ------------------------------------------------ 2012 2011 2010 --------------- -------------- -------------- AllianceBernstein Global Thematic Growth Investment Division......... 4,346,961 265,271 84,747 AllianceBernstein Intermediate Bond Investment Division......... 1,934 1,493 29,920 AllianceBernstein International Value Investment Division......... 5 2,772 16(a) American Century VP Vista Investment Division......... 7,528 74,661 147,832 American Funds Bond Investment Division......... 763,603 731,112 647,988 American Funds Global Small Capitalization Investment Division......... 5,038,503 5,452,768 4,848,239 American Funds Growth Investment Division......... 10,752,272 8,870,119 7,482,387 American Funds Growth-Income Investment Division......... 5,517,911 3,636,760 3,422,111 American Funds High-Income Bond Investment Division......... 189(b) -- -- American Funds International Investment Division.................... 107,360 191,972 91,760 American Funds U.S. Government/AAA-Rated Securities Investment Division.................... 7,421 18,298 63,369 Dreyfus VIF International Value Investment Division.................... 2,581 6,265 73,348 Fidelity VIP Asset Manager: Growth Investment Division.................... 229,156 542,259 401,055 Fidelity VIP Contrafund Investment Division......... 392,517 826,551 2,359,396 Fidelity VIP Equity-Income Investment Division......... 7,307 243,406 152,960 Fidelity VIP Freedom 2010 Investment Division......... 1,313 13,581 1,077 Fidelity VIP Freedom 2020 Investment Division......... 41,771 79,620 15,399 Fidelity VIP Freedom 2030 Investment Division......... 23,108 83,225 42,841 Fidelity VIP Freedom 2050 Investment Division......... 302 25,362(c) --
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 181 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, -------------------------- ------------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ------------ ------------ ------------------------------------------- 2012 2012 2012 2011 2010 ------------ ------------ ---------- ------------- ------------ Fidelity VIP High Income Investment Division..... 28,424 168,038 125,580 40,651 340 Fidelity VIP Investment Grade Bond Investment Division................ 176,645 2,309,600 1,921,672 1,807,611 1,216,749 Fidelity VIP Mid Cap Investment Division..... 24,981 702,923 173,748 287,684 192,649 FTVIPT Mutual Global Discovery Securities Investment Division..... 39,801 790,298 175,011 279,594 735,899 FTVIPT Templeton Foreign Securities Investment Division................ 270,845 3,801,087 878,128 539,313 1,298,784 FTVIPT Templeton Global Bond Securities Investment Division..... 22,105 427,416 146,290 626,974 454,211 Goldman Sachs Mid-Cap Value Investment Division................ 16,840 254,903 2,932 58,548 2,264 Goldman Sachs Structured Small Cap Equity Investment Division..... 2,071 22,781 6,983 893 4,341 Invesco V.I. Global Real Estate Investment Division................ 169,020 2,480,584 1,031,105 1,144,072 281,030 Invesco V.I. Government Securities Investment Division................ 25 309 15,310 105,415(d) 26,124 Invesco V.I. International Growth Investment Division................ 216,655 5,820,659 6,090,412 11,463 348,070 Invesco V.I. Van Kampen Comstock Investment Division................ 17,951 210,983 29,964 166,971 62,391(e) Janus Aspen Balanced Investment Division..... 38,724 1,072,774 249,875 476,479 1,410,141 Janus Aspen Forty Investment Division..... 22,042 724,755 251,563 60,009 374,848 Janus Aspen Janus Investment Division..... 36,736 725,079 34,590 11,493 709,475 Janus Aspen Overseas Investment Division..... 11,935 564,816 114,730 5,940,358 246,705 MFS VIT Global Equity Investment Division..... 8,975 128,563 135,732 14,292 201,962 MFS VIT High Income Investment Division..... 18,452 134,943 29,358 12,069 10,141 MFS VIT New Discovery Investment Division..... 11,458 163,711 42,794 24,020 105,171 FOR THE YEAR ENDED DECEMBER 31, ------------------------------------------ PROCEEDS FROM SALES ($) ------------------------------------------ 2012 2011 2010 ---------- ------------- ----------- Fidelity VIP High Income Investment Division..... 2,451 236 37,262 Fidelity VIP Investment Grade Bond Investment Division................ 1,407,822 593,778 919,692 Fidelity VIP Mid Cap Investment Division..... 67,376 86,070 32,284 FTVIPT Mutual Global Discovery Securities Investment Division..... 195,072 383,211 728,462 FTVIPT Templeton Foreign Securities Investment Division................ 422,457 6,463,366 553,148 FTVIPT Templeton Global Bond Securities Investment Division..... 19,865 316,892 458,606 Goldman Sachs Mid-Cap Value Investment Division................ 57,554 130,799 34,533 Goldman Sachs Structured Small Cap Equity Investment Division..... 35,753 1,806 34,881 Invesco V.I. Global Real Estate Investment Division................ 364,719 1,047,754 349,677 Invesco V.I. Government Securities Investment Division................ 36,465 86,648(d) 9,364 Invesco V.I. International Growth Investment Division................ 311,291 236,029 122,011 Invesco V.I. Van Kampen Comstock Investment Division................ 16,512 2,690 30,405(e) Janus Aspen Balanced Investment Division..... 555,156 1,530,768 490,563 Janus Aspen Forty Investment Division..... 231,604 495,862 175,085 Janus Aspen Janus Investment Division..... 57,167 7,130,795 408,399 Janus Aspen Overseas Investment Division..... 18,736 5,664,163 20,135 MFS VIT Global Equity Investment Division..... 12,826 232,286 73,751 MFS VIT High Income Investment Division..... 12,497 1,866 3,882 MFS VIT New Discovery Investment Division..... 4,661 4,419 4,660
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 182 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, ------------------------- --------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ----------- ------------ --------------------------------------- 2012 2012 2012 2011 2010 ----------- ------------ ------------ --------- --------- MFS VIT Value Investment Division............... 1,207 15,291 1,023 36,464 969 MIST AllianceBernstein Global Dynamic Allocation Investment Division............... 663 6,934 8,989(f) -- -- MIST American Funds Balanced Allocation Investment Division.... 60,078 564,961 111,688 225,636 209,126 MIST American Funds Growth Allocation Investment Division.... 91,780 788,428 211,211 237,080 546,597 MIST American Funds Moderate Allocation Investment Division.... 55,547 537,412 223,173 184,789 144,861 MIST AQR Global Risk Balanced Investment Division............... 2,151 24,410 30,767(f) -- -- MIST BlackRock Global Tactical Strategies Investment Division.... 3,761 38,201 40,820(f) -- -- MIST BlackRock Large Cap Core Investment Division.... 31,674,442 338,241,649 5,579,948 6,851,461 6,951,054 MIST Clarion Global Real Estate Investment Division............... 2,269,161 26,891,735 3,856,513 2,264,531 3,370,800 MIST Dreman Small Cap Value Investment Division............... 2,558 34,673 19,336 16,769 10,026 MIST Harris Oakmark International Investment Division............... 2,231,255 30,985,772 2,666,808 2,500,638 3,407,788 MIST Invesco Balanced- Risk Allocation Investment Division.... 716 7,515 9,936(f) -- -- MIST Invesco Small Cap Growth Investment Division............... 295,370 3,916,907 866,163 950,748 797,813 MIST Janus Forty Investment Division.... 199,959 13,554,667 2,118,628 1,510,556 2,738,764 MIST JPMorgan Global Active Allocation Investment Division.... 1,798 18,731 21,306(f) -- -- MIST Legg Mason ClearBridge Aggressive Growth Investment Division............... 1,536,327 11,654,136 770,047 5,893,574 471,892 FOR THE YEAR ENDED DECEMBER 31, -------------------------------------- PROCEEDS FROM SALES ($) -------------------------------------- 2012 2011 2010 -------------- --------- ---------- MFS VIT Value Investment Division............... 33,595 67,428 2,907 MIST AllianceBernstein Global Dynamic Allocation Investment Division............... 2,055(f) -- -- MIST American Funds Balanced Allocation Investment Division.... 50,779 119,833 22,345 MIST American Funds Growth Allocation Investment Division.... 178,743 112,650 60,823 MIST American Funds Moderate Allocation Investment Division.... 72,031 27,959 8,208 MIST AQR Global Risk Balanced Investment Division............... 6,330(f) -- -- MIST BlackRock Global Tactical Strategies Investment Division.... 2,670(f) -- -- MIST BlackRock Large Cap Core Investment Division.... 24,675,854 23,235,479 20,284,505 MIST Clarion Global Real Estate Investment Division............... 2,040,067 1,937,838 1,679,748 MIST Dreman Small Cap Value Investment Division............... 21,553 5,385 3,466 MIST Harris Oakmark International Investment Division............... 3,615,172 2,457,952 2,246,052 MIST Invesco Balanced- Risk Allocation Investment Division.... 2,420(f) -- -- MIST Invesco Small Cap Growth Investment Division............... 1,148,655 984,337 592,803 MIST Janus Forty Investment Division.... 1,831,257 2,004,491 1,663,638 MIST JPMorgan Global Active Allocation Investment Division.... 2,566(f) -- -- MIST Legg Mason ClearBridge Aggressive Growth Investment Division............... 1,188,432 1,236,188 698,228
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 183 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, -------------------------- ---------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ------------ ------------ ---------------------------------------- 2012 2012 2012 2011 2010 ------------ ------------ -------------- -------------- ---------- MIST Lord Abbett Bond Debenture Investment Division............... 2,123,239 25,322,728 4,029,220 4,202,645 3,982,725 MIST Lord Abbett Mid Cap Value Investment Division................ 4,262,662 72,390,245 76,386,802 17,623 7,623 MIST Met/Franklin Income Investment Division..... 31,904 314,897 94,603 104,557 90,123 MIST Met/Franklin Mutual Shares Investment Division................ 15,476 122,733 47,800 34,651 31,238 MIST Met/Franklin Templeton Founding Strategy Investment Division................ 30,513 268,486 42,511 36,620 56,837 MIST Met/Templeton Growth Investment Division................ 6,801 58,375 17,630 19,150 26,766 MIST Met/Templeton International Bond Investment Division.... 219 2,557 3,780(f) -- -- MIST MetLife Aggressive Strategy Investment Division (b)............ 1,445,108 14,892,050 1,631,765 15,450,469(d) -- MIST MetLife Balanced Plus Investment Division............... 4,293 44,243 50,269(f) -- -- MIST MFS Emerging Markets Equity Investment Division..... 8,058 82,805 153,279 26,770(d) -- MIST MFS Research International Investment Division................ 1,522,917 16,398,808 3,674,489 2,576,414 1,608,825 MIST MLA Mid Cap Investment Division..... 461,310 5,460,602 408,026 1,280,594 595,846 MIST Morgan Stanley Mid Cap Growth Investment Division................ 15,790,949 160,842,321 4,192,041 9,829,634 181,166,153 MIST PIMCO Inflation Protected Bond Investment Division..... 1,155,669 13,063,982 4,918,545 3,303,438 2,469,861 MIST PIMCO Total Return Investment Division..... 3,925,808 46,212,838 6,325,271 7,403,802 7,076,844 MIST Pioneer Fund Investment Division..... 13,388 136,688 7,582 7,780 6,857 MIST RCM Technology Investment Division..... 3,144,984 13,659,135 3,717,366 2,111,961 2,790,890 FOR THE YEAR ENDED DECEMBER 31, ---------------------------------------- PROCEEDS FROM SALES ($) ---------------------------------------- 2012 2011 2010 ------------- -------------- --------- MIST Lord Abbett Bond Debenture Investment Division............... 2,630,362 5,865,230 3,898,865 MIST Lord Abbett Mid Cap Value Investment Division................ 4,011,220 3,264 22,956 MIST Met/Franklin Income Investment Division..... 8,795 10,557 4,997 MIST Met/Franklin Mutual Shares Investment Division................ 4,845 5,687 2,657 MIST Met/Franklin Templeton Founding Strategy Investment Division................ 26,306 12,523 16,387 MIST Met/Templeton Growth Investment Division................ 13,167 9,023 1,499 MIST Met/Templeton International Bond Investment Division.... 1,243(f) -- -- MIST MetLife Aggressive Strategy Investment Division (b)............ 989,906 1,027,360(d) -- MIST MetLife Balanced Plus Investment Division............... 6,146(f) -- -- MIST MFS Emerging Markets Equity Investment Division..... 95,164 540(d) -- MIST MFS Research International Investment Division................ 1,969,844 2,605,812 2,067,653 MIST MLA Mid Cap Investment Division..... 756,033 1,251,786 595,212 MIST Morgan Stanley Mid Cap Growth Investment Division................ 13,094,724 16,285,234 9,832,558 MIST PIMCO Inflation Protected Bond Investment Division..... 1,739,898 2,028,482 1,583,040 MIST PIMCO Total Return Investment Division..... 5,836,729 5,653,299 3,959,479 MIST Pioneer Fund Investment Division..... 4,551 67,759 31,995 MIST RCM Technology Investment Division..... 3,015,053 3,577,458 3,395,885
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 184 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, -------------------------- --------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ------------ ------------ --------------------------------------- 2012 2012 2012 2011 2010 ------------ ------------ -------------- --------- ----------- MIST Schroders Global Multi-Asset Investment Division............... 545 5,776 8,021(f) -- -- MIST SSgA Growth and Income ETF Investment Division................ 510,566 5,521,373 1,824,928 1,498,489 2,220,868 MIST SSgA Growth ETF Investment Division..... 364,021 3,776,125 1,113,746 1,923,928 875,750 MIST T. Rowe Price Large Cap Value Investment Division................ 54,075 1,327,202 76,536 25,689 501,908 MIST T. Rowe Price Mid Cap Growth Investment Division................ 2,219,463 18,559,725 3,759,855 8,275,848 1,810,217 MIST Third Avenue Small Cap Value Investment Division................ 55,315 778,082 126,084 595,096 877,330 MSF Baillie Gifford International Stock Investment Division..... 4,353,412 48,696,172 2,184,026 3,235,087 2,105,704 MSF Barclays Capital Aggregate Bond Index Investment Division..... 10,044,484 109,757,798 18,934,907 11,501,288 22,625,306 MSF BlackRock Aggressive Growth Investment Division..... 6,594,035 153,172,524 2,359,607 8,269,136 2,338,781 MSF BlackRock Bond Income Investment Division................ 741,788 79,571,999 5,640,825 5,805,876 6,783,042 MSF BlackRock Diversified Investment Division................ 15,238,687 244,853,334 8,590,251 10,350,108 8,518,236 MSF BlackRock Large Cap Value Investment Division................ 1,458,260 15,800,374 3,386,813 1,424,125 1,366,630 MSF BlackRock Legacy Large Cap Growth Investment Division..... 492,517 12,119,741 7,158,245 2,393,555 955,624 MSF BlackRock Money Market Investment Division................ 232,745 23,274,455 13,187,844 11,412,230 39,085,331 MSF Davis Venture Value Investment Division..... 1,753,067 48,252,225 2,240,132 4,062,485 3,532,125 MSF FI Value Leaders Investment Division..... 44,814 7,179,192 549,077 923,988 768,915 MSF Jennison Growth Investment Division..... 1,515,312 16,878,865 5,678,348 1,020,376 1,735,188 FOR THE YEAR ENDED DECEMBER 31, ---------------------------------------- PROCEEDS FROM SALES ($) ---------------------------------------- 2012 2011 2010 ------------- ---------- ---------- MIST Schroders Global Multi-Asset Investment Division............... 2,255(f) -- -- MIST SSgA Growth and Income ETF Investment Division................ 688,031 604,376 321,444 MIST SSgA Growth ETF Investment Division..... 500,843 1,172,938 269,381 MIST T. Rowe Price Large Cap Value Investment Division................ 17,219 5,307,279 286,976 MIST T. Rowe Price Mid Cap Growth Investment Division................ 7,974,926 2,781,426 2,059,741 MIST Third Avenue Small Cap Value Investment Division................ 192,017 1,211,039 444,016 MSF Baillie Gifford International Stock Investment Division..... 4,015,643 3,373,752 3,842,700 MSF Barclays Capital Aggregate Bond Index Investment Division..... 11,439,455 21,342,034 16,711,144 MSF BlackRock Aggressive Growth Investment Division..... 16,639,363 17,101,074 16,490,360 MSF BlackRock Bond Income Investment Division................ 7,542,088 8,666,314 7,737,220 MSF BlackRock Diversified Investment Division................ 21,948,665 21,365,154 21,488,733 MSF BlackRock Large Cap Value Investment Division................ 1,826,005 1,183,780 1,193,468 MSF BlackRock Legacy Large Cap Growth Investment Division..... 2,120,133 1,606,886 766,286 MSF BlackRock Money Market Investment Division................ 10,707,190 20,447,498 44,495,834 MSF Davis Venture Value Investment Division..... 3,984,624 5,416,410 4,155,257 MSF FI Value Leaders Investment Division..... 728,968 900,032 500,892 MSF Jennison Growth Investment Division..... 1,525,681 2,289,730 1,361,813
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 185 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, ------------------------------ --------------------------------------------- COST OF SHARES COST ($) PURCHASES ($) -------------- -------------- --------------------------------------------- 2012 2012 2012 2011 2010 -------------- -------------- ------------ --------------- ------------ MSF Loomis Sayles Small Cap Core Investment Division.................... 75,232 15,377,635 1,244,281 1,401,272 779,792 MSF Loomis Sayles Small Cap Growth Investment Division.................... 727,317 6,743,782 435,159 1,535,720 588,154 MSF Met/Artisan Mid Cap Value Investment Division.................... 252,918 51,480,088 1,652,342 2,136,634 3,730,063 MSF MetLife Conservative Allocation Investment Division................... 451,331 5,053,916 1,835,676 1,806,198 2,451,236 MSF MetLife Conservative to Moderate Allocation Investment Division........ 715,057 7,782,001 2,243,025 1,953,282 2,108,320 MSF MetLife Mid Cap Stock Index Investment Division................... 4,824,314 59,075,087 6,434,902 7,118,449 4,558,217 MSF MetLife Moderate Allocation Investment Division................... 3,789,971 39,789,720 5,656,884 6,621,830 7,290,820 MSF MetLife Moderate to Aggressive Allocation Investment Division........ 6,539,874 68,806,566 7,501,562 8,856,018 9,000,879 MSF MetLife Stock Index Investment Division........ 22,136,633 667,211,901 41,740,053 42,140,081 47,048,203 MSF MFS Total Return Investment Division........ 58,054 7,741,000 1,197,544 1,189,902 2,150,016 MSF MFS Value Investment Division................... 4,195,031 53,479,318 3,310,186 3,888,301 3,693,963 MSF MSCI EAFE Index Investment Division........ 5,820,975 63,949,200 7,247,918 9,375,469 10,748,813 MSF Neuberger Berman Genesis Investment Division................... 6,238,426 89,603,420 1,372,639 2,070,471 2,239,658 MSF Oppenheimer Global Equity Investment Division................... 2,516,431 32,324,895 1,995,431 4,561,354 3,249,970 MSF Russell 2000 Index Investment Division........ 3,841,387 45,326,711 2,536,084 4,574,342 4,271,448 MSF T. Rowe Price Large Cap Growth Investment Division................... 2,795,839 34,493,708 2,729,462 2,728,837 1,214,090 MSF T. Rowe Price Small Cap Growth Investment Division................... 5,328,638 70,024,797 12,017,765 6,480,374 2,318,086 MSF Van Eck Global Natural Resources Investment Division......... 4,135 57,891 52,989 15,766(d) -- FOR THE YEAR ENDED DECEMBER 31, --------------------------------------------- PROCEEDS FROM SALES ($) --------------------------------------------- 2012 2011 2010 ------------- ---------------- ----------- MSF Loomis Sayles Small Cap Core Investment Division.................... 1,870,414 2,332,479 1,332,319 MSF Loomis Sayles Small Cap Growth Investment Division.................... 1,390,992 1,011,621 546,779 MSF Met/Artisan Mid Cap Value Investment Division.................... 3,672,223 4,226,880 3,981,454 MSF MetLife Conservative Allocation Investment Division................... 1,004,176 1,511,348 768,583 MSF MetLife Conservative to Moderate Allocation Investment Division........ 731,687 2,239,776 898,546 MSF MetLife Mid Cap Stock Index Investment Division................... 6,851,251 5,790,251 5,525,712 MSF MetLife Moderate Allocation Investment Division................... 4,063,798 3,119,932 2,263,141 MSF MetLife Moderate to Aggressive Allocation Investment Division........ 5,594,631 4,089,610 3,399,802 MSF MetLife Stock Index Investment Division........ 56,539,432 42,862,666 49,869,268 MSF MFS Total Return Investment Division........ 1,043,992 1,494,750 2,044,235 MSF MFS Value Investment Division................... 4,486,581 5,180,543 3,946,394 MSF MSCI EAFE Index Investment Division........ 7,865,571 5,508,673 7,741,327 MSF Neuberger Berman Genesis Investment Division................... 5,678,800 5,494,730 4,796,586 MSF Oppenheimer Global Equity Investment Division................... 4,751,183 6,449,346 3,980,518 MSF Russell 2000 Index Investment Division........ 5,292,336 7,433,659 6,680,460 MSF T. Rowe Price Large Cap Growth Investment Division................... 3,564,278 5,712,444 4,584,444 MSF T. Rowe Price Small Cap Growth Investment Division................... 10,094,477 9,130,453 6,301,609 MSF Van Eck Global Natural Resources Investment Division......... 9,747 344(d) --
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 186 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. STATEMENTS OF INVESTMENTS -- (CONCLUDED)
AS OF DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31, ------------------------- ----------------------------------------- COST OF SHARES COST ($) PURCHASES ($) ----------- ------------ ----------------------------------------- 2012 2012 2012 2011 2010 ----------- ------------ ------------- ------------- ----------- MSF Western Asset Management Strategic Bond Opportunities Investment Division... 1,820,890 22,287,439 2,398,460 2,218,805 3,765,318 MSF Western Asset Management U.S. Government Investment Division.............. 1,344,866 16,268,874 1,529,728 1,868,479 1,730,763 PIMCO VIT All Asset Investment Division... 11,592 124,263 31,250 97,359(d) -- PIMCO VIT Long-Term U.S. Government Investment Division... 2,437 33,002 33,105(g) -- -- PIMCO VIT Low Duration Investment Division... 91,532 933,182 47,764 210,299 14,655 Pioneer VCT Emerging Markets Investment Division.............. 26,343 640,834 511,183 461,977 292,305 Pioneer VCT Mid Cap Value Investment Division.............. 8,814 136,154 13,669 52,297 68,084 Royce Micro-Cap Investment Division... 33,973 346,507 56,398 22,196 291,230(a) Royce Small-Cap Investment Division... 49,127 505,731 194,261 1,012,962 433,307 UIF Emerging Markets Debt Investment Division.............. 124,223 1,092,320 734,902 432,895 3,126 UIF Emerging Markets Equity Investment Division.............. 68,792 954,379 423,867 657,354 160,270 Wells Fargo VT Total Return Bond Investment Division.............. 45,232 480,809 435,287 134,983 920,218 FOR THE YEAR ENDED DECEMBER 31, ------------------------------------------ PROCEEDS FROM SALES ($) ------------------------------------------ 2012 2011 2010 ------------ --------- ------------- MSF Western Asset Management Strategic Bond Opportunities Investment Division... 2,267,683 2,678,776 1,826,322 MSF Western Asset Management U.S. Government Investment Division.............. 1,548,704 2,143,284 1,893,816 PIMCO VIT All Asset Investment Division... 4,536 -- -- PIMCO VIT Long-Term U.S. Government Investment Division... 101(g) -- -- PIMCO VIT Low Duration Investment Division... 43,068 21,217 10,848 Pioneer VCT Emerging Markets Investment Division.............. 259,048 837,851 225,049 Pioneer VCT Mid Cap Value Investment Division.............. 7,978 6,022 4,348 Royce Micro-Cap Investment Division... 11,535 9,860 4,681(a) Royce Small-Cap Investment Division... 463,815 605,050 163,799 UIF Emerging Markets Debt Investment Division.............. 65,546 19,721 1,934 UIF Emerging Markets Equity Investment Division.............. 68,649 220,179 8,134 Wells Fargo VT Total Return Bond Investment Division.............. 88,422 1,089,695 371,858
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 187 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
ALLIANCEBERNSTEIN GLOBAL THEMATIC GROWTH ALLIANCEBERNSTEIN INTERMEDIATE BOND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 914,212 19,486 25,043 3,232 3,146 2,242 Units issued and transferred from other funding options. 797 943,623 5,471 3,563 191 3,226 Units redeemed and transferred to other funding options....... (903,379) (48,897) (11,028) (120) (105) (2,322) --------------- --------------- --------------- ---------------- --------------- --------------- Units end of year........ 11,630 914,212 19,486 6,675 3,232 3,146 =============== =============== =============== ================ =============== =============== ALLIANCEBERNSTEIN INTERNATIONAL VALUE AMERICAN CENTURY VP VISTA INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 (a) 2012 2011 2010 --------------- --------------- --------------- --------------- ---------------- --------------- Units beginning of year.. 9 73 -- 679 5,360 13,115 Units issued and transferred from other funding options. -- 6 73 63 753 2,722 Units redeemed and transferred to other funding options....... -- (70) -- (463) (5,434) (10,477) --------------- --------------- --------------- --------------- ---------------- --------------- Units end of year........ 9 9 73 279 679 5,360 =============== =============== =============== =============== ================ ===============
AMERICAN FUNDS BOND AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 367,699 361,073 335,183 2,037,588 2,114,920 2,152,577 Units issued and transferred from other funding options. 131,998 111,528 767,492 343,427 395,698 2,898,451 Units redeemed and transferred to other funding options....... (101,751) (104,902) (741,602) (433,428) (473,030) (2,936,108) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 397,946 367,699 361,073 1,947,587 2,037,588 2,114,920 ================ ================ =============== ================ =============== =============== AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 1,353,057 1,411,108 1,419,237 1,453,945 1,483,095 1,491,242 Units issued and transferred from other funding options. 191,289 236,308 1,491,854 212,605 249,184 1,511,750 Units redeemed and transferred to other funding options....... (274,936) (294,359) (1,499,983) (284,434) (278,334) (1,519,897) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 1,269,410 1,353,057 1,411,108 1,382,116 1,453,945 1,483,095 ================ ================ =============== ================ =============== ===============
AMERICAN FUNDS HIGH-INCOME BOND AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------------------------- 2012 (b) 2012 2011 2010 ------------------- --------------- --------------- --------------- Units beginning of year.. -- 21,039 27,930 17,214 Units issued and transferred from other funding options. 4,621 1,746 306 13,635 Units redeemed and transferred to other funding options....... (15) (4,012) (7,197) (2,919) ------------------- --------------- --------------- --------------- Units end of year........ 4,606 18,773 21,039 27,930 =================== =============== =============== =============== AMERICAN FUNDS U.S. GOVERNMENT/ AAA-RATED SECURITIES DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ----------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- ---------------- -------------- Units beginning of year.. 2,025 1,810 4,564 16,153 16,502 21,676 Units issued and transferred from other funding options. 292 1,074 398 77 99 505 Units redeemed and transferred to other funding options....... (345) (859) (3,152) (217) (448) (5,679) --------------- --------------- --------------- --------------- ---------------- -------------- Units end of year........ 1,972 2,025 1,810 16,013 16,153 16,502 =============== =============== =============== =============== ================ ==============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 188 189 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
FIDELITY VIP ASSET MANAGER: GROWTH FIDELITY VIP CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- ---------------- ---------------- --------------- Units beginning of year.. 138,116 172,460 181,097 157,450 190,755 332,757 Units issued and transferred from other funding options. 47,327 17,093 24,042 16,403 22,512 43,442 Units redeemed and transferred to other funding options....... (20,847) (51,437) (32,679) (26,439) (55,817) (185,444) --------------- --------------- --------------- ---------------- ---------------- --------------- Units end of year........ 164,596 138,116 172,460 147,414 157,450 190,755 =============== =============== =============== ================ ================ =============== FIDELITY VIP EQUITY-INCOME FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- ---------------- Units beginning of year.. 1,549 17,040 23,778 3,238 3,002 1,541 Units issued and transferred from other funding options. 3,462 2,435 4,102 200 246 1,471 Units redeemed and transferred to other funding options....... (580) (17,926) (10,840) (60) (10) (10) --------------- --------------- --------------- --------------- --------------- ---------------- Units end of year........ 4,431 1,549 17,040 3,378 3,238 3,002 =============== =============== =============== =============== =============== ================
FIDELITY VIP FREEDOM 2020 FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 53,514 56,297 56,341 6,028 9,011 3,665 Units issued and transferred from other funding options. 968 121 829 83 2,929 9,042 Units redeemed and transferred to other funding options....... (3,203) (2,904) (873) (2,172) (5,912) (3,696) --------------- --------------- --------------- ---------------- --------------- --------------- Units end of year........ 51,279 53,514 56,297 3,939 6,028 9,011 =============== =============== =============== ================ =============== =============== FIDELITY VIP FREEDOM 2050 FIDELITY VIP HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- ------------------------------------------------- 2012 2011 (c) 2012 2011 2010 --------------- --------------- --------------- ---------------- --------------- Units beginning of year.. 1,492 -- 2,677 294 3,001 Units issued and transferred from other funding options. -- 1,494 6,418 2,406 -- Units redeemed and transferred to other funding options....... (24) (2) (140) (23) (2,707) --------------- --------------- --------------- ---------------- --------------- Units end of year........ 1,468 1,492 8,955 2,677 294 =============== =============== =============== ================ ===============
FIDELITY VIP INVESTMENT GRADE BOND FIDELITY VIP MID CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- -------------- --------------- --------------- --------------- Units beginning of year. 117,053 38,436 18,087 24,942 16,733 10,051 Units issued and transferred from other funding options 117,701 120,433 87,556 4,204 12,194 7,750 Units redeemed and transferred to other funding options...... (90,025) (41,816) (67,207) (2,589) (3,985) (1,068) --------------- --------------- -------------- --------------- --------------- --------------- Units end of year....... 144,729 117,053 38,436 26,557 24,942 16,733 =============== =============== ============== =============== =============== =============== FTVIPT MUTUAL GLOBAL DISCOVERY SECURITIES FTVIPT TEMPLETON FOREIGN SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------ 2012 2011 2010 2012 2011 2010 -------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year. 44,626 53,444 54,588 203,775 558,309 520,792 Units issued and transferred from other funding options 6,077 9,519 32,229 49,290 26,853 75,062 Units redeemed and transferred to other funding options...... (10,364) (18,337) (33,373) (27,753) (381,387) (37,545) -------------- --------------- --------------- --------------- --------------- --------------- Units end of year....... 40,339 44,626 53,444 225,312 203,775 558,309 ============== =============== =============== =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 190 191 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
FTVIPT TEMPLETON GLOBAL BOND SECURITIES GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 14,004 179 204 19,234 24,643 27,552 Units issued and transferred from other funding options. 5,493 25,202 11,325 -- -- 1 Units redeemed and transferred to other funding options....... (941) (11,377) (11,350) (3,609) (5,409) (2,910) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 18,556 14,004 179 15,625 19,234 24,643 =============== =============== =============== =============== =============== =============== GOLDMAN SACHS STRUCTURED SMALL CAP EQUITY INVESCO V.I. GLOBAL REAL ESTATE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 4,148 4,258 7,623 54,002 54,093 59,960 Units issued and transferred from other funding options. 435 38 436 31,822 34,742 6,829 Units redeemed and transferred to other funding options....... (2,658) (148) (3,801) (11,890) (34,833) (12,696) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 1,925 4,148 4,258 73,934 54,002 54,093 =============== =============== =============== =============== =============== ===============
INVESCO V.I. GOVERNMENT SECURITIES INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- ------------------------------------------------- 2012 2011 (d) 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- Units beginning of year. 1,570 -- 1,308 14,201 1,080 Units issued and transferred from other funding options 1,091 8,213 329,534 320 20,685 Units redeemed and transferred to other funding options...... (2,639) (6,643) (16,045) (13,213) (7,564) --------------- --------------- --------------- --------------- --------------- Units end of year....... 22 1,570 314,797 1,308 14,201 =============== =============== =============== =============== =============== INVESCO V.I. VAN KAMPEN COMSTOCK JANUS ASPEN BALANCED INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------------------------------------- 2012 2011 2010 (e) 2012 2011 2010 --------------- -------------- --------------- --------------- --------------- --------------- Units beginning of year. 17,951 2,966 -- 81,522 155,834 99,381 Units issued and transferred from other funding options 2,259 15,242 2,966 9,247 8,172 79,900 Units redeemed and transferred to other funding options...... (1,363) (257) -- (31,704) (82,484) (23,447) --------------- -------------- --------------- --------------- --------------- --------------- Units end of year....... 18,847 17,951 2,966 59,065 81,522 155,834 =============== ============== =============== =============== =============== ===============
JANUS ASPEN FORTY JANUS ASPEN JANUS INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- --------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 45,616 73,218 61,130 85,791 741,523 718,894 Units issued and transferred from other funding options. 13,757 4,044 22,591 1,271 640 65,451 Units redeemed and transferred to other funding options....... (12,868) (31,646) (10,503) (5,141) (656,372) (42,822) ---------------- --------------- --------------- ---------------- --------------- --------------- Units end of year........ 46,505 45,616 73,218 81,921 85,791 741,523 ================ =============== =============== ================ =============== =============== JANUS ASPEN OVERSEAS MFS VIT GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 15,536 11,481 3,135 356 14,222 5,543 Units issued and transferred from other funding options. 3,116 181,594 9,125 7,683 851 11,271 Units redeemed and transferred to other funding options....... (1,025) (177,539) (779) (806) (14,717) (2,592) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 17,627 15,536 11,481 7,233 356 14,222 =============== =============== =============== =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 192 193 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MFS VIT HIGH INCOME MFS VIT NEW DISCOVERY INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 8,896 9,020 9,209 7,919 7,814 396 Units issued and transferred from other funding options. 1,126 1 106 1,553 359 7,766 Units redeemed and transferred to other funding options....... (757) (125) (295) (268) (254) (348) --------------- --------------- --------------- ---------------- --------------- --------------- Units end of year........ 9,265 8,896 9,020 9,204 7,919 7,814 =============== =============== =============== ================ =============== =============== MIST ALLIANCEBERNSTEIN GLOBAL DYNAMIC MFS VIT VALUE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------- 2012 2011 2010 2012 (f) --------------- --------------- --------------- ------------------- Units beginning of year.. 3,138 5,577 5,803 -- Units issued and transferred from other funding options. -- -- -- 852 Units redeemed and transferred to other funding options....... (2,089) (2,439) (226) (196) --------------- --------------- --------------- ------------------- Units end of year........ 1,049 3,138 5,577 656 =============== =============== =============== ===================
MIST AMERICAN FUNDS BALANCED ALLOCATION MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 50,766 41,296 23,102 82,817 71,574 15,564 Units issued and transferred from other funding options. 8,491 21,131 70,685 19,200 22,942 90,305 Units redeemed and transferred to other funding options....... (4,666) (11,661) (52,491) (17,699) (11,699) (34,295) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 54,591 50,766 41,296 84,318 82,817 71,574 =============== =============== =============== =============== =============== =============== MIST AQR GLOBAL MIST AMERICAN FUNDS MODERATE ALLOCATION RISK BALANCED INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------- 2012 2011 2010 2012 (f) --------------- --------------- --------------- ------------------- Units beginning of year.. 37,706 23,584 9,961 -- Units issued and transferred from other funding options. 18,239 16,729 29,424 2,974 Units redeemed and transferred to other funding options....... (6,361) (2,607) (15,801) (616) --------------- --------------- --------------- ------------------- Units end of year........ 49,584 37,706 23,584 2,358 =============== =============== =============== ===================
MIST BLACKROCK GLOBAL TACTICAL STRATEGIES MIST BLACKROCK LARGE CAP CORE INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------------------------------------- 2012 (f) 2012 2011 2010 ------------------- --------------- --------------- ---------------- Units beginning of year.. -- 12,762,727 13,468,383 14,107,746 Units issued and transferred from other funding options....... 3,964 1,483,936 1,797,760 9,046,176 Units redeemed and transferred to other funding options....... (257) (2,333,325) (2,503,416) (9,685,539) ------------------- --------------- --------------- ---------------- Units end of year........ 3,707 11,913,338 12,762,727 13,468,383 =================== =============== =============== ================ MIST CLARION GLOBAL REAL ESTATE MIST DREMAN SMALL CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- --------------- --------------- --------------- Units beginning of year.. 1,311,823 1,342,988 1,332,507 2,480 1,705 1,271 Units issued and transferred from other funding options....... 371,416 277,732 1,901,957 1,210 1,121 1,222 Units redeemed and transferred to other funding options....... (294,820) (308,897) (1,891,476) (1,390) (346) (788) ---------------- ---------------- --------------- --------------- --------------- --------------- Units end of year........ 1,388,419 1,311,823 1,342,988 2,300 2,480 1,705 ================ ================ =============== =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 194 195 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MIST INVESCO BALANCED-RISK MIST HARRIS OAKMARK INTERNATIONAL ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- ------------------- 2012 2011 2010 2012 (f) --------------- ---------------- --------------- ------------------- Units beginning of year.. 1,483,192 1,473,309 1,439,875 -- Units issued and transferred from other funding options. 301,420 324,563 1,994,881 9,427 Units redeemed and transferred to other funding options....... (362,647) (314,680) (1,961,447) (2,327) --------------- ---------------- --------------- ------------------- Units end of year........ 1,421,965 1,483,192 1,473,309 7,100 =============== ================ =============== =================== MIST INVESCO SMALL CAP GROWTH MIST JANUS FORTY INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- ---------------- --------------- --------------- ---------------- Units beginning of year.. 279,254 280,254 268,049 1,093,634 1,185,626 1,122,196 Units issued and transferred from other funding options. 58,241 85,976 345,354 286,818 250,215 2,258,407 Units redeemed and transferred to other funding options....... (91,762) (86,976) (333,149) (294,792) (342,207) (2,194,977) --------------- --------------- ---------------- --------------- --------------- ---------------- Units end of year........ 245,733 279,254 280,254 1,085,660 1,093,634 1,185,626 =============== =============== ================ =============== =============== ================
MIST JPMORGAN GLOBAL ACTIVE MIST LEGG MASON CLEARBRIDGE ALLOCATION AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------------------------------------- 2012 (f) 2012 2011 2010 ------------------- --------------- ---------------- --------------- Units beginning of year.. -- 1,353,551 888,257 918,435 Units issued and transferred from other funding options. 20,291 230,917 760,794 862,843 Units redeemed and transferred to other funding options....... (2,480) (270,726) (295,500) (893,021) ------------------- --------------- ---------------- --------------- Units end of year........ 17,811 1,313,742 1,353,551 888,257 =================== =============== ================ =============== MIST LORD ABBETT BOND DEBENTURE MIST LORD ABBETT MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- --------------- --------------- --------------- --------------- ---------------- Units beginning of year.. 1,085,311 1,222,207 1,300,112 9,000 7,974 9,319 Units issued and transferred from other funding options. 167,197 200,137 833,058 3,301,144 1,279 620 Units redeemed and transferred to other funding options....... (189,305) (337,033) (910,963) (436,992) (253) (1,965) ---------------- --------------- --------------- --------------- --------------- ---------------- Units end of year........ 1,063,203 1,085,311 1,222,207 2,873,152 9,000 7,974 ================ =============== =============== =============== =============== ================
MIST MET/FRANKLIN INCOME MIST MET/FRANKLIN MUTUAL SHARES INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- ---------------- --------------- Units beginning of year.. 19,993 13,040 5,364 8,617 6,134 2,904 Units issued and transferred from other funding options....... 6,087 7,842 13,379 3,067 3,078 6,436 Units redeemed and transferred to other funding options....... (689) (889) (5,703) (491) (595) (3,206) --------------- --------------- --------------- --------------- ---------------- --------------- Units end of year........ 25,391 19,993 13,040 11,193 8,617 6,134 =============== =============== =============== =============== ================ =============== MIST MET/FRANKLIN TEMPLETON FOUNDING STRATEGY MIST MET/TEMPLETON GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 27,693 25,753 21,298 6,014 5,088 2,173 Units issued and transferred from other funding options....... 2,368 3,131 55,695 1,505 1,929 5,903 Units redeemed and transferred to other funding options....... (2,432) (1,191) (51,240) (1,298) (1,003) (2,988) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 27,629 27,693 25,753 6,221 6,014 5,088 =============== =============== =============== =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 196 197 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MIST MET/ TEMPLETON INTERNATIONAL MIST METLIFE MIST METLIFE MIST MFS EMERGING BOND MIST AGGRESSIVE STRATEGY BALANCED PLUS MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------- ------------------- -------------------------------- 2012 (f) 2012 2011 (d) 2012 (f) 2012 2011 (d) ------------------- --------------- -------------- ------------------- --------------- --------------- Units beginning of year. -- 1,049,786 -- -- 2,070 -- Units issued and transferred from other funding options 270 225,712 1,234,168 4,873 12,249 2,117 Units redeemed and transferred to other funding options...... (89) (189,824) (184,382) (586) (7,582) (47) ------------------- --------------- -------------- ------------------- --------------- --------------- Units end of year....... 181 1,085,674 1,049,786 4,287 6,737 2,070 =================== =============== ============== =================== =============== =============== MIST MFS RESEARCH INTERNATIONAL MLA MID CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------ 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- -------------- --------------- --------------- Units beginning of year. 820,338 838,110 885,756 358,406 360,447 362,314 Units issued and transferred from other funding options 314,771 223,953 1,201,606 58,299 109,194 450,103 Units redeemed and transferred to other funding options...... (214,418) (241,725) (1,249,252) (82,282) (111,235) (451,970) --------------- --------------- --------------- -------------- --------------- --------------- Units end of year....... 920,691 820,338 838,110 334,423 358,406 360,447 =============== =============== =============== ============== =============== ===============
MIST MORGAN STANLEY MID CAP GROWTH MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 12,356,734 13,121,650 23,317 700,157 653,613 618,801 Units issued and transferred from other funding options. 1,750,563 1,773,282 24,103,485 381,726 288,475 1,507,168 Units redeemed and transferred to other funding options....... (2,275,594) (2,538,198) (11,005,152) (244,174) (241,931) (1,472,356) ---------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 11,831,703 12,356,734 13,121,650 837,709 700,157 653,613 ================ =============== =============== =============== =============== =============== MIST PIMCO TOTAL RETURN MIST PIONEER FUND INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 2,427,091 2,450,427 2,378,221 13,480 17,938 20,277 Units issued and transferred from other funding options. 550,605 620,126 2,765,705 301 399 399 Units redeemed and transferred to other funding options....... (612,124) (643,462) (2,693,499) (327) (4,857) (2,738) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 2,365,572 2,427,091 2,450,427 13,454 13,480 17,938 =============== =============== =============== =============== =============== ===============
MIST SCHRODERS MIST RCM TECHNOLOGY GLOBAL MULTI-ASSET INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------- 2012 2011 2010 2012 (f) --------------- --------------- -------------- ------------------- Units beginning of year. 1,828,123 2,007,835 2,111,049 -- Units issued and transferred from other funding options 519,280 541,643 3,754,204 7,478 Units redeemed and transferred to other funding options...... (630,576) (721,355) (3,857,418) (2,144) --------------- --------------- -------------- ------------------- Units end of year....... 1,716,827 1,828,123 2,007,835 5,334 =============== =============== ============== =================== MIST SSGA GROWTH AND INCOME ETF MIST SSGA GROWTH ETF INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------------------------------------ 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- -------------- --------------- Units beginning of year. 381,525 320,284 149,333 299,115 237,751 181,473 Units issued and transferred from other funding options 154,362 139,491 435,343 100,874 190,117 355,523 Units redeemed and transferred to other funding options...... (85,111) (78,250) (264,392) (67,322) (128,753) (299,245) --------------- --------------- --------------- --------------- -------------- --------------- Units end of year....... 450,776 381,525 320,284 332,667 299,115 237,751 =============== =============== =============== =============== ============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 198 199 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MIST T. ROWE PRICE LARGE CAP VALUE MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- ---------------- --------------- --------------- ---------------- --------------- Units beginning of year.. 108,604 601,441 585,353 1,957,835 1,725,748 1,754,850 Units issued and transferred from other funding options. 5,096 1,323 46,143 314,763 685,902 2,400,707 Units redeemed and transferred to other funding options....... (1,586) (494,160) (30,055) (727,694) (453,815) (2,429,809) --------------- ---------------- --------------- --------------- ---------------- --------------- Units end of year........ 112,114 108,604 601,441 1,544,904 1,957,835 1,725,748 =============== ================ =============== =============== ================ =============== MIST THIRD AVENUE SMALL CAP VALUE MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- ---------------- --------------- --------------- ---------------- Units beginning of year.. 54,483 96,930 66,457 2,947,427 2,985,340 3,130,833 Units issued and transferred from other funding options. 8,078 30,935 54,144 466,869 537,715 2,254,216 Units redeemed and transferred to other funding options....... (12,048) (73,382) (23,671) (628,395) (575,628) (2,399,709) --------------- --------------- ---------------- --------------- --------------- ---------------- Units end of year........ 50,513 54,483 96,930 2,785,901 2,947,427 2,985,340 =============== =============== ================ =============== =============== ================
MSF BARCLAYS CAPITAL AGGREGATE BOND INDEX MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- ---------------- --------------- --------------- --------------- Units beginning of year.. 5,367,889 6,069,208 5,979,612 8,613,267 9,010,506 9,655,662 Units issued and transferred from other funding options. 1,299,442 1,036,792 5,950,976 944,396 1,226,282 5,730,219 Units redeemed and transferred to other funding options....... (1,138,456) (1,738,111) (5,861,380) (1,504,257) (1,623,521) (6,375,375) --------------- --------------- ---------------- --------------- --------------- --------------- Units end of year........ 5,528,875 5,367,889 6,069,208 8,053,406 8,613,267 9,010,506 =============== =============== ================ =============== =============== =============== MSF BLACKROCK BOND INCOME MSF BLACKROCK DIVERSIFIED INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- ---------------- --------------- --------------- --------------- --------------- Units beginning of year.. 3,448,815 3,695,898 3,849,026 10,223,668 10,826,228 11,480,151 Units issued and transferred from other funding options. 453,762 476,235 2,545,294 1,214,215 1,401,995 7,504,390 Units redeemed and transferred to other funding options....... (616,053) (723,318) (2,698,422) (1,840,603) (2,004,555) (8,158,313) --------------- ---------------- --------------- --------------- --------------- --------------- Units end of year........ 3,286,524 3,448,815 3,695,898 9,597,280 10,223,668 10,826,228 =============== ================ =============== =============== =============== ===============
MSF BLACKROCK LARGE CAP VALUE MSF BLACKROCK LEGACY LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 1,036,664 1,026,360 1,018,697 533,802 494,998 480,438 Units issued and transferred from other funding options. 193,068 229,911 1,430,731 759,181 231,277 793,080 Units redeemed and transferred to other funding options....... (257,334) (219,607) (1,423,068) (209,226) (192,473) (778,520) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 972,398 1,036,664 1,026,360 1,083,757 533,802 494,998 ================ ================ =============== ================ =============== =============== MSF BLACKROCK MONEY MARKET MSF DAVIS VENTURE VALUE INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 1,163,332 1,663,896 1,962,757 1,569,723 1,632,869 1,661,533 Units issued and transferred from other funding options. 797,800 607,896 1,839,931 233,892 320,460 1,634,097 Units redeemed and transferred to other funding options....... (655,130) (1,108,460) (2,138,792) (291,754) (383,606) (1,662,761) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 1,306,002 1,163,332 1,663,896 1,511,861 1,569,723 1,632,869 ================ ================ =============== ================ =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 200 201 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MSF FI VALUE LEADERS MSF JENNISON GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- -------------- --------------- --------------- --------------- Units beginning of year. 489,548 493,819 478,934 1,066,474 1,234,658 1,148,604 Units issued and transferred from other funding options 86,660 119,587 576,474 309,675 212,585 1,009,921 Units redeemed and transferred to other funding options...... (106,947) (123,858) (561,589) (224,631) (380,769) (923,867) --------------- --------------- -------------- --------------- --------------- --------------- Units end of year....... 469,261 489,548 493,819 1,151,518 1,066,474 1,234,658 =============== =============== ============== =============== =============== =============== MSF LOOMIS SAYLES SMALL CAP CORE MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------ 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- -------------- --------------- --------------- Units beginning of year. 95,949 115,539 116,312 639,754 597,616 592,149 Units issued and transferred from other funding options 10,523 19,557 70,304 96,222 204,191 595,787 Units redeemed and transferred to other funding options...... (17,993) (39,147) (71,077) (166,556) (162,053) (590,320) --------------- --------------- --------------- -------------- --------------- --------------- Units end of year....... 88,479 95,949 115,539 569,420 639,754 597,616 =============== =============== =============== ============== =============== ===============
MSF MET/ARTISAN MID CAP VALUE MSF METLIFE CONSERVATIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- ---------------- --------------- --------------- --------------- ---------------- Units beginning of year.. 187,483 222,836 191,339 293,962 281,025 179,332 Units issued and transferred from other funding options. 37,546 55,960 303,121 138,689 187,246 672,097 Units redeemed and transferred to other funding options....... (36,252) (91,313) (271,624) (101,783) (174,309) (570,404) --------------- ---------------- --------------- --------------- --------------- ---------------- Units end of year........ 188,777 187,483 222,836 330,868 293,962 281,025 =============== ================ =============== =============== =============== ================ MSF METLIFE CONSERVATIVE TO MODERATE ALLOCATION MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- ---------------- ---------------- --------------- --------------- Units beginning of year.. 491,119 523,187 443,689 3,140,839 3,223,737 3,313,158 Units issued and transferred from other funding options. 165,315 194,728 852,775 476,623 578,839 3,107,108 Units redeemed and transferred to other funding options....... (107,740) (226,796) (773,277) (646,076) (661,737) (3,196,529) --------------- --------------- ---------------- ---------------- --------------- --------------- Units end of year........ 548,694 491,119 523,187 2,971,386 3,140,839 3,223,737 =============== =============== ================ ================ =============== ===============
MSF METLIFE MODERATE ALLOCATION MSF METLIFE MODERATE TO AGGRESSIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------ 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- -------------- --------------- --------------- Units beginning of year. 3,050,810 2,825,563 2,488,914 5,400,236 5,118,269 4,732,679 Units issued and transferred from other funding options 658,640 818,677 4,421,202 1,100,174 1,298,976 8,011,177 Units redeemed and transferred to other funding options...... (623,602) (593,430) (4,084,553) (1,066,769) (1,017,009) (7,625,587) --------------- --------------- --------------- -------------- --------------- --------------- Units end of year....... 3,085,848 3,050,810 2,825,563 5,433,641 5,400,236 5,118,269 =============== =============== =============== ============== =============== =============== MSF METLIFE STOCK INDEX MSF MFS TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------ ------------------------------------------------ 2012 2011 2010 2012 2011 2010 --------------- -------------- --------------- --------------- --------------- -------------- Units beginning of year. 36,301,700 36,664,506 36,924,505 528,477 568,106 580,613 Units issued and transferred from other funding options 4,994,055 5,857,273 25,845,802 105,811 110,243 701,621 Units redeemed and transferred to other funding options...... (6,237,155) (6,220,079) (26,105,801) (110,694) (149,872) (714,128) --------------- -------------- --------------- --------------- --------------- -------------- Units end of year....... 35,058,600 36,301,700 36,664,506 523,594 528,477 568,106 =============== ============== =============== =============== =============== ==============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 202 203 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
MSF MFS VALUE MSF MSCI EAFE INDEX INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 3,828,828 3,975,344 4,056,273 4,910,651 4,717,340 4,618,467 Units issued and transferred from other funding options. 529,637 685,905 3,454,529 973,636 1,183,779 5,171,804 Units redeemed and transferred to other funding options....... (723,577) (832,421) (3,535,458) (1,145,550) (990,468) (5,072,931) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 3,634,888 3,828,828 3,975,344 4,738,737 4,910,651 4,717,340 ================ ================ =============== ================ =============== =============== MSF NEUBERGER BERMAN GENESIS MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 3,915,596 4,111,864 4,279,459 1,918,512 2,044,692 2,111,250 Units issued and transferred from other funding options. 506,545 590,730 3,571,339 220,361 348,871 1,375,412 Units redeemed and transferred to other funding options....... (720,799) (786,998) (3,738,934) (369,617) (475,051) (1,441,970) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 3,701,342 3,915,596 4,111,864 1,769,256 1,918,512 2,044,692 ================ ================ =============== ================ =============== ===============
MSF RUSSELL 2000 INDEX MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- -------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- ---------------- --------------- ---------------- --------------- --------------- Units beginning of year.. 2,653,125 2,808,600 2,972,133 2,954,760 3,148,378 3,409,767 Units issued and transferred from other funding options. 369,378 516,402 2,633,026 509,096 503,272 2,659,923 Units redeemed and transferred to other funding options....... (529,922) (671,877) (2,796,559) (561,801) (696,890) (2,921,312) ---------------- ---------------- --------------- ---------------- --------------- --------------- Units end of year........ 2,492,581 2,653,125 2,808,600 2,902,055 2,954,760 3,148,378 ================ ================ =============== ================ =============== =============== MSF VAN ECK GLOBAL MSF T. ROWE PRICE SMALL CAP GROWTH NATURAL RESOURCES INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- --------------------------------- 2012 2011 2010 2012 2011 (d) ---------------- --------------- --------------- ---------------- --------------- Units beginning of year.. 3,938,724 4,055,742 4,272,691 81 -- Units issued and transferred from other funding options. 426,779 645,717 2,453,679 295 83 Units redeemed and transferred to other funding options....... (705,119) (762,735) (2,670,628) (57) (2) ---------------- --------------- --------------- ---------------- --------------- Units end of year........ 3,660,384 3,938,724 4,055,742 319 81 ================ =============== =============== ================ ===============
MSF WESTERN ASSET MANAGEMENT MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 1,068,823 1,145,809 1,115,618 957,065 1,021,769 1,063,071 Units issued and transferred from other funding options. 191,180 190,447 1,232,736 195,506 193,206 1,297,550 Units redeemed and transferred to other funding options....... (222,981) (267,433) (1,202,545) (216,214) (257,910) (1,338,852) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 1,037,022 1,068,823 1,145,809 936,357 957,065 1,021,769 =============== =============== =============== =============== =============== =============== PIMCO VIT LONG-TERM PIMCO VIT ALL ASSET U.S. GOVERNMENT PIMCO VIT LOW DURATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------- ------------------- ------------------------------------------------- 2012 2011 (d) 2012 (g) 2012 2011 2010 --------------- --------------- ------------------- --------------- --------------- --------------- Units beginning of year.. 8,649 -- -- 80,364 65,497 66,450 Units issued and transferred from other funding options. 2,051 8,680 1,975 2,679 16,680 -- Units redeemed and transferred to other funding options....... (375) (31) (7) (3,955) (1,813) (953) --------------- --------------- ------------------- --------------- --------------- --------------- Units end of year........ 10,325 8,649 1,968 79,088 80,364 65,497 =============== =============== =================== =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 204 205 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010:
PIONEER VCT EMERGING MARKETS PIONEER VCT MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 22,116 41,431 37,577 3,306 2,302 586 Units issued and transferred from other funding options. 24,901 15,775 11,637 238 1,144 1,815 Units redeemed and transferred to other funding options....... (13,796) (35,090) (7,783) (155) (140) (99) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 33,221 22,116 41,431 3,389 3,306 2,302 =============== =============== =============== =============== =============== =============== ROYCE MICRO-CAP ROYCE SMALL-CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------- ------------------------------------------------- 2012 2011 2010 (a) 2012 2011 2010 --------------- --------------- --------------- --------------- --------------- --------------- Units beginning of year.. 19,473 19,226 -- 52,075 26,235 4,703 Units issued and transferred from other funding options. 2,968 1,095 19,549 11,367 66,609 35,416 Units redeemed and transferred to other funding options....... (756) (848) (323) (30,208) (40,769) (13,884) --------------- --------------- --------------- --------------- --------------- --------------- Units end of year........ 21,685 19,473 19,226 33,234 52,075 26,235 =============== =============== =============== =============== =============== ===============
UIF EMERGING MARKETS DEBT UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION -------------------------------------------------- ------------------------------------------------- 2012 2011 2010 2012 2011 2010 ---------------- --------------- ---------------- ---------------- --------------- --------------- Units beginning of year.. 13,883 259 223 43,435 13,018 442 Units issued and transferred from other funding options. 21,216 14,310 79 30,945 46,847 13,146 Units redeemed and transferred to other funding options....... (2,040) (686) (43) (4,968) (16,430) (570) ---------------- --------------- ---------------- ---------------- --------------- --------------- Units end of year........ 33,059 13,883 259 69,412 43,435 13,018 ================ =============== ================ ================ =============== =============== WELLS FARGO VT TOTAL RETURN BOND INVESTMENT DIVISION ------------------------------------------------- 2012 2011 2010 --------------- --------------- --------------- Units beginning of year.. 8,689 75,281 39,845 Units issued and transferred from other funding options. 26,948 4,877 56,222 Units redeemed and transferred to other funding options....... (6,017) (71,469) (20,786) --------------- --------------- --------------- Units end of year........ 29,620 8,689 75,281 =============== =============== ===============
(a) Commenced November 10, 2008 and began transactions in 2010. (b) Commenced May 3, 2010 and began transactions in 2012. (c) Commenced May 4, 2009 and began transactions in 2011. (d) For the period May 2, 2011 to December 31, 2011. (e) For the period May 3, 2010 to December 31, 2010. (f) For the period April 30, 2012 to December 31, 2012. (g) Commenced May 4, 2009 and began transactions in 2012. 206 207 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS The Company sells a number of variable life products which have unique combinations of features and fees, some of which directly affect the unit values of the Investment Divisions. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The following table is a summary of unit values and units outstanding for the Policies, net investment income ratios, and expense ratios, excluding expenses for the underlying fund, portfolio, or series, for the respective stated periods in the five years ended December 31, 2012:
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ----------------- ------------- AllianceBernstein Global Thematic 2012 11,630 5.32 61,856 Growth Investment Division 2011 914,212 4.70 4,293,695 2010 19,486 6.13 119,488 2009 25,043 5.17 129,504 2008 14,644 3.38 49,447 AllianceBernstein Intermediate Bond 2012 6,675 15.48 103,300 Investment Division 2011 3,232 14.63 47,286 (Commenced 5/1/2005 2010 3,146 13.75 43,265 and began transactions in 2009) 2009 2,242 12.62 28,308 AllianceBernstein International Value 2012 9 17.28 156 Investment Division 2011 9 15.08 141 (Commenced 11/10/2008 2010 73 18.68 1,357 and began transactions in 2010) American Century VP Vista 2012 279 14.73 4,105 Investment Division 2011 679 12.74 8,654 2010 5,360 13.83 74,155 2009 13,115 11.17 146,455 2008 8,686 9.12 79,193 American Funds Bond Investment 2012 397,946 12.53 - 22.37 5,420,310 Division 2011 367,699 11.99 - 21.23 4,735,459 2010 361,073 11.41 - 20.00 4,365,031 2009 335,183 10.81 - 18.79 3,760,642 2008 317,147 9.69 - 16.69 3,143,128 American Funds Global Small 2012 1,947,587 27.80 - 35.48 59,237,806 Capitalization Investment Division 2011 2,037,588 23.74 - 30.03 52,474,989 2010 2,114,920 29.62 - 37.13 67,405,353 2009 2,152,577 24.42 - 30.34 56,054,284 2008 2,098,117 15.27 - 18.81 33,880,750 American Funds Growth Investment 2012 1,269,410 23.60 - 258.21 130,921,222 Division 2011 1,353,057 20.02 - 219.03 118,199,510 2010 1,411,108 20.92 - 228.81 127,437,855 2009 1,419,237 17.62 - 192.80 109,197,492 2008 1,382,286 12.64 - 138.29 76,515,292 American Funds Growth-Income 2012 1,382,116 51.99 - 175.83 79,614,717 Investment Division 2011 1,453,945 44.65 - 149.67 71,256,817 2010 1,483,095 45.89 - 152.46 73,861,194 2009 1,491,242 41.56 - 136.83 66,537,414 2008 1,461,879 31.95 - 104.26 49,610,668 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) -------------- ---------------- ----------------- AllianceBernstein Global Thematic 2012 -- 0.00 13.24 Growth Investment Division 2011 0.43 0.00 (23.40) 2010 1.84 0.00 18.58 2009 -- 0.00 53.14 2008 -- 0.00 (47.48) AllianceBernstein Intermediate Bond 2012 3.42 0.00 5.79 Investment Division 2011 4.56 0.00 6.38 (Commenced 5/1/2005 2010 5.90 0.00 8.93 and began transactions in 2009) 2009 4.18 0.00 18.20 AllianceBernstein International Value 2012 1.66 0.00 14.53 Investment Division 2011 1.92 0.00 (19.25) (Commenced 11/10/2008 2010 2.40 0.00 13.41 and began transactions in 2010) American Century VP Vista 2012 -- 0.00 15.61 Investment Division 2011 -- 0.00 (7.90) 2010 -- 0.00 23.88 2009 -- 0.00 22.47 2008 -- 0.00 (48.63) American Funds Bond Investment 2012 2.55 0.00 - 0.90 4.42 - 5.37 Division 2011 3.08 0.00 - 0.90 5.15 - 6.10 2010 3.15 0.00 - 0.90 5.49 - 6.44 2009 3.37 0.90 11.60 - 12.61 2008 5.80 0.90 (10.12) - (9.37) American Funds Global Small 2012 1.34 0.00 - 0.90 17.11 - 18.18 Capitalization Investment Division 2011 1.33 0.00 - 0.90 (19.87) - (19.14) 2010 1.74 0.00 - 0.90 21.32 - 22.41 2009 0.29 0.90 59.85 - 61.30 2008 -- 0.90 (53.94) - (48.89) American Funds Growth Investment 2012 0.80 0.00 - 0.90 16.83 - 17.89 Division 2011 0.61 0.00 - 0.90 (5.13) - (4.27) 2010 0.73 0.00 - 0.90 17.62 - 18.68 2009 0.67 0.90 38.16 - 39.41 2008 0.86 0.90 (44.47) - 27.72 American Funds Growth-Income 2012 1.64 0.00 - 0.90 16.42 - 17.48 Investment Division 2011 1.57 0.00 - 0.90 (2.71) - (1.83) 2010 1.51 0.00 - 0.90 10.43 - 11.43 2009 1.65 0.90 30.07 - 31.24 2008 1.79 0.90 (38.41) - (35.35)
208 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ----------------- ------------- American Funds High-Income Bond 2012 4,606 12.43 57,231 Investment Division (Commenced 5/3/2010 and began transactions in 2012) American Funds International 2012 18,773 29.41 552,053 Investment Division 2011 21,039 24.94 524,711 (Commenced 4/28/2008) 2010 27,930 28.99 809,625 2009 17,214 27.03 465,344 2008 2,335 18.89 44,134 American Funds U.S. 2012 1,972 22.92 45,192 Government/AAA-Rated 2011 2,025 22.49 45,539 Securities Investment Division 2010 1,810 20.90 37,830 (Commenced 4/28/2008) 2009 4,564 19.77 90,231 2008 1,808 19.29 34,883 Dreyfus VIF International Value 2012 16,013 12.81 205,133 Investment Division 2011 16,153 11.40 184,061 2010 16,502 14.03 231,464 2009 21,676 13.45 291,742 2008 33,156 10.30 341,560 Fidelity VIP Asset Manager: Growth 2012 164,596 11.95 1,966,232 Investment Division 2011 138,116 10.36 1,430,516 2010 172,460 11.05 1,905,608 2009 181,097 9.51 1,722,435 2008 126,890 7.16 908,867 Fidelity VIP Contrafund Investment 2012 147,414 15.89 2,343,022 Division 2011 157,450 13.67 2,151,649 2010 190,755 14.04 2,677,373 2009 332,757 11.99 3,988,185 2008 218,160 8.83 1,927,330 Fidelity VIP Equity-Income 2012 4,431 14.06 62,291 Investment Division 2011 1,549 12.00 18,589 2010 17,040 11.90 202,690 2009 23,778 10.33 245,766 2008 72,691 7.95 577,801 Fidelity VIP Freedom 2010 2012 3,378 11.73 39,638 Investment Division 2011 3,238 10.55 34,144 (Commenced 4/28/2008) 2010 3,002 10.61 31,860 2009 1,541 9.44 - 12.05 14,548 2008 3,089 7.63 - 9.69 23,569 Fidelity VIP Freedom 2020 2012 51,279 11.29 - 15.34 764,724 Investment Division 2011 53,514 10.01 - 13.53 699,714 (Commenced 4/28/2008) 2010 56,297 10.16 - 13.67 738,702 2009 56,341 8.91 - 11.94 648,511 2008 4,617 6.94 - 9.26 37,721 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) -------------- ---------------- ----------------- American Funds High-Income Bond 2012 5.70 0.00 6.93 Investment Division (Commenced 5/3/2010 and began transactions in 2012) American Funds International 2012 1.43 0.00 17.91 Investment Division 2011 1.50 0.00 (13.96) (Commenced 4/28/2008) 2010 2.23 0.00 7.23 2009 1.51 0.00 43.07 2008 2.51 0.00 (39.19) American Funds U.S. 2012 1.00 0.00 1.90 Government/AAA-Rated 2011 1.73 0.00 7.57 Securities Investment Division 2010 1.49 0.00 5.75 (Commenced 4/28/2008) 2009 3.32 0.00 2.50 2008 2.26 0.00 6.61 Dreyfus VIF International Value 2012 2.56 0.00 12.42 Investment Division 2011 1.88 0.00 (18.76) 2010 1.53 0.00 4.22 2009 3.77 0.00 30.67 2008 2.14 0.00 (37.50) Fidelity VIP Asset Manager: Growth 2012 1.40 0.00 15.34 Investment Division 2011 1.33 0.00 (6.27) 2010 1.12 0.00 16.18 2009 1.60 0.00 32.79 2008 1.87 0.00 (35.88) Fidelity VIP Contrafund Investment 2012 1.22 0.00 16.31 Division 2011 0.83 0.00 (2.64) 2010 0.96 0.00 17.11 2009 1.48 0.00 35.66 2008 0.90 0.00 (42.60) Fidelity VIP Equity-Income 2012 5.62 0.00 17.19 Investment Division 2011 0.35 0.00 0.86 2010 1.60 0.00 15.09 2009 1.95 0.00 30.03 2008 1.89 0.00 (42.69) Fidelity VIP Freedom 2010 2012 1.97 0.00 11.28 Investment Division 2011 2.18 0.00 (0.63) (Commenced 4/28/2008) 2010 2.67 0.00 12.45 2009 3.32 0.45 23.72 - 24.27 2008 6.53 0.45 (23.71) - (23.48) Fidelity VIP Freedom 2020 2012 2.06 0.00 12.87 - 13.38 Investment Division 2011 2.10 0.00 (1.47) - (1.03) (Commenced 4/28/2008) 2010 2.26 0.00 13.98 - 14.49 2009 4.16 0.45 28.40 - 28.97 2008 4.51 0.45 (30.60) - (30.39)
209 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ---------------- ------------- Fidelity VIP Freedom 2030 2012 3,939 10.87 42,834 Investment Division 2011 6,028 9.45 - 13.00 56,970 (Commenced 4/28/2008) 2010 9,011 9.75 - 13.35 108,191 2009 3,665 8.43 - 11.50 31,738 2008 3,324 6.43 - 8.74 21,387 Fidelity VIP Freedom 2050 2012 1,468 12.12 17,799 Investment Division 2011 1,492 10.34 15,438 (Commenced 5/4/2009 and began transactions in 2011) Fidelity VIP High Income 2012 8,955 18.44 165,146 Investment Division 2011 2,677 16.14 43,223 (Commenced 4/28/2008 and began 2010 294 15.52 4,565 transactions in 2009) 2009 3,001 13.63 40,915 Fidelity VIP Investment Grade Bond 2012 144,729 15.79 2,285,792 Investment Division 2011 117,053 14.93 1,747,852 2010 38,436 13.93 535,344 2009 18,087 12.93 233,950 2008 3,908 11.18 43,701 Fidelity VIP Mid Cap Investment 2012 26,557 28.20 748,919 Division (Commenced 4/28/2008) 2011 24,942 24.62 613,958 2010 16,733 27.61 462,031 2009 10,051 21.48 215,869 2008 2,071 15.37 31,825 FTVIPT Mutual Global Discovery 2012 40,339 19.91 803,176 Securities Investment Division 2011 44,626 17.56 783,835 2010 53,444 18.10 967,332 2009 54,588 16.17 882,515 2008 140,006 13.11 1,835,518 FTVIPT Templeton Foreign Securities 2012 225,312 17.59 3,962,470 Investment Division 2011 203,775 14.83 3,021,785 2010 558,309 16.56 9,244,694 2009 520,792 15.24 7,935,141 2008 527,866 11.09 5,856,168 FTVIPT Templeton Global Bond 2012 18,556 23.82 442,101 Securities Investment Division 2011 14,004 20.66 289,345 (Commenced 5/4/2009) 2010 179 20.79 3,728 2009 204 18.12 3,704 Goldman Sachs Mid-Cap Value 2012 15,625 16.52 258,154 Investment Division 2011 19,234 13.95 268,248 2010 24,643 14.90 367,089 2009 27,552 11.92 328,341 2008 102,102 8.95 913,808 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Fidelity VIP Freedom 2030 2012 1.84 0.00 15.06 Investment Division 2011 1.97 0.00 (3.03) - (2.59) (Commenced 4/28/2008) 2010 2.42 0.00 15.56 - 16.08 2009 2.47 0.45 31.07 - 31.66 2008 6.89 0.45 (35.65) - (35.46) Fidelity VIP Freedom 2050 2012 2.12 0.00 17.20 Investment Division 2011 1.77 0.00 (5.36) (Commenced 5/4/2009 and began transactions in 2011) Fidelity VIP High Income 2012 14.49 0.00 14.23 Investment Division 2011 37.24 0.00 4.03 (Commenced 4/28/2008 and began 2010 4.94 0.00 13.82 transactions in 2009) 2009 26.74 0.00 43.96 Fidelity VIP Investment Grade Bond 2012 1.95 0.00 5.77 Investment Division 2011 4.67 0.00 7.21 2010 4.23 0.00 7.68 2009 10.75 0.00 15.67 2008 1.19 0.00 (3.35) Fidelity VIP Mid Cap Investment 2012 0.42 0.00 14.56 Division (Commenced 4/28/2008) 2011 0.03 0.00 (10.85) 2010 0.15 0.00 28.57 2009 0.29 0.00 39.75 2008 0.15 0.00 (46.25) FTVIPT Mutual Global Discovery 2012 2.67 0.00 13.36 Securities Investment Division 2011 2.31 0.00 (2.96) 2010 1.39 0.00 11.96 2009 0.75 0.00 23.31 2008 2.51 0.00 (28.44) FTVIPT Templeton Foreign Securities 2012 3.26 0.00 18.60 Investment Division 2011 1.67 0.00 (10.44) 2010 2.02 0.00 8.67 2009 3.61 0.00 37.34 2008 2.58 0.00 (40.23) FTVIPT Templeton Global Bond 2012 6.56 0.00 15.31 Securities Investment Division 2011 3.79 0.00 (0.61) (Commenced 5/4/2009) 2010 0.20 0.00 14.71 2009 -- 0.00 95.55 Goldman Sachs Mid-Cap Value 2012 1.06 0.00 18.47 Investment Division 2011 0.67 0.00 (6.37) 2010 0.70 0.00 25.00 2009 1.09 0.00 33.15 2008 1.06 0.00 (37.33)
210 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ---------------- ------------- Goldman Sachs Structured Small Cap 2012 1,925 13.67 26,317 Equity Investment Division 2011 4,148 12.12 50,259 2010 4,258 12.04 51,252 2009 7,623 9.25 70,508 2008 6,818 7.24 49,396 Invesco V.I. Global Real Estate 2012 73,934 35.37 2,614,736 Investment Division 2011 54,002 27.60 1,490,644 2010 54,093 29.53 1,597,111 2009 59,960 25.13 1,506,522 2008 76,172 19.10 1,455,085 Invesco V.I. Government Securities 2012 22 13.99 311 Investment Division 2011 1,570 13.69 21,491 (Commenced 5/2/2011) Invesco V.I. International Growth 2012 314,797 20.67 6,506,152 Investment Division 2011 1,308 17.89 23,407 (Commenced 4/28/2008 2010 14,201 19.18 272,411 and began transactions in 2009) 2009 1,080 17.00 18,360 Invesco V.I. Van Kampen Comstock 2012 18,847 12.59 237,306 Investment Division 2011 17,951 10.59 190,062 (Commenced 5/3/2010) 2010 2,966 10.82 32,084 Janus Aspen Balanced Investment 2012 59,065 18.63 1,100,549 Division 2011 81,522 16.43 1,339,788 2010 155,834 16.22 2,526,859 2009 99,381 15.00 1,490,464 2008 20,633 11.94 246,409 Janus Aspen Forty Investment 2012 46,505 19.09 887,847 Division 2011 45,616 15.41 703,136 2010 73,218 16.56 1,212,768 2009 61,130 15.56 950,941 2008 45,182 10.65 475,295 Janus Aspen Janus Investment 2012 81,921 11.86 971,677 Division 2011 85,791 10.00 858,094 2010 741,523 10.56 7,832,002 2009 718,894 9.22 6,630,451 2008 685,791 6.76 4,638,873 Janus Aspen Overseas Investment 2012 17,627 25.07 441,942 Division (Commenced 4/28/2008) 2011 15,536 22.15 344,135 2010 11,481 32.74 375,851 2009 3,135 26.19 82,093 2008 1,777 14.62 25,984 MFS VIT Global Equity Investment 2012 7,233 18.72 135,428 Division 2011 356 15.23 5,414 2010 14,222 15.95 226,794 2009 5,543 14.23 78,884 2008 5,386 10.80 58,159 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Goldman Sachs Structured Small Cap 2012 1.02 0.00 12.83 Equity Investment Division 2011 0.82 0.00 0.67 2010 0.57 0.00 30.12 2009 1.46 0.00 27.67 2008 0.66 0.00 (33.96) Invesco V.I. Global Real Estate 2012 0.56 0.00 28.12 Investment Division 2011 4.08 0.00 (6.51) 2010 5.17 0.00 17.51 2009 -- 0.00 31.53 2008 5.47 0.00 (44.65) Invesco V.I. Government Securities 2012 -- 0.00 10.11 Investment Division 2011 -- 0.00 7.73 (Commenced 5/2/2011) Invesco V.I. International Growth 2012 1.58 0.00 15.53 Investment Division 2011 1.52 0.00 (6.74) (Commenced 4/28/2008 2010 2.40 0.00 12.86 and began transactions in 2009) 2009 1.38 0.00 35.24 Invesco V.I. Van Kampen Comstock 2012 1.58 0.00 18.92 Investment Division 2011 0.44 0.00 (2.11) (Commenced 5/3/2010) 2010 -- 0.00 19.94 Janus Aspen Balanced Investment 2012 2.26 0.00 13.37 Division 2011 2.04 0.00 1.36 2010 2.71 0.00 8.12 2009 2.93 0.00 25.58 2008 3.65 0.00 (16.08) Janus Aspen Forty Investment 2012 0.56 0.00 23.86 Division 2011 0.24 0.00 (6.94) 2010 0.24 0.00 6.48 2009 0.01 0.00 46.01 2008 0.01 0.00 (44.31) Janus Aspen Janus Investment 2012 0.56 0.00 18.59 Division 2011 0.24 0.00 (5.30) 2010 1.09 0.00 14.52 2009 0.54 0.00 36.35 2008 0.74 0.00 (39.71) Janus Aspen Overseas Investment 2012 0.63 0.00 13.18 Division (Commenced 4/28/2008) 2011 0.10 0.00 (32.34) 2010 0.73 0.00 25.02 2009 0.46 0.00 79.07 2008 -- 0.00 (52.68) MFS VIT Global Equity Investment 2012 0.22 0.00 22.98 Division 2011 0.67 0.00 (4.53) 2010 0.78 0.00 12.05 2009 2.04 0.00 31.80 2008 0.76 0.00 (33.95)
211 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ----------------- ------------- MFS VIT High Income Investment 2012 9,265 17.41 161,267 Division 2011 8,896 15.21 135,311 2010 9,020 14.65 132,109 2009 9,209 12.80 117,897 2008 354 8.82 3,111 MFS VIT New Discovery Investment 2012 9,204 18.68 171,983 Division 2011 7,919 15.46 122,395 2010 7,814 17.27 134,923 2009 396 12.70 5,029 2008 249 7.80 1,942 MFS VIT Value Investment Division 2012 1,049 16.36 17,162 2011 3,138 14.12 44,299 2010 5,577 14.18 79,095 2009 5,803 12.75 74,001 2008 6,081 10.41 63,334 MIST AllianceBernstein Global 2012 656 10.82 7,098 Dynamic Allocation Investment Division (Commenced 4/30/2012) MIST American Funds Balanced 2012 54,591 11.57 631,423 Allocation Investment Division 2011 50,766 10.16 515,995 (Commenced 4/28/2008) 2010 41,296 10.35 427,406 2009 23,102 9.21 212,728 2008 1,427 7.08 10,107 MIST American Funds Growth 2012 84,318 10.99 926,978 Allocation Investment Division 2011 82,817 9.43 781,245 (Commenced 4/28/2008) 2010 71,574 9.87 706,300 2009 15,564 8.67 134,986 2008 2,439 6.45 15,747 MIST American Funds Moderate 2012 49,584 11.85 587,686 Allocation Investment Division 2011 37,706 10.65 401,606 (Commenced 4/28/2008) 2010 23,584 10.60 250,094 2009 9,961 9.63 95,893 2008 593 7.77 4,607 MIST AQR Global Risk Balanced 2012 2,358 10.51 24,784 Investment Division (Commenced 4/30/2012) MIST BlackRock Global Tactical 2012 3,707 10.54 39,078 Strategies Investment Division (Commenced 4/30/2012) MIST BlackRock Large Cap Core 2012 11,913,338 9.54 - 41.30 307,558,825 Investment Division 2011 12,762,727 8.43 - 36.66 291,615,739 2010 13,468,383 8.42 - 36.79 309,489,536 2009 14,107,746 7.50 - 32.93 291,577,776 2008 14,670,780 6.31 - 27.82 258,799,279 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ------------------ MFS VIT High Income Investment 2012 7.49 0.00 14.43 Division 2011 8.93 0.00 3.86 2010 7.00 0.00 14.40 2009 1.48 0.00 45.22 2008 10.38 0.00 (28.67) MFS VIT New Discovery Investment 2012 -- 0.00 20.90 Division 2011 -- 0.00 (10.49) 2010 -- 0.00 35.94 2009 -- 0.00 62.92 2008 -- 0.00 (39.52) MFS VIT Value Investment Division 2012 1.77 0.00 15.88 2011 1.45 0.00 (0.47) 2010 1.32 0.00 11.22 2009 1.24 0.00 22.45 2008 6.73 0.00 (32.72) MIST AllianceBernstein Global 2012 -- 0.00 4.39 Dynamic Allocation Investment Division (Commenced 4/30/2012) MIST American Funds Balanced 2012 1.94 0.00 13.80 Allocation Investment Division 2011 1.44 0.00 (1.80) (Commenced 4/28/2008) 2010 1.26 0.00 12.40 2009 -- 0.00 30.06 2008 5.25 0.00 (29.27) MIST American Funds Growth 2012 1.55 0.00 16.54 Allocation Investment Division 2011 1.38 0.00 (4.41) (Commenced 4/28/2008) 2010 0.62 0.00 13.78 2009 -- 0.00 34.36 2008 8.38 0.00 (35.51) MIST American Funds Moderate 2012 2.15 0.00 11.28 Allocation Investment Division 2011 1.66 0.00 0.44 (Commenced 4/28/2008) 2010 1.38 0.00 10.15 2009 -- 0.00 23.90 2008 6.80 0.00 (22.46) MIST AQR Global Risk Balanced 2012 -- 0.00 4.63 Investment Division (Commenced 4/30/2012) MIST BlackRock Global Tactical 2012 -- 0.00 4.21 Strategies Investment Division (Commenced 4/30/2012) MIST BlackRock Large Cap Core 2012 1.21 0.00 - 0.90 12.66 - 13.68 Investment Division 2011 1.12 0.00 - 0.90 (0.36) - 0.54 2010 1.34 0.00 - 0.90 11.73 - 12.73 2009 1.61 0.45 - 0.90 18.37 - 19.43 2008 0.70 0.45 - 0.90 (37.68) - (31.87)
212 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 --------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ---------------- ------------- MIST Clarion Global Real Estate 2012 1,388,419 17.60 - 19.03 26,083,318 Investment Division 2011 1,311,823 14.06 - 15.06 19,560,387 2010 1,342,988 14.98 - 15.90 21,160,564 2009 1,332,507 13.00 - 13.68 18,066,465 2008 1,247,223 9.71 - 10.12 12,525,455 MIST Dreman Small Cap Value 2012 2,300 16.76 38,553 Investment Division 2011 2,480 14.49 35,938 (Commenced 4/28/2008) 2010 1,705 16.12 27,489 2009 1,271 13.49 17,136 2008 11 10.45 120 MIST Harris Oakmark International 2012 1,421,965 12.34 - 24.19 33,602,695 Investment Division 2011 1,483,192 9.53 - 18.68 27,216,742 2010 1,473,309 20.09 - 21.72 31,544,698 2009 1,439,875 17.38 - 18.61 26,459,351 2008 1,337,674 11.28 - 11.97 15,844,670 MIST Invesco Balanced-Risk 2012 7,100 1.06 7,513 Allocation Investment Division (Commenced 4/30/2012) MIST Invesco Small Cap Growth 2012 245,733 17.38 - 21.67 4,616,668 Investment Division 2011 279,254 14.80 - 18.28 4,412,967 2010 280,254 15.06 - 18.44 4,469,898 2009 268,049 12.01 - 14.58 3,392,636 2008 230,618 9.03 - 10.86 2,187,257 MIST Janus Forty Investment Division 2012 1,085,660 12.25 - 404.14 15,566,776 2011 1,093,634 10.07 - 329.01 12,484,277 2010 1,185,626 10.96 - 355.01 14,254,655 2009 1,122,196 10.08 - 323.68 12,100,411 2008 943,170 7.10 - 226.02 6,915,393 MIST JPMorgan Global Active 2012 17,811 1.06 18,883 Allocation Investment Division (Commenced 4/30/2012) MIST Legg Mason ClearBridge 2012 1,313,742 9.48 - 11.14 14,226,385 Aggressive Growth Investment 2011 1,353,551 7.98 - 9.38 12,365,794 Division 2010 888,257 7.56 - 9.05 7,832,576 2009 918,435 6.11 - 7.30 6,533,459 2008 929,444 4.59 - 5.47 4,956,827 MIST Lord Abbett Bond Debenture 2012 1,063,203 23.01 - 34.98 28,515,095 Investment Division 2011 1,085,311 20.52 - 30.90 25,730,993 2010 1,222,207 19.75 - 29.48 27,673,730 2009 1,300,112 17.61 - 26.05 26,033,742 2008 1,205,110 12.96 - 19.00 17,548,678 MIST Lord Abbett Mid Cap Value 2012 2,873,152 15.40 - 32.87 74,892,920 Investment Division 2011 9,000 13.43 120,858 2010 7,974 13.94 111,190 2009 9,319 11.11 103,521 2008 10,463 8.78 91,851 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST Clarion Global Real Estate 2012 2.22 0.00 - 0.90 25.16 - 26.30 Investment Division 2011 4.03 0.00 - 0.90 (6.12) - (5.28) 2010 8.28 0.00 - 0.90 15.24 - 16.28 2009 3.50 0.90 33.91 - 35.12 2008 2.00 0.90 (44.73) - (41.56) MIST Dreman Small Cap Value 2012 0.95 0.00 15.66 Investment Division 2011 1.63 0.00 (10.12) (Commenced 4/28/2008) 2010 0.82 0.00 19.53 2009 -- 0.00 29.09 2008 -- 0.00 (25.08) MIST Harris Oakmark International 2012 1.82 0.00 - 0.90 28.31 - 29.47 Investment Division 2011 0.03 0.00 - 0.90 (14.75) - (13.98) 2010 2.05 0.00 - 0.90 15.63 - 16.67 2009 7.87 0.90 54.07 - 55.46 2008 1.96 0.90 (41.26) - (37.26) MIST Invesco Balanced-Risk 2012 0.66 0.00 4.67 Allocation Investment Division (Commenced 4/30/2012) MIST Invesco Small Cap Growth 2012 -- 0.00 - 0.90 17.44 - 18.51 Investment Division 2011 -- 0.00 - 0.90 (1.73) - (0.85) 2010 -- 0.00 - 0.90 25.34 - 26.47 2009 -- 0.90 33.01 - 34.21 2008 -- 0.90 (38.73) - (34.43) MIST Janus Forty Investment Division 2012 0.43 0.00 - 0.90 21.73 - 22.83 2011 1.80 0.00 - 0.90 (8.16) - (7.32) 2010 1.71 0.00 - 0.90 8.70 - 9.68 2009 -- 0.90 41.93 - 43.21 2008 4.58 0.90 (44.68) - (41.84) MIST JPMorgan Global Active 2012 1.08 0.00 4.66 Allocation Investment Division (Commenced 4/30/2012) MIST Legg Mason ClearBridge 2012 0.21 0.00 - 0.90 8.91 - 18.81 Aggressive Growth Investment 2011 0.08 0.00 - 0.90 (8.33) - 3.56 Division 2010 0.06 0.00 - 0.90 22.94 - 24.05 2009 0.12 0.90 32.26 - 33.45 2008 0.01 0.90 (39.49) - (36.35) MIST Lord Abbett Bond Debenture 2012 7.24 0.00 - 0.90 12.17 - 13.19 Investment Division 2011 5.96 0.00 - 0.90 3.89 - 4.83 2010 6.47 0.00 - 0.90 12.16 - 13.18 2009 7.18 0.45 - 0.90 35.89 - 37.12 2008 4.38 0.45 - 0.90 (19.13) - (18.40) MIST Lord Abbett Mid Cap Value 2012 -- 0.00 - 0.90 2.78 - 3.71 Investment Division 2011 0.53 0.00 (3.69) 2010 0.58 0.00 25.53 2009 2.10 0.00 26.53 2008 0.25 0.00 (38.78)
213 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ---------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ----------------- ------------- MIST Met/Franklin Income 2012 25,391 13.39 340,094 Investment Division 2011 19,993 11.88 237,483 (Commenced 4/28/2008) 2010 13,040 11.60 151,292 2009 5,364 10.35 55,505 2008 2,408 8.08 19,461 MIST Met/Franklin Mutual Shares 2012 11,193 10.59 118,548 Investment Division 2011 8,617 9.27 79,913 (Commenced 4/28/2008) 2010 6,134 9.30 57,042 2009 2,904 8.36 24,280 2008 1,208 6.68 8,064 MIST Met/Franklin Templeton 2012 27,629 11.60 320,390 Founding Strategy Investment 2011 27,693 9.96 275,812 Division (Commenced 4/28/2008) 2010 25,753 10.11 260,280 2009 21,298 9.16 195,055 2008 1,503 7.11 10,681 MIST Met/Templeton Growth 2012 6,221 10.90 67,807 Investment Division 2011 6,014 8.90 53,526 (Commenced 4/28/2008) 2010 5,088 9.53 48,492 2009 2,173 8.83 19,197 2008 480 6.64 3,188 MIST Met/Templeton International 2012 181 14.36 2,605 Bond Investment Division (Commenced 4/30/2012) MIST MetLife Aggressive 2012 1,085,674 12.72 - 133.49 15,142,596 Strategy Investment Division 2011 1,049,786 10.97 - 114.35 12,472,661 (Commenced 5/2/2011) MIST MetLife Balanced Plus 2012 4,287 10.71 45,933 Investment Division (Commenced 4/30/2012) MIST MFS Emerging Markets 2012 6,737 13.20 88,957 Equity Investment Division 2011 2,070 11.09 22,950 (Commenced 5/2/2011) MIST MFS Research International 2012 920,691 15.26 - 17.85 15,720,813 Investment Division 2011 820,338 13.07 - 15.26 12,176,899 2010 838,110 14.64 - 17.04 13,920,818 2009 885,756 13.14 - 15.26 13,178,754 2008 870,603 9.99 - 11.57 9,814,566 MIST MLA Mid Cap Investment 2012 334,423 13.59 - 18.16 5,197,739 Division 2011 358,406 12.90 - 17.20 5,277,678 2010 360,447 13.62 - 18.13 5,585,124 2009 362,314 11.09 - 14.71 4,569,758 2008 371,732 8.11 - 10.73 3,422,640 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) -------------- ---------------- ------------------ MIST Met/Franklin Income 2012 4.65 0.00 12.76 Investment Division 2011 4.33 0.00 2.39 (Commenced 4/28/2008) 2010 3.26 0.00 12.13 2009 -- 0.00 28.05 2008 4.29 0.00 (19.19) MIST Met/Franklin Mutual Shares 2012 0.74 0.00 14.20 Investment Division 2011 2.90 0.00 (0.27) (Commenced 4/28/2008) 2010 -- 0.00 11.23 2009 -- 0.00 25.15 2008 3.53 0.00 (33.20) MIST Met/Franklin Templeton 2012 4.13 0.00 16.43 Founding Strategy Investment 2011 1.86 0.00 (1.45) Division (Commenced 4/28/2008) 2010 -- 0.00 10.36 2009 -- 0.00 28.84 2008 7.79 0.00 (28.92) MIST Met/Templeton Growth 2012 1.65 0.00 22.48 Investment Division 2011 1.44 0.00 (6.61) (Commenced 4/28/2008) 2010 0.98 0.00 7.88 2009 0.02 0.00 33.08 2008 1.08 0.00 (33.62) MIST Met/Templeton International 2012 -- 0.00 8.00 Bond Investment Division (Commenced 4/30/2012) MIST MetLife Aggressive 2012 0.85 0.00 - 0.90 (0.17) - 3.96 Strategy Investment Division 2011 -- 0.00 - 0.90 (13.94) - (10.95) (Commenced 5/2/2011) MIST MetLife Balanced Plus 2012 -- 0.00 5.63 Investment Division (Commenced 4/30/2012) MIST MFS Emerging Markets 2012 1.57 0.00 19.10 Equity Investment Division 2011 -- 0.00 (22.19) (Commenced 5/2/2011) MIST MFS Research International 2012 2.10 0.00 - 0.90 15.92 - 16.97 Investment Division 2011 2.07 0.00 - 0.90 (11.23) - (10.44) 2010 1.89 0.00 - 0.90 10.65 - 11.65 2009 3.35 0.90 30.75 - 31.93 2008 2.06 0.90 (42.78) - (41.00) MIST MLA Mid Cap Investment 2012 0.63 0.00 - 0.90 4.64 - 5.59 Division 2011 0.92 0.00 - 0.90 (5.98) - (5.13) 2010 1.05 0.00 - 0.90 22.15 - 23.25 2009 1.34 0.90 35.92 - 37.14 2008 1.17 0.90 (38.70) - (36.07)
214 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ---------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ----------------- ------------- MIST Morgan Stanley Mid Cap 2012 11,831,703 6.82 - 19.14 186,491,111 Growth Investment Division 2011 12,356,734 6.22 - 17.47 178,350,417 2010 13,121,650 6.67 - 18.71 203,754,931 2009 23,317 13.14 - 14.13 306,427 2008 1,987 8.35 - 8.96 16,600 MIST PIMCO Inflation Protected 2012 837,709 12.64 - 19.05 13,671,560 Bond Investment Division 2011 700,157 11.56 - 17.42 10,519,501 2010 653,613 12.97 - 15.63 8,812,538 2009 618,801 12.12 - 14.47 7,734,444 2008 523,888 10.33 - 12.23 5,523,166 MIST PIMCO Total Return 2012 2,365,572 11.82 - 21.86 50,485,893 Investment Division 2011 2,427,091 10.79 - 19.95 47,131,879 2010 2,450,427 17.69 - 19.29 46,602,262 2009 2,378,221 16.46 - 17.80 41,820,317 2008 2,287,745 14.03 - 15.03 34,041,059 MIST Pioneer Fund Investment 2012 13,454 14.47 194,664 Division (Commenced 5/4/2009) 2011 13,480 13.08 176,354 2010 17,938 13.71 245,860 2009 20,277 11.79 239,136 MIST RCM Technology Investment 2012 1,716,827 7.43 - 8.25 13,932,280 Division 2011 1,828,123 6.67 - 7.34 13,216,535 2010 2,007,835 7.46 - 8.14 16,113,886 2009 2,111,049 5.87 - 6.34 13,221,048 2008 1,806,845 3.72 - 3.99 7,121,496 MIST Schroders Global Multi-Asset 2012 5,334 1.08 5,752 Investment Division (Commenced 4/30/2012) MIST SSgA Growth and Income 2012 450,776 12.95 - 14.59 6,167,640 ETF Investment Division 2011 381,525 11.55 - 12.90 4,611,127 2010 320,284 11.51 - 12.74 3,818,907 2009 149,333 10.31 - 11.31 1,581,109 2008 39,742 8.33 - 9.05 336,449 MIST SSgA Growth ETF Investment 2012 332,667 12.10 - 13.90 4,244,488 Division 2011 299,115 10.59 - 12.05 3,309,518 2010 237,751 10.89 - 12.28 2,679,381 2009 181,473 9.61 - 10.74 1,789,007 2008 59,898 7.48 - 8.29 457,331 MIST T. Rowe Price Large Cap Value 2012 112,114 11.78 1,320,515 Investment Division 2011 108,604 9.96 1,081,554 2010 601,441 10.35 6,224,061 2009 585,353 8.82 5,163,011 2008 569,914 7.43 - 48.32 4,235,811 MIST T. Rowe Price Mid Cap Growth 2012 1,544,904 12.50 - 20.49 21,145,655 Investment Division 2011 1,957,835 11.07 - 18.03 25,204,627 2010 1,725,748 11.33 - 18.33 21,234,908 2009 1,754,850 8.93 - 14.35 16,772,681 2008 1,702,757 6.18 - 9.87 11,162,717 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) -------------- ---------------- ------------------ MIST Morgan Stanley Mid Cap 2012 -- 0.00 - 0.90 8.57 - 9.55 Growth Investment Division 2011 0.73 0.00 - 0.90 (7.50) - (6.67) 2010 -- 0.00 - 0.90 17.91 - 32.19 2009 -- 0.00 57.27 - 57.83 2008 1.36 0.00 (46.77) - (43.85) MIST PIMCO Inflation Protected 2012 3.14 0.00 - 0.90 8.34 - 20.51 Bond Investment Division 2011 1.74 0.00 - 0.90 10.23 - 11.49 2010 2.54 0.00 - 0.90 7.04 - 8.00 2009 3.75 0.90 17.31 - 18.37 2008 3.28 0.90 (9.73) - (6.61) MIST PIMCO Total Return 2012 3.30 0.00 - 0.90 8.57 - 9.56 Investment Division 2011 2.84 0.00 - 0.90 2.50 - 3.42 2010 3.66 0.00 - 0.90 7.44 - 8.41 2009 7.36 0.90 17.33 - 18.39 2008 3.92 0.90 (1.28) - 0.61 MIST Pioneer Fund Investment 2012 1.53 0.00 10.59 Division (Commenced 5/4/2009) 2011 1.21 0.00 (4.55) 2010 0.90 0.00 17.93 2009 -- 0.00 17.93 MIST RCM Technology Investment 2012 -- 0.00 - 0.90 11.42 - 12.43 Division 2011 -- 0.00 - 0.90 (10.60) - (9.79) 2010 -- 0.00 - 0.90 27.12 - 28.27 2009 -- 0.90 57.74 - 59.17 2008 13.07 0.90 (44.79) - (37.82) MIST Schroders Global Multi-Asset 2012 1.48 0.00 6.68 Investment Division (Commenced 4/30/2012) MIST SSgA Growth and Income 2012 2.40 0.00 - 0.90 12.09 - 13.11 ETF Investment Division 2011 1.79 0.00 - 0.90 0.37 - 1.28 2010 1.29 0.00 - 0.90 11.60 - 12.61 2009 1.61 0.90 23.84 - 24.96 2008 1.95 0.90 (25.54) - (23.99) MIST SSgA Growth ETF Investment 2012 2.07 0.00 - 0.90 14.28 - 15.32 Division 2011 1.76 0.00 - 0.90 (2.75) - (1.86) 2010 1.57 0.00 - 0.90 13.35 - 14.37 2009 1.53 0.90 28.34 - 29.51 2008 1.65 0.90 (33.42) - (30.82) MIST T. Rowe Price Large Cap Value 2012 1.62 0.00 18.27 Investment Division 2011 0.51 0.00 (3.77) 2010 1.22 0.00 17.33 2009 2.45 0.00 18.67 2008 1.80 0.00 (36.20) - (32.76) MIST T. Rowe Price Mid Cap Growth 2012 -- 0.00 - 0.90 12.90 - 13.93 Investment Division 2011 -- 0.00 - 0.90 (2.28) - (1.39) 2010 -- 0.00 - 0.90 26.93 - 28.07 2009 -- 0.90 44.54 - 45.85 2008 0.07 0.90 (40.16) - (37.28)
215 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ---------------- ------------- MIST Third Avenue Small Cap Value 2012 50,513 17.46 881,737 Investment Division 2011 54,483 14.79 806,051 2010 96,930 16.25 1,575,589 2009 66,457 13.56 900,994 2008 22,742 10.72 243,831 MSF Baillie Gifford International 2012 2,785,901 11.92 - 17.95 40,399,665 Stock Investment Division 2011 2,947,427 10.02 - 15.01 35,919,561 2010 2,985,340 12.56 - 18.74 45,766,876 2009 3,130,833 11.77 - 17.48 45,163,862 2008 3,272,041 9.71 - 14.31 38,994,328 MSF Barclays Capital Aggregate 2012 5,528,875 18.38 - 21.34 116,415,557 Bond Index Investment Division 2011 5,367,889 17.85 - 20.54 108,763,587 2010 6,069,208 16.75 - 19.11 114,484,755 2009 5,979,612 15.94 - 18.02 106,351,639 2008 5,705,639 15.30 - 17.13 96,524,738 MSF BlackRock Aggressive Growth 2012 8,053,406 18.55 - 70.35 190,699,476 Investment Division 2011 8,613,267 16.80 - 63.39 184,990,795 2010 9,010,506 17.39 - 65.35 200,141,525 2009 9,655,662 15.15 - 56.68 187,532,635 2008 10,226,808 10.19 - 37.93 134,277,037 MSF BlackRock Bond Income 2012 3,286,524 20.08 - 95.09 85,513,325 Investment Division 2011 3,448,815 18.67 - 88.42 84,065,205 2010 3,695,898 17.52 - 82.97 84,862,836 2009 3,849,026 16.17 - 76.59 82,419,233 2008 4,137,787 14.77 - 69.96 81,985,350 MSF BlackRock Diversified 2012 9,597,280 17.41 - 70.46 266,981,783 Investment Division 2011 10,223,668 15.50 - 62.70 255,554,192 2010 10,826,228 14.93 - 60.41 263,102,316 2009 11,480,151 13.61 - 55.09 257,391,816 2008 12,136,197 11.61 - 46.97 235,715,981 MSF BlackRock Large Cap Value 2012 972,398 13.53 - 14.89 14,290,950 Investment Division 2011 1,036,664 11.95 - 13.03 13,313,052 2010 1,026,360 11.78 - 12.73 12,899,137 2009 1,018,697 10.88 - 11.66 11,723,889 2008 924,995 9.87 - 10.48 9,571,372 MSF BlackRock Legacy Large Cap 2012 1,083,757 10.67 - 42.95 14,012,099 Growth Investment Division 2011 533,802 9.33 - 37.56 7,367,810 2010 494,998 10.25 - 41.25 7,322,523 2009 480,438 8.55 - 34.42 5,950,495 2008 413,693 6.25 - 25.16 3,786,888 MSF BlackRock Money Market 2012 1,306,002 17.35 - 17.98 23,274,454 Investment Division 2011 1,163,332 17.51 - 17.98 20,783,208 2010 1,663,896 17.66 - 17.98 29,818,336 2009 1,962,757 17.82 - 17.98 35,228,518 2008 3,533,477 17.90 - 17.91 63,265,014 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST Third Avenue Small Cap Value 2012 -- 0.00 17.99 Investment Division 2011 0.92 0.00 (8.98) 2010 1.05 0.00 19.90 2009 0.62 0.00 26.45 2008 0.70 0.00 (29.73) MSF Baillie Gifford International 2012 1.37 0.00 - 0.90 18.44 - 19.52 Stock Investment Division 2011 1.77 0.00 - 0.90 (20.59) - (19.87) 2010 1.57 0.00 - 0.90 6.25 - 7.21 2009 0.71 0.45 - 0.90 21.07 - 22.17 2008 3.13 0.45 - 0.90 (44.63) - (40.37) MSF Barclays Capital Aggregate 2012 3.71 0.00 - 0.90 2.97 - 3.90 Bond Index Investment Division 2011 3.52 0.00 - 0.90 6.55 - 7.51 2010 3.72 0.00 - 0.90 5.10 - 6.05 2009 5.95 0.45 - 0.90 4.22 - 5.17 2008 4.55 0.45 - 0.90 4.32 - 5.99 MSF BlackRock Aggressive Growth 2012 -- 0.00 - 0.90 9.98 - 10.97 Investment Division 2011 0.30 0.00 - 0.90 (3.87) - (3.00) 2010 0.07 0.00 - 0.90 14.27 - 15.30 2009 0.20 0.45 - 0.90 48.10 - 49.44 2008 -- 0.45 - 0.90 (46.22) - (44.59) MSF BlackRock Bond Income 2012 2.69 0.00 - 0.90 6.58 - 7.55 Investment Division 2011 3.92 0.00 - 0.90 5.61 - 6.56 2010 3.95 0.00 - 0.90 7.37 - 8.34 2009 7.04 0.45 - 0.90 8.49 - 9.47 2008 5.16 0.45 - 0.90 (4.31) - (3.43) MSF BlackRock Diversified 2012 2.28 0.00 - 0.90 11.36 - 12.38 Investment Division 2011 2.43 0.00 - 0.90 2.87 - 3.81 2010 1.90 0.00 - 0.90 8.67 - 9.65 2009 5.15 0.45 - 0.90 16.25 - 17.30 2008 2.81 0.45 - 0.90 (25.47) - (20.65) MSF BlackRock Large Cap Value 2012 1.63 0.00 - 0.90 13.25 - 14.28 Investment Division 2011 1.11 0.00 - 0.90 1.43 - 2.35 2010 1.05 0.00 - 0.90 8.24 - 9.22 2009 1.58 0.90 10.22 - 11.21 2008 0.82 0.90 (35.46) - (30.94) MSF BlackRock Legacy Large Cap 2012 0.31 0.00 - 0.90 13.34 - 14.37 Growth Investment Division 2011 0.19 0.00 - 0.90 (9.76) - (8.94) 2010 0.23 0.00 - 0.90 18.75 - 19.82 2009 0.62 0.90 35.56 - 36.79 2008 0.43 0.90 (37.07) - (34.56) MSF BlackRock Money Market 2012 -- 0.00 - 0.90 (0.90) - 0.00 Investment Division 2011 -- 0.00 - 0.90 (0.89) - 0.00 2010 0.01 0.00 - 0.90 (0.89) - 0.01 2009 0.45 0.90 (0.48) - 0.42 2008 2.81 0.90 1.92 - 2.84
216 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ----------------- ------------- MSF Davis Venture Value Investment 2012 1,511,861 14.11 - 46.62 58,219,352 Division 2011 1,569,723 12.50 - 41.31 53,650,792 2010 1,632,869 13.03 - 43.04 57,910,618 2009 1,661,533 11.63 - 38.43 52,773,242 2008 1,580,625 8.81 - 29.12 38,001,762 MSF FI Value Leaders Investment 2012 469,261 11.38 - 37.48 6,748,157 Division 2011 489,548 9.83 - 32.38 6,065,829 2010 493,819 10.47 - 34.50 6,488,932 2009 478,934 9.14 - 30.11 5,481,161 2008 451,406 7.50 - 24.71 4,225,438 MSF Jennison Growth Investment 2012 1,151,518 7.50 - 16.55 17,774,611 Division 2011 1,066,474 6.47 - 14.29 14,166,486 2010 1,234,658 6.44 - 14.22 15,408,401 2009 1,148,604 5.77 - 12.74 13,473,347 2008 1,170,101 4.12 - 9.10 9,813,769 MSF Loomis Sayles Small Cap Core 2012 88,479 18.49 - 409.49 18,836,597 Investment Division 2011 95,949 16.14 - 357.46 17,443,984 2010 115,539 16.04 - 355.36 18,282,784 2009 116,312 12.58 - 278.66 14,825,414 2008 116,157 9.66 - 213.94 11,034,259 MSF Loomis Sayles Small Cap 2012 569,420 12.93 - 14.36 8,095,037 Growth Investment Division 2011 639,754 11.74 - 12.92 8,179,779 2010 597,616 11.50 - 12.54 7,430,441 2009 592,149 8.22 - 9.52 5,593,368 2008 579,322 5.93 - 7.33 4,206,928 MSF Met/Artisan Mid Cap Value 2012 188,777 20.91 - 299.35 50,145,783 Investment Division 2011 187,483 18.74 - 267.60 47,188,989 2010 222,836 17.60 - 250.67 46,601,141 2009 191,339 35.18 - 217.89 41,071,915 2008 196,801 24.85 - 153.92 29,975,616 MSF MetLife Conservative 2012 330,868 14.29 - 150.19 5,385,935 Allocation Investment Division 2011 293,962 13.17 - 137.56 4,371,255 2010 281,025 12.84 - 133.23 4,036,496 2009 179,332 11.74 - 121.06 2,188,237 2008 133,696 9.82 - 10.14 1,350,130 MSF MetLife Conservative to 2012 548,694 14.12 - 148.28 8,676,630 Moderate Allocation Investment 2011 491,119 12.75 - 133.03 6,564,562 Division 2010 523,187 12.70 - 131.65 6,925,701 2009 443,689 11.47 - 118.05 5,262,543 2008 336,506 9.33 - 9.64 3,218,477 MSF MetLife Mid Cap Stock Index 2012 2,971,386 21.35 - 23.88 69,807,817 Investment Division 2011 3,140,839 18.32 - 20.31 62,847,615 2010 3,223,737 18.84 - 20.70 65,796,062 2009 3,313,158 14.93 - 16.39 53,691,851 2008 3,450,115 10.90 - 11.97 40,733,135 FOR THE YEAR ENDED DECEMBER 31 ---------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) -------------- ---------------- ----------------- MSF Davis Venture Value Investment 2012 0.83 0.00 - 0.90 11.85 - 12.86 Division 2011 1.15 0.00 - 0.90 (4.89) - (4.03) 2010 1.00 0.00 - 0.90 11.00 - 12.00 2009 1.57 0.90 30.80 - 31.99 2008 1.34 0.90 (39.89) - (37.59) MSF FI Value Leaders Investment 2012 1.21 0.00 - 0.90 14.72 - 15.77 Division 2011 1.10 0.00 - 0.90 (6.99) - (6.15) 2010 1.56 0.00 - 0.90 13.54 - 14.56 2009 2.80 0.90 20.75 - 21.85 2008 1.93 0.90 (39.49) - (34.25) MSF Jennison Growth Investment 2012 0.22 0.00 - 0.90 14.74 - 15.78 Division 2011 0.28 0.00 - 0.90 (0.39) - 0.51 2010 0.59 0.00 - 0.90 10.63 - 11.66 2009 0.19 0.90 38.73 - 39.99 2008 2.43 0.90 (37.00) - (26.98) MSF Loomis Sayles Small Cap Core 2012 -- 0.00 - 0.90 13.52 - 14.55 Investment Division 2011 0.11 0.00 - 0.90 (0.31) - 0.59 2010 0.09 0.00 - 0.90 26.38 - 27.53 2009 0.28 0.90 29.08 - 30.25 2008 -- 0.90 (36.47) - (30.05) MSF Loomis Sayles Small Cap 2012 -- 0.00 - 0.90 10.19 - 11.19 Growth Investment Division 2011 -- 0.00 - 0.90 2.06 - 2.98 2010 -- 0.00 - 0.90 30.53 - 31.71 2009 -- 0.90 28.77 - 38.63 2008 -- 0.90 (41.67) - (36.32) MSF Met/Artisan Mid Cap Value 2012 0.99 0.00 - 0.90 10.86 - 11.86 Investment Division 2011 0.95 0.00 - 0.90 5.80 - 6.76 2010 0.74 0.00 - 0.90 7.99 - 15.04 2009 1.13 0.90 40.30 - 41.56 2008 0.37 0.90 (46.49) - (42.81) MSF MetLife Conservative 2012 2.97 0.00 - 0.90 8.50 - 9.49 Allocation Investment Division 2011 2.46 0.00 - 0.90 2.55 - 3.48 2010 3.52 0.00 - 0.90 9.35 - 10.34 2009 3.20 0.90 19.65 - 20.73 2008 1.41 0.90 (14.87) - (13.89) MSF MetLife Conservative to 2012 2.88 0.00 - 0.90 10.73 - 11.74 Moderate Allocation Investment 2011 2.28 0.00 - 0.90 0.37 - 1.28 Division 2010 3.39 0.00 - 0.90 10.78 - 11.78 2009 3.27 0.90 22.89 - 24.00 2008 1.34 0.90 (22.11) - (20.23) MSF MetLife Mid Cap Stock Index 2012 0.99 0.00 - 0.90 16.54 - 17.60 Investment Division 2011 0.90 0.00 - 0.90 (2.77) - (1.89) 2010 0.99 0.00 - 0.90 25.15 - 26.28 2009 1.81 0.90 35.77 - 36.99 2008 1.41 0.90 (36.75) - (35.42)
217 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ----------------- ------------- MSF MetLife Moderate Allocation 2012 3,085,848 13.74 - 144.51 45,401,738 Investment Division 2011 3,050,810 12.22 - 127.62 39,588,309 2010 2,825,563 12.48 - 129.39 37,214,331 2009 2,488,914 11.09 - 114.33 28,790,175 2008 2,031,439 8.82 - 90.36 18,535,109 MSF MetLife Moderate to Aggressive 2012 5,433,641 13.34 - 14.29 77,039,719 Allocation Investment Division 2011 5,400,236 11.62 - 12.34 66,170,247 2010 5,118,269 12.16 - 126.24 65,064,069 2009 4,732,679 10.68 - 110.06 52,449,221 2008 3,956,910 8.33 - 8.61 33,871,944 MSF MetLife Stock Index Investment 2012 35,058,600 14.48 - 64.83 739,806,231 Division 2011 36,301,700 12.50 - 56.01 668,626,167 2010 36,664,506 12.28 - 55.00 671,751,965 2009 36,924,505 10.69 - 47.90 597,707,546 2008 36,120,853 8.47 - 37.94 472,610,929 MSF MFS Total Return Investment 2012 523,594 14.32 - 75.73 8,143,436 Division 2011 528,477 12.95 - 67.87 7,362,338 2010 568,106 12.76 - 66.27 7,708,272 2009 580,613 11.70 - 60.20 7,134,157 2008 469,855 9.95 - 50.76 4,861,537 MSF MFS Value Investment Division 2012 3,634,888 14.55 - 21.23 57,891,425 2011 3,828,828 12.53 - 18.20 52,363,369 2010 3,975,344 12.48 - 18.04 54,052,850 2009 4,056,273 11.25 - 16.19 49,365,491 2008 4,061,727 9.35 - 13.40 41,012,912 MSF MSCI EAFE Index Investment 2012 4,738,737 11.42 - 16.34 68,221,885 Division 2011 4,910,651 9.74 - 13.81 59,759,550 2010 4,717,340 11.23 - 15.78 65,367,829 2009 4,618,467 10.47 - 14.59 58,913,857 2008 4,548,869 8.21 - 11.34 44,991,420 MSF Neuberger Berman Genesis 2012 3,701,342 20.16 - 22.55 82,409,606 Investment Division 2011 3,915,596 18.49 - 20.50 79,279,066 2010 4,111,864 17.63 - 19.37 78,718,096 2009 4,279,459 14.59 - 15.93 67,433,059 2008 4,285,033 12.90 - 14.08 59,706,219 MSF Oppenheimer Global Equity 2012 1,769,256 22.75 - 26.22 41,848,339 Investment Division 2011 1,918,512 18.89 - 21.58 37,497,219 2010 2,044,692 20.77 - 23.52 43,706,570 2009 2,111,250 18.03 - 20.23 38,882,417 2008 2,250,790 12.94 - 14.42 29,644,684 MSF Russell 2000 Index Investment 2012 2,492,581 16.83 - 24.76 55,930,600 Division 2011 2,653,125 14.59 - 21.28 51,171,784 2010 2,808,600 15.35 - 22.19 56,596,227 2009 2,972,133 12.21 - 17.49 47,243,288 2008 2,979,566 9.77 - 13.88 37,446,370 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MSF MetLife Moderate Allocation 2012 2.48 0.00 - 0.90 12.45 - 13.47 Investment Division 2011 1.72 0.00 - 0.90 (2.02) - (1.14) 2010 2.69 0.00 - 0.90 12.45 - 13.47 2009 3.09 0.90 25.71 - 26.84 2008 1.08 0.90 (29.06) - (26.51) MSF MetLife Moderate to Aggressive 2012 2.10 0.00 - 0.90 14.77 - 15.82 Allocation Investment Division 2011 1.59 0.00 - 0.90 (4.42) - (3.55) 2010 2.27 0.00 - 0.90 13.86 - 14.89 2009 2.75 0.90 28.27 - 29.43 2008 0.84 0.90 (35.55) - (32.36) MSF MetLife Stock Index Investment 2012 1.76 0.00 - 0.90 14.72 - 15.76 Division 2011 1.66 0.00 - 0.90 0.93 - 1.84 2010 1.75 0.00 - 0.90 13.79 - 14.82 2009 2.70 0.45 - 0.90 25.11 - 26.26 2008 1.94 0.45 - 0.90 (37.67) - (34.22) MSF MFS Total Return Investment 2012 2.81 0.00 - 0.90 10.58 - 11.58 Division 2011 2.71 0.00 - 0.90 1.50 - 2.42 2010 3.01 0.00 - 0.90 9.09 - 10.08 2009 4.19 0.90 17.54 - 18.60 2008 3.50 0.90 (22.84) - (20.13) MSF MFS Value Investment Division 2012 1.92 0.00 - 0.90 15.60 - 16.65 2011 1.56 0.00 - 0.90 (0.05) - 0.85 2010 1.43 0.00 - 0.90 10.43 - 11.42 2009 -- 0.45 - 0.90 19.74 - 20.82 2008 1.91 0.45 - 0.90 (34.05) - (17.37) MSF MSCI EAFE Index Investment 2012 3.07 0.00 - 0.90 17.26 - 18.33 Division 2011 2.43 0.00 - 0.90 (13.28) - (12.50) 2010 2.68 0.00 - 0.90 7.22 - 8.19 2009 4.28 0.45 - 0.90 27.52 - 28.67 2008 2.87 0.45 - 0.90 (42.58) - (40.15) MSF Neuberger Berman Genesis 2012 0.37 0.00 - 0.90 9.04 - 10.03 Investment Division 2011 0.74 0.00 - 0.90 4.85 - 5.80 2010 0.51 0.00 - 0.90 20.49 - 21.58 2009 1.12 0.90 12.14 - 13.15 2008 0.54 0.90 (38.96) - (35.81) MSF Oppenheimer Global Equity 2012 1.64 0.00 - 0.90 20.42 - 21.52 Investment Division 2011 1.98 0.00 - 0.90 (9.05) - (8.24) 2010 1.54 0.00 - 0.90 15.19 - 16.23 2009 2.57 0.45 - 0.90 39.06 - 40.31 2008 2.15 0.45 - 0.90 (40.90) - (37.34) MSF Russell 2000 Index Investment 2012 1.15 0.00 - 0.90 15.30 - 16.35 Division 2011 1.05 0.00 - 0.90 (4.96) - (4.10) 2010 1.10 0.00 - 0.90 25.78 - 26.92 2009 2.05 0.45 - 0.90 24.88 - 26.01 2008 1.26 0.45 - 0.90 (34.09) - (30.11)
218 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 9. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- --------------- ------------ MSF T. Rowe Price Large Cap Growth 2012 2,902,055 12.65 - 20.21 49,402,465 Investment Division 2011 2,954,760 10.73 - 16.99 42,317,336 2010 3,148,378 10.95 - 17.18 45,775,087 2009 3,409,767 9.44 - 14.68 42,520,597 2008 3,522,287 6.64 - 10.23 30,702,575 MSF T. Rowe Price Small Cap Growth 2012 3,660,384 23.20 - 27.18 93,411,008 Investment Division 2011 3,938,724 20.15 - 23.40 86,825,771 2010 4,055,742 19.98 - 22.99 88,004,866 2009 4,272,691 14.95 - 17.11 68,810,021 2008 4,498,247 10.85 - 12.37 52,291,217 MSF Van Eck Global Natural 2012 319 167.46 53,423 Resources Investment Division 2011 81 162.89 13,179 (Commenced 5/2/2011) MSF Western Asset Management 2012 1,037,022 22.40 - 39.30 25,456,035 Strategic Bond Opportunities 2011 1,068,823 20.28 - 35.25 23,536,888 Investment Division 2010 1,145,809 19.28 - 33.21 23,786,502 2009 1,115,618 17.25 - 29.46 20,580,082 2008 1,106,833 13.17 - 22.28 15,464,462 MSF Western Asset Management 2012 936,357 16.15 - 24.71 16,622,548 U.S. Government Investment 2011 957,065 15.77 - 23.91 16,435,798 Division 2010 1,021,769 15.08 - 22.66 16,633,651 2009 1,063,071 14.38 - 21.41 16,359,270 2008 1,059,598 13.91 - 20.52 15,636,881 PIMCO VIT All Asset Investment 2012 10,325 12.78 131,919 Division (Commenced 5/2/2011) 2011 8,649 11.12 96,138 PIMCO VIT Long-Term U.S. 2012 1,968 15.30 30,108 Government Investment Division (Commenced 5/4/2009 and began transactions in 2012) PIMCO VIT Low Duration 2012 79,088 12.46 985,514 Investment Division 2011 80,364 11.77 946,008 (Commenced 5/4/2009) 2010 65,497 11.64 762,531 2009 66,450 11.06 734,746 Pioneer VCT Emerging Markets 2012 33,221 20.26 673,079 Investment Division 2011 22,116 18.14 401,298 (Commenced 4/28/2008) 2010 41,431 23.75 984,166 2009 37,577 20.55 772,123 2008 13,031 11.81 153,859 Pioneer VCT Mid Cap Value 2012 3,389 45.30 153,545 Investment Division 2011 3,306 40.77 134,780 (Commenced 4/28/2008 and began 2010 2,302 43.21 99,478 transactions in 2009) 2009 586 36.55 21,403 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------ INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MSF T. Rowe Price Large Cap Growth 2012 0.12 0.00 - 0.90 17.90 - 18.97 Investment Division 2011 0.09 0.00 - 0.90 (1.99) - (1.11) 2010 0.27 0.00 - 0.90 16.00 - 17.05 2009 0.63 0.90 42.15 - 43.44 2008 0.59 0.90 (41.89) - (38.27) MSF T. Rowe Price Small Cap Growth 2012 -- 0.00 - 0.90 15.13 - 16.18 Investment Division 2011 -- 0.00 - 0.90 0.86 - 1.77 2010 -- 0.00 - 0.90 33.69 - 34.90 2009 0.35 0.45 - 0.90 37.72 - 38.97 2008 -- 0.45 - 0.90 (36.76) - (33.41) MSF Van Eck Global Natural 2012 -- 0.00 2.80 Resources Investment Division 2011 -- 0.00 (22.34) (Commenced 5/2/2011) MSF Western Asset Management 2012 3.61 0.00 - 0.90 10.49 - 11.50 Strategic Bond Opportunities 2011 5.05 0.00 - 0.90 5.19 - 6.14 Investment Division 2010 6.04 0.00 - 0.90 11.72 - 12.73 2009 6.60 0.90 31.04 - 32.22 2008 4.07 0.90 (15.76) - (14.42) MSF Western Asset Management 2012 2.09 0.00 - 0.90 2.44 - 3.37 U.S. Government Investment 2011 1.49 0.00 - 0.90 4.56 - 5.51 Division 2010 2.70 0.00 - 0.90 4.86 - 5.81 2009 4.49 0.90 3.40 - 4.33 2008 4.27 0.90 (1.23) - (0.36) PIMCO VIT All Asset Investment 2012 5.69 0.00 10.96 Division (Commenced 5/2/2011) 2011 3.04 0.00 (3.47) PIMCO VIT Long-Term U.S. 2012 0.76 0.00 5.45 Government Investment Division (Commenced 5/4/2009 and began transactions in 2012) PIMCO VIT Low Duration 2012 1.91 0.00 5.86 Investment Division 2011 1.68 0.00 1.11 (Commenced 5/4/2009) 2010 1.62 0.00 5.29 2009 1.55 0.00 10.57 Pioneer VCT Emerging Markets 2012 0.24 0.00 11.66 Investment Division 2011 -- 0.00 (23.62) (Commenced 4/28/2008) 2010 0.33 0.00 15.61 2009 0.96 0.00 74.02 2008 -- 0.00 (55.11) Pioneer VCT Mid Cap Value 2012 1.05 0.00 11.11 Investment Division 2011 0.87 0.00 (5.64) (Commenced 4/28/2008 and began 2010 1.08 0.00 18.22 transactions in 2009) 2009 -- 0.00 25.58
219 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONCLUDED) 9. FINANCIAL HIGHLIGHTS -- (CONCLUDED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- --------------- ------------ Royce Micro-Cap Investment 2012 21,685 17.16 372,006 Division (Commenced 11/10/2008 2011 19,473 15.94 310,463 and began transactions in 2010) 2010 19,226 18.14 348,709 Royce Small-Cap Investment 2012 33,234 16.30 541,872 Division (Commenced 11/10/2008 2011 52,075 14.49 754,742 and began transactions in 2009) 2010 26,235 14.99 393,142 2009 4,703 12.43 58,471 UIF Emerging Markets Debt 2012 33,059 35.77 1,182,598 Investment Division 2011 13,883 30.33 420,998 (Commenced 11/10/2008 2010 259 28.33 7,343 and began transactions in 2009) 2009 223 25.82 5,747 UIF Emerging Markets Equity 2012 69,412 14.90 1,033,944 Investment Division 2011 43,435 12.42 539,388 (Commenced 11/10/2008 2010 13,018 15.18 197,669 and began transactions in 2009) 2009 442 12.76 5,643 Wells Fargo VT Total Return Bond 2012 29,620 16.51 489,060 Investment Division 2011 8,689 15.56 135,214 2010 75,281 14.37 1,081,415 2009 39,845 13.42 534,737 2008 15,329 11.98 183,674 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- Royce Micro-Cap Investment 2012 -- 0.00 7.60 Division (Commenced 11/10/2008 2011 2.46 0.00 (12.10) and began transactions in 2010) 2010 3.02 0.00 29.96 Royce Small-Cap Investment 2012 0.09 0.00 12.50 Division (Commenced 11/10/2008 2011 0.36 0.00 (3.28) and began transactions in 2009) 2010 0.14 0.00 20.52 2009 -- 0.00 35.20 UIF Emerging Markets Debt 2012 2.41 0.00 17.96 Investment Division 2011 3.50 0.00 7.03 (Commenced 11/10/2008 2010 4.24 0.00 9.74 and began transactions in 2009) 2009 2.19 0.00 30.21 UIF Emerging Markets Equity 2012 -- 0.00 19.95 Investment Division 2011 0.35 0.00 (18.22) (Commenced 11/10/2008 2010 0.57 0.00 19.02 and began transactions in 2009) 2009 -- 0.00 69.84 Wells Fargo VT Total Return Bond 2012 1.38 0.00 6.11 Investment Division 2011 2.74 0.00 8.33 2010 3.35 0.00 7.04 2009 4.42 0.00 12.00 2008 4.82 0.00 2.41
1 These amounts represent the dividends, excluding distributions of capital gains, received by the Investment Division from the underlying fund, portfolio, or series, net of management fees assessed by the fund manager, divided by the average net assets, regardless of share class, if any. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against policy owner accounts either through reductions in the unit values or the redemption of units. The investment income ratio is calculated for each period indicated or from the effective date through the end of the reporting period. The recognition of investment income by the Investment Division is affected by the timing of the declaration of dividends by the underlying fund, portfolio, or series, in which the Investment Division invests. The investment income ratio is calculated as a weighted average ratio since the Investment Division may invest in two or more share classes, if any, within the underlying fund, portfolio, or series of the Trusts which may have unique investment income ratios. 2 These amounts represent annualized policy expenses of each of the applicable Investment Divisions, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to policy owner accounts through the redemption of units and expenses of the underlying fund, portfolio, or series have been excluded. 3 These amounts represent the total return for the period indicated, including changes in the value of the underlying fund, portfolio, or series, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on the minimum and maximum returns within each product grouping of the applicable Investment Division. 220 METROPOLITAN LIFE INSURANCE COMPANY 200 PARK AVENUE NEW YORK, NY 10166 RECEIPT This is to acknowledge receipt of an Equity Advantage VUL Prospectus (Book #252) dated April 29, 2013. This Variable Life Insurance Policy is offered by Metropolitan Life Insurance Company. -------- --------------------- (Date) (Client's Signature)
METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT UL EQUITY ADVANTAGE VUL SUPPLEMENT DATED APRIL 29, 2013 TO THE PROSPECTUS DATED APRIL 29, 2013 This supplement revises certain information in the April 29, 2013 prospectus for the Equity Advantage Variable Universal Life insurance policy issued by Metropolitan Life Insurance Company. You should read and retain this supplement. We currently limit the amount of cash value you may transfer to or from any one Investment Division to a maximum of $2.5 million per day. If you own more than one Equity Advantage VUL policy on the same insured, this limit will be applied to the cumulative transfers you make to or from the Investment Division under all such Policies. 10693 METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT UL EQUITY ADVANTAGE VUL SUPPLEMENT DATED APRIL 29, 2013 TO THE PROSPECTUS DATED APRIL 29, 2013 If you purchase the Policy pursuant to your right to request a face amount increase under a Zenith Flexible Life or Zenith Flexible Life 2001 flexible premium variable life insurance policy issued by New England Life Insurance Company, your Policy will differ from the Policy as described in the prospectus. The differences are as follows: 1. The minimum face amount required at issue of the Policy will be $25,000 (except that, subject to state law requirements, the minimum face amount of a Policy issued to the owner of a Zenith Flexible Life policy may be $10,000). You will have the right to reduce the face amount below $25,000. 2. You will not be subject to the monthly Policy Charge. 3. You will be subject to a reduced monthly Coverage Expense Charge equal to 75% of the charge that would otherwise be payable under the Policy. 10694 METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT UL EQUITY ADVANTAGE VUL SUPPLEMENT DATED APRIL 29, 2013 TO THE PROSPECTUS DATED APRIL 29, 2013 When you apply for the Policy, certain Portfolios may not be available to you because the broker-dealer through which you are purchasing the Policy does not make them available. However, once your Policy has been issued, all of the Portfolios will be available for premium allocations and cash value transfers. Please be aware that your registered representative may not be able to provide you any information or answer any questions you may have about the Portfolios that are not made available. Therefore, to allocate premium payments or to transfer cash value to those Portfolios, you may need to contact us directly, as described under RECEIPT OF COMMUNICATIONS AND PAYMENTS AT METLIFE'S DESIGNATED OFFICE on page A-26 of the prospectus. EQUITY ADVANTAGE VUL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION (PART B) APRIL 29, 2013 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the Prospectus dated April 29, 2013 and should be read in conjunction therewith. A copy of the Prospectus may be obtained by writing to Metropolitan Life Insurance Company, P.O. Box 543, Warwick, RI 02887-0543. SAI-1 TABLE OF CONTENTS
PAGE ----- GENERAL INFORMATION AND HISTORY............................ SAI-3 The Company............................................... SAI-3 The Separate Account...................................... SAI-3 DISTRIBUTION OF THE POLICIES............................... SAI-3 ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES. SAI-4 Payment of Proceeds....................................... SAI-4 Payment Options........................................... SAI-4 ADDITIONAL INFORMATION ABOUT CHARGES....................... SAI-5 Group or Sponsored Arrangements........................... SAI-5 POTENTIAL CONFLICTS OF INTEREST............................ SAI-5 LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY.......... SAI-5 MISSTATEMENT OF AGE OR SEX................................. SAI-6 REPORTS.................................................... SAI-6 PERSONALIZED ILLUSTRATIONS................................. SAI-6 PERFORMANCE DATA........................................... SAI-6 REGISTRATION STATEMENT..................................... SAI-7 INDEPENDENT AUDITORS....................................... SAI-7 EXPERTS.................................................... SAI-7 FINANCIAL STATEMENTS....................................... F-1
SAI-2 GENERAL INFORMATION AND HISTORY THE COMPANY Metropolitan Life Insurance Company and its subsidiaries (collectively, the "Company") is a leading provider of insurance, employee benefits and financial services with operations throughout the United States. The Company offers life insurance and annuities to individuals, as well as group insurance and retirement and savings products and services to corporations and other institutions. The Company was formed under the laws of New York in 1868. The Company's home office is located at 200 Park Avenue, New York, New York 10166-0188. The Company is a wholly-owned subsidiary of MetLife, Inc. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowners insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. MetLife, Inc. has operations throughout the United States and the regions of Latin America, Asia Pacific and Europe, Middle East and India. THE SEPARATE ACCOUNT We established the Separate Account as a separate investment account on December 13, 1988. The Separate Account is the funding vehicle for the Policies, and other variable life insurance policies that we issue. These other policies impose different costs, and provide different benefits, from the Policies. The Separate Account meets the definition of a "separate account" under Federal securities laws, and is registered with the Securities and Exchange Commission (the "SEC") as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). Registration with the SEC does not involve SEC supervision of the Separate Account's management or investments. However, the New York Insurance Commissioner regulates MetLife and the Separate Account. DISTRIBUTION OF THE POLICIES Our affiliate, MetLife Investors Distribution Company, 5 Park Plaza, Suite 1900, Irvine, California 92614, ("Distributor") serves as principal underwriter for the Policies. Distributor is a Missouri corporation organized in 2000. Distributor is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as well as with the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority. Distributor is not a member of the Securities Investor Protection Corporation. Distributor may enter into selling agreements with other broker-dealers ("selling firms") and compensate them for their services. Distributor passes through commissions it receives to selling firms for their sales and does not retain any portion of them in return for its services as distributor for the Policies. The Policies are sold through licensed life insurance sales representatives who are either registered through our affiliated broker-dealers, or registered through other broker-dealers. Distributor received sales compensation with respect to the Policies in the following amounts in the periods indicated:
AGGREGATE AMOUNT OF AGGREGATE AMOUNT OF COMMISSIONS RETAINED BY FISCAL COMMISSIONS PAID TO DISTRIBUTOR AFTER PAYMENTS YEAR DISTRIBUTOR TO SELLING FIRMS ------ ------------------- -------------------------- 2012... $9,003,190 $0 2011... $7,963,172 $0 2010... $7,757,198 $0
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. As noted in the prospectus, Distributor pays compensation to all selling firms in the form of commissions and certain types of non-cash compensation. Distributor may pay additional compensation to selected firms, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. The terms of any particular agreement governing compensation may vary among selling firms and the amounts may be significant. The amount of additional compensation (non-commission amounts) paid to selected selling firms that sold our variable life and variable annuity products in 2012 ranged from $0 to $22,603,189. For purposes of calculating these amounts, the amount of compensation received by a selling firm includes the additional compensation received by the firm for the sale of life insurance and annuity products issued by us and our affiliates. SAI-3 The following list sets forth the names of selling firms that received additional compensation in 2012 in connection with the sale of our and our affiliates' variable life policies, variable annuity contracts and other insurance products: Ameriprise Financial Services, Inc. AXA Advisors LLC BBVA Compass Investment Solutions, Inc. Capital Investments Brokerage, Inc. Capital Investments Group, Inc. CCO Investment Services Corp. Centaurus Financial, Inc. Cetera Financial Specialists LLC Citigroup Global Markets, Inc. Commonwealth Financial Network CUSO Financial Services, L.P. Edward D. Jones & Co., L.P. Essex National Securities, Inc. FSC Securities Corporation Financial Network Investment Corporation First Allied Securities, Inc. First Tennessee Brokerage, Inc. Founders Financial Securities, LLC H. D. Vest Investment Securities, Inc. ING Financial Partners, Inc. Invest Financial Corporation Investment Centers of America, Inc. Investment Professionals, Inc. Janney Montgomery Scott, LLC J.J.B. Hilliard, W.L. Lyons, LLC JPMorgan Securities, LLC Key Investment Services LLC Lincoln Financial Advisors Corporation Lincoln Financial Securities Corporation Lincoln Investment Planning, Inc. LPL Financial Corporation LPL Financial LLC M&T Securities, Inc. Merrill Lynch, Inc. Morgan Keegan & Company, Inc. Morgan Stanley Smith Barney, LLC Multi Financial Securities Corporation National Planning Corporation Navy Federal Brokerage Services, LLC NEXT Financial Group NFP Securities, Inc. PFS Investments Inc. Pioneer Funds Distributor, Inc. PNC Investments LLC ProEquities, Inc. Raymond James Financial Services, Inc. RBC Wealth Management Royal Alliance Associates, Inc. SII Investments, Inc. Sage Point Financial, Inc. Sammons Securities Company, LLC Securities America, Inc. Sigma Financial Corporation Signator Investors, Inc. Sorrento Pacific Financial, LLC Stifel, Nicolaus & Company, Incorporated Tower Square Securities, Inc. Transamerica Financial Advisors, Inc. Triad Advisors, Inc. UBS Financial Services, Inc. U.S. Bancorp Investments, Inc. United Planners' Financial Services of America UVEST Financial Services Group ValMark Securities, Inc. Wall Street Financial Group, Inc. Walnut Street Securities, Inc. Wells Fargo Advisors, LLC Wells Fargo Advisors Financial Network, LLC Wescom Financial Services, LLC Woodbury Financial Services, Inc. ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES PAYMENT OF PROCEEDS We may withhold payment of surrender or loan proceeds if those proceeds are coming from a Policy Owner's check, or from a premium transaction under our pre-authorized checking arrangement, which has not yet cleared. We may also delay payment while we consider whether to contest the Policy. We pay interest on the death benefit proceeds from the date they become payable to the date we pay them. Normally we promptly make payments of cash value, or of any loan value available, from cash value in the Fixed Account. However, we may delay those payments for up to six months. We pay interest in accordance with state insurance law requirements on delayed payments. PAYMENT OPTIONS We pay the Policy's death benefit and cash surrender value in one sum unless you or the payee choose a payment option for all or part of the proceeds. You can choose a combination of payment options. You can make, change or revoke the selection of payee or payment option before the death of the insured. You can contact your registered representative or our Designated Office for the procedure to follow. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The payment options available are fixed benefit options only and are not affected by the investment experience of the Separate Account. Once payments under an option begin, withdrawal rights may be restricted. Even if the death benefit under the Policy is excludible from income, payments under Payment Options may not be excludible in full. This is because earnings on the death benefit after the insured's death are taxable and payments under the Payment Options generally include such earnings. You should consult a tax adviser as to the tax treatment of payments under Payment Options. SAI-4 The following payment options are available: (i)SINGLE LIFE INCOME. We pay proceeds in equal monthly installments for the life of the payee. (ii)SINGLE LIFE INCOME--10-YEAR GUARANTEED PAYMENT PERIOD. We pay proceeds in equal monthly installments during the life of the payee, with a guaranteed payment period of 10 years. (iii)JOINT AND SURVIVOR LIFE INCOME. We pay proceeds in equal monthly installments (a) while either of two payees is living, or (b) while either of the two payees is living, but for at least 10 years. ADDITIONAL INFORMATION ABOUT CHARGES GROUP OR SPONSORED ARRANGEMENTS We may issue the Policies to group or sponsored arrangements, as well as on an individual basis. A "group arrangement" includes a situation where a trustee, employer or similar entity purchases individual Policies covering a group of individuals. Examples of such arrangements are non-qualified deferred compensation plans. A "sponsored arrangement" includes a situation where an employer or an association permits group solicitation of its employees or members for the purchase of individual Policies. We may waive, reduce or vary any Policy charges under Policies sold to a group or sponsored arrangement. We may also raise the interest rate credited to loaned amounts under these Policies. The amount of the variations and our eligibility rules may change from time to time. In general, they reflect cost savings over time that we anticipate for Policies sold to the eligible group or sponsored arrangements and relate to objective factors such as the size of the group, its stability, the purpose of the funding arrangement and characteristics of the group members. Consult your registered representative for any variations that may be available and appropriate for your case. The United States Supreme Court has ruled that insurance policies with values and benefits that vary with the sex of the insured may not be used to fund certain employee benefit programs. Therefore, we offer Policies that do not vary based on the sex of the insured to certain employee benefit programs. We recommend that employers consult an attorney before offering or purchasing the Policies in connection with an employee benefit program. POTENTIAL CONFLICTS OF INTEREST The Portfolios' 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 Portfolios from the Separate Account, 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 Generally, we can challenge the validity of your Policy or a rider during the insured's lifetime for two years (or less, if required by state law) from the date of issue, based on misrepresentations made in the application. We can challenge the portion of the death benefit resulting from an underwritten premium payment for two years during the insured's lifetime from receipt of the premium payment. However, if the insured dies within two years of the date of issue, we can challenge all or part of the Policy at any time based on misrepresentations in the application. We can challenge an increase in face amount, with regard to material misstatements concerning such increase, for two years during the insured's lifetime from its effective date. SAI-5 MISSTATEMENT OF AGE OR SEX If we determine, while the insured is still living, that there was a misstatement of age or sex in the application, the Policy values and charges will be recalculated from the issue date based on the correct information. If, after the death of the insured, we determine that the application misstates the insured's age or sex, the Policy's death benefit is the amount that the most recent Monthly Deduction which was made would provide, based on the insured's correct age and, if the Policy is sex-based, correct sex. REPORTS We will send you an annual statement showing your Policy's death benefit, cash value and any outstanding Policy loan principal. We will also confirm Policy loans, account transfers, lapses, surrenders and other Policy transactions when they occur. You will be sent periodic reports containing the financial statements of the Portfolios. 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, risk 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 period 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 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. 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. Insurance, sales, premium tax, mortality and expense risk and coverage expense 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. SAI-6 REGISTRATION STATEMENT This Statement of Additional Information and the prospectus omit certain information contained in the Registration Statement which has been filed with the SEC. Copies of such additional information may be obtained from the SEC upon payment of the prescribed fee. INDEPENDENT AUDITORS The consolidated financial statements of Metropolitan Life Insurance Company and subsidiaries (the "Company"), included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein (which report expresses an unmodified opinion and includes an emphasis-of-matter paragraph referring to changes in the Company's method of accounting for deferred policy acquisition costs as required by accounting guidance adopted on January 1, 2012 and the Company's reorganization of its segments in 2012). Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is Two World Financial Center, New York, New York 10281-1414. EXPERTS Robert L. Staffier, Jr., FSA, Vice President of MetLife has examined actuarial matters included in the Registration Statement, as stated in his opinion filed as an exhibit to the Registration Statement. SAI-7 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholder of Metropolitan Life Insurance Company: We have audited the accompanying consolidated financial statements of Metropolitan Life Insurance Company and its subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2012, and the related notes to the consolidated financial statements. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Life Insurance Company and its subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the Company changed its method of accounting for deferred policy acquisition costs as required by accounting guidance adopted on January 1, 2012. In addition, as discussed in Note 2, the Company reorganized its segments in 2012. Our opinion is not modified with respect to these matters. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP New York, New York April 2, 2013 F-1 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2012 and 20110 (In millions, except share and per share data)
2012 2011 ------------ ------------ Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $164,757 and $154,376, respectively; includes $170 and $0, respectively, relating to variable interest entities).................................................................. $ 183,676 $ 168,178 Equity securities available-for-sale, at estimated fair value (cost: $1,541 and $1,379, respectively)................................................................................ 1,499 1,278 Trading and fair value option securities, at estimated fair value (includes $659 and $473, respectively, of actively traded securities; and $41 and $117, respectively, relating to variable interest entities).................................................................. 752 697 Mortgage loans (net of valuation allowances of $304 and $393, respectively).................... 44,657 43,880 Policy loans................................................................................... 8,364 8,314 Real estate and real estate joint ventures (includes $10 and $15, respectively, relating to variable interest entities).................................................................. 6,837 5,891 Other limited partnership interests (includes $165 and $152, respectively, relating to variable interest entities).................................................................. 4,508 4,334 Short-term investments, principally at estimated fair value.................................... 6,881 6,140 Other invested assets, principally at estimated fair value (includes $81 and $98, respectively, relating to variable interest entities)........................................ 12,479 12,478 ------------ ------------ Total investments............................................................................ 269,653 251,190 Cash and cash equivalents, principally at estimated fair value (includes $31 and $70, respectively, relating to variable interest entities).......................................... 1,401 2,089 Accrued investment income (includes $2 and $1, respectively, relating to variable interest entities)...................................................................................... 2,242 2,219 Premiums, reinsurance and other receivables (includes $4 and $10, respectively, relating to variable interest entities).................................................................... 24,721 27,981 Deferred policy acquisition costs and value of business acquired................................ 5,832 6,341 Other assets (includes $4 and $4, respectively, relating to variable interest entities)......... 4,444 4,233 Separate account assets......................................................................... 120,971 106,678 ------------ ------------ Total assets................................................................................. $ 429,264 $ 400,731 ============ ============ Liabilities and Equity Liabilities Future policy benefits.......................................................................... $ 113,986 $ 109,333 Policyholder account balances................................................................... 94,716 88,856 Other policy-related balances................................................................... 5,663 5,876 Policyholder dividends payable.................................................................. 610 659 Policyholder dividend obligation................................................................ 3,828 2,919 Payables for collateral under securities loaned and other transactions.......................... 22,461 20,280 Short-term debt................................................................................. 100 101 Long-term debt (includes $124 and $116, respectively, at estimated fair value, relating to variable interest entities).................................................................... 2,345 2,248 Current income tax payable...................................................................... 161 123 Deferred income tax liability (includes $2 and $0, respectively, at estimated fair value, relating to variable interest entities)........................................................ 3,036 2,324 Other liabilities (includes $22 and $42, respectively, relating to variable interest entities).. 33,941 36,614 Separate account liabilities.................................................................... 120,971 106,678 ------------ ------------ Total liabilities............................................................................ 401,818 376,011 ------------ ------------ Contingencies, Commitments and Guarantees (Note 17) Equity Metropolitan Life Insurance Company 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, 2012 and 2011......................................... 5 5 Additional paid-in capital..................................................................... 14,510 14,506 Retained earnings.............................................................................. 8,631 6,973 Accumulated other comprehensive income (loss).................................................. 4,008 3,054 ------------ ------------ Total Metropolitan Life Insurance Company stockholder's equity............................... 27,154 24,538 Noncontrolling interests........................................................................ 292 182 ------------ ------------ Total equity................................................................................. 27,446 24,720 ------------ ------------ Total liabilities and equity................................................................. $ 429,264 $ 400,731 ============ ============
See accompanying notes to the consolidated financial statements. F-2 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Operations For the Years Ended December 31, 2012, 2011 and 2010 (In millions)
2012 2011 2010 ---------- ---------- ---------- Revenues Premiums............................................................. $ 19,880 $ 18,288 $ 18,519 Universal life and investment-type product policy fees............... 2,239 2,202 2,075 Net investment income................................................ 11,852 11,615 11,581 Other revenues....................................................... 1,730 1,808 1,725 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities....... (214) (244) (510) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss).................. 22 17 150 Other net investment gains (losses)................................. (138) 359 190 ---------- ---------- ---------- Total net investment gains (losses)............................... (330) 132 (170) Net derivative gains (losses)....................................... 675 1,578 (266) ---------- ---------- ---------- Total revenues.................................................. 36,046 35,623 33,464 ---------- ---------- ---------- Expenses Policyholder benefits and claims..................................... 22,269 20,681 20,707 Interest credited to policyholder account balances................... 2,390 2,372 2,523 Policyholder dividends............................................... 1,295 1,355 1,443 Other expenses....................................................... 6,394 6,471 6,282 ---------- ---------- ---------- Total expenses.................................................. 32,348 30,879 30,955 ---------- ---------- ---------- Income (loss) from continuing operations before provision for income tax................................................................ 3,698 4,744 2,509 Provision for income tax expense (benefit)........................... 1,055 1,460 769 ---------- ---------- ---------- Income (loss) from continuing operations, net of income tax.......... 2,643 3,284 1,740 Income (loss) from discontinued operations, net of income tax........ 40 61 31 ---------- ---------- ---------- Net income (loss)................................................... 2,683 3,345 1,771 Less: Net income (loss) attributable to noncontrolling interests..... 2 (8) (3) ---------- ---------- ---------- Net income (loss) attributable to Metropolitan Life Insurance Company............................................................ $ 2,681 $ 3,353 $ 1,774 ========== ========== ==========
See accompanying notes to the consolidated financial statements. F-3 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2012, 2011 and 2010 (In millions)
2012 2011 2010 ---------- ---------- ---------- Net income (loss) attributable to Metropolitan Life Insurance Company.......................................................... $ 2,681 $ 3,353 $ 1,774 Net income (loss) attributable to noncontrolling interests......... 2 (8) (3) ---------- ---------- ---------- Net income (loss).................................................. 2,683 3,345 1,771 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets...... 2,502 2,567 4,470 Unrealized gains (losses) on derivatives.......................... (241) 1,203 182 Foreign currency translation adjustments.......................... (30) 6 (29) Defined benefit plans adjustment.................................. (766) (671) 161 ---------- ---------- ---------- Other comprehensive income (loss), before income tax.............. 1,465 3,105 4,784 Income tax (expense) benefit related to items of other comprehensive income (loss)..................................... (511) (1,074) (1,676) ---------- ---------- ---------- Other comprehensive income (loss), net of income tax.............. 954 2,031 3,108 ---------- ---------- ---------- Comprehensive income (loss)........................................ 3,637 5,376 4,879 Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income tax...................................... 2 (8) 3 ---------- ---------- ---------- Comprehensive income (loss) attributable to Metropolitan Life Insurance Company, excluding cumulative effect of change in accounting principle............................................. 3,635 5,384 4,876 Cumulative effect of change in accounting principle, net of income tax.............................................................. -- -- 10 ---------- ---------- ---------- Comprehensive income (loss) attributable to Metropolitan Life Insurance Company................................................ $ 3,635 $ 5,384 $ 4,886 ========== ========== ==========
See accompanying notes to the consolidated financial statements. F-4 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Equity For the Year Ended December 31, 2012 (In millions)
Additional Common Paid-in Retained Stock Capital Earnings ------- ----------- ---------- Balance at December 31, 2011............... $ 5 $ 14,506 $ 6,973 Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 1 Dividends on common stock.................. (1,023) Change in equity of noncontrolling interests................................. Net income (loss).......................... 2,681 Other comprehensive income (loss), net of income tax............................. -------- ----------- ---------- Balance at December 31, 2012............... $ 5 $ 14,510 $ 8,631 ======== =========== ==========
Accumulated Other Comprehensive Income (Loss) -------------------------------------------------------- Net Foreign Defined Total Unrealized Other-Than- Currency Benefit Metropolitan Life Investment Temporary Translation Plans Insurance Company Gains (Losses) Impairments Adjustments Adjustment Stockholder's Equity --------------- ------------ ------------ -------------- --------------------- Balance at December 31, 2011............... $ 5,185 $ (317) $ 37 $ (1,851) $ 24,538 Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 1 Dividends on common stock.................. (1,023) Change in equity of noncontrolling interests................................. Net income (loss).......................... 2,681 Other comprehensive income (loss), net of income tax............................. 1,312 159 (19) (498) 954 --------------- ------------ ------------ -------------- --------------------- Balance at December 31, 2012............... $ 6,497 $ (158) $ 18 $ (2,349) $ 27,154 =============== ============ ============ ============== =====================
Noncontrolling Total Interests Equity --------------- ----------- Balance at December 31, 2011............... $ 182 $ 24,720 Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 1 Dividends on common stock.................. (1,023) Change in equity of noncontrolling interests................................. 108 108 Net income (loss).......................... 2 2,683 Other comprehensive income (loss), net of income tax............................. 954 --------------- ----------- Balance at December 31, 2012............... $ 292 $ 27,446 =============== ===========
See accompanying notes to the consolidated financial statements. F-5 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Equity -- (Continued) For the Year Ended December 31, 2011 (In millions)
Common Additional Retained Stock Paid-in Capital Earnings ------- --------------- --------- Balance at December 31, 2010......... $ 5 $ 14,445 $ 4,941 Capital contributions from MetLife, Inc. (Note 13)...................... 50 Excess tax benefits related to stock- based compensation.................. 11 Dividends on common stock............ (1,321) Change in equity of noncontrolling interests........................... Net income (loss).................... 3,353 Other comprehensive income (loss), net of income tax................... ---------- --------------- --------- Balance at December 31, 2011......... $ 5 $ 14,506 $ 6,973 ========== =============== =========
Accumulated Other Comprehensive Income (Loss) ---------------------------------------------------------- Net Foreign Defined Total Unrealized Other-Than- Currency Benefit Metropolitan Life Investment Temporary Translation Plans Insurance Company Gains (Losses) Impairments Adjustments Adjustment Stockholder's Equity --------------- ------------ ------------ ---------------- --------------------- Balance at December 31, 2010......... $ 2,672 $ (254) $ 34 $ (1,429) $ 20,414 Capital contributions from MetLife, Inc. (Note 13)...................... 50 Excess tax benefits related to stock- based compensation.................. 11 Dividends on common stock............ (1,321) Change in equity of noncontrolling interests........................... Net income (loss).................... 3,353 Other comprehensive income (loss), net of income tax................... 2,513 (63) 3 (422) 2,031 --------------- ------------ ------------ ---------------- --------------------- Balance at December 31, 2011......... $ 5,185 $ (317) $ 37 $ (1,851) $ 24,538 =============== ============ ============ ================ =====================
Noncontrolling Total Interests Equity --------------- ----------- Balance at December 31, 2010......... $ 148 $ 20,562 Capital contributions from MetLife, Inc. (Note 13)...................... 50 Excess tax benefits related to stock- based compensation.................. 11 Dividends on common stock............ (1,321) Change in equity of noncontrolling interests........................... 42 42 Net income (loss).................... (8) 3,345 Other comprehensive income (loss), net of income tax................... 2,031 --------------- ----------- Balance at December 31, 2011......... $ 182 $ 24,720 =============== ===========
See accompanying notes to the consolidated financial statements. F-6 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Equity -- (Continued) For the Year Ended December 31, 2010 (In millions)
Additional Common Paid-in Retained Stock Capital Earnings ------- ----------- ---------- Balance at December 31, 2009............... $ 5 $ 14,438 $ 4,817 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... (1,009) -------- ----------- ---------- Balance at January 1, 2010................. 5 14,438 3,808 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... (10) Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 4 Dividends on common stock.................. (631) Change in equity of noncontrolling interests................................. Net income (loss).......................... 1,774 Other comprehensive income (loss), net of income tax................................ -------- ----------- ---------- Balance at December 31, 2010............... $ 5 $ 14,445 $ 4,941 ======== =========== ==========
Accumulated Other Comprehensive Income (Loss) ------------------------------------------------------ Net Foreign Defined Total Unrealized Other-Than- Currency Benefit Metropolitan Life Investment Temporary Translation Plans Insurance Company Gains (Losses) Impairments Adjustments Adjustment Stockholder's Equity --------------- ------------ ------------ ------------ --------------------- Balance at December 31, 2009............... $ (265) $ (341) $ 51 $ (1,527) $ 17,178 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... (6) (1) (1,016) ---------- ---------- ----------- ------------ --------------- Balance at January 1, 2010................. (271) (341) 50 (1,527) 16,162 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... 10 -- Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 4 Dividends on common stock.................. (631) Change in equity of noncontrolling interests................................. Net income (loss).......................... 1,774 Other comprehensive income (loss), net of income tax................................ 2,933 87 (16) 98 3,102 --------------- ------------ ------------ ------------ --------------------- Balance at December 31, 2010............... $ 2,672 $ (254) $ 34 $ (1,429) $ 20,414 =============== ============ ============ ============ =====================
Noncontrolling Total Interests Equity --------------- --------- Balance at December 31, 2009............... $ 291 $ 17,469 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... (1,016) ------------ --------- Balance at January 1, 2010................. 291 16,453 Cumulative effect of change in accounting principle, net of income tax (Note 1)..... -- Capital contributions from MetLife, Inc. (Note 13)................................. 3 Excess tax benefits related to stock-based compensation.............................. 4 Dividends on common stock.................. (631) Change in equity of noncontrolling interests................................. (146) (146) Net income (loss).......................... (3) 1,771 Other comprehensive income (loss), net of income tax................................ 6 3,108 --------------- --------- Balance at December 31, 2010............... $ 148 $ 20,562 =============== =========
See accompanying notes to the consolidated financial statements. F-7 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows For the Years Ended December 31, 2012, 2011 and 2010 (In millions)
2012 2011 2010 ----------- ---------- ---------- Cash flows from operating activities Net income (loss)........................................................................ $ 2,683 $ 3,345 $ 1,771 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization expenses................................................. 416 407 394 Amortization of premiums and accretion of discounts associated with investments, net... (698) (683) (709) (Gains) losses on investments and derivatives and from sales of businesses, net........ (188) (1,735) 380 (Income) loss from equity method investments, net of dividends or distributions........ 42 269 116 Interest credited to policyholder account balances..................................... 2,390 2,372 2,523 Universal life and investment-type product policy fees................................. (2,239) (2,202) (2,075) Change in trading and fair value option securities..................................... (100) 20 (14) Change in accrued investment income.................................................... 22 14 (117) Change in premiums, reinsurance and other receivables.................................. (422) (208) (377) Change in deferred policy acquisition costs and value of business acquired, net........ 359 150 169 Change in income tax................................................................... (28) 527 727 Change in other assets................................................................. 361 767 283 Change in insurance-related liabilities and policy-related balances.................... 1,915 2,587 2,469 Change in other liabilities............................................................ 170 726 684 Other, net............................................................................. (147) (125) (120) ----------- ---------- ---------- Net cash provided by operating activities................................................ 4,536 6,231 6,104 ----------- ---------- ---------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities............................................................. 52,889 53,325 49,828 Equity securities..................................................................... 245 816 520 Mortgage loans........................................................................ 8,668 8,152 4,853 Real estate and real estate joint ventures............................................ 721 1,058 241 Other limited partnership interests................................................... 585 754 383 Purchases of: Fixed maturity securities............................................................. (62,136) (54,038) (57,961) Equity securities..................................................................... (393) (278) (157) Mortgage loans........................................................................ (9,448) (10,443) (5,820) Real estate and real estate joint ventures............................................ (1,447) (980) (539) Other limited partnership interests................................................... (660) (658) (614) Cash received in connection with freestanding derivatives.............................. 634 1,011 712 Cash paid in connection with freestanding derivatives.................................. (443) (695) (920) Issuances of loans to affiliates....................................................... -- (525) -- Net change in policy loans............................................................. (50) (44) (171) Net change in short-term investments................................................... (567) (3,816) 841 Net change in other invested assets.................................................... (791) (562) 149 Net change in property, equipment and leasehold improvements........................... (71) (104) (138) Other, net............................................................................. -- 7 (7) ----------- ---------- ---------- Net cash used in investing activities.................................................... $ (12,264) $ (7,020) $ (8,800) ----------- ---------- ----------
See accompanying notes to the consolidated financial statements. F-8 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows -- (Continued) For the Years Ended December 31, 2012, 2011 and 2010 (In millions)
2012 2011 2010 ----------- ----------- ----------- Cash flows from financing activities Policyholder account balances: Deposits............................................................................ $ 61,647 $ 55,586 $ 44,481 Withdrawals......................................................................... (56,373) (57,078) (43,381) Net change in payables for collateral under securities loaned and other transactions. 2,181 3,266 2,352 Net change in short-term debt........................................................ (1) (1) (217) Long-term debt issued................................................................ 79 110 188 Long-term debt repaid................................................................ (81) (1,411) (324) Dividends on common stock............................................................ (1,023) (1,151) (232) Capital contribution................................................................. -- 47 -- Other, net........................................................................... 611 25 (33) ----------- ----------- ----------- Net cash provided by (used in) financing activities.................................... 7,040 (607) 2,834 ----------- ----------- ----------- Change in cash and cash equivalents.................................................... (688) (1,396) 138 Cash and cash equivalents, beginning of year........................................... 2,089 3,485 3,347 ----------- ----------- ----------- Cash and cash equivalents, end of year................................................. $ 1,401 $ 2,089 $ 3,485 =========== =========== =========== Supplemental disclosures of cash flow information: Net cash paid for: Interest............................................................................ $ 151 $ 196 $ 217 =========== =========== =========== Income tax.......................................................................... $ 842 $ 701 $ 183 =========== =========== =========== Non-cash transactions: Purchase money mortgage loans on sales of real estate joint ventures................ $ -- $ -- $ 2 =========== =========== =========== Capital contributions from MetLife, Inc............................................. $ 3 $ 3 $ 3 =========== =========== =========== Dividends to MetLife, Inc........................................................... $ -- $ 170 $ 399 =========== =========== =========== Real estate and real estate joint ventures acquired in satisfaction of debt......... $ 264 $ 151 $ 58 =========== =========== ===========
See accompanying notes to the consolidated financial statements. F-9 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Metropolitan Life Insurance Company and its subsidiaries (collectively, "MLIC" or the "Company") is a leading provider of insurance, annuities and employee benefit programs throughout the United States. The Company offers life insurance and annuities to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. The Company is organized into three segments: Retail; Group, Voluntary & Worksite Benefits; and Corporate Benefit Funding. See Note 2 for information on the reorganization of the Company's segments during 2012, which were retrospectively applied. Basis of Presentation 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. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions 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 business and operations. Actual results could differ from estimates. Consolidation The accompanying consolidated financial statements include the accounts of Metropolitan Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities ("VIEs") for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. Discontinued Operations The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in discontinued operations if certain criteria are met. In order to qualify for a discontinued operation, the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company, and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. 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 F-10 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: . such separate accounts are legally recognized; . assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; . investments are directed by the contractholder; and . all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets at their fair value, which is based on the estimated fair values of the underlying assets comprising the individual separate account portfolios. 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 operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Such fees are included in universal life and investment-type product policy fees in the consolidated statements of operations. Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. See "-- Adoption of New Accounting Pronouncements" for discussion of accounting pronouncements adopted in 2012, which were retrospectively applied. Summary of Significant Accounting Policies The following are the Company's significant accounting policies with references to notes providing additional information on such policies and critical accounting estimates relating to such policies. -------------------------------------------------------------------------------------------------------- Accounting Policy Note -------------------------------------------------------------------------------------------------------- Insurance 4 -------------------------------------------------------------------------------------------------------- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Policy-Related Intangibles 5 -------------------------------------------------------------------------------------------------------- Reinsurance 6 -------------------------------------------------------------------------------------------------------- Investments 8 -------------------------------------------------------------------------------------------------------- Derivatives 9 -------------------------------------------------------------------------------------------------------- Fair Value 10 -------------------------------------------------------------------------------------------------------- Goodwill 11 -------------------------------------------------------------------------------------------------------- Employee Benefit Plans 15 -------------------------------------------------------------------------------------------------------- Income Tax 16 -------------------------------------------------------------------------------------------------------- Litigation Contingencies 17 --------------------------------------------------------------------------------------------------------
F-11 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Insurance Future Policy Benefit Liabilities and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies. 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. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. For long duration insurance contracts, assumptions such as mortality, morbidity and interest rates are "locked in" upon the issuance of new business. However, significant adverse changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then current assumptions and do not include a provision for adverse deviation. Premium deficiency reserves may also be established for short duration contracts to provide for expected future losses. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated investment income is considered in the calculation of premium deficiency losses for short duration contracts. 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 assumptions used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing deferred policy acquisition costs ("DAC"), and are thus subject to the same variability and risk as further discussed herein. The assumptions of investment performance and volatility for variable products are consistent with historical experience of appropriate underlying equity indices, such as the Standard & Poor's Ratings Services ("S&P") 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company regularly reviews its estimates of liabilities for future policy benefits and compares them with its actual experience. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the period in which the changes occur. Policyholder account balances ("PABs") relate to contract or contract features where the Company has no significant insurance risk. The Company issues certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. These guarantees are accounted for as insurance liabilities or as embedded derivatives depending on how and when the benefit is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a F-12 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) specific insurable event, or (ii) annuitization. In certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is split and accounted for under both models. Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death benefits ("GMDBs"), the portion of guaranteed minimum income benefits ("GMIBs") that require annuitization, and the life-contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"). Guarantees accounted for as embedded derivatives in PABs include the non life-contingent portion of GMWB, guaranteed minimum accumulation benefits ("GMABs") and the portion of GMIB that do not require annuitization. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. Other Policy-Related Balances Other policy-related balances 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 ("LTC") 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 analyses of historical patterns of claims by business line. 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 as discussed further herein. Such amortization is recorded in universal life and investment-type product policy fees. The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premium received in advance and applies the cash received to premiums when due. Recognition of Insurance Revenues and Deposits 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 to recognize profits over the estimated lives of the insurance 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 earnings 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. F-13 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Deposits related to universal life-type and investment-type products are credited to PABs. Revenues from such contracts consist of fees 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 earnings include interest credited and benefit claims incurred in excess of related PABs. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Policy-Related Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include: . incremental direct costs of contract acquisition, such as commissions; . the portion of an employee's total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; and . other essential direct costs that would not have been incurred had a policy not been acquired or renewed. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Value of business acquired ("VOBA") is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. DAC and VOBA are amortized as follows: ----------------------------------------------------------------------------- Products: In proportion to the following over estimated lives of the contracts: ----------------------------------------------------------------------------- . Non-participating and Historic actual and expected future non-dividend-paying traditional gross premiums. contracts: . Term insurance . Non-participating whole life insurance . Traditional group life insurance . Non-medical health insurance ----------------------------------------------------------------------------- . Participating, dividend-paying Actual and expected future gross traditional contracts margins. ----------------------------------------------------------------------------- . Fixed and variable universal life Actual and expected future gross contracts profits. . Fixed and variable deferred annuity contracts ----------------------------------------------------------------------------- F-14 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) See Note 5 for additional information on DAC and VOBA amortization. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated in the consolidated financial statements for reporting purposes. The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements to determine the recoverability of the asset. Value of distribution agreements acquired ("VODA") is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over useful lives ranging from 10 to 30 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired. Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. 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 reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC and recognized as a component of other expenses on a basis consistent with the way the acquisition costs on the underlying reinsured contracts would be recognized. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums and ceded (assumed) future policy benefit liabilities are established. For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums and are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are F-15 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) recognized immediately as a loss and are reported in the appropriate line item within the consolidated statement of operations. Any gain on such retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method. Ceded policyholder and contract related liabilities, other than those currently due, are reported gross on the consolidated balance sheet. Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the consolidated balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With respect to GMIBs, a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net derivative gains (losses). If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Investments Net Investment Income Income on investments is reported within net investment income, unless otherwise stated herein. Fixed Maturity and Equity Securities The majority of the Company's fixed maturity and equity securities are classified as available-for-sale ("AFS") and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) ("OCI"), 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 are determined on a specific identification basis. F-16 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Interest income on fixed maturity securities is recognized when earned using an effective yield method giving effect to amortization of premiums and accretion of discounts. Prepayment fees are recognized when earned. Dividends on equity securities are recognized when declared. The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value and an analysis of the gross unrealized losses by severity and/or age. The analysis of gross unrealized losses is described further in Note 8 "-- Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities." For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the OTTI recognized in earnings is the entire difference between the security's amortized cost and estimated fair value. If neither of these conditions exist, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as an OTTI in earnings ("credit loss"). If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors ("noncredit loss") is recorded in OCI. Adjustments are not made for subsequent recoveries in value. With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the security's cost and its estimated fair value with a corresponding charge to earnings. Trading and Fair Value Option Securities Trading and fair value option securities are stated at estimated fair value and include investments for which the fair value option ("FVO") has been elected ("FVO Securities") and investments that are actively purchased and sold ("Actively Traded Securities"). Actively Traded Securities principally include fixed maturity securities and short sale agreement liabilities, which are included in other liabilities. FVO Securities include: . fixed maturity and equity securities held-for-investment by the general account to support asset and liability matching strategies for certain insurance products; and . securities held by consolidated securitization entities ("CSEs") (former qualifying special purpose entities), with changes in estimated fair value subsequent to consolidation included in net investment gains (losses). Changes in estimated fair value of these securities subsequent to purchase are included in net investment income, except for certain securities included in FVO Securities where changes are included in net investment gains (losses). F-17 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Mortgage Loans The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural, and residential. The accounting and valuation allowance policies that are applicable to all portfolio segments are presented below and policies related to each of the portfolio segments are included in Note 8. Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned. Interest is accrued on the principal amount of the loan based on the loan's contractual interest rate, while amortization of premiums and discounts is recognized using the effective yield method. Gains and losses from sales of loans and increases or decreases to valuation allowances are recorded 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 contractual interest rate. Generally, accrued interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal or interest on the loan is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Real Estate Real estate held-for-investment 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 associated with such real estate is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, which is generally computed using the present value of expected future cash flows discounted at a rate commensurate with the underlying risks. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition for a reasonable price in comparison to its estimated fair value is classified as held for sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated. Real estate acquired upon foreclosure 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 ownership interest or more than a minor influence over the joint venture's or partnership's operations, but does not have a controlling financial interest. Equity method investment income is recognized as earned by the investee. The Company records its share of earnings using a three-month lag methodology for instances where the timely financial information is not available and the contractual agreements provide for the delivery of the investees' financial information after the end of the Company's reporting period. F-18 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The Company uses the cost method of accounting for investments in which it has virtually no influence over the joint venture's or the partnership's operations. Based on the nature and structure of these investments, they do not meet the characteristics of an equity security in accordance with applicable accounting standards. The Company recognizes distributions on cost method investments as earned or received. In addition to the investees performing regular evaluations for the impairment of underlying investments, the Company routinely evaluates these investments for impairments. 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. The Company considers its cost method investments for OTTI when the carrying value of such investments exceeds the net asset value ("NAV"). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is other-than-temporarily impaired. When an OTTI has occurred, the impairment loss is recorded within net investment gains (losses). Short-term Investments Short-term investments include securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value. Short-term investments also include investments in affiliated money market pools. Other Invested Assets Other invested assets consist principally of the following: . Freestanding derivatives with positive estimated fair values are described in "-- Derivatives" below. . Tax credit partnerships derive their primary source of investment return in the form of income tax credits. Where tax credits are guaranteed by a creditworthy third party, the investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method. . Loans to affiliates are stated at unpaid principal balance, adjusted for any unamortized premium or discount. . Leveraged leases are recorded net of non-recourse debt. 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. . Funds withheld represent a receivable for amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying investments. . Joint venture investments that engage in insurance underwriting activities are accounted for under the equity method. Securities Lending Program Securities lending transactions, whereby blocks of securities, which are included in fixed maturity securities, equity securities, and short-term investments, are loaned to third parties, primarily brokerage firms and F-19 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) commercial banks, and are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration of the loan. The Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements. The Company monitors the estimated fair value of the securities loaned on a daily basis with additional collateral obtained as necessary. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, within net investment income. Derivatives Freestanding Derivatives Freestanding derivatives are carried in the Company's consolidated balance sheets either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivatives carrying value in other invested assets or other liabilities. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows: ------------------------------------------------------------------------------- Statement of Operations Presentation: Derivative: ------------------------------------------------------------------------------- Net investment income . Economic hedges of equity method investments in joint ventures . All derivatives held in relation to trading portfolios ------------------------------------------------------------------------------- Hedge Accounting 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. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows: . Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in fair value of the hedged item attributable to the designated risk being hedged. . Cash flow hedge (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)--effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the consolidated statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses). F-20 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The change in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of operations within interest income or interest expense to match the location of the hedged item. In its hedge 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 that 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 at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the consolidated statements of operations 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 on the anticipated date or within two months of that date, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net derivative gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value in the consolidated balance sheets, with changes in its estimated fair value recognized in the current period as net derivative gains (losses). Embedded Derivatives The Company sells variable annuities and purchases certain investments that contain embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if: . the combined instrument is not accounted for in its entirety at fair value with changes in fair value recorded in earnings; F-21 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) . the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and . a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. Such embedded derivatives are carried in the consolidated balance sheets at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. Fair Value Certain assets and liabilities are measured at estimated fair value in the Company's consolidated balance sheets. In addition, the notes to these consolidated financial statements include further disclosures of estimated fair values. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition. Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable inputs. If these inputs are not available, or observable inputs are not determinative, unobservable inputs and/or adjustments to observable inputs requiring management judgment are used to determine the fair value of assets and liabilities. Goodwill Goodwill, which is included in other assets, represents the future economic benefits arising from net assets acquired in a business combination that are not individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless there is a significant identified impairment event. The impairment test is performed at the reporting unit level, which is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit F-22 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) exceeds its estimated fair value, there may be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income. On an ongoing basis, the Company evaluates potential triggering events that may affect the estimated fair value of the Company's reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have an impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. Employee Benefit Plans The Company sponsors and administers various qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees and sales representatives who meet specified eligibility requirements of the sponsor and its participating affiliates. A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. The Company recognizes the funded status of the projected pension benefit obligation ("PBO") for pension benefits and the accumulated pension benefit obligation ("APBO") for other postretirement benefits for each of its plans. The Company recognizes an expense for differences between actual experience and estimates over the average future service period of participants. The actuarial gains or losses, prior service costs and credits not yet included in net periodic benefit costs are charged to accumulated OCI ("AOCI"), net of income tax. The Company also sponsors defined contribution plans for substantially all U.S. employees under which a portion of participant contributions is 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 defined contribution plans, no liability for matching contributions is recognized in the consolidated balance sheets. Income Tax Metropolitan Life Insurance Company and its includable subsidiaries join with MetLife, Inc. and its includable subsidiaries in filing a consolidated U.S. life and non-life federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). Metropolitan Life Insurance Company and its includable subsidiaries participate in a tax sharing agreement with MetLife, Inc. The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Factors in management's determination include the performance F-23 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) of the business and its ability to generate capital gains. 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: . future taxable income exclusive of reversing temporary differences and carryforwards; . future reversals of existing taxable temporary differences; . taxable income in prior carryback years; and . tax planning strategies. The Company may be required to change its provision for income taxes in certain circumstances. Examples of such circumstances include when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws, tax regulations, or interpretations of such laws or regulations, could have an impact on the provision for income tax and the effective tax rate. Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Except as otherwise disclosed in Note 17, legal costs are recognized in other expenses as incurred. 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. Other Accounting Policies Stock-Based Compensation Stock-based compensation recognized in the Company's consolidated results of operations is allocated from MetLife, Inc. The accounting policies described below represent those that MetLife, Inc. applies in determining such allocated expenses. MetLife, Inc. grants certain employees and directors stock-based compensation awards under various plans that are subject to specific vesting conditions. The cost of all stock-based transactions is measured at fair value at grant date and recognized over the period during which a grantee is required to provide services in exchange for F-24 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) the award. Although the terms of MetLife, Inc.'s stock-based plans do not accelerate vesting upon retirement, or the attainment of retirement eligibility, the requisite service period subsequent to attaining such eligibility is considered nonsubstantive. Accordingly, MetLife, Inc. recognizes compensation expense related to stock-based awards over the shorter of the requisite service period or the period to attainment of retirement eligibility. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense when recognizing expense over the requisite service period. Cash and Cash Equivalents The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value. 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 the straight-line method over the estimated useful lives of the assets, as appropriate. The estimated life is generally 40 years for company occupied real estate property, from five to 10 years for leasehold improvements, and from three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1.7 billion at both December 31, 2012 and 2011. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $1.0 billion and $999 million at December 31, 2012 and 2011, respectively. Related depreciation and amortization expense was $121 million, $118 million and $111 million for the years ended December 31, 2012, 2011 and 2010, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $902 million and $1.6 billion at December 31, 2012 and 2011, respectively. Accumulated amortization of capitalized software was $611 million and $1.2 billion at December 31, 2012 and 2011, respectively. Related amortization expense was $143 million, $145 million and $132 million for the years ended December 31, 2012, 2011 and 2010, respectively. Other Revenues Other revenues include, in addition to items described elsewhere herein, advisory fees, broker-dealer commissions and fees, administrative service fees, and changes in account value relating to corporate-owned life insurance ("COLI"). Such fees and commissions are recognized in the period in which services are performed. Under certain COLI contracts, if the Company reports certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject to market value adjustment, which could result in a reduction of the account value. Policyholder Dividends Policyholder dividends are approved annually by Metropolitan Life Insurance Company and its insurance subsidiaries' boards of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the F-25 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) appropriate level of statutory surplus to be retained by Metropolitan Life Insurance Company and its insurance subsidiaries. Foreign Currency Assets, liabilities and operations of foreign affiliates and subsidiaries, if any, are recorded based on the functional currency of each entity. The determination of the functional currency is made based on the appropriate economic and management indicators. The local currencies of foreign operations are the functional currencies. Assets and liabilities of foreign affiliates and subsidiaries, if any, are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end and income and expense accounts are translated at the average exchange rates during the year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur. Adoption of New Accounting Pronouncements On January 1, 2012, the Company adopted new guidance regarding accounting for DAC, which was retrospectively applied. The guidance specifies that only costs related directly to successful acquisition of new or renewal contracts can be capitalized as DAC; all other acquisition-related costs must be expensed as incurred. As a result, certain sales manager compensation and administrative costs previously capitalized by the Company will no longer be deferred. The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company's previously reported consolidated balance sheet:
As Previously Reported Adjustment As Adjusted ------------------------ ------------------- ------------------- December 31, 2011 December 31, 2011 December 31, 2011 ------------------------ ------------------- ------------------- (In millions) Assets Other invested assets, principally at estimated fair value................................................ $ 12,505 $ (27) $ 12,478 Deferred policy acquisition costs and value of business acquired (1)................................ $ 7,779 $ (1,438) $ 6,341 Liabilities Deferred income tax liability......................... $ 2,827 $ (503) $ 2,324 Equity Retained earnings..................................... $ 8,077 $ (1,104) $ 6,973 Accumulated other comprehensive income (loss)......... $ 2,912 $ 142 $ 3,054 Total Metropolitan Life Insurance Company stockholder's equity................................. 25,500 (962) 24,538 Total equity.......................................... $ 25,682 $ (962) $ 24,720
-------- (1)VOBA was not impacted by the adoption of this guidance. F-26 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company's previously reported consolidated statements of operations:
As Previously Reported Adjustment As Adjusted --------------------------- ------------------------ ------------------------ Years Ended December 31, Years Ended December 31, Years Ended December 31, --------------------------- ------------------------ ------------------------ 2011 2010 2011 2010 2011 2010 ------------- ------------- ---------- ------- -------- -------- (In millions) Revenues Net investment income.............. $ 11,621 (1) $ 11,586 (1) $ (6) $ (5) $11,615 $11,581 Expenses Other expenses..................... $ 6,414 $ 6,259 $ 57 $ 23 $ 6,471 $ 6,282 Income (loss) from continuing operations before provision for income tax........................ $ 4,807 (1) $ 2,537 (1) $ (63) $ (28) $ 4,744 $ 2,509 Provision for income tax expense (benefit)......................... $ 1,479 (1) $ 776 (1) $ (19) $ (7) $ 1,460 $ 769 Income (loss) from continuing operations, net of income tax..... $ 3,328 (1) $ 1,761 (1) $ (44) $ (21) $ 3,284 $ 1,740 Net income (loss).................. $ 3,389 $ 1,792 $ (44) $ (21) $ 3,345 $ 1,771 Net income (loss) attributable to Metropolitan Life Insurance Company........................... $ 3,397 $ 1,795 $ (44) $ (21) $ 3,353 $ 1,774
-------- (1)Amounts in the table above differ from the amounts previously reported in the consolidated statements of operations and comprehensive income due to the inclusion of the impact of discontinued real estate operations of $4 million ($6 million net investment income, net of $2 million income tax) and $5 million ($7 million net investment income, net of $2 million income tax) for the years ended December 31, 2011 and 2010, respectively. The following table presents the effects of the retrospective application of the adoption of such new accounting guidance to the Company's previously reported consolidated statements of cash flows:
As Previously Reported Adjustment As Adjusted -------------------------- ------------------------ -------------------------- Years Ended December 31, Years Ended December 31, Years Ended December 31, -------------------------- ------------------------ -------------------------- 2011 2010 2011 2010 2011 2010 ------------- ------------ ------------ ----------- ------------- ------------ (In millions) Cash flows from operating activities Net income (loss)............................ $ 3,389 $ 1,792 $ (44) $ (21) $ 3,345 $ 1,771 Change in deferred policy acquisition costs and value of business acquired, net......... $ 94 $ 147 $ 56 $ 22 $ 150 $ 169 Change in income tax......................... $ 547 $ 735 $ (20) $ (8) $ 527 $ 727 Cash flows from investing activities Net change in other invested assets.......... $ (570) $ 142 $ 8 $ 7 $ (562) $ 149
On January 1, 2012, the Company adopted new guidance regarding comprehensive income, which was retrospectively applied, that provides companies with the option to present the total of comprehensive income, components of net income, and the components of OCI either in a single continuous statement of comprehensive income or in two separate but consecutive statements in annual financial statements. The standard eliminates the option to present components of OCI as part of the statement of changes in stockholder's equity. The Company adopted the two-statement approach for annual financial statements. F-27 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Effective January 1, 2012, the Company adopted new guidance on goodwill impairment testing that simplifies how an entity tests goodwill for impairment. This new guidance allows an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it needs to perform the quantitative two-step goodwill impairment test. Only if an entity determines, based on qualitative assessment, that it is more likely than not that a reporting unit's fair value is less than its carrying value will it be required to calculate the fair value of the reporting unit. The qualitative assessment is optional and the Company is permitted to bypass it for any reporting unit in any period and begin its impairment analysis with the quantitative calculation. In 2012, the Company proceeded to Step 1 of the two-step impairment analysis for all of the Company's reporting units. The Company is permitted to perform the qualitative assessment in any subsequent period. Effective January 1, 2012, the Company adopted new guidance regarding fair value measurements that establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards. Some of the amendments clarify the Financial Accounting Standards Board's ("FASB") intent on the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The adoption did not have a material impact on the Company's consolidated financial statements other than the expanded disclosures in Note 10. Effective July 1, 2010, the Company adopted guidance regarding accounting for embedded credit derivatives within structured securities. This guidance clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Specifically, embedded credit derivatives resulting only from subordination of one financial instrument to another continue to qualify for the scope exception. Embedded credit derivative features other than subordination must be analyzed to determine whether they require bifurcation and separate accounting. As a result of the adoption of this guidance, the Company elected FVO for certain structured securities that were previously accounted for as fixed maturity securities. Upon adoption, the Company reclassified $50 million of securities from fixed maturity securities to trading and FVO securities. These securities had cumulative unrealized losses of $10 million, net of income tax, which was recognized as a cumulative effect adjustment to decrease retained earnings with a corresponding increase to AOCI as of July 1, 2010. Effective January 1, 2010, the Company adopted guidance related to financial instrument transfers and consolidation of VIEs. The financial instrument transfer guidance eliminates the concept of a qualified special purpose entity ("QSPE"), eliminates the guaranteed mortgage securitization exception, changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The revised consolidation guidance changed the definition of the primary beneficiary, as well as the method of determining whether an entity is a primary beneficiary of a VIE from a quantitative model to a qualitative model. Under the qualitative VIE consolidation model, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or receive benefits that could potentially be significant to the VIE is considered to be the primary beneficiary. The guidance requires a continuous reassessment, as well as enhanced disclosures, including the effects of a company's involvement with VIEs on its financial statements. As a result of the adoption of the amended VIE consolidation guidance, the Company consolidated certain former QSPEs that were previously accounted for as equity security collateralized debt obligations. The Company also elected FVO for all of the consolidated assets and liabilities of these entities. Upon consolidation, the Company recorded $278 million of securities classified as trading and FVO securities and $232 million of F-28 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) long-term debt based on estimated fair values at January 1, 2010 and de-recognized less than $1 million in equity securities. The consolidation also resulted in an increase in retained earnings of $30 million, net of income tax, at January 1, 2010. For the year ended December 31, 2010, the Company recorded $15 million of net investment income on the consolidated assets, $15 million of interest expense in other expenses on the related long-term debt, and ($30) million in net investment gains (losses) to remeasure the assets and liabilities at their estimated fair values. Future Adoption of New Accounting Pronouncements In March 2013, the FASB issued new guidance regarding foreign currency (Accounting Standards Update ("ASU") 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity), effective prospectively for fiscal years and interim reporting periods within those years beginning after December 15, 2013. The amendments require an entity that ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity to apply the guidance in Subtopic 830-30, Foreign Currency Matters--Translation of Financial Statements, to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. For an equity method investment that is a foreign entity, the partial sale guidance in section 830-30-40, Derecognition, still applies. As such, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In February 2013, the FASB issued new guidance regarding liabilities (ASU 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date), effective retrospectively for fiscal years beginning after December 15, 2013 and interim periods within those years. The amendments require an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. In addition the amendments require an entity to disclose the nature and amount of the obligation as well as other information about the obligations. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2013, the FASB issued new guidance regarding comprehensive income (ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income), effective prospectively for fiscal years beginning after December 15, 2012. The amendments require an entity to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. F-29 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) In January 2013, the FASB issued new guidance regarding balance sheet offsetting disclosures (ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities ("ASU 2013-01")), effective for fiscal years and interim periods within those years beginning on or after January 1, 2013. The amendments in ASU 2013-01 clarify that the scope of ASU 2011-11 (as defined below), applies to derivatives, including bifurcated embedded derivatives, repurchase and reverse repurchase agreements, and securities borrowing and lending transactions. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In December 2011, the FASB issued new guidance regarding balance sheet offsetting disclosures (ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities ("ASU 2011-11")), effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance will be applied retrospectively for all comparative periods presented. The guidance requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effects of those arrangements on its financial position. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of the guidance is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In July 2011, the FASB issued new guidance on other expenses (ASU 2011-06, Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers), effective for calendar years beginning after December 31, 2013. The objective of this standard is to address how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act. The amendments in this standard specify that the liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using the straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 2. Segment Information As announced in November 2011, MetLife, Inc. reorganized its business into three broad geographic regions. As a result, during 2012, the Company reorganized into three segments: Retail; Group, Voluntary & Worksite Benefits; and Corporate Benefit Funding. In addition, the Company reports certain of its results of operations in Corporate & Other. Prior period results have been revised in connection with these changes. Retail The Retail segment offers a broad range of protection products and services and a variety of annuities to individuals and employees of corporations and other institutions, and is organized into two businesses: Life & Other and Annuities. Life & Other insurance products and services include variable life, universal life, term life and whole life products. Additionally, through broker-dealer affiliates, the Company offers a full range of mutual funds and other securities products. Life & Other products and services also include individual disability income products. Annuities include a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs. F-30 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Group, Voluntary & Worksite Benefits The Group, Voluntary & Worksite Benefits segment offers a broad range of protection products and services to individuals and corporations, as well as other institutions and their respective employees, and is organized into two businesses: Group and Voluntary & Worksite. Group insurance products and services include variable life, universal life and term life products. Group insurance products and services also include dental, group short- and long-term disability and accidental death & dismemberment coverages. The Voluntary & Worksite business includes LTC, prepaid legal plans and critical illness products. Corporate Benefit Funding The Corporate Benefit Funding segment offers a broad range of annuity and investment products, including guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This segment also includes certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives. Corporate & Other Corporate & Other contains the excess capital not allocated to the segments, enterprise-wide strategic initiative restructuring charges, various start-up and certain run-off entities, 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 intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings. Financial Measures and Segment Accounting Policies Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is the Company's measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for GAAP income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings is defined as operating revenues less operating expenses, both net of income tax. Operating revenues excludes net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues: . Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees ("GMIB Fees"); and . Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, and (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP. F-31 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses: . Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs ("GMIB Costs"), and (iv) market value adjustments associated with surrenders or terminations of contracts ("Market Value Adjustments"); . Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of PABs but do not qualify for hedge accounting treatment; . Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments; . Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and . Other expenses excludes costs related to noncontrolling interests and goodwill impairments. 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, 2012, 2011 and 2010 and at December 31, 2012 and 2011. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below. 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 MetLife, Inc.'s and the Company's business. MetLife, Inc.'s economic capital model aligns segment allocated equity with emerging standards and consistent risk principles. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income, operating earnings or income (loss) from continuing operations, net of income tax. F-32 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Operating Earnings ----------------------------------------------------- Group, Voluntary, Corporate & Worksite Benefit Corporate Total Year Ended December 31, 2012 Retail Benefits Funding & Other Total Adjustments Consolidated ------------------------------------------- ---------- ---------- ---------- --------- ---------- ----------- ------------ (In millions) Revenues Premiums................................... $ 3,997 $ 13,274 $ 2,608 $ 1 $ 19,880 $ -- $ 19,880 Universal life and investment-type product policy fees............................... 1,332 663 194 -- 2,189 50 2,239 Net investment income...................... 5,384 1,680 4,519 554 12,137 (285) 11,852 Other revenues............................. 265 398 252 815 1,730 -- 1,730 Net investment gains (losses).............. -- -- -- -- -- (330) (330) Net derivative gains (losses).............. -- -- -- -- -- 675 675 ---------- --------- ---------- --------- ---------- -------- --------- Total revenues........................... 10,978 16,015 7,573 1,370 35,936 110 36,046 ---------- --------- ---------- --------- ---------- -------- --------- Expenses Policyholder benefits and claims and policyholder dividends.................... 6,294 12,580 4,552 (1) 23,425 139 23,564 Interest credited to policyholder account balances.................................. 1,002 167 1,192 -- 2,361 29 2,390 Capitalization of DAC...................... (584) (24) (24) -- (632) -- (632) Amortization of DAC and VOBA............... 656 29 12 2 699 292 991 Interest expense on debt................... 5 1 9 133 148 4 152 Other expenses............................. 2,341 1,901 438 1,196 5,876 7 5,883 ---------- --------- ---------- --------- ---------- -------- --------- Total expenses........................... 9,714 14,654 6,179 1,330 31,877 471 32,348 ---------- --------- ---------- --------- ---------- -------- --------- Provision for income tax expense (benefit). 442 477 488 (236) 1,171 (116) 1,055 ---------- --------- ---------- --------- ---------- --------- Operating earnings......................... $ 822 $ 884 $ 906 $ 276 2,888 ========== ========= ========== ========= Adjustments to: Total revenues........................... 110 Total expenses........................... (471) Provision for income tax (expense) benefit................................. 116 ---------- Income (loss) from continuing operations, net of income tax......................... $ 2,643 $ 2,643 ========== ========= Group, Voluntary Corporate & Worksite Benefit Corporate At December 31, 2012 Retail Benefits Funding & Other Total ------------------------------------------- ---------- ---------- ---------- --------- ---------- (In millions) Total assets............................... $ 171,050 $ 41,362 $ 183,856 $ 32,996 $ 429,264 Separate account assets.................... $ 50,572 $ 532 $ 69,867 $ -- $ 120,971 Separate account liabilities............... $ 50,572 $ 532 $ 69,867 $ -- $ 120,971
F-33 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Operating Earnings --------------------------------------------------- Group, Voluntary, Corporate & Worksite Benefit Corporate Total Year Ended December 31, 2011 Retail Benefits Funding & Other Total Adjustments Consolidated ------------------------------------------- ---------- ---------- --------- --------- --------- ----------- ------------ (In millions) Revenues Premiums................................... $ 4,022 $ 12,487 $ 1,778 $ 1 $ 18,288 $ -- $ 18,288 Universal life and investment-type product policy fees............................... 1,334 630 197 -- 2,161 41 2,202 Net investment income...................... 5,363 1,682 4,312 385 11,742 (127) 11,615 Other revenues............................. 226 374 242 966 1,808 -- 1,808 Net investment gains (losses).............. -- -- -- -- -- 132 132 Net derivative gains (losses).............. -- -- -- -- -- 1,578 1,578 ---------- --------- --------- -------- --------- --------- --------- Total revenues........................... 10,945 15,173 6,529 1,352 33,999 1,624 35,623 ---------- --------- --------- -------- --------- --------- --------- Expenses Policyholder benefits and claims and policyholder dividends.................... 6,425 11,880 3,683 4 21,992 44 22,036 Interest credited to policyholder account balances.................................. 1,000 178 1,140 -- 2,318 54 2,372 Capitalization of DAC...................... (622) (84) (18) -- (724) -- (724) Amortization of DAC and VOBA............... 681 95 14 1 791 84 875 Interest expense on debt................... 5 -- 8 172 185 9 194 Other expenses............................. 2,564 1,837 472 1,247 6,120 6 6,126 ---------- --------- --------- -------- --------- --------- --------- Total expenses........................... 10,053 13,906 5,299 1,424 30,682 197 30,879 ---------- --------- --------- -------- --------- --------- --------- Provision for income tax expense (benefit)................................. 314 445 432 (229) 962 498 1,460 ---------- --------- --------- -------- --------- --------- Operating earnings......................... $ 578 $ 822 $ 798 $ 157 2,355 ========== ========= ========= ======== Adjustments to: Total revenues........................... 1,624 Total expenses........................... (197) Provision for income tax (expense) benefit................................. (498) --------- Income (loss) from continuing operations, net of income tax......................... $ 3,284 $ 3,284 ========= ========= Group, Voluntary, Corporate & Worksite Benefit Corporate At December 31, 2011 Retail Benefits Funding & Other Total ------------------------------------------- ---------- ---------- --------- --------- --------- (In millions) Total assets............................... $ 160,164 $ 42,603 $ 164,244 $ 33,720 $ 400,731 Separate account assets.................... $ 43,229 $ 478 $ 62,971 $ -- $ 106,678 Separate account liabilities............... $ 43,229 $ 478 $ 62,971 $ -- $ 106,678
F-34 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Operating Earnings ------------------------------------------------- Group, Voluntary, Corporate & Worksite Benefit Corporate Total Year Ended December 31, 2010 Retail Benefits Funding & Other Total Adjustments Consolidated ------------------------------------------- -------- ---------- --------- --------- --------- ----------- ------------ (In millions) Revenues Premiums................................... $ 4,125 $ 12,691 $ 1,702 $ 1 $ 18,519 $ -- $ 18,519 Universal life and investment-type product policy fees............................... 1,228 616 196 -- 2,040 35 2,075 Net investment income...................... 5,675 1,617 4,156 141 11,589 (8) 11,581 Other revenues............................. 163 358 240 964 1,725 -- 1,725 Net investment gains (losses).............. -- -- -- -- -- (170) (170) Net derivative gains (losses).............. -- -- -- -- -- (266) (266) -------- --------- -------- -------- --------- --------- --------- Total revenues........................... 11,191 15,282 6,294 1,106 33,873 (409) 33,464 -------- --------- -------- -------- --------- --------- --------- Expenses Policyholder benefits and claims and policyholder dividends.................... 6,504 12,122 3,511 (18) 22,119 31 22,150 Interest credited to policyholder account balances.................................. 1,026 192 1,252 -- 2,470 53 2,523 Capitalization of DAC...................... (530) (97) (13) -- (640) -- (640) Amortization of DAC and VOBA............... 593 96 15 1 705 104 809 Interest expense on debt................... 5 -- 8 189 202 15 217 Other expenses............................. 2,411 1,843 459 1,181 5,894 2 5,896 -------- --------- -------- -------- --------- --------- --------- Total expenses........................... 10,009 14,156 5,232 1,353 30,750 205 30,955 -------- --------- -------- -------- --------- --------- --------- Provision for income tax expense (benefit)................................. 415 395 371 (208) 973 (204) 769 -------- --------- -------- -------- --------- --------- Operating earnings......................... $ 767 $ 731 $ 691 $ (39) 2,150 ======== ========= ======== ======== Adjustments to: Total revenues........................... (409) Total expenses........................... (205) Provision for income tax (expense) benefit................................. 204 --------- Income (loss) from continuing operations, net of income tax............. $ 1,740 $ 1,740 ========= =========
Net investment income is based upon the actual results of each segment's specifically identifiable investment 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. The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company's segments, as well as Corporate & Other:
Years Ended December 31, ----------------------------- 2012 2011 2010 --------- --------- --------- (In millions) Life insurance (1)............ $ 17,224 $ 16,209 $ 16,204 Accident and health insurance. 6,458 5,940 5,982 Non-insurance................. 167 149 133 --------- --------- --------- Total........................ $ 23,849 $ 22,298 $ 22,319 ========= ========= =========
-------- (1) Includes annuities and corporate benefit funding products. F-35 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Revenues derived from one external customer were $2.5 billion, $2.4 billion and $2.2 billion for the years ended December 31, 2012, 2011 and 2010, respectively, which represented 11%, 11% and 10%, respectively, of consolidated premiums, universal life and investment-type product policy fees and other revenues. Revenues derived from any other customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2012, 2011 and 2010. Substantially all of the Company's consolidated premiums, universal life & investment-type product policy fees and other revenues originated in the U.S. 3. Discontinued Operations The following table summarizes the amounts that have been reflected as discontinued operations in the consolidated statements of operations. Income (loss) from discontinued operations includes real estate classified as held-for-sale or sold.
Years ended December 31, ----------------------- 2012 2011 2010 ------- ------- ------- (In millions) Total revenues.......................................................... $ 62 $ 105 $ 37 Total expenses.......................................................... -- -- -- ------- ------- ------- Income (loss) before provision for income tax........................... 62 105 37 Provision for income tax expense (benefit).............................. 22 37 12 ------- ------- ------- Income (loss) from operations of discontinued operations, net of income tax................................................................... 40 68 25 Gain (loss) on disposal of operations, net of income tax................ -- (7) 6 ------- ------- ------- Income (loss) from discontinued operations, net of income tax........... $ 40 $ 61 $ 31 ======= ======= =======
4. Insurance Insurance Liabilities Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, PABs and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
December 31, ------------------------- 2012 2011 ------------ ------------ (In millions) Retail............................... $ 92,322 $ 92,352 Group, Voluntary & Worksite Benefits. 28,517 27,480 Corporate Benefit Funding............ 93,051 83,752 Corporate & Other.................... 475 481 ------------ ------------ Total............................... $ 214,365 $ 204,065 ============ ============
See Note 2 for information on the reorganization of the Company's segments during 2012, which was retrospectively applied. See Note 6 for discussion of affiliated reinsurance liabilities included in the table above. F-36 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Future policy benefits are measured as follows: Product Type: Measurement Assumptions: ------------------------------------------------------------------- Participating life 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. ------------------------------------------------------------------- Non-participating life Aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 2% to 10%. ------------------------------------------------------------------- Individual and group Present value of expected future traditional fixed annuities payments. Interest rate assumptions after annuitization used in establishing such liabilities range from 1% to 11%. ------------------------------------------------------------------- Non-medical health The net level premium method and insurance assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. ------------------------------------------------------------------- Disabled lives Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 2% to 8%. ------------------------------------------------------------------- Participating business represented 5% and 6% of the Company's life insurance in-force at December 31, 2012 and 2011, respectively. Participating policies represented 29%, 32% and 32% of gross life insurance premiums for the years ended December 31, 2012, 2011 and 2010, respectively. PABs are equal to: (i) policy account values, which consist of an accumulation of gross premium payments; (ii) credited interest, ranging from 1% to 13%, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments relating to business combinations. F-37 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Guarantees The Company issues variable annuity products with guaranteed minimum benefits. The non-life contingent portion of GMWBs and the portion of certain GMIBs that does not require annuitization are accounted for as embedded derivatives in PABs and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include: Guarantee: Measurement Assumptions: ------------------------------------------------------------------------------------ GMDBs . A return of purchase payment upon . Present value of expected death death even if the account value is benefits in excess of the reduced to zero. projected account balance recognizing the excess ratably over the accumulation period based on the present value of total expected assessments. ------------------------------------------------------------------------------------ . An enhanced death benefit may be . Assumptions are consistent with available for an additional fee. those used for amortizing DAC, and are thus subject to the same variability and risk. . Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index. . Benefit assumptions are based on the average benefits payable over a range of scenarios. ------------------------------------------------------------------------------------ GMIBs . After a specified period of time . Present value of expected income determined at the time of issuance benefits in excess of the of the variable annuity contract, projected account balance at any a minimum accumulation of purchase future date of annuitization and payments, even if the account recognizing the excess ratably value is reduced to zero, that can over the accumulation period based be annuitized to receive a monthly on present value of total expected income stream that is not less assessments. than a specified amount. . Certain contracts also provide for . Assumptions are consistent with a guaranteed lump sum return of those used for estimating GMDBs purchase premium in lieu of the liabilities. annuitization benefit. . Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. ------------------------------------------------------------------------------------ GMWBs. . A return of purchase payment via . Expected value of the life partial withdrawals, even if the contingent payments and expected account value is reduced to zero, assessments using assumptions provided that cumulative consistent with those used for withdrawals in a contract year do estimating the GMDBs liabilities. not exceed a certain limit. . Certain contracts include guaranteed withdrawals that are life contingent.
F-38 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 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, maturity or at annuitization. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows:
Universal and Variable Annuity Contracts Life Contracts ---------------- --------------------- Secondary Paid-Up GMDBs GMIBs Guarantees Guarantees Total ------- -------- ---------- ---------- -------- (In millions) Direct Balance at January 1, 2010................................................. $ 57 $ 89 $ 67 $ 21 $ 234 Incurred guaranteed benefits............................................... 10 24 179 28 241 Paid guaranteed benefits................................................... (6) -- -- -- (6) ------- -------- ------- ------- -------- Balance at December 31, 2010............................................... 61 113 246 49 469 Incurred guaranteed benefits............................................... 30 45 15 9 99 Paid guaranteed benefits................................................... (7) -- -- -- (7) ------- -------- ------- ------- -------- Balance at December 31, 2011............................................... 84 158 261 58 561 Incurred guaranteed benefits............................................... 31 174 79 10 294 Paid guaranteed benefits................................................... (6) -- -- -- (6) ------- -------- ------- ------- -------- Balance at December 31, 2012............................................... $ 109 $ 332 $ 340 $ 68 $ 849 ======= ======== ======= ======= ======== Ceded Balance at January 1, 2010................................................. $ 37 $ 28 $ 44 $ 8 $ 117 Incurred guaranteed benefits............................................... 13 8 165 26 212 Paid guaranteed benefits................................................... (6) -- -- -- (6) ------- -------- ------- ------- -------- Balance at December 31, 2010............................................... 44 36 209 34 323 Incurred guaranteed benefits............................................... 25 16 3 7 51 Paid guaranteed benefits................................................... (7) -- -- -- (7) ------- -------- ------- ------- -------- Balance at December 31, 2011............................................... 62 52 212 41 367 Incurred guaranteed benefits............................................... 30 58 53 6 147 Paid guaranteed benefits................................................... (6) -- -- -- (6) ------- -------- ------- ------- -------- Balance at December 31, 2012............................................... $ 86 $ 110 $ 265 $ 47 $ 508 ======= ======== ======= ======= ======== Net Balance at January 1, 2010................................................. $ 20 $ 61 $ 23 $ 13 $ 117 Incurred guaranteed benefits............................................... (3) 16 14 2 29 Paid guaranteed benefits................................................... -- -- -- -- -- ------- -------- ------- ------- -------- Balance at December 31, 2010............................................... 17 77 37 15 146 Incurred guaranteed benefits............................................... 5 29 12 2 48 Paid guaranteed benefits................................................... -- -- -- -- -- ------- -------- ------- ------- -------- Balance at December 31, 2011............................................... 22 106 49 17 194 Incurred guaranteed benefits............................................... 1 116 26 4 147 Paid guaranteed benefits................................................... -- -- -- -- -- ------- -------- ------- ------- -------- Balance at December 31, 2012............................................... $ 23 $ 222 $ 75 $ 21 $ 341 ======= ======== ======= ======= ========
F-39 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Account balances of contracts with insurance guarantees were invested in separate account asset classes as follows at:
December 31, ------------------- 2012 2011 --------- --------- (In millions) Fund Groupings: Equity.......... $ 19,623 $ 18,240 Balanced........ 19,235 14,368 Bond............ 4,771 4,221 Specialty....... 852 787 Money Market.... 192 211 --------- --------- Total.......... $ 44,673 $ 37,827 ========= =========
Based on the type of guarantee, the Company defines net amount at risk ("NAR") as listed below. These amounts include direct business, but exclude offsets from hedging or reinsurance, if any. Variable Annuity Guarantees In the Event of Death Defined as the guaranteed minimum death benefit less the total contract account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. At Annuitization Defined as the amount (if any) that would be required to be added to the total contract account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that only allow annuitization of the guaranteed amount after the 10th anniversary of the contract, which not all contractholders have achieved. Two Tier Annuities Defined as the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date. These contracts apply a lower rate of funds if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. Universal and Variable Life Contracts Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. F-40 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts was as follows at:
December 31, -------------------------------------------------------------- 2012 2011 --------------------------- ------------------------------- In the At In the Event of Death Annuitization Event of Death At Annuitization -------------- ------------- -------------- ---------------- (In millions) Annuity Contracts (1) Variable Annuity Guarantees Total contract account value..... $ 55,469 $ 24,229 $ 48,671 $ 18,378 Separate account value............. $ 43,327 $ 22,963 $ 36,327 $ 17,024 Net amount at risk.. $ 902 $ 845 (2) $ 1,894 $ 413 (2) Average attained age of contractholders... 64 years 60 years 63 years 60 years Two Tier Annuities General account value............. N/A $ 274 N/A $ 276 Net amount at risk.. N/A $ 48 N/A $ 49 Average attained age of contractholders... N/A 64 years N/A 63 years December 31, -------------------------------------------------------------- 2012 2011 --------------------------- ------------------------------- Secondary Paid-Up Secondary Paid-Up Guarantees Guarantees Guarantees Guarantees -------------- ------------- -------------- ---------------- (In millions) Universal and Variable Life Contracts (1) Account value (general and separate account). $ 6,958 $ 1,163 $ 6,535 $ 1,206 Net amount at risk.. $ 85,216 $ 9,299 $ 88,999 $ 9,977 Average attained age of policyholders..... 52 years 59 years 51 years 58 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 Company had previously disclosed the NAR based on the excess of the benefit base over the contractholder's total contract account value on the balance sheet date. Such amounts were $1.9 billion and $2.6 billion at December 31, 2012 and 2011, respectively. The Company has provided, in the table above, the NAR as defined above. The Company believes that this definition is more representative of the potential economic exposures of these guarantees as the contractholders do not have access to this difference other than through annuitization. Obligations Under Funding Agreements The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain special purpose entities ("SPEs") that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. During the years ended December 31, 2012, 2011 and 2010, the Company issued $24.7 billion, $27.4 billion and $15.0 billion, respectively, and repaid $21.5 billion, $28.2 billion and $12.3 billion, respectively, of such funding agreements. At December 31, 2012 and 2011, liabilities for funding agreements outstanding, which are included in PABs, were $23.9 billion and $20.1 billion, respectively. F-41 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Metropolitan Life Insurance Company and General American Life Insurance Company ("GALIC"), a subsidiary, are members of the Federal Home Loan Bank ("FHLB"). Holdings of FHLB common stock by branch, included in equity securities, were as follows at:
December 31, ------------- 2012 2011 ------ ------ (In millions) FHLB of New York... $ 736 $ 658 FHLB of Des Moines. $ 55 $ 31
The Company has also entered into funding agreements. The liability for funding agreements is included in PABs. Information related to the funding agreements was as follows at:
Liability Collateral ------------------- -------------------------- December 31, ---------------------------------------------- 2012 2011 2012 2011 --------- --------- ------------ ------------- (In millions) FHLB of New York (1)... $ 13,512 $ 11,655 $ 14,611(2) $ 13,002 (2) Farmer Mac (3)......... $ 2,550 $ 2,550 $ 2,929 $ 2,927 FHLB of Des Moines (1). $ 1,000 $ 475 $ 1,298(2) $ 662 (2)
-------- (1)Represents funding agreements issued to the FHLB in exchange for cash and for which the FHLB has been granted a lien on certain assets, which are in the custody of the FHLB, including residential mortgage-backed securities ("RMBS"), to collateralize obligations under advances evidenced by funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of the FHLB as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, the FHLB's recovery on the collateral is limited to the amount of the Company's liability to the FHLB. (2)Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value. (3)Represents funding agreements issued to certain SPEs that have issued debt securities for which payment of interest and principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and principal by the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. ("Farmer Mac"). The obligations under these funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of collateral presented is at carrying value. F-42 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Liabilities for Unpaid Claims and Claim Expenses Information regarding the liabilities for unpaid claims and claim expenses relating to group accident and non-medical health policies and contracts, which are reported in future policy benefits and other policy-related balances, was as follows:
Years Ended December 31, -------------------------- 2012 2011 2010 -------- -------- -------- (In millions) Balance at January 1,............................. $ 6,622 $ 6,539 $ 6,302 Less: Reinsurance recoverables.................. 324 448 354 -------- -------- -------- Net balance at January 1,......................... 6,298 6,091 5,948 -------- -------- -------- Incurred related to: Current year.................................... 4,320 3,856 3,733 Prior years..................................... (42) (79) 13 -------- -------- -------- Total incurred................................. 4,278 3,777 3,746 -------- -------- -------- Paid related to: Current year.................................... (2,626) (2,282) (2,244) Prior years..................................... (1,425) (1,288) (1,359) -------- -------- -------- Total paid..................................... (4,051) (3,570) (3,603) -------- -------- -------- Net balance at December 31,....................... 6,525 6,298 6,091 Add: Reinsurance recoverables..................... 301 324 448 -------- -------- -------- Balance at December 31,........................... $ 6,826 $ 6,622 $ 6,539 ======== ======== ========
During 2012 and 2011, claims and claim adjustment expenses associated with prior years decreased by $42 million and $79 million, respectively, due to improved loss ratios for non-medical health claim liabilities. During 2010, claims and claim adjustment expenses associated with prior years increased by $13 million due to differences between the actual benefits paid and expected benefits owed during those periods. Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $71.7 billion and $62.7 billion at December 31, 2012 and 2011, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $49.3 billion and $44.0 billion at December 31, 2012 and 2011, respectively. The latter category consisted primarily of funding agreements and participating close-out contracts. The average interest rate credited on these contracts was 2.80% and 3.12% at December 31, 2012 and 2011, respectively. For the years ended December 31, 2012, 2011 and 2010, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Policy-Related Intangibles See Note 1 for a description of capitalized acquisition costs. F-43 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Non-Participating and Non-Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts (term insurance, non-participating whole life insurance, traditional group life insurance, and non-medical health insurance) over the appropriate premium paying period in proportion to the actual historic and expected future gross premiums that were set at contract issue. The expected premiums are 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), 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. Participating, Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these 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 within the closed block (dividend-paying traditional contracts) future gross margins are also dependent upon changes in the policyholder dividend obligation. See Note 7. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances. Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses and persistency are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the F-44 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. Factors Impacting Amortization Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions primarily relate to 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. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Amortization of DAC and VOBA is attributed to both investment gains and losses and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. F-45 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Information regarding DAC and VOBA was as follows:
Years Ended December 31, -------------------------- 2012 2011 2010 -------- -------- -------- (In millions) DAC Balance at January 1,................................................. $ 6,244 $ 6,640 $ 7,639 Capitalizations....................................................... 632 724 640 Amortization related to: Net investment gains (losses)....................................... (270) (88) (108) Other expenses...................................................... (709) (777) (687) -------- -------- -------- Total amortization................................................. (979) (865) (795) -------- -------- -------- Unrealized investment gains (losses).................................. (145) (255) (844) -------- -------- -------- Balance at December 31,............................................... 5,752 6,244 6,640 -------- -------- -------- VOBA Balance at January 1,................................................. 97 115 136 Amortization related to: Other expenses...................................................... (12) (10) (14) -------- -------- -------- Total amortization................................................. (12) (10) (14) -------- -------- -------- Unrealized investment gains (losses).................................. (5) (8) (7) -------- -------- -------- Balance at December 31,............................................... 80 97 115 -------- -------- -------- Total DAC and VOBA Balance at December 31,............................................... $ 5,832 $ 6,341 $ 6,755 ======== ======== ========
See Note 1 for information on the retrospective application of the adoption of new accounting guidance related to DAC. See Note 2 for information on the reorganization of the Company's segments during 2012, which was retrospectively applied. Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
December 31, ----------------- 2012 2011 -------- -------- (In millions) Retail................................................................ $ 5,407 $ 5,921 Group, Voluntary & Worksite Benefits.................................. 337 342 Corporate Benefit Funding............................................. 88 76 Corporate & Other..................................................... -- 2 -------- -------- Total............................................................... $ 5,832 $ 6,341 ======== ========
F-46 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Information regarding other policy-related intangibles was as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 ------ ------ ------ (In millions) Deferred Sales Inducements Balance at January 1,...... $ 184 $ 190 $ 173 Capitalization............. 22 29 42 Amortization............... (26) (35) (25) ------ ------ ------ Balance at December 31,.... $ 180 $ 184 $ 190 ====== ====== ====== VODA and VOCRA Balance at January 1,...... $ 378 $ 400 $ 412 Acquisitions............... -- -- 7 Amortization............... (25) (22) (19) ------ ------ ------ Balance at December 31,.... $ 353 $ 378 $ 400 ====== ====== ====== Accumulated amortization... $ 104 $ 79 $ 57 ====== ====== ======
The estimated future amortization expense to be reported in other expenses for the next five years is as follows:
VOBA VODA and VOCRA ------- -------------- (In millions) 2013.......................... $ 11 $ 28 2014.......................... $ 9 $ 30 2015.......................... $ 8 $ 30 2016.......................... $ 4 $ 30 2017.......................... $ 5 $ 28
6. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser for reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. 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 in Note 8. For its individual life insurance products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. The Company currently reinsures 90% of the mortality F-47 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) risk in excess of $2 million for most products and reinsures up to 90% of the mortality risk for certain other products. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount the Company retains. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. For other policies within the Group, Voluntary and Worksite Benefits segment, the Company generally retains most of the risk and only cedes particular risks on certain client arrangements. The Company's Retail Annuities business assumes 90% of the fixed annuities issued by several affiliates. The Company also reinsures 100% of the living and death benefit guarantees issued in connection with its variable annuities issued since 2004 to an affiliated reinsurer and certain portions of the living and death benefit guarantees issued in connection with its variable annuities issued prior to 2004 to affiliated and unaffiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on fees associated with the guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations. The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The Company's Corporate Benefit Funding segment periodically engages in reinsurance activities, as considered appropriate. The impact of these activities on the financial results of this segment has not been significant. 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 agreements to provide greater diversification of risk and minimize exposure to larger risks. The Company reinsures its business through a diversified group of well-capitalized, highly rated reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at December 31, 2012 and 2011, were not significant. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $2.4 billion and $2.3 billion of unsecured unaffiliated reinsurance recoverable balances at December 31, 2012 and 2011, respectively. At December 31, 2012, the Company had $5.4 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $4.4 billion, or 82%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.8 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2011, the Company had $5.4 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $4.2 billion, or 78%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.6 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. F-48 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The Company has reinsured with an unaffiliated third-party reinsurer 49.25% of the closed block through a modified coinsurance agreement. The Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has offset the modified coinsurance deposit with the deposit recoverable. The amounts in the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:
Years Ended December 31, ----------------------------- 2012 2011 2010 --------- --------- --------- (In millions) Premiums: Direct premiums............................................... $ 19,821 $ 18,435 $ 18,793 Reinsurance assumed........................................... 1,350 1,240 1,155 Reinsurance ceded............................................. (1,291) (1,387) (1,429) --------- --------- --------- Net premiums................................................. $ 19,880 $ 18,288 $ 18,519 ========= ========= ========= Universal life and investment-type product policy fees: Direct universal life and investment-type product policy fees. $ 2,763 $ 2,686 $ 2,627 Reinsurance assumed........................................... 39 38 13 Reinsurance ceded............................................. (563) (522) (565) --------- --------- --------- Net universal life and investment-type product policy fees... $ 2,239 $ 2,202 $ 2,075 ========= ========= ========= Other revenues: Direct other revenues......................................... $ 887 $ 836 $ 750 Reinsurance assumed........................................... (6) (6) (5) Reinsurance ceded............................................. 849 978 980 --------- --------- --------- Net other revenues........................................... $ 1,730 $ 1,808 $ 1,725 ========= ========= ========= Policyholder benefits and claims: Direct policyholder benefits and claims....................... $ 22,677 $ 21,100 $ 21,246 Reinsurance assumed........................................... 1,208 1,069 1,235 Reinsurance ceded............................................. (1,616) (1,488) (1,774) --------- --------- --------- Net policyholder benefits and claims......................... $ 22,269 $ 20,681 $ 20,707 ========= ========= ========= Other expenses: Direct other expenses......................................... $ 5,328 $ 5,280 $ 5,167 Reinsurance assumed........................................... 479 458 462 Reinsurance ceded............................................. 587 733 653 --------- --------- --------- Net other expenses........................................... $ 6,394 $ 6,471 $ 6,282 ========= ========= =========
F-49 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The amounts in the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:
December 31, --------------------------------------------------------------------------------- 2012 2011 ---------------------------------------- ---------------------------------------- Total Total Balance Balance Direct Assumed Ceded Sheet Direct Assumed Ceded Sheet ---------- -------- --------- ---------- ---------- -------- --------- ---------- (In millions) Assets: Premiums, reinsurance and other receivables...................... $ 1,613 $ 480 $ 22,628 $ 24,721 $ 1,383 $ 485 $ 26,113 $ 27,981 Deferred policy acquisition costs and value of business acquired......................... 5,685 460 (313) 5,832 6,337 386 (382) 6,341 ---------- -------- --------- ---------- ---------- -------- --------- ---------- Total assets.................... $ 7,298 $ 940 $ 22,315 $ 30,553 $ 7,720 $ 871 $ 25,731 $ 34,322 ========== ======== ========= ========== ========== ======== ========= ========== Liabilities: Future policy benefits............ $ 112,264 $ 1,722 $ -- $ 113,986 $ 107,713 $ 1,620 $ -- $ 109,333 Policyholder account balances..... 94,454 262 -- 94,716 88,557 299 -- 88,856 Other policy-related balances..... 5,401 291 (29) 5,663 5,631 294 (49) 5,876 Other liabilities................. 9,544 7,327 17,070 33,941 8,068 7,574 20,972 36,614 ---------- -------- --------- ---------- ---------- -------- --------- ---------- Total liabilities............... $ 221,663 $ 9,602 $ 17,041 $ 248,306 $ 209,969 $ 9,787 $ 20,923 $ 240,679 ========== ======== ========= ========== ========== ======== ========= ==========
Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $13.9 billion and $17.9 billion at December 31, 2012 and 2011, respectively. The deposit liabilities on reinsurance were $6.9 billion and $7.0 billion at December 31, 2012 and 2011, respectively. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including Exeter Reassurance Company Ltd. ("Exeter"), First MetLife Investors Insurance Company, MetLife Insurance Company of Connecticut ("MICC"), MetLife Investors USA Insurance Company, MetLife Investors Insurance Company, MetLife Reinsurance Company of Charleston ("MRC"), MetLife Reinsurance Company of Vermont and Metropolitan Tower Life Insurance Company, all of which are related parties. F-50 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Information regarding the significant effects of affiliated reinsurance included in the consolidated statements of operations was as follows:
Years Ended December 31, -------------------------- 2012 2011 2010 -------- -------- -------- (In millions) Premiums: Reinsurance assumed............................................................. $ 319 $ 169 $ 88 Reinsurance ceded............................................................... (54) (51) (63) -------- -------- -------- Net premiums.................................................................. $ 265 $ 118 $ 25 ======== ======== ======== Universal life and investment-type product policy fees: Reinsurance assumed............................................................. $ 39 $ 38 $ 13 Reinsurance ceded............................................................... (216) (170) (230) -------- -------- -------- Net universal life and investment-type product policy fees.................... $ (177) $ (132) $ (217) ======== ======== ======== Other revenues: Reinsurance assumed............................................................. $ (6) $ (7) $ (5) Reinsurance ceded............................................................... 790 916 908 -------- -------- -------- Net other revenues............................................................ $ 784 $ 909 $ 903 ======== ======== ======== Policyholder benefits and claims: Reinsurance assumed............................................................. $ 334 $ 175 $ 112 Reinsurance ceded............................................................... (177) (121) (129) -------- -------- -------- Net policyholder benefits and claims.......................................... $ 157 $ 54 $ (17) ======== ======== ======== Other expenses: Reinsurance assumed............................................................. $ 357 $ 352 $ 362 Reinsurance ceded............................................................... 789 914 824 -------- -------- -------- Net other expenses............................................................ $ 1,146 $ 1,266 $ 1,186 ======== ======== ========
Information regarding the significant effects of affiliated reinsurance included in the consolidated balance sheets was as follows at:
December 31, ------------------------------------- 2012 2011 ------------------ ------------------ Assumed Ceded Assumed Ceded -------- --------- -------- --------- (In millions) Assets: Premiums, reinsurance and other receivables (1)......... $ 85 $ 16,925 $ 44 $ 20,469 Deferred policy acquisition costs and value of business acquired.............................................. 435 (266) 359 (286) -------- --------- -------- --------- Total assets........................................... $ 520 $ 16,659 $ 403 $ 20,183 ======== ========= ======== ========= Liabilities: Future policy benefits.................................. $ 567 $ -- $ 442 $ -- Policyholder account balances........................... 251 -- 266 -- Other policy-related balances........................... 57 (29) 59 (49) Other liabilities (1)................................... 6,906 14,652 7,114 18,707 -------- --------- -------- --------- Total liabilities...................................... $ 7,781 $ 14,623 $ 7,881 $ 18,658 ======== ========= ======== =========
F-51 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) (1)Effective in June 2012, the Company recaptured 10% of the 40.75% of the closed block liabilities that were ceded to MRC on a coinsurance with funds withheld basis. In connection with this partial recapture, the Company recognized a decrease of $3.9 billion in the deposit receivable included within premiums, reinsurance and other receivables as well as an offsetting decrease of $3.9 billion in the funds withheld included within other liabilities at December 31, 2012. MLIC ceded two blocks of business to two affiliates on a 75% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and increased the funds withheld balance by $29 million and $20 million at December 31, 2012 and 2011, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($9) million, ($29) million and $9 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were assets of $1.4 billion and $1.2 billion at December 31, 2012 and 2011, respectively. Net derivative gains (losses) associated with the embedded derivatives were $14 million, $727 million and ($66) million for the years ended December 31, 2012, 2011 and 2010, respectively. Certain contractual features of the closed block agreement with MRC create an embedded derivative, which is separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivative related to the funds withheld associated with this reinsurance agreement was included within other liabilities and increased the funds withheld balance by $1.4 billion and $1.5 billion at December 31, 2012 and 2011, respectively. Net derivative gains (losses) associated with the embedded derivative were $135 million, ($811) million and ($596) million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $2.1 billion and $1.5 billion of unsecured affiliated reinsurance recoverable balances at December 31, 2012 and 2011, respectively. Affiliated reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on affiliated reinsurance were $11.8 billion and $15.7 billion at December 31, 2012 and 2011, respectively. The deposit liabilities on affiliated reinsurance were $6.8 billion and $6.9 billion at December 31, 2012 and 2011, respectively. 7. Closed Block On April 7, 2000 (the "Demutualization Date"), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance (the "Superintendent") approving Metropolitan Life Insurance Company's plan of reorganization, as amended (the "Plan"). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the F-52 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) 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 are 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 are 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. Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company's net income continues to be sensitive to the actual performance of the closed block. F-53 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 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. Information regarding the closed block liabilities and assets designated to the closed block was as follows:
December 31, ------------------- 2012 2011 --------- --------- (In millions) Closed Block Liabilities Future policy benefits............................................................ $ 42,586 $ 43,169 Other policy-related balances..................................................... 298 358 Policyholder dividends payable.................................................... 466 514 Policyholder dividend obligation.................................................. 3,828 2,919 Other liabilities................................................................. 602 613 --------- --------- Total closed block liabilities................................................. 47,780 47,573 --------- --------- Assets Designated to the Closed Block Investments: Fixed maturity securities available-for-sale, at estimated fair value............ 30,546 30,407 Equity securities available-for-sale, at estimated fair value.................... 41 35 Mortgage loans................................................................... 6,192 6,206 Policy loans..................................................................... 4,670 4,657 Real estate and real estate joint ventures....................................... 459 364 Other invested assets............................................................ 953 857 --------- --------- Total investments.............................................................. 42,861 42,526 Cash and cash equivalents......................................................... 381 249 Accrued investment income......................................................... 481 509 Premiums, reinsurance and other receivables....................................... 107 109 Current income tax recoverable.................................................... 2 53 Deferred income tax assets........................................................ 319 362 --------- --------- Total assets designated to the closed block.................................. 44,151 43,808 --------- --------- Excess of closed block liabilities over assets designated to the closed block..... 3,629 3,765 --------- --------- Amounts included in accumulated other comprehensive income (loss): Unrealized investment gains (losses), net of income tax.......................... 2,891 2,394 Unrealized gains (losses) on derivatives, net of income tax...................... 9 11 Allocated to policyholder dividend obligation, net of income tax................. (2,488) (1,897) --------- --------- Total amounts included in accumulated other comprehensive income (loss)........... 412 508 --------- --------- Maximum future earnings to be recognized from closed block assets and liabilities.............................................................. $ 4,041 $ 4,273 ========= =========
F-54 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Information regarding the closed block policyholder dividend obligation was as follows:
Years Ended December 31, --------------------------- 2012 2011 2010 ---------- -------- ------- (In millions) Balance at January 1,........................................................... $ 2,919 $ 876 $ -- Change in unrealized investment and derivative gains (losses)................... 909 2,043 876 ---------- -------- ------- Balance at December 31,......................................................... $ 3,828 $ 2,919 $ 876 ========== ======== =======
Information regarding the closed block revenues and expenses was as follows:
Years Ended December 31, -------------------------- 2012 2011 2010 -------- -------- -------- (In millions) Revenues Premiums................................................................. $ 2,139 $ 2,306 $ 2,461 Net investment income.................................................... 2,188 2,231 2,292 Net investment gains (losses)............................................ 61 32 39 Net derivative gains (losses)............................................ (12) 8 (27) -------- -------- -------- Total revenues........................................................ 4,376 4,577 4,765 -------- -------- -------- Expenses Policyholder benefits and claims......................................... 2,783 2,991 3,115 Policyholder dividends................................................... 1,072 1,137 1,235 Other expenses........................................................... 179 193 199 -------- -------- -------- Total expenses........................................................ 4,034 4,321 4,549 -------- -------- -------- Revenues, net of expenses before provision for income tax expense (benefit).............................................................. 342 256 216 Provision for income tax expense (benefit)............................... 120 89 71 -------- -------- -------- Revenues, net of expenses and provision for income tax expense (benefit) from continuing operations............................................. 222 167 145 Revenues, net of expenses and provision for income tax expense (benefit) from discontinued operations........................................... 10 1 1 -------- -------- -------- Revenues, net of expenses and provision for income tax expense (benefit).............................................................. $ 232 $ 168 $ 146 ======== ======== ========
Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes and other additive state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block. 8. Investments See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies. F-55 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Investment Risks and Uncertainties Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements. The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments 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. The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities ("ABS"), certain structured investment transactions and trading and FVO securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. Fixed Maturity and Equity Securities AFS Fixed Maturity and Equity Securities AFS by Sector The following table presents the fixed maturity and equity securities AFS by sector. The unrealized loss amounts presented below include the noncredit loss component of OTTI losses. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including RMBS, CMBS and ABS.
December 31, 2012 December 31, 2011 --------------------------------------------- --------------------------------------------- Gross Unrealized Gross Unrealized Cost or ------------------------- Estimated Cost or ------------------------- Estimated Amortized Temporary OTTI Fair Amortized Temporary OTTI Fair Cost Gains Losses Losses Value Cost Gains Losses Losses Value --------- -------- --------- ------ --------- --------- -------- --------- ------ --------- (In millions) Fixed Maturity Securities: U.S. corporate............. $ 59,587 $ 7,717 $ 304 $ -- $ 67,000 $ 56,298 $ 6,113 $ 715 $ -- $ 61,696 U.S. Treasury and agency... 28,252 4,408 9 -- 32,651 21,572 4,272 -- -- 25,844 Foreign corporate (1)...... 27,231 3,128 126 (1) 30,234 27,298 2,400 551 1 29,146 RMBS....................... 23,792 1,716 226 257 25,025 25,445 1,564 766 524 25,719 CMBS....................... 9,264 559 37 -- 9,786 8,750 473 114 4 9,105 ABS (1).................... 8,025 205 105 -- 8,125 6,589 156 166 (7) 6,586 State and political subdivision............... 5,554 1,184 18 -- 6,720 5,387 842 47 -- 6,182 Foreign government......... 3,052 1,086 3 -- 4,135 3,037 915 52 -- 3,900 --------- -------- --------- ------ --------- --------- -------- --------- ------ --------- Total fixed maturity securities............... $ 164,757 $ 20,003 $ 828 $ 256 $ 183,676 $ 154,376 $ 16,735 $ 2,411 $ 522 $ 168,178 ========= ======== ========= ====== ========= ========= ======== ========= ====== ========= Equity Securities: Common..................... $ 1,013 $ 33 $ 5 $ -- $ 1,041 $ 830 $ 32 $ 6 $ -- $ 856 Non-redeemable preferred... 528 41 111 -- 458 549 11 138 -- 422 --------- -------- --------- ------ --------- --------- -------- --------- ------ --------- Total equity securities... $ 1,541 $ 74 $ 116 $ -- $ 1,499 $ 1,379 $ 43 $ 144 $ -- $ 1,278 ========= ======== ========= ====== ========= ========= ======== ========= ====== =========
F-56 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) -------- (1)OTTI losses, as presented above, represent the noncredit portion of OTTI losses that is included in AOCI. OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities was in an unrealized gain position of $1 million at December 31, 2012 and $7 million for ABS at December 31, 2011, due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also "-- Net Unrealized Investment Gains (Losses)." The Company held non-income producing fixed maturity securities with an estimated fair value of $41 million and $7 million with unrealized gains (losses) of $6 million and ($3) million at December 31, 2012 and 2011, respectively. Methodology for Amortization of Discount or Premium on Structured Securities Amortization of the discount or premium on structured 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 originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and ABS are estimated using inputs obtained from third-party specialists and based on management's knowledge of the current market. For credit-sensitive mortgage-backed and ABS and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other mortgage-backed and ABS, the effective yield is recalculated on a retrospective basis. Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at:
December 31, ------------------------------------------- 2012 2011 --------------------- --------------------- Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value ---------- ---------- ---------- ---------- (In millions) Due in one year or less........................... $ 12,671 $ 12,796 $ 8,089 $ 8,159 Due after one year through five years............. 30,187 32,160 26,375 27,486 Due after five years through ten years............ 34,983 40,009 34,660 38,517 Due after ten years............................... 45,835 55,775 44,468 52,606 ---------- ---------- ---------- ---------- Subtotal........................................ 123,676 140,740 113,592 126,768 Structured securities (RMBS, CMBS and ABS)........ 41,081 42,936 40,784 41,410 ---------- ---------- ---------- ---------- Total fixed maturity securities................ $ 164,757 $ 183,676 $ 154,376 $ 168,178 ========== ========== ========== ==========
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately, as they are not due at a single maturity. F-57 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. The unrealized loss amounts include the noncredit component of OTTI loss.
December 31, 2012 December 31, 2011 ----------------------------------------- ----------------------------------------- Equal to or Greater Equal to or Greater Less than 12 Months than 12 Months Less than 12 Months than 12 Months -------------------- -------------------- -------------------- -------------------- Estimated Gross Estimated Gross Estimated Gross Estimated Gross Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Value Losses --------- ---------- --------- ---------- --------- ---------- --------- ---------- (In millions, except number of securities) Fixed Maturity Securities: U.S. corporate................... $ 2,567 $ 58 $ 2,507 $ 246 $ 5,669 $ 204 $ 3,170 $ 511 U.S. Treasury and agency......... 1,576 9 -- -- 2,189 -- -- -- Foreign corporate................ 758 34 1,381 91 4,560 334 1,258 218 RMBS............................. 639 18 3,098 465 2,647 407 3,241 883 CMBS............................. 727 5 308 32 709 66 365 52 ABS.............................. 1,246 22 697 83 2,557 45 608 114 State and political subdivision..................... 92 1 103 17 31 -- 169 47 Foreign government............... 106 1 27 2 499 44 88 8 -------- ------ -------- ------ --------- -------- -------- -------- Total fixed maturity securities.................... $ 7,711 $ 148 $ 8,121 $ 936 $ 18,861 $ 1,100 $ 8,899 $ 1,833 ======== ====== ======== ====== ========= ======== ======== ======== Equity Securities: Common........................... $ 62 $ 5 $ 1 $ -- $ 4 $ 6 $ -- $ -- Non-redeemable preferred......... -- -- 190 111 126 14 238 124 -------- ------ -------- ------ --------- -------- -------- -------- Total equity securities........ $ 62 $ 5 $ 191 $ 111 $ 130 $ 20 $ 238 $ 124 ======== ====== ======== ====== ========= ======== ======== ======== Total number of securities in an unrealized loss position........ 622 637 1,412 819 ======== ======== ========= ========
Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities Evaluation and Measurement Methodologies 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 in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair 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) with respect to fixed maturity securities, whether the F-58 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to structured securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; and (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies. The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows: . The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment. . When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management's best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies. . Additional considerations are made when assessing the unique features that apply to certain structured securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds; current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security. . When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described in (ii) above, as well as private and public sector programs to restructure such securities. With respect to securities that have attributes of debt and equity (perpetual hybrid securities), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security's cost and its estimated fair value with a corresponding charge to earnings. F-59 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value. In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows. Current Period Evaluation Based on the Company's current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company's current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are not other-than-temporarily impaired at December 31, 2012. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals or any of the above factors deteriorate, additional OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities in an unrealized loss position decreased $1.8 billion during the year ended December 31, 2012 from $2.9 billion to $1.1 billion. The decline in, or improvement in, gross unrealized losses for the year ended December 31, 2012, was primarily attributable to narrowing credit spreads and a decrease in interest rates. At December 31, 2012, $389 million of the total $1.1 billion of gross unrealized losses were from 102 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. Investment Grade Fixed Maturity Securities Of the $1.1 billion of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $172 million, or 44%, are related to gross unrealized losses on 50 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads or rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $1.1 billion of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $217 million, or 56%, are related to gross unrealized losses on 52 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to non-agency RMBS (primarily alternative residential mortgage loans and sub-prime residential mortgage loans), ABS (primarily collateralized debt obligations) and U.S and foreign corporate securities (primarily financial services industry securities) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over the financial services industry sector, unemployment levels and valuations of residential real estate supporting non-agency RMBS. Management evaluates these U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and F-60 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) near-term and long-term prospects of the issuer; and evaluates non-agency RMBS and ABS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security. Equity Securities Equity securities in an unrealized loss position decreased $28 million during the year ended December 31, 2012 from $144 million to $116 million. Of the $116 million, $99 million were from 13 equity securities with gross unrealized losses of 20% or more of cost for 12 months or greater, of which 90% were financial services industry investment grade non-redeemable preferred stock, of which 75% were rated A, AA, or AAA. Trading and FVO Securities See Note 10 for tables that present the four categories of securities that comprise trading and FVO securities. See "-- Net Investment Income" and "-- Net Investment Gains (Losses)" for the net investment income recognized on trading and FVO securities and the related changes in estimated fair value subsequent to purchase included in net investment income and net investment gains (losses) for securities still held as of the end of the respective years, as applicable. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
December 31, ------------------------------------------ 2012 2011 -------------------- -------------------- Carrying % of Carrying % of Value Total Value Total ------------- ------ ------------- ------ (In millions) (In millions) Mortgage loans: Commercial............................ $ 33,369 74.7 % $ 32,774 74.7 % Agricultural.......................... 11,487 25.7 11,498 26.2 Residential........................... 105 0.3 1 -- --------- ------ --------- ------ Subtotal (1)......................... 44,961 100.7 44,273 100.9 Valuation allowances.................. (304) (0.7) (393) (0.9) --------- ------ --------- ------ Total mortgage loans, net............ $ 44,657 100.0 % $ 43,880 100.0 % ========= ====== ========= ======
-------- (1)In 2012, the Company purchased $1.2 billion, $191 million and $105 million of commercial, agricultural and residential mortgage loans, respectively, of which $1.2 billion and $191 million of commercial and agricultural mortgage loans, respectively, were purchased at estimated fair value from an affiliate, MetLife Bank, National Association ("MetLife Bank"). The Company purchased $64 million of commercial mortgage loans during the year ended December 31, 2011. F-61 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Mortgage Loans and Valuation Allowance by Portfolio Segment The carrying value prior to valuation allowance ("recorded investment") in mortgage loans, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, were as follows:
December 31, ------------------------------------------------------------------------------------------- 2012 2011 --------------------------------------------- --------------------------------------------- Commercial Agricultural Residential Total Commercial Agricultural Residential Total ---------- ------------ ----------- --------- ---------- ------------ ----------- --------- (In millions) Mortgage loans: Evaluated individually for credit losses............... $ 441 $ 181 $ -- $ 622 $ 73 $ 159 $ -- $ 232 Evaluated collectively for credit losses............... 32,928 11,306 105 44,339 32,701 11,339 1 44,041 ---------- ------------ ----------- --------- ---------- ------------ ----------- --------- Total mortgage loans........ 33,369 11,487 105 44,961 32,774 11,498 1 44,273 ---------- ------------ ----------- --------- ---------- ------------ ----------- --------- Valuation allowances: Specific credit losses....... 84 21 -- 105 44 45 -- 89 Non-specifically identified credit losses............... 172 27 -- 199 274 30 -- 304 ---------- ------------ ----------- --------- ---------- ------------ ----------- --------- Total valuation allowances................. 256 48 -- 304 318 75 -- 393 ---------- ------------ ----------- --------- ---------- ------------ ----------- --------- Mortgage loans, net of valuation allowance................. $ 33,113 $ 11,439 $ 105 $ 44,657 $ 32,456 $ 11,423 $ 1 $ 43,880 ========== ============ =========== ========= ========== ============ =========== =========
Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows:
Commercial Agricultural Total ---------- ------------ -------- (In millions) Balance at January 1, 2010.............. $ 492 $ 102 $ 594 Provision (release)..................... (39) 12 (27) Charge-offs, net of recoveries.......... (12) (33) (45) ---------- ------------ -------- Balance at December 31, 2010............ 441 81 522 Provision (release)..................... (111) (2) (113) Charge-offs, net of recoveries.......... (12) (4) (16) ---------- ------------ -------- Balance at December 31, 2011............ 318 75 393 Provision (release)..................... (50) 2 (48) Charge-offs, net of recoveries.......... (12) (24) (36) Transfer to held-for-sale............... -- (5) (5) ---------- ------------ -------- Balance at December 31, 2012............ $ 256 $ 48 $ 304 ========== ============ ========
F-62 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Valuation Allowance Methodology Mortgage 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 loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company's experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available. Commercial and Agricultural Mortgage Loan Portfolio Segments The Company typically uses several years of historical experience in establishing non-specific valuation allowances which captures multiple economic cycles. For evaluations of commercial loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for each portfolio segment. All commercial loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. All agricultural loans are monitored on an ongoing basis. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, potentially delinquent, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. The monitoring process for agricultural loans is generally similar to the commercial loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above for all loan portfolio segments. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio. For commercial loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial loan portfolio. Loan-to-value ratios F-63 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and loan-to-value ratio, as well as the values utilized in calculating these ratios, are updated annually, on a rolling basis, with a portion of the loan portfolio updated each quarter. For agricultural loans, the Company's primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated. Additionally, the Company focuses the monitoring process on higher risk loans, including reviews on a geographic and property-type basis. Residential Mortgage Loan Portfolio Segment The Company's residential loan portfolio is comprised primarily of closed end, amortizing residential loans. For evaluations of residential loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company's historical experience. In contrast to the commercial and agricultural loan portfolios, residential loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential loans when they have been restructured and are established using the methodology described above for all loan portfolio segments. For residential loans, the Company's primary credit quality indicator is whether the loan is performing or non-performing. The Company generally defines non-performing residential loans as those that are 90 or more days past due and/or in non-accrual status which is assessed monthly. Generally, non-performing residential loans have a higher risk of experiencing a credit loss. Credit Quality of Commercial Mortgage Loans Information about the credit quality of commercial mortgage loans is presented below at:
Recorded Investment ------------------------------------------------- Debt Service Coverage Ratios -------------------------------- % of Estimated % of > 1.20x 1.00x - 1.20x < 1.00x Total Total Fair Value Total --------- ------------- -------- --------- ------ ------------- ------ (In millions) (In millions) December 31, 2012: Loan-to-value ratios: Less than 65%......... $ 24,906 $ 452 $ 575 $ 25,933 77.7 % $ 27,894 78.8 % 65% to 75%............ 4,254 641 108 5,003 15.0 5,218 14.7 76% to 80%............ 448 123 259 830 2.5 863 2.4 Greater than 80%...... 847 501 255 1,603 4.8 1,451 4.1 --------- -------- -------- --------- ------ --------- ------ Total................ $ 30,455 $ 1,717 $ 1,197 $ 33,369 100.0 % $ 35,426 100.0 % ========= ======== ======== ========= ====== ========= ====== December 31, 2011: Loan-to-value ratios: Less than 65%......... $ 20,510 $ 389 $ 332 $ 21,231 64.8 % $ 22,547 66.1 % 65% to 75%............ 6,919 237 268 7,424 22.6 7,734 22.6 76% to 80%............ 950 98 200 1,248 3.8 1,251 3.7 Greater than 80%...... 1,880 674 317 2,871 8.8 2,588 7.6 --------- -------- -------- --------- ------ --------- ------ Total................ $ 30,259 $ 1,398 $ 1,117 $ 32,774 100.0 % $ 34,120 100.0 % ========= ======== ======== ========= ====== ========= ======
F-64 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Credit Quality of Agricultural Mortgage Loans Information about the credit quality of agricultural mortgage loans is presented below at:
December 31, ---------------------------------------------- 2012 2011 ---------------------- ---------------------- Recorded % of Recorded % of Investment Total Investment Total ------------- -------- ------------- -------- (In millions) (In millions) Loan-to-value ratios: Less than 65%......... $ 10,628 92.5 % $ 10,378 90.2 % 65% to 75%............ 514 4.5 732 6.4 76% to 80%............ 92 0.8 12 0.1 Greater than 80%...... 253 2.2 376 3.3 ------------- -------- ------------- -------- Total................ $ 11,487 100.0 % $ 11,498 100.0 % ============= ======== ============= ========
The estimated fair value of agricultural mortgage loans was $11.8 billion and $11.9 billion at December 31, 2012 and 2011, respectively. Credit Quality of Residential Mortgage Loans All residential mortgage loans were performing at both December 31, 2012 and 2011; accordingly, residential mortgage loan data is not presented in the following past due, impaired and troubled debt restructuring tables. The estimated fair value of residential mortgage loans was $109 million and $1 million at December 31, 2012 and 2011, respectively. Past Due and Interest Accrual Status of Mortgage Loans The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both December 31, 2012 and 2011. The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial and residential mortgage loans -- 60 days; and agricultural mortgage loans -- 90 days. The recorded investment in mortgage loans, prior to valuation allowances, past due according to these aging categories, greater than 90 days past due and still accruing interest and in nonaccrual status, by portfolio segment, were as follows at:
Greater than 90 Days Past Due Past Due and Still Accruing Interest ----------------------------------- ----------------------------------- December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011 ----------------- ----------------- ----------------- ----------------- (In millions) Commercial.............................. $ -- $ 63 $ -- $ -- Agricultural............................ 116 139 53 27 ----------------- ----------------- ----------------- ----------------- Total................................. $ 116 $ 202 $ 53 $ 27 ================= ================= ================= =================
Nonaccrual Status ----------------------------------- December 31, 2012 December 31, 2011 ----------------- ----------------- Commercial.............................. $ 83 $ 63 Agricultural............................ 67 150 ----------------- ----------------- Total................................. $ 150 $ 213 ================= =================
F-65 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Impaired Mortgage Loans Information regarding impaired mortgage loans, including those modified in a troubled debt restructuring, by portfolio segment, were as follows at and for the periods ended:
Loans without Loans with a Valuation Allowance a Valuation Allowance All Impaired Loans ---------------------------------------- -------------------- -------------------------------------- Unpaid Unpaid Unpaid Average Principal Recorded Valuation Carrying Principal Recorded Principal Carrying Recorded Interest December 31, Balance Investment Allowances Value Balance Investment Balance Value Investment Income ------------------- --------- ---------- ---------- -------- --------- ---------- --------- -------- ---------- -------- (In millions) 2012: Commercial.......... $ 367 $ 359 $ 84 $ 275 $ 82 $ 82 $ 449 $ 357 $ 384 $ 11 Agricultural........ 110 107 21 86 79 74 189 160 201 8 --------- ---------- ---------- -------- --------- ---------- --------- -------- ---------- -------- Total.............. $ 477 $ 466 $ 105 $ 361 $ 161 $ 156 $ 638 $ 517 $ 585 $ 19 ========= ========== ========== ======== ========= ========== ========= ======== ========== ======== 2011: Commercial.......... $ 73 $ 73 $ 44 $ 29 $ 225 $ 209 $ 298 $ 238 $ 257 $ 5 Agricultural........ 160 159 45 114 62 60 222 174 239 3 --------- ---------- ---------- -------- --------- ---------- --------- -------- ---------- -------- Total.............. $ 233 $ 232 $ 89 $ 143 $ 287 $ 269 $ 520 $ 412 $ 496 $ 8 ========= ========== ========== ======== ========= ========== ========= ======== ========== ========
Unpaid principal balance is generally prior to any charge-offs. Interest income recognized is primarily cash basis income. The average recorded investment for commercial and agricultural mortgage loans was $126 million and $259 million, respectively, for the year ended December 31, 2010; and interest income recognized for commercial and agricultural mortgage loans was $4 million and $8 million, respectively, for the year ended December 31, 2010. Mortgage Loans Modified in a Troubled Debt Restructuring For a small portion of the mortgage loan portfolio, classified as troubled debt restructurings, concessions are granted related to borrowers experiencing financial difficulties. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concession granted is considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring. Accordingly, the carrying value (after specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. The number of mortgage loans and carrying value after specific valuation allowance of mortgage loans modified during the period in a troubled debt restructuring were as follows:
For the Years Ended December 31, ------------------------------------------------------------------------------- 2012 2011 --------------------------------------- --------------------------------------- Number of Number of Mortgage Carrying Value after Specific Mortgage Carrying Value after Specific Loans Valuation Allowance Loans Valuation Allowance --------- ----------------------------- --------- ----------------------------- Pre- Post- Pre- Post- Modification Modification Modification Modification ------------ ------------ ------------ ------------ (In millions) (In millions) Commercial... 1 $ 168 $ 152 4 $ 125 $ 87 Agricultural. 5 17 16 9 40 40 --------- ------------ ------------ --------- ------------ ------------ Total...... 6 $ 185 $ 168 13 $ 165 $ 127 ========= ============ ============ ========= ============ ============
F-66 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) There were no mortgage loans during the previous 12 months modified in a troubled debt restructuring with a subsequent payment default at December 31, 2012. During the 12 months ended December 31, 2011, the Company had three agricultural mortgage loans, with a carrying value after specific valuation allowance of $11 million, modified in a troubled debt restructuring with a subsequent payment default. Payment default is determined in the same manner as delinquency status -- when interest and principal payments are past due. Other Invested Assets Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), tax credit partnerships, loans to affiliates (see "-- Related Party Investment Transactions") and leveraged leases. Leveraged Leases Investment in leveraged leases, included in other invested assets, consisted of the following:
December 31, ------------------- 2012 2011 -------- ---------- (In millions) Rental receivables, net......... $ 1,465 $ 1,761 Estimated residual values....... 927 1,110 -------- ---------- Subtotal....................... 2,392 2,871 Unearned income................. (834) (1,039) -------- ---------- Investment in leveraged leases. $ 1,558 $ 1,832 ======== ==========
Rental receivables are generally due in periodic installments. The payment periods range from one to 15 years, but in certain circumstances, are as long as 33 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or non-performing, which is assessed monthly. The Company generally defines non-performing rental receivables as those that are 90 days or more past due. At December 31, 2012 and 2011, all rental receivables were performing. The deferred income tax liability related to leveraged leases was $1.4 billion and $1.3 billion at December 31, 2012 and 2011, respectively. The components of income from investment in leveraged leases, excluding net investment gains (losses) were as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 ------ ------ ------ (In millions) Income from investment in leveraged leases........ $ 34 $ 101 $ 102 Less: Income tax expense on leveraged leases...... (12) (35) (36) ------ ------ ------ Investment income after income tax from investment in leveraged leases.................. $ 22 $ 66 $ 66 ====== ====== ======
F-67 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $1.1 billion and $1.2 billion at December 31, 2012 and 2011, respectively. Net Unrealized Investment Gains (Losses) The components of net unrealized investment gains (losses), included in AOCI, were as follows:
Years Ended December 31, ---------------------------- 2012 2011 2010 --------- --------- -------- (In millions) Fixed maturity securities............................................... $ 19,120 $ 14,266 $ 6,189 Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss)..................................... (256) (522) (419) --------- --------- -------- Total fixed maturity securities...................................... 18,864 13,744 5,770 Equity securities....................................................... (13) (98) (66) Derivatives............................................................. 1,052 1,293 90 Short-term investments.................................................. (2) (10) (13) Other................................................................... 18 45 48 --------- --------- -------- Subtotal............................................................. 19,919 14,974 5,829 --------- --------- -------- Amounts allocated from: Insurance liability loss recognition................................... (5,120) (3,495) (426) DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)........................ 12 33 27 DAC and VOBA........................................................... (1,231) (1,102) (833) Policyholder dividend obligation....................................... (3,828) (2,919) (876) --------- --------- -------- Subtotal............................................................. (10,167) (7,483) (2,108) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)........... 86 172 138 Deferred income tax benefit (expense)................................... (3,498) (2,794) (1,440) --------- --------- -------- Net unrealized investment gains (losses)................................ 6,340 4,869 2,419 Net unrealized investment gains (losses) attributable to noncontrolling interests............................................................. (1) (1) (1) --------- --------- -------- Net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company................................................ $ 6,339 $ 4,868 $ 2,418 ========= ========= ========
F-68 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:
Years Ended December 31, -------------------------- 2012 2011 -------- -------- (In millions) Balance, January 1,............................... $ (522) $ (419) Noncredit OTTI losses recognized (1).............. (22) (17) Securities sold with previous noncredit OTTI loss. 122 85 Subsequent changes in estimated fair value........ 166 (171) -------- -------- Balance, December 31,............................. $ (256) $ (522) ======== ========
-------- (1)Noncredit OTTI losses recognized, net of DAC, were ($26) million and ($16) million for the years ended December 31, 2012 and 2011, respectively. The changes in net unrealized investment gains (losses) were as follows:
Years Ended December 31, ------------------------------ 2012 2011 2010 ---------- ---------- -------- (In millions) Balance, beginning of period............................................ $ 4,868 $ 2,418 $ (612) Cumulative effect of change in accounting principles, net of income tax. -- -- 10 Fixed maturity securities on which noncredit OTTI losses have been recognized............................................................ 266 (103) 155 Unrealized investment gains (losses) during the year.................... 4,679 9,248 6,650 Unrealized investment gains (losses) relating to: Insurance liability gain (loss) recognition............................ (1,625) (3,069) (426) DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)........................ (21) 6 (22) DAC and VOBA........................................................... (129) (269) (829) Policyholder dividend obligation....................................... (909) (2,043) (876) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss).......... (86) 34 (46) Deferred income tax benefit (expense).................................. (704) (1,354) (1,580) ---------- ---------- -------- Net unrealized investment gains (losses)................................ 6,339 4,868 2,424 Net unrealized investment gains (losses) attributable to noncontrolling interests............................................................. -- -- (6) ---------- ---------- -------- Balance, end of period.................................................. $ 6,339 $ 4,868 $ 2,418 ========== ========== ======== Change in net unrealized investment gains (losses)...................... $ 1,471 $ 2,450 $ 3,036 Change in net unrealized investment gains (losses) attributable to noncontrolling interests.............................................. -- -- (6) ---------- ---------- -------- Change in net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company.................................... $ 1,471 $ 2,450 $ 3,030 ========== ========== ========
Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company's equity, other than the U.S. government and its agencies at both December 31, 2012 and 2011. F-69 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Securities Lending As described in Note 1, the Company participates in a securities lending program. Elements of the securities lending program are presented below at:
December 31, ------------------- 2012 2011 --------- --------- (In millions) Securities on loan: (1) Amortized cost........................ $ 16,224 $ 13,595 Estimated fair value.................. $ 18,564 $ 15,726 Cash collateral on deposit from counterparties (2).................... $ 19,036 $ 15,870 Security collateral on deposit from counterparties (3).................... $ 46 $ 188 Reinvestment portfolio -- estimated fair value............................ $ 19,392 $ 15,803
-------- (1)Included within fixed maturity securities, equity securities and short-term investments. (2)Included within payables for collateral under securities loaned and other transactions. (3)Security collateral on deposit from counterparties may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements. Invested Assets on Deposit and Pledged as Collateral Invested assets on deposit and pledged as collateral are presented below at estimated fair value for cash and cash equivalents, short-term investments, fixed maturity and equity securities, and trading and FVO securities, and at carrying value for mortgage loans.
December 31, ----------------- 2012 2011 -------- -------- (In millions) Invested assets on deposit (regulatory deposits)............ $ 1,555 $ 976 Invested assets pledged as collateral (1)................... 19,812 17,280 -------- -------- Total invested assets on deposit and pledged as collateral. $ 21,367 $ 18,256 ======== ========
-------- (1)The Company has pledged fixed maturity securities, mortgage loans and cash and cash equivalents in connection with various agreements and transactions, including funding agreements (see Note 4) and derivative transactions (see Note 9). Purchased Credit Impaired Investments Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired ("PCI") investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition-date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition F-70 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI (see Note 1). The Company's PCI fixed maturity securities were as follows at:
December 31, ----------------- 2012 2011 -------- -------- (In millions) Outstanding principal and interest balance (1)........................... $ 4,335 $ 3,708 Carrying value (2)...................... $ 3,441 $ 2,675
-------- (1)Represents the contractually required payments, which is the sum of contractual principal, whether or not currently due, and accrued interest. (2)Estimated fair value plus accrued interest. The following table presents information about PCI fixed maturity securities acquired during the periods indicated:
Years Ended December 31, -------------------------- 2012 2011 -------- -------- (In millions) Contractually required payments (including interest).................. $ 1,911 $ 4,260 Cash flows expected to be collected (1). $ 1,436 $ 3,603 Fair value of investments acquired...... $ 936 $ 2,140
-------- (1)Represents undiscounted principal and interest cash flow expectations at the date of acquisition. The following table presents activity for the accretable yield on PCI fixed maturity securities for:
Years Ended December 31, -------------------------- 2012 2011 --------- -------- (In millions) Accretable yield, January 1,............ $ 1,978 $ 436 Investments purchased................... 500 1,463 Accretion recognized in earnings........ (181) (97) Disposals............................... (84) -- Reclassification (to) from nonaccretable difference.............. 144 176 --------- -------- Accretable yield, December 31,.......... $ 2,357 $ 1,978 ========= ========
Collectively Significant Equity Method Investments The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $7.5 billion at December 31, 2012. The Company's maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $1.9 billion at December 31, 2012. Except for certain real estate joint ventures, the Company's investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities. F-71 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company's consolidated pre-tax income (loss) from continuing operations for two of the three most recent annual periods: 2011 and 2010. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company's proportionate share of the assets, liabilities, or earnings of such entities. The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2012, 2011 and 2010. Aggregate total assets of these entities totaled $259.4 billion and $229.7 billion at December 31, 2012 and 2011, respectively. Aggregate total liabilities of these entities totaled $22.2 billion at both December 31, 2012 and 2011. Aggregate net income (loss) of these entities totaled $16.5 billion, $8.4 billion and $16.5 billion for the years ended December 31, 2012, 2011 and 2010, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses). Variable Interest Entities The Company has invested in certain structured transactions that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE's primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party's relationship with or involvement in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. The Company generally uses a qualitative approach to determine whether it is the primary beneficiary. However, for VIEs that are investment companies or apply measurement principles consistent with those utilized by investment companies, the primary beneficiary is based on a risks and rewards model and is defined as the entity that will absorb a majority of a VIE's expected losses, receive a majority of a VIE's expected residual returns if no single entity absorbs a majority of expected losses, or both. The Company reassesses its involvement with VIEs on a quarterly basis. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect on the amounts presented within the consolidated financial statements. Consolidated VIEs The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at December 31, 2012 and 2011. Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company's obligation to the VIEs is limited to the amount of its committed investment. F-72 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
December 31, ------------------------------------- 2012 2011 ------------------ ------------------ Total Total Total Total Assets Liabilities Assets Liabilities ------ ----------- ------ ----------- (In millions) Other limited partnership interests..... $ 189 $ 1 $ 203 $ 1 CSEs (assets (primarily securities) and liabilities (primarily debt)) (1)..... 51 50 146 138 Fixed maturity securities (2)........... 172 83 -- -- Other invested assets................... 85 -- 102 1 Real estate joint ventures.............. 11 14 16 18 ------ ------ ------ ------ Total................................. $ 508 $ 148 $ 467 $ 158 ====== ====== ====== ======
-------- (1)The Company consolidates former QSPEs that are structured as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The assets and liabilities of these CSEs are primarily trading and FVO securities and long-term debt, respectively, and to a lesser extent include cash and cash equivalents and other liabilities. The Company's exposure was limited to that of its remaining investment in the former QSPEs of less than $1 million at estimated fair value at both December 31, 2012 and 2011. The long-term debt bears interest primarily at variable rates, payable on a bi-annual basis. Interest expense related to these obligations, included in other expenses, was $4 million, $9 million and $15 million for the years ended December 31, 2012, 2011 and 2010, respectively. (2)The Company consolidates certain fixed maturity securities purchased in an investment vehicle which was partially funded with affiliated long-term debt. The long-term debt bears interest primarily at variable rates, payable on a bi-annual basis. Interest expense related to these obligations, included in other expenses, was $1 million for the year ended December 31, 2012. There was no interest expense for both the years ended December 31, 2011 and 2010. Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
December 31, ------------------------------------------- 2012 2011 --------------------- --------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) --------- ----------- --------- ----------- (In millions) Fixed maturity securities AFS: Structured securities (RMBS, CMBS and ABS) (2)............................. $ 42,936 $ 42,936 $ 41,410 $ 41,410 U.S. and foreign corporate............ 2,566 2,566 2,379 2,379 Other limited partnership interests..... 2,966 3,880 2,537 3,259 Other invested assets................... 1,068 1,381 745 1,140 Real estate joint ventures.............. 34 40 32 49 --------- --------- --------- --------- Total................................ $ 49,570 $ 50,803 $ 47,103 $ 48,237 ========= ========= ========= =========
-------- (1)The maximum exposure to loss relating to fixed maturity securities is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership F-73 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. For certain of its investments in other invested assets, the Company's return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $315 million and $264 million at December 31, 2012 and 2011, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2)For these variable interests, the Company's involvement is limited to that of a passive investor. As described in Note 17, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the years ended December 31, 2012, 2011 and 2010. Net Investment Income The components of net investment income were as follows:
Years Ended December 31, ----------------------------- 2012 2011 2010 --------- --------- --------- (In millions) Investment income: Fixed maturity securities........................................ $ 8,295 $ 8,225 $ 8,147 Equity securities................................................ 68 73 89 Trading and FVO securities -- Actively Traded Securities and FVO general account securities (1)................................. 77 29 72 Mortgage loans................................................... 2,528 2,401 2,258 Policy loans..................................................... 451 479 515 Real estate and real estate joint ventures....................... 593 493 329 Other limited partnership interests.............................. 555 435 684 Cash, cash equivalents and short-term investments................ 19 12 15 International joint ventures..................................... (2) (1) 9 Other............................................................ 7 112 111 --------- --------- --------- Subtotal..................................................... 12,591 12,258 12,229 Less: Investment expenses...................................... 743 652 663 --------- --------- --------- Subtotal, net................................................ 11,848 11,606 11,566 --------- --------- --------- FVO CSEs -- interest income: Securities..................................................... 4 9 15 --------- --------- --------- Net investment income...................................... $ 11,852 $ 11,615 $ 11,581 ========= ========= =========
-------- (1)Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective years included in net investment income were $44 million, $2 million and $30 million for the years ended December 31, 2012, 2011, and 2010, respectively. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. F-74 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 -------- ------ -------- (In millions) Total gains (losses) on fixed maturity securities: Total OTTI losses recognized -- by sector and industry: U.S. and foreign corporate securities -- by industry: Utility................................ $ (29) $ -- $ (1) Finance................................ (21) (37) (117) Consumer............................... (19) (40) (20) Communications......................... (18) (26) (10) Industrial............................. (4) (8) -- Transportation......................... (1) -- -- -------- ------ -------- Total U.S. and foreign corporate securities......................... (92) (111) (148) RMBS................................... (70) (78) (87) CMBS................................... (28) (9) (59) ABS.................................... (2) (28) (66) Foreign government..................... -- (1) -- -------- ------ -------- OTTI losses on fixed maturity securities recognized in earnings........ (192) (227) (360) Fixed maturity securities -- net gains (losses) on sales and disposals.... 16 107 129 -------- ------ -------- Total gains (losses) on fixed maturity securities.................. (176) (120) (231) -------- ------ -------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by sector: Common................................... (7) (8) (4) Non-redeemable preferred................. -- (33) (3) -------- ------ -------- OTTI losses on equity securities recognized in earnings................... (7) (41) (7) Equity securities - net gains (losses) on sales and disposals.......... 15 44 77 -------- ------ -------- Total gains (losses) on equity securities............................. 8 3 70 -------- ------ -------- Trading and FVO securities -- FVO general account securities -- changes in estimated fair value subsequent to consolidation............................. 11 (2) -- Mortgage loans.............................. 84 133 59 Real estate and real estate joint ventures.................................. (27) 133 (33) Other limited partnership interests......... (35) 11 (5) Other investment portfolio gains (losses).................................. (192) (4) 36 -------- ------ -------- Subtotal -- investment portfolio gains (losses)......................... (327) 154 (104) -------- ------ -------- FVO CSEs -- changes in estimated fair value subsequent to consolidation: Securities................................ -- -- (78) Long-term debt -- related to securities............................... (7) (8) 48 Non-investment portfolio gains (losses)..... 4 (14) (36) -------- ------ -------- Subtotal FVO CSEs and non-investment portfolio gains (losses)............... (3) (22) (66) -------- ------ -------- Total net investment gains (losses).... $ (330) $ 132 $ (170) ======== ====== ========
F-75 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. Gains (losses) from foreign currency transactions included within net investment gains (losses) were $2 million, $21 million and $18 million for the years ended December 31, 2012, 2011 and 2010, respectively. Sales or Disposals and Impairments of Fixed Maturity and Equity Securities Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) are as shown in the table below. Investment gains and losses on sales of securities are determined on a specific identification basis.
Years Ended December 31, ----------------------------------------------------------------------- 2012 2011 2010 2012 2011 2010 2012 2011 2010 -------- -------- -------- ----- ----- ----- -------- -------- -------- Fixed Maturity Securities Equity Securities Total -------------------------- ----------------- -------------------------- (In millions) Proceeds..................................... $ 29,472 $ 34,015 $ 30,817 $ 126 $ 771 $ 429 $ 29,598 $ 34,786 $ 31,246 ======== ======== ======== ===== ===== ===== ======== ======== ======== Gross investment gains....................... $ 327 $ 445 $ 544 $ 23 $ 86 $ 88 $ 350 $ 531 $ 632 -------- -------- -------- ----- ----- ----- -------- -------- -------- Gross investment losses...................... (311) (338) (415) (8) (42) (11) (319) (380) (426) -------- -------- -------- ----- ----- ----- -------- -------- -------- Total OTTI losses recognized in earnings: Credit-related.............................. (125) (183) (334) -- -- -- (125) (183) (334) Other (1)................................... (67) (44) (26) (7) (41) (7) (74) (85) (33) -------- -------- -------- ----- ----- ----- -------- -------- -------- Total OTTI losses recognized in earnings.. (192) (227) (360) (7) (41) (7) (199) (268) (367) -------- -------- -------- ----- ----- ----- -------- -------- -------- Net investment gains (losses)............. $ (176) $ (120) $ (231) $ 8 $ 3 $ 70 $ (168) $ (117) $ (161) ======== ======== ======== ===== ===== ===== ======== ======== ========
-------- (1)Other OTTI losses recognized in earnings include impairments on (i) equity securities, (ii) perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and (iii) fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value. Credit Loss Rollforward The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI:
Years Ended December 31, -------------------------- 2012 2011 -------- -------- (In millions) Balance, at January 1,.................................................................... $ 316 $ 330 Additions: Initial impairments -- credit loss OTTI recognized on securities not previously impaired. 38 33 Additional impairments -- credit loss OTTI recognized on securities previously impaired.. 45 68 Reductions: Sales (maturities, pay downs or prepayments) during the period of securities previously impaired as credit loss OTTI............................................................ (95) (82) Securities impaired to net present value of expected future cash flows................... (17) (24) Increases in cash flows -- accretion of previous credit loss OTTI........................ (2) (9) -------- -------- Balance, at December 31,.................................................................. $ 285 $ 316 ======== ========
F-76 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Related Party Investment Transactions In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Invested assets transferred to and from affiliates were as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 ----- ------ ------ (In millions) Estimated fair value of invested assets transferred to affiliates............. $ 4 $ 170 $ 444 Amortized cost of invested assets transferred to affiliates............. $ 4 $ 164 $ 431 Net investment gains (losses) recognized on transfers............... $ -- $ 6 $ 13 Estimated fair value of invested assets transferred from affiliates........... $ -- $ 132 $ 582
The Company purchased from MetLife Bank, an affiliate, $1.5 billion of fixed maturity securities, at estimated fair value, for cash during the year ended December 31, 2012. See "-- Mortgage Loans" for information on additional purchases from this affiliate. The Company has affiliated loans outstanding, which are included in other invested assets, totaling $1.5 billion at both December 31, 2012 and 2011. At December 31, 2011, the loans were outstanding with Exeter, an affiliate. During 2012, MetLife, Inc. assumed this affiliated debt from Exeter. One loan matured on September 30, 2012 and was replaced by a new loan on October 1, 2012. The loans which bear interest at a fixed rate, payable semiannually are due as follows: $500 million at 6.44% due on June 30, 2014, $250 million at 3.57% due on October 1, 2019, $250 million at 7.44% due on September 30, 2016, $150 million at 5.64% due July 15, 2021 and $375 million at 5.86% due December 16, 2021. Net investment income from these loans was $93 million, $69 million and $59 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company has a loan outstanding to Exeter, which is included in other invested assets, totaling $75 million at both December 31, 2012 and 2011. This loan is due on December 30, 2014 and bears interest on a weighted average of 6.80%. Net investment income from this loan was $5 million for each of the years ended December 31, 2012, 2011 and 2010, respectively. The Company provides investment administrative services to certain affiliates. The related investment administrative service charges to these affiliates were $158 million, $164 million and $107 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company also had additional affiliated net investment income of $4 million, $3 million and $16 million for the years ended December 31, 2012, 2011 and 2010, respectively. 9. Derivatives Accounting for Derivatives See Note 1 for a description of the Company's accounting policies for derivatives and Note 10 for information about the fair value hierarchy for derivatives. Derivative Strategies The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. F-77 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter ("OTC") market. The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance agreements that have embedded derivatives. Interest Rate Derivatives The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, caps, floors, swaptions and forwards. 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 amount. The Company utilizes interest rate swaps in fair value, cash flow and non-qualifying hedging relationships. The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury, agency, or other fixed maturity security. Structured interest rate swaps are included in interest rate swaps. Structured interest rate swaps are not designated as hedging instruments The Company purchases interest rate caps and floors 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, as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in non-qualifying hedging relationships. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in non-qualifying hedging relationships. Swaptions are included in interest rate options. The Company enters into interest rate 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. The Company utilizes interest rate forwards in cash flow and non-qualifying hedging relationships. To a lesser extent the Company uses interest rate futures in non-qualifying hedging relationships. Foreign Currency Exchange Rate Derivatives The Company uses foreign currency exchange rate derivatives including foreign currency swaps and foreign currency forwards to reduce the risk from fluctuations in foreign currency exchange rates associated with its F-78 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) assets and liabilities denominated in foreign currencies. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and non-qualifying hedging relationships. 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 at the specified future date. The Company utilizes foreign currency forwards in non-qualifying hedging relationships. To a lesser extent the Company uses currency options in non-qualifying hedging relationships. Credit Derivatives Credit default swaps are primarily used to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments such as U.S. Treasury securities, agency securities or other fixed maturity securities. The Company also enters into certain credit default swaps held in relation to trading portfolios for the purpose of generating profits on short-term differences in price. These credit default swaps are not designated as hedging instruments. The Company also uses credit default swaps to economically hedge against credit-related changes in the value of its investments. The Company utilizes credit default swaps in non-qualifying hedging relationships. Equity Derivatives To a lesser extent, the Company uses equity index options in non-qualifying hedging relationships. F-79 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Primary Risks Managed by Derivatives The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the Company's derivatives, excluding embedded derivatives, held at:
December 31, ------------------------------------------------------------- 2012 2011 ------------------------------- ----------------------------- Estimated Fair Value Estimated Fair Value Notional -------------------- Notional -------------------- Primary Underlying Risk Exposure Amount Assets Liabilities Amount Assets Liabilities - -------------------------------- ---------- -------- ----------- -------- -------- ----------- (In millions) Derivatives Designated as Hedging Instruments Fair value hedges: Interest rate swaps..... Interest rate............. $ 4,824 $ 1,893 $ 79 $ 4,259 $ 1,849 $ 86 Foreign currency swaps.. Foreign currency exchange rate............. 3,064 332 71 2,622 312 79 ---------- -------- -------- -------- -------- -------- Subtotal............................................. 7,888 2,225 150 6,881 2,161 165 ---------- -------- -------- -------- -------- -------- Cash flow hedges: Interest rate swaps..... Interest rate............. 2,984 606 -- 2,875 852 -- Interest rate forwards.. Interest rate............. 265 58 -- 345 81 -- Foreign currency swaps.. Foreign currency exchange rate............. 7,595 198 246 5,135 314 160 Credit forwards......... Credit.................... -- -- -- 20 4 -- ---------- -------- -------- -------- -------- -------- Subtotal............................................. 10,844 862 246 8,375 1,251 160 ---------- -------- -------- -------- -------- -------- Total qualifying hedges............................ 18,732 3,087 396 15,256 3,412 325 ---------- -------- -------- -------- -------- -------- Derivatives Not Designated or Not Qualifying as Hedging Instruments Interest rate swaps....... Interest rate............. 41,008 1,978 854 28,935 1,908 866 Interest rate floors...... Interest rate............. 33,870 737 493 13,290 789 14 Interest rate caps........ Interest rate............. 40,434 63 -- 38,532 83 -- Interest rate futures..... Interest rate............. 2,476 -- 10 2,675 6 2 Interest rate options..... Interest rate............. 4,862 336 2 4,624 326 -- Interest rate forwards.... Interest rate............. -- -- -- 500 -- 14 Synthetic GICs............ Interest rate............. 4,162 -- -- 4,454 -- -- Foreign currency swaps.... Foreign currency exchange rate............. 6,411 137 532 5,392 241 410 Foreign currency forwards. Foreign currency exchange rate............. 2,131 16 26 2,014 81 -- Currency options.......... Foreign currency exchange rate............. 129 1 -- -- -- -- Credit default swaps...... Credit.................... 7,693 62 19 7,765 90 81 Equity options............ Equity market............. 630 1 -- 135 -- -- ---------- -------- -------- -------- -------- -------- Total non-designated or non-qualifying derivatives......................................... 143,806 3,331 1,936 108,316 3,524 1,387 ---------- -------- -------- -------- -------- -------- Total................................................ $ 162,538 $ 6,418 $ 2,332 $123,572 $ 6,936 $ 1,712 ========== ======== ======== ======== ======== ========
The estimated fair value of all derivatives in an asset position is reported within other invested assets in the consolidated balance sheets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the consolidated balance sheets. Net Derivative Gains (Losses) The components of net derivative gains (losses) were as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 ------ -------- -------- (In millions) Derivatives and hedging gains (losses) (1).................................... $ 77 $ 2,040 $ 353 Embedded derivatives.................... 598 (462) (619) ------ -------- -------- Total net derivative gains (losses).... $ 675 $ 1,578 $ (266) ====== ======== ========
-------- (1)Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedging relationships, which are not presented elsewhere in this note. F-80 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents earned income on derivatives for the:
Years Ended December 31, ------------------------ 2012 2011 2010 ------ ------ ------ (In millions) Qualifying hedges: Net investment income................. $ 108 $ 96 $ 82 Interest credited to policyholder account balances..................... 146 173 196 Non-qualifying hedges: Net investment income................. (6) (8) (4) Net derivative gains (losses)......... 314 179 53 ------ ------ ------ Total................................ $ 562 $ 440 $ 327 ====== ====== ======
Non-Qualifying Derivatives and Derivatives for Purposes Other Than Hedging The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or qualifying as hedging instruments:
Net Net Derivative Investment Gains (Losses) Income (1) -------------- ---------- (In millions) For the Year Ended December 31, 2012: Interest rate derivatives............... $ (83) $ -- Foreign currency exchange rate derivatives........................... (252) -- Credit derivatives...................... 33 (15) Equity derivatives...................... -- (12) -------------- ---------- Total................................. $ (302) $ (27) ============== ========== For the Year Ended December 31, 2011: Interest rate derivatives............... $ 1,679 $ -- Foreign currency exchange rate derivatives........................... 103 -- Credit derivatives...................... 13 5 Equity derivatives...................... -- (14) -------------- ---------- Total................................. $ 1,795 $ (9) -------------- ========== For the Year Ended December 31, 2010: Interest rate derivatives............... $ 149 $ -- Foreign currency exchange rate derivatives........................... 106 -- Credit derivatives...................... 28 (2) Equity derivatives...................... 13 (17) -------------- ---------- Total................................. $ 296 $ (19) ============== ==========
-------- (1)Changes in estimated fair value related to economic hedges of equity method investments in joint ventures, and changes in estimated fair value related to derivatives held in relation to trading portfolios. F-81 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Fair Value Hedges The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities; and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities. The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses):
Net Derivative Net Derivative Ineffectiveness Gains (Losses) Gains (Losses) Recognized in Derivatives in Fair Value Hedged Items in Fair Value Recognized Recognized for Net Derivative Hedging Relationships Hedging Relationships for Derivatives Hedged Items Gains (Losses) ------------------------- ----------------------------------- --------------- -------------- --------------- (In millions) For the Year Ended December 31, 2012: Interest rate swaps: Fixed maturity securities.......... $ 2 $ (3) $ (1) Policyholder liabilities (1)....... (72) 89 17 Foreign currency swaps: Foreign-denominated fixed maturity securities......................... (1) 1 -- Foreign-denominated PABs (2)....... 32 (41) (9) ----------- ------------- ---------- Total..................................................... $ (39) $ 46 $ 7 =========== ============= ========== For the Year Ended December 31, 2011: Interest rate swaps: Fixed maturity securities.......... $ (18) $ 18 $ -- Policyholder liabilities (1)....... 1,019 (994) 25 Foreign currency swaps: Foreign-denominated fixed maturity securities......................... 1 3 4 Foreign-denominated PABs (2)....... 28 (55) (27) ----------- ------------- ---------- Total..................................................... $ 1,030 $ (1,028) $ 2 =========== ============= ========== For the Year Ended December 31, 2010: Interest rate swaps: Fixed maturity securities.......... $ (13) $ 15 $ 2 Policyholder liabilities (1)....... 153 (150) 3 Foreign currency swaps: Foreign-denominated fixed maturity securities......................... 13 (13) -- Foreign-denominated PABs (2)....... 47 (34) 13 ----------- ------------- ---------- Total..................................................... $ 200 $ (182) $ 18 =========== ============= ==========
-------- (1)Fixed rate liabilities reported in PABs or future policy benefits. (2)Fixed rate or floating rate liabilities. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. Cash Flow Hedges The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not F-82 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) probable of occurring within two months of the anticipated date, the Company reclassified $1 million, $3 million and $9 million from AOCI into net derivative gains (losses) for the years ended December 31, 2012, 2011 and 2010, respectively, related to such discontinued cash flow hedges. At December 31, 2012 and 2011, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed eight years and nine years, respectively. At December 31, 2012 and 2011, the balance in AOCI associated with cash flow hedges was $1.1 billion and $1.3 billion, respectively. The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity:
Amount of Gains (Losses) Amount and Location of Gains Amount and Location Deferred in Accumulated (Losses) Reclassified from of Gains (Losses) Derivatives in Cash Flow Other Comprehensive Income Accumulated Other Comprehensive Recognized in Income (Loss) Hedging Relationships (Loss) on Derivatives Income (Loss) into Income (Loss) on Derivatives ------------------------ -------------------------- --------------------------------------- --------------------------- (Effective Portion) (Effective Portion) (Ineffective Portion) -------------------------- --------------------------------------- --------------------------- Net Derivative Net Investment Other Net Derivative Gains (Losses) Income Expenses Gains (Losses) -------------- -------------- --------- --------------------------- (In millions) For the Year Ended December 31, 2012: Interest rate swaps...... $ (55) $ 3 $ 4 $ -- $ 1 Interest rate forwards... (1) -- 2 -- -- Foreign currency swaps... (187) (7) (5) -- (5) Credit forwards.......... -- -- 1 -- -- -------------------------- -------------- -------------- --------- --------------------------- Total.................. $ (243) $ (4) $ 2 $ -- $ (4) ========================== ============== ============== ========= =========================== For the Year Ended December 31, 2011: Interest rate swaps...... $ 919 $ -- $ 1 $ -- $ 1 Interest rate forwards... 128 22 2 -- 2 Foreign currency swaps... 166 7 (5) -- 1 Credit forwards.......... 18 1 -- -- -- -------------------------- -------------- -------------- --------- --------------------------- Total.................. $ 1,231 $ 30 $ (2) $ -- $ 4 ========================== ============== ============== ========= =========================== For the Year Ended December 31, 2010: Interest rate swaps...... $ 90 $ -- $ -- $ 1 $ 3 Interest rate forwards... (35) 10 3 -- (1) Foreign currency swaps... 74 (56) (6) -- -- Credit forwards.......... 5 -- -- -- -- -------------------------- -------------- -------------- --------- --------------------------- Total.................. $ 134 $ (46) $ (3) $ 1 $ 2 ========================== ============== ============== ========= ===========================
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2012, ($4) million of deferred net gains (losses) on derivatives in AOCI was expected to be reclassified to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions and credit default swaps held in relation to the trading portfolio, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the non-qualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may F-83 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $6.2 billion and $5.4 billion at December 31, 2012 and 2011, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At December 31, 2012 and 2011, the Company would have received $50 million and paid $29 million, respectively, to terminate all of these contracts. The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
December 31, ----------------------------------------------------------------------------- 2012 2011 -------------------------------------- -------------------------------------- Maximum Maximum Estimated Amount Estimated Amount Fair Value of Future Weighted Fair Value of Future Weighted of Credit Payments under Average of Credit Payments under Average Rating Agency Designation of Referenced Default Credit Default Years to Default Credit Default Years to Credit Obligations (1) Swaps Swaps (2) Maturity (3) Swaps Swaps (2) Maturity (3) --------------------------------------- ---------- -------------- ------------ ---------- -------------- ------------ (In millions) (In millions) Aaa/Aa/A Single name credit default swaps (corporate)........................ $ 7 573 2.5 $ 3 $ 488 3.1 Credit default swaps referencing indices............................ 31 2,064 2.1 (1) 2,150 3.0 ---------- -------------- ---------- -------------- Subtotal............................ 38 2,637 2.2 2 2,638 3.0 ---------- -------------- ---------- -------------- Baa Single name credit default swaps (corporate)........................ 4 835 3.2 (10) 750 3.6 Credit default swaps referencing indices............................ 6 2,469 4.9 (19) 1,959 4.9 ---------- -------------- ---------- -------------- Subtotal............................ 10 3,304 4.5 (29) 2,709 4.5 ---------- -------------- ---------- -------------- Ba Single name credit default swaps (corporate)........................ -- 25 2.7 -- 25 3.5 Credit default swaps referencing indices............................ -- -- -- -- -- -- ---------- -------------- ---------- -------------- Subtotal............................ -- 25 2.7 -- 25 3.5 ---------- -------------- ---------- -------------- B Single name credit default swaps (corporate)........................ -- -- -- -- -- -- Credit default swaps referencing indices............................ 2 264 4.9 (2) 25 4.8 ---------- -------------- ---------- -------------- Subtotal............................. 2 264 4.9 (2) 25 4.8 ---------- -------------- ---------- -------------- Total................................ $ 50 $ 6,230 3.5 $ (29) $ 5,397 3.8 ========== ============== ========== ==============
-------- (1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's Investors Service ("Moody's"), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used. (2)Assumes the value of the referenced credit obligations is zero. F-84 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) (3)The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. As a result, the maximum amounts of potential future recoveries available to offset the $6.2 billion and $5.4 billion from the table above were $120 million and $80 million at December 31, 2012 and 2011, respectively. Written credit default swaps held in relation to the trading portfolio amounted to $10 million in notional and $0 in fair value at December 31, 2012. Written credit default swaps held in relation to the trading portfolio amounted to $10 million in notional and ($1) million in fair value at December 31, 2011. Credit Risk on Freestanding Derivatives The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivatives. Generally, the current credit exposure of the Company's derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to credit support annexes. The Company manages its credit risk related to OTC derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for netting of payments by product and currency for periodic settlements and a single net payment to be made by one party 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 derivatives. See Note 10 for a description of the impact of credit risk on the valuation of derivatives. The Company enters into various collateral arrangements which require both the pledging and accepting of collateral in connection with its OTC derivatives. At December 31, 2012 and 2011, the Company was obligated to return cash collateral under its control of $3.4 billion and $4.4 billion, respectively. This cash collateral is included in cash and cash equivalents or in short-term investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. At December 31, 2012 and 2011, the Company had received collateral consisting of various securities with a fair market value of $1.2 billion and $768 million, respectively, which were held in separate custodial accounts. Subject to certain constraints, the Company is permitted by contract to sell or repledge this collateral, but at December 31, 2012, none of the collateral had been sold or repledged. The Company's collateral arrangements for its OTC derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the fair value of that counterparty's derivatives reaches a pre-determined threshold. Certain of these arrangements also include credit-contingent provisions that provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of the Company and/or the counterparty. In addition, certain of the Company's netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody's and S&P. If a party's credit ratings were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party's reasonable valuation of the derivatives. F-85 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents the estimated fair value of the Company's OTC derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The table also presents the incremental collateral that the Company would be required to provide if there was a one notch downgrade in the Company's credit rating at the reporting date or if the Company's credit rating sustained a downgrade to a level that triggered full overnight collateralization or termination of the derivative position at the reporting date. Derivatives that are not subject to collateral agreements are not included in the scope of this table.
Estimated Fair Value of Fair Value of Incremental Collateral Collateral Provided: Provided Upon: ---------------------------- ------------------------------------ Downgrade in the One Notch Company's Credit Rating Downgrade to a Level that Triggers Estimated in the Full Overnight Fair Value of Company's Collateralization or Derivatives in Net Fixed Maturity Credit Termination Liability Position (1) Securities (2) Cash (3) Rating of the Derivative Position ---------------------- -------------- ------------- --------- -------------------------- (In millions) December 31, 2012: Derivatives subject to credit- contingent provisions........... $ 263 $ 261 $ -- $ -- $ 1 Derivatives not subject to credit- contingent provisions........... -- -- 1 -- -- ---------------------- -------------- ------------- --------- -------------------------- Total............................ $ 263 $ 261 $ 1 $ -- $ 1 ====================== ============== ============= ========= ========================== December 31, 2011: Derivatives subject to credit- contingent provisions........... $ 151 $ 94 $ -- $ 25 $ 64 Derivatives not subject to credit- contingent provisions........... -- -- -- -- -- ---------------------- -------------- ------------- --------- -------------------------- Total............................ $ 151 $ 94 $ -- $ 25 $ 64 ====================== ============== ============= ========= ==========================
-------- (1)After taking into consideration the existence of netting agreements. (2)Included in fixed maturity securities in the consolidated balance sheets. Subject to certain constraints, the counterparties are permitted by contract to sell or repledge this collateral. (3)Included in premiums, reinsurance and other receivables in the consolidated balance sheets. The Company also has exchange-traded futures, which require the pledging of collateral. At both December 31, 2012 and 2011, the Company did not pledge any securities collateral for exchange-traded futures. At December 31, 2012 and 2011, the Company provided cash collateral for exchange-traded futures of $35 million and $37 million, respectively, which is included in premiums, reinsurance and other receivables. Embedded Derivatives The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs F-86 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) and certain GMIBs; affiliated ceded reinsurance of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; funds withheld on ceded reinsurance and affiliated funds withheld on ceded reinsurance; funding agreements with equity or bond indexed crediting rates; and certain debt and equity securities. The following table presents the estimated fair value and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at:
December 31, ----------------- Balance Sheet Location 2012 2011 -------------------------------- -------- -------- (In millions) Net embedded derivatives within asset host contracts: Ceded guaranteed minimum benefits...................... Premiums, reinsurance and other receivables..................... $ 1,362 $ 1,163 Options embedded in debt or equity securities............................................ Investments..................... (55) (15) -------- -------- Net embedded derivatives within asset host contracts................................ $ 1,307 $ 1,148 ======== ======== Net embedded derivatives within liability host contracts: Direct guaranteed minimum benefits..................... PABs............................ $ (92) $ 307 Funds withheld on ceded reinsurance.................... Other liabilities............... 1,563 1,646 Other.................................................. PABs............................ 16 17 -------- -------- Net embedded derivatives within liability host contracts............................ $ 1,487 $ 1,970 ======== ========
The following table presents changes in estimated fair value related to embedded derivatives:
Years Ended December 31, ------------------------ 2012 2011 2010 ------ -------- -------- (In millions) Net derivative gains (losses) (1), (2). $ 598 $ (462) $ (619)
-------- (1)The valuation of direct guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were ($71) million, $88 million and ($43) million for the years ended December 31, 2012, 2011 and 2010, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $122 million, ($219) million and $82 million for the years ended December 31, 2012, 2011 and 2010, respectively. (2)See Note 6 for discussion of affiliated net derivative gains (losses) included in the table above. 10. Fair Value When developing estimated fair values, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs, F-87 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) giving priority to observable inputs. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. F-88 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected the FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:
December 31, 2012 -------------------------------------------- Fair Value Hierarchy ---------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value --------- --------- -------- --------------- (In millions) Assets: Fixed maturity securities: U.S. corporate............................................. $ -- $ 61,540 $ 5,460 $ 67,000 U.S. Treasury and agency................................... 17,653 14,927 71 32,651 Foreign corporate.......................................... -- 27,180 3,054 30,234 RMBS....................................................... -- 23,323 1,702 25,025 CMBS....................................................... -- 9,384 402 9,786 ABS........................................................ -- 6,202 1,923 8,125 State and political subdivision............................ -- 6,720 -- 6,720 Foreign government......................................... -- 3,853 282 4,135 --------- --------- -------- --------------- Total fixed maturity securities.......................... 17,653 153,129 12,894 183,676 --------- --------- -------- --------------- Equity securities: Common stock............................................... 189 792 60 1,041 Non-redeemable preferred stock............................. -- 177 281 458 --------- --------- -------- --------------- Total equity securities.................................. 189 969 341 1,499 --------- --------- -------- --------------- Trading and FVO securities: Actively Traded Securities................................. 7 646 6 659 FVO general account securities............................. -- 26 26 52 FVO securities held by CSEs................................ -- 41 -- 41 --------- --------- -------- --------------- Total trading and FVO securities......................... 7 713 32 752 --------- --------- -------- --------------- Short-term investments (1)................................... 2,565 3,936 252 6,753 Derivative assets: (2) Interest rate.............................................. -- 5,613 58 5,671 Foreign currency exchange rate............................. -- 646 38 684 Credit..................................................... -- 29 33 62 Equity market.............................................. -- 1 -- 1 --------- --------- -------- --------------- Total derivative assets.................................. -- 6,289 129 6,418 --------- --------- -------- --------------- Net embedded derivatives within asset host contracts (3)..... -- -- 1,362 1,362 Separate account assets (4).................................. 24,237 95,794 940 120,971 --------- --------- -------- --------------- Total assets............................................ $ 44,651 $ 260,830 $ 15,950 $ 321,431 ========= ========= ======== =============== Liabilities: Derivative liabilities: (2) Interest rate.............................................. $ 10 $ 1,428 $ -- $ 1,438 Foreign currency exchange rate............................. -- 874 1 875 Credit..................................................... -- 19 -- 19 Equity market.............................................. -- -- -- -- --------- --------- -------- --------------- Total derivative liabilities............................. 10 2,321 1 2,332 --------- --------- -------- --------------- Net embedded derivatives within liability host contracts (3). -- 16 1,471 1,487 Long-term debt of CSEs....................................... -- -- 44 44 Trading liabilities (5)...................................... 163 -- -- 163 --------- --------- -------- --------------- Total liabilities....................................... $ 173 $ 2,337 $ 1,516 $ 4,026 ========= ========= ======== ===============
F-89 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
December 31, 2011 ------------------------------------------------ Fair Value Hierarchy -------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------- ---------- ---------- --------------- (In millions) Assets: Fixed maturity securities: U.S. corporate............................................. $ -- $ 56,777 $ 4,919 $ 61,696 U.S. Treasury and agency................................... 11,450 14,369 25 25,844 Foreign corporate.......................................... -- 26,888 2,258 29,146 RMBS....................................................... -- 25,028 691 25,719 CMBS....................................................... -- 8,886 219 9,105 ABS........................................................ -- 5,440 1,146 6,586 State and political subdivision............................ -- 6,182 -- 6,182 Foreign government......................................... -- 3,609 291 3,900 ---------- ---------- ---------- --------------- Total fixed maturity securities.......................... 11,450 147,179 9,549 168,178 ---------- ---------- ---------- --------------- Equity securities: Common stock............................................... 79 673 104 856 Non-redeemable preferred stock............................. -- 129 293 422 ---------- ---------- ---------- --------------- Total equity securities.................................. 79 802 397 1,278 ---------- ---------- ---------- --------------- Trading and FVO securities: Actively Traded Securities................................. -- 473 -- 473 FVO general account securities............................. -- 93 14 107 FVO securities held by CSEs................................ -- 117 -- 117 ---------- ---------- ---------- --------------- Total trading and FVO securities......................... -- 683 14 697 ---------- ---------- ---------- --------------- Short-term investments (1)................................... 1,641 4,364 134 6,139 Derivative assets: (2) Interest rate.............................................. 6 5,807 81 5,894 Foreign currency exchange rate............................. -- 892 56 948 Credit..................................................... -- 71 23 94 Equity market.............................................. -- -- -- -- ---------- ---------- ---------- --------------- Total derivative assets.................................. 6 6,770 160 6,936 ---------- ---------- ---------- --------------- Net embedded derivatives within asset host contracts (3)..... -- -- 1,163 1,163 Separate account assets (4).................................. 22,445 83,151 1,082 106,678 ---------- ---------- ---------- --------------- Total assets............................................ $ 35,621 $ 242,949 $ 12,499 $ 291,069 ========== ========== ========== =============== Liabilities: Derivative liabilities: (2) Interest rate.............................................. $ 2 $ 966 $ 14 $ 982 Foreign currency exchange rate............................. -- 649 -- 649 Credit..................................................... -- 59 22 81 Equity market.............................................. -- -- -- -- ---------- ---------- ---------- --------------- Total derivative liabilities............................. 2 1,674 36 1,712 ---------- ---------- ---------- --------------- Net embedded derivatives within liability host contracts (3). -- 17 1,953 1,970 Long-term debt of CSEs....................................... -- -- 116 116 Trading liabilities (5)...................................... 124 3 -- 127 ---------- ---------- ---------- --------------- Total liabilities....................................... $ 126 $ 1,694 $ 2,105 $ 3,925 ========== ========== ========== ===============
-------- (1)Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis. F-90 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) (2)Derivative assets are presented within other invested assets in the consolidated balance sheets and derivative liabilities are presented within other liabilities in the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation in the consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables. (3)Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables in the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented within PABs and other liabilities in the consolidated balance sheets. At December 31, 2012, fixed maturity securities and equity securities included embedded derivatives of $0 and ($55) million, respectively. At December 31, 2011, fixed maturity securities and equity securities included embedded derivatives of less than $1 million and ($15) million, respectively. (4)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. (5)Trading liabilities are presented within other liabilities in the consolidated balance sheets. The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy. Investments Valuation Controls and Procedures On behalf of the Company and MetLife, Inc.'s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee that is independent of the trading and investing functions and comprised of senior management provides oversight of control systems and valuation policies for securities, mortgage loans and derivatives. On a monthly basis, this committee reviews and approves new transaction types and markets, ensures that observable market prices and market-based parameters are used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. This committee also provides oversight of the selection of independent third party pricing providers and the controls and procedures to evaluate third party pricing. Periodically, the Chief Accounting Officer reports to the Audit Committee of MetLife, Inc.'s Board of Directors regarding compliance with fair value accounting standards. The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management's knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from F-91 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices received from independent brokers, also referred to herein as "consensus pricing," represent a reasonable estimate of fair value by reviewing such pricing with the Company's knowledge of the current market dynamics and current pricing for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker quotations represent 0.5% of the total estimated fair value of fixed maturity securities and 7% of the total estimated fair value of Level 3 fixed maturity securities. The Company also applies a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management's best estimate is used. Securities, Short-term Investments, Long-term Debt of CSEs and Trading Liabilities When available, the estimated fair value of these investments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management's judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management's judgment or estimation and cannot be supported by reference to market activity. Even though these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances. The estimated fair value of FVO securities held by CSEs, long-term debt of CSEs and trading liabilities is determined on a basis consistent with the methodologies described herein for securities. The Company consolidates certain securitization entities that hold securities that have been accounted for under the FVO and classified within trading and FVO securities. Level 2 Valuation Techniques and Key Inputs This level includes fixed maturity securities and equity securities priced principally by independent pricing services using observable inputs. Trading and FVO securities and short-term investments within this level are of a similar nature and class to the Level 2 fixed maturity securities and equity securities. F-92 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) U.S. corporate and foreign corporate securities These securities are principally valued using the market and income approaches. Valuations are based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use standard market observable inputs such as benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparable securities. Investment grade privately placed securities are valued using discounted cash flow methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer. This level also includes certain below investment grade privately placed fixed maturity securities priced by independent pricing services that use observable inputs. U.S. Treasury and agency securities These securities are principally valued using the market approach. Valuation is based primarily on quoted prices in markets that are not active or using matrix pricing or other similar techniques using standard market observable inputs such as benchmark U.S. Treasury yield curve, the spread off the U.S. Treasury yield curve for the identical security and comparable securities that are actively traded. Structured securities comprised of RMBS, CMBS and ABS These securities are principally valued using the market and income approaches. Valuation is based primarily on matrix pricing, discounted cash flow methodologies or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information, including, but not limited to: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans. State and political subdivision and foreign government securities These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark U.S. Treasury yield or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including those within the same sub-sector or with a similar maturity or credit rating. Common and non-redeemable preferred stock These securities are principally valued using the market approach where market quotes are available but are not considered actively traded. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active. Level 3 Valuation Techniques and Key Inputs: In general, fixed maturity securities and equity securities classified within Level 3 use many of the same valuation techniques and inputs as described in the Level 2 Valuation Techniques and Key Inputs. However, if F-93 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) key inputs are unobservable, or if the investments are less liquid and there is very limited trading activity, the investments are generally classified as Level 3. The use of independent non-binding broker quotations to value investments generally indicates there is a lack of liquidity or a lack of transparency in the process to develop the valuation estimates, generally causing these investments to be classified in Level 3. Trading and FVO securities and short-term investments within this level are of a similar nature and class to the Level 3 securities described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also similar to those described below. U.S. corporate and foreign corporate securities These securities, including financial services industry hybrid securities classified within fixed maturity securities, are principally valued using the market approach. Valuations are based primarily on matrix pricing or other similar techniques that utilize unobservable inputs or inputs that cannot be derived principally from, or corroborated by, observable market data, including illiquidity premium, delta spread adjustments or spreads over below investment grade curves to reflect industry trends or specific credit-related issues; and inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2. Certain valuations are based on independent non-binding broker quotations. Structured securities comprised of RMBS, CMBS and ABS These securities are principally valued using the market and income approaches. Valuation is based primarily on matrix pricing, discounted cash flow methodologies or other similar techniques that utilize inputs that are unobservable or cannot be derived principally from, or corroborated by, observable market data, including spreads over below investment grade curves to reflect industry trends on specific credit-related issues. Below investment grade securities, alternative residential mortgage loan RMBS and sub-prime RMBS included in this level are valued based on inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2. Certain of these valuations are based on independent non-binding broker quotations. Foreign government securities These securities are principally valued using the market approach. Valuation is based primarily on independent non-binding broker quotations and inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2. Common and non-redeemable preferred stock These securities, including privately held securities and financial services industry hybrid securities classified within equity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing, discounted cash flow methodologies or other similar techniques using inputs such as comparable credit rating and issuance structure. Certain of these securities are valued based on inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2 and independent non-binding broker quotations. F-94 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Separate Account Assets Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheets. The estimated fair value of separate account assets is based on the estimated fair value of the underlying assets. Assets within the Company's separate accounts include: mutual funds, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. Level 2 Valuation Techniques and Key Inputs: These assets are comprised of investments that are similar in nature to the instruments described under "--Securities, Short-term Investments, Long-term Debt of CSEs and Trading Liabilities" and "-- Derivatives -- Freestanding Derivatives." Also included are certain mutual funds and hedge funds without readily determinable fair values as prices are not published publicly. Valuation of the mutual funds and hedge funds is based upon quoted prices or reported NAVs provided by the fund managers. Level 3 Valuation Techniques and Key Inputs: These assets are comprised of investments that are similar in nature to the instruments described under "--Securities, Short-term Investments, Long-term Debt of CSEs and Trading Liabilities" and "-- Derivatives -- Freestanding Derivatives." Separate account assets within this level also include other limited partnership interests. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest. Derivatives The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. The valuation controls and procedures for derivatives are described in "-- Investments." The significant inputs to the pricing models for most OTC derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain OTC derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant inputs that are unobservable generally include references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. F-95 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its derivatives using the standard swap curve which includes a spread to the risk free rate. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Most inputs for OTC derivatives are mid-market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. Freestanding Derivatives Level 2 Valuation Techniques and Key Inputs: This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3. These derivatives are principally valued using the income approach. Interest rate Non-option-based. -- Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve and London Interbank Offered Rate ("LIBOR") basis curves. Option-based. -- Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and interest rate volatility. Foreign currency exchange rate Non-option-based. -- Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, currency spot rates and cross currency basis curves. Credit Non-option-based. -- Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves and recovery rates. Equity market Option-based. -- Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, spot equity index levels, dividend yield curves and equity volatility. F-96 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Level 3 Valuation Techniques and Key Inputs: These derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. These valuation methodologies generally use the same inputs as described in the corresponding sections above for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Interest rate Non-option-based. -- Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves. Foreign currency exchange rate Non-option-based. -- Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves, cross currency basis curves and currency correlation. Credit Non-option-based. -- Significant unobservable inputs may include credit spreads, repurchase rates and the extrapolation beyond observable limits of the swap yield curve and credit curves. Certain of these derivatives are valued based on independent non-binding broker quotations. Embedded Derivatives Embedded derivatives principally include certain direct variable annuity guarantees, certain affiliated ceded reinsurance agreements related to such variable annuity guarantees, equity or bond indexed crediting rates within certain funding agreements and those related to ceded funds withheld on reinsurance. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within PABs in the consolidated balance sheets. The fair value of these embedded derivatives, estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior, is calculated by the Company's actuarial department. The calculation is based on in-force business, and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk free rates. Capital market assumptions, such as risk free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. F-97 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.'s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income. The Company ceded the risk associated with certain of the GMIBs, GMABs and GMWBs previously described. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also ceded directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives) but where the reinsurance agreement contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables in the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as previously described in "-- Investments -- Securities, Short-term Investments, Long-term Debt of CSEs and Trading Liabilities." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities in the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The estimated fair value of the embedded equity and bond indexed derivatives contained in certain funding agreements is determined using market standard swap valuation models and observable market inputs, including a nonperformance risk adjustment. The estimated fair value of these embedded derivatives are included, along with their funding agreements host, within PABs with changes in estimated fair value recorded in net derivative gains (losses). Changes in equity and bond indices, interest rates and the Company's credit standing may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. F-98 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Embedded Derivatives Within Asset and Liability Host Contracts Level 3 Valuation Techniques and Key Inputs: Direct Guaranteed Minimum Benefits These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin. Reinsurance Ceded on Certain Guaranteed Minimum Benefits These embedded derivatives are principally valued using the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in "-- Direct Guaranteed Minimum Benefits" and also include counterparty credit spreads. Embedded Derivatives Within Funds Withheld Related to Certain Ceded Reinsurance These embedded derivatives are principally valued using the income approach. The valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data. Transfers between Levels Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the period. Transfers between Levels 1 and 2: During 2012, there were no transfers between Levels 1 and 2 for assets and liabilities measured at estimated fair value and still held at December 31, 2012. During 2011, transfers between Levels 1 and 2 were not significant for assets and liabilities measured at estimated fair value and still held at December 31, 2011. Transfers into or out of Level 3: Transfers into or out of Level 3 are presented in the tables which follow. Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This F-99 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Transfers into Level 3 for fixed maturity securities and separate account assets were due primarily to a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade) which have resulted in decreased transparency of valuations and an increased use of independent non-binding broker quotations and unobservable inputs, such as illiquidity premiums, delta spread adjustments, or spreads from below investment grade curves. Transfers out of Level 3 for fixed maturity securities and separate account assets resulted primarily from increased transparency of both new issuances that, subsequent to issuance and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company was able to obtain pricing from, or corroborate pricing received from, independent pricing services with observable inputs or increases in market activity and upgraded credit ratings. F-100 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2012.
Valuation Techniques Significant Unobservable Inputs Range -------------------------------------------------------------------------------------- Fixed maturity securities: U.S. corporate and foreign corporate Matrix pricing Delta spread adjustments (1) (50) - 500 Illiquidity premium (1) 30 - 30 Spreads from below investment grade curves (1) (144) - 779 Offered quotes (2) -- - 178 Market pricing Quoted prices (2) (1,416) - 830 Consensus pricing Offered quotes (2) 35 - 105 -------------------------------------------------------------------------------------- RMBS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 9 - 2,980 Market pricing Quoted prices (2) 13 - 100 Consensus pricing Offered quotes (2) 28 - 100 -------------------------------------------------------------------------------------- CMBS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 35 - 4,750 Market pricing Quoted prices (2) 100 - 104 -------------------------------------------------------------------------------------- ABS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) -- - 1,829 Market pricing Quoted prices (2) 40 - 102 Consensus pricing Offered quotes (2) -- - 111 -------------------------------------------------------------------------------------- Foreign government Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 111 - 111 Market pricing Quoted prices (2) 77 - 101 Consensus pricing Offered quotes (2) 82 - 158 -------------------------------------------------------------------------------------- Derivatives: Interest rate Present value techniques Swap yield (1) 186 - 332 -------------------------------------------------------------------------------------- Foreign currency exchange rate Present value techniques Swap yield (1) 647 - 795 Currency correlation 43% - 57% -------------------------------------------------------------------------------------- Credit Present value techniques Credit spreads (1) 100 - 100 Consensus pricing Offered quotes (3) -------------------------------------------------------------------------------------- Embedded derivatives: Direct and ceded guaranteed minimum Option pricing techniques Mortality rates: benefits Ages 0 - 40 0% - 0.10% Ages 41 - 60 0.05% - 0.64% Ages 61 - 115 0.32% - 100% Lapse rates: Durations 1 - 10 0.50% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 3% - 100% Utilization rates (4) 20% - 50% Withdrawal rates 0.07% - 10% Long-term equity volatilities 17.40% - 25% Nonperformance risk spread 0.10% - 0.67% --------------------------------------------------------------------------------------
Weighted Valuation Techniques Significant Unobservable Inputs Average --------------------------------------------------------------------------- Fixed maturity securities: U.S. corporate and foreign corporate Matrix pricing Delta spread adjustments (1) 84 Illiquidity premium (1) Spreads from below investment grade curves (1) 205 Offered quotes (2) Market pricing Quoted prices (2) 138 Consensus pricing Offered quotes (2) --------------------------------------------------------------------------- RMBS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 541 Market pricing Quoted prices (2) 99 Consensus pricing Offered quotes (2) --------------------------------------------------------------------------- CMBS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 486 Market pricing Quoted prices (2) 102 --------------------------------------------------------------------------- ABS Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 105 Market pricing Quoted prices (2) 99 Consensus pricing Offered quotes (2) --------------------------------------------------------------------------- Foreign government Matrix pricing and discounted Spreads from below investment cash flow grade curves (1) 111 Market pricing Quoted prices (2) 87 Consensus pricing Offered quotes (2) --------------------------------------------------------------------------- Derivatives: Interest rate Present value techniques Swap yield (1) --------------------------------------------------------------------------- Foreign currency exchange rate Present value techniques Swap yield (1) Currency correlation --------------------------------------------------------------------------- Credit Present value techniques Credit spreads (1) Consensus pricing Offered quotes (3) --------------------------------------------------------------------------- Embedded derivatives: Direct and ceded guaranteed minimum Option pricing techniques Mortality rates: benefits Ages 0 - 40 Ages 41 - 60 Ages 61 - 115 Lapse rates: Durations 1 - 10 Durations 11 - 20 Durations 21 - 116 Utilization rates (4) Withdrawal rates Long-term equity volatilities Nonperformance risk spread ---------------------------------------------------------------------------
(1)For this unobservable input, range and weighted average are presented in basis points. F-101 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) (2)For this unobservable input, range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par. (3)At December 31, 2012, independent non-binding broker quotations were used in the determination of less than 1% of the total net derivative estimated fair value. (4)This range is attributable to certain GMIBs and lifetime withdrawal benefits. The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value measurement for other assets and liabilities classified within Level 3. These assets and liabilities are subject to the controls described under "-- Investments - Valuation Controls and Procedures." Generally, all other classes of securities including those within separate account assets and embedded derivatives within funds withheld related to certain ceded reinsurance use the same valuation techniques and significant unobservable inputs as previously described for Level 3 fixed maturity securities. This includes matrix pricing and discounted cash flow methodologies, inputs such as quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, as well as independent non-binding broker quotations. The long-term debt of CSEs is valued using independent non-binding broker quotations and internal models including matrix pricing and discounted cash flow methodologies using current interest rates. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these assets and liabilities is similar in nature to that described below. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in "-- Nonrecurring Fair Value Measurements" and Note 11. A description of the sensitivity of the estimated fair value to changes in the significant unobservable inputs for certain of the major asset and liability classes described above is as follows: Securities Significant spread widening in isolation will adversely impact the overall valuation, while significant spread tightening will lead to substantial valuation increases. Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations. Significant increases (decreases) in offered quotes in isolation would result in substantially higher (lower) valuations. For U.S. and foreign corporate securities, significant increases (decreases) in illiquidity premiums in isolation would result in substantially lower (higher) valuations. For RMBS, CMBS and ABS, changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates. Interest rate derivatives Significant increases (decreases) in the unobservable portion of the swap yield curve in isolation will result in substantial valuation changes. Foreign currency exchange rate derivatives Significant increases (decreases) in the unobservable portion of the swap yield curve in isolation will result in substantial valuation changes. Increases (decreases) in currency correlation in isolation will increase (decrease) the significance of the change in valuations. F-102 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Credit derivatives Credit derivatives with significant unobservable inputs are primarily comprised of credit default swaps written by the Company. Significant credit spread widening in isolation will result in substantially higher adverse valuations, while significant spread tightening will result in substantially lower adverse valuations. Significant increases (decreases) in offered quotes in isolation will result in substantially higher (lower) valuations. Direct and ceded guaranteed minimum benefits For any increase (decrease) in mortality and lapse rates, the fair value of the guarantees will decrease (increase). For any increase (decrease) in utilization and volatility, the fair value of the guarantees will increase (decrease). Specifically for GMWBs, for any increase (decrease) in withdrawal rates, the fair value of the guarantees will increase (decrease). Specifically for GMABs and GMIBs, for any increase (decrease) in withdrawal rates, the fair value of the guarantees will decrease (increase). The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3), including realized and unrealized gains (losses) of all assets and (liabilities) and realized and unrealized gains (losses) of all assets and (liabilities) still held at the end of the respective periods:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------------ Fixed Maturity Securities: ------------------------------------------------------------------------------ U.S. State and U.S. Treasury Foreign Political Foreign Corporate and Agency Corporate RMBS CMBS ABS Subdivision Government --------- ---------- --------- -------- ------ -------- ----------- ---------- (In millions) Year Ended December 31, 2012: Balance, January 1,...................... $ 4,919 $ 25 $ 2,258 $ 691 $ 219 $ 1,146 $ -- $ 291 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)............. Net investment income................. 7 -- 6 27 -- 1 -- 5 Net investment gains (losses)......... (2) -- (52) (5) (7) (1) -- (5) Net derivative gains (losses)......... -- -- -- -- -- -- -- -- Other comprehensive income (loss)....... 173 -- 142 220 (3) (3) -- 19 Purchases (3)............................ 1,282 47 1,213 892 268 953 -- 2 Sales (3)................................ (848) (1) (489) (242) (167) (157) -- (55) Issuances (3)............................ -- -- -- -- -- -- -- -- Settlements (3).......................... -- -- -- -- -- -- -- -- Transfers into Level 3 (4)............... 559 -- 99 131 104 4 -- 25 Transfers out of Level 3 (4)............. (630) -- (123) (12) (12) (20) -- -- --------- ---------- --------- -------- ------ -------- ----------- ---------- Balance, December 31,.................... $ 5,460 $ 71 $ 3,054 $ 1,702 $ 402 $ 1,923 $ -- $ 282 ========= ========== ========= ======== ====== ======== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income................. $ 4 $ -- $ 5 $ 27 $ -- $ 1 $ -- $ 5 Net investment gains (losses)......... $ (3) $ -- $ (13) $ (2) $ -- $ -- $ -- $ -- Net derivative gains (losses)......... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
F-103 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ----------------------------------------------------------------------- Equity Securities: Trading and FVO Securities: --------------------- ------------------------ Non- FVO redeemable Actively General Separate Common Preferred Traded Account Short-term Account Stock Stock Securities Securities Investments Assets (6) ------ ---------- ---------- ---------- ----------- ---------- (In millions) Year Ended December 31, 2012: Balance, January 1,............................... $ 104 $ 293 $ -- $ 14 $ 134 $ 1,082 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- 12 -- -- Net investment gains (losses)................... 7 (1) -- -- -- 84 Net derivative gains (losses)................... -- -- -- -- -- -- Other comprehensive income (loss)................ (7) 16 -- -- (19) -- Purchases (3)..................................... 10 5 6 -- 246 171 Sales (3)......................................... (24) (32) -- -- (106) (379) Issuances (3)..................................... -- -- -- -- -- 2 Settlements (3)................................... -- -- -- -- -- (1) Transfers into Level 3 (4)........................ 1 -- -- -- 5 24 Transfers out of Level 3 (4)...................... (31) -- -- -- (8) (43) ------ ---------- ---------- ---------- ----------- ---------- Balance, December 31,............................. $ 60 $ 281 $ 6 $ 26 $ 252 $ 940 ====== ========== ========== ========== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ -- $ -- $ -- $ 12 $ -- $ -- Net investment gains (losses)................... $ (4) $ -- $ -- $ -- $ -- $ -- Net derivative gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ --
F-104 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ----------------------------------------------------------------------- Net Derivatives: (7) ---------------------------------------- Foreign Currency Net Interest Exchange Equity Embedded Long-term Rate Rate Credit Market Derivatives (8) Debt of CSEs --------- -------- -------- -------- --------------- ------------ (In millions) Year Ended December 31, 2012: Balance, January 1,............................... $ 67 $ 56 $ 1 $ -- $ (790) $ (116) Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- -- -- -- Net investment gains (losses)................... -- -- -- -- -- (7) Net derivative gains (losses)................... 17 (19) 38 -- 629 -- Other comprehensive income (loss)................ (1) -- -- -- -- -- Purchases (3)..................................... -- -- -- -- -- -- Sales (3)......................................... -- -- -- -- -- -- Issuances (3)..................................... -- -- (3) -- -- -- Settlements (3)................................... (25) -- (3) -- 52 79 Transfers into Level 3 (4)........................ -- -- -- -- -- -- Transfers out of Level 3 (4)...................... -- -- -- -- -- -- --------- -------- -------- -------- --------------- ------------ Balance, December 31,............................. $ 58 $ 37 $ 33 $ -- $ (109) $ (44) ========= ======== ======== ======== =============== ============ Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ -- $ -- $ -- $ -- $ -- $ -- Net investment gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ (7) Net derivative gains (losses)................... $ -- $ (19) $ 36 $ -- $ 636 $ --
F-105 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) -------------------------------------------------------------------------------------- Fixed Maturity Securities: -------------------------------------------------------------------------------------- U.S. State and U.S. Treasury Foreign Political Foreign Corporate and Agency Corporate RMBS CMBS ABS Subdivision Government ---------- ---------- ---------- ---------- -------- ---------- ----------- ---------- (In millions) Year Ended December 31, 2011: Balance, January 1,........... $ 5,063 $ 44 $ 2,796 $ 1,985 $ 161 $ 1,514 $ 1 $ 171 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2).. Net investment income....... 4 -- 7 10 -- 2 -- 6 Net investment gains (losses)................... (15) -- 16 (10) (1) (12) -- -- Net derivative gains (losses)................... -- -- -- -- -- -- -- -- Other comprehensive income (loss)...................... 258 2 (24) (52) 28 42 -- 17 Purchases (3)................. 789 -- 915 78 106 670 -- 118 Sales (3)..................... (653) (1) (1,129) (127) (86) (370) -- (21) Issuances (3)................. -- -- -- -- -- -- -- -- Settlements (3)............... -- -- -- -- -- -- -- -- Transfers into Level 3 (4).... 122 -- 155 -- 11 11 -- -- Transfers out of Level 3 (4).. (649) (20) (478) (1,193) -- (711) (1) -- ---------- ---------- ---------- ---------- -------- ---------- ----------- ---------- Balance, December 31,......... $ 4,919 $ 25 $ 2,258 $ 691 $ 219 $ 1,146 $ -- $ 291 ========== ========== ========== ========== ======== ========== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income....... $ 4 $ -- $ 5 $ 11 $ -- $ 2 $ -- $ 5 Net investment gains (losses)................... $ (27) $ -- $ (22) $ (10) $ -- $ (9) $ -- $ -- Net derivative gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
F-106 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------- Equity Securities: Trading and FVO Securities: ---------------------- ------------------------- Non- FVO redeemable Actively General Separate Common Preferred Traded Account Short-term Account Stock Stock Securities Securities Investments Assets (6) -------- ---------- ---------- ---------- ----------- ---------- (In millions) Year Ended December 31, 2011: Balance, January 1,............................... $ 79 $ 633 $ 10 $ 50 $ 379 $ 1,509 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- (6) 1 -- Net investment gains (losses)................... 11 (45) -- -- (1) 101 Net derivative gains (losses)................... -- -- -- -- -- -- Other comprehensive income (loss)................ 11 1 -- -- -- -- Purchases (3)..................................... 22 2 -- -- 134 188 Sales (3)......................................... (20) (298) (8) (30) (379) (482) Issuances (3)..................................... -- -- -- -- -- -- Settlements (3)................................... -- -- -- -- -- -- Transfers into Level 3 (4)........................ 1 -- -- -- -- 18 Transfers out of Level 3 (4)...................... -- -- (2) -- -- (252) -------- ---------- ---------- ---------- ----------- ---------- Balance, December 31,............................. $ 104 $ 293 $ -- $ 14 $ 134 $ 1,082 ======== ========== ========== ========== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income............................ $ -- $ -- $ -- $ (6) $ 1 $ -- Net investment gains (losses).................... $ (6) $ (16) $ -- $ -- $ (1) $ -- Net derivative gains (losses).................... $ -- $ -- $ -- $ -- $ -- $ --
F-107 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ----------------------------------------------------------------------- Net Derivatives: (7) ---------------------------------------- Foreign Currency Net Interest Exchange Equity Embedded Long-term Rate Rate Credit Market Derivatives (8) Debt of CSEs -------- -------- ------ ------- --------------- ------------ (In millions) Year Ended December 31, 2011: Balance, January 1,............................... $ (23) $ 46 $ 33 $ -- $ (382) $ (184) Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- -- -- -- Net investment gains (losses)................... -- -- -- -- -- (8) Net derivative gains (losses)................... (7) 10 (33) -- (458) -- Other comprehensive income (loss)................ 130 -- 14 -- -- -- Purchases (3)..................................... -- -- -- -- -- -- Sales (3)......................................... -- -- -- -- -- -- Issuances (3)..................................... -- -- (2) -- -- -- Settlements (3)................................... (33) -- (11) -- 50 76 Transfers into Level 3 (4)........................ -- -- -- -- -- -- Transfers out of Level 3 (4)...................... -- -- -- -- -- -- -------- -------- ------ ------- --------------- ------------ Balance, December 31,............................. $ 67 $ 56 $ 1 $ -- $ (790) $ (116) ======== ======== ====== ======= =============== ============ Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ -- $ -- $ -- $ -- $ -- $ -- Net investment gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ (8) Net derivative gains (losses)................... $ -- $ (13) $ 10 $(32) $ -- $ (454)
F-108 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) --------------------------------------------------------------------------- Fixed Maturity Securities: --------------------------------------------------------------------------- U.S. State and U.S. Treasury Foreign Political Foreign Corporate and Agency Corporate RMBS CMBS ABS Subdivision Government --------- ---------- --------- -------- ----- ------ ----------- ---------- (In millions) Year Ended December 31, 2010: Balance, January 1,............................... $ 4,674 $ -- $ 3,456 $ 2,290 $ 87 $ 958 $ 20 $ 249 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... 17 -- (1) 63 2 5 -- 5 Net investment gains (losses)................... (10) -- (32) (47) (2) (33) -- (1) Net derivative gains (losses)................... -- -- -- -- -- -- -- -- Other comprehensive income (loss)................ 184 -- 179 234 50 113 -- 16 Purchases, sales, issuances and settlements (3)... (400) 22 (709) (420) (21) 581 2 15 Transfers into Level 3 (4)........................ 751 22 351 57 45 29 -- -- Transfers out of Level 3 (4)...................... (153) -- (448) (192) -- (139) (21) (113) --------- ---------- --------- -------- ----- ------ ----------- ---------- Balance, December 31,............................. $ 5,063 $ 44 $ 2,796 $ 1,985 $ 161 $1,514 $ 1 $ 171 ========= ========== ========= ======== ===== ====== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ 8 $ -- $ (2) $ 62 $ 1 $ 5 $ -- $ 5 Net investment gains (losses)................... $ (32) $ -- $ (43) $ (26) $ (2) $ (23) $ -- $ -- Net derivative gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
F-109 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------- Equity Securities: Trading and FVO Securities: - ---------------------- ------------------------- Non- FVO redeemable Actively General Separate Common Preferred Traded Account Short-term Account Stock Stock Securities Securities Investments Assets (6) ------- ---------- ---------- ---------- ----------- ---------- (In millions) Year Ended December 31, 2010: Balance, January 1,............................... $ 64 $ 793 $ 32 $ 51 $ 8 $ 1,583 Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- 10 1 -- Net investment gains (losses)................... (1) 30 -- -- -- 142 Net derivative gains (losses)................... -- -- -- -- -- -- Other comprehensive income (loss)................ -- 2 -- -- -- -- Purchases, sales, issuances and settlements (3)... 16 (192) (22) (30) 370 (31) Transfers into Level 3 (4)........................ 1 -- -- 37 -- 46 Transfers out of Level 3 (4)...................... (1) -- -- (18) -- (231) ------- ---------- ---------- ---------- ----------- ---------- Balance, December 31,............................. $ 79 $ 633 $ 10 $ 50 $ 379 $ 1,509 ======= ========== ========== ========== =========== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ -- $ -- $ -- $ 13 $ 1 $ -- Net investment gains (losses)................... $ (2) $ (3) $ -- $ -- $ -- $ -- Net derivative gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ --
F-110 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ----------------------------------------------------------------------- Net Derivatives: (7) ---------------------------------------- Foreign Currency Net Long-term Interest Exchange Equity Embedded Debt of Rate Rate Credit Market Derivatives (8) CSEs (9) -------- -------- ------ ------ --------------- ---------- (In millions) Year Ended December 31, 2010: Balance, January 1,............................... $ -- $ 53 $ 37 $ 2 $ 166 $ -- Total realized/unrealized gains (losses) included in: Net income (loss): (1), (2)...................... Net investment income........................... -- -- -- -- -- -- Net investment gains (losses)................... -- -- -- -- -- 48 Net derivative gains (losses)................... 23 28 2 (2) (588) -- Other comprehensive income (loss)................ (36) -- 1 -- -- -- Purchases, sales, issuances and settlements (3)... (10) (35) (7) -- 40 (232) Transfers into Level 3 (4)........................ -- -- -- -- -- -- Transfers out of Level 3 (4)...................... -- -- -- -- -- -- -------- -------- ------ ------ --------------- ---------- Balance, December 31,............................. $ (23) $ 46 $ 33 $ -- $ (382) $ (184) ======== ======== ====== ====== =============== ========== Changes in unrealized gains (losses) included in net income (loss): (5) Net investment income........................... $ -- $ -- $ -- $ -- $ -- $ -- Net investment gains (losses)................... $ -- $ -- $ -- $ -- $ -- $ 48 Net derivative gains (losses)................... $ 23 $ 21 $ 3 $ (2) $ (584) $ --
-------- (1)Amortization of premium/discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with net embedded derivatives are included in net derivative gains (losses). (2)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (3)The amount reported within purchases, sales, issuances and settlements is the purchase or issuance price and the sales or settlement proceeds based upon the actual date purchased or issued and sold or settled, F-111 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) respectively. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (4)Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (5)Relates to assets and liabilities still held at the end of the respective periods. (6)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income. For the purpose of this disclosure, these changes are presented within net investment gains (losses). (7)Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (8)Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (9)The long-term debt of the CSEs consolidated as of January 1, 2010 is reported within the purchases, sales, issuances and settlements caption of the rollforward. Fair Value Option The following table presents information for long-term debt held by CSEs, which are accounted for under the FVO, and were initially measured at fair value.
December 31, ---------------- 2012 2011 - ------- -------- (In millions) Contractual principal balance............................................. $ 60 $ 138 Difference between estimated fair value and contractual principal balance. (16) (22) ------- -------- Carrying value at estimated fair value (1)............................... $ 44 $ 116 ======= ========
-------- (1)Changes in estimated fair value are recognized in net investment gains (losses). Interest expense is recognized in other expenses. F-112 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Nonrecurring Fair Value Measurements The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods presented; that is, they are not measured at fair value on a recurring basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The estimated fair values for these assets were determined using significant unobservable inputs (Level 3).
Years Ended December 31, ------------------------------------------------------------------------------------------- 2012 2011 2010 --------------------------------- --------------------------------- ----------------------- Carrying Carrying Carrying Carrying Carrying Carrying Value Value Value Value Value Value Prior to After Gains Prior to After Gains Prior to After Measurement Measurement (Losses) Measurement Measurement (Losses) Measurement Measurement ----------- ----------- --------- ----------- ----------- --------- ----------- ----------- (In millions) Mortgage loans, net (1)........ $ 377 $ 361 $ (16) $ 168 $ 143 $ (25) $ 176 $ 160 Other limited partnership interests (2)................. $ 78 $ 48 $ (30) $ 11 $ 8 $ (3) $ 3 $ 1 Real estate joint ventures (3). $ 12 $ 8 $ (4) $ -- $ -- $ -- $ 8 $ 3 Goodwill (4)................... $ 10 $ -- $ (10) $ -- $ -- $ -- $ -- $ --
---------- ---------- Gains (Losses) --------- Mortgage loans, net (1)........ $ (16) Other limited partnership interests (2)................. $ (2) Real estate joint ventures (3). $ (5) Goodwill (4)................... $ --
-------- (1)The carrying value after measurement has been adjusted for the excess of the carrying value prior to measurement over the estimated fair value. Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral or the present value of the expected future cash flows. (2)These investments were accounted for using the cost method. Estimated fair value is determined from information provided in the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2012 and 2011 were not significant. (3)These investments were accounted for using the cost method. Estimated fair value is determined from information provided in the financial statements of the underlying entities including NAV data. These investments include several real estate funds that typically invest primarily in commercial real estate. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2012 and 2011 were not significant. (4)As discussed in Note 11, in 2012, the Company recorded an impairment of goodwill associated with the Retail Annuities reporting unit. F-113 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the "-- Recurring Fair Value Measurements" section. The estimated fair value of these financial instruments, which are primarily classified in Level 2 and, to a lesser extent, in Level 1, approximate carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. The tables below also exclude financial instruments reported at estimated fair value on a recurring basis. See "-- Recurring Fair Value Measurements." All remaining balance sheet amounts excluded from the table below are not considered financial instruments subject to this disclosure. The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
December 31, 2012 -------------------------------------------------------------- Fair Value Hierarchy -------------------------------------------------------------- Carrying Total Estimated Value Level 1 Level 2 Level 3 Fair Value ---------- ----------- ----------- ----------- --------------- (In millions) Assets: Mortgage loans, net......................... $ 44,657 $ -- $ -- $ 47,365 $ 47,365 Policy loans................................ $ 8,364 $ -- $ 793 $ 9,470 $ 10,263 Real estate joint ventures.................. $ 52 $ -- $ -- $ 68 $ 68 Other limited partnership interests......... $ 1,048 $ -- $ -- $ 1,161 $ 1,161 Other invested assets....................... $ 2,014 $ 93 $ 1,885 $ 152 $ 2,130 Premiums, reinsurance and other receivables................................ $ 14,172 $ -- $ 37 $ 15,129 $ 15,166 Liabilities: PABs........................................ $ 71,611 $ -- $ -- $ 75,189 $ 75,189 Long-term debt.............................. $ 2,276 $ -- $ 2,713 $ -- $ 2,713 Other liabilities........................... $ 19,865 $ -- $ 171 $ 20,488 $ 20,659 Separate account liabilities................ $ 51,985 $ -- $ 51,985 $ -- $ 51,985 Commitments: (1) Mortgage loan commitments................... $ -- $ -- $ -- $ 10 $ 10 Commitments to fund bank credit facilities, bridge loans and private corporate bond investments................................ $ -- $ -- $ 13 $ -- $ 13
F-114 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
December 31, 2011 --------------------------- Carrying Estimated Value Fair Value ------------- ------------- (In millions) Assets: Mortgage loans, net................................................................. $ 43,880 $ 46,013 Policy loans........................................................................ $ 8,314 $ 10,279 Real estate joint ventures.......................................................... $ 59 $ 73 Other limited partnership interests................................................. $ 1,207 $ 1,517 Other invested assets............................................................... $ 1,996 $ 2,032 Premiums, reinsurance and other receivables......................................... $ 18,127 $ 19,276 Liabilities: PABs................................................................................ $ 65,606 $ 68,360 Long-term debt...................................................................... $ 2,106 $ 2,408 Other liabilities................................................................... $ 23,963 $ 24,637 Separate account liabilities........................................................ $ 45,467 $ 45,467 Commitments: (1) Mortgage loan commitments........................................................... $ -- $ 3 Commitments to fund bank credit facilities, bridge loans and private corporate bond investments........................................................................ $ -- $ 38
-------- (1)Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities. See Note 17 for additional information on these off-balance sheet obligations. The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Mortgage Loans The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk. Policy Loans Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. Policy loans with variable interest rates are classified within Level 2 and the estimated fair value approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. F-115 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Real Estate Joint Ventures and Other Limited Partnership Interests The amounts disclosed in the preceding tables consist of those investments accounted for using the cost method. The estimated fair values for such cost method investments are generally based on the Company's share of the NAV as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Other Invested Assets Other invested assets within the preceding tables are principally comprised of loans to affiliates and funds withheld. The estimated fair value of loans to affiliates is determined by discounting the expected future cash flows using market interest rates currently available for instruments with similar terms and remaining maturities. For funds withheld, the Company evaluates the specific facts and circumstances of each instrument to determine the appropriate estimated fair values. These estimated fair values were not materially different from the recognized carrying values. Premiums, Reinsurance and Other Receivables Premiums, reinsurance and other receivables in the preceding tables are principally comprised of certain amounts recoverable under reinsurance agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and amounts receivable for securities sold but not yet settled. Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using interest rates determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements, classified within Level 2, essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. PABs PABs in the preceding tables include investment contracts. Embedded derivatives on investment contracts and certain variable annuity guarantees accounted for as embedded derivatives are excluded from this caption in the preceding tables as they are separately presented in "-- Recurring Fair Value Measurements." The investment contracts primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance risk in the liability. Long-term Debt The estimated fair value of long-term debt is principally determined using market standard valuation methodologies. Valuations are based primarily on quoted prices in markets that are not active or using matrix F-116 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable inputs including market yield curve, duration, observable prices and spreads for similar publicly traded or privately traded issues. Capital leases, which are not required to be disclosed at estimated fair value, are excluded from the preceding tables. Other Liabilities Other liabilities consist primarily of interest and dividends payable, amounts due for securities purchased but not yet settled, funds withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance agreements, and amounts payable under certain ceded and assumed reinsurance agreements, which are recorded using the deposit method of accounting. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which are not materially different from the carrying values, with the exception of certain deposit type reinsurance payables. For such payables, the estimated fair value is determined as the present value of expected future cash flows, which are discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty. Separate Account Liabilities Separate account liabilities included in the preceding tables represent those balances due to policyholders under contracts that are classified as investment contracts. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance, funding agreements related to group life contracts and certain contracts that provide for benefit funding. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described in the section "-- Recurring Fair Value Measurements," the value of those assets approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate account liabilities are similar to those described for separate account assets. Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments The estimated fair values for mortgage loan commitments that will be held for investment and commitments to fund bank credit facilities, bridge loans and private corporate bonds that will be held for investment reflected in the above tables represent the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the commitments. 11. Goodwill Goodwill, which is included in other assets, is the excess of cost over the estimated fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or F-117 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. Step 1 of the goodwill impairment process requires a comparison of the fair value of a reporting unit to its carrying value. In performing the Company's goodwill impairment tests, the estimated fair values of the reporting units are first determined using a market multiple valuation approach. When further corroboration is required, the Company uses a discounted cash flow valuation approach. For reporting units which are particularly sensitive to market assumptions, such as the Retail Annuities and Life & Other reporting units, the Company may use additional valuation methodologies to estimate the reporting units' fair values. The market multiple valuation approach utilizes market multiples of companies with similar businesses and the projected operating earnings of the reporting unit. The discounted cash flow valuation approach requires judgments about revenues, operating earnings projections, capital market assumptions and discount rates. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected operating earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates, comparative market multiples, the account value of in-force business, projections of new and renewal business, as well as margins on such business, the level of interest rates, credit spreads, equity market levels, and the discount rate that the Company believes is appropriate for the respective reporting unit. The estimated fair values of the Retail Annuities and Life & Other reporting units are particularly sensitive to equity market levels. The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only management's reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair value of the Company's reporting units could result in goodwill impairments in future periods which could materially adversely affect the Company's results of operations or financial position. A discontinued cash flow valuation was performed for the Retail Annuities reporting unit that resulted in a fair value of the reporting unit less than the carrying value, indicating a potential for goodwill impairment. The growing concern regarding an extended period of low interest rates was reflected in the fair value estimate, particularly on the returns a market buyer would assume on the fixed income portion of separate account annuity products. While performing the Step 2 analysis, which compares the implied fair value of goodwill with the carrying value of that goodwill in the reporting unit to calculate the amount of goodwill impairment, the Company considered similar analysis performed on the Retail Annuities reporting unit of its parent company, MetLife, Inc., and determined that all of the recorded goodwill associated with the Company's Retail Annuities reporting unit was not recoverable. A non-cash charge of $10 million, which had no impact on income taxes, was recorded for the impairment of the entire goodwill balance in other expenses in the consolidated statements of operations for the year ended December 31, 2012. In addition, the Company performed its annual goodwill impairment tests of its other reporting units and concluded that the fair values of all such reporting units were in excess of their carrying values and, therefore, their goodwill was not impaired. As discussed in Note 2, during 2012, the Company reorganized its business. In connection with this reorganization, $105 million of goodwill at December 31, 2009 was reallocated to the Retail segment and Group, F-118 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Voluntary & Worksite Benefits segment in the amounts of $37 million and $68 million, respectively. The reorganization had no impact on goodwill for the Corporate Benefit Funding segment and Corporate & Other. There were no acquisitions, dispositions or impairments of goodwill for both the years ended December 31, 2011 and 2010. Information regarding goodwill by segment, as well as Corporate & Other, was as follows:
Group, Voluntary & Corporate Worksite Benefit Corporate Retail Benefits Funding & Other Total --------- ----------- --------- --------- -------- (In millions) Balance at December 31, 2011 Goodwill..................... $ 37 $ 68 $ 2 $ 4 $ 111 Accumulated impairment....... -- -- -- -- -- --------- ------- ------- ------- -------- Total goodwill, net......... $ 37 $ 68 $ 2 $ 4 $ 111 Impairments.................. $ (10) $ -- $ -- $ -- $ (10) Balance at December 31, 2012 Goodwill..................... 37 68 2 4 111 Accumulated impairment....... (10) -- -- -- (10) --------- ------- ------- ------- -------- Total goodwill, net.......... $ 27 $ 68 $ 2 $ 4 $ 101 ========= ======= ======= ======= ========
12. Long-term and Short-term Debt Long-term and short-term debt outstanding was as follows:
Interest Rates (1) ---------------------- December 31, Weighted ----------------- Range Average Maturity 2012 2011 ------------- -------- ----------- -------- -------- (In millions) Surplus notes -- affiliated.... 3.00% - 7.38% 6.52% 2014 - 2037 $ 1,099 $ 1,099 Surplus notes.................. 7.63% - 7.88% 7.84% 2015 - 2025 700 700 Mortgage loans -- affiliated... 2.17% - 7.26% 5.40% 2015 - 2020 306 307 Senior notes -- affiliated (2). 1.03% - 3.09% 2.23% 2021 - 2022 80 -- Other notes.................... 0.22% - 8.00% 1.72% 2016 - 2027 91 -- Capital lease obligations...... 25 26 -------- -------- Total long-term debt (3)....... 2,301 2,132 Total short-term debt.......... 100 101 -------- -------- Total......................... $ 2,401 $ 2,233 ======== ========
-------- (1)Range of interest rates and weighted average interest rates are for the year ended December 31, 2012. (2)During 2012, a consolidated VIE issued $80 million of long-term debt to an affiliate. See Note 8. (3)Excludes $44 million and $116 million at December 31, 2012 and 2011, respectively, of long-term debt relating to CSEs. See Note 8. The aggregate maturities of long-term debt at December 31, 2012 for the next five years and thereafter are $1 million in 2013, $220 million in 2014, $502 million in 2015, $5 million in 2016, $5 million in 2017 and $1.6 billion thereafter. F-119 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Capital lease obligations and mortgage loans are collateralized and rank highest in priority, followed by unsecured senior debt which consists of senior notes and other notes. Payments of interest and principal on the Company's surplus notes are subordinate to all other obligations. Payments of interest and principal on surplus notes may be made only with the prior approval of the insurance department of the state of domicile. Certain of the Company's debt instruments, credit facilities and committed facilities contain various administrative, reporting, legal and financial covenants. The Company believes it was in compliance with all such covenants at December 31, 2012. Surplus Notes -- Affiliated In April 2011, Metropolitan Life Insurance Company repaid in cash a $775 million surplus note issued to MetLife, Inc., with an original maturity of December 2011. The early redemption was approved by the Superintendent. In December 2010, Metropolitan Life Insurance Company repaid in cash a $300 million surplus note issued to MetLife, Inc. with an original maturity of 2011. The early redemption was approved by the Superintendent. In November 2010, Metropolitan Life Insurance Company issued a $188 million surplus note to MetLife Mexico, S.A., an affiliate, maturing in 2015 with an interest rate of 3.0%. Capital Notes -- Affiliated In December 2011, Metropolitan Life Insurance Company repaid in cash $500 million of capital notes issued to MetLife, Inc. Mortgage Loans -- Affiliated In December 2011, a wholly-owned real estate subsidiary of the Company issued a note for $110 million to MICC. This affiliated mortgage loan is secured by real estate held by the Company for investment. This note bears interest at a rate of one-month LIBOR plus 1.95%, which is payable quarterly through maturity in 2015. Short-term Debt Short-term debt with original maturities of one year or less consisted entirely of commercial paper. During the years ended December 31, 2012, 2011 and 2010, the weighted average interest rate on short-term debt was 0.17%, 0.16% and 0.21%, respectively. During the years ended December 31, 2012, 2011 and 2010, the average daily balance of short-term debt was $119 million, $102 million and $311 million, respectively, and the average days outstanding was 40 days, 44 days and 29 days, respectively. Interest Expense Interest expense related to the Company's indebtedness included in other expenses was $148 million, $185 million and $202 million for the years ended December 31, 2012, 2011 and 2010, respectively. These amounts include $89 million, $125 million and $143 million of interest expense related to affiliated debt for the years ended December 31, 2012, 2011 and 2010, respectively. Such amounts do not include interest expense on long-term debt related to CSEs. See Note 8. Credit and Committed Facilities The Company maintains unsecured credit facilities and a committed facility, which aggregated $4.0 billion and $500 million, respectively, at December 31, 2012. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements. F-120 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Credit Facilities The unsecured credit facilities are used for general corporate purposes, to support the borrowers' commercial paper program and for the issuance of letters of credit. Total fees expensed by the Company associated with these credit facilities were $3 million, $6 million and $8 million for the years ended December 31, 2012, 2011 and 2010, respectively, and are included in other expenses. Information on these credit facilities at December 31, 2012 was as follows:
Letter of Credit Unused Borrower(s) Expiration Capacity Issuances (1) Drawdowns Commitments ---------------------------------------- ------------------ -------- ------------- --------- ----------- (In millions) MetLife, Inc. and MetLife Funding, Inc.. September 2017 (2) $ 1,000 $ 365 $ -- $ 635 MetLife, Inc. and MetLife Funding, Inc.. August 2016 3,000 2,203 -- 797 -------- -------- ------- -------- Total.................................. $ 4,000 $ 2,568 $ -- $ 1,432 ======== ======== ======= ========
-------- (1)MetLife, Inc. and MetLife Funding, Inc. are severally liable for their respective obligations under such unsecured credit facilities. MetLife Funding, Inc. is not an applicant under letters of credit outstanding as of December 31, 2012 and is not responsible for any reimbursement obligations under such letters of credit. (2)In September 2012, MetLife, Inc. and MetLife Funding, Inc. entered into a $1.0 billion five-year credit agreement which amended and restated the three-year agreement dated October 2010. All borrowings under the 2012 five-year credit agreement must be repaid by September 2017, except that letters of credit outstanding on that date may remain outstanding until no later than September 2018. The Company incurred costs of $2 million related to the amended and restated credit facility, which have been capitalized and included in other assets. These costs will be amortized over the remaining term of the amended and restated credit facility. Committed Facility The committed facility is used for collateral for certain of the Company's affiliated reinsurance liabilities. Total fees expensed by the Company associated with this committed facility were $3 million, $3 million and $4 million for the years ended December 31, 2012, 2011 and 2010, respectively, and are included in other expenses. Information on the committed facility at December 31, 2012 was as follows:
Letter of Credit Unused Account Party/Borrower(s) Expiration Capacity Issuances Drawdowns Commitments ------------------------------------------- ---------- -------- --------- --------- ----------- (In millions) Exeter Reassurance Company, Ltd., MetLife, Inc. & Missouri Reinsurance, Inc......... June 2016 $ 500 $ 490 (1) $ -- $ 10
-------- (1)Missouri Reinsurance, Inc., a subsidiary of Metropolitan Life Insurance Company, had outstanding $390 million in letters of credit at December 31, 2012. F-121 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 13. Equity Capital Contributions During the year ended December 31, 2011, United MetLife Insurance Company Limited ("United"), an insurance underwriting joint venture of the Company accounted for under the equity method, merged with Sino-US MetLife Insurance Company Limited ("Sino"), another insurance underwriting joint venture of an affiliate of the Company. The Company's ownership interest in the merged entity, Sino-US United MetLife Insurance Company Limited ("Sino-United") was determined based on its contributed capital and share of undistributed earnings of United compared to the contributed capital and undistributed earnings of all other owners of United and Sino. Since both of the joint ventures were under common ownership both prior to and subsequent to the merger, the Company's investment in Sino-United is based on the carrying value of its investment in United. Pursuant to the merger, the Company entered into an agreement whereby the affiliate will pay an amount to the Company based on the relative fair values of their respective investments in Sino-United. Accordingly, upon completion of the estimation of fair value, $47 million, representing a capital contribution, was received during the year ended December 31, 2011. The Company's investment in Sino-United is accounted for under the equity method and is included in other invested assets. During each of the years ended December 31, 2012, 2011 and 2010, MetLife, Inc. contributed $3 million in the form of payment of line of credit fees on the Company's behalf. Stock-Based Compensation Plans Overview The stock-based compensation expense recognized by the Company is related to awards payable in shares of MetLife, Inc. common stock ("Shares"), or options to purchase MetLife, Inc. common stock. The Company does not issue any awards payable in its common stock or options to purchase its common stock. Description of Plans for Employees and Agents -- General Terms The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the "2000 Stock Plan") authorized the granting of awards to employees and agents in the form of options ("Stock Options") to buy Shares that either qualify as incentive Stock Options under Section 422A of the Code or are non-qualified. By December 31, 2009 all awards under the 2000 Stock Plan had either vested or been forfeited. No awards have been made under the 2000 Stock Plan since 2005. Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the "2005 Stock Plan"), awards granted to employees and agents 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 with reference to Shares). The aggregate number of shares authorized for issuance under the 2005 Stock Plan is 68,000,000, plus those shares available but not utilized under the 2000 Stock Plan and those shares utilized under the 2000 Stock Plan that are recovered due to forfeiture of Stock Options. 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 F-122 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Options or Stock Appreciation Rights reduces the number of Shares remaining for issuance under that plan by 1.179 Shares. At December 31, 2012, the aggregate number of Shares remaining available for issuance pursuant to the 2005 Stock Plan was 24,715,318. Stock Option exercises and other awards settled in Shares are satisfied through the issuance of Shares held in treasury by MetLife, Inc. or by the issuance of new Shares. Of MetLife, Inc.'s stock-based compensation expense for the years ended December 31, 2012, 2011 and 2010, 76%, 70% and 79%, respectively, was allocated to the Company. No expense amounts related to stock-based awards to MetLife, Inc. non-management directors were allocated to the Company. This allocation represents substantially all stock-based compensation recognized in the Company's consolidated results of operations. Accordingly, this discussion addresses MetLife, Inc.'s practices for recognizing expense for awards under the 2000 Stock Plan and 2005 Stock Plan (together, the "Incentive Plans"). References to compensation expense in this note refer to the Company's allocated portion of that expense. All other references relevant to awards under the Incentive Plans pertain to all awards under those plans. Compensation expense related to awards under the 2005 Stock Plan 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 forfeiture 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 related to awards under the 2005 Stock Plan is principally related to the issuance of Stock Options, Performance Shares and Restricted Stock Units. The majority of the awards granted by MetLife, Inc. each year under the 2005 Stock Plan are made in the first quarter of each year. Compensation Expense Related to Stock-Based Compensation The components of compensation expense related to stock-based compensation were as follows:
Years Ended December 31, ------------------------- 2012 2011 2010 -------- -------- ------- (In millions) Stock Options.............. $ 52 $ 48 $ 39 Performance Shares (1)..... 53 37 19 Restricted Stock Units..... 22 15 9 -------- -------- ------- Total compensation expense. $ 127 $ 100 $ 67 ======== ======== ======= Income tax benefit......... $ 44 $ 35 $ 23 ======== ======== =======
-------- (1)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. At December 31, 2012, the Company's allocated portion of expense for Stock Options, Performance Shares and Restricted Stock Units was 84%, 66% and 83%, respectively. F-123 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents MetLife, Inc.'s total unrecognized compensation expense related to stock-based compensation and the expected weighted average period over which these expenses will be recognized at:
December 31, 2012 ------------------------------ Weighted Average Expense Period ------------- ---------------- (In millions) (Years) Stock Options.......... $ 56 1.74 Performance Shares..... $ 52 1.65 Restricted Stock Units. $ 28 1.73
Equity Awards Stock Options Stock Options are the contingent right of award holders to purchase Shares at a stated price for a limited time. All Stock Options have an exercise price equal to the closing price of a Share reported on the New York Stock Exchange on the date of grant, and have a maximum term of 10 years. The vast majority of Stock Options granted have become or will become exercisable at a rate of one-third of each award on each of the first three anniversaries of the grant date. Other Stock Options have become or will become exercisable on the third anniversary of the grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. A summary of the activity related to Stock Options for the year ended December 31, 2012 was as follows:
Weighted Average Remaining Aggregate Shares Under Weighted Average Contractual Intrinsic Option Exercise Price Term Value (1) ------------ ---------------- ----------- ------------- (Years) (In millions) Outstanding at January 1, 2012....................... 34,713,526 $ 40.22 5.35 $ -- Granted.............................................. 6,247,050 $ 37.91 Exercised............................................ (3,817,301) $ 28.44 Expired.............................................. (1,017,994) $ 47.35 Forfeited............................................ (972,210) $ 40.23 ------------ Outstanding at December 31, 2012..................... 35,153,071 $ 40.89 5.50 $ 51 ============ ================ =========== ============= Expected to vest at a future date as of December 31, 2012............................................... 34,684,396 $ 40.94 5.41 $ 51 ============ ================ =========== ============= Exercisable at December 31, 2012..................... 24,530,711 $ 41.36 4.16 $ 50 ============ ================ =========== =============
-------- (1)The aggregate intrinsic value was computed using the closing Share price on December 31, 2012 of $32.94 and December 30, 2011 of $31.18, as applicable. The fair value of Stock Options is estimated on the date of grant using a binomial lattice model. Significant assumptions used in MetLife, Inc.'s binomial lattice model, which are further described below, include: expected volatility of the price of Shares; risk-free rate of return; expected dividend yield on Shares; exercise multiple; and the post-vesting termination rate. F-124 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Expected volatility is based upon an analysis of historical prices of Shares and call options on Shares traded on the open market. MetLife, Inc. uses a weighted-average of the implied volatility for publicly-traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of Shares. MetLife, Inc. chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the underlying Shares rather than on daily price movements. The binomial lattice model used by MetLife, Inc. incorporates different risk-free rates based on the imputed forward rates for U.S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates that were used for options granted during the respective periods. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying Shares as of the valuation date and held constant over the life of the Stock Option. The binomial lattice model used by MetLife, Inc. incorporates the contractual term of the Stock Options and then factors in expected exercise behavior and a post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination of employment, to derive an expected life. Exercise behavior in the binomial lattice model used by MetLife, Inc. is expressed using an exercise multiple, which reflects the ratio of exercise price to the strike price of Stock Options granted at which holders of the Stock Options are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The post-vesting termination rate is determined from actual historical exercise experience and expiration activity under the Incentive Plans. The following table presents the weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, used to determine the fair value of Stock Options issued:
Years Ended December 31, ----------------------------------- 2012 2011 2010 ----------- ----------- ----------- Dividend yield........................................... 1.95% 1.65% 2.11% Risk-free rate of return................................. 0.21%-4.17% 0.29%-5.51% 0.35%-5.88% Expected volatility...................................... 35.59% 32.64% 34.41% Exercise multiple........................................ 1.58 1.69 1.75 Post-vesting termination rate............................ 3.14% 3.36% 3.64% Contractual term (years)................................. 10 10 10 Expected life (years).................................... 7 7 7 Weighted average exercise price of stock options granted. $37.91 $45.16 $35.06 Weighted average fair value of stock options granted..... $11.33 $14.27 $11.29
MetLife, Inc. deducts 35% of the compensation amount of a Stock Option from its income on its tax return. The compensation amount is the price of shares on the date the Stock Option is exercised less the exercise price of the Stock Option. This tax benefit is allocated to the subsidiary of MetLife, Inc. that is the current or former employer of the associate, or is or was the principal for the non-employee insurance agent, who exercised the Stock Option. F-125 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents a summary of Stock Option exercise activity:
Years Ended December 31, ------------------------ 2012 2011 2010 - -------- ------- ------- (In millions) Total intrinsic value of stock options exercised......... $ 29 $ 41 $ 22 Cash received from exercise of stock options............. $ 109 $ 88 $ 52 Income tax benefit realized from stock options exercised. $ 10 $ 13 $ 8
Performance Shares Performance Shares are units that, if they vest, are multiplied by a performance factor to produce a number of final Performance Shares which are payable in Shares. Performance Shares are accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on Shares during the performance period. Accordingly, the estimated fair value of Performance Shares is based upon the closing price of a Share on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. Performance Share awards normally vest in their entirety at the end of the three-year performance period. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Vested Performance Shares are multiplied by a performance factor of 0.0 to 2.0 based on MetLife, Inc.'s adjusted income, total shareholder return, and performance in change in annual net operating earnings and total shareholder return compared to the performance of its competitors, each measured with respect to the applicable three-year performance period or portions thereof. The performance factor was 1.13 for the January 1, 2009 -- December 31, 2011 performance period. Restricted Stock Units Restricted Stock Units are units that, if they vest, are payable in an equal number of Shares. Restricted Stock Units are accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on Shares during the performance period. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing price of Shares on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period. The vast majority of Restricted Stock Units normally vest in their entirety on the third anniversary of their grant date. Other Restricted Stock Units normally vest in their entirety on the fifth anniversary of their grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. F-126 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The following table presents a summary of Performance Share and Restricted Stock Unit activity for the year ended December 31, 2012:
Performance Shares Restricted Stock Units ---------------------------- -------------------------- Weighted Average Weighted Average Grant Date Grant Date Shares Fair Value Units Fair Value ----------- ---------------- --------- ---------------- Outstanding at January 1, 2012.......... 5,024,094 $ 31.50 1,562,849 $ 34.74 Granted................................. 2,042,133 $ 35.38 971,304 $ 35.39 Forfeited............................... (452,590) $ 37.36 (171,475) $ 37.62 Payable (1)............................. (1,791,609) $ 20.71 (282,530) $ 21.88 ----------- --------- Outstanding at December 31, 2012........ 4,822,028 $ 36.93 2,080,148 $ 36.55 =========== ================ ========= ================ Expected to vest at a future date as of December 31, 2012..................... 4,817,941 $ 36.98 2,080,148 $ 36.55 =========== ================ ========= ================
-------- (1)Includes both Shares paid and Shares deferred for later payment. Performance Share amounts above represent aggregate initial target awards and do not reflect potential increases or decreases resulting from the performance factor determined after the end of the respective performance periods. At December 31, 2012, the three year performance period for the 2010 Performance Share grants was completed, but the performance factor had not yet been calculated. Included in the immediately preceding table are 1,347,025 outstanding Performance Shares to which the 2010-2012 performance factor will be applied. The factor will be determined in the second quarter of 2013. Statutory Equity and Income Each U.S. insurance company's state of domicile imposes risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). Regulatory compliance is determined by a ratio of a company's total adjusted capital, calculated in the manner prescribed by the NAIC ("TAC") to its authorized control level RBC, calculated in the manner prescribed by the NAIC ("ACL RBC"). Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC ("Company Action RBC"). TAC for Metropolitan Life Insurance Company and each of its insurance subsidiaries was in excess of four times Company Action RBC for all periods presented. Metropolitan Life Insurance Company and its insurance subsidiaries prepare statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of their respective state of domicile. The NAIC has adopted the Codification of Statutory Accounting Principles ("Statutory Codification"). Statutory Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by the various state insurance departments may impact the effect of Statutory Codification on the statutory capital and surplus of Metropolitan Life Insurance Company and its insurance subsidiaries. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt, reporting of reinsurance agreements and valuing securities on a different basis. F-127 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three years. Statutory net income (loss) of Metropolitan Life Insurance Company, a New York domiciled insurer, was $1.3 billion, $2.0 billion and $2.1 billion for the years ended December 31, 2012, 2011 and 2010, respectively. Statutory capital and surplus was $14.3 billion and $13.5 billion at December 31, 2012 and 2011, respectively. All such amounts are derived from the statutory-basis financial statements as filed with the New York State Department of Financial Services. Statutory net income (loss) of New England Life Insurance Company ("NELICO"), a Massachusetts domiciled insurer, was $79 million, $63 million and $33 million for the years ended December 31, 2012, 2011 and 2010, respectively. Statutory capital and surplus was $539 million and $529 million at December 31, 2012 and 2011, respectively. All such amounts are derived from the statutory-basis financial statements as filed with the Massachusetts State Division of Insurance. Statutory net income (loss) of GALIC, a Missouri domiciled insurer, was $19 million, $128 million and $64 million for the years ended December 31, 2012, 2011 and 2010, respectively. Statutory capital and surplus was $873 million and $825 million at December 31, 2012 and 2011, respectively. All such amounts are derived from the statutory-basis financial statements as filed with the Missouri State Department of Insurance. Dividend Restrictions Under New York State Insurance Law, Metropolitan Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to MetLife, Inc. as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life Insurance Company will be permitted to pay a dividend to MetLife, Inc. in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent either approves the distribution of the dividend or does not disapprove the dividend 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 stockholders. During the year ended December 31, 2012, Metropolitan Life Insurance Company paid a dividend of $1.0 billion. During the year ended December 31, 2011, Metropolitan Life Insurance Company paid a dividend of $1.3 billion, of which $170 million was a transfer of securities. During the year ended December 31, 2010, Metropolitan Life Insurance Company paid a dividend of $631 million, of which $399 million was a transfer of securities. Based on amounts at December 31, 2012, Metropolitan Life Insurance Company could pay a stockholder dividend in 2013 of $1.4 billion without prior approval of the Superintendent. Under Massachusetts State Insurance Law, NELICO is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to Metropolitan Life Insurance Company as long as the aggregate amount of all such dividends, when aggregated with all other dividends paid in the preceding 12 months, does not exceed the greater of: (i) 10 % of its surplus to policyholders at the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year. NELICO will be permitted to pay a dividend to Metropolitan Life Insurance Company in excess of the greater of such two F-128 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) amounts only if it files notice of the declaration of such a dividend and the amount thereof with the Massachusetts Commissioner of Insurance (the "Massachusetts Commissioner") and the Massachusetts Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds unassigned funds (surplus) as of the last filed annual statutory statement requires insurance regulatory approval. Under Massachusetts State Insurance Law, the Massachusetts Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. During the years ended December 31, 2012, 2011 and 2010, NELICO paid a dividend of $46 million, $107 million and $84 million, respectively. Based on amounts at December 31, 2012, NELICO could pay a stockholder dividend in 2013 of $77 million without prior approval of the Massachusetts Commissioner. Under Missouri State Insurance Law, GALIC is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to Metropolitan Life Insurance Company as long as the amount of the dividend when aggregated with all other dividends in the preceding 12 months does not exceed the greater 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 net realized capital gains). GALIC will be permitted to pay a cash dividend to Metropolitan Life Insurance Company in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with the Missouri Director of Insurance (the "Missouri Director") and the Missouri Director either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined by the Company as "unassigned funds (surplus)") as of the last filed annual statutory statement requires insurance regulatory approval. Under Missouri State Insurance Law, the Missouri Director has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. During the year ended December 31, 2012, GALIC did not pay dividends to Metropolitan Life Insurance Company. During the year ended December 31, 2011, GALIC paid an extraordinary cash dividend to GenAmerica Financial, LLC ("GenAmerica"), its former parent, of $183 million and GenAmerica subsequently paid an ordinary dividend to Metropolitan Life Insurance Company of $183 million. During the year ended December 31, 2010, GALIC paid a dividend to GenAmerica, which was subsequently paid by GenAmerica to Metropolitan Life Insurance Company, of $149 million. Based on amounts at December 31, 2012, GALIC could pay a stockholder dividend in 2013 of $86 million without prior approval of the Missouri Director. For the years ended December 31, 2012, 2011 and 2010, Metropolitan Life Insurance Company received dividends from non-insurance subsidiaries of $87 million, $518 million and $248 million, respectively. F-129 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Other Comprehensive Income (Loss) The following table sets forth the balance and changes in AOCI including reclassification adjustments required for the years ended December 31, 2012, 2011 and 2010 in OCI that are included as part of net income for the current year that have been reported as a part of OCI in the current or prior year:
Years Ended December 31, -------------------------------- 2012 2011 2010 ---------- ---------- ---------- (In millions) Holding gains (losses) on investments arising during the year...................... $ 4,825 $ 9,190 $ 7,350 Income tax effect of holding gains (losses)........................................ (1,688) (3,219) (2,568) Reclassification adjustments for recognized holding (gains) losses included in current year income............................................................... 120 (45) (545) Income tax effect of reclassification adjustments.................................. (42) 16 190 Allocation of holding (gains) losses on investments relating to other policyholder amounts........................................................................... (2,684) (5,375) (2,153) Income tax effect of allocation of holding (gains) losses to other policyholder amounts........................................................................... 940 1,883 752 ---------- ---------- ---------- Net unrealized investment gains (losses), net of income tax........................ 1,471 2,450 3,026 Foreign currency translation adjustments, net of income tax expense (benefit) of ($11) million, $3 million and ($13) million.................................... (19) 3 (16) Defined benefit plans adjustment, net of income tax expense (benefit) of ($268) million, ($249) million and $63 million................................. (498) (422) 98 ---------- ---------- ---------- Other comprehensive income (loss), net of income tax............................... 954 2,031 3,108 Other comprehensive income (loss) attributable to noncontrolling interests......... -- -- (6) ---------- ---------- ---------- Other comprehensive income (loss) attributable to Metropolitan Life Insurance Company, excluding cumulative effect of change in accounting principle............ 954 2,031 3,102 Cumulative effect of change in accounting principle, net of income tax expense (benefit) of $0, $0 and $6 million (see Note 1)................................... -- -- 10 ---------- ---------- ---------- Other comprehensive income (loss) attributable to Metropolitan Life Insurance Company........................................................................... $ 954 $ 2,031 $ 3,112 ========== ========== ==========
14. Other Expenses Information on other expenses was as follows:
Years Ended December 31, ---------------------------- 2012 2011 2010 -------- -------- -------- (In millions) Compensation............................................... $ 2,426 $ 2,260 $ 2,230 Pension, postretirement and postemployment benefit costs... 285 330 331 Commissions................................................ 769 724 651 Volume-related costs....................................... 241 196 173 Affiliated interest costs on ceded and assumed reinsurance. 1,209 1,393 1,386 Capitalization of DAC...................................... (632) (724) (640) Amortization of DAC and VOBA............................... 991 875 809 Interest expense on debt and debt issuance costs........... 152 194 217 Premium taxes, licenses and fees........................... 294 302 288 Professional services...................................... 946 832 743 Rent, net of sublease income............................... 123 129 147 Other...................................................... (410) (40) (53) -------- -------- -------- Total other expenses..................................... $ 6,394 $ 6,471 $ 6,282 ======== ======== ========
F-130 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Capitalization of DAC and Amortization of DAC and VOBA See Note 1 for information on the retrospective application of the adoption of new accounting guidance related to DAC. See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See also Note 7 for a description of the DAC amortization impact associated with the closed block. Interest Expense on Debt and Debt Issuance Costs Interest expense on debt and debt issuance costs includes interest expense (see Note 12) and interest expense related to CSEs (see Note 8). Affiliated Expenses Commissions, capitalization of DAC and amortization of DAC and VOBA include the impact of affiliated reinsurance transactions. See Notes 6, 12 and 18 for a discussion of affiliated expenses included in the table above. Restructuring Charges MetLife, Inc. commenced in 2012 an enterprise-wide strategic initiative. This global strategy focuses on leveraging MetLife, Inc. and its subsidiaries' scale to improve the value they provide to customers and shareholders in order to reduce costs, enhance revenues, achieve efficiencies and reinvest in their technology, platforms and functionality to improve their current operations and develop new capabilities. These restructuring charges are included in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate & Other. Estimated restructuring costs may change as management continues to execute this enterprise-wide strategic initiative. Such restructuring charges, primarily related to severance, which were allocated to the Company were as follows:
Year Ended December 31, 2012 ------------------------------ (In millions) Balance at January 1,.............................................. $ -- Restructuring charges.............................................. 119 Cash payments...................................................... (97) ------------------------------ Balance at December 31,............................................ $ 22 ============================== Total restructuring charges incurred since inception of initiative. $ 119 ==============================
Management anticipates further restructuring charges including severance, lease and asset impairments, through the year ending December 31, 2014. However, such restructuring plans were not sufficiently developed to enable MetLife, Inc. to make an estimate of such restructuring charges at December 31, 2012. F-131 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 15. Employee Benefit Plans Pension and Other Postretirement Benefit Plans The Company sponsors and administers various U.S. qualified and non-qualified defined benefit pension plans and other postretirement employee benefit plans covering employees and sales representatives who meet specified eligibility requirements. 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 final average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually based upon the average annual rate of interest on 30-year U.S. Treasury securities, for each account balance. At December 31, 2012, the majority of active participants were accruing benefits under the cash balance formula; however, approximately 90% of the Company's obligations result from benefits calculated with the traditional formula. The non-qualified pension plans provide supplemental benefits in excess of limits applicable to a qualified plan. Participating affiliates are allocated a proportionate share of net expense related to the plans as well as contributions made to the plans. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. Employees of the Company 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 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 costs of postretirement medical benefits. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. Participating affiliates are allocated a proportionate share of net expense and contributions related to the postemployment and other postretirement plans. F-132 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Obligations and Funded Status
Other Pension Postretirement Benefits (1) Benefits --------------------- ------------------- December 31, ----------------------------------------- 2012 2011 2012 2011 ---------- ---------- ---------- -------- (In millions) Change in benefit obligations: Benefit obligations at January 1,..................... $ 7,867 $ 6,690 $ 2,106 $ 1,819 Service costs........................................ 197 165 36 16 Interest costs....................................... 384 384 103 107 Plan participants' contributions..................... -- -- 29 28 Net actuarial (gains) losses......................... 944 897 261 269 Plan amendments, change in benefits, and other (2)... -- 128 -- -- Net transfer in (out) of controlled group............ -- (12) -- -- Benefits paid........................................ (455) (385) (133) (133) ---------- ---------- ---------- -------- Benefit obligations at December 31,................... 8,937 7,867 2,402 2,106 ---------- ---------- ---------- -------- Change in plan assets: Fair value of plan assets at January 1,............... 6,699 5,976 1,240 1,184 Actual return on plan assets......................... 695 787 105 81 Plan amendments, change in benefits, and other (2)... -- 110 -- -- Plan participants' contributions..................... -- -- 29 28 Employer contributions............................... 451 223 79 80 Net transfer in (out) of controlled group............ -- (12) -- -- Benefits paid........................................ (455) (385) (133) (133) ---------- ---------- ---------- -------- Fair value of plan assets at December 31,............. 7,390 6,699 1,320 1,240 ---------- ---------- ---------- -------- Over (under) funded status at December 31,........... $ (1,547) $ (1,168) $ (1,082) $ (866) ========== ========== ========== ======== Amounts recognized in the consolidated balance sheets consist of: Other assets......................................... $ -- $ -- $ -- $ -- Other liabilities.................................... (1,547) (1,168) (1,082) (866) ---------- ---------- ---------- -------- Net amount recognized.............................. $ (1,547) $ (1,168) $ (1,082) $ (866) ========== ========== ========== ======== Accumulated other comprehensive (income) loss: Net actuarial (gains) losses......................... $ 2,918 $ 2,403 $ 796 $ 621 Prior service costs (credit)......................... 23 29 (74) (179) ---------- ---------- ---------- -------- Accumulated other comprehensive (income) loss, before income tax................................ $ 2,941 $ 2,432 $ 722 $ 442 ========== ========== ========== ======== Accumulated Benefit Obligation........................ $ 8,381 $ 7,438 N/A N/A ========== ==========
-------- (1)Includes non-qualified unfunded plans, for which the aggregate projected benefit obligation was $1.1 billion and $997 million at December 31, 2012 and 2011, respectively. (2)During 2011, the Company became the sole sponsor of a certain qualified defined pension plan. Accordingly, the Company transitioned its accounting for that plan from a multiemployer to a single employer plan as of December 31, 2011. F-133 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The aggregate pension accumulated benefit obligation and aggregate fair value of plan assets for pension benefit plans with accumulated benefit obligations in excess of plan assets was as follows:
December 31, ----------------- 2012 2011 -------- -------- (In millions) Projected benefit obligations... $ 1,282 $ 1,129 Accumulated benefit obligations. $ 1,127 $ 1,011 Fair value of plan assets....... $ 123 $ 110
Information for pension and other postretirement benefit plans with a projected benefit obligation in excess of plan assets were as follows:
Other Pension Postretirement Benefits Benefits ----------------- ----------------- December 31, ----------------------------------- 2012 2011 2012 2011 -------- -------- -------- -------- (In millions) Projected benefit obligations. $ 8,937 $ 7,867 $ 2,402 $ 2,106 Fair value of plan assets..... $ 7,390 $ 6,699 $ 1,320 $ 1,240
Net Periodic Benefit Costs 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 net actuarial gains (losses) and amortization of any prior service cost (credit). 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 firms, 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. Net periodic pension costs and net periodic other postretirement benefit plan costs are comprised of the following: . Service Costs -- Service costs are the increase in the projected (expected) PBO resulting from benefits payable to employees of the Company on service rendered during the current year. . Interest Costs -- Interest costs are the time value adjustment on the projected (expected) PBO at the end of each year. . Settlement and Curtailment Costs -- The aggregate amount of net gains (losses) recognized in net periodic benefit costs due to settlements and curtailments. Settlements result from actions that relieve/ F-134 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) eliminate the plan's responsibility for benefit obligations or risks associated with the obligations or assets used for the settlement. Curtailments result from an event that significantly reduces/eliminates plan participants' expected years of future services or benefit accruals. . Expected Return on Plan Assets -- Expected return on plan assets is the assumed return earned by the accumulated pension and other postretirement fund assets in a particular year. . Amortization of Net Actuarial Gains (Losses) -- Actuarial gains and losses result from differences between the actual experience and the expected experience on pension and other postretirement plan assets or projected (expected) PBO during a particular period. These gains and losses are accumulated and, to the extent they exceed 10% of the greater of the PBO or the fair value of plan assets, the excess is amortized into pension and other postretirement benefit costs over the expected service years of the employees. . Amortization of Prior Service Costs (Credit) -- These costs relate to the recognition of increases or decreases in pension and other postretirement benefit obligation due to amendments in plans or initiation of new plans. These increases or decreases in obligation are recognized in AOCI at the time of the amendment. These costs are then amortized to pension and other postretirement benefit costs over the expected service years of the employees affected by the change. The Company's proportionate share of components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in OCI were as follows:
Pension Benefits Other Postretirement Benefits ----------------------- ----------------------------- Years Ended December 31, ----------------------------------------------------- 2012 2011 2010 2012 2011 2010 ------- ------- ------- ------- ------- ------ (In millions) Net Periodic Benefit Costs: Service costs................................... $ 190 $ 165 $ 150 $ 30 $ 16 $ 17 Interest costs.................................. 374 384 375 95 107 111 Settlement and curtailment costs................ -- -- 8 -- -- -- Expected return on plan assets.................. (448) (423) (422) (75) (76) (79) Amortization of net actuarial (gains) losses.... 182 189 192 52 42 38 Amortization of prior service costs (credit).... 6 3 6 (95) (108) (83) ------- ------- ------- ------- ------- ------ Total net periodic benefit costs (credit)..... 304 318 309 7 (19) 4 ------- ------- ------- ------- ------- ------ Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): Net actuarial (gains) losses.................... 705 532 24 232 264 49 Prior service costs (credit).................... -- 18 -- -- -- (81) Amortization of net actuarial gains (losses).... (189) (189) (192) (57) (42) (38) Amortization of prior service (costs) credit.... (6) (3) (6) 104 108 83 ------- ------- ------- ------- ------- ------ Total recognized in other comprehensive income (loss)............................... 510 358 (174) 279 330 13 ------- ------- ------- ------- ------- ------ Total recognized in net periodic benefit costs and other comprehensive income (loss).................................... $ 814 $ 676 $ 135 $ 286 $ 311 $ 17 ======= ======= ======= ======= ======= ======
F-135 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) For the year ended December 31, 2012, included within OCI were other changes in plan assets and benefit obligations associated with pension benefits of $510 million and other postretirement benefits of $279 million for an aggregate reduction in OCI of $789 million before income tax and $512 million, net of income tax. The estimated net actuarial (gains) losses and prior service costs (credit) for the pension plans and the defined benefit other postretirement benefit plans that will be amortized from AOCI into net periodic benefit costs over the next year are $216 million and $6 million, and $73 million and ($75) million, respectively. The Medicare Modernization Act of 2003 created various subsidies for sponsors of retiree drug programs. Two common ways of providing subsidies were the Retiree Drug Subsidy ("RDS") and Medicare Part D Prescription Drug Plans ("PDP"). From 2006 through 2010, the Company applied for and received the RDS each year. The RDS program provides the subsidy through cash payments made by Medicare to the Company, resulting in smaller net claims paid by the Company. A summary of the reduction to the APBO and the related reduction to the components of net periodic other postretirement benefits plan costs resulting from receipt of the RDS is presented below. As of January 1, 2011, as a result of changes made under the Patient Protection and Affordable Care Act of 2010, the Company, no longer applies for the RDS. Instead it has joined PDP and will indirectly receive Medicare subsidies in the form of smaller gross benefit payments for prescription drug coverage.
December 31, 2010 ------------------- (In millions) Cumulative reduction in other postretirement benefits obligations: Balance at January 1,............................................. $ 247 Service costs..................................................... 3 Interest costs.................................................... 16 Net actuarial (gains) losses...................................... (255) Expected prescription drug subsidy................................ (11) -------------- Balance at December 31,........................................... $ -- ==============
Year Ended December 31, 2010 ------------------- (In millions) Reduction in net periodic other postretirement benefit costs: Service costs................................................ $ 3 Interest costs............................................... 16 Amortization of net actuarial (gains) losses................. 10 -------------- Total reduction in net periodic benefit costs.............. $ 29 ==============
The Company did not receive subsidies for the year ended December 31, 2012. The Company received subsidies of $3 million and $8 million for the years ended December 31, 2011 and 2010, respectively. Assumptions Assumptions used in determining benefit obligations were as follows:
Pension Benefits Other Postretirement Benefits ---------------------- ---------------------------- December 31, ---------------------------------------------------- 2012 2011 2012 2011 ---------- ---------- ---- ---- Weighted average discount rate.......... 4.20% 4.95% 4.20% 4.95% Rate of compensation increase........... 3.50%-7.50% 3.50%-7.50% N/A N/A
F-136 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Assumptions used in determining net periodic benefit costs were as follows:
Pension Benefits Other Postretirement Benefits ----------------------------------- ----------------------------- December 31, ---------------------------------------------------------------- 2012 2011 2010 2012 2011 2010 ----------- ----------- ----------- ----- ---- ---- Weighted average discount rate.... 4.95% 5.80% 6.25% 4.95% 5.80% 6.25% Weighted average expected rate of return onplan assets............ 7.00% 7.25% 8.00% 6.26% 7.25% 7.20% Rate of compensation increase..... 3.50%-7.50% 3.50%-7.50% 3.50%-7.50% N/A N/A N/A
The weighted average discount rate is determined annually based on the yield, measured on a yield to worst basis, of a hypothetical portfolio constructed of high quality debt instruments available on the valuation date, which would provide the necessary future cash flows to pay the aggregate projected benefit obligation when due. The weighted average 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 rate of 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 rate of return on plan assets for use in that plan's valuation in 2013 is currently anticipated to be 6.25% for pension benefits and 5.75% for other postretirement benefits. The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
December 31, -------------------------------------------------------------------------- 2012 2011 -------------------------------------- ----------------------------------- 7.8% in 2013, gradually 7.3% in 2012, gradually decreasing each year until 2094 decreasing each year until 2083 reaching the ultimate rate of 4.4% for reaching the ultimate rate of 4.3%. Pre-and Post-Medicare Pre-Medicare and 4.6% for eligible claims..... Post-Medicare.
Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A 1% change in assumed healthcare costs trend rates would have the following effects as of December 31, 2012:
One Percent One Percent Increase Decrease ------------ ------------ (In millions) Effect on total of service and interest costs components.............. $ 17 $ (14) Effect of accumulated postretirement benefit obligations.............. $ 309 $ (252)
F-137 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Plan Assets The pension and other postretirement benefit plan assets are categorized into a three-level fair value hierarchy, as defined in Note 10, based upon the significant input with the lowest level in its valuation. The following summarizes the types of assets included within the three-level fair value hierarchy presented below. Level 1 This category includes investments in fixed maturity securities, equity securities, derivative assets, and short-term investments which have unadjusted quoted market prices in active markets for identical assets and liabilities. Level 2 This category includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The estimated fair value of such separate account is based upon reported NAV provided by fund managers and this value represents the amount at which transfers into and out of the respective separate account are effected. These separate accounts provide reasonable levels of price transparency and can be corroborated through observable market data. Certain separate accounts are invested in investment partnerships designated as hedge funds. The values for these separate accounts is determined monthly based on the NAV of the underlying hedge fund investment. Additionally, such hedge funds generally contain lock out or other waiting period provisions for redemption requests to be filled. While the reporting and redemption restrictions may limit the frequency of trading activity in separate accounts invested in hedge funds, the reported NAV, and thus the referenced value of the separate account, provides a reasonable level of price transparency that can be corroborated through observable market data. Directly held investments are primarily invested in U.S. and foreign government and corporate securities. Level 3 This category includes separate accounts that are invested in fixed maturity securities, equity securities, derivative assets and other investments that provide little or no price transparency due to the infrequency with which the underlying assets trade and generally require additional time to liquidate in an orderly manner. Accordingly, the values for separate accounts invested in these alternative asset classes are based on inputs that cannot be readily derived from or corroborated by observable market data. The Company provides employees with benefits under various Employee Retirement Income Security Act of 1974 ("ERISA") benefit plans. These include qualified pension plans, postretirement medical plans and certain retiree life insurance coverage. The assets of the Company's qualified pension plans are held in insurance group annuity contracts, and the vast majority of the assets of the postretirement medical plan and backing the retiree life coverage are held in insurance contracts. All of these contracts are issued by the Company and the assets under the contracts are held in insurance separate accounts that have been established by the Company. The underlying assets of the separate accounts are principally comprised of cash and cash equivalents, short term investments, fixed maturity and equity securities, derivatives, real estate, private equity investments and hedge fund investments. The insurance contract provider engages investment management firms ("Managers") to serve as sub-advisors for the separate accounts based on the specific investment needs and requests identified by the plan fiduciary. These Managers have portfolio management discretion over the purchasing and selling of securities and other F-138 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) investment assets pursuant to the respective investment management agreements and guidelines established for each insurance separate account. The assets of the qualified pension plans and postretirement medical plans (the "Invested Plans") are well diversified across multiple asset categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given asset category or with any given Manager. The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with investment policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters. Specifically, investment policies are oriented toward (i) maximizing the Invested Plan's funded status; (ii) minimizing the volatility of the Invested Plan's funded status; (iii) generating asset returns that exceed liability increases; and (iv) targeting rates of return in excess of a custom benchmark and industry standards over appropriate reference time periods. These goals are expected to be met through identifying appropriate and diversified asset classes and allocations, ensuring adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and managing the Invested Plan's investments. Independent investment consultants are periodically used to evaluate the investment risk of Invested Plan's assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and management strategies and to recommend asset allocations. Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of an asset or asset class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an asset, asset class, interest rates or any other financial variable. Derivatives are also prohibited for use in creating exposures to securities, currencies, indices or any other financial variable that are otherwise restricted. The table below summarizes the actual weighted average allocation of the fair value of total plan assets by asset class at December 31 for the years indicated and the approved target allocation by major asset class at December 31, 2012 for the Invested Plans:
Pension Postretirement Medical -------------------------- -------------------------- Actual Allocation Actual Allocation ----------------- ----------------- Target 2012 2011 Target 2012 2011 -------- ------- ------- -------- ------- ------- Asset Class: Fixed maturity securities (1)..................... 75% 69% 61% 70% 63% 62% Equity securities (2)............................. 12% 21% 24% 30% 37% 37% Alternative securities (3)........................ 13% 10% 15% 0% --% 1% ------- ------- ------- ------- Total assets..................................... 100% 100% 100% 100% ======= ======= ======= =======
Postretirement Life ------------------------- Actual Allocation ---------------- Target 2012 2011 -------- -------- ------- Asset Class: Fixed maturity securities (1)..................... 0% -- % --% Equity securities (2)............................. 0% -- % --% Alternative securities (3)........................ 100% 100% 100% -------- ------- Total assets..................................... 100% 100% ======== =======
---------- (1)Fixed maturity securities include ABS, collateralized mortgage obligations, corporate, federal agency, foreign bonds, mortgage-backed securities, municipals, preferred stocks and U.S. government bonds. Certain prior year amounts have been reclassified from alternative securities into fixed maturity securities to conform to the current year presentation. (2)Equity securities primarily include common stock of U.S. companies. (3)Alternative securities primarily include derivative assets, money market securities, short-term investments and other investments. Postretirement life's target and actual allocation of plan assets are all in short-term investments. F-139 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The pension and postretirement plan assets measured at estimated fair value on a recurring basis were determined as described in "-- Plan Assets." These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:
December 31, 2012 ------------------------------------------------------------------------ Pension Benefits Other Postretirement Benefits ----------------------------------- ------------------------------------ Fair Value Measurements at Fair Value Measurements at Reporting Date Using Reporting Date Using ------------------------- -------------------------- Total Total Estimated Estimated Fair Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value -------- -------- ------- --------- ------- ------- ------- --------- (In millions) Assets: Fixed maturity securities: Corporate................. $ -- $ 2,119 $ 18 $ 2,137 $ -- $ 165 $ 4 $ 169 U.S. government bonds..... 1,082 150 -- 1,232 175 3 -- 178 Foreign bonds............. -- 714 7 721 -- 51 -- 51 Federal agencies.......... 1 314 -- 315 -- 26 -- 26 Municipals................ -- 242 -- 242 -- 70 1 71 Other (1)................. -- 460 7 467 -- 55 3 58 -------- -------- ------ -------- ------ ------ ---- -------- Total fixed maturity securities............. 1,083 3,999 32 5,114 175 370 8 553 -------- -------- ------ -------- ------ ------ ---- -------- Equity securities: Common stock - domestic... 1,024 36 129 1,189 249 1 -- 250 Common stock - foreign.... 339 -- -- 339 83 -- -- 83 -------- -------- ------ -------- ------ ------ ---- -------- Total equity securities.. 1,363 36 129 1,528 332 1 -- 333 -------- -------- ------ -------- ------ ------ ---- -------- Other investments........... -- 110 419 529 -- -- -- -- Short-term investments...... -- 200 -- 200 -- 432 -- 432 Money market securities..... 2 9 -- 11 1 -- -- 1 Derivative assets........... -- 7 1 8 -- 1 -- 1 -------- -------- ------ -------- ------ ------ ---- -------- Total assets............. $ 2,448 $ 4,361 $ 581 $ 7,390 $ 508 $ 804 $ 8 $ 1,320 ======== ======== ====== ======== ====== ====== ==== ========
F-140 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued)
December 31, 2011 ------------------------------------------------------------------------ Pension Benefits Other Postretirement Benefits - ----------------------------------- ------------------------------------ Fair Value Measurements at Fair Value Measurements at Reporting Date Using Reporting Date Using - ------------------------- -------------------------- Total Total Estimated Estimated Fair Fair Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value -------- -------- ------- --------- ------- ------- ------- --------- (In millions) Assets: Fixed maturity securities: Corporate............................. $ -- $ 1,820 $ 30 $ 1,850 $ -- $ 139 $ 4 $ 143 U.S. government bonds................. 949 176 -- 1,125 160 1 -- 161 Foreign bonds......................... -- 200 5 205 -- 13 -- 13 Federal agencies...................... 1 270 -- 271 -- 29 -- 29 Municipals............................ -- 174 -- 174 -- 59 1 60 Other (1)............................. -- 445 2 447 -- 84 5 89 -------- -------- ------ -------- ------ ------ ----- -------- Total fixed maturity securities...... 950 3,085 37 4,072 160 325 10 495 -------- -------- ------ -------- ------ ------ ----- -------- Equity securities: Common stock - domestic............... 1,082 36 194 1,312 240 2 -- 242 Common stock - foreign................ 271 -- -- 271 55 -- -- 55 -------- -------- ------ -------- ------ ------ ----- -------- Total equity securities.............. 1,353 36 194 1,583 295 2 -- 297 -------- -------- ------ -------- ------ ------ ----- -------- Other investments....................... -- 65 501 566 -- -- -- -- Short-term investments.................. 4 378 -- 382 6 435 -- 441 Money market securities................. 2 -- -- 2 -- 1 -- 1 Derivative assets....................... 28 9 4 41 -- -- 1 1 Other receivables....................... -- 45 -- 45 -- 4 -- 4 Securities receivable................... -- 8 -- 8 -- 1 -- 1 -------- -------- ------ -------- ------ ------ ----- -------- Total assets......................... $ 2,337 $ 3,626 $ 736 $ 6,699 $ 461 $ 768 $ 11 $ 1,240 ======== ======== ====== ======== ====== ====== ===== ========
---------- (1)Other primarily includes mortgage-backed securities, collateralized mortgage obligations, and ABS. The prior year amounts have been reclassified into fixed maturity securities to conform to the current year presentation. F-141 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs was as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) -------------------------------------------------------------------------------------------------------- Pension Benefits Other Postretirement Benefits - -------------------------------------------------------------- ----------------------------------------- Fixed Maturity Equity Fixed Maturity Securities: Securities: Securities: - --------------------------- ----------- ------------------------------ Common Foreign Stock- Other Derivative Derivative Corporate Bonds Other (1) Domestic Investments Assets Corporate Municipals Other (1) Assets --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- ---------- (In millions) Year Ended December 31, 2012: Balance, January 1,. $ 30 $ 5 $ 2 $ 194 $ 501 $ 4 $ 4 $ 1 $ 5 $ 1 Realized gains (losses)........... -- -- -- (25) 52 4 -- -- (2) 2 Unrealized gains (losses)........... (1) 8 1 9 (38) (6) -- -- 2 (2) Purchases, sales, issuances and settlements, net... (11) (6) 4 (49) (96) (1) -- -- (2) (1) Transfers into and/or out of Level 3............ -- -- -- -- -- -- -- -- -- -- --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- ---------- Balance, December 31,....... $ 18 $ 7 $ 7 $ 129 $ 419 $ 1 $ 4 $ 1 $ 3 $ -- ========= ======= ========= =========== =========== ========== ========= ========== ========= ========== Fair Value Measurements Using Significant Unobservable Inputs (Level 3) -------------------------------------------------------------------------------------------------------- Pension Benefits Other Postretirement Benefits - -------------------------------------------------------------- ----------------------------------------- Fixed Maturity Equity Fixed Maturity Securities: Securities: Securities: - --------------------------- ----------- ------------------------------ Common Foreign Stock- Other Derivative Derivative Corporate Bonds Other (1) Domestic Investments Assets Corporate Municipals Other (1) Assets --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- ---------- (In millions) Year Ended December 31, 2011: Balance, January 1,. $ 45 $ 4 $ 2 $ 228 $ 446 $ (1) $ 4 $ 1 $ 6 $ -- Realized gains (losses)........... -- -- (1) (57) 80 1 -- -- (1) -- Unrealized gains (losses)........... (3) (2) 1 110 42 6 -- -- 1 1 Purchases, sales, issuances and settlements, net... (13) 3 (1) (87) (67) (2) -- -- (1) -- Transfers into and/or out of Level 3............ 1 -- 1 -- -- -- -- -- -- -- --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- ---------- Balance, December 31,....... $ 30 $ 5 $ 2 $ 194 $ 501 $ 4 $ 4 $ 1 $ 5 $ 1 ========= ======= ========= =========== =========== ========== ========= ========== ========= ==========
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) --------------------------------------------------------------------------------------------- Pension Benefits Other Postretirement Benefits - -------------------------------------------------------------- ------------------------------ Fixed Maturity Equity Fixed Maturity Securities: Securities: Securities: - --------------------------- ----------- ------------------------------ Common Foreign Stock- Other Derivative Corporate Bonds Other (1) Domestic Investments Assets Corporate Municipals Other (1) --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- (In millions) Year Ended December 31, 2010: Balance, January 1,. $ 64 $ 5 $ 66 $ 229 $ 354 $ -- $ -- $ -- $ 9 Realized gains (losses)........... -- -- (11) -- 74 2 -- -- (4) Unrealized gains (losses)........... 7 1 13 (2) (4) (2) 1 -- 1 Purchases, sales, issuances and settlements, net... (17) (2) (67) 1 22 (1) -- -- (1) Transfers into and/or out of Level 3............ (9) -- 1 -- -- -- 3 1 1 --------- ------- --------- ----------- ----------- ---------- --------- ---------- --------- Balance, December 31,....... $ 45 $ 4 $ 2 $ 228 $ 446 $ (1) $ 4 $ 1 $ 6 ========= ======= ========= =========== =========== ========== ========= ========== =========
---------- (1)Other includes ABS and collateralized mortgage obligations. F-142 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Expected Future Contributions and Benefit Payments It is the Company's practice to make contributions to the qualified pension plan to comply with minimum funding requirements of ERISA. In accordance with such practice, no contributions are required for 2013. The Company expects to make discretionary contributions to the qualified pension plan of $202 million in 2013. For information on employer contributions, see "--Obligations and Funded Status." Benefit payments due under the non-qualified pension plans are primarily funded from the Company's general assets as they become due under the provision of the plans, therefore benefit payments equal employer contributions. The Company expects to make contributions of $61 million to fund the benefit payments in 2013. Postretirement benefits are either: (i) not vested under law; (ii) a non-funded obligation of the Company; or (iii) both. Current regulations do not require funding for these benefits. The Company uses its general assets, net of participant's contributions, to pay postretirement medical claims as they come due in lieu of utilizing any plan assets. The Company expects to make contributions of $78 million towards benefit obligations in 2013 to pay postretirement medical claims. As noted previously, the Company no longer expects to receive the RDS under the Medicare Modernization Act of 2003 to partially offset payment of such benefits. Instead, the gross benefit payments that will be made under the PDP will already reflect subsidies. Gross benefit payments for the next 10 years, which reflect expected future service where appropriate, are expected to be as follows:
Other Pension Postretirement Benefits Benefits ------------ -------------- (In millions) 2013.............................................. $ 422 $ 113 2014.............................................. $ 457 $ 116 2015.............................................. $ 452 $ 118 2016.............................................. $ 468 $ 119 2017.............................................. $ 493 $ 120 2018-2022......................................... $ 2,705 $ 617
Additional Information As previously discussed, most of the assets of the pension and other postretirement benefit plans are held in group annuity and life insurance contracts issued by the Company. Total revenues from these contracts recognized in the consolidated statements of operations were $54 million, $47 million and $46 million for the years ended December 31, 2012, 2011 and 2010, respectively, and included policy charges and net investment income from investments backing the contracts and administrative fees. Total investment income (loss), including realized and unrealized gains (losses), credited to the account balances was $867 million, $885 million and $767 million for the years ended December 31, 2012, 2011 and 2010, respectively. The terms of these contracts are consistent in all material respects with those the Company offers to unaffiliated parties that are similarly situated. F-143 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Defined Contribution Plans The Company sponsors defined contribution plans for substantially all Company employees under which a portion of employee contributions are matched. The Company contributed $83 million, $73 million and $72 million for the years ended December 31, 2012, 2011 and 2010, respectively. 16. Income Tax The provision for income tax from continuing operations was as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 - -------- -------- ------ (In millions) Current: Federal.......................................... $ 675 $ 551 $ 304 State and local.................................. 2 2 4 Foreign.......................................... 176 116 46 -------- -------- ------ Subtotal....................................... 853 669 354 -------- -------- ------ Deferred: Federal.......................................... 346 769 346 Foreign.......................................... (144) 22 69 -------- -------- ------ Subtotal....................................... 202 791 415 -------- -------- ------ Provision for income tax expense (benefit)... $ 1,055 $ 1,460 $ 769 ======== ======== ======
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations was as follows:
Years Ended December 31, ------------------------ 2012 2011 2010 -------- -------- ------ (In millions) Tax provision at U.S. statutory rate.... $ 1,294 $ 1,660 $ 878 Tax effect of: Tax-exempt investment income.......... (118) (102) (100) State and local income tax............ 2 3 1 Prior year tax........................ 10 10 48 Tax credits........................... (160) (119) (72) Foreign tax rate differential......... 3 2 (2) Change in valuation allowance......... 13 -- 13 Other, net............................ 11 6 3 -------- -------- ------ Provision for income tax expense (benefit).......................... $ 1,055 $ 1,460 $ 769 ======== ======== ======
F-144 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:
December 31, --------------------- 2012 2011 ---------- ---------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables.................. $ 2,495 $ 2,558 Net operating loss carryforwards.......................... 35 26 Employee benefits......................................... 1,075 840 Capital loss carryforwards................................ 17 11 Tax credit carryforwards.................................. 372 249 Litigation-related and government mandated................ 175 200 Other..................................................... 198 94 ---------- ---------- Total gross deferred income tax assets................... 4,367 3,978 Less: Valuation allowance................................. 52 38 ---------- ---------- Total net deferred income tax assets..................... 4,315 3,940 ---------- ---------- Deferred income tax liabilities: Investments, including derivatives........................ 2,283 1,754 DAC....................................................... 1,629 1,876 Net unrealized investment gains........................... 3,412 2,617 Other..................................................... 27 17 ---------- ---------- Total deferred income tax liabilities.................... 7,351 6,264 ---------- ---------- Net deferred income tax asset (liability)................ $ (3,036) $ (2,324) ========== ==========
The following table sets forth the domestic, state, and foreign net operating and capital loss carryforwards for tax purposes at December 31, 2012:
Net Operating Loss Capital Loss Carryforwards Carryforwards ------------------------------- ------------------------------- Amount Expiration Amount Expiration ------------- ----------------- ------------- ----------------- (In millions) (In millions) Domestic................................ $ 30 Beginning in 2018 $ -- N/A Foreign................................. $ 70 Beginning in 2027 $ 50 Beginning in 2014
Tax credit carryforwards of $372 million at December 31, 2012 will expire beginning in 2021. The Company has recorded a valuation allowance increase related to tax benefits of $7 million related to certain state and foreign net operating loss carryforwards and an increase of $7 million related to certain foreign capital 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 and capital loss carryforwards and certain state 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. The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the Internal F-145 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 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 and subsidiary. The Company is no longer subject to U.S. federal, state and local, or foreign income tax examinations in major taxing jurisdictions for years prior to 2003, except for 2000 through 2002 where the IRS has disallowed certain tax credits claimed and the Company continues to protest. The IRS audit cycle for the years 2003 through 2006, which began in April 2010, is expected to conclude in 2013. The Company's liability for unrecognized tax benefits may increase or decrease in the next 12 months. A reasonable estimate of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
Years Ended December 31, -------------------------- 2012 2011 2010 -------- -------- -------- (In millions) Balance at January 1,.................................................... $ 525 $ 499 $ 592 Additions for tax positions of prior years............................... 27 26 2 Reductions for tax positions of prior years.............................. (5) -- (54) Additions for tax positions of current year.............................. -- 1 2 Reductions for tax positions of current year............................. -- (1) (1) Settlements with tax authorities......................................... (15) -- (31) Lapses of statutes of limitations........................................ -- -- (11) -------- -------- -------- Balance at December 31,.................................................. $ 532 $ 525 $ 499 ======== ======== ======== Unrecognized tax benefits that, if recognized would impact the effective rate................................................................... $ 466 $ 459 $ 432 ======== ======== ========
The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while penalties are included in income tax expense. Interest was as follows:
Years Ended December 31, ---------------------- 2012 2011 2010 ------ ------- ------- (In millions) Interest recognized in the consolidated statements of operations................................................ $ 8 $ 27 $ 27 December 31, --------------- 2012 2011 ------- ------- (In millions) Interest included in other liabilities in the consolidated balance sheets............................................................. $ 211 $ 203
F-146 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) The Company had no penalties for the years ended December 31, 2012, 2011 and 2010. The U.S. Treasury Department and the IRS have indicated that they intend to address through regulations the methodology to be followed in determining the dividends received deduction ("DRD"), related to variable life insurance and annuity contracts. The DRD reduces the amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected amount determined using the federal statutory tax rate of 35%. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2012 and 2011, the Company recognized an income tax benefit of $70 million and $69 million, respectively, related to the separate account DRD. The 2012 benefit included a benefit of $2 million related to a true-up of the 2011 tax return. The 2011 benefit included a benefit of $4 million related to a true-up of the 2010 tax return. 17. 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 U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. 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 difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness 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. The Company establishes liabilities for litigation and regulatory loss contingencies 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 at December 31, 2012. 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 to management, management does not believe any such charges are likely to have a material effect on the Company's financial position. F-147 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Matters as to Which an Estimate Can Be Made For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of December 31, 2012, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $235 million. Matters as to Which an Estimate Cannot Be Made For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Asbestos-Related Claims Metropolitan Life Insurance Company is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life Insurance Company has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life Insurance Company issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life Insurance Company's employees during the period from the 1920's through approximately the 1950's and allege that Metropolitan Life Insurance Company learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life Insurance Company believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life Insurance Company. Metropolitan Life Insurance Company employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling individual or groups of claims or lawsuits under appropriate circumstances. Claims asserted against Metropolitan Life Insurance Company have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life Insurance Company's defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life Insurance Company owed no duty to the plaintiffs-- it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs did not rely on any actions of Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company's conduct was not the cause of the plaintiffs' injuries; (iv) plaintiffs' exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the course of the litigation, certain trial F-148 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) courts have granted motions dismissing claims against Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company's motions to dismiss. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials. The approximate total number of asbestos personal injury claims pending against Metropolitan Life Insurance Company as of the dates indicated, the approximate number of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos personal injury claims at or during those years are set forth in the following table:
December 31, -------------------------------------- 2012 2011 2010 --------- --------- --------- (In millions, except number of claims) Asbestos personal injury claims at year end................. 65,812 66,747 68,513 Number of new claims during the year........................ 5,303 4,972 5,670 Settlement payments during the year (1)..................... $ 36.4 $ 34.2 $ 34.9
-------- (1)Settlement payments represent payments made by Metropolitan Life Insurance Company during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life Insurance Company's attorneys' fees and expenses and do not reflect amounts received from insurance carriers. In 2009, Metropolitan Life Insurance Company received 3,910 new claims, ending the year with a total of 68,804 claims, and paid $37.6 million for settlements reached in 2009 and prior years. In 2008, Metropolitan Life Insurance Company received 5,063 new claims, ending the year with a total of 74,027 claims, and paid $99 million for settlements reached in 2008 and prior years. In 2007, Metropolitan Life Insurance Company received 7,161 new claims, ending the year with a total of 79,717 claims, and paid $28.2 million for settlements reached in 2007 and prior years. In 2006, Metropolitan Life Insurance Company received 7,870 new claims, ending the year with a total of 87,070 claims, and paid $35.5 million for settlements reached in 2006 and prior years. In 2005, Metropolitan Life Insurance Company received 18,500 new claims, ending the year with a total of 100,250 claims, and paid $74.3 million for settlements reached in 2005 and prior years. In 2004, Metropolitan Life Insurance Company received 23,900 new claims, ending the year with a total of 108,000 claims, and paid $85.5 million for settlements reached in 2004 and prior years. In 2003, Metropolitan Life Insurance Company received 58,750 new claims, ending the year with a total of 111,700 claims, and paid $84.2 million for settlements reached in 2003 and prior years. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year. The ability of Metropolitan Life Insurance Company to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life Insurance Company when F-149 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts. The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company's judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company's total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material effect on the Company's financial position. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life Insurance Company's recorded asbestos liability is based on its estimation of the following elements, as informed by the facts presently known to it, its understanding of current law and its past experiences: (i) the probable and reasonably estimable liability for asbestos claims already asserted against Metropolitan Life Insurance Company, including claims settled but not yet paid; (ii) the probable and reasonably estimable liability for asbestos claims not yet asserted against Metropolitan Life Insurance Company, but which Metropolitan Life Insurance Company believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life Insurance Company's analysis of the adequacy of its recorded liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to defend claims. Metropolitan Life Insurance Company reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants and the jurisdictions in which claims are pending. As previously disclosed, in 2002 Metropolitan Life Insurance Company increased its recorded liability for asbestos related claims by $402 million from $820 million to $1.2 billion. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through December 31, 2012. Regulatory Matters The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the U.S. Securities and Exchange Commission ("SEC"); federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority ("FINRA") seeking a broad range of information. The issues involved in information requests and regulatory matters vary widely. The Company cooperates in these inquiries. United States of America v. EME Homer City Generation, L.P., et al. (W.D. Pa., filed January 4, 2011). On January 4, 2011, the U.S. commenced a civil action in United States District Court for the Western District of Pennsylvania against EME Homer City Generation L.P. ("EME Homer City"), Homer City OL6 LLC, and other defendants regarding the operations of the Homer City Generating Station, an electricity generating facility. At F-150 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) the time the action was commenced, Homer City OL6 LLC, an entity owned by Metropolitan Life Insurance Company, was a passive investor with a non-controlling interest in the electricity generating facility, which was solely operated by the lessee, EME Homer City. In a 2012 transaction, ownership of the electricity generating facility was transferred to Homer City Generation, L.P., and Homer City OL6 LLC was merged into Homer City Generation, L.P. Metropolitan Life Insurance Company is a limited partner in Homer City Generation, L.P. The complaint sought injunctive relief and assessment of civil penalties for alleged violations of the federal Clean Air Act and Pennsylvania's State Implementation Plan. The alleged violations were the subject of Notices of Violations ("NOVs") that the Environmental Protection Agency ("EPA") issued to EME Homer City, Homer City OL6 LLC, and others in June 2008 and May 2010. On January 7, 2011, the United States District Court for the Western District of Pennsylvania granted the motion by the Pennsylvania Department of Environmental Protection and the State of New York to intervene in the lawsuit as additional plaintiffs. On February 16, 2011, the State of New Jersey filed an Intervenor's Complaint in the lawsuit. On October 12, 2011, the court issued an order dismissing the U.S.'s lawsuit with prejudice. The Government entities have appealed from the order granting defendants' motion to dismiss. EME Homer City acknowledged its obligation to indemnify the owners of the electricity generating facility for any claims relating to the NOVs. The Sierra Club, which in a February 13, 2012 letter to the operator and owners of the electricity generating facility had stated its intent to sue for alleged violations of the Clean Air Act, subsequently indicated that it does not intend to commence suit. As a result of the change in the ownership structure, the parties to the proceeding no longer include a subsidiary of Metropolitan Life Insurance Company. In the Matter of Chemform, Inc. Site, Pompano Beach, Broward County, Florida. In July 2010, the EPA advised Metropolitan Life Insurance Company that it believed payments were due under two settlement agreements, known as "Administrative Orders on Consent," that New England Mutual Life Insurance Company ("New England Mutual") signed in 1989 and 1992 with respect to the cleanup of a Superfund site in Florida (the "Chemform Site"). The EPA originally contacted Metropolitan Life Insurance Company (as successor to New England Mutual) and a third party in 2001, and advised that they owed additional clean-up costs for the Chemform Site. The matter was not resolved at that time. The EPA is requesting payment of an amount under $1 million from Metropolitan Life Insurance Company and such third party for past costs and an additional amount for future environmental testing costs at the Chemform Site. In June 2012, the EPA, Metropolitan Life Insurance Company and the third party executed an Administrative Order on Consent under which Metropolitan Life Insurance Company and the third party have agreed to be responsible for certain environmental testing at the Chemform site. The Company estimates that its costs for the environmental testing will not exceed $100,000. The June 2012 Administrative Order on Consent does not resolve the EPA's claim for past clean-up costs. The EPA may seek additional costs if the environmental testing identifies issues. The Company estimates that the aggregate cost to resolve this matter will not exceed $1 million. Metco Site, Hicksville, Nassau County, New York. On February 22, 2012, the New York State Department of Environmental Conservation ("Department of Environmental Conservation") issued a notice to Metropolitan Life Insurance Company, as purported successor in interest to New England Mutual, that it is a potentially responsible party with respect to hazardous substances and hazardous waste located on a property that New England Mutual owned for a time in 1978. Metropolitan Life Insurance Company has responded to the Department of Environmental Conservation and asserted that it is not a potentially responsible party under the law. Sales Practices Regulatory Matters. Regulatory authorities in a small number of states and FINRA, and occasionally the SEC, have had investigations or inquiries relating to sales of individual life insurance policies or annuities or other products by Metropolitan Life Insurance Company, NELICO, GALIC, and New England Securities Corporation. These investigations often focus on the conduct of particular financial services F-151 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) representatives and the sale of unregistered or unsuitable products or the misuse of client assets. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief, including restitution payments. 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 these sales practices related investigations or inquiries. Unclaimed Property Inquiries and Related Litigation In April 2012, MetLife, Inc., for itself and on behalf of entities including Metropolitan Life Insurance Company, reached agreements with representatives of the U.S. jurisdictions that were conducting audits of MetLife, Inc. and certain of its affiliates, including Metropolitan Life Insurance Company, for compliance with unclaimed property laws, and with state insurance regulators directly involved in a multistate targeted market conduct examination relating to claim-payment practices and compliance with unclaimed property laws. As of year-end 2012, the unclaimed property regulators of 39 states and the District of Columbia, and the insurance regulators of 48 states and the District of Columbia have accepted the respective agreements. Pursuant to the agreements, the Company will, among other things, take specified action to identify liabilities under life insurance, annuity, and retained asset contracts, to adopt specified procedures for seeking to contact and pay owners of the identified liabilities, and, to the extent that it is unable to locate such owners, to escheat these amounts with interest at a specified rate to the appropriate states. Additionally, the Company has agreed to accelerate the final date of certain industrial life policies and to escheat unclaimed benefits of such policies. Pursuant to the agreement to resolve the market conduct examination, MetLife, Inc. made a $40 million multistate examination payment, of which the Company's share is $33 million, to be allocated among the settling states. In the third quarter of 2011, Metropolitan Life Insurance Company incurred a $110 million after tax charge to increase reserves in connection with the Company's use of the U.S. Social Security Administration's Death Master File and similar databases to identify potential life insurance claims that had not been presented to the Company. In the first quarter of 2012, the Company recorded a $47 million after tax charge for the multistate examination payment and the expected acceleration of benefit payments to policyholders under the settlements. On September 20, 2012, the West Virginia Treasurer filed an action against Metropolitan Life Insurance Company in West Virginia state court (West Virginia ex rel. John D. Perdue v. Metropolitan Life Insurance Company, Circuit Court of Putnam County, Civil Action No. 12-C-295) alleging that the Company violated the West Virginia Uniform Unclaimed Property Act, seeking to compel compliance with the Act, and seeking payment of unclaimed property, interest, and penalties. On November 21, 2012 and January 9, 2013, the Treasurer filed substantially identical suits against NELICO and GALIC, respectively. At least one other jurisdiction is pursuing a similar market conduct examination concerning compliance with unclaimed property statutes. It is possible that other jurisdictions may pursue similar examinations, audits, or lawsuits and that such actions may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, interest, and/or further changes to the Company's procedures. The Company is not currently able to estimate these additional possible costs. Total Asset Recovery Services, LLC on behalf of the State of Minnesota v. MetLife, Inc., et. al. (District Court, County of Hennepin, MN, filed January 31, 2011). Alleging that MetLife, Inc. and another company violated the Minnesota Uniform Disposition of Unclaimed Property Act by failing to escheat to Minnesota benefits of 584 life insurance contracts, the Relator brought an action under the Minnesota False Claims Act seeking to recover damages on behalf of Minnesota. The action was sealed by court order until March 22, 2012. The Relator alleged that the aggregate damages, including statutory damages and treble damages, are $228 million. The Relator did not allocate this claimed damage amount between MetLife, Inc. and the other defendant. On December 31, 2012, the court granted motions by MetLife, Inc. and the other defendant to dismiss the action. F-152 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) Total Asset Recovery Services, LLC on behalf of the State of Florida v. MetLife, Inc., et. al. (Cir. Ct. Leon County, FL, filed October 27, 2010). Alleging that MetLife, Inc. and two other companies have violated the Florida Disposition of Unclaimed Property law by failing to escheat to Florida benefits of 9,022 life insurance contracts, the Relator has brought an action under the Florida False Claims act seeking to recover damages on behalf of Florida. The action has been sealed by court order until December 17, 2012. The relator alleges that the aggregate damages, including statutory damages and treble damages, are $3.2 billion. The Relator does not allocate this claimed damage amount between MetLife, Inc. and the other defendants. The Relator also bases its damage calculation in part on its assumption that the average face amount of the subject policies is $120,000. MetLife, Inc. strongly disputes this assumption, the Relator's alleged damages amounts, and other allegations in the complaint. On December 14, 2012, the Florida Attorney General apprised the court that the State of Florida declined to intervene in the action and noted that the allegations in the complaint ". . . are very similar (if not identical) to those raised in regulatory investigations of the defendants that predated the filing of the action" and that those regulatory investigations have been resolved. The Company intends to defend this action vigorously. Total Control Accounts Litigation Metropolitan Life Insurance Company is a defendant in a consolidated lawsuit related to its use of retained asset accounts, known as Total Control Accounts ("TCA"), as a settlement option for death benefits. Keife, et al. v. Metropolitan Life Insurance Company (D. Nev., filed in state court on July 30, 2010 and removed to federal court on September 7, 2010); and Simon v. Metropolitan Life Insurance Company. (D. Nev., filed November 3, 2011). These consolidated putative class action lawsuits raise breach of contract claims arising from Metropolitan Life Insurance Company's use of the TCA to pay life insurance benefits under the Federal Employees' Group Life Insurance program. On March 8, 2013, the court granted Metropolitan Life Insurance Company's motion for summary judgment. Plaintiffs have appealed that decision to the United States Court of Appeals for the Ninth Circuit. Various state regulators have also taken actions with respect to retained asset accounts. The New York Department of Financial Services issued a circular letter on March 29, 2012 stating that an insurer should only use a retained asset account when a policyholder or beneficiary affirmatively chooses to receive life insurance proceeds through such an account and providing for certain disclosures to a beneficiary, including that payment by a single check is an option. In connection with a market conduct exam, Metropolitan Life Insurance Company entered into a consent order with the Minnesota Department of Commerce regarding the Company's use of TCAs as a default option. The Company is unable to estimate the reasonably possible loss or range of loss arising from the TCA matters. Other Litigation Merrill Haviland, et al. v. Metropolitan Life Insurance Company (E.D. Mich., removed to federal court on July 22, 2011). This lawsuit was filed by 45 retired General Motors ("GM") employees against Metropolitan Life Insurance Company and the amended complaint includes claims for conversion, unjust enrichment, breach of contract, fraud, intentional infliction of emotional distress, fraudulent insurance acts, unfair trade practices, and ERISA claims based upon GM's 2009 reduction of the employees' life insurance coverage under GM's ERISA-governed plan. The complaint includes a count seeking class action status. Metropolitan Life Insurance Company is the insurer of GM's group life insurance plan and administers claims under the plan. According to the complaint, Metropolitan Life Insurance Company had previously provided plaintiffs with a "written guarantee" that their life insurance benefits under the GM plan would not be reduced for the rest of their lives. On June 26, F-153 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 2012, the district court granted Metropolitan Life Insurance Company's motion to dismiss the complaint. Plaintiffs have appealed that decision to the United States Court of Appeals for the Sixth Circuit. McGuire v. Metropolitan Life Insurance Company (E.D. Mich., filed February 22, 2012). This lawsuit was filed by the fiduciary for the Union Carbide Employees' Pension Plan and alleges that Metropolitan Life Insurance Company, which issued annuity contracts to fund some of the benefits the Plan provides, engaged in transactions that ERISA prohibits and violated duties under ERISA and federal common law by determining that no dividends were payable with respect to the contracts from and after 1999. On September 26, 2012, the court denied Metropolitan Life Insurance Company's motion to dismiss the complaint. The parties have begun discovery. Sales Practices Claims. Over the past several years, the Company has faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys' fees. The Company continues to vigorously defend against the claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Sun Life Assurance Company of Canada v. Metropolitan Life Ins. Co. (Super. Ct., Ontario, October 2006). In 2006, Sun Life Assurance Company of Canada ("Sun Life"), as successor to the purchaser of Metropolitan Life Insurance Company's Canadian operations, filed this lawsuit in Toronto, seeking a declaration that Metropolitan Life Insurance Company remains liable for "market conduct claims" related to certain individual life insurance policies sold by Metropolitan Life Insurance Company and that have been transferred to Sun Life. Sun Life had asked that the court require Metropolitan Life Insurance Company to indemnify Sun Life for these claims pursuant to indemnity provisions in the sale agreement for the sale of Metropolitan Life Insurance Company's Canadian operations entered into in June of 1998. In January 2010, the court found that Sun Life had given timely notice of its claim for indemnification but, because it found that Sun Life had not yet incurred an indemnifiable loss, granted Metropolitan Life Insurance Company's motion for summary judgment. Both parties appealed. In September 2010, Sun Life notified Metropolitan Life Insurance Company that a purported class action lawsuit was filed against Sun Life in Toronto, Kang v. Sun Life Assurance Co. (Super. Ct., Ontario, September 2010), alleging sales practices claims regarding the same individual policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. An amended class action complaint in that case was served on Sun Life, again without naming Metropolitan Life Insurance Company as a party. On August 30, 2011, Sun Life notified Metropolitan Life Insurance Company that a purported class action lawsuit was filed against Sun Life in Vancouver, Alamwala v. Sun Life Assurance Co. (Sup. Ct., British Columbia, August 2011), alleging sales practices claims regarding certain of the same policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. Sun Life contends that Metropolitan Life Insurance Company is obligated to indemnify Sun Life for some or all of the claims in these lawsuits. The Company is unable to estimate the reasonably possible loss or range of loss arising from this litigation. Summary Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. F-154 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material 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 insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments were as follows:
December 31, --------------- 2012 2011 ------- ------- (In millions) Other Assets: Premium tax offset for future undiscounted assessments....... $ 85 $ 63 Premium tax offsets currently available for paid assessments. 12 13 ------- ------- $ 97 $ 76 ======= ======= Other Liabilities: Insolvency assessments....................................... $ 136 $ 113 ======= =======
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' revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office space, information technology 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) 2013....... $ 345 $ 18 $ 181 2014....... $ 331 $ 15 $ 143 2015....... $ 291 $ 15 $ 133 2016....... $ 220 $ 15 $ 119 2017....... $ 180 $ 15 $ 103 Thereafter. $ 750 $ 80 $ 847
F-155 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 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 $2.2 billion and $2.5 billion at December 31, 2012 and 2011, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years. Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $2.7 billion and $2.3 billion at December 31, 2012 and 2011, respectively. Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments The Company commits to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $971 million and $986 million at December 31, 2012 and 2011, respectively. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $800 million, with a cumulative maximum of $1.0 billion, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company's recorded liabilities were $4 million at both December 31, 2012 and 2011, for indemnities, guarantees and commitments. F-156 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (Continued) 18. Related Party Transactions Service Agreements The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include personnel, policy administrative functions and distribution services. For certain agreements, charges are based on various performance measures or activity-based costing. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the Company and/or affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $2.6 billion, $2.8 billion and $2.7 billion for the years ended December 31, 2012, 2011 and 2010, respectively. Revenues received from affiliates related to these agreements recorded in universal life and investment-type product policy fees were $108 million, $94 million and $84 million for the years ended December 31, 2012, 2011 and 2010, respectively. Revenues received from affiliates related to these agreements recorded in other revenues were $113 million, $46 million and $34 million for the years ended December 31, 2012, 2011 and 2010, respectively. The Company also entered into agreements with affiliates to provide additional services necessary to conduct the affiliates' activities. Typical services provided under these agreements include management, policy administrative functions, investment advice and distribution services. Expenses incurred by the Company related to these agreements, included in other expenses, were $1.6 billion, $1.6 billion and $1.2 billion for the years ended December 31, 2012, 2011 and 2010, respectively, and were reimbursed to the Company by these affiliates. The Company had net payables to affiliates of $346 million and $238 million at December 31, 2012 and 2011, respectively, related to the items discussed above. These payables exclude affiliated reinsurance balances discussed in Note 6. See Notes 4, 8 and 12 for additional related party transactions. F-157 Metropolitan Life Separate Account UL PART C. OTHER INFORMATION ----------------- ITEM 26. EXHIBITS (a) Resolution of the Board of Directors of Metropolitan Life effecting the establishment of Metropolitan Life Separate Account UL 1 (b) None (c) (i) Form of Broker Agreement 1 (ii) Forms of Selling Agreement 5 (iii) Form of Retail Sales Agreement 7 (iv) Principal Underwriting Agreement 11 (v) Enterprise Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated February 2010 14 (vi) Master Retail Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated September 2012 19 (d) (i) Flexible Premium Variable Life Policy 12 (ii) Riders: Accelerated Death Benefit Rider, Accidental Death Benefit Rider, Children's Term Insurance, Guaranteed Minimum Death Benefit Rider, Guaranteed Survivor Income Benefit Rider, Options to Purchase Additional Insurance Coverage Rider, Overloan Protection Rider, Waiver of Monthly Deduction Rider, Waiver of Specified Premium Rider 12 (e) (i) Enterprise Application for Policy 10 (ii) Application Supplements 12 (f) (i) Restated Charter and By-Laws of Metropolitan Life 2 (ii) Amended and Restated Charter and By-laws of Metropolitan Life 4 (iii) Amended and Restated By-Laws of Metropolitan Life 11 (g) (i) Reinsurance Contracts 18 (ii) Reinsurance Contract Amendments dated June 25, 2012 and November 30, 2012 (Filed herewith) (h) (i) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC, MetLife Investors Distribution Company and Metropolitan Life Insurance Company (8/31/07) 9 (ii) Participation Agreement among Met Investors Series Trust, Metropolitan Life Insurance Company, Met Investors Advisory Corp and MetLife Investors Distribution Company 4 (iii) Participation Agreement among American Funds Insurance Series, Capital Research and Management Company and Metropolitan Life Insurance Company dated April 30th, 2001 3 (iv) Participation Agreement among Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc. and Metropolitan Life Insurance Company dated April 30, 2004 6 (v) First and Second Amendments to the Participation Agreement with Met Investors Series Trust 13 (vi) Amendment to the American Funds Insurance Series Participation Agreement dated April 30, 2010 15 (vii) Amendment to the Participation Agreement with Franklin Templeton Variable Insurance Trust 16 (viii) Amendments to the Participation Agreements with Franklin Templeton Variable Insurance Products Trust, Met Investors Series Trust and Metropolitan Series Fund, Inc. 17 (ix) Amendment to the Participation Agreement with Franklin Templeton Variable Insurance Products Trust 20 (i) None (j) None (k) Opinion and Consent of Marie C. Swift as to the legality of the securities being registered 12 (l) Actuarial Opinion and Consent (Filed herewith) (m) Calculation Exhibit (Filed herewith) (n) Consent of Independent Registered Public Accounting Firm (Filed herewith) (o) None (p) None (q) (i) Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) 1 (ii) Addendum to Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) 8 (r) (i) Powers of Attorney 18 (ii) Power of Attorney of John C. R. Hele (Filed herewith) ---------- 1 Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement (File No. 033-47927) filed on April 30, 1997. 2 Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form S-6 (File No. 333-40161) filed on April 6, 2000. 3 Incorporated herein by reference to the Registration Statement of MetLife Separate Account E of Form N-4 (File No. 333-52366) filed on August 3, 2001 4 Incorporated herein by reference to the Registration Statement of MetLife Separate Account E on Form N-4 (File No. 333-83716) filed on March 5, 2002. 5 Incorporated herein by reference to the Post-Effective Amendment No. 18 to the Registration Statement on Form N-6 (File No. 033-47927) filed on April 30, 2004. 6 Incorporated herein by reference to Post-Effective Amendment No. 16 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 30, 2004. 7 Incorporated herein by reference to Post-Effective Amendment No. 20 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed on April 25, 2006. 8 Incorporated herein by reference to Post-Effective Amendment No. 21 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 18, 2007. 9 Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registration Statement of MetLife Separate Account E on Form N-4 (File No. 333-83716) filed September 10, 2007. 10 Incorporated herein by reference to the Account's Registration Statement on Form N-6 (File No. 333-147508) filed November 19, 2007. 11 Incorporation herein by reference to Post-Effective Amendment No. 3 to Paragon Separate Account B's Registration Statement on Form N-6 (File No. 333-133675) filed January 16, 2008. 12 Incorporated herein by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 4, 2008. 13 Incorporated herein by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 16, 2009. 14 Incorporated herein by reference to Exhibit 3(b)(ii) in Post-Effective Amendment No. 14 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) as filed April 13, 2010. 15 Incorporated herein by reference to Exhibit (3)(d)(i) in Post-Effective Amendment No. 15 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) as filed on April 12, 2011. 16 Incorporated herein by reference to Post-Effective Amendment No. 24 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 14, 2011. 17 Incorporated herein by reference to Post-Effective Amendment No. 25 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 12, 2012. 18 Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 12, 2012. 19 Incorporated herein by reference to Post-Effective Amendment No. 27 to the Registrant's Registration Statement on Form N-6 (File No. 333-47927) filed April 11, 2013. 20 Incorporated herein by reference to Post-Effective Amendment No. 26 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 11, 2013. ITEM 27. DIRECTORS AND OFFICERS OF DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS POSITION AND OFFICES WITH DEPOSITOR ----------------------------------- -------------------------------------- Steven A. Kandarian Chairman of the Board, President and MetLife, Inc, and Metropolitan Life Chief Executive Officer Insurance Company 200 Park Avenue New York, NY 10166 Sylvia Mathews Burwell Director President, WalMart Foundation Corporate Affairs 702 Southwest 8th Street Pole D-48 Bentonville, AR 72716-0150 Cheryl W. Grise Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 R. Glenn Hubbard Director Dean of Graduate School of Business and Russell L. Carson Professor of Finance and Economics Columbia University Uris Hall 3022 Broadway New York, NY 10027-6902 John M. Keane Director Co-Founder and Senior Managing Director Keane Advisors, LLC 2020 K St., N.W. Washington, DC 20006 Alfred F. Kelly, Jr. Director President and Chief Executive Officer 2014 NY/NJ Super Bowl Host Company MetLife Stadium One MetLife Stadium Drive East Rutherford, NJ 07073 James M. Kilts Director Founding Partner Centerview Capital Greenwich Office Park 2nd Floor Greenwich, CT 06831 Catherine R. Kinney Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 Hugh B. Price Director Senior Fellow Brookings Institution 1775 Massachusetts Avenue, N.W. Washington, DC 20036 David Satcher Director Director of Satcher Health Leadership Institute and Center of Excellence on Health Disparities Morehouse School of Medicine 720 Westview Drive, S.W. Atlanta, GA 30310-1495 Kenton J. Sicchitano Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 Lulu C. Wang Director Chief Executive Officer Tupelo Capital Management LLC 340 Madison Avenue, 19th Floor New York, NY 10173
Set forth below is a list of certain principal officers of Metropolitan Life Insurance Company. The principal business address of each principal officer is 1095 Avenue of Americas, New York, NY 10036.
NAME POSITIONS WITH DEPOSITOR ----------------------------------- -------------------------------------- Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer Michel A. Khalaf President, Europe/Middle East/Africa Division Christopher G. Townsend President, Asia William J. Wheeler President, Americas Ricardo A. Anzaldua Executive Vice President and General Counsel Peter M. Carlson Executive Vice President and Chief Accounting Officer Richard S. Collins Deputy General Counsel Steven J. Goulart Executive Vice President and Chief Investment Officer John C.R. Hele Executive Vice President and Chief Financial Officer Shailendra Ghorpade Executive Vice President Franciscus Hijkoop Executive Vice President and Chief Human Resources Officer Beth M. Hirschhorn Executive Vice President of Global Brand, Marketing and Communications William R. Hogan Executive Vice President Todd B. Katz Executive Vice President Robin Lenna Executive Vice President Martin J. Lippert Executive Vice President, Global Technology & Operations Eugene R. Marks, Jr. Executive Vice President William D. Moore Executive Vice President Maria R. Morris Executive Vice President, Global Employee Benefits Anthony J. Nugent Executive Vice President Oscar Schmidt Executive Vice President Marc Sevestre Executive Vice President Peter A. Smyth Executive Vice President Eric T. Steigerwalt Executive Vice President Stanley J. Talbi Executive Vice President Andreas E. Vassiliou Executive Vice President
ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT The registrant is a separate account of Metropolitan Life Insurance Company under the New York Insurance law. Under said law the assets allocated to the separate account are the property of Metropolitan Life Insurance Company. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. The following outline indicates those persons who are controlled by or under common control with Metropolitan Life Insurance Company: ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 2011 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2011. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, if any) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Bank, National Association (USA) 1. Federal Flood Certification Corp. (TX) 2. MetLife Home Loans LLC (DE) C. Exeter Reassurance Company, Ltd. (Cayman Islands) D. Metropolitan Tower Life Insurance Company (DE) 1. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 2. Plaza Drive Properties, LLC (DE) 3. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. d) 1320 Venture LLC (DE) i) 1320 Owner LP (DE) - a 99.9% limited partnership of 1320 Owner LP is held by 1320 Venture LLC and .01% general partnership is held by 1320 GP LLC e) 1320 GP LLC (DE) E. MetLife Chile Inversiones Limitada (Chile)- 91.15% is owned by MetLife, Inc., 8.84% is owned by Inversiones MetLife Holdco Dos Limitada and 0.01% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Seguros de Vida S.A. (Chile)- 68.6071% is held by MetLife Chile Inversiones Limitada, 31.3898% is held by Inversiones Interamericana S.A. and .0031% by International Technical & Advisory Services. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile)- 99.99% is owned by MetLife Chile Seguros de Vida S.A. and 0.01% is owned by MetLife Chile Inversiones Limitada. F. Metropolitan Life Seguros de Vida S.A. (Uruguay) - 99.9994% is owned by MetLife, Inc. and 0.0006% is owned by Oscar Schmidt. G. MetLife Securities, Inc. (DE) H. Enterprise General Insurance Agency, Inc. (DE) 1 I. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. Met P&C Managing General Agency, Inc. (TX) 5. MetLife Auto & Home Insurance Agency, Inc. (RI) 6. Metropolitan Group Property and Casualty Insurance Company (RI) a) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) 7. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 8. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) J. MetLife Investors Insurance Company (MO) K. First MetLife Investors Insurance Company (NY) L. Walnut Street Securities, Inc. (MO) M. Newbury Insurance Company, Limited (Bermuda) N. MetLife Investors Group, Inc. (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Advisers, LLC (MA) 2 O. MetLife International Holdings, Inc. (DE) 1. MetLife Mexico Cares, S.A. de C.V. (Mexico) a) Fundacion MetLife Mexico, A.C. (Mexico) 2. Natiloportem Holdings, Inc. (DE) a) Servicios Administrativos Gen, S.A. de C.V. (Mexico) i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. 3. MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, Inc. and 74% is owned by third parties. 4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, Inc. and 0.00065% is owned by Natiloporterm Holdings, Inc. 5. MetLife Seguros de Vida S.A. (Argentina)- 96.7372% is owned by MetLife International Holdings, Inc. and 3.2628% is owned by Natiloportem Holdings, Inc. 6. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)- 66.6617540% is owned by MetLife International Holdings, Inc., 33.3382457% is owned by MetLife Worldwide Holdings, Inc. and 0.0000003% is owned by Natiloportem Holdings, Inc. 7. MetLife Global, Inc. (DE) 8. MetLife Administradora de Fundos Multipatrocinados Ltda. (Brazil) - 99.999998% of MetLife Administradora de Fundos Multipatrocinados Ltda. is owned by MetLife International Holdings, Inc. and .000002% by Natiloportem Holdings, Inc. 9. MetLife Insurance Limited (United Kingdom) 10. MetLife Limited (United Kingdom) 11. MetLife Insurance S.A./NV (Belgium) - 99.99999% of MetLife Insurance S.A./NV is owned by MetLife International Holdings, Inc. and 0.00001% by Natiloportem Holdings, Inc. 12. MetLife Services Limited (United Kingdom) 13. MetLife Europe R Limited (Ireland) 14. MetLife Seguros de Retiro S.A. (Argentina) - 96.8488% is owned by MetLife International Holdings, Inc. and 3.1512% is owned by Natiloportem Holdings, Inc. 15. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, Inc. and 95% is owned by MetLife International Holdings Inc. 16. Compania Previsional MetLife S.A. (Brazil) - 95.46% is owned by MetLife International Holdings, Inc. and 4.54% is owned by Natiloportem Holdings, Inc. a) Met AFJP S.A. (Argentina) - 75.41% of the shares of Met AFJP S.A. are held by Compania Previsional MetLife S.A., 19.59% is owned by MetLife Seguros de Vida S.A., 3.97% is held by Natiloportem Holdings, Inc. and 1.03% is held by MetLife Seguros de Retiro S.A. 17. MetLife Worldwide Holdings, Inc. (DE) a) MetLife Direct Co., LTD. (Japan) b) MetLife Limited (Hong Kong) 18. MetLife NC Limited (Ireland) 19. MetLife Europe Services Limited (Ireland) 20. MetLife International Limited, LLC (DE) 21. MetLife Planos Odontologicos Ltda. (Brazil) - 99.999% is owned by MetLife International Holdings, Inc. and .001% is owned by Natiloportem Holdings, Inc. 22. MetLife Ireland Holdings One Limited (Ireland) a) MetLife Global Holdings Corporation S.A. de C.V. (Mexico) - 98.9% is owned by MetLife Ireland Holdings One Limited and 1.1% is owned by MetLife International Limited, LLC. i) MetLife Ireland Treasury Limited (Ireland) a) MetLife General Insurance Limited (Australia) b) MetLife Insurance Limited (Australia) 1) MetLife Services (Singapore) PTE Limited (Singapore) 2) The Direct Call Centre PTY Limited (Australia) 3) MetLife Investments PTY Limited (Australia) aa) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investments PTY Limited ("MIPL"). MIPL is a wholly owned subsidiary of MetLife Insurance Limited. ii) Metropolitan Global Management, LLC (DE) - 99.7% is owned by MetLife Global Holdings Corporation, S.A. de C.V. and 0.3% is owned by MetLife International Holdings, Inc. a) MetLife Pensiones Mexico S.A. (Mexico)- 97.4738% is owned by Metropolitan Global Management, LLC and 2.5262% is owned by MetLife International Holdings, Inc. b) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by Metropolitan Global Management, LLC and 2% is owned by MetLife International Holdings, Inc. c) MetLife Mexico S.A. (Mexico)- 98.70541% is owned by Metropolitan Global Management, LLC and 1.29459% is owned by MetLife International Holdings, Inc. 1) MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. aa) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. bb) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. cc) MetA SIEFORE Adicional, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. dd) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. ee) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. ff) Met5 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. 2) ML Capacitacion Comercial S.A. de C.V. (Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. d) MetLife Saengmyoung Insurance Co. Ltd. (also known as MetLife Insurance Company of Korea Limited (South Korea)- 14.64% is owned by MetLife Mexico, S.A. and 85.36% is owned by Metropolitan Global Management, LLC. 23. Inversiones Metlife Holdco Dos Limitada (Chile)- 99% is owned by Metlife International Holdings, Inc. and 1% is owned by Natiloportem Holdings, Inc. 24. MetLife Asia Pacific Limited (Hong Kong) P. Metropolitan Life Insurance Company (NY) 1. 334 Madison Euro Investments, Inc. (DE) 2. St. James Fleet Investments Two Limited (Cayman Islands) a) Park Twenty Three Investments Company (United Kingdom) i) Convent Station Euro Investments Four Company (United Kingdom) a) One Madison Investments (Cayco) Limited (Cayman Islands)- 99.99999% voting control of One Madison Investments (Cayco) Limited is held by Convent Station Euro Investments Four Company and 0.00001% by St. James Fleet Investments Two Limited. 3. CRB Co., Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000 preferred non-voting shares and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 4. MLIC Asset Holdings II LLC (DE) 3 5. Thorngate, LLC (DE) 6. Alternative Fuel I, LLC (DE) 7. Transmountain Land & Livestock Company (MT) 8. MetPark Funding, Inc. (DE) 9. HPZ Assets LLC (DE) 10. Missouri Reinsurance (Barbados), Inc. (Barbados) 11. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 12. MetLife Real Estate Cayman Company (Cayman Islands) 13. MetCanada Investments Ltd. (Canada) 14. MetLife Private Equity Holdings, LLC (DE) 15. 23rd Street Investments, Inc. (DE) a) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. b) MetLife Capital Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. 16. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 17. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 4 18. MetLife Investments Asia Limited (Hong Kong) 19. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 20. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 21. New England Life Insurance Company (MA) a) New England Securities Corporation (MA) 22. General American Life Insurance Company (MO) a) GALIC Holdings LLC (DE) 5 23. Corporate Real Estate Holdings, LLC (DE) 24. Ten Park SPC (Cayman Islands) - 1% voting control of Ten Park SPC is held by 23rd Street Investments, Inc. 25. MetLife Tower Resources Group, Inc. (DE) 26. Headland - Pacific Palisades, LLC (CA) 27. Headland Properties Associates (CA) - 1% is owned by Headland - Pacific Palisades, LLC and 99% is owned by Metropolitan Life Insurance Company. 28. WFP 1000 Holding Company GP, LLC (DE) 29. White Oak Royalty Company (OK) 30. 500 Grant Street GP LLC (DE) 31. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC. 32. MetLife Canada/MetVie Canada (Canada) 33. MetLife Retirement Services LLC (NJ) a) MetLife Investment Funds Services LLC (NJ) i) MetLife Associates LLC (DE) 34. Euro CL Investments LLC (DE) 35. MEX DF Properties, LLC (DE) 36. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company 37. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (United Kingdom) 38. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 39. MLIC Asset Holdings, LLC (DE) 40. 85 Broad Street Mezzanine LLC (DE) a) 85 Broad Street LLC (DE) 41. The Building at 575 Fifth Avenue Mezzanine LLC (DE) a) The Building at 575 Fifth LLC (DE) 42. CML Columbia Park Fund I, LLC (DE)- 10% of membership interest is held by MetLife Insurance Company of Connecticut and 90% membership interest is held by Metropolitan Life Insurance Company. 43. Para-Met Plaza Associates (FL)- 75% of the General Partnership is held by Metropolitan Life Insurance Company and 25% of the General Partnership is held by Metropolitan Tower Realty Company, Inc. 44. MLIC CB Holdings LLC (DE) 45. Met II Office Mezzanine, LLC (FL) - 10.4167% of the membership interest is owned by Metropolitan Tower Life Insurance Company and 89.5833% is owned by Metropolitan Life Insurance Company. a) Met II Office, LLC Q. MetLife Capital Trust IV (DE) R. MetLife Insurance Company of Connecticut (CT) - 86.72% is owned by MetLife, Inc. and 13.28% by MetLife Investors Group, Inc. 1. MetLife Property Ventures Canada ULC (Canada) 2. Pilgrim Alternative Investments Opportunity Fund I, LLC (DE) - 67% is owned by MetLife Insurance Company of Connecticut and 33% is owned by third party. 3. Pilgrim Alternative Investments Opportunity Fund III Associates, LLC (CT) - 67% is owned by MetLife Insurance Company of Connecticut and 33% is owned by third party. 4. Metropolitan Connecticut Properties Ventures, LLC (DE) a) ML/VCC UT West Jordan, LLC (DE) 5. MetLife Canadian Property Ventures LLC (NY) 6. Euro TI Investments LLC (DE) 7. Greenwich Street Investments, L.L.C. (DE) a) Greenwich Street Capital Offshore Fund, Ltd. (Virgin Islands) b) Greenwich Street Investments, L.P. (DE) 8. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company of Connecticut. 9. Plaza LLC (CT) a) Tower Square Securities, Inc. (CT) 10. TIC European Real Estate LP, LLC (DE) 11. MetLife European Holdings, LLC (DE) a) MetLife Europe Limited (Ireland) i) MetLife Pension Trustees Limited (United Kingdom) b) MetLife Assurance Limited (United Kingdom) 12. Travelers International Investments Ltd. (Cayman Islands) 13. Euro TL Investments LLC (DE) 14. Corrigan TLP LLC (DE) 15. TLA Holdings LLC (DE) a) The Prospect Company (DE) i) Panther Valley, Inc. (NJ) 16. TRAL & Co. (CT) - TRAL & Co. is a general partnership. Its partners are MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company. 17. MetLife Investors USA Insurance Company (DE) a) MetLife Renewables Holding, LLC (DE) i) Greater Sandhill I, LLC (DE) 18. TLA Holdings II LLC (DE) 19. TLA Holdings III LLC (DE) 20. MetLife Greenstone Southeast Ventures, LLC (DE) - 95% of MetLife Greenstone Southeast Ventures, LLC is owned by MetLife Insurance Company of Connecticut and 5% is owned by Metropolitan Connecticut Properties Ventures, LLC. a) MLGP Lakeside, LLC (DE) S. MetLife Reinsurance Company of South Carolina (SC) T. MetLife Investment Advisors Company, LLC (DE) U. MetLife Standby I, LLC (DE) 1. MetLife Exchange Trust I (DE) V. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) a) MetLife Services East Private Limited (India) b) MetLife Global Operations Support Center Private Limited (India) - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, Inc. W. SafeGuard Health Enterprises, Inc. (DE) 1. MetLife Health Plans, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) X. MetLife Capital Trust X (DE) Y. Cova Life Management Company (DE) Z. MetLife Reinsurance Company of Charleston (SC) AA. MetLife Reinsurance Company of Vermont (VT) AB. Delaware American Life Insurance Company (DE) 1. GBN, LLC (DE) AC. American Life Insurance Company (ALICO) (US) 1. ALICO Nagasaki Operation Yugen Kaisha (Japan) 2. Communication One Kabushiki Kaisha (Japan) 3. Financial Learning Kabushiki Kaisha (Japan) 4. Pharaonic American Life Insurance Company (Egypt) - 84.125% of Pharaonic American Life Insurance Company is owned by ALICO and the remaining interests are owned by third parties. 5. A.I.G. Limited (Nigeria) 6. ALICO Limited (Nigeria) 7. American Life Limited (Nigeria) 8. American Life Insurance Company (Pakistan) Ltd. (Pakistan) - 66.47% of American Life Insurance Company (Pakistan) Ltd. is owned by ALICO and the remaining interests are owned by third parties. 9. American Life Hayat Sigorta A.S. (Turkey) a) Deniz Emeklilik ve Hayat A.S. (Turkey) - 99.86% of Deniz Emeklilik ve Hayat A.S. is owned by American Life Hayat Sigorta A.S., .0000000004% by ALICO and the remaining interests are owned by third parties 10. ALICO (Bulgaria) Zhivotozastrahovatelno Druzestvo EAD (Bulgaria) 11. Amcico pojist'ovna a.s. (Czech Republic) 12. MetLife S.A. (France) a) Hestis S.A.S. (France) - 66.06% of Hestis S.A.S. is owned by ALICO and the remaining interests are owned by third parties. b) MetLife Solutions S.A.S. (France) 13. ALICO Mutual Fund Management Company (Greece) - 90% of ALICO Mutual Fund Management Company is owned by ALICO and the remaining interests are owned by third parties. 14. AHICO First American Hungarian Insurance Company (Elso Amerikai-Magyar Biztosito) Zrt (Hungary) a) First Hungarian-American Insurance Agency Limited (Hungary) 15. ALICO Life International Limited (Ireland) 16. ALICO Italia S.p.A. (Italy) a) Agenvita S.r.L. (Italy) - 95% of Agenvita S.r.L. is owned by ALICO Italia S.p.A., the remaining 5% is owned by ALICO. 17. AMPLICO Life-First American Polish Life Insurance & Reinsurance Company, S.A. (Poland) - 95.74% of AMPLICO Life-First American Polish Life Insurance & Reinsurance Company, S.A. is owned by ALICO and 4.26% by MetLife Worldwide Holdings, Inc. a) Amplico Services Sp z.o.o. (Poland) b) AMPLICO Towartzystwo Funduszky Inwestycyjnych, S.A. (Poland) c) AMPLICO Powszechne Towartzystwo Emerytalne S.A. (Poland) - 50% of AMPLICO Powszechne Towarzystwo Emerytalne S.A. is owned by AMPLICO Life-First American Polish Life Insurance & Reinsurance Company, S.A. and the remaining 50% is owned by ALICO. 18. ALICO Asigurari Romania S.A. (Romania) - 99.99999726375% of ALICO Asigurari Romania S.A. is owned by American Life Insurance Company and the remaining .000001273625% is owned by International Technical and Advisory Services Limited. a) ALICO Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. (Romania) - 99.9748% of ALICO Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. is owned by ALICO Asigurari Romania S.A. and .0252% is owned by AMPLICO Services Sp z.o.o. b) ALICO Training and Consulting S.R.L. (Romania) 19. International Investment Holding Company Limited (Russia) 20. ALICO European Holdings Limited (Ireland) a) ZAO Master D (Russia) i) ZAO ALICO Insurance Company (Russia) - 51% of ZAO ALICO Insurance Company is owned by ZAO Master D and 49% is owned by ALICO. 21. MetLife Akcionarska Drustvoza za Zivotno Osiguranje (Serbia) - 99.96% of MetLife Akcionarska Drustvoza za Zivotno Osiguranje is owned by American Life Insurance Company and the remaining .04% is owned by International Technical and Advisory Services Limited. 22. AMSLICO poist'ovna ALICO a.s. (Slovakia) a) ALICO Services Central Europe s.r.o. (Slovakia) b) ALICO Funds Central Europe sprav.spol., a.s. (Slovakia) 23. ALICO Gestora de Fondos y Planos de Pensiones S.A. (Spain) 24. ALICO Management Services Limited (United Kingdom) 25. ZEUS Administration Services Limited (United Kingdom) 26. ALICO Trustees (UK) Ltd. (United Kingdom) - 50% of ALICO Trustees (UK) Ltd. is owned by ALICO and the remaining interests are owned by International Technical and Advisory Services Limited. 27. PJSC ALICO Ukraine (Ukraine) - 99.9990% of PJSC ALICO Ukraine is owned by American Life Insurance Company, .0005% is owned by International Technical and Advisory Services Limited and the remaining .0005% is owned by Borderland Investment Limited. 28. Borderland Investments Limited (USA-Delaware) a) ALICO Hellas Single Member Limited Liability Company (Greece) 29. International Technical and Advisory Services Limited (USA-Delaware) 30. International Services Incorporated (USA-Delaware) 31. ALICO Operations Inc. (USA-Delaware) a) ALICO Asset Management Corp. (Japan) 32. ALICO Compania de Seguros de Retiro, S.A. (Argentina) - 90% of ALICO Compania de Seguros de Retiro, S.A. is owned by ALICO and 10% by International Technical & Advisory Services. 33. ALICO Compania de Seguros, S.A. (Argentina) - 90% of ALICO Compania de Seguros, S.A. is owned by ALICO and 10% by International Technical & Advisory Services. 34. MetLife Colombia Seguros de Vida S.A. (Colombia) - 94.989811% of MetLife Colombia Seguros de Vida S.A. is owned by ALICO, 5.0100030% is owned by International Technical and Advisory Services Limited and the remaining interests are owned by third parties. 35. Inversiones Interamericana S.A. (Chile) 99.9850% of Inversiones Interamericana S.A. is owned by ALICO and .0150% by International Technical & Advisory Services. a) ALICO Costa Rica S.A. (Costa Rica) - 99% of ALICO Costa Rica S.A. is owned by Inversiones Interamericana S.A. and 1% by La Interamericana Compania de Seguros de Vida S.A. b) Legal Chile S.A. (Chile) - 51% of Legal Chile S.A. is owned by Inversiones Interamericana S.A. and the remaining interests by a third party. i) Legagroup S.A. (Chile) - 99% is owned by Legal Chile and 1% is owned by a third party. 36. ALICO Mexico Compania de Seguros, S.A. de C.V. (Mexico) - 99.999998% of ALICO Mexico Compania de Seguros de Vida, SA de CV is owned by American Life Insurance Company and .000002% is owned by International Technical and Advisory Services Limited. 37. ALICO Services, Inc. (Panama) 38. American Life and General Insurance Company (Trinidad & Tobago) Ltd. (Trinidad and Tobago) - 80.92373% of American Life and General Insurance Company (Trinidad & Tobago) Ltd. is owned by ALICO and the remaining interests are owned by a third party. a) ALGICO Properties, Ltd. (Trinidad & Tobago) - 99.99994% of ALGICO Properties, Ltd. is owned by American Life and General Insurance Company (Trinidad & Tobago), .00003% is owned by American Life Insurance Company and the remaining .00003% is owned by third parties. b) Eleven Dee, LTD. (Trinidad & Tobago) 39. MetLife Seguros de Vida, S.A. (Uruguay) 40. ALICO Properties, Inc. (USA-Delaware) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. 41. Global Properties, Inc. (USA-Delaware) 42. Alpha Properties, Inc. (USA-Delaware) 43. Beta Properties, Inc. (USA-Delaware) 44. Delta Properties Japan, Inc. (USA-Delaware) 45. Epsilon Properties Japan, Inc. (USA) 46. Iris Properties, Inc. (USA-Delaware) 47. Kappa Properties Japan, Inc. (USA-Delaware) 48. MetLife Global Holding Company I GmbH (Swiss I) (Switzerland) a) MetLife Global Holding Company II GmbH (Swiss II) (Switzerland) i) MetLife EU Holding Company Limited (Ireland) 49. MetLife ALICO Preparatory Company KK (Japan) 1) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. 2) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. 3) The MetLife, Inc. organizational chart does not include real estate joint ventures and partnerships of which MetLife, Inc. and/or its subsidiaries is an investment partner. In addition, certain inactive subsidiaries have also been omitted. 4) MetLife Services EEIG is a cost-sharing mechanism used in the EU for EU affiliated members. 6 ITEM 29. INDEMNIFICATION MetLife, Inc. has secured a Financial Institutions Bond in the amount of $50,000,000 subject to a $5,000,000 deductible. MetLife, Inc. also maintains a Directors' and Officers' Liability and Corporate Reimbursement Insurance Policy with limits of $400 million. The Directors and Officers of Metropolitan Life Insurance Company ("Metropolitan"), as well as certain other subsidiaries of MetLife, Inc. are covered under the Financial Institutions Bond as well as under the Directors' and Officers' Liability Policy. A provision in Metropolitan's by-laws provides for the indemnification (under certain circumstances) of individuals serving as directors or officers of Metropolitan. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Metropolitan pursuant to the foregoing provisions, or otherwise, Metropolitan Life Insurance Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Metropolitan of expenses incurred or paid by a director, officer or controlling person or Metropolitan Life Insurance Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Metropolitan will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 30. PRINCIPAL UNDERWRITERS (a) MetLife Investors Distribution Company is the principal underwriter and distributor of the Policies. MetLife Investors Distribution Company is also the principal underwriter for the following investment companies (other than Registrant): Met Investors Series Trust, Metropolitan Series Fund, Metropolitan Life Separate Account E, MetLife Investors USA Separate Account A, MetLife Investors USA Variable Life Account A, MetLife Investors Variable Annuity Account One, MetLife Investors Variable Life Account One, First MetLife Investors Variable Annuity Account One, General American Separate Account Eleven, General American Separate Account Twenty-Eight, General American Separate Account Twenty-Nine, General American Separate Account Two, Security Equity Separate Account 26, Security Equity Separate Account 27, MetLife of CT Separate Account Eleven for Variable Annuities, MetLife of CT Separate Account QPN for Variable Annuities, MetLife of CT Fund UL for Variable Life Insurance, MetLife of CT Fund UL III for Variable Life Insurance, Metropolitan Life Variable Annuity Separate Account II, Paragon Separate Account A, Paragon Separate Account B, Paragon Separate Account C, Paragon Separate Account D, Metropolitan Tower Separate Account One and Metropolitan Tower Separate Account Two. (b) The following persons are the officers and directors of MetLife Investors Distribution Company. The principal business address for MetLife Investors Distribution Company is 5 Park Plaza, Suite 1900, Irvine, CA 92614.
Name and Principal Business Office Positions and Offices with Underwriter ----------------------------------- -------------------------------------- Mark E. Rosenthal President Metropolitan Life Insurance Company 5 Park Plaza, Suite 1900 Irvine, CA 92614 Elizabeth M. Forget Director and Executive Vice President Metropolitan Life Insurance Company 1095 Avenue of the Americas New York, NY 10036 Paul A. LaPiana Director and Executive Vice President, Metropolitan Life Insurance Company National Sales Manager- Life 501 Route 22 Bridgewater, NJ 08807 Jay S. Kaduson Senior Vice President Metropolitan Life Insurance Company 1 MetLife Plaza 27-01 Queens Plaza North Long Island City, NY 11101 Andrew G. Aiello Senior Vice President, Channel Head- Metropolitan Life Insurance Company National Accounts 5 Park Plaza, Suite 1900 Irvine, CA 92614 John G. Martinez Vice President and Chief Financial Metropolitan Life Insurance Company Officer 18210 Crane Nest Drive Tampa, FL 33647 Marlene B. Debel Treasurer Metropolitan Life Insurance Company 1095 Avenue of the Americas New York, NY 10036
(c) Compensation from the Registrant.
(1) (2) (3) (4) (5) Compensation on Events Occasioning the Net Underwriting Deduction of a Name of Principal Discounts and Deferred Sales Brokerage Other Underwriter Commissions Load Commissions Compensation ----------- ----------- ---- ----------- ------------ MetLife Investors Distribution Insurance Company $9,003,190 $0 $0 $0
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS The following companies will maintain possession of the documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder: (a) Registrant (b) Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 (c) MetLife Investors Distribution Company 5 Park Plaza, Suite 1900 Irvine, California 92614 ITEM 32. MANAGEMENT SERVICES Not applicable ITEM 33. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the Policy described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Metropolitan Life Separate Account UL, certifies that it meets all of the requirements for effectiveness of this amended Registration Statement under Rule 485(b) under the Securities Act and has caused this Amendment to the Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 11th day of April, 2013. Metropolitan Life Separate Account UL By: Metropolitan Life Insurance Company By: /s/ Paul G. Cellupica ------------------------------------- Paul G. Cellupica, Esq. Chief Counsel Americas SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, Metropolitan Life Insurance Company certifies that it meets all of the requirements for effectiveness of this amended Registration Statement under Rule 485(b) under the Securities Act and has caused this Amendment to the Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 11th day of April, 2013. Metropolitan Life Insurance Company By: /s/ Paul G. Cellupica ------------------------------------------- Paul G. Cellupica, Esq. Chief Counsel Americas Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons, in the capacities indicated, on April 11, 2013. SIGNATURE TITLE --------- ----- * Chairman of the Board, President and ------------------------------------- Chief Executive Officer Steven A. Kandarian * Executive Vice President and ------------------------------------- Chief Accounting Officer Peter M. Carlson * Director ------------------------------------- Sylvia Mathews Burwell * Director ------------------------------------- Cheryl W. Grise * Director ------------------------------------- R. Glenn Hubbard * Director ------------------------------------- John M. Keane * Director ------------------------------------- Alfred F. Kelly, Jr. * Director ------------------------------------- James M. Kilts * Director ------------------------------------- Catherine R. Kinney * Director ------------------------------------- Hugh B. Price ------------------------------------- Director David Satcher * Director ------------------------------------- Kenton J. Sicchitano * Director ------------------------------------- Lulu C. Wang * Executive Vice President and ------------------------------------- Chief Financial Officer John C.R. Hele By: /s/ Marie C. Swift -------------------------- Marie C. Swift, Esq. Attorney-in-fact * Executed by Marie C. Swift, Esq. on behalf of those indicated pursuant to Powers of Attorney filed herewith and with Post-Effective Amendment No. 4 to this Registration Statement on Form N-6, File No. 333-147508, filed April 12, 2012. Exhibit Index (g)(ii) Amendments to the Reinsurance Agreements (l) Actuarial Opinion and Consent (m) Calculation Exhibit (n) Consent of Independent Registered Public Accounting Firm (r)(ii) Power of Attorney EX-99.(G)(II) 2 d444537dex99gii.txt REINSURANCE CONTRACT AMENDMENTS AMENDMENT EFFECTIVE JUNE 25, 2012 to the AUTOMATIC AND FACULTATIVE YRT AGREEMENT EFFECTIVE JANUARY 1, 2012 between THE METROPOLITAN LIFE INSURANCE COMPANIES WHICH SHALL INCLUDE THE FOLLOWING COMPANIES: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY, GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY. (HEREINAFTER INDIVIDUALLY OR COLLECTIVELY REFERRED TO AS "THE CEDING COMPANY" OR "COMPANIES") AND GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY (HEREINAFTER REFERRED TO AS "THE REINSURER") This Agreement originally executed effective January 1, 2012, as amended, is hereby amended, effective JUNE 25, 2012 for all eligible policies issued on or after the effective date of this amendment, including policies backdated for up to six (6) months to save age. NOW THEREFORE, in consideration of the mutual and foregoing recitals and the mutual covenants and undertakings herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows. 1. Exhibit III is hereby replaced by the attached Exhibit III - Three additional products are added (LASUL 12, GAUL 12, LGUL 12). All terms, provisions, and conditions of this Agreement will continue unchanged except as specifically revised in this Amendment. Page 1 of 7 In witness of the above, THE METROPOLITAN LIFE INSURANCE COMPANIES WHICH SHALL INCLUDE THE FOLLOWING COMPANIES: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY, GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY. ("THE CEDING COMPANY" OR "COMPANIES") and GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY ("THE REINSURER") have by their respective officers executed and delivered this Amendment, effective JUNE 25, 2012. METROPOLITAN LIFE INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Senior Vice President ------------------------------------ NEW ENGLAND LIFE INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ Page 2 of 7 GENERAL AMERICAN LIFE INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ METLIFE INVESTORS USA INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ METLIFE INVESTORS INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ FIRST METLIFE INVESTORS INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ METROPOLITAN TOWER LIFE INSURANCE COMPANY By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ Page 3 of 7 METLIFE INSURANCE COMPANY OF CONNECTICUT By: /s/ Roberto Baron ------------------------------------ Name: Roberto Baron ------------------------------------ Title: Vice President ------------------------------------ GENERALI USA LIFE REASSURANCE COMPANY By: /s/ J C Brueckner By: /s/ Nancy Pike ------------------------------ ------------------------------ Name: J C Brueckner Name: Nancy Pike ------------------------------ ------------------------------ Title: President & COC Title: Asst Registrar ------------------------------ ------------------------------ Page 4 of 7 EXHIBIT III POLICIES AND RIDERS ------------------- The Policies and Riders underwritten by or on behalf of the Ceding Companies or simplified issue with fully underwritten rates, as described below may be ceded hereunder:
STATUTORY REINSURANCE VALUATION REINSURANCE REINSURANCE MAXIMUM REINSURANCE CEDING MORTALITY RATES TO BE PRODUCT CATEGORY BASIS AGE TABLE COMPANY TABLE USED ------- ----------- ------------ ----------- ------------------- -------- --------- -------------------- 90-95modified - MLI GLT Term Excess 100 UW.xls USA/FMLI 2001 CSO 6 Class Level Term UL/Accum 90-95modified - UW MLIC, Permanent - 5 class JSUL 2005 Product First Dollar 120 to age 120.xls MLI USA 2001 CSO (joint life) Permanent - 5 class (single life); Permanent - 4 class (single life); UL/Accum 90-95modified - UW MLIC, Permanent - 2 class GAUL07 Product First Dollar 121 to age 120.xls MLI USA 2001 CSO (single life) UL/Accum 90-95modified - UW MLIC, Permanent - 5 class EAVUL08 Product Excess 121 to age 120.xls MLI USA 2001 CSO (single life) Life Paid up at UL/Accum 90-95modified - UW Permanent - 5 class Age 100 (WL 08) Product Excess 121 to age 120.xls MLIC 2001 CSO (single life) EEA COLI UL/Accum 90-95modified - Permanent - 5 class (2001 CSO) Product Excess 100 UW.xls NELICO 2001 CSO (single life) UL/Accum 90-95modified - Permanent - 4 class PPVUL Product Excess 100 UW.xls GALIC 2001 CSO (single life) UL/Accum 90-95modified - UW Permanent - 2 class Premier BOLI Product Excess 100 - ALB.xls MLIC 2001 CSO (single life) UL/Accum 90-95modified - UW MLIC, Permanent - 5 class LASUL 09 Product First Dollar 120 to age 120.xls MLI USA 2001 CSO (joint life) Permanent - 5 class (single life); Permanent - 4 class (single life); UL/Accum 90-95modified - UW MLIC, Permanent - 2 class GAUL 09 Product First Dollar 121 to age 120.xls MLI USA 2001 CSO (single life) UL/Accum 90-95modified - UW MLIC, Permanent - 5 class WL 10 Product Excess 120 to age 120.xls MLI USA 2001 CSO (single life) UL/Accum 90-95modified - UW MLIC, Permanent - 5 class LASUL 11 Product First Dollar 120 to age 120.xls MLI USA 2001 CSO (joint life)
Page 5 of 7
STATUTORY REINSURANCE VALUATION REINSURANCE REINSURANCE MAXIMUM CEDING MORTALITY RATES TO BE PRODUCT CATEGORY BASIS AGE REINSURANCE TABLE COMPANY TABLE USED ------- ----------- ------------ ----------- ------------------- --------- --------- -------------------- Permanent - 5 class (single life); Permanent - 4 class UL/ (single life); Accum 90-95modified - UW MLIC, MLI Permanent - 2 class GAUL 11 Product First Dollar 121 to age 120.xls USA 2001 CSO (single life) UL/ Life Paid up at Accum 90-95modified - UW MLIC, MLI Permanent - 5 class Age 120 (L120) Product Excess 120 to age 120.xls USA 2001 CSO (single life) LASUL 12 UL/Accum First Dollar 120 90-95modified - UW MLIC, MLI Permanent - 5 class Product to age 120.xls USA 2001 CSO (joint life) GAUL 12 UL/Accum First Dollar 121 90-95modified - UW MLIC, MLI Permanent - 5 class Product to age 120.xls USA 2001 CSO (single life); Permanent - 4 class (single life): Permanent - 2 class (single life) GAUL 12 UL/Accum Excess 121 90-95modified - UW MLIC, MLI Permanent - 5 class Product to age 120.xls USA 2001 CSO (single life)
Product ------- GLT - Guaranteed Level Term JSUL 2005 - Joint Universal Life with Secondary Guarantee GAUL07 - Universal Life with Secondary Guarantee EAVUL08 - Variable Universal Life Life Paid up at Age 100 (WL08) - Whole Life EEA COLI (2001 CSO) - Variable Universal Life PPVUL - Variable Universal Life Premier BOLI - Universal Life LASUL 09 - Joint Universal Life with Secondary Guarantee GAUL 09 - Universal Life with Secondary Guarantee WL 10-Whole Life LASUL 11 - Joint Universal Life with Secondary Guarantee GAUL 11 - Universal Life with Secondary Guarantee Life Paid up at Age 120 (L120) - Whole Life LASUL 12 - Joint Universal Life with Secondary Guarantee GAUL 12 - Universal Life with Secondary Guarantee LGUL 12 - Universal Life with Secondary Guarantee Riders attached to the listed plans ----------------------------------- ADBR - Accelerated Death Benefit Rider Preliminary Term/Temporary Term ART - Annually Renewable Term Outside Term Rider FTR - Flexible Term Rider Page 6 of 7 Other ----- The Reinsurer shall pay its share of any claim after the Reinsurance Maximum Age under the extended maturity coverage, including interest, as defined in Article VI, For joint life policies with one life insurable, this will be the Reinsurance Maximum Age of the insurable life and for joint life policies with both lives insurable, this will be the Reinsurance Maximum Age of the younger insured. Products not listed above resulting from the exercise of business exchanges, policy split options, and purchase options shall be covered on an excess reinsurance basis. For Policies ceded with RPR/SFIO riders, the maximum net amount at risk illustrated at the time of issue shall be used for purposes of underwriting, autobind limits, and jumbo limits. For Policies ceded facultatively with RPR rider, the ultimate amount ceded to the Reinsurers shall not exceed the maximum net amount at risk included in the facultative offers from the Reinsurers. Page 7 of 7 AMENDMENT EFFECTIVE NOVEMBER 30, 2012 to the AUTOMATIC AND FACULTATIVE YRT AGREEMENT EFFECTIVE JANUARY 1, 2012 between THE METROPOLITAN LIFE INSURANCE COMPANIES WHICH SHALL INCLUDE THE FOLLOWING COMPANIES: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY, GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY. (HEREINAFTER INDIVIDUALLY OR COLLECTIVELY REFERRED TO AS "THE CEDING COMPANY" OR"COMPANIES") AND GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY (HEREINAFTER REFERRED TO AS "THE REINSURER") This Agreement originally executed effective January 1, 2012, as amended, is hereby amended, effective NOVEMBER 30, 2012 for all eligible policies issued on or after the effective date of this amendment, including policies backdated for up to six (6) months to save age. NOW THEREFORE, in consideration of the mutual and foregoing recitals and the mutual covenants and undertakings herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows. 1. Exhibit III is hereby replaced by the attached Exhibit III - Two additional products are added (CDT, OYT). 2. Exhibit IV, Table A is hereby replaced by the attached Exhibit IV, Table A - 2 class One Year Term rates are added. All terms, provisions, and conditions of this Agreement will continue unchanged except as specifically revised in this Amendment. Page 1 of 13 In witness of the above, THE METROPOLITAN LIFE INSURANCE COMPANIES WHICH SHALL INCLUDE THE FOLLOWING COMPANIES: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY, GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY, FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY, METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY, ("THE CEDING COMPANY" OR "COMPANIES") and GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY ("THE REINSURER") have by their respective officers executed and delivered this Amendment, effective NOVEMBER 30, 2012. METROPOLITAN LIFE INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Senior Vice President ----------------------------- NEW ENGLAND LIFE INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- Page 2 of 13 GENERAL AMERICAN LIFE INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- METLIFE INVESTORS USA INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- METLIFE INVESTORS INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- FIRST METLIFE INVESTORS INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- METROPOLITAN TOWER LIFE INSURANCE COMPANY By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- Page 3 of 13 METLIFE INSURANCE COMPANY OF CONNECTICUT By: /s/ Roberto Baron ----------------------------- Name: Roberto Baron ----------------------------- Title: Vice President ----------------------------- GENERALI USA LIFE REASSURANCE COMPANY By: /s/ David A Gates By: /s/ Nancy Pike ------------------------- --------------------------- Name: David A Gates Name: Nancy Pike ------------------------- --------------------------- Title: Senior Vice President Title: Asst. Registrar ------------------------- --------------------------- Page 4 of 13 EXHIBIT III POLICIES AND RIDERS ------------------- The Policies and Riders underwritten by or on behalf of the Ceding Companies or simplified issue with fully underwritten rates, as described below may be ceded hereunder:
STATUTORY VALUATION REINSURANCE REINSURANCE CEDING MORTALITY PRODUCT CATEGORY REINSURANCE BASIS MAXIMUM AGE REINSURANCE TABLE COMPANY TABLE RATES TO BE USED ---------------- ---------------- ----------------- ----------- ----------------- ------------- --------- ------------------- 90-95modified - MLI 6 Class Level GLT Term Excess 100 UW.xls USA/FMLI 2001 CSO Term 90-95modified - Permanent -5 JSUL 2005 UL/Accum Product First Dollar 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (joint life) Permanent -5 class (single life); Permanent -4 class (single life); 90-95modified - Permanent -2 GAUL07 UL/Accum Product First Dollar 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - Permanent -5 EAVUL08 UL/Accum Product Excess 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) Life Paid up at 90-95modified - Permanent -5 Age 100 (WL 08) UL/Accum Product Excess 121 UW to age 120.xls MLIC 2001 CSO class (single life) EEA COLI 90-95modified - Permanent -5 (2001 CSO) UL/Accum Product Excess 100 UW.xls NELICO 2001 CSO class (single life) 90-95modified - Permanent -4 PPVUL UL/Accum Product Excess 100 UW.xls GALIC 2001 CSO class (single life) 90-95modified - Permanent -2 Premier BOLI UL/Accum Product Excess 100 UW -ALB.xls MLIC 2001 CSO class (single life) 90-95modified - Permanent -5 LASUL 09 UL/Accum Product First Dollar 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (joint life) Permanent -5 class (single life); Permanent -4 class (single life); 90-95modified - Permanent -2 GAUL 09 UL/Accum Product First Dollar 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - Permanent -5 WL 10 UL/Accum Product Excess 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - Permanent -5 LASUL 11 UL/Accum Product First Dollar 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (joint life)
Page 5 of 13
STATUTORY VALUATION REINSURANCE REINSURANCE CEDING MORTALITY RATES TO BE PRODUCT CATEGORY REINSURANCE BASIS MAXIMUM AGE REINSURANCE TABLE COMPANY TABLE USED ---------------- ---------------- ----------------- ----------- ----------------- ------------- --------- ------------------- Permanent -5 class (single life); Permanent -4 class (single life); 90-95modified - Permanent -2 GAUL 11 UL/Accum Product First Dollar 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) Life Paid up at 90-95modified - Permanent -5 Age 120 (L120) UL/Accum Product Excess 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - Permanent -5 LASUL 12 UL/Accum Product First Dollar 120 UW to age 120.xls MLIC, MLI USA 2001 CSO class (joint life) Permanent -5 class (single life); Permanent -4 class (single life); 90-95modified - Permanent -2 GAUL 12 UL/Accum Product First Dollar 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - Permanent -5 LGUL 12 UL/Accum Product Excess 121 UW to age 120.xls MLIC, MLI USA 2001 CSO class (single life) 90-95modified - 6 Class Level CDT Term Excess 100 UW.xls MLIC, MLI USA 2001 CSO Term 90-95modified - 2 Class One OYT Term Excess 100 UW.xls MLIC, MLI USA 2001 CSO Year Term
Product ------- GLT - Guaranteed Level Term JSUL 2005 - Joint Universal Life with Secondary Guarantee GAUL07 - Universal Life with Secondary Guarantee EAVUL08 - Variable Universal Life Life Paid up at Age 100 (WL08) - Whole Life EEA COLI (2001 CSO) - Variable Universal Life PPVUL - Variable Universal Life Premier BOLI - Universal Life LASUL 09 - Joint Universal Life with Secondary Guarantee GAUL 09 - Universal Life with Secondary Guarantee WL 10-Whole Life LASUL 11 - Joint Universal Life with Secondary Guarantee GAUL 11 - Universal Life with Secondary Guarantee Life Paid up at Age 120 (L120) - Whole Life LASUL 12 - Joint Universal Life with Secondary Guarantee GAUL 12 - Universal Life with Secondary Guarantee LGUL 12 - Universal Life with Secondary Guarantee CDT - Guaranteed Level Term OYT - One Year Term Page 6 of 13 Riders attached to the listed plans ----------------------------------- ADBR - Accelerated Death Benefit Rider Preliminary Term/Temporary Term ART - Annually Renewable Term JTCR - Joint Term Coverage Rider RPR - Return of Premium Rider EPTR - Estate Preservation Term Rider SFIO - Scheduled Face Increase Option PAIR - Option to Purchase Additional Insurance Rider Inside Term Rider Outside Term Rider FTR - Flexible Term Rider Other ----- The Reinsurer shall pay its share of any claim after the Reinsurance Maximum Age under the extended maturity coverage, including interest, as defined in Article VI. For joint life policies with one life insurable, this will be the Reinsurance Maximum Age of the insurable life and for joint life policies with both lives insurable, this will be the Reinsurance Maximum Age of the younger insured. Products not listed above resulting from the exercise of business exchanges, policy split options, and purchase options shall be covered on an excess reinsurance basis. For Policies ceded with RPR/SFIO riders, the maximum net amount at risk illustrated at the time of issue shall be used for purposes of underwriting, autobind limits, and jumbo limits. For Policies ceded facultatively with RPR rider, the ultimate amount ceded to the Reinsurers shall not exceed the maximum net amount at risk included in the facultative offers from the Reinsurers. Page 7 of 13 EXHIBIT IV TABLE A ------- Joint Life Minimum Premium Per Thousand:0.15 For policies with a Reinsurance Basis of Excess and Reinsurance Category of Term -------------------------------------------------------------------------------- 6 Class Level Term - T10
Female Female Male Male Risk Class Rate Table Class Yrs 1-10 Yrs 11+ Yrs 1-10 Yrs 11+ Elite+ NS Elite Nonsmoker 63.0% 157.3% 55.0% 137.5% Pref+ NS Elite Nonsmoker 68.2% 170.4% 57.7% 144.1% Std+ NS Preferred Nonsmoker 60.7% 151.6% 53.2% 132.9% Std NS Standard (Residual) Nonsmoker 63.3% 157.8% 54.4% 136.0% Pref SM Preferred Smoker 75.1% 187.5% 85.7% 214.1% Std SM Standard (Residual) Smoker 79.5% 198.5% 78.5% 196.2%
6 Class Level Term - T15
Female Female Male Male Risk Class Rate Table Class Yrs 1-15 Yrs 16+ Yrs 1-15 Yrs 16+ Elite+ NS Elite Nonsmoker 59.9% 149.5% 52.4% 130.8% Pref+ NS Elite Nonsmoker 64.3% 160.5% 55.9% 139.5% Std+ NS Preferred Nonsmoker 58.8% 147.0% 50.8% 127.0% Std NS Standard (Residual) Nonsmoker 58.8% 147.0% 50.0% 124.8% Pref SM Preferred Smoker 73.2% 182.9% 84.0% 209.8% Std SM Standard (Residual) Smoker 77.1% 192.5% 76.7% 191.5%
6 Class Level Term - T20
Female Female Female Male Male Male Risk Class Rate Table Class Yrs 1-15 Yrs 16-20 Yrs 21+ Yrs 1-15 Yrs 16-20 Yrs 21+ Elite+ NS Elite Nonsmoker 62.3% 60.1% 150.1% 54.9% 56.6% 141.2% Pref+ NS Elite Nonsmoker 64.2% 65.4% 163.4% 57.6% 58.3% 145.6% Std+ NS Preferred Nonsmoker 63.4% 59.0% 147.5% 54.6% 53.3% 133.2% Std NS Standard (Residual) Nonsmoker 60.1% 55.9% 139.5% 53.3% 50.6% 126.5% Pref SM Preferred Smoker 71.7% 89.1% 222.8% 79.7% 101.3% 253.2% Std SM Standard (Residual) Smoker 76.3% 88.4% 220.8% 74.6% 91.3% 227.9%
Page 8 of 13 6 Class Level Term - T30
Female Female Female Male Male Male Risk Class Rate Table Class Yrs 1-15 Yrs 16-30 Yrs 31+ Yrs 1-15 Yrs 16-30 Yrs 31+ Elite+ NS Elite Nonsmoker 66.4% 54.6% 136.5% 59.6% 58.9% 147.3% Pref+ NS Elite Nonsmoker 68.8% 56.3% 140.5% 65.9% 62.7% 156.6% Std+ NS Preferred Nonsmoker 71.2% 53.6% 133.9% 62.4% 55.4% 138.4% Std NS Standard (Residual) Nonsmoker 61.7% 45.5% 113.6% 64.3% 53.7% 134.3% Pref SM Preferred Smoker 69.1% 75.9% 189.7% 71.9% 90.2% 225.6% Std SM Standard (Residual) Smoker 76.1% 77.2% 192.7% 70.8% 84.2% 210.3%
2 Class One Year Term
Female Male Risk Class Rate Table Class Yr 1 Yr 1 Std NS Standard (Residual) Nonsmoker 74.1% 63.7% Std SM Standard (Residual) Smoker 93.1% 91.9%
Page 9 of 13 For policies with a Reinsurance Basis of First Dollar and Reinsurance Category ------------------------------------------------------------------------------ of UL/Accumulation ------------------ Permanent Fully Underwritten 5-Class - Single Life - $1 ,000,000 +
Female Female Female Female Female Female Female Female IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 56.1% 63.6% 76.5% 82.2% Pref NS Preferred Nonsmoker 59.1% 65.2% 74.4% 69.3% Std NS Standard (Residual) Nonsmoker 59.3% 68.6% 68.6% 70.5% 60.0% 60.0% Pref SM Preferred Smoker 77.0% 149.9% 132.7% 176.4% Std SM Standard (Residual) Smoker 80.3% 162.3% 162.3% 123.1% 184.8% 184.8% Agg Aggregate 59.3% 70.5%
Male Male Male Male Male Male Male Male IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 46.2% 50.2% 56.2% 66.9% Pref NS Preferred Nonsmoker 49.7% 50.2% 54.4% 57.8% Std NS Standard (Residual) Nonsmoker 46.8% 51.7% 51.7% 48.4% 53.1% 53.1% Pref SM Preferred Smoker 89.0% 139.0% 133.9% 149.7% Std SM Standard (Residual) Smoker 80.2% 147.1 % 147.1% 115.6% 134.3% 134.3% Agg Aggregate 46.8% 48.4%
Permanent Fully Underwritten 5-Class - Single Life - $250,000 - $999,999
Female Female Female Female Female Female Female Female IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 75.1% 85.8% 98.3% 107.0% Pref NS Preferred Nonsmoker 74.0% 81.1% 97.4% 91.7% Std NS Standard (Residual) Nonsmoker 75.9% 82.5% 82 .5% 93.9% 81.0% 81.0% Pref SM Preferred Smoker 103.4% 202.3% 171.5% 241.6% Std SM Standard (Residual) Smoker 108.2% 219.0% 219.0% 159.5% 257.8% 257.8% Agg Aggregate 75.9% 93.9%
Male Male Male Male Male Male Male Male IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 60.9% 68.3% 72.8% 87.7% Pref NS Preferred Nonsmoker 63.4% 68.2% 70.6% 76.1% Std NS Standard (Residual) Nonsmoker 61.6% 67.9% 67.9% 62.9% 67.2% 67.2% Pref SM Preferred Smoker 119.8% 189.0% 175.6% 205.4% Std SM Standard (Residual) Smoker 108.3% 170.9% 170.9% 152.9% 184.7% 184.7% Agg Aggregate 61.6% 62.9%
Page 10 of 13 Permanent Fully Underwritten 4-Class - Single Life - $100,000 - $249,999
Female Female Female Female Female Female Female Female IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 R ISK Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Pref NS Preferred Nonsmoker 74.0% 81.1% 97.4% 91.7% Std NS Standard (Residual.) Nonsmoker 75.9% 82.5% 82.5% 93.9% 81.0% 81.0% Pref SM Preferred Smoker 103.4% 202.3% 171.5% 241.6% Std SM Standard (Residual) Smoker 108.2% 219.0% 219.0% 159.5% 257.8% 257.8% Agg Aggregate 75.9% 93.9%
Male Male Male Male Male Male Male Male IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Pref NS Preferred Nonsmoker 63.4% 68.2% 70.6% 76.1% Std NS Standard (Residual) Nonsmoker 61.6% 67.9% 67.9% 62.9% 67.2% 67.2% Pref SM Preferred Smoker 119.8% 189.0% 175.6% 205.4% Std SM Standard (Residual) Smoker 108.3% 170.9% 170.9% 152.9% 184.7% 184.7% Agg Aggregate 61.6% 62.9%
Permanent Fully Underwritten 2-Class - Single Life - < $100,000
Female Female Female Female Female Female Female Female IA 0-17 IA 18-70 IA 71-80 IA 81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Std NS Standard (Residual) Nonsmoker 83.4% 95.5% 95.5% 102.7% 93.8% 93.8% Std SM Standard (Residual) Smoker 113.8% 228.2% 228.2% 166.4% 272.9% 272.9% Agg Aggregate 83.4% 102.7%
Male Male Male Male Male Male Male Male IA 0-17 IA18-70 IA 71-80 IA81-85 IA 0-17 IA 18-70 IA 71-80 IA 81-85 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Yrs 16+ Std NS Standard (Residual) Nonsmoker 67.8% 77.5% 77.5% 69.1% 77.5% 77.5% Std SM Standard (Residual) Smoker 121.3% 191.2% 191.2% 169.0% 208.4% 208.4% Agg Aggregate 67.8% 69.1%
Permanent Fully Underwritten 5-Class - Joint Life - $1,000,000 +
IA1 8-70 IA 71-80 IA 81-90 IA 18-70 IA 71-80 IA 81-90 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 59.8% 74.4% 78.1% 75.0% Pref NS Preferred Nonsmoker 60.6% 69.0% 69.1% 63.9% Std NS Standard (Residual) Nonsmoker 62.3% 66.9% 66.9% 61.2% 58.4% 58.4% Pref SM Preferred Smoker 105.1% 180.4% 164.6% 155.1% Std SM Standard (Residual) Smoker 95.6% 194.8% 194.8% 146.2% 162.8% 162.8%
Page 11 of 13 Permanent Fully Underwritten 5-Class - Joint Life - $250,000 - $999,999
IA 18-70 IA 71-80 IA 81-90 IA 18-70 IA 71-80 IA 81-90 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 61.5% 84.2% 91.4% 93.2% Pref NS Preferred Nonsmoker 66.7% 78.8% 82.4% 79.7% Std NS Standard (Residual) Nonsmoker 69.0% 72.7% 72.7% 74.2% 71.7% 71.7% Pref SM Preferred Smoker 121.2% 219.8% 202.5% 210.6% Std SM Standard (Residual) Smoker 111.6% 240.4% 240.4% 181.2% 224.9% 224.9%
Page 12 of 13 For policies with a Reinsurance Basis of Excess and Reinsurance Categoey of ---------------------------------------------------------------------------- UL/Accumulation --------------- Permanent Fully Underwritten 5-Class - Single Life
Female Female Female Female Female Female IA 0-17 IA 18-80 IA 81-85 IA 0-17 IA 18-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 68.1% 75.2% Pref NS Preferred Nonsmoker 63.4% 65.4% Std NS Standard (Residual) Nonsmoker 64.1% 64.1% 60.9% 60.9% Pref SM Preferred Smoker 81.3% 115.0% Std SM Standard (Residual) Smoker 85.7% 85.7% 109.7% 109.7% Agg Aggregate 64.1% 60.9%
Male Male Male Male Male Male IA 0-17 IA 18-80 IA 81-85 IA 0-17 IA 18-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Elite NS Elite Nonsmoker 58.1% 62.8% Pref NS Preferred Nonsmoker 56.6% 55.8% Std NS Standard (Residual) Nonsmoker 57.3% 57.3% 52.1% 52.1% Pref SM Preferred Smoker 90.9% 123.2% Std SM Standard (Residual) Smoker 83.2% 83.2% 108.5% 108.5% Agg Aggregate 57.3% 52.1%
Permanent Fully Underwritten 4-Class - Single Life
Female Female Female Female Female Female IA 0-17 IA 18-80 IA 81-85 IA 0-17 IA 18-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Pref NS Preferred Nonsmoker 62.1% 64.1% Std NS Standard (Residual) Nonsmoker 64.0% 64.0% 60.8% 60.8% Pref SM Preferred Smoker 81.3% 114.9% Std SM Standard (Residual) Smoker 85.7% 85.7% 109.7% 109.7% Agg Aggregate 64.0% 60.8%
Male Male Male Male Male Male IA 0-17 IA 18-80 IA 81-85 IA 0-17 IA 18-80 IA 81-85 Risk Class Rate Table Class Yrs 1-15 Yrs 1-15 Yrs 1-15 Yrs 16+ Yrs 16+ Yrs 16+ Pref NS Preferred Nonsmoker 56.0% 55.2% Std NS Standard (Residual) Nonsmoker 57.3% 57.3% 52.0% 52.0% Pref SM Preferred Smoker 90.8% 123.1% Std SM Standard (Residual) Smoker 83.1% 83.1% 108.4% 108.4% Agg Aggregate 57.3% 52.0%
Permanent Fully Underwritten 2-Class - Single Life
Female Female Male Male IA 20-80 IA 20-80 IA 20-80 IA 20-80 Risk Class Rate Table Class Yrs 1-15 Yrs 16+ Yrs 1-15 Yrs 16+ Std NS Standard (Residual) Nonsmoker 62.2% 59.0% 57.3% 52.0% Std SM Standard (Residual) Smoker 80.5% 103.1% 79.9% 104.1%
Page 13 of 13 EX-99.(L) 3 d444537dex99l.txt ACTUARIAL OPINION AND CONSENT Equity Advantage VUL Exhibit (l) April 11, 2013 Metropolitan Life Insurance Company 200 Park Avenue New York, New York Gentlemen: In my capacity as Vice President and Actuary of Metropolitan Life Insurance Company (the "Company"), I have provided actuarial advice concerning: The preparation of Post-Effective Amendment No. 5 to the registration statement on Form N-6 (File No. 333-147508) filed by Metropolitan Life Separate Account UL and the Company with the Securities and Exchange Commission under the Securities Act of 1933 with respect to variable life insurance policies (the "Registration Statement"); and The preparation of policy forms for the variable life insurance policies described in the Registration Statement (the "Policies"). It is my professional opinion that: 1. The illustrations of death benefits, cash surrender values and cash values shown under "Partial Withdrawal" and in Appendix B of the Prospectus, based on the assumptions stated in the illustrations, are consistent with the provisions of the Policies. The rate structure of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear to be correspondingly more favorable to prospective purchasers of Policies for male insureds, aged 35 in the underwriting class illustrated, than to prospective purchasers of Policies for insureds of other sexes or ages. Insureds in other underwriting classes may have higher cost of insurance charges. 2. The calculation of surrender charges, face amounts and cash values shown in the Example under the heading "Surrenders and Partial Withdrawals - Partial Withdrawal" are accurate and consistent with the provisions of the Policies based on the assumptions stated in the Example. 3. The illustration of net premiums shown under the heading "Charges - Deductions from Premiums" in the Prospectus contains the net premium amounts allocated to the Policy for a $4,000 premium. 4. The maximum surrender charges shown in the examples of surrender charges under the heading "Charges - Surrender Charges" are the correct amounts based on the Policy's face amount and the characteristics of the insured. I hereby consent to the filing of this opinion as an Exhibit to this Post-Effective Amendment to the Registration Statement and to the use of my name under the heading "Experts" in the Statement of Additional Information. Sincerely, /s/ Robert L. Staffier, Jr. Robert L. Staffier, Jr., F.S.A. Vice President and Actuary EX-99.(M) 4 d444537dex99m.txt CALCULATION EXHIBIT CALCULATION EXHIBIT FOR EQUITY ADVANTAGE VUL 08 ASSUMPTIONS: MALE, ISSUE AGE 35, PREFERRED NONSMOKER FACE AMOUNT OF 350,000.00 GUIDELINE PREMIUM TEST, LEVEL DB OPTION PLANNED ANNUAL PREMIUM OF 2,500.00 USING CURRENT CHARGES, 6.00% GROSS INTEREST RATE THE FOLLOWING IS A DETAILED REPRESENTATION OF THE MONTHLY PROCESSING DURING POLICY YEAR 5:
COST BEGINNING OF NET END END END OF MONTH GROSS INSU- INVEST- OF MONTH OUTSTANDING OF MONTH OF MONTH POLICY POLICY CASH PREMIUM PREMIUM ASSET ADMIN RIDER RANCE MENT CASH SURRENDER LOAN CASH SURR DEATH YEAR MONTH VALUE PAID LOAD CHARGE CHARGE CHARGE CHARGE EARNIGS VALUE CHARGE BALANCE VALUE BENEFIT 5 1 7,010.14 2,500.00 137.50 4.67 57.61 0.00 16.75 38.38 9,331.99 4,192.63 0.00 5,139.36 350,000.00 5 2 9,331.99 0.00 0.00 4.65 57.61 0.00 16.76 38.21 9,291.18 4,138.18 0.00 5,153.00 350,000.00 5 3 9,291.18 0.00 0.00 4.63 57.61 0.00 16.76 38.05 9,250.23 4,083.73 0.00 5,166.50 350,000.00 5 4 9,250.23 0.00 0.00 4.61 57.61 0.00 16.76 37.88 9,209.13 4,029.28 0.00 5,179.85 350,000.00 5 5 9,209.13 0.00 0.00 4.59 57.61 0.00 16.76 37.71 9,167.88 3,974.83 0.00 5,193.05 350,000.00 5 6 9,167.88 0.00 0.00 4.57 57.61 0.00 16.76 37.54 9,126.48 3,920.39 0.00 5,206.09 350,000.00 5 7 9,126.48 0.00 0.00 4.55 57.61 0.00 16.77 37.37 9,084.92 3,865.94 0.00 5,218.98 350,000.00 5 8 9,084.92 0.00 0.00 4.53 57.61 0.00 16.77 37.19 9,043.20 3,811.49 0.00 5,231.71 350,000.00 5 9 9,043.20 0.00 0.00 4.51 57.61 0.00 16.77 37.02 9,001.33 3,757.04 0.00 5,244.29 350,000.00 5 10 9,001.33 0.00 0.00 4.49 57.61 0.00 16.77 36.85 8,959.31 3,702.59 0.00 5,256.72 350,000.00 5 11 8,959.31 0.00 0.00 4.47 57.61 0.00 16.77 36.68 8,917.14 3,648.14 0.00 5,269.00 350,000.00 5 12 8,917.14 0.00 0.00 4.45 57.61 0.00 16.78 36.50 8,874.80 3,593.70 0.00 5,281.10 350,000.00
THE FOLLOWING IS A DESCRIPTION OF EACH COLUMN OF THE DETAILED REPRESENTATION: POLICY YEAR The policy year is assumed to be 5, as described above. POLICY MONTH The policy month ranges from 1 through 12, to describe the monthly processing that occurs throughout the policy year. BEGINNING OF MONTH CASH VALUE The beginning of month cash value (BOM CV) in each current month is equal to the end of month cash value from each previous month. This demonstration assumes that the cash value is comprised of separate account cash value only; no general account cash value or loan account cash value are present. GROSS PREMIUM PAID The gross premium paid is the planned ANNUAL premium of 2,500.00 as described above. PREMIUM LOAD The premium load is the sum of the sales charge, premium tax, and federal tax as described in the Transaction Fees table. For year 5, this sum is 5.50% of gross premium paid up to target, and 3.25% of gross premium paid over target. In year 5 month 1, the premium load is therefore 5.50% x 2,500.00 + 3.25% x Max{0, 2,500.00 - 3,267.01} = 137.50 (the target premium is 3,267.01). ASSET CHARGE The asset charge is a percentage of the separate account cash value at the time that the charge is deducted. This demonstration assumes that all cash value is comprised of separate account cash value only. The annual percentages are described in the Periodic Fees table. The monthly percentages are the annual percentages compounded monthly. For example, in year 5 month 1, the annual percentage is 0.60% and the cash value at the time that the charge is deducted is: Cash Value = BOM CV + Gross Premium Paid - Premium Load Cash Value = 7,010.14 + 2,500.00 - 137.50 (values are from the Detailed Representation above) Cash Value = 9,372.64 The asset charge is therefore {[(1+0.60%)^(1/12)]-1} x 9,372.64 = 0.049863025% x 9,372.64 = 2.91. ADMIN CHARGE The admin charge is the sum of the Policy Charge and the Administration and Issue Expense Charge (per 1000) multiplied by the face amount divided by 1000 as described in the Periodic Fees table (although the Administration and Issue Expense Charge (per 1000) listed in the Periodic Fees table is rounded to 2 places, whereas the exact charge is used here). In year 5, this sum is therefore 0.00 + (0.1646 x 350,000.00 / 1,000) = 57.61. RIDER CHARGE The rider charge is the sum of the charges for all riders present, except for the Guaranteed Survivor Income Benefit Rider (GSIB), the Guaranteed Minimum Death Benefit Rider (GMDB), and the Waiver of Monthly Deduction Rider (WMD). The GSIB and GMDB riders are calculated at the same point in time as the Cost of Insurance Charge because they use the same death benefit and net amount at risk respectively. The WMD is calculated after the Cost of Insurance Charge because it uses that charge in its calculation. This illustration assumes no riders (including GSIB, GMDB, and WMD) are present; the rider charge (as well as GSIB charge, GMDB charge, and WMD charge) is therefore 0.00. A list of available riders can be found in the Rider Fees Table. COST OF INSURANCE CHARGE The cost of insurance (COI) charge is the product of the monthly COI rate and the net amount at risk (NAR). The NAR is the difference between the death benefit (DB) and the cash value (floored at 0), both at the time that the NAR is calculated. There are 6 different DB options: level DB option, guideline premium test: DB = Max (face amount , cash value x IRS Corridor Factor) increasing DB option, guideline premium test: DB = Max (face amount + cash value (floored at 0), cash value x IRS Corridor Factor) mixed DB option, guideline premium test: DB = increasing DB option, guideline premium test until attained age 65, level DB option, guideline premium test thereafter level DB option, cash value accumulation test: DB = Max (face amount , cash value x NSP Corridor Factor) increasing DB option, cash value accumulation test: DB = Max (face amount + cash value (floored at 0), cash value x NSP Corridor Factor) mixed DB option, cash value accumulation test: DB = increasing DB option, cash value accumulation test until attained age 65, level DB option, cash value accumulation test thereafter At the time that the NAR is calculated, the face amount is comprised of those attributable to the base policy, the Supplemental Coverage Term Rider, and the Return of Premium Rider. It is divided by a monthly discount factor which is calculated based upon the guaranteed interest rate. The guaranteed interest rate is 3.00%, so the monthly discount factor is calculated as follows: monthly discount factor = ROUND {(1 + guaranteed interest rate) ^ (1/12), 7} monthly discount factor = ROUND {(1 + 3.00%) ^ (1/12), 7} monthly discount factor = 1.0024663 The NAR is: NAR = death benefit - Max (0, cash value) and finally the COI charge is: COI charge = monthly COI rate x NAR For example, in year 5 month 1, we have the following: level DB option, guideline premium test face amount = 350,000.00 cash value = BOM CV + Gross Premium Paid - Premium Load - Asset Charge - Admin Charge - Rider Charge cash value = 7,010.14 + 2,500.00 - 137.50 - 2.91 - 57.61 - 0.00 cash value = 9,312.12 IRS Corridor Factor = 2.50 monthly discount factor = 1.0024663 monthly COI rate = 0.0000493 DB = Max (face amount / monthly discount factor, cash value x IRS Corridor Factor) DB = Max (350,000.00 / 1.0024663, 9,312.12 x 2.50) DB = Max (349,138.91868485, 23,280.30) DB = 349,138.91868485 NAR = DB - Max (0, cash value) NAR = 349,138.91868485 - Max (0, 9,312.12) NAR = 349,138.91868485 - 9,312.12 NAR = 339,826.79868485 COI charge = monthly COI rate x NAR COI charge = 0.0000493 x 339,826.79868485 COI charge = 16.75 NET INVESTMENT EARNINGS The net investment earnings represent the policy performance of the cash value. The cash value is actually tracked separately for each separate account fund that has invested cash value, as well as for a loan fund if any loan balance is present. This demonstration assumes fund performance across all funds to average a gross annual interest rate of 6.00% and an investment management fee of 0.88%. To calculate the annual net interest rate (used to calculate the net investment earnings), given the annual gross interest rate and the investment management fee, we use the following: annual net interest rate = ROUND{([ {(1+I)^(1/365)} x {1-(IMF/365)} ] ^ 365) - 1, 4} where: I = annual gross interest rate IMF = investment management fee For I = 6.00% and IMF = 0.88%, we have: annual net interest rate = ROUND{([ {(1+I)^(1/365)} x {1-(IMF/365)} ] ^ 365) - 1, 4} annual net interest rate = ROUND{([ {(1+6.00%)^(1/365)} x {1-(0.88%/365)} ] ^ 365) - 1, 4} annual net interest rate = ROUND{([ {(1.06)^(1/365)} x {1-0.00002411} ] ^ 365) - 1, 4} annual net interest rate = ROUND{([ 1.00015965 x 0.99997589 ] ^ 365) - 1, 4} annual net interest rate = ROUND{(1.00013554 ^ 365) - 1, 4} annual net interest rate = ROUND{(1.05071281 - 1, 4} annual net interest rate = ROUND{0.05071281, 4} annual net interest rate = 0.0507 which expressed as a percentage is 5.07%. To calculate the net investment earnings for the month, we calculate the product of the cash value at the time the net investment earnings is calculated and the monthly net interest rate. The cash value at the time the net investment earnings is calculated is: cash value = BOM CV + Gross Premium Paid - Premium Load - Asset Charge - Admin Charge - Rider Charge - COI Charge The monthly net interest rate is not simply 1/12th of the annual net interest rate, but rather we use a compound formula to solve: monthly net interest rate = [(1 + annual net interest rate) ^ (1/12)] - 1 monthly net interest rate = [(1 + 0.0507) ^ (1/12)] - 1 monthly net interest rate = [1.0507 ^ (1/12)] - 1 monthly net interest rate = 1.0041299 - 1 monthly net interest rate = 0.0041299 For example, in year 5 month 1, we have the following: cash value = BOM CV + Gross Premium Paid - Premium Load - Asset Charge - Admin Charge - Rider Charge - COI Charge cash value = 7,010.14 + 2,500.00 - 137.50 - 2.91 - 57.61 - 0.00 - 16.75 cash value = 9,295.37 net investment earnings = cash value x monthly net interest rate net investment earnings = 9,295.37 x 0.0041299 net investment earnings = 38.39 END OF MONTH CASH VALUE The end of month cash value (EOM CV) is simply: EOM CV = BOM CV + Gross Premium Paid - Premium Load - Asset Charge - Admin Charge - Rider Charge - COI Charge + Net Investment Earnings In year 5 month 1, we have: EOM CV = BOM CV + Gross Premium Paid - Premium Load - Asset Charge - Admin Charge - Rider Charge - COI Charge + Net Investment Earnings EOM CV = 7,010.14 + 2,500.00 - 137.50 - 2.91 - 57.61 - 0.00 - 16.75 + 38.39 EOM CV = 9,333.76 SURRENDER CHARGE The surrender charge is defined as a per thousand of base face amount charge applied to the base policy on new issues, and to any increase in face amount. The per thousand rates (which are used to calculate the charge) vary by segment issue age, sex, and underwriting class. Using the assumptions from above, the surrender charge per thousand rates are as follows:
M 35 PREFERRED NONSMOKER END OF YR PER 1000 RATE 1 14.0014 2 14.0014 3 14.0014 4 12.1345 5 10.2677 6 9.3343 7 8.4008 8 6.5340 9 3.2670 10 0.0000
The surrender charge is level for the first year and after the first year, grades down linearly on a monthly basis to the rate at the end of the following year. For example, in year 5 month 1, we have the following: base face amount = 350,000.00 year 4 month 12 per thousand rate = 12.1345 year 5 month 12 per thousand rate = 10.2677 N1 = # of months from year 4 month 12 until year 5 month 1 = 1 N2 = # of months from year 4 month 12 until year 5 month 12 = 12 surrender charge = [year 4 month 12 per thousand rate x (1 - N1/N2) + year 5 month 12 per thousand rate x (N1/N2)] x base face amount / 1000 surrender charge = [12.1345 x (1 - 1/12) + 10.2677 x 1/12] x 350,000.00 / 1000 surrender charge = [12.1345 x (1 - 0.08333333) + 10.2677 x 0.08333333] x 350,000.00 / 1000 surrender charge = [12.1345 x 0.91666667 + 10.2677 x 0.08333333] x 350,000.00 / 1000 surrender charge = [11.12329167 + 0.85564167] x 350.00 surrender charge = 11.97893333 x 350.00 surrender charge = 4,192.63 OUTSTANDING LOAN BALANCE The outstanding loan balance represents the amount of cash value loaned, including loan charged interest as described in the Periodic Fees table. This illustration assumes no loans have been taken; the outstanding loan balance is therefore 0.00. END OF MONTH CASH SURRENDER VALUE The end of month cash surrender value (EOM CSV) is the end of month cash value net of surrender charge and outstanding loan balance. That is: EOM CSV = EOM CV - surrender charge - outstanding loan balance In year 5 month 1, we have: EOM CSV = EOM CV - surrender charge - outstanding loan balance EOM CSV = 9,333.76 - 4,192.63 - 0.00 EOM CSV = 5,141.13 END OF MONTH DEATH BENEFIT The end of month death benefit (EOM DB) is calculated based upon the DB option. The DB options are as follows: level DB option, guideline premium test: DB = Max (face amount , cash value x IRS Corridor Factor) increasing DB option, guideline premium test: DB = Max (face amount + cash value (floored at 0), cash value x IRS Corridor Factor) mixed DB option, guideline premium test: DB = increasing DB option, guideline premium test until attained age 65, level DB option, guideline premium test thereafter level DB option, cash value accumulation test: DB = Max (face amount , cash value x NSP Corridor Factor) increasing DB option, cash value accumulation test: DB = Max (face amount + cash value (floored at 0), cash value x NSP Corridor Factor) mixed DB option, cash value accumulation test: DB = increasing DB option, cash value accumulation test until attained age 65, The face amount is the same as that used to calculate the NAR in the COI charge. If the Convertible Supplemental Coverage Term Rider is present, the face amount attributable to that rider is added to the DB. The DB is actually the gross DB, before the reduction of any outstanding loan balance. The EOM DB is therefore: EOM DB = DB - outstanding loan balance In year 5 month 1, we have: level DB option, guideline premium test face amount = 350,000.00 cash value = EOM CV = 9,333.76 IRS Corridor Factor = 2.50 DB = Max (face amount, cash value x IRS Corridor Factor) DB = Max (350,000.00, 9,333.76 x 2.50) DB = Max (350,000.00, 23,334.40) DB = 350,000.00 EOM DB = DB - outstanding loan balance EOM DB = 350,000.00 - 0.00 EOM DB = 350,000.00 EX-99.(N) 5 d444537dex99n.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Exhibit (n) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use in this Post-Effective Amendment No. 5/Amendment No. 60 to Registration Statement Nos. 333-147508/811-06025 on Form N-6 of our report dated March 28, 2013, relating to the financial statements and financial highlights comprising each of the Investment Divisions of Metropolitan Life Separate Account UL (the "Separate Account")(which report expresses an unqualified opinion on the financial statements and financial highlights and includes an explanatory paragraph referring to changes in the Separate Account's method of accounting for certain mortality and expense risk charges assessed through a redemption of units) appearing in the Prospectus, which is part of such Registration Statement, and our report dated April 2, 2013, relating to the consolidated financial statements of Metropolitan Life Insurance Company and subsidiaries (the "Company")(which report expresses an unmodified opinion and includes an emphasis-of-matter paragraph referring to changes in the Company's method of accounting for deferred policy acquisition costs as required by accounting guidance adopted on January 1, 2012 and the Company's reorganization of its segments in 2012), appearing in the Statement of Additional Information, which is also part of such Registration Statement and to the references to us under the headings "Independent Registered Public Accounting Firm" in the Prospectus, and "Independent Auditors" in the Statement of Additional Information. /s/ DELOITTE & TOUCHE LLP Tampa, Florida April 11, 2013 EX-99.(R)(II) 6 d444537dex99rii.txt POWERS OF ATTORNEY Metropolitan Life Insurance Company POWER OF ATTORNEY John C.R. Hele Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that I, John C.R. Hele, Executive Vice President and Chief Financial Officer of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Nicholas D. Latrenta, Paul G. Cellupica, Marie C. Swift, Myra L. Saul, John E. Connolly, Jr. and Michele H. Abate, as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the Registration Statements and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333- 176654 Preference Premier Variable Annuity . Metropolitan Life Separate Account UL File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-131664 Advantage Equity Options; File No. 333-147508 Equity Advantage VUL . Metropolitan Life Variable Annuity Separate Account II File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account File No. 333-11133 Preference . New England Variable Annuity Fund I File No. 333-11137 . Paragon Separate Account A File No. 333-133674 AFIS; File No. 333-133699 Group American Plus . Paragon Separate Account B File No. 333-133671 DWS C, Met Flex GVUL C and Multi Manager C, Morgan Stanley product, Putnam product, MFS product, Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D and Multi Manager D, and Multi Manager II . Paragon Separate Account C File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account 26 File No. 333-110183 Variable Annuity . Security Equity Separate Account 27 File No. 333-110184 Variable Annuity . Separate Account No. 13 S File No. 333-110185 LCL2 Flexible Premium Variable Life and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior powers of attorney. IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of September, 2012. /s/ John C.R. Hele -------------------------- John C.R. Hele